ANNUAL REPORT
2019
FOUNDATIONS SET
FOR LONGEVITY
Gruyere Gold Project, Western Australia
CONTENTS
03 | OUR BUSINESS
47 | FINANCIAL REPORT
04 | WHAT WE DO
05 | OUR VALUES
48 | DIRECTORS’ STATEMENT
54 | CORPORATE GOVERNANCE
06 | LOCATION OF FACILITIES
71 | CORPORATE REGISTRY
AND PROJECTS
08 | YEAR IN REVIEW 2018-2019
10 | FINANCIAL HIGHLIGHTS
12 | OUR 10 YEAR JOURNEY
72 | INDEPENDENT AUDITOR’S REPORT
76 | CONSOLIDATED INCOME STATEMENT
77 | CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
14 | EXECUTIVE CHAIRMAN’S STATEMENT
78 | STATEMENTS OF FINANCIAL
16 | CHIEF EXECUTIVE OFFICER’S REPORT
POSITION
19 | OUR OPERATING SECTORS
20 | OIL & GAS
22 | METALS & MINERALS
24 | INFRASTRUCTURE
80 | CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
82 | CONSOLIDATED STATEMENT OF
CASH FLOWS
83 | NOTES TO THE FINANCIAL
STATEMENTS
26 | MARINE & DEFENCE
143 | STATISTICS OF SHAREHOLDERS
145 | NOTICE OF AGM
158 | DISCLOSURE OF DIRECTORS
SEEKING RE-ELECTION
162 | PROXY FORM
29 | OUR SUSTAINABILITY
30 | HEALTH & SAFETY, ENVIRONMENT,
QUALITY
32 | OUR PEOPLE
36 | COMMUNITY ENGAGEMENT
41 | OUR SUSTAINABILITY
42 | BOARD OF DIRECTORS
44 | EXECUTIVE TEAM
1
CIVMEC ANNUAL REPORT 2019
2
Civmec employees who attended the 10 year celebrations at Henderson, Western Australia
CIVMEC ANNUAL REPORT 2019 OUR
BUSINESS
04 | WHAT WE DO
05 | OUR VALUES
06 | LOCATION OF FACILITIES
AND PROJECTS
08 | YEAR IN REVIEW 2018-2019
10 | FINANCIAL HIGHLIGHTS
12 | OUR 10 YEAR JOURNEY
14 | EXECUTIVE CHAIRMAN’S STATEMENT
16 | CHIEF EXECUTIVE OFFICER’S REPORT
3
CIVMEC ANNUAL REPORT 2019
WHAT WE DO
Civmec is an integrated, multi-disciplinary
construction and engineering services
provider to the Oil & Gas, Metals & Minerals,
Infrastructure and Marine & Defence sectors.
Established in 2009, we are one of
Australia’s leading providers of turnkey
solutions across a range of core
capabilities.
During FY2019, we created employment
opportunities for 3,400 people, including
direct employment for 2,700. Our vast
self-performance capability enables us to
respond agilely to our clients’ needs and our
commitment to innovation and technology
enables us to work smarter, providing value-
driven solutions. Focused on establishing
long-term partnerships and working
collaboratively with clients and delivery
partners, we have played a significant role
in the delivery of some of Australia’s most
complex projects, including in remote,
logistically challenging environments.
Our strategically located facilities in Western
Australia and New South Wales support
our vertically integrated operating model.
Our state-of-the-art west coast facility in
Henderson is set on 200,000m2 of land at
the Australian Marine Complex, with direct
waterfront access. It is the largest fabrication
facility of its kind in Australia and, on
completion of our new Main Assembly Hall
during FY2020, will offer over 100,000m2
of useable undercover space, serviced by
52 overhead travelling cranes. On the east
coast, Civmec’s facility in New South Wales
is located on 227,000m2 of waterfront
land, just 14 kilometres from the port of
Newcastle, with 30,000m2 of undercover
facilities serviced by 24 overhead travelling
cranes.
These world-class facilities, and our extensive
construction equipment base, enable us to
provide manufacturing, technical, administrative
and logistical support to service projects of all
sizes and complexities. With regional depots
in Broome (Western Australia) and Gladstone
(Queensland), we have the capability and
capacity to comprehensively service our
projects located across Australia.
“Our world-class facilities and
extensive construction equipment
base enable us to service projects
of all sizes and complexities.”
4
CIVMEC ANNUAL REPORT 2019 OUR VALUES
COMMITMENT
Our individual
commitment facilitates
our success
INNOVATION
Our innovative approach
drives continuous
improvement
VALUE
DRIVEN
Our performance-driven
culture delivers value
MAKE A
DIFFERENCE
Our ability to influence
and challenge drives
sustainability
EXCELLENCE
Our pursuit of excellence
makes us a world-class
service provider
COLLABORATION
Our focus on working
together drives sustainable
partnerships
“Our vast self-performance
capability enables us to respond
agilely to our clients’ needs.”
5
CIVMEC ANNUAL REPORT 2019 LOCATION OF FACILITIES AND PROJECTS
Our facilities are strategically located around Australia to
support our vertically integrated delivery model and drive
efficiencies in our onsite activities.
Key projects in delivery or completed during FY2019 include:
2019
Total value of projects
in delivery
A$1.7b
FY2019
Revenue by
Location
WA NT
QLD NSW
OVERSEAS
1
2
3
4
5
6
7
8
9
Project
Kemerton Lithium Project
South Flank
Roy Hill Ultrafines
Gruyere Gold Project
Pinjarra Residue Filtration Facility
Amrun Project
Client
Albemarle
BHP and thyssenkrupp
Location
Near Bunbury, WA
Henderson, WA
(fabrication)
Roy Hill Iron Ore
Pilbara, WA
Gold Road Resources
Limited & Gold Fields
Limited
Alcoa Australia Ltd
Rio Tinto Iron Ore and
Sandvik Mining and
Construction
Eastern Goldfields,
WA
Pinjarra, WA
Weipa, QLD
Pilgangoora Lithium Project
Altura Mining
Port Hedland, WA
Tianqi Lithium Processing Plant
Refractory replacement
10 Civil & mechanical site upgrades
11 Refractory replacement & mechanical upgrades
MSP Engineering
Cockburn Cement
CBH Grain
Queensland Alumina
Limited
12 Refractory replacement & mechanical upgrades
Alcoa Australia
13 Refractory replacement & mechanical upgrades
Rio Tinto
14 Conveyor & TLO mechanical repairs & upgrades
FMG
Kwinana, WA
Perth, WA
Regional WA
Gladstone, QLD
Regional WA
Yarwun, QLD
Pilbara, WA
15 Boiler refractory replacement & mechanical repairs
Orica Mining Services
Yarwun, QLD
16
Ship loader mechanical repairs & upgrades
Roy Hill Iron Ore
Port Hedland, WA
17 Boiler refractory replacement & mechanical repairs
NRG Services
Gladstone, QLD
18
Ichthys LNG Onshore Combined Cycle Power
Plant (CCPP)
JKC
19 Gorgon LNG Plant
Chevron Australia
20
Phillip Creek Gas Treatment and Compressor
Station (Northern Gas Pipeline)
Jemena
21
Princes Highway Upgrade – Berry to Bomaderry
Downer Seymour Whyte JV
22 Woodman Point Wastewater Treatment Plant
Water Corporation
Darwin, NT
Henderson, WA
(fabrication)
Tennant Creek, NT
Newcastle, NSW
(fabrication)
Woodman Point,
WA
Upgrade
23 WestConnex
CPB Contractors Dragados
Samsung JV
Newcastle, NSW
(precast)
24 Clarence Correctional Centre
John Holland
Lavadia, NSW
25
26
27
Sydney Metro Northwest
Sydney Light Rail
Northwest Rapid Transit
Sydney, NSW
Acciona Infrastructure
Sydney, NSW
SEA 1180 Offshore Patrol Vessel Program
Luerssen Australia
Henderson, WA
6
METALS & MINERALS
OIL & GAS
INFRASTRUCTURE
MARINE & DEFENCE
CIVMEC ANNUAL REPORT 2019 OPERATIONAL LOCATIONS
AND OFFICES
Newcastle NSW
E
Singapore
18
6
Broome
C
20
7
16
14
3
2
8
9
12
19
22
27
13
Perth
10
12
A
5
1
4
10
13
D
15
11 17
Gladstone
24
21
23
B
Newcastle
26
25
Sydney
LOCATIONS
A
B
C
D
E
Perth – West Coast Facility
Newcastle – East Coast Facility
Broome – Depot
Gladstone – Depot
Singapore – Registered Office
Henderson WA
7
WANTSAQLDNSWVICTASCIVMEC ANNUAL REPORT 2019 YEAR IN REVIEW 2018-19
JULY 2018
We continue to strengthen our
maintenance service offering, with the
award of a maintenance contract with
Roy Hill Holdings to provide shutdown
and maintenance services at its
Pilbara mine and port. Our growing
maintenance division is now delivering
maintenance contracts across Australia
for key clients including FMG, Alcoa,
Rio Tinto and Cockburn Cement.
252
PROJECTS IN DELIVERY
during FY2019
45,000
TONNES OF STEEL
through our workshops
8
AUGUST 2018
Continuing our specialist subsea work,
we are awarded a contract from Santos
to fabricate a pig launcher for the Greater
East Spar gas field off Western Australia’s
north-west coast.
SEPTEMBER 2018
Receive a Civil Contractors Federation
(CCF) Earth Award for our work on the
iconic Optus Stadium, which comprised
the fabrication, supply and erection of key
elements of the stadium structure.
OCTOBER 2018
Prime Minister Scott Morrison visits
our Henderson facility to witness the
erection of the first steel for our new Main
Assembly Hall, and the commencement
of profile cutting of the Australian steel
plate for the first of 12 vessels to be
constructed under the Offshore Patrol
Vessel program.
NOVEMBER 2018
Awarded the contract to fabricate the
bridge girders for the first weathered steel
bridge ever commissioned by NSW’s
Roads and Maritime Services, as part of
the Princes Highway upgrade project being
delivered between Berry and Bomaderry,
south of Sydney.
Complete construction of our new 2,600m2, 30m high, blast & paint facility at
Henderson, complementing our existing 4,800m2 surface treatment facility
and enabling us to provide a comprehensive range of surface preparation
and protective coating application services.
DECEMBER 2018
We partner with Luerssen Australia and
ASC to launch the Shipbuilding Education
and Apprenticeship (SEA) program, which
will help build the skills needed for Australia’s
multibillion-dollar naval shipbuilding industry.
Twelve scholarships are awarded, with
three of the scholarship recipients also
granted internship placements, including
one with Civmec.
CIVMEC ANNUAL REPORT 2019 JANUARY 2019
At our east coast facility in Newcastle, we complete our new
7,500m2 precast/prestressed concrete facility and expand
our heavy engineering facility to 15,000m2.
FEBRUARY 2019
Awarded significant scope in the delivery of
Australia’s largest lithium hydroxide plant to be built
in Western Australia’s south-west for Albemarle,
comprising site civil works and structural,
mechanical and piping works, including fabrication
and onsite installation. We are already fabricating
the kilns and cooler shells for the project,
for Metso.
MARCH 2019
Awarded fabrication and modularisation package
with BHP for their flagship South Flank iron ore
mine being constructed in the Pilbara. This award
complements the fabrication package already in
production for thyssenkrupp for the project.
MAY 2019
Before retiring from his political career, Minister for
Defence, Christopher Pyne, makes another visit
to our Henderson facility, congratulating Civmec
on having the foresight to invest in the future of
Australia’s defence capability, both in people and
infrastructure.
We sign a contract with Chevron Australia for the
execution of maintenance turnaround services
for their Gorgon and Wheatstone LNG facilities
until the end of 2020, to be delivered through our
joint venture with KBR, known as Brown & Root
Civmec (BRC).
Our Executive Chairman, James Fitzgerald, is
appointed to the Board of the Centre for Defence
Industry Capability (CDIC), which is tasked
with building the relationship between defence
and industry and advising government on the
development of sustainable defence capability
and capacity.
APRIL 2019
In the lead up to the federal election, Prime Minister
Scott Morrison makes a second visit to our
Henderson facility, viewing progress on the Main
Assembly Hall under construction and meeting
the workforce. The following day, we welcomed
Opposition Leader Bill Shorten and WA Premier
Mark McGowan, who also took a tour of the facility
and addressed the workforce.
JUNE 2019
As FY2019 draws to a close, we celebrate our
10-year anniversary. Our continuous building
program at Henderson over the past decade
has seen us transform our waterfront land at
the Australian Marine Complex into the largest
facility of its kind in Australia and one of the best
in the world. We reflect on the level of skill and
sophistication we have been able to cultivate in
the business over just a few short years, having
played a significant role in the delivery of some of
Australia’s largest and most complex projects.
9
CIVMEC ANNUAL REPORT 2019 FINANCIAL HIGHLIGHTS
The Group’s revenue for the financial year ended
30 June 2019 (FY2019) was A$488.5 million,
reflective of levels prior to 2018. FY2019 Earnings
Before Interest, Tax, Depreciation and Amortisation
(EBITDA) was A$24.0 million and Net Profit After
Tax (NPAT) was A$7.0 million.
The Group’s intent during FY2019 was to strengthen the balance sheet
and improve operating cashflow. To this end, net cash generated from
operating activities at year end FY2019 was A$78.9 million, an increase of
A$98.6 million on the FY2018 position, with A$40.7 million cash in the bank
at year end.
Fortifying the Group’s position over the period, focus has been on successfully
closing out projects and collection of trade receivables. The second half of the year
was challenging, due to delays in projects commencing impacting revenue. The
Order Book is strong going into FY2020, increasing from A$700.0 million at the
close of FY2018 to A$819.0 million at year end FY2019.
Reinforcing the Balance Sheet, the value of property, plant and equipment
increased A$57.3 million, as construction of the new Main Assembly Hall
progressed at Henderson. The Group raised a A$60 million, four-year,
secured note in November 2018 to partially fund construction of the new facility.
Further capital investment at Newcastle included the addition of a
new dedicated precast/prestressed concrete facility, and expansion of the heavy
engineering facility.
As at 30 June 2019, the Group had total assets of A$430 million, net assets of A$174
million and net tangible asset backing per share of 34.77 cents.
Total banking facilities available to the Group, including insurance bonds, increased
during the year to A$382.5 million up from A$292 million in FY2018.
Operating
Cashflow
A$ 100
A$ 50
A$ 0
A$ (50)
Dividend
CPS
2016
2017
2018
2019
0.7cents
0.7cents
0.7cents
0.7cents
2016
2017
2018
2019
10
CIVMEC ANNUAL REPORT 2019 FINANCIAL PERFORMANCE
A$’000
Sales revenue
EBITDA
Net profit after tax
Operating cash flow
Earnings per share (cents)
Dividend per share (cents)
Return on equity (%)
2019
488,511
24,012
7,030
78,861
1.21
0.7
4.0
2018
CHANGE %
702,415
39,685
17,418
(19,728)
3.62
0.7
10.2
(30.5)
(39.5)
(59.6)
499.7
(66.6)
-
(60.8)
OPERATING CURRENCY (A$)
Revenue
EBITDA
2016
392.4m
2017
330.3m
2018
702.4m*
2019
488.5m
2016
33.6m
2017
21.9m
2018
39.7m*
2019
24.0m
NPAT
Order Book
2016
17.1m
2017
7.9m
2018
17.4m*
2019
7.0m
2016
155m
2017
600m
2018
700m
2019
819m
EBITDA: Earnings Before Interest, Tax, Depreciation and Amortisation
NPAT: Net Profit After Tax
Dividend CPS: Dividend - Cents Per Share
* 2018 restated
11
CIVMEC ANNUAL REPORT 2019 OUR 10 YEAR JOURNEY
2009
2011
2013
CIVMEC MOVES INTO THE
AUSTRALIAN MARINE COMPLEX
Commence operations.
Acquire the rights to strategic
waterfront land at the Australian
Marine Complex in Henderson,
Western Australia.
Commence development of the site.
RAIL CAR DUMPER
Undertake several projects for Rio Tinto,
including the award for fabrication and
assembly of the largest iron ore rail car
dumper ever built in Australia.
Awarded our first major fabrication and
modularisation packages for BHP’s Port
Hedland Inner Harbour Project.
Awarded further precast and fabrication
packages for the Gorgon LNG Project.
YANDICOOGINA SUSTAINING
PROJECT
Continue our relationship with Rio Tinto,
with the award of packages for their
Yandicoogina, Nammuldi Below Water
Table, Marandoo and Hope Downs 4
iron ore projects in the Pilbara.
Deliver works for three of Australia’s
largest LNG projects – Gorgon and
Wheatstone in the north-west, and
Ichthys, our first major contract award
in the Northern Territory.
Awarded packages for the Mungari
Gold Project in the Goldfields.
2010
2012
MOF WHARF CAISSON FOR THE
GORGON LNG PROJECT
SUBSEA MANIFOLD FOR THE
CONISTON DEVELOPMENT PROJECT
Start operating from our new
29,300m2 heavy engineering facility.
Civmec Limited is publicly listed on
the Singapore Exchange.
Deliver our first project for the
Gorgon LNG Project – MOF wharf
caissons.
Deliver our first site-based project,
civil works for the new Binningup
Desalination Plant.
Supply subsea manifolds and an oil
production pipeline end manifold
(PLEM), for the Coniston, Balnaves
and Greater East Spar Phase 2
Development Projects.
Awarded further works on BHP’s
Port Hedland Inner Harbour Project.
12
CIVMEC ANNUAL REPORT 2019 2015
2017
2019
PERTH STADIUM
AMRUN MODULES BEING SHIPPED
Awarded a major contract on the
prestigious new Perth Stadium Project
(since named Optus Stadium).
Complete construction of our
specialist subsea facility and new
operational readiness facility at
Henderson.
Launch our new Defence division.
Commence preparation of the site
for construction of our new 70m (H),
53,000m2 (usable floor area) state-of-the-
art Main Assembly Hall at Henderson.
In delivery of several major projects,
including the Gruyere Gold Project,
Amrun Project, Pinjarra Residue
Filtration Facility, Pilgangoora Lithium
Project and Phillip Creek Gas Treatment
and Compressor Station.
On the east coast, we are supplying
concrete and structural steel for the
major road and rail infrastructure
projects being delivered across Sydney.
NEW FACILITY UNDER
CONSTRUCTION
Awarded contract to deliver
Australia’s largest lithium hydroxide
plant for Albemarle.
Launch a joint venture with KBR, called
Brown & Root Civmec (BRC), providing
a diversified and integrated turnaround
and maintenance solution to service
the Australian onshore and offshore
LNG sector.
Main Assembly Hall in Henderson
delivers a new world-class resource to
the Australian maritime landscape.
2014
2016
2018
HEAD OFFICE BUILDING
OFFICIALLY OPENS
Premier Colin Barnett officially opens
our new 6,500m2 head office building
and we complete construction of our
4,800m2 surface treatment facility,
expanding our in-house blasting
and surface treatment capabilities at
Henderson.
Deliver works on the Elizabeth Quay
Project, a significant public infrastructure
development on the banks of the Swan
River in the Perth CBD.
Receive accreditation as a Registered
Training Organisation (RTO).
CIVMEC ACQUIRES WATERFRONT
FACILITY IN NEWCASTLE
Acquire Forgacs’ 23-hectare riverfront
facility in Newcastle, New South Wales.
Deliver our first EPC contract, for the
expansion of mining and processing
capacity of BHP’s existing Jimblebar
operations in the Pilbara.
Hold ground-breaking ceremony
for the new state-of-the-art Main
Assembly Hall to be built at
Henderson.
OFFSHORE PATROL VESSELS
Awarded contract for the Royal
Australian Navy’s OPV program,
supplying and processing the steel for
12 vessels, with consolidation of 10 of
the 12 vessels to be undertaken in our
new state-of-the-art facility.
Fabricate and deliver the complex
steel for the Matagarup Bridge.
Achieve dual listing status, with
our acceptance to the Australian
Securities Exchange (ASX) along with
our existing status on the Singapore
Exchange (SGX).
13
CIVMEC ANNUAL REPORT 2019 EXECUTIVE CHAIRMAN’S STATEMENT
On behalf of the Board of Directors,
I am pleased to present the 2019
Civmec Limited Annual Report.
The end of this financial year marks a significant milestone
for the company – 10 successful years of operation. Our
vision when we started out in 2009, was to bring to the
construction industry a multi-disciplined organisation
offering diversified core capabilities, based on the
foundation of a skilled and talented workforce focused on
self-performance. In just 10 short years, I truly believe we
have achieved this vision.
If I look back on the last decade, what strikes me as our biggest
strength, is our ability to continue to adapt, evolve and innovate.
We have been able to carve out our competitive advantage by
driving and unlocking the value of innovation, developing long-
term strategic partnerships, and diversifying our offering to meet
changing market needs. As we have grown, our management and
employees have shown great dedication and strength in meeting all
of the challenges along the way; the result being the strong culture
of achievement and continuous improvement that resides in our
business today.
The evolution of our facility at Henderson since 2009 has been
incredible. Taking possession of 50,000m2 of vacant land 10
years ago and turning it into what we have built today – a heavy
engineering facility on 200,000m2 of waterfront land, rivalling the
best in the world – is something I am personally immensely proud
of. The sheer scale of what we have achieved, and the state-of-the-
art equipment at our disposal, is unrivalled. I am very much looking
forward to the addition of our new world-class Main Assembly Hall,
which will complete what has been a continuous building program
over a decade.
FINANCIAL PERFORMANCE
Sales revenue for FY2019 was A$488.5 million, with Net Profit after
Tax of A$7.0 million.
Focus during the period was on closing out a number of major
projects and securing new work, with delays in projects due to
commence in the second half of the year impacting projected
revenue. We finished the year with a strong Order Book of A$819.0
million, providing a solid revenue stream going forward into FY2020.
Our objectives of strengthening the balance sheet, improving
operating cashflow and lowering debt over the period were
achieved, with net cash generated from operating activities up by
A$98.6 million on the FY2018 position, with A$40.7 million cash
The sheer
scale of what
we have achieved,
and the state-of-
the-art equipment
at our disposal, is
unrivalled.
14
CIVMEC ANNUAL REPORT 2019 in the bank at year end. Our net asset
position of A$174 million at year end is
underpinned by our investment in property,
plant and equipment, including the further
development of our facilities at both
Henderson and Newcastle.
DIVIDENDS
The Board of Directors has recommended
a cash dividend of 0.7 Singapore cents per
share, subject to shareholders’ approval at
our Annual General Meeting on 29 October
2019. The full year dividend payment
represents a 50% payout ratio and will be
paid on 12 December 2019.
OUR PEOPLE
Civmec continues to hold its position as a
significant employer in our industry, with
2,700 direct employees engaged during
FY2019, and approximately a further 700
employed as a result of our activities. We
take great pride in our self-performance
capability, enabling us to provide our
clients with quality products and services
that support their activities, and offering
our people sustainable opportunities to
grow their career with us. Over the year,
we continued to develop our expertise
in emerging markets, embarking on the
delivery of the Royal Australian Navy’s
Offshore Patrol Vessel program and
significantly growing our maintenance
capability and capacity.
The commitment of our people to our
Never Assume culture, as the fundamental
basis for how we manage ourselves and
support those around us,
remains steadfast.
STRATEGY & FUTURE FOCUS
Our strategy to position the business to capitalise on the
Federal Government’s commitment to undertake the
continuous build and sustainment of minor war vessels
at Henderson will come to the fore when we complete
construction of our state-of-the-art Main Assembly Hall during
FY2020. In addition to facilitating delivery of the Department of
Defence’s Integrated Naval Vessel Investment Program, aimed
at building Australia’s future Defence capabilities, this new
facility can also support the delivery of large integrated modules
for the Oil & Gas and Metals & Minerals sectors. As the largest
undercover modularisation and sustainment facility in Australia,
when fully operational it will provide employment opportunities
for up to an additional 1,000 people, including 100 new
apprentices and trainees. Capable of handling any of Australia’s
major projects across the resource, infrastructure and Defence
sectors, our substantial investment in this new facility is an
integral element in securing the company’s long-term future.
Our focus remains on providing quality, value-for-money
engineering solutions for our clients, whilst maintaining a
disciplined approach to capital and overhead management, to
maximise our shareholders’ returns.
On behalf of the Board, I would like to thank our people for
their dedication and commitment in shaping Civmec over the
past 10 years. We are lucky to have a significant number of
employees who have been with the business for many years,
including some since its inception.
We have delivered some amazing projects over the past
decade, and our success has only been possible because
of the skill and dedication of our people; the confidence and
loyalty of our shareholders; and the trust our clients have
placed in us in delivering their projects. Our business has seen
phenomenal growth and thank you to all of you who have
played a valuable role in this.
Yours sincerely
James Fitzgerald
Executive Chairman
Civmec Limited
15
CIVMEC ANNUAL REPORT 2019 CHIEF EXECUTIVE OFFICER’S REPORT
With a decade of operations behind us, looking
back at the projects we were delivering in
2009, compared to today, the level of skill and
sophistication we have been able to cultivate in the
business over just a few short years is astounding.
When we first started out, we were leveraging our skills to deliver elements for
major projects. Today, we are capable of delivering those complete projects in
our own right. Over the years we have continued to build our suite of capabilities,
responding to the needs of our clients to provide them with an all-inclusive
service offering.
BUSINESS PERFORMANCE
During FY2019 we successfully completed
a number of major projects across Australia,
including the Pilgangoora Lithium Project
in Western Australia; the Phillip Creek
Gas Treatment and Compressor Station
and the Ichthys LNG Onshore Combined
Cycle Power Plant (CCPP) in the Northern
Territory; the Amrun Project in Queensland;
and the Clarence Correctional Centre and
WestConnex (M5) projects in New South
Wales. Leveraging our broad expertise
and self-performance capability, we
delivered significant scope on each of
these projects, integrating onsite works,
including site civil and earthworks,
structural, mechanical & piping, electrical
& instrumentation, and industrial
insulation, with our fabrication, surface
treatment, modular assembly and precast
manufacturing capability delivered through
our facilities in Henderson and Newcastle.
At Henderson, our delivery of the Royal
Australian Navy’s SEA 1180 Offshore Patrol
Vessel (OPV) program is ongoing, with
the preparation and profile cutting of steel
plates for the first two vessels being built
in South Australia. This long-term project
includes the supply and processing of steel
for 12 vessels. Following the build of the
first two vessels in South Australia, we will
undertake the fabrication and consolidation
of the following 10 vessels at our West
Coast facility, from 2020.
The value of new projects and contract
extensions awarded in FY2019 was A$608
million, comprising new contracts and
additional scope in Oil & Gas (A$54m),
Metals & Minerals, including maintenance
and specialist refractory works (A$505m),
and Infrastructure (A$49m).
This includes playing a significant role in
the delivery of Australia’s largest lithium
hydroxide plant being constructed south of
Perth, for Albemarle. Our extensive scope
on the project includes site civil works
and fabrication and onsite installation of
the plant’s structural, mechanical & piping
works. This two-year project is ideally suited
to our operations, with our onsite activities
supported by our Henderson facility, which
will fabricate and pre-assemble modularised
components for onsite erection.
During the year, we were extremely pleased
to be given the opportunity to extend our
relationship with BHP, supporting the
delivery of their flagship South Flank iron
ore mine in the Pilbara. Our scope includes
the supply, manufacture, trial assembly
and surface treatment of components
for the project’s rail mounted machines
being delivered by thyssenkrupp, and,
in a separate contract directly with BHP,
we are also supplying and assembling
23 fully equipped ‘smart modules’.
When fully operational, South Flank will
be one of the world’s largest iron ore
operations, integrating the latest advances
in autonomous-ready fleets, digital
We are continuing to
deliver on our strategy,
which is focused on
establishing consistent
and recurring revenue
streams and capitalising
on major expansion
project opportunities,
underpinned by
our commitment
to continuous
improvement.
16
CIVMEC ANNUAL REPORT 2019 connectivity and modular design.
On the east coast, we are continuing to
play an important role in the delivery of
major transport infrastructure projects.
Having previously provided structural and
precast components for the WestConnex,
Sydney Metro Northwest and Sydney
Light Rail projects, we have been
awarded the fabrication of bridge girders
for the first weathered steel bridge ever
commissioned by NSW’s Roads and
Maritime Services, as part of the Princes
Highway upgrade project being delivered
between Berry and Bomaderry, south
of Sydney.
Our investment in system and process
improvements to support project delivery
performance has seen the implementation
of a number of new initiatives during the
year. Civtrac People was launched across
the business in October 2018, with three
modules rolled out simultaneously –
Recruitment, Onboarding and Employee
Central – enhancing our ability to source
and transition quality personnel into the
business. We also implemented our
new Project Launch Process, including
conducting workshops to facilitate
alignment with HSE, Quality, project
controls and IR requirements for projects.
OUR PEOPLE
As we mark our 10 year anniversary, there
are a significant number of people who
have been with the business for much
of this time, including many since its
inception. This is testament to our ability
to provide our people with sustainable
career pathways that enable them to
grow with the business. Over the past 12
months, significant focus has been on
providing leadership training, including the
identification of high potential individuals
and succession planning.
Working on projects across Australia
and in our fabrication facilities, during
FY2019 we directly employed some 2,700
people, with approximately an additional
700 people employed as a result of our
activities. This included more than 60
apprentices and trainees across our
operations, including the introduction
this year of a school-based traineeship
program, confirming our commitment to
developing the industry’s next generation.
STRATEGY &
FUTURE FOCUS
We are continuing to deliver on
our strategy, which is focused
on establishing consistent and
recurring revenue streams
and capitalising on major
expansion project opportunities,
underpinned by our commitment
to continuous improvement.
Our strategy to establish
sustainable revenue streams for
the business has seen the further
strengthening of our maintenance
service offering over the past 12
months. In the Metals & Minerals
sector, we are now delivering
maintenance contracts across
Australia for key clients including
FMG, Roy Hill, Alcoa, Rio Tinto
and Cockburn Cement. In the Oil
& Gas sector, we have established
a joint venture with KBR, known
as Brown & Root Civmec
(BRC), providing a diversified
and integrated turnaround and
maintenance solution to service
the Australian onshore and
offshore LNG sector. Our first
client is Chevron Australia, with a
contract to support their assets
until the end of 2020, including
the Gorgon and Wheatstone LNG
facilities. We recognise there is
a significant future opportunities
pipeline for the specialised
shutdown and maintenance
service offering we can provide,
with the requirement to maintain
new plants in the Metals &
Minerals and Oil & Gas sectors
across Australia.
Delivery of the Royal Australian
Navy’s Offshore Patrol Vessel
program will be ongoing until
2029, providing a sustained
revenue stream over this period.
The Federal Government’s
commitment to undertake its
minor naval vessel continuous
build program and sustainment of
these vessels at Henderson will
provide further construction and
through-life support opportunities
in the Marine & Defence sector
going forward. With the upcoming
completion of our new world-
class Main Assembly Hall,
we are well positioned to support
these projects.
We will continue to pursue new
construction and expansion
projects across the energy and
resources sectors, leveraging our
multi-disciplinary, self-performance
capability to provide delivery
solutions for either the entire project
or separable portions, to meet client
needs and strategy. With growing
confidence and investment across
Australia, there are significant
forward opportunities in the Metals
& Minerals sector, including iron ore,
gold and other rare metals. In the Oil
& Gas sector, the next wave in LNG
investment is building, including new
developments and expansion and life
extension projects.
Over the past decade, we have built
an experienced, well-trained and
loyal workforce that understands
our clients’ needs and is focused on
working collaboratively with them
to drive positive outcomes and
provide them with a level of service
that exceeds their expectations.
Our culture, founded on a ‘can
do’ attitude, shared values and
teamwork, is the cornerstone of our
reputation for excellence and we take
great pride in being a partner who
delivers, and an employer of choice.
Thank you to our people and our
clients for taking this journey with us.
We look forward to continuing to work
together to create the next exciting
chapter in the Civmec story.
Yours sincerely
Patrick Tallon
Chief Executive Officer
Civmec Limited
17
CIVMEC ANNUAL REPORT 2019 18
Woodman Point Wastewater Treatment Plant Upgrade, Western Australia
CIVMEC ANNUAL REPORT 2019 OUR
OPERATING
SECTORS
20 | OIL & GAS
22 | METALS & MINERALS
24 | INFRASTRUCTURE
26 | MARINE & DEFENCE
19
CIVMEC ANNUAL REPORT 2019 OIL AND GAS
Annual revenue
A$67
million
A$54
million
in new contract awards
and extensions
During FY2019 we completed works on
two significant Oil & Gas projects in the
Northern Territory.
Having supported construction of the INPEX-operated Ichthys LNG onshore
processing facilities in Darwin since 2013, during the year we completed
our scope for the Ichthys LNG onshore combined cycle power plant (CCPP).
Ranked among the most significant oil and gas projects in the world, the
onshore plant supports peak production of 8.9 million tonnes of LNG and
1.6 million tonnes of LPG per annum and 15,000 barrels of condensate per
day. We also completed construction of the Phillip Creek Gas Treatment and
Compressor Station, as part of the Northern Gas Pipeline Project. The project
links Tennant Creek in the Northern Territory with Mount Isa in Queensland,
unlocking the next phase of economic growth for the NT.
We continue to service the Gorgon LNG Project, with the ongoing fabrication of piping
and structural steel for the plant. During FY2019, this included delivery of the fabrication
of structural steel, pipe supports, access platforms, duplex, super duplex and carbon
steel piping for the plant’s CO2 Injection Project.
Through BRC, our joint venture with KBR, we have now also partnered with Chevron
Australia for the execution of maintenance turnaround services, both on and offshore,
until the end of 2020. Any program of complex turnarounds requires specialist
knowledge and experience in turnaround management and delivery to optimise plant
availability and utilisation, with BRC combining Civmec’s vast multi-disciplined self-
performance capability with KBR’s 70 year history in providing global turnaround and
maintenance solutions.
With the growing capability and capacity of our maintenance division, we will continue to
target the requirement to maintain the new LNG plants that have been developed across
Australia in recent years. Having been a partner in the construction of many of these
facilities, we will leverage our existing relationships with key clients to support them with
the specialised shutdown and turnaround service offering we can provide.
Further investment in LNG is anticipated, including expansion and life extension projects
for existing plants, in addition to new developments. In particular, subsea activity is
expected to continue to grow to support both new and recently constructed projects,
with a number of subsea developments underway. Given our past experience and
specialist capability to support the delivery of subsea projects, we are well positioned to
optimise opportunities as they come to market.
20
CIVMEC ANNUAL REPORT 2019 CHEVRON AUSTRALIA TURNAROUND AND
MAINTENANCE SERVICES
CLIENT
Chevron Australia
LOCATION
North-West, WA
DURATION
July 2019, ongoing as required until the end of 2020
OVERVIEW Brown & Root Civmec (BRC), an incorporated joint venture
of Civmec and KBR, has partnered with Chevron Australia
for the execution of maintenance turnaround services of
Chevron Australia assets, both on and offshore.
BRC was formed to provide a diversified and integrated
turnaround and maintenance solution to service the
Australian onshore and offshore LNG sector. BRC offers
the full range of industrial services, including predictive
analytics, monitoring, engineering, procurement,
construction, fabrication, maintenance and turnarounds,
through to commissioning and startup. It combines
Civmec’s vast multi-disciplined self-performance capability
with KBR’s 70 year history in providing global turnaround
and maintenance solutions.
ICHTHYS LNG ONSHORE CCPP
CLIENT
JKC
LOCATION
Darwin, NT
DURATION
July 2017 – December 2018
OVERVIEW
Working for our client JKC Australia LNG and their
client INPEX, we supported the execution of civil
works, piping, insulation and specialised surface
treatment for the Combined Cycle Power Plant
(CCPP) element of the INPEX-operated Ichthys LNG
onshore processing facilities.
Ichthys LNG is considered to be one of the most
significant Oil & Gas projects in the world.
GORGON LNG PROJECT
CLIENT
Chevron Australia
LOCATION
Henderson, WA
DURATION
November 2010 – current
OVERVIEW
Following the delivery of site civil works, precast and
structural steel fabrication for the construction of the
Gorgon LNG Project commencing in 2010, we have
continued to service the project with the ongoing
fabrication of piping and structural steel for the plant.
21
CIVMEC ANNUAL REPORT 2019 METALS & MINERALS
Annual revenue
A$357
million
A$505
million
in new contract awards
and extensions
Leveraging our vertically integrated operating
model and vast self-performance capability, we
delivered two significant projects during FY2019.
These were the Gruyere Gold Project, in joint venture with Wood, for
the design, procurement and installation of a new gold process plant
and other non-process infrastructure in the Eastern Goldfields, and
the construction of a new filter facility, materials handling system and
associated supporting infrastructure at Alcoa’s Pinjarra Alumina Refinery
in the south-west.
With Western Australia expected to produce more than half of the world’s lithium
supply, the delivery of infrastructure to support lithium processing is an opportunity
we have capitalised on over recent years. Following the successful delivery of Altura
Mining’s new Pilgangoora lithium processing facility in the Pilbara, we are now in
delivery of significant scope for Australia’s largest lithium hydroxide plant being
constructed south of Perth, for Albemarle, including site civil works and fabrication
and onsite installation of the plant’s structural, mechanical & piping works. We
are also fabricating the kilns and cooler shells for this project, on behalf of Metso.
Continuing to leverage our specialist refractory capability, we are delivering the
full refractory supply package for the design, supply and installation of over 750
tonnes of refractory materials for the new lithium hydroxide processing plant being
constructed in Kwinana for Tianqi Lithium Australia.
With renewed confidence and activity in the iron ore sector, we are supporting BHP
in the delivery of key components for their new flagship South Flank mine being
constructed in the Pilbara, which will be one of the world’s largest iron ore mines
when fully operational. During the year, we again partnered with Roy Hill in the
further development of their Pilbara mine, delivering the Roy Hill Ultrafines package,
for the supply of concrete and associated earthworks to optimise the capture
of fine ores that previously were not collected in the process. From our facility in
Henderson, we fabricated, surface treated and assembled stackers for Rio Tinto’s
Paraburdoo and East Intercourse Island operations in the Pilbara.
With growing investment, it is anticipated further opportunities in iron ore will come
to market in the short to medium term, where we can leverage our core disciplines
to provide a single, vertically integrated, turnkey solution.
Continuing to build on our capability in the delivery of specialised maintenance
and shutdown services, providing a single, multi-disciplinary solution across the
spectrum of services and leveraging our ongoing relationships with key resource
clients, we are now delivering maintenance contracts across Australia for FMG, Roy
Hill, Alcoa, Rio Tinto and Cockburn Cement.
22
CIVMEC ANNUAL REPORT 2019 KEMERTON LITHIUM PROJECT
CLIENT
Albemarle
LOCATION
Henderson and South-West, WA
DURATION
June 2019 – March 2021
OVERVIEW We are playing a significant role in the delivery of Australia’s
largest lithium hydroxide plant, being constructed in the
Kemerton Strategic Industrial Area, south of Perth near the
port town of Bunbury.
Our extensive scope on the project includes site civil
works and fabrication and onsite installation of structural,
mechanical & piping for the Hydromet and Final Product,
Reagents and Utilities for Trains 1 and 2.
SOUTH FLANK
CLIENT
thyssenkrupp and BHP (separate contracts)
LOCATION
Henderson, WA
DURATION
February 2019 – mid-2020
OVERVIEW We are supporting the delivery of BHP’s flagship South
Flank iron ore mine in the Pilbara, with the supply,
manufacture, trial assembly and surface treatment of (a)
stackers substructure / super structure, and (b) stackers
and reclaimer bogies and equalisers for the project’s rail
mounted machines being delivered by thyssenkrupp.
In a separate contract directly with BHP, we are also
supplying and assembling 23 fully equipped ‘smart
modules’, including conveyor shuttle modules, sample
station, pump skids, train loadout and feeder modules.
GRUYERE GOLD PROJECT
CLIENT
Gold Road Resources Limited and Gold Fields Limited
LOCATION
Eastern Goldfields, WA
DURATION
July 2017 – July 2019
OVERVIEW In a joint venture with Wood, the contract included the
detailed design, procurement and installation of the
process plant and other non-process infrastructure,
including administration office, workshop and warehouse.
Works also included installation of the main water pipeline
and borefield powerlines. Engineering, procurement,
fabrication & modularisation, delivery, construction,
integration, commissioning and performance testing was
all self-performed.
PINJARRA RESIDUE FILTRATION FACILITY
CLIENT
Alcoa Australia
LOCATION
Pinjarra, WA
DURATION
October 2017 – September 2019
OVERVIEW Our scope at Alcoa’s Pinjarra alumina refinery included the
engineering, procurement, fabrication and modularisation,
delivery, construction, integration, commissioning and
performance testing of a filter facility, materials handling
system and associated supporting infrastructure. Our
innovative solution included integrating the world’s largest
plate and frame filters with the materials handling system.
23
CIVMEC ANNUAL REPORT 2019 INFRASTRUCTURE
Annual revenue
A$65
million
A$49
million
in new contract awards
and extensions
From our Newcastle facility, we supported
the delivery of east coast infrastructure
projects, an example being completion of
our works for the WestConnex M5 Project,
manufacturing 2,200 precast units totalling
approximately 22,500 tonnes.
This section of the complex WestConnex project more than doubles
the capacity of Sydney’s M5 East motorway and includes new twin
tunnels running underground for nine kilometres between Kingsgrove
and St Peters. Also during FY2019 we completed our work on the new
Clarence Correctional Centre, supplying 630 precast cell modules
weighing between 20 and 85 tonnes.
Playing an important role in the delivery of major transport infrastructure projects
on the east coast, supported by the completion of our precast/prestressed
concrete facility and expansion of our heavy engineering facility at Newcastle,
we are now in delivery of bridge girders for the first weathered steel bridge ever
commissioned by NSW’s Roads and Maritime Services, as part of the Princes
Highway upgrade project being delivered between Berry and Bomaderry, south
of Sydney. Having established local capacity and capability on the east coast, we
will continue to seek opportunities to support the delivery of major road and rail
infrastructure projects in delivery, with the supply of manufactured products.
In Western Australia, our delivery of the Woodman Point Wastewater Treatment
Plant upgrade project, in an alliance with Water Corporation and Black & Veatch
for the design and construction of the expanded plant to increase the capacity to
180ml/day, is ongoing.
24
Note: Annual revenue includes Infrastructure and Marine & Defence.
CIVMEC ANNUAL REPORT 2019 PRINCES HIGHWAY UPGRADE –
BERRY TO BOMADERRY
CLIENT
Downer Seymour Whyte JV
LOCATION
Newcastle, NSW
DURATION
March 2019 – January 2020
OVERVIEW We are fabricating the bridge girders for the first weathered
steel bridge ever commissioned by NSW’s Roads and
Maritime Services, as part of the Princes Highway upgrade
project being delivered between Berry and Bomaderry,
south of Sydney.
WOODMAN POINT WASTEWATER TREATMENT
PLANT UPGRADE
CLIENT
Water Corporation
LOCATION Woodman Point, WA
DURATION
December 2016 – December 2019
OVERVIEW An alliance contract with Water Corporation, Black &
Veatch and Civmec, for the design and construction of
the expanded plant to increase the capacity to 180ml/day.
The scope of works includes earthworks, civils, concrete,
structural, mechanical & piping and commissioning.
WESTCONNEX
CLIENT
Rizzani CPB Joint Venture (M4) and CPB Contractors
Dragados Samsung JV (M5)
LOCATION
Sydney, NSW
DURATION
June 2016 – July 2019
OVERVIEW Our involvement in the complex WestConnex project
commenced with the M4 widening, supplying and
delivering 4,235 linear metres of precast bridge parapets
totalling 5,850 tonnes. Following this, we were awarded
the manufacture and delivery of complex precast concrete
structures for the M5 works, including the supply of 2,200
precast units totalling approximately 22,500 tonnes.
CLARENCE CORRECTIONAL CENTRE
CLIENT
John Holland
LOCATION
Lavadia, NSW
DURATION
July 2017 – May 2019
OVERVIEW We established an onsite precast facility to facilitate the
supply of volumetric precast prison cells for the new
Clarence Correctional Centre. The scope included the
design development and procurement of 10 purpose-built
precast moulds for the production of 630 cell modules with
the capacity to accommodate 1,700 inmates. Each cell
module weighed between 20 and 85 tonnes.
25
CIVMEC ANNUAL REPORT 2019 MARINE & DEFENCE
Our ability to provide the Marine & Defence
sector with a fully integrated service offering
for the construction of Naval vessels and
future sustainment, maintenance and repairs,
and the provision of defence estate works,
is underpinned by our multi-disciplinary
capabilities and specialised waterfront facilities.
Construction of our new Main Assembly Hall at Henderson progressed
significantly during FY2019. Designed to be one of the most efficient and
innovative in the world, the new facility is a significant piece of industrial
infrastructure, adding a world-class resource to the Australian maritime
landscape. The 53,000m2 (usable floor area), 18-storey high, purpose-
built ship and module construction, ship repair and sustainment facility
will be the largest undercover facility of it’s kind in Australia. With crane
capability at a height of 60m, the facility has a 400T crane capacity at
40m and will be large enough to house complete Air Warfare Destroyers,
Frigates and Offshore Patrol Vessels, for construction or sustainment.
Our extensive waterfront facilities and specialised equipment, on both the west
and east coast, enable us to provide a comprehensive national service offering
for the construction, repair and sustainment of vessels of any size. Our strategy is
to position the company to be well placed to support the Federal Government’s
initiative to develop Australia’s sovereign shipbuilding capability and their
commitment to undertake the continuous build and sustainment of minor war
vessels at Henderson. The delivery of the Royal Australian Navy’s Offshore Patrol
Vessel program commenced in late 2018, with the preparation and profile cutting
of steel plates for the first two vessels currently being built in South Australia now
well underway at Henderson.
Through our core capabilities, we can also provide vertically integrated services in
the delivery of Defence estate projects, including new developments and facilities
upgrade and maintenance works aimed at restoring or sustaining capability of
existing facilities and infrastructure.
26
CIVMEC ANNUAL REPORT 2019 OFFSHORE PATROL VESSELS
©Luerssen
CLIENT
LOCATION
DURATION
OVERVIEW
Luerssen Australia
Henderson, WA
October 2018 – 2029
In April 2018, Luerssen Australia awarded Civmec the contract for the Royal Australian Navy’s SEA
1180 Offshore Patrol Vessel (OPV) program.
The project includes the supply and processing of steel for 12 vessels. Following the build of the first
two vessels in South Australia, we will undertake the fabrication and consolidation of the following 10
vessels at our Henderson facility in Western Australia.
The preparation and profile cutting of steel plates for the first two vessels being built in South Australia
is underway at Henderson.
The new OPV fleet will be named the Arafura class in deference to their planned primary area of
operation – the Arafura Sea lies west of the Pacific Ocean, overlying the continental shelf between
Australia and Indonesian New Guinea.
The primary role of the OPV will be to undertake constabulary missions, maritime patrol and response
duties. State of the art sensors as well as command and communication systems will allow the OPVs
to operate alongside Australian Border Force vessels, other Australian Defence Force units and other
regional partners.
The lead vessel, HMAS Arafura is planned to enter service in 2021.
27
CIVMEC ANNUAL REPORT 2019 28
Amrun modules, Henderson, Western Australia
CIVMEC ANNUAL REPORT 2019 OUR
SUSTAINABILITY
30 | HEALTH & SAFETY, ENVIRONMENT,
QUALITY
32 | OUR PEOPLE
36 | COMMUNITY ENGAGEMENT
41 | OUR SUSTAINABILITY
42 | BOARD OF DIRECTORS
44 | EXECUTIVE TEAM
29
CIVMEC ANNUAL REPORT 2019 HSEQ
The integration of our Health, Safety, Environment and Quality
systems ensures effective controls are in place to provide our clients
with surety of delivery.
Organisation (RTO), with extensive
training undertaken specific to
safety processes, procedures and
awareness.
• Further enhancement of the
Never Assume program, with
the development of a behaviour-
based safety program.
During FY2019, a number of safety
initiatives were implemented to
support continuous improvement
in our safety performance. In
November, we held our Safety &
Leadership Forum, bringing people
together from across the business to
talk about safety and opportunities
for improvement. A comprehensive
list of ideas and improvement
initiatives resulted from the forum,
which were actioned over the
ensuing months, including:
• Implementation of our new
Supervisor LEAD Program
training course, incorporating
four nationally accredited units
delivered through our internal
RTO:
• Apply Risk Management
Processes;
• Communicate Information;
• Supervise On-site
Operations; and
• Show Leadership.
• HSE systems improvement,
with the introduction of six new
operational level procedures.
• Revised and updated corporate
and project specific induction
programs to online platforms,
with a face-to-face site orientation
component.
• Review of the Reward &
Recognition program, with
actions for improvement to drive
greater engagement and link to
improved safety performance.
In November, we launched
our Critical Safety Essentials,
outlining the business’ mandatory
expectations for safe behaviour and
delivery. The way we manage safety
starts with these Critical Safety
Essentials and every employee
is expected to abide by these
underlying rules, which form the
foundation of how we operate.
Going forward, we will continue to
evolve our safety culture, systems,
planning and risk management to
deliver improved health and safety
outcomes for our people, clients and
delivery partners.
HEALTH & SAFETY
Our health and safety performance
is critical to our business success
and sustainability. Our strong safety
culture is built on the Never Assume
program, incorporating our core
values and providing a framework for
the behavioural expectations of our
people across the business.
The program is designed to empower
every person in the company to ensure
their work practices are focused on
achieving a safe work environment,
reinforcing the right and responsibility of
every employee to stop work and intervene
if they see an unsafe act, condition or
behaviour and be part of the solution. We
encourage our people to lead by example,
looking out for those around them and
for themselves and our commitment to
continual improvement means we are
always seeking opportunities to innovate
and learn from our experience.
Our health and safety systems are certified
to OHSAS 18001, the internationally
recognised standard for health and safety
management. They are based on the
principles of risk management and provide
a comprehensive set of requirements
to support our wide-ranging scope of
business activities. Implementation of our
health and safety systems is supported by
our on-site fitness-for-work health centre
and our status as a Registered Training
CRITICAL SAFETY ESSENTIALS
ENERGY
ISOLATIONS
PROCESS
30
CHANGE
HEIGHTS
LIFTING
CIVMEC ANNUAL REPORT 2019 ENVIRONMENT
Strong environmental
performance is essential to the
ongoing success, growth and
sustainability of our company.
Promoting an environmentally
aware culture through
training and communication;
demonstrating leadership
and commitment to applying
best-practice in environmental
management across our
operations; and continually
improving our environmental
performance and efficiency, is
fundamental to our business
strategy and operating method.
Our environmental management
systems are certified to ISO 14001,
the internationally recognised
standard for environmental
management, and we also hold
platinum status with the Australian
Steel Institute Environmental
Sustainability Charter.
We acknowledge the biodiverse
locations in which many of our
projects are delivered, and remain
committed to minimising our impact
on the environment. In addition to
our project sites, we continue to
implement environmental best-
practice at our fabrication and
assembly facilities in Perth and
Newcastle. Along with our traditional
and established controls, we
continue to seek new opportunities
to improve our environmental
performance, focused on resource
and energy efficiency.
During FY2019 we continued to
implement our environmental
improvement programs across the
business, including:
• Promoting an environmentally
aware culture through ongoing
training and communication
across all levels of the business.
• Ongoing systems review and
improvement.
• Measuring and monitoring
our inputs (energy, water and
materials) and outputs (waste
and emissions), enabling us
to understand our impacts on
the environment and monitor
performance and improvement
over time.
Improving efficiency through
innovation, measured via
efficiency indicators including
energy intensity (TJ/$m AUD)
and emissions intensity (tCO2-
e/$m AUD).
•
• Further developing and
implementing our waste
management strategy, reducing
supplier packaging and
improving recycling rates, with
the aim of increasing year-on-
year the proportion of co-
mingled and wood recyclable
waste streams compared to the
general waste stream.
•
Investigating the feasibility of
investing in renewable energy.
National Tree Day
QUALITY
Providing quality products
and project outcomes for
our clients continues to be
a fundamental metric of
success.
Our quality management
systems are certified to ISO
9001, the internationally
recognised standard for
quality management, and our
facilities in Perth and Newcastle
hold CC3 certification to
the requirements of AS/
NZS 5131-2016, ‘Structural
Steelwork – Fabrication and
Erection’. We are one of only
three companies in Western
Australia to hold this level of
accreditation and one of only
two in New South Wales. We
have also obtained certification
to ISO 3834.2:2008, ‘Quality
requirements for fusion welding
of metallic materials (Part
2: Comprehensive quality
requirements)’.
Civtrac is our proprietary, web-
based integrated business
management, quality and
tracking system, managing
all aspects of project delivery,
including document control,
project reporting and quality
compliance, enabling
live project data to be recorded
and facilitating the seamless
flow from fabrication through
to onsite installation and
commissioning.
During the year, our Quality
team ensured our systems
continue to meet certification
requirements and industry
best-practice, with the ongoing
review and refinement of our
processes and procedures to
drive continuous improvement.
31
CIVMEC ANNUAL REPORT 2019 OUR PEOPLE
Our committed and talented people underpin the business.
The evolution of the company over the past decade has
enabled our people to grow their career with us.
As we celebrate our 10-year anniversary, we
acknowledge and thank the many people in the
organisation who have been with us for much
of this time and who have played an integral
role in shaping Civmec into the successful
company it is today.
Continuing to build expertise across our specialised
disciplines and diversifying into new markets has
provided ongoing opportunities to attract and retain
the best available talent. In FY2019, we created
employment opportunities for approximately 3,400
people, including direct employment for 2,700.
We have implemented a number of initiatives during
FY2019 to deliver best-practice in the way we
support and manage our people. Civtrac People,
an addition to Civtrac, our proprietary, web-based
integrated business management system, was
launched in October 2018. This new employee
management platform, initially incorporating three
modules – Recruitment, Onboarding and Employee
Central – is facilitating our ability to source and
transition quality personnel throughout and into
the business.
With our commitment to providing our people with
sustainable career pathways, focus over the year
has been on providing leadership training, including
the identification of high potential individuals
and succession planning. We implemented our
new Supervisor LEAD Program training course,
incorporating four nationally accredited units –
Apply Risk Management Processes; Communicate
Information; Supervise On-site Operations; and
Show Leadership – delivered through our internal
RTO and overseen by our full-time Learning and
Development Manager.
We have reviewed our
reward and recognition
strategy, to provide greater
opportunity for the valued
people in our business to
be recognised and rewarded
for their efforts.
32
Rewarding and recognising our people
CIVMEC ANNUAL REPORT 2019 We also reviewed our reward and
recognition strategy, to provide greater
opportunity for the valued people in
our business to be recognised and
rewarded for their efforts.
Our commitment to supporting the
future of our industry is reflected in
the engagement of more than 60
apprentices and trainees across our
operations. Our apprentices include
fabrication (boilermakers and welders),
carpenters, and electrical, and our
trainees are providing functional
support in business administration,
human resources and logistics.
During the year, we partnered with
Luerssen Australia and ASC to
launch the Shipbuilding Education
and Apprenticeship (SEA) program,
which will help build the skills needed
for Australia’s multi-billion dollar naval
shipbuilding industry. Under the
program, 12 scholarships have been
awarded to engineering and trade
students in Western Australia, South
Australia and the Northern Territory.
In addition, three of the scholarship
recipients have also been awarded
internship placements, including one
with Civmec.
We are also collaborating with South
Metropolitan TAFE and local high
schools, to introduce a school-based
traineeship program during 2019.
Initially, this will provide the opportunity
for five local students completing
Year 10, 11 or 12 , who have an
interest in the Metal Fabrication
trades, to undertake work experience
through the year at our Henderson
facility, whilst continuing their school
education. On completion of their
studies and traineeship, they will be
considered for an opportunity to join
our apprenticeship program. This
commitment between the schools and
Civmec, provides a mutual benefit to
develop the next generation of trade
professionals to meet expanding
workforce requirements, including
for the delivery of the Offshore Patrol
Vessel program over the next decade.
Shipbuilding Education and Apprenticeship (SEA) program
33
CIVMEC ANNUAL REPORT 2019 OUR PEOPLE (CONTINUED)
3,400 people
employed on our projects
60+ Apprentices
and Trainees
34
ABORIGINAL ENGAGEMENT
We have continued to implement our
Reconciliation Action Plan (RAP), which
supports our commitment to building positive,
sustainable relationships with Aboriginal and
Torres Strait Islander (ATSI) people and
their communities.
During FY2019, we provided employment and
training opportunities for some 75 Aboriginal people
across our business. Overall, 13% of our apprentices,
including two females, are of ATSI descent.
Our participation in National Reconciliation Week and
NAIDOC Week enabled us to continue to develop
our understanding of cross-cultural sensitivities
to improve relationships across the business. In
October, our Gruyere Gold project in the Eastern
Goldfields supported Cosmo Newberry, a small
Aboriginal community located between Laverton
and Warburton in the Goldfields-Esperance region
of Western Australia, with the donation of funds
towards the construction of basketball courts for the
local people.
Our Reconciliation
Action Plan supports
our commitment to
building positive,
sustainable
relationships with
Aboriginal and
Torres Strait Islander
people and their
communities.
CIVMEC ANNUAL REPORT 2019 We believe achieving
diversity in the workplace
makes Civmec a more
attractive place to work for
all employees.
DIVERSITY
Our commitment to driving diversity in
the workplace is founded on a belief
that a more balanced workforce,
across age, gender and ethnicity,
positively contributes to our culture
and makes Civmec a more attractive
place to work for all employees.
As is typical of organisations in our
industry, the ability to achieve a diverse
workforce in the corporate environment is
much easier than achieving this balance in
operations and project delivery, particularly
given our vast self-performance capability
in traditionally male-dominated disciplines.
Our female participation rate from a head
office perspective is much higher, and
therefore our focus continues to be at
the grass-roots level, encouraging female
apprentices to start and grow their career
with us. To this end, we have three female
apprentices working with us and one of
our five school-based trainees is female.
Furthermore, Kayla Roemer-Hanisch, who
undertook work experience with us in
2018, is our internship placement under the
Shipbuilding Education and Apprenticeship
program, and we look forward to providing
Kayla with further hands-on experience
to enable her to forge a career in the
Australian shipbuilding industry.
35
CIVMEC ANNUAL REPORT 2019 COMMUNITY ENGAGEMENT
Our value of Make a Difference empowers our people to
positively impact the communities in which we live and
work. Our support over the past year has seen us work with
numerous charities and community groups.
CITY TO SURF
Participating in Chevron Australia’s City to Surf, our people took to
the streets of Perth, walking and running to raise funds for Activ,
supporting people living with intellectual and developmental disability.
CANCER COUNCIL
Raising funds to support the Cancer Council’s mission to work with the
community to reduce the incidence and impact of cancer, we hosted events
during the year including Pink Ribbon Day and Australia’s Biggest Morning Tea.
CEO SLEEPOUT
Our CEO Pat Tallon braved the cold
once again this year, participating in
the St Vincent de Paul Society’s CEO
Sleepout to raise much needed funds
for those around the nation finding
themselves without a home. Setting
an ambitious fundraising target of
$25,000, actual funds raised were
more than $26,000, placing Pat in
the top five fundraisers in Western
Australia. According to St Vincent de
Paul, the money raised is equivalent
to providing 82 individual support
programs, 217 beds and 868 meals.
36
CIVMEC ANNUAL REPORT 2019 ATSI ENGAGEMENT
Our commitment to building positive, sustainable relationships with Aboriginal and Torres Strait Islander (ATSI) people
and their communities continued during the year, with our participation in National Reconciliation Week and NAIDOC
Week. We also supported Cosmo Newberry, a small Aboriginal community located between Laverton and Warburton in
the Goldfields-Esperance region of Western Australia, with the donation of funds towards the construction of basketball
courts for the local people.
ST VINCENT DE PAUL SOCIETY’S
DRIVE-IN, SLEEP-IN
A number of our people and their families participated in
the 2018 Drive-In, Sleep-In, helping raise awareness and
funds to support people who are experiencing or are at
risk of homelessness. Braving the cold, wet conditions
and sleeping in their cars for the night, an impressive
$12,495 was raised for the St Vincent de Paul Society.
NATIONAL TREE DAY
Participating in National Tree day, Australia's largest
community tree-planting and nature care event,
we planted trees at both our Henderson and
Newcastle facilities.
37
CIVMEC ANNUAL REPORT 2019 COMMUNITY ENGAGEMENT (CONTINUED)
CLEAN UP AUSTRALIA DAY
Employees at our Henderson and Newcastle facilities, and
across our projects, participated in Clean Up Australia
Day, cleaning up their local area and contributing to a
cleaner environment.
SPONSORED CONCERTS
AND EVENTS
We regularly make a corporate suite at Perth
Arena available for charities to host families
and children that benefit from them, for
events including the basketball and netball,
Disney on Ice, and other stage shows.
Recipient charities during the year included
the Perth Children’s Hospital Foundation,
Wirrpanda Foundation, Variety, Anglicare and
Friends of the Cancer Council.
EUROZ BIG WALK FOR THE
PERTH CHILDREN’S HOSPITAL
FOUNDATION
The Euroz Big Walk is a chance for the community to come
together, have fun and raise money for sick kids in hospital.
Civmec was proud to support the event, with a St Patricks
Day lucky dip for the kids to enjoy as they undertook the
6km adventure walk across the Matagarup Bridge and
along the banks of the Swan River.
38
CIVMEC ANNUAL REPORT 2019 JEANS FOR GENES DAY
Our staff wore their jeans to work for a day, raising funds for the Children’s Medical Research Institute, working to find
treatments and cures for children’s genetic diseases.
INTERNATIONAL WOMEN’S
DAY SPARKLING HIGH TEA
In support of the Women’s Council for Domestic
& Family Violence Services (WA), we sponsored
a table at their Sparkling High Tea in celebration
of International Women’s Day.
PROJECT INITIATIVES
Throughout the year, our projects and staff
around Australia participated in fundraising
events for a variety of charities, including
Movember and RUOK Day.
CHRISTMAS
SPIRIT
To support those in our
community who need our
help, we made a special
Christmas donation to
the St Vincent de Paul
Society Christmas Appeal
and the Women’s Council
for Domestic & Family
Violence Services (WA) in
December.
39
CIVMEC ANNUAL REPORT 2019 40
The construction team in the centre bay of the Main Assembly Hall
CIVMEC ANNUAL REPORT 2019 OUR SUSTAINABILITY
During FY2019, we produced our inaugural
Sustainability Report. The purpose of this
report, produced annually in line with our
financial reporting period, is to enable key
stakeholders to understand our sustainability
approach, actions, performance and key
material issues over that period.
The report links our
sustainability principles to our
mission, vision and values and
was prepared in accordance
with the Global Reporting
Initiative (GRI) Sustainability
Reporting Standards 2016 core-
level reporting, which focuses
on identifying and reporting
on issues or concerns that
are material to our business
and stakeholders, in relation
to environmental, social and
governance (ESG) performance.
The report outlines our
management approach and
performance across the key
material risk areas identified,
as a fundamental component
of future strategy to drive
sustainable growth.
OUR SUSTAINABILITY
AGENDA IS FOCUSED ON:
• continuing to operate with
integrity;
• actively contributing to
the success and welfare
of our people and the
communities in which we
operate;
• ensuring our operations
have minimal environmental
impact; and
• achieving our safety, health,
people, environment, and
financial targets.
A Sustainability Report outlining our
performance during FY2019, and our
future strategies for improvement, will be
released in late 2019.
41
CIVMEC ANNUAL REPORT 2019 BOARD OF DIRECTORS
JAMES FINBARR FITZGERALD
EXECUTIVE CHAIRMAN
Mr James Finbarr Fitzgerald was appointed to the Board on 27 March
2012. He is responsible for providing leadership to the Board and
guidance on the company’s corporate direction, facilitating the effective
contribution of the Directors and ensuring procedures are in place
to comply with the company’s guidelines on corporate governance.
With more than 35 years’ experience, Mr Fitzgerald has a wealth of
experience, with a natural ability to create solutions for complex tasks.
He has a strong belief in the training and development of people which
has been a key aspect of the company’s growth and success.
PATRICK JOHN TALLON
CHIEF EXECUTIVE OFFICER
Mr Patrick John Tallon was appointed to the Board on 27 March
2012. He is responsible for implementing the strategic decisions and
policies of the company, with a strong focus on safety culture, team
building, leadership and the group’s financial performance. Over the
past 30 years, Mr Tallon has developed his knowledge in the Oil & Gas,
Metals & Minerals, Infrastructure and Defence sectors, building an
understanding of key stakeholder requirements at all levels. 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 the 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-oriented culture, compliance and operational
productivity. Mr Deery has more than 20 years’ experience, including
significant time spent within the construction and engineering services
industry throughout Australia.
42
CIVMEC ANNUAL REPORT 2019 CHONG TECK SIN
LEAD INDEPENDENT DIRECTOR
Mr Chong Teck Sin was appointed to the Board on 27 March
2012. Mr Chong is currently an Independent Director of Changan
Minsheng APLL Logistics Co Ltd, InnoTek Limited and AIMS
APAC REIT Management Limited, and a Director of Civmec
Construction & Engineering, Singapore Pte Ltd, Accordia Golf
Trust Management Pte Ltd and Ranhill Pte Ltd. He has a
Bachelor of Engineering from the University of Tokyo, and a
Master of Business Administration from the National University
of Singapore.
WONG FOOK CHOY SUNNY
INDEPENDENT DIRECTOR
Mr Sunny Wong Fook Choy was appointed to the 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 Excelpoint Technology Ltd,
Mencast Holdings Ltd and InnoTek Limited and a Director and
shareholder of WTL Management Services Pte Ltd. Mr Wong
holds a Bachelor of Law (Honours) from the National University
of Singapore.
DOUGLAS OWEN CHESTER
INDEPENDENT DIRECTOR
Mr Douglas Owen Chester was appointed to the Board on 2
November 2012. He is an Independent Director of the Australian
Maritime Shipbuilding and Export Group Pty Ltd. He was
previously a senior Australian Government official and diplomat
and prior to his appointment, held the role of Australia’s High
Commissioner to Singapore. Mr Chester holds a Bachelor of
Science (Honours) from the Australian National University.
43
CIVMEC ANNUAL REPORT 2019 EXECUTIVE TEAM
JUSTINE CAMPBELL
CHIEF FINANCIAL OFFICER
Ms Justine Campbell joined the Group in October 2014, and is responsible for
all financial management operations, including the development of financial
strategies and developing and monitoring control systems. Ms Campbell has
more than 20 years’ experience in finance, accounting, corporate transactions
and commercial projects, with extensive experience in acquisitions and implementing
numerous systems. Prior to joining Civmec, Ms Campbell spent seven years as
Chief Financial Officer and Company Secretary for another ASX listed company
operating in similar markets.
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 offering client solutions. He has been fundamental in the
completion of key projects, ensuring safety and quality of the highest standards,
meeting schedule and budget expectations.
ADAM GOLDSMITH
EXECUTIVE GENERAL MANAGER – COMMERCIAL AND RISK
Mr Adam Goldsmith joined the Group in 2017, and has made a significant
contribution to the company. He is a Fellow of the Royal Institute of Chartered
Surveyors, with quantity surveying and construction law qualifications. He
brings a wealth of knowledge and experience to the executive team, with over
25 years’ commercial and risk management experience gained previously with
major UK and Australian companies.
RODNEY BOWES
EXECUTIVE GROUP MANAGER – PROPOSALS
Mr Rod Bowes joined the Group in 2010 and is responsible for managing the
Group’s proposals division. Mr Bowes brings over 40 years’ experience in the
fabrication and construction industry. He is focused on securing a strong and
profitable Order Book for the Group.
44
CIVMEC ANNUAL REPORT 2019 45
Pilgangoora Lithium Project, Western Australia
CIVMEC ANNUAL REPORT 2019 46
Henderson facility, Western Australia
CIVMEC ANNUAL REPORT 2019 FINANCIAL
REPORT
48 | DIRECTORS’ STATEMENT
54 | CORPORATE GOVERNANCE
71 | CORPORATE REGISTRY
72 | INDEPENDENT AUDITOR’S REPORT
76 | CONSOLIDATED INCOME STATEMENT
77 | CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
78 | STATEMENTS OF FINANCIAL POSITION
80 | CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
82 | CONSOLIDATED STATEMENT OF
CASH FLOWS
83 | NOTES TO THE FINANCIAL
STATEMENTS
143 | STATISTICS OF SHAREHOLDERS
145 | NOTICE OF AGM
158 | DISCLOSURE OF DIRECTORS
SEEKING RE-ELECTION
162 | PROXY FORM
47
CIVMEC ANNUAL REPORT 2019
DIRECTORS’ STATEMENT
30 June 2019
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 2019 and the statement of financial position of the Company as at 30 June 2019.
In the opinion of the Directors:
(a) the statement of financial position of the Company and the consolidated financial statements of the Group 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 2019 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
Executive Chairman
Mr Patrick John Tallon
Mr Kevin James Deery
Mr Chong Teck Sin
Chief Executive Officer
Chief Operating Officer
Independent Director
Mr Wong Fook Choy Sunny
Independent Director
Mr Douglas Owen Chester
Independent Director
2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES
OR DEBENTURES
Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to
enable the Directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or
any other body corporate, other than as disclosed under ‘Share Options’ and ‘Shares’ in this report.
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 1.7.18
AT 30.6.19
AT 1.7.18
AT 30.6.19
NO. OF ORDINARY SHARES
The Company
Mr James Finbarr Fitzgerald
-
-
97,720,806
97,720,806
Mr Patrick John Tallon
54,000
54,000
97,566,806
97,566,806
Mr Kevin James Deery
-
-
13,295,250
13,295,250
There was no change in any of the above-mentioned interests between the end of the financial year and 21 July 2019.
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.
48
CIVMEC ANNUAL REPORT 2019
DIRECTORS’ STATEMENT
30 June 2019
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.
As part of Civmec’s dual listing on the Australian Securities Exchange (‘ASX’), no further grants will be made under the CESOS.
Options Granted under the Scheme
As at 30 June 2019, 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
4,000,000
The options granted by the Company do not entitle the holder of the options, by virtue of such holding, to any right to
participate in any share issue of any other company.
Options Exercised
During the financial year, there were no shares of the Company or its subsidiaries issued by virtue of the exercise of options to
take up unissued shares.
Options Outstanding
Details of all the options to subscribe for ordinary shares of the Company pursuant to the CESOS, outstanding as at
30 June 2019 are as follows:
EXPIRY DATE
EXERCISE PRICE
NUMBER OF OPTIONS
11 September 2023
S$0.65
4,000,000
5. PERFORMANCE SHARE PLAN
CIVMEC LIMITED PERFORMANCE SHARE PLAN
The Civmec Limited Performance Share Plan (the ‘CPSP’) for key management personnel and employees of the Group
was approved and adopted by shareholders at the Annual General Meeting held on 25 October 2012.
The Remuneration Committee (the ‘RC’) administering the Scheme comprises Directors, Mr Wong Fook Choy Sunny
(Chairman of the Committee), Mr Chong 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 Limited 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.
49
CIVMEC ANNUAL REPORT 2019 DIRECTORS’ STATEMENT
30 June 2019
5. PERFORMANCE SHARE PLAN (Continued)
CIVMEC LIMITED PERFORMANCE SHARE PLAN (Continued)
Principal terms of the Scheme (Continued)
(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
6. PERFORMANCE RIGHTS PLAN
CIVMEC LIMITED PERFORMANCE RIGHTS PLAN
The Civmec Limited Performance Rights Plan (the ‘CPRP’) for key senior executives of the Group was approved and adopted
by shareholders at the Annual General meeting held on 25 October 2018.
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 CPRP is designed to reinforce the vital equity culture at the top management level and to further align the interests of the
Company’s top management with those of Shareholders.
Principal terms of the Scheme
(i) Participants
Under the rules of the Scheme, Key Senior Executives who have attained the age of 21 years and hold such rank as may
be designated by the Committee from time to time, shall be eligible to participate in the Plan at the absolute discretion of the
Committee. It also serves as an incentive for the recruitment and retention of talented senior executives.
Persons who are Controlling Shareholders and their Associates shall be eligible to participate in the CPRP if:
(a) their participation in the Civmec Limited Performance Rights Plan; and
50
CIVMEC ANNUAL REPORT 2019 DIRECTORS’ STATEMENT
30 June 2019
6. PERFORMANCE RIGHTS PLAN (Continued)
CIVMEC LIMITED PERFORMANCE RIGHTS PLAN (Continued)
Principal terms of the Scheme (Continued)
(i) Participants (Continued)
(b) the actual number and terms of the Performance Rights 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 Ordinary Shares which may be delivered pursuant to the CPRP granted under the Plan on any date,
when added to (i) the total number of Shares issued or issuable in respect of Performance Rights granted under the Plan, and
(ii) any other share schemes adopted by the Company, shall not exceed 15% of the total 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
The grant of Awards may be made on an annual basis following the Company’s Annual General Meeting, or at any time, from time
to time at the discretion of the Committee.
When considering the value of the Award to be provided, the Committee primarily considers the number of Award shares and the
performance condition within the performance period.
(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, the retirement of the participant, a misconduct of the
participant, a take-over of the Company and the winding-up of the Company.
(v) Vesting of Performance Rights
The Performance Rights are subject to the following vesting criteria:
1. Satisfaction of gateway hurdles
2. Achievement of company performance measures
Gateway Hurdles
The following two gateway hurdles need to be satisfied for any vesting, regardless of achievement of company
performance measures.
•
Personal performance reviews have been received over the performance period at a satisfactory level
(as determined by the Committee); and
• The participant remains employed with Civmec
Company Performance Measures
To the extent the gateway hurdles are satisfied, 100% of the vesting will be based on the absolute earnings per share (aEPS)
outcome. The vesting schedule is as follows:
LONG TERM INCENTIVE (LTI)
PROPORTION VESTING
AEPS (100%)
50%
Target =90% of three-year average annual result
Pro-rata between 50% and 100% Outcome achieved between target and stretch
100%
Stretch >110% of three-year average annual result
The Committee has discretion to extend the original measurement period and the difficulty of hurdles where it deems to
be appropriate.
(vi) 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.
(vii) 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.
51
CIVMEC ANNUAL REPORT 2019 DIRECTORS’ STATEMENT
30 June 2019
6. PERFORMANCE RIGHTS PLAN (Continued)
CIVMEC LIMITED PERFORMANCE RIGHTS PLAN (Continued)
Awards Granted under the Scheme
The details of the Awards granted under the Scheme are as follows:
YEAR OF AWARD
NO. OF RIGHTS
FY 2018/19
8,109,993
FY2019 Performance rights grant
Rights will vest in two tranches as follows:
• Tranche 1 (50%): 2 year performance period (1 July 2018 to 30 June 2020)
• Tranche 2 (50%): 3 year performance period (1 July 2018 to 30 June 2021)
The number of performance rights in the Company held during the financial year by each Director and key management
personnel (KMP) of the consolidated entity, is set out below:
BALANCE
1.07.2018
GRANTED
VESTED
EXPIRED/
OTHER
BALANCE
30.06.2019
Directors
James Finbarr Fitzgerald*
Patrick John Tallon*
Kevin James Deery*
Key management personnel:
Justine Campbell
Rodney Bowes
Charles Sweeney
Adam Goldsmith
*pending shareholders’ approval at AGM 2019.
-
-
-
-
-
-
-
750,000
750,000
750,000
750,000
624,000
624,000
546,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
750,000
750,000
750,000
624,000
624,000
546,000
52
CIVMEC ANNUAL REPORT 2019 DIRECTORS’ STATEMENT
30 June 2019
7. AUDIT COMMITTEE
The members of the Audit Committee (‘AC’) at the end of the financial year are as follows:
Mr Chong Teck Sin
Mr Wong Fook Choy Sunny Member
Mr Douglas Owen Chester Member
Chairman
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’), the Listing Rules of the Australian Securities
Exchange (‘ASX’), the Code of Corporate Governance and Section 201B(5) of the Singapore Companies Act, Chapter 50.
The nature and extent of the functions performed by the Audit Committee are detailed in the Corporate Governance Report set
out in the Annual Report of the Company.
8. INDEPENDENT AUDITORS
The independent auditors, Moore Stephens LLP, have expressed their willingness to accept re-appointment as auditors.
On behalf of the Board of Directors
James Finbarr Fitzgerald
Executive Chairman
Singapore
28 August 2019
Patrick John Tallon
Executive Director
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
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 and protecting the interests of shareholders, as well as strengthening investors’ confidence in its
management and financial reporting and are, accordingly, committed to maintaining a high standard of corporate
governance throughout the Group.
This corporate governance report (‘Report’) describes the Company’s corporate governance practices that were in place during
the financial year ended 30 June 2019 (‘FY2019’) 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, the Listing Manual of the Singapore Exchange
Securities Limited (the ‘SGX-ST’), and the Listing Rules of the Australian Securities Exchange (the ‘ASX’), 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 Officer, Mr Patrick John Tallon and the Chief Operating Officer, Mr Kevin James
Deery. Matters that are specifically reserved for the approval of the Board include, among others:
•
reviewing the adequacy and integrity of the Group’s internal controls, risk management systems, compliance and financial
reporting systems;
• approving the annual budgets and business plans;
• approving major 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 and ASX;
• approving annual report and audited financial statements;
• monitoring Management’s performance;
•
recommending share issuance, dividend payments and other returns to shareholders;
• ensuring accurate, adequate and timely reporting to, and communication with Shareholders; and
• assuming responsibility for corporate governance.
The Company has adopted a policy on signing limits, setting out the level of authorisation required for specific transactions,
including those that require Board approval.
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
BOARD’S CONDUCT OF AFFAIRS (Continued)
PRINCIPLE 1 (Continued)
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 meetings by
teleconferencing or videoconferencing or other similar means of communication whereby all persons participating in the meeting
are able to hear each other. The Board and Board Committees may also make decisions by way of circulating resolutions.
The number of Board and Board Committee meetings held and attended by each Board member during the financial year ended
30 June 2019 (‘FY2019’) 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
2
Number of Meetings Attended
2*
2*
2*
2
2
2
2*
2*
2*
2
2
2
4
4*
4*
4*
4
4
4
Number of Meetings Held
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Wong Fook Choy Sunny
Douglas Owen Chester
*By invitation
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.
Each quarter, the Board was briefed and/or updated on recent changes to the accounting standards and industry
developments and business initiatives.
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
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 significantly
to Board decisions.
The Board in concurrence with the Nominating Committee (‘NC’) is of the view that the current Board and the Board Committees
comprise 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 qualifications, and other directorships in other listed companies is set out on related pages of this annual report.
The current Board composition provides a diversity of skill, experience, and knowledge to the Company as follows:
CORE COMPETENCIES
Business Management
Accounting or finance
Legal or corporate governance
Strategic planning experience
Relevant industry knowledge or experience
GENDER
Male
Female
BALANCE AND DIVERSITY OF THE BOARD
NUMBER OF
DIRECTORS
PROPORTION
OF BOARD
6
6
6
6
4
6
0
100%
100%
100%
100%
67%
100%
0
The Company values diversity and equal opportunity and has in place a diversity policy to ensure that its workforce is comprised
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. Civmec’s annual
Sustainability Report clearly articulates the Company’s strategy, targets, performance and future focus in relation to diversity.
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, providing a non-executive perspective and balanced viewpoint.
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
BOARD COMPOSITION AND GUIDANCE (Continued)
PRINCIPLE 2 (Continued)
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 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 an effective review of 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 proposals.
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 pertinent issue 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.
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 making.
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 between them. The Executive Chairman also 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 (‘AGM’) and other shareholders’ meetings, the Executive Chairman ensures constructive dialogue
between Board, Management and shareholders, and upholds high standards of corporate governance.
Whilst the Board does not have an independent Chairman, the roles of the Executive Chairman and that of the CEO are clearly
delineated. The Board believes that while the Chairman is not independent, the current composition of the Board with its
combined skills and capability, and its mix of experience, best serve the interests of shareholders. In addition, 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. All the Board Committees are led and solely comprise of Independent Directors.
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
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 has established an 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:
Mr Douglas Owen Chester
Mr Chong Teck Sin
Mr Wong Fook Choy Sunny
Chairman
Member
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 and considering their 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 AGM 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 Executive 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 the Board, prepares a description of the role and the essential and desirable competencies for a particular
appointment;
if required, the NC may engage consultants to undertake research on, or assess, candidates for new positions on
the Board;
the NC meets with short-listed candidates to assess their suitability and ensure that the candidates are aware of the
expectations; and
the NC makes recommendations to the Board for approval.
Pursuant to Article 118 of the Company’s Constitution, all the directors are required to retire from office at every 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:
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
1.
2.
3.
4. Chong Teck Sin
5. Wong Fook Choy Sunny
6. Douglas Owen Chester
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.
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
BOARD MEMBERSHIP (Continued)
PRINCIPLE 4 (Continued)
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 Directors’ initial appointment, last re-election and their directorships are set out below:
NAME OF DIRECTOR
James Finnbar Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
DATE OF INITIAL
APPOINTMENT
DATE OF LAST
RE-ELECTION
27 Mar 2012
27 Mar 2012
27 Mar 2012
27 Mar 2012
25 Oct 2018
25 Oct 2018
25 Oct 2018
25 Oct 2018
PRESENT
DIRECTORSHIPS IN
LISTED COMPANIES
PAST
DIRECTORSHIPS IN
LISTED COMPANIES*
-
-
-
-
-
-
Changan Minsheng APLL
Logistics Co. Ltd (1)
InnoTek Limited
AIMS APAC REIT
Management Limited
AVIC International
Maritime Holdings
Limited
Wong Fook Choy Sunny
27 Mar 2012
25 Oct 2018
Mencast Holdings Ltd
Excelpoint Technology
Ltd
InnoTek Limited
Douglas Owen Chester
2 Nov 2012
25 Oct 2018
China Medical
(International) Group
Limited
KTL Global Ltd
Stamford Land
Corporation Limited
Kim Heng Offshore
& Marine Holdings
Limited
* Within the past three years
Notes:
(1)
Listed on Hong Kong Stock Exchange
The NC has considered and taken the view that it would not be appropriate at this time to set a limit on the number of listed
company directorships that a Director may hold. Directors have different capabilities, the nature of the organisations in which they
hold appointments and the committees on which they serve are of different complexities, and accordingly, each Director would
personally determine the demands of 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.
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
BOARD MEMBERSHIP (Continued)
PRINCIPLE 4 (Continued)
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
FY2019 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
Directors’ 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 FY2019 consistent with this process and
determined that all Directors have demonstrated full commitment to their roles and contributed effectively in the discharge of their
duties. Both the NC and the Board are of the view that the Board has met its performance objectives for FY2019.
ACCESS TO INFORMATION
Principle 6: Board members should be provided with complete, adequate and timely information prior to Board
meetings and on an ongoing basis.
The Board has separate and independent access to the senior Management of the Company and the Company Secretaries
at all times. Requests 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 a wide range of relevant information, including, quarterly and annual
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.
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
ACCESS TO INFORMATION (Continued)
PRINCIPLE 6 (Continued)
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
ongoing 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 ensure
that the requirements of the Companies Act (Chapter 50), SGX-ST Listing Manual, ASX Listing Rules and other governance
matters applicable to the Company are complied with. The Company Secretaries work together with the Company to ensure
that the Company complies with all relevant rules and regulations. The appointment and removal of the Company Secretaries are
subject to the approval of the Board.
The Board in fulfilling its responsibilities can, as a collective body or individually as Board members, when deemed fit, direct the
Company and at the Company’s expense, appoint independent professionals to render advice.
REMUNERATION MATTERS
Principle 7: The policy on executive remuneration and for fixing remuneration packages of individual Directors
should be formal and transparent. No Director should be involved in deciding his own remuneration.
The Company has established a Remuneration Committee (RC) to make recommendations to the Board on remuneration
packages of individual Directors and key management personnel. The RC is comprised 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, level of responsibilities, performance and value creation; and
•
perform such other acts as may be required by the SGX-ST and the Code, or ASX, from time to time.
The recommendations of the RC are submitted for endorsement by the entire Board. Each member of the RC abstains from
voting on any resolutions in respect of their own remuneration package. Also, in the event that a member of the RC is related to
the employee under review, they will abstain from participating in that review. Directors are not involved in the discussion and in
deciding their own remuneration.
The RC has established a framework of remuneration for the Board and key management personnel covering all aspects of
remuneration but not limited to Directors’ fees, salaries, allowances, bonuses, incentive schemes and benefits-in-kind.
The RC also oversees the administration of the Civmec Limited Employee Share Option Scheme (‘CESOS’), the Civmec Limited
Performance Share Plan (‘CPSP’) and the Civmec Limited Performance Rights Plan (‘CPRP’) upon the terms of reference as
defined in the CESOS, CPSP and CPRP. The CESOS, CPSP and CPRP were established on 27 March 2012, 25 October 2012
and 25 October 2018 respectively, with a 10-year tenure commencing on the establishment date.
The Company does not have a policy on whether participants are permitted to enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk of participating in the Share Plan scheme.
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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REMUNERATION MATTERS (Continued)
PRINCIPLE 7 (Continued)
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 McDonald.
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 and 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 CESOS, CPSP and CPRP, are in place to strengthen the pay-for-performance framework by
rewarding and recognising the key executives’ contributions to the growth of the Company. This is designed to align remuneration
with the interests of shareholders and link rewards to corporate and individual performance so as to promote long-term
sustainability of the Group.
The Company has renewed the service agreements with the Executive Directors, Mr James Finbarr Fitzgerald, Mr Patrick John
Tallon and Mr Kevin James Deery. Each service agreement is valid for a period of three (3) years with effect from the date of expiry
of the previous 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 Director’s 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 FY2019, no Share Options under the CESOS were granted, as required under the ASX Listing Rules. Refer to the
Directors’ Statement for details of Performance Rights granted to 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 own remuneration.
The Independent Directors’ fees were derived using the fee structure as follows:
Independent Director who is the Chairman of Audit Committee
Other Independent Directors
ANNUAL FEES (S$)
80,000
70,000
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CIVMEC ANNUAL REPORT 2019 REPORT ON
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30 June 2019
REMUNERATION MATTERS (Continued)
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 year ended
30 June 2019. Instead, the Company discloses the bands of remuneration as follows:
FOR THE YEAR ENDED 30 JUNE 2019
NAME OF DIRECTOR
A$600,000 to A$1,000,000
James Finbarr Fitzgerald
Patrick John Tallon
A$300,000 to A$599,999
Kevin James Deery
Below A$250,000
Chong Teck Sin
Douglas Owen Chester
Wong Fook Choy Sunny
SALARY
BONUS
DIRECTORS’
FEES
ALLOWANCES
AND OTHER
BENEFITS
TOTAL
$
93%
95%
93%
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
7%
5%
7%
-
-
-
100%
100%
100%
100%
100%
100%
Details of remuneration paid to key management personnel (who are not Directors of the Company) of the Group for the financial
year ended 30 June 2019 are set out below. For competitive reasons, the Company discloses only the band of remuneration of
each management personnel as follows:
FOR THE YEAR ENDED 30 JUNE 2019
NAME OF KEY
EXECUTIVE
A$300,000 to A$599,999
DESIGNATION
SALARY
BONUS
ALLOWANCES
AND OTHER
BENEFITS
TOTAL
$
Justine Campbell
Chief Financial Officer
Rodney Bowes
Charles Sweeney
Adam Goldsmith
Executive Group Manager
Proposals
Executive General Manager –
Construction
Executive General Manager –
Commercial & Risk
90%
86%
82%
92%
-
3%
9%
-
10%
11%
9%
8%
100%
100%
100%
100%
The annual aggregate remuneration paid to all the above-mentioned Directors and key management personnel of the Group is
A$4,171,000 (2018: A$4,449,000) in FY2019.
Thomas Tallon, being the brother of Patrick Tallon, the CEO, who holds the position of ‘Supervisor – Construction’ with a
remuneration of A$203,000 (2018: A$200,000) for FY2019, was employed by the Company during year ended 30 June 2019.
During the year, the son of James Fitzgerald, being Sean Fitzgerald, worked for the Group, earning A$30,784. Apart from those
disclosed above, the Company does not have any employees who are immediate family members of a Director or CEO during
FY2019. 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 in relation to the CESOS, CPSP and CPRP can be found in the ‘Directors’ Statement’ in the ‘Financials’ section of
the Annual Report.
63
CIVMEC ANNUAL REPORT 2019 REPORT ON
CORPORATE GOVERNANCE
30 June 2019
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, operations
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 SGX-ST Listing
Manual and ASX Listing Rules.
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 and ASX Online.
Principle 11: Maintains a sound system of risk management and internal controls to safeguard the shareholders’
interests and the Company’s assets.
The Company has established a Risks and Conflicts Committee (RCC) to advise and make recommendations to the Board on
risk and conflict matters.
The RCC comprises three (3) members, all of whom, including the RCC Chairman, are Independent Non-Executive Directors:
Mr Chong Teck Sin
Mr Douglas Owen Chester
Mr Wong Fook Choy Sunny
Chairman
Member
Member
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 of the risk assessment model used to monitor
the risk exposures and Management’s views on the acceptable and appropriate level of risk faced by the 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.
64
CIVMEC ANNUAL REPORT 2019 REPORT ON
CORPORATE GOVERNANCE
30 June 2019
ACCOUNTABILITY AND AUDIT (Continued)
PRINCIPLE 11 (Continued)
The Company’s internal audit function prepares an annual internal audit plan, which takes account of the Company’s key
risks and other assurance activities performed, enabling internal audit resources to be targeted to areas of greatest value
across the Company’s operations, including group and subsidiary structures. Processes subject to internal audit include
financial, administrative, operational and project specific activities and systems. The internal audit function provides advice
on the effectiveness of risk management processes and material internal controls, recommends corrective actions and
control improvements and follows up on the implementation of action plans designed by management to address any control
deficiencies or improvement opportunities. Internal audit reports containing internal audit results, recommendations and agreed
action plans are presented to the AC on a quarterly basis.
The Group appoints internal auditors to carry out a review of the adequacy and effectiveness of the Group’s key internal controls,
including financial, operational, compliance and information technology controls as well as risk management systems to the
extent of their scope as laid out in their audit plan.
In the absence of evidence to the contrary, the Board is satisfied 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 satisfied 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, with no material weaknesses identified.
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.
The Company will publish its Sustainability Report later in 2019, which will further consider the management of any material
economic, environmental and social sustainability risks faced by the Group.
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
Mr Wong Fook Choy Sunny
Chairman
Member
Member
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.
65
CIVMEC ANNUAL REPORT 2019 REPORT ON
CORPORATE GOVERNANCE
30 June 2019
ACCOUNTABILITY AND AUDIT (Continued)
PRINCIPLE 12 (Continued)
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 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 and internal
auditors on matters relating to audit;
to monitor Management’s commitment to the establishment and maintenance of a satisfactory control environment and an
effective system of internal control (including any arrangements for internal audit);
to monitor and review the scope and results of external audit and its cost effectiveness and the independence and
objectivity of the external auditors; and
•
to monitor and review the scope and results of internal audit and the 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 the Group’s financial
performance before submission to the Board for approval, focusing in particular, on changes in accounting policies
and practices, major risk areas, significant adjustments resulting from the audit, compliance with accounting standards
and compliance with the SGX-ST Listing Manual, ASX Listing Rules 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 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);
review the Group’s hedging policies, procedures and activities (if any) and monitor the implementation of the hedging
procedure/policies, including reviewing the instruments, processes and practices in accordance with any hedging polices
approved by the Board;
review potential conflicts of interest, if any, and 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 the Group’s operating results or financial position, and the
management’s response thereto;
66
CIVMEC ANNUAL REPORT 2019 REPORT ON
CORPORATE GOVERNANCE
30 June 2019
ACCOUNTABILITY AND AUDIT (Continued)
PRINCIPLE 12 (Continued)
•
•
•
•
•
generally to undertake such other functions and duties as may be required by statute or the SGX-ST Listing Manual and
ASX Listing Rules, 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 ASX Online; and
review the Group’s compliance with such functions and duties as may be required under the relevant statutes or the
SGX-ST Listing Manual and ASX Listing Rules, including such amendments made thereto from time to time.
The AC has the power to conduct or authorise investigations into any matters within its scope of responsibility. The AC is
authorised to obtain independent professional advice whenever deemed necessary for the discharge of its responsibilities.
Such expenses will be borne by the Company.
The AC has the co-operation of and complete access to the Company’s management. It has full discretion to invite any Director
or Executive Officer to attend the meetings, and has been given reasonable resources to enable the discharge of its functions.
As at the Report date, the AC has:
•
•
•
•
•
•
•
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 ensured 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 a quarterly basis whenever there is a
whistle-blowing issue.
The AC having reviewed the external auditors’ non-audit services, is satisfied 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 FY2019 is A$104,000
(equivalent S$102,000) which comprises audit fee of A$83,000 (equivalent S$82,000) and A$21,000 (equivalent S$20,000)
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.
67
CIVMEC ANNUAL REPORT 2019 REPORT ON
CORPORATE GOVERNANCE
30 June 2019
ACCOUNTABILITY AND AUDIT (Continued)
PRINCIPLE 12 (Continued)
The AC is kept abreast by the external auditors of changes to accounting standards, SGX-ST Listing Rules and ASX Listing
Rules, 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 system during FY2019.
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 the 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 the AC in overseeing and monitoring the implementation and improvements required on
internal control weaknesses identified. The AC reviews the adequacy and effectiveness of the internal audit function quarterly.
The role of the internal auditors is to support the AC in ensuring that the Group maintains a sound system of internal controls by
monitoring and assessing the effectiveness of key controls and procedures, conducting in-depth audits of high risk areas and
undertaking investigations as directed by the AC.
The RCC reviews all significant control policies and procedures and highlights all significant risk matters to the Board for
discussion 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.
68
CIVMEC ANNUAL REPORT 2019 REPORT ON
CORPORATE GOVERNANCE
30 June 2019
SHAREHOLDERS RIGHTS AND RESPONSIBILITIES
Principle 14: Companies should treat all shareholders fairly and equitably, and should recognise, protect and
facilitate the exercise of shareholders’ rights, and continually review and update such governance arrangements.
Principle 15: Companies should actively engage their shareholders and put in place an investor relations policy to
promote regular, effective and fair communication with shareholders.
Principle 16: Companies should encourage greater shareholder participation at general meetings of shareholders,
and allow shareholders the opportunity to communicate their views on various matters affecting the company.
The Company recognises the importance of regular, timely and effective communication with the shareholders. The Company
does not practise selective disclosure. In line with continuous disclosure obligations of the Company pursuant to the SGX-ST
Listing Manual, the Companies Act of Singapore and the ASX Listing Rules, it is the Board’s policy that all the shareholders
should be equally informed, on a timely basis via SGXNET and ASX Online, 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 SGXNET and ASX Online.
In addition to SGXNET and ASX Online, 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/her/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 makes 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 and ASX Online 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 address their concerns, if any and where appropriate. All investors and
analyst briefings presentation materials are uploaded onto SGXNET and ASX Online for all investors’ information.
The Company has in place an investor relations 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 decisions
and to ensure a level playing field.
In addition, the Group has engaged Chapter One Advisors as its media and investor relations team that communicates with its
shareholders and analysts regularly. The investor relations team supports the Company to promote relations with, and acts as
liaison for, institutional investors and public shareholders.
69
CIVMEC ANNUAL REPORT 2019 REPORT ON
CORPORATE GOVERNANCE
30 June 2019
SHAREHOLDERS RIGHTS AND RESPONSIBILITIES (Continued)
PRINCIPLE 14, 15, 16 (Continued)
The Group’s website also includes a tab labelled ‘Investors’ which provides investors with all the information they
may require.
Civmec Limited is committed to providing excellent returns to its shareholders through a combination of longer term capital
growth and regular dividend payments. The Board considers a range of factors in determining the dividend payable in any year,
including the business environment, balance sheet, working capital requirements of the business and potential investment
opportunities. The form, frequency and amount of dividends declared each year will take into consideration the Group’s profit
growth, cash position, positive cash flow generated from operations, projected capital requirements for business growth
and other factors as the Board may deem appropriate. Any payouts are clearly communicated to shareholders in public
announcements and via announcements on SGXNET and ASX Online when the Company discloses its financial results.
The Company has proposed a tax exempt (foreign source) First and Final Dividend of 0.7 Singapore cents per ordinary share
for the financial year ended 30 June 2019, 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 FY2019.
Interested Person Transactions
The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner
to the AC and these interested persons’ transactions are conducted on an arm’s length basis and are not prejudicial to the
interests of the shareholders. There were no material interested person transactions for FY2019.
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 and price-sensitive information relating to the relevant securities.
70
CIVMEC ANNUAL REPORT 2019 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
REGISTERED OFFICE
80 Robinson Road, #02-00
Singapore 068898
Tel: (65) 6236 3333
Fax: (65) 6236 4399
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
Computershare
Level 11
172 St Georges Terrace
Perth WA 6000
Australia
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)
RISKS & CONFLICTS COMMITTEE
PRINCIPAL BANKER
Mr Chong Teck Sin
(Chairman)
Mr Douglas Owen Chester
Mr Wong Fook Choy Sunny
COMPANY SECRETARIES
Ms Chan Lai Yin
Ms Lee Pay Lee
National Australia Bank
Level 14
100 St Georges Terrace
Perth WA 6000
Australia
CORPORATE WEBSITE
http://www.civmec.com.au
71
CIVMEC ANNUAL REPORT 2019 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CIVMEC LIMITED
30 June 2019
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 2019, 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 Singapore
Financial Reporting Standards (International) (‘SFRS(I)s’) 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 2019 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.
KEY AUDIT MATTER
HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
Accounting for construction contracts
Our response
We refer to Note 3(a)(ii), 3(a)(iii) and 3(b)(i) under
“Critical Accounting Judgements and Key
Sources of Estimation Uncertainty”, Note 4, Note
31 and Note 32(b) to the financial statements.
During the financial year ended 30 June 2019,
revenue from construction contracts amounted
to A$483.9 million which represented 99.1%
of the total revenue of the Group. The Group’s
initial application of SFRS(I) 15 Revenue from
Contracts with Customers has resulted in
transitional adjustments as disclosed in Note
32(b) to the financial statements.
Contract revenue comprises the initial amount
agreed in the contract and variations in the
contract as constrained to the extent that it is
highly probable that a significant reversal in the
amount of cumulative revenue recognised will not
occur when the uncertainty associated with the
variable consideration is subsequently removed.
•
We performed procedures to understand the projects through discussions with
management and examination of project documents including contracts and
correspondences with customers on delays and extension of time. We evaluated
and validated relevant key controls put in place by the management over the
construction contract revenue and costs recognition on construction contracts.
•
In relation to the contract revenue for projects, on a sample basis, we have:
- Traced the contract sums to the contracts and variation orders entered by the
Group and its customers.
- Challenged the appropriateness of the variations and claims included in the
computation of the construction contract revenue.
- Held discussions with management and the Group’s legal advisors and
specialist consultants where appropriate, to evaluate management’s
assessment that it is highly probable that a significant reversal in the amount
of cumulative revenue recognised will not occur when the uncertainty
associated with the variable consideration is subsequently removed.
- Assessed the adequacy of the provision for onerous contracts based on
our understanding of the projects. This includes reviewing management’s
assessment of provision for onerous contracts by focusing on projects
with low or negative margins.
72
CIVMEC ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CIVMEC LIMITED
30 June 2019
KEY AUDIT MATTER
HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
Accounting for construction contracts
(Continued)
Our response
(Continued)
The amount of revenue recognised is based
on the Group’s progress towards completion
of the construction contract, determined
based on the proportion of construction costs
incurred to date to the estimated total contract
costs (‘input method’). The Group uses the
input method to measure project progress and
recognises contract revenue in accordance
with SFRS(I) 15 Revenue from Contracts
with Customers.
Estimates of revenues, costs or the extent
of progress toward completion are revised if
circumstances change. Any resulting increases
or decreases in estimated revenues or costs are
reflected in profit or loss in the period in which
the circumstances that give rise to the revision
become known by management.
The determination of estimated contract revenue,
total contract costs and costs to complete
require significant judgement which may impact
on the amounts of construction contract revenue
and profits recognised during the year, including
the provision for onerous contracts. We have
therefore, identified this as a key audit matter.
Recoverability of trade and other
receivables and contract assets
We refer to Note 3(a)(i) under “Critical Accounting
Judgements and Key Sources of Estimation
Uncertainty”, Note 4(b), Note 11 and Note 30(a)
to the financial statements.
The carrying amount of trade and other
receivables and contract assets of the Group
was A$63.6 million and A$117.4 million as at 30
June 2019 respectively. 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.
In accordance with SFRS(I) 9 Financial
Instruments, the Group assesses periodically and
at each financial year end, the expected credit
loss associated with its receivables. When there
is expected credit loss impairment, the amount
and timing of future cash flows are estimated
based on historical, current and forward-looking
loss experience for assets with similar credit risk
characteristics.
•
In relation to total contract costs, on a sample basis, we have:
- Tested costs incurred to date and agreed these to supporting documentation.
- 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.
- We examined key project documentation and discussed the progress of the
significant projects with the Group’s key project personnel and management
for significant events that could impact the estimated total contract costs and
stage of completion.
•
We have recomputed the percentage of completion based on actual cumulative
contract costs incurred to date to the total estimated contract costs for
individually significant projects.
• We checked the arithmetic accuracy of the revenue and profit recognised based
on the percentage of completion computation for individually significant projects
and traced the revenue for the current year based on the measurement of
progress to the accounting records.
•
•
We have also assessed the adequacy of the disclosures of the key accounting
estimates and the sensitivity of the inputs to the estimates and found the
disclosures in the financial statements to be appropriate.
We also evaluated management’s assessment of the impact to revenue
recognition and reviewed the transitional adjustments resulting from the
adoption of SFRS(I) 15.
Our findings
We are satisfied that the judgements applied by management in accounting for
construction contracts are reasonable.
Our response
•
•
•
•
•
We obtained an understanding of the Group credit policy and evaluated the
processes for identifying impairment indicators.
We have reviewed and tested the ageing of trade and other receivables.
We have reviewed management’s assessment on the credit worthiness of
selected customers.
We have also assessed current ongoing negotiations and settlements of
significant contracts subject to modifications, to identify if the collectability of
contract consideration is highly probable.
We further discussed with the key management and the component auditors
on the adequacy of the allowance for impairment recorded by the Group and
reviewed the supporting documents provided by management in relation to
their assessment.
•
We have also reviewed the adequacy and appropriateness of the impairment
charge based on the available information.
Our findings
Based on our audit procedures, we found management’s assessment of the
recoverability of trade and other receivables and contract assets to be reasonable
and the disclosures to be appropriate.
73
CIVMEC ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CIVMEC LIMITED
30 June 2019
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.
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 SFRS(I)s, 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.
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.
74
CIVMEC ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CIVMEC LIMITED
30 June 2019
Auditor’s Responsibilities for the Audit of the Financial Statements (Continued)
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
28 August 2019
75
CIVMEC ANNUAL REPORT 2019 CONSOLIDATED
INCOME STATEMENT
For the year ended 30 June 2019
Revenue
Cost of sales
Gross profit
Other income
Share of profit of associate/joint ventures
Administrative expenses
Other expenses
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Profit attributable to:
Owners of the Company
Non-controlling interest
Earnings per share attributable to equity holders
of the Company (cents per share):
- Basic
- Diluted
The accompanying notes form an integral part of the financial statements.
GROUP
2018
A$’000
(REPORTED
UNDER
SFRS(I))
702,415
(664,009)
38,406
8,457
260
(17,863)
-
(4,112)
25,148
(7,730)
17,418
18,112
(694)
17,418
3.62
3.62
NoNote
NOTE
4(a)
5
17
8
6
9
10
10
2019
A$’000
488,511
(462,978)
25,533
5,389
39
(16,687)
(277)
(5,005)
8,992
(1,962)
7,030
6,075
955
7,030
1.21
1.21
76
CIVMEC ANNUAL REPORT 2019 CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
For the year ended 30 June 2019
GROUP
2018
A$’000
(REPORTED
UNDER SFRS(I))
2019
A$’000
Profit for the year
7,030
17,418
Other comprehensive income:
Item that may be reclassified subsequently
to profit or loss
Exchange differences on re-translation from functional currency to
presentation currency
Reclassification of translation reserve to the profit or loss account
on deconsolidation
(185)
92
93
-
Total comprehensive income for the year
6,937
17,511
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interest
The accompanying notes form an integral part of the financial statements.
5,982
955
6,937
18,205
(694)
17,511
77
CIVMEC ANNUAL REPORT 2019 STATEMENTS OF
FINANCIAL POSITION
As at 30 June 2019
GROUP
COMPANY
NoNote
NOTE
2019
A$’000
2018
A$’000
(REPORTED
UNDER
SFRS(I))
1 JULY 2017
A$’000
(REPORTED
UNDER
SFRS(I))
2019
A$’000
2018
A$’000
(REPORTED
UNDER
SFRS(I))
1 JULY 2017
A$’000
(REPORTED
UNDER
SFRS(I))
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Other assets
Income tax recoverable
Non-current assets
Investment in subsidiaries
Investment in joint ventures
Trade and other receivables
Property, plant and
equipment
Intangible assets
Deferred tax assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Provisions
Income tax payable
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
13
11
40,662
63,558
4(b)
117,443
1,063
4,024
23,369
125,662
140,201
1,747
5,313
22,712
52,186
84,553
1,192
7,769
6
5
29,513
34,285
-
9
4,043
-
-
-
226,750
296,292
168,412
33,571
34,290
24
27,612
-
3
4,249
31,888
-
41
-
-
-
-
-
122
153
201,004
143,711
128,524
10
1,930
10
2,520
10
1,097
202,985
146,241
129,906
7,579
7,579
7,579
-
-
-
-
-
-
-
-
-
-
-
-
394
7,973
16
7,595
11
7,590
12
9
16
17
11
14
15
9
174
136
145
20
4(b)
21
22
57,543
69,333
8,930
5,557
-
119,881
30,989
43,275
9,197
-
59,234
15,999
4,983
4,831
-
-
-
-
-
141,363
203,342
85,047
174
21
22
9
108,248
4,634
1,362
64,434
3,935
-
53,555
2,955
-
114,244
68,369
56,510
-
-
-
-
-
-
-
1,356
1,492
-
-
-
-
-
-
-
-
145
-
-
-
-
TOTAL ASSETS
429,735
442,533
298,318
41,544
41,885
39,478
TOTAL LIABILITIES
255,607
271,711
141,557
174
1,492
145
The accompanying notes form an integral part of the financial statements.
78
CIVMEC ANNUAL REPORT 2019 STATEMENTS OF
FINANCIAL POSITION (Continued)
As at 30 June 2019
GROUP
COMPANY
2018
A$’000
(REPORTED
UNDER
SFRS(I))
1 JULY 2017
A$’000
(REPORTED
UNDER
SFRS(I))
2019
A$’000
2018
A$’000
(REPORTED
UNDER
SFRS(I))
1 JULY 2017
A$’000
(REPORTED
UNDER
SFRS(I))
29,807
(10)
7,911
134,147
171,855
29,807
29,807
29,807
29,807
(10)
7,818
119,485
157,100
(10)
4,483
7,090
(10)
4,513
6,083
(10)
4,483
5,053
41,370
40,393
39,333
NoNote
NOTE
23
23
25
2019
A$’000
29,807
(10)
7,818
136,591
174,206
(78)
174,128
(1,033)
170,822
(339)
-
-
-
156,761
41,370
40,393
39,333
429,735
442,533
298,318
41,544
41,885
39,478
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
TOTAL LIABILITIES
AND EQUITY
The accompanying notes form an integral part of the financial statements.
79
CIVMEC ANNUAL REPORT 2019 L
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81
CIVMEC ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF
CASH FLOWS
For the year ended 30 June 2019
Cash Flows from Operating Activities
Profit before income tax
Adjustment for:
Depreciation of property, plant and equipment
Loss/(gain) on disposal of property, plant and equipment
Share of profit of joint ventures
Share of loss of an associate
Gain on deconsolidation of a subsidiary
Finance cost
Interest income
Foreign exchange differences
Operating cash flow before working capital changes
Changes in working capital:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in contract assets
Decrease/(increase) in other current assets
(Decrease)/increase in trade and other payables
Increase in contract liabilities
(Decrease)/increase in provisions
Cash generated from/(used in) operations
Interest received
Finance cost paid
Income tax refund
Income tax paid
Net cash generated from/(used in) operating activities
Cash Flows from Investing Activities
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Repayment from a related party
Cash distribution from joint venture
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
GROUP
NoNote
NOTE
2019
A$’000
2018
A$’000
8,992
25,148
14
5
17
5
8
5
14
23(a)
13
10,015
277
(41)
2
(2,091)
5,005
(689)
(97)
21,373
62,748
22,758
684
(68,702)
45,671
(2,940)
81,592
617
(4,627)
7,346
(6,067)
78,861
641
(68,227)
182
-
(67,404)
345,599
(336,132)
(3,631)
5,836
17,293
23,369
40,662
10,425
(272)
(217)
-
-
4,112
(354)
78
38,920
(73,351)
(55,648)
(555)
53,649
19,114
5,345
(12,526)
354
(3,611)
3,882
(7,827)
(19,728)
1,605
(26,954)
-
432
(24,917)
397,359
(348,607)
(3,450)
45,302
657
22,712
23,369
The reconciliation of movements of liabilities to cash flows arising from financing activities is presented below:
CASH FLOWS
NON-CASH
CHANGES
OPENING
A$’000
PROCEEDS
A$’000
REPAYMENT
A$’000
EXCHANGE
A$’000
CLOSING
A$’000
2019 Borrowings
2018 Borrowings
107,709
58,538
345,599
397,359
(336,132)
(348,607)
2
419
117,178
107,709
The accompanying notes form an integral part of the financial statements.
82
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
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. On 22 June 2018, the Company was listed on the Australian
Securities Exchange (‘ASX’). The Company is now holding dual listing status. The Company has provided an option to shareholders
to convert their shares with SGX-ST for shares with ASX, at the ratio of 1:1.
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
ventures, associate, and joint operations are set out in Note 16, 17,18 and 19 respectively.
The financial statements for the financial year ended 30 June 2019 were approved and authorised for issue on the date of the
statement by the board of directors in accordance with a resolution of the directors on the date of the Directors’ Statement.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The financial statements have been prepared in accordance with the provisions of the Singapore Companies Act,
Chapter 50 and Singapore Financial Reporting Standards (International) (‘SFRS(I)’) under the historical cost convention,
except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with SFRS(I) requires management to exercise its judgement in the process
of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements are disclosed in Note 3.
Adoption of SFRS(I)
As required by the listing requirements of the SGX-ST, the Group has adopted SFRS(I) on 1 July 2018. These financial statements
for the year ended 30 June 2019 are the first set of financial statements the Group has prepared in accordance with SFRS(I). The
Group’s previously issued financial statements for periods up to and including the financial year ended
30 June 2018 were prepared in accordance with the previous Singapore Financial Reporting Standards (‘SFRS’).
In adopting SFRS(I) on 1 July 2018, the Group is required to apply all of the specific transition requirements in
SFRS(I) 1 First-time Adoption of SFRS(I).
Under SFRS(I) 1, these financial statements are required to be prepared using accounting policies that comply with SFRS(I)
effective as at 30 June 2019. The same accounting policies are applied throughout all periods presented in these financial
statements, subject to the mandatory exceptions and optional exemptions under SFRS(I) 1.
Optional exemptions applied on adoption of SFRS(I)
For first-time adopters, SFRS(I) 1 allows the exemptions from the retrospective application of certain requirements under SFRS(I).
The Group has applied the following exemptions:
a) SFRS(I) 3 Business Combinations has not been applied to business combinations that occurred before the date of transition on
1 July 2017. The same classification as in its previous SFRS financial statements has been adopted.
b) SFRS(I) 1-21 The Effects of Changes in Foreign Exchange Rates has not been applied retrospectively to fair value adjustments
and goodwill from business combinations that occurred before the date of transition to SFRS(I) on 1 July 2017. Such fair value
adjustments and goodwill continue to be accounted for using the same basis as under
SFRS 21.
Under the previous SFRS, goodwill and fair value adjustments arising on the acquisition of foreign operations on or
after 1 January 2005 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of
the foreign operations and translated in accordance with the accounting policy set out in Note 2(i) to the financial statements.
Goodwill and fair value adjustments which arose on acquisition of foreign operations before 1 January 2005 are deemed
to be assets and liabilities of the Company and are recorded in A$ at the rates prevailing at the date of acquisition.
83
CIVMEC ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(a) Basis of preparation (Continued)
Optional exemptions applied on adoption of SFRS(I) (Continued)
c) The Group has not reassessed the determination of whether an arrangement contained a lease in accordance with SFRS(I)
INT 4 Determining whether an Arrangement contains a Lease.
d) The Group has elected to apply the requirements in SFRS(I) 1-23 Borrowing Costs from the date of transition to SFRS(I) on
1 July 2017. Borrowing costs that were accounted for previously under SFRS prior to the date of transition are not restated.
e) The Group has elected to apply the exemption to adopt SFRS(I) 2 Share-based Payment for equity instruments granted after
7 November 2002 that vested before the date of transition on 1 July 2017. Retrospective application of SFRS(I) 2 is
encouraged but not required.
f) The Group has elected the short-term exemption to adopt SFRS(I) 9 Financial Instruments on 1 July 2018.
Accordingly, the information presented for 2018 is presented, as previously reported, under SFRS 39 Financial Instruments:
Recognition and Measurement. Arising from this election, the Group is exempted from complying with SFRS(I) 7 Financial
Instruments: Disclosures to the extent that the disclosures as required by SFRS(I) 7 to items within
the scope of SFRS(I) 9.
g) The Group has elected to apply the transitional provisions under paragraph C5 of SFRS(I) 15 at 1 July 2018 and have used the
following practical expedients as allowed under SFRS(I) 1 as follows:
i.
The Group has not restated those completed contracts that began and ended in the same annual reporting period in 2018
and contracts completed at 1 July 2017;
ii. for completed contracts that have variable consideration, the Group has used the transaction price at the date the contract
was completed, rather than estimating the variable consideration amounts in the comparative reporting period;
iii.
iv.
for contracts which were modified before 1 July 2017, the Group did not retrospectively restate the contract for those
contract modifications; and
for the year ended 30 June 2018, the Group did not disclose the amount of transaction price allocated to the remaining
performance obligations and explanation of when the Group expects to recognise that amount as revenue.
The Group’s opening balance sheet has been prepared as at 1 July 2017, which is the Group’s date of transition to SFRS(I)
(‘date of transition’). An explanation of how the transition to SFRS(I) and application of SFRS(I) 9 and SFRS(I) 15 have affected the
reported financial position, financial performance and cash flows are provided in Note 32 to the financial statements.
Changes in accounting policy
Accounting for research and development tax offset
The Group has elected to recognise the excess of the research and development tax offset over the statutory rate (‘R&D offset’)
being an additional 8.5% (previously 10%) deduction as government grant under SFRS(I) 1-20. Refer to Note 2(f). In prior years,
the whole R&D offset was recognised as a reduction to the income tax expense. The change results in the R&D offset being
separately disclosed and simplifies the presentation of the financial statements by matching the benefit of the grant against the
expenditure which generated the R&D offset.
The application of the changes in accounting policy has been applied retrospectively. The following reconciliation summarises the
impact on the Group’s consolidated income statement for the year ended 30 June 2018. There were no material adjustments to
the Group’s consolidated statement of comprehensive income for the year ended 30 June 2018, the Group’s financial position
as at 1 July 2017 and 30 June 2018 and the Group’s statement of cash flows for the year ended 30 June 2018 arising from the
changes in accounting policy.
84
CIVMEC ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(a) Basis of preparation (Continued)
Changes in accounting policy (Continued)
Accounting for research and development tax offset (Continued)
Reconciliation of the Group’s consolidated income statement:
Revenue
Cost of sales
Gross profit
Other income
Share of profit of a joint venture
Administrative expenses
Finance costs
Profit before tax
Income tax expense
Profit for the year
30 JUN 2018
AS PREVIOUSLY
AUDITED
A$’000
ADJUSTMENT
A$’000
AS PER
RESTATED
A$’000
712,850
(666,760)
46,090
8,457
260
(17,863)
(4,112)
32,832
(8,109)
24,723
-
2,751
2,751
-
-
-
-
2,751
(2,751)
-
712,850
(664,009)
48,841
8,457
260
(17,863)
(4,112)
35,583
(10,860)
24,723
The above figures were derived before the transition to SFRS(I) and adoption of new standards which are disclosed in Note 32 to
the financial statements.
(b) 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;
• 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.
85
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b) Basis of Consolidation (Continued)
(i) Subsidiaries (Continued)
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 SFRS(I) 9 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.
(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 venture
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.
86
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b) Basis of Consolidation (Continued)
(ii) Joint Arrangements (Continued)
Joint operations (Continued)
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.
(c) Investment in Subsidiary Companies
Investments in subsidiary companies are carried at cost less accumulated impairment losses in the statement of financial position
of the Company.
On disposal of investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the
investments are recognised in the profit or loss.
(d) Investment in Associate
The Group recognises its interest in an associate 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.
If the Group’s share of losses of an associate equals or exceeds its interest in the associate, the Group discontinues recognising
its share of further losses. If the associate subsequently reports profits, the Group resumes recognising its share of those profits
only after its share of the profits equals the share of losses not recognised.
(e) Revenue Recognition
Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring promised
goods or services to a customer, excluding amounts collected on behalf of third parties.
Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good or service to the
customer, which is when the customer obtains control of the good or service. A performance obligation may be satisfied at a
point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation.
Construction Contract Revenue
The Group provides engineering and construction services to customers through contracts. Contract revenue is recognised when
the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced.
For these contracts, revenue is recognised over time by reference to the Group’s progress towards completion of the contract.
The measure of progress is determined based on the proportion of contract costs incurred to date to the estimated total
contract costs (‘input method’). Costs incurred that are not related to the contract or that do not contribute towards satisfying a
performance obligation (‘PO’) are excluded from the measurement of progress and instead are expensed as incurred.
In some circumstances, such as in the early stages of a contract where the Group may not be able to reasonably measure its
progress but expects to recover the contract costs incurred, contract revenue is recognised only to the extent of the contract
costs incurred until such time when the Group can reasonably measure its progress.
Contract modifications that do not add distinct goods or services are accounted for as a continuation of the original contract and
the change is recognised as a cumulative adjustment to revenue at the date of modification.
87
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e) Revenue Recognition (Continued)
Construction contract revenue (Continued)
The amount of revenue recognised is based on the estimated transaction price, which comprises the contractual price,
adjusted for expected returns. Based on the Group’s experience with similar types of contracts, variable consideration is typically
constrained and included in the transaction only to the extent that is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently
resolved.
Estimates of revenues, costs or the extent of progress toward completion are revised if circumstances change. Any resulting
increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that
give rise to the revision become known by management.
At the end of each reporting date, the Group updates its assessment of the estimated transaction price, including its assessment
of whether an estimate of variable consideration is constrained. The corresponding amounts are adjusted against revenue in the
period in which the transaction price changes.
The period between the transfer of the promised services and customer payment may exceed one year. For such contracts, there
is no significant financing component present as the payment terms are an industry practice to protect the customers from the
performing entity’s failure to adequately complete some or all of its obligations under the contract. As a consequence, the Group
does not adjust any of the transaction prices for the time value of money.
The customer is invoiced on a milestone payment schedule. If the value of the goods transferred by the Group exceed
the payments, a contract asset is recognised. If the payments exceed the value of the goods transferred, a contract liability
is recognised.
For costs incurred in fulfilling the contract which are within the scope of another SFRS(I) (e.g. Inventories), these have been
accounted for in accordance with those other SFRS(I). If these are not within the scope of another SFRS(I), the Group will
capitalise these as contract cost assets only if (a) these costs relate directly to a contract or an anticipated contract which the
Group can specifically identify; (b) these costs generate or enhance resources of the Group that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future; and (c) these costs are expected to be recovered. Otherwise, such
costs are recognised as an expense immediately.
Sale of goods and services
Revenue from the sale of goods and services in the ordinary course of business are recognised when the Group satisfies a PO
by transferring control of a promised good or service to the customer. The amount of revenue recognised is the amount of the
transaction price allocated to the satisfied PO.
The transaction price is allocated to each PO in the contract on the basis of the relative stand-alone selling prices of the promised
goods or services. The individual standalone selling price of a good or service that has not previously been sold on a stand-alone
basis, or has a highly variable selling price, is determined based on the residual portion of the transaction price after allocating
the transaction price to goods and/or services with observable stand-alone selling prices. A discount or variable consideration is
allocated to one or more, but not all, of the performance obligations if it relates specifically to those performance obligations.
Transaction price is the amount of consideration in the contract to which the Group expects to be entitled in exchange for
transferring the promised goods or services. The transaction price may be fixed or variable and is adjusted for the time value of
money if the contract includes a significant financing component. Consideration payable to a customer is deducted from the
transaction price if the Group does not receive a separate identifiable benefit from the customer. When consideration is variable,
the estimated amount is included in the transaction price to the extent that it is highly probable that a significant reversal of the
cumulative revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
Revenue may be recognised at a point in time or over time following the timing of satisfaction of the PO. If a PO is satisfied
over time, revenue is recognised based on the percentage of completion reflecting the progress towards complete satisfaction
of that PO.
88
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e) Revenue Recognition (Continued)
Sale of goods and services (Continued)
The Group considers certain services to be a distinct service as it is both regularly supplied by the Group to other customers on a
stand-alone basis and is available for customers from other providers in the market. A portion of the transaction price is therefore
allocated to the maintenance services based on the stand-alone selling price of those services. Discounts are not considered as
they are only given in rare circumstances and are never material. Revenue from the maintenance services is recognised over time.
The transaction price allocated to these services is recognised as a contract liability at the time of the initial sales transaction and
is released on a straight-line basis over the period of service.
(f) Government Grants
Government grants are recognised when there is reasonable assurance that the grant will be received and all attached conditions
will be complied with. As the grant relates to R&D expenditure already incurred it is recognised in the income statement in the
period it became receivable.
(g) Contract Assets and Contract Liabilities
A contract asset is recognised when the Group recognises revenue as set out in Note 2(e) before being unconditionally entitled
to the consideration under the payment terms set out in the contract. Contract assets are assessed for expected credit losses
(‘ECLs’) in accordance with the policy set out in Note 2(j) and are reclassified to receivables when the right to the consideration
has become unconditional.
A contract liability is recognised when the customer pays consideration before the Group recognises the related revenue as set
out in Note 2(e). A contract liability would also be recognised if the Group has an unconditional right to receive consideration
before the Group recognises the related revenue. In such cases, a corresponding receivable would also be recognised.
For a single contract with the customer, either a net contract asset or a net contract liability is presented. For multiple contracts,
contract assets and contract liabilities of unrelated contracts are not presented on a net basis.
(h) Income Tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current income tax is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates
and tax laws that have been enacted or substantively enacted by the balance sheet date.
Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or
an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at
the time of the transaction.
Deferred tax liabilities are recognised on all temporary differences except for taxable temporary differences associated with
investments in subsidiaries and joint venture, where the Group is able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
tax losses, to the extent that it is probable that future taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilised except where the deferred tax
asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In
respect of deductible temporary differences associated with investments in subsidiaries and interest in joint venture, deferred tax
assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are measured:
(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
(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.
89
CIVMEC ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h) Income Tax (Continued)
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.
(i) 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 financial statements are
presented in Australian Dollars (‘A$’), which is the functional currency of the Company.
Prior to 1 July 2018, the financial statements were presented in Singapore Dollars (‘S$’). With effect from 1 July 2018, the Group
changed its presentation currency from S$ to A$. The Group largely operates within Australia where virtually all its income is
derived. Following the Group’s listing on the Australian Securities Exchange on 22 June 2018, the change will help to provide a
clearer understanding of the Group’s financial results and improve comparability of the Group’s performance.
The effect of the change of presentation currency was applied retrospectively using the following procedures:
•
•
Assets and liabilities of all corresponding figures presented (including opening balances from the beginning of earliest prior
period presented) were translated at the closing rates of respective year end;
Income and expenses for all corresponding figures presented were translated at the average exchange rate for the financial
year approximating the exchange rates at the dates of transactions; and
•
All resulting exchange differences were recognised in other comprehensive income.
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.
90
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(i) Foreign Currency Translation (Continued)
Transactions and balances (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.
(j) Financial Assets
The accounting for financial assets before 1 July 2018 is as follows:
Classification
Financial assets are recognised on the statement of financial position when, and only when, the Group becomes a party to the
contractual provisions of the financial instrument. The classification depends on the nature of the asset and the purpose for which
the assets were acquired. Management determines the classification of financial assets at initial recognition and re-evaluates this
designation at every reporting date.
Loans and receivables are non-derivatives financial assets with fixed or determinable payments that are not quoted in an active
market. They are presented as current assets, except those maturing later than twelve months after the balance sheet date which
are classified as non-current assets. Loans and receivables are presented as ‘trade and other receivables’ and ‘cash and cash
equivalents’ at the balance sheet date.
Recognition and derecognition
Regular way purchase and sales of financial assets are recognised on the trade-date – the date on which the Group commits to
purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
On disposal of a financial asset, the difference between the net sale proceeds and its carrying amount is recognised in
profit or loss.
Initial and subsequent measurement
Loans and receivables are initially recognised at fair value plus transaction costs. Subsequent to initial recognition, loans
and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses
are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the
amortisation process.
Impairment
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial
assets is impaired and recognises an allowance for impairment when such evidence exists.
Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, and default or significant delay in
payments are objective evidence that these financial assets are impaired.
91
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(j) Financial Assets (Continued)
Impairment (Continued)
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.
The accounting for financial assets from 1 July 2018 is as follows:
Classification and measurement
The Group classifies its financial assets in the following measurement categories:
• Amortised cost;
• Fair value through other comprehensive income (‘FVOCI’); and
• Fair value through profit or loss (‘FVPL’).
The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of
the cash flows of the financial asset.
Financial assets with embedded derivatives, if any, are considered in their entirety when determining whether their cash flows are
solely payment of principal and interest.
The Group reclassifies debt instruments when and only when its business model for managing those assets changes.
Initial recognition
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss are expensed in profit or loss.
Subsequent measurement
Debt instruments mainly comprise of cash and cash equivalents, trade and other receivables and contract assets.
There are three subsequent measurement categories, depending on the Group’s business model for managing the asset and the
cash flow characteristics of the asset:
•
•
Amortised cost: Debt instruments that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt instrument that is
subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when
the asset is derecognised or impaired. Interest income from these financial assets is included in interest income using the
effective interest rate method.
FVOCI: Debt instruments that are held for collection of contractual cash flows and for sale, and where the assets’ cash
flows represent solely payments of principal and interest, are classified as FVOCI. Movements in fair values are recognised
in Other Comprehensive Income (OCI) and accumulated in fair value reserve, except for the recognition of impairment
gains or losses, interest income and foreign exchange gains and losses, which are recognised in profit and loss. When
the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to
profit or loss and presented in ‘other income / other expenses’. Interest income from these financial assets is recognised
using the effective interest rate method and presented in ‘interest income’, if any.
•
FVPL: Debt instruments that are held for trading as well as those that do not meet the criteria for classification as
amortised cost or FVOCI are classified as FVPL. Movement in fair values and interest income is recognised in profit or loss
in the period in which it arises and presented in ‘other income / other expenses’, if any.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade date - the date on which the Group commits to
purchase or sell the asset.
92
CIVMEC ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(j) Financial Assets (Continued)
Recognition and derecognition (Continued)
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 debt instrument, the difference between the carrying amount and the sale proceeds is recognised in
profit or loss. Any amount previously recognised in other comprehensive income relating to that asset is reclassified to
profit or loss.
Impairment
The Group assesses on a forward-looking basis the expected credit loss (‘ECL’) associated with its debt financial assets carried
at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase
in credit risk. ECL are probability-weighted estimates of credit losses. Credit losses are measured at the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the
Group expects to receive). ECL are discounted at the effective interest rate of the financial asset.
For trade receivables and contract assets, the Group applies the simplified approach permitted by SFRS(I) 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables.
For other receivables, the Group applies the general approach. For the purpose of impairment assessment for other receivables,
the loss allowance is measured at an amount equal to 12-month ECL, which reflects the low credit risk of the exposures.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of
the financial asset have occurred. At each reporting date, the Group assesses whether financial assets carried at amortised cost
are credit-impaired.
Evidence that a financial asset is credit-impaired includes the observable data about the following events:
• Significant financial difficulty of the borrower or issuer;
• A breach of contract such as a default or past due;
•
The lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having
granted to the borrower or a concession(s) that the lender(s) would not other consider (e.g. the restructuring of a loan or
advance by the Group on terms that the Group would not consider otherwise);
•
It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
• The disappearance of an active market for a security because of financial difficulties.
Write-off policy
The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and
there is no realistic prospect of recovery. Financial assets written off may still be subject to recovery efforts under the Group’s
recovery procedures. Any recoveries made are recognised in profit or loss.
(k) 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.
(l) 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.
93
CIVMEC ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(l) Property, Plant and Equipment (Continued)
Property (Continued)
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.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Assets
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.
(m) Impairment of Non-Financial Assets
Non-financial assets are tested for impairment whenever there is any indication that these assets may be impaired.
At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss (if any), on an individual asset.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. The difference between the carrying amount
and recoverable amount is recognised as an impairment loss in profit or loss.
94
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(m) Impairment of Non-Financial Assets
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.
(n) 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.
(o) 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.
(p) 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.
(q) 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.
95
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(q) Leases (Continued)
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.
(r) Employee Benefits
Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations.
Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is
performed. The Group has no further payment obligations once the contributions have been paid.
Provision for employee benefits
Provisions are made for the Group’s liability for employee benefits arising from services rendered by employees to the end of
the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts
expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the
present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is
given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash flows
are discounted using the market yields on high quality corporate bonds with terms to maturity that match the expected timing of
cash flows.
Share-based payments
The Group operates an equity-settled share-based compensation plan. The fair value of the employee services received in
exchange for the grant of options is recognised as an expense with a corresponding increase in the share option reserve over the
vesting period.
The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on
the date of the grant. Non-market vesting conditions are included in the estimation of the number of shares under options that are
expected to become exercisable on the vesting date.
At each balance sheet date, the Group revises its estimates of the number of shares under options that are expected to become
exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding
adjustment to the share option reserve over the remaining vesting period.
The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised as at the beginning
and end of that period.
No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon
a market condition, which are treated as vested irrespective of whether or not the market condition is satisfied, provided
that all other performance and/or service conditions are satisfied. The employee share option reserve is transferred to retained
earnings upon expiry of the share options. When the options are exercised, the employee share option reserve is transferred to
share capital if new shares are issued, or to treasury shares if the options are satisfied by the reissuance of treasury shares.
In situations where equity instruments are issued and some or all of the goods or services received by the entity as consideration
cannot be specifically identified, the unidentified goods or services received (or to be received) are measured as the difference
between the fair value of the share-based payment and the fair value of any identifiable goods or services received at the grant
date. This is then capitalised or expensed as appropriate.
(s) 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.
96
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(t) 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.
(u) 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:
i. has control or joint control over the reporting entity;
ii. has significant influence over the reporting entity; or
iii.
is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
b. An entity is related to a reporting entity if any of the following conditions applies:
i.
ii.
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);
iii. both entities are joint ventures of the same third party;
iv. one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
v.
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;
vi. the entity is controlled or jointly controlled by a person identified in (a);
vii. 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
viii. 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
In the application of the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions
about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results
may differ from these estimates.
97
CIVMEC ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Continued)
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
(a) Critical judgements in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, the application of judgements that are expected to have a significant
effect on the amounts recognised in the financial statements are discussed as follows.
Impairment of trade and other receivables and contract assets
(i)
As at 30 June 2019, the Group’s trade and other receivables and contract assets amounted to A$63,558,000 (2018:
A$125,662,000; 1 July 2017: A$52,339,000) and A$117,443,000 (2018: A$140,201,000; 1 July 2017: A$84,553,000)
respectively, net of allowance for impairment, if any, arising from the Group’s different revenue segments as disclosed in Note 29.
Based on the Group’s historical credit loss experience, trade receivables exhibited different loss patterns for each revenue
segment. Within each revenue segment, the Group has common customers across the different geographical regions and applies
credit evaluations by customer. Accordingly, management has determined the expected loss rates by grouping the receivables
across geographical regions in each revenue segment. No allowance for impairment for trade and other receivables and contract
assets respectively was recognized as at 30 June 2019 (2018: Nil; 1 July 2017: Nil).
Notwithstanding the above, the Group evaluates the expected credit loss on customers in financial difficulties separately. There is
no major customer in financial difficulties during the financial year.
The Group’s and the Company’s credit risk exposure for trade receivables by different revenue segment are set out in Note 30(a).
(ii) Judgement and method used in estimating construction contract revenue
As discussed in Note 2(e) to the financial statements, construction contract revenue is recognised over time by reference to
the Group’s progress towards completion of the contract. The measure of progress is determined based on the proportion of
contract costs incurred to date to the estimated total contract costs (‘input method’). Costs incurred that are not related to the
contract or that do not contribute towards satisfying a performance obligation (‘PO’) are excluded from the measure of progress
and instead are expensed as incurred.
Construction contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work
to the extent that is highly probable that a significant reversal in the amount of the cumulative revenue will not occur when the
uncertainty associated with the variable consideration is subsequently resolved.
In estimating the variable consideration for contract revenue, the Group uses the expected value amount method to estimate the
transaction price. The expected value is the sum of probability-weighted amounts in a range of possible consideration amounts.
Management has relied on historical experience and the work of experts, analysed by customers and nature of scope of work,
from prior years.
Management has exercised judgement in applying the constraint on the estimated variable consideration that can be included in
the transaction price. For variations claims, management has determined that a portion of the estimated variable consideration
is subject to the constraint as, based on past experience with the customers, it is highly probable that a significant reversal in the
cumulative amount of revenue recognised will occur, and therefore will not be recognised as revenue.
(iii) Legal proceedings
The Group is exposed to the risk of claims and litigation which can arise for various reasons, including changes in scope of work,
delay and disputes etc. Given the nature of the business, variation orders, additional works and prolongation costs are common.
As some of these items could be subjective and hence contentious in nature, the Group may from time to time be involved in
adjudication or legal processes.
In making its judgment as to whether it is probable that any such adjudication decisions or litigation will result in a liability and
whether any such liability can be measured reliably, management relies on past experience and the opinion of legal advisors and
technical experts.
In making that overall judgment, the management has included in its consideration the likely outcome of the claims. Although an
adverse outcome of those claims could have a material adverse impact on the financial position of the Group, management have
taken the view that such a material adverse outcome is very unlikely.
98
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Continued)
(iv) 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 was recorded for the financial years ended 30 June 2019 and 2018.
The carrying amount of property, plant and equipment at 30 June 2019 is A$201,004,000 (2018: A$143,711,000;
1 July 2017: A$128,524,000).
(b) Key sources of estimation uncertainty
The estimates at 1 July 2017 and at 30 June 2018 are consistent with those made for the same dates in accordance with SFRS.
The estimates used by the Group to present these amounts in accordance with SFRS(I) reflect conditions at 1 July 2017, the date
of transition to SFRS(I) and as of 30 June 2018.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the
reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year.
(i) Estimation of total contract costs for construction contracts
The Group has significant ongoing construction contracts as at 30 June 2019 that are non-cancellable. For these contracts,
revenue is recognised over time by reference to the Group’s progress towards completion of the contract. The measure of
progress is determined based on the proportion of contract costs incurred to date to the estimated total contract costs
(‘input method’).
Management has to estimate the total contract costs to complete, which are used in the input method to determine the Group’s
recognition of construction revenue. When it is probable that the total contract costs will exceed the total construction revenue, a
provision for onerous contracts is recognised immediately.
Significant assumptions are used to estimate the total contract sum and the total contract costs which affect the accuracy of
revenue recognition based on the percentage-of-completion and completeness of provision for onerous contracts recognised.
In making these estimates, management has relied on past experience and the work of specialists.
If the estimated total contract sum decreases by 1.0% from management’s estimates, the Group’s profit before income tax will
decrease by approximately A$4,870,000.
If the remaining estimated contract costs increase by 1.0% from management’s estimates, the Group’s profit before income tax
will decrease by approximately A$4,633,000.
(ii) Estimation of 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 current financial year.
The carrying amount of the Group’s property, plant and equipment as at 30 June 2019 was A$201,004,000
(2018: A$143,711,000; 1 July 2017: A$128,524,000) (Note 14). A 10% difference in the expected useful lives of
these assets from management’s estimate would result in an approximately A$1,001,500 (2018: A$1,042,500) variance
in the Group’s profit before tax.
(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 the 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 2019 were income tax recoverable of A$4,024,000 (2018: tax recoverable
of A$5,313,000; 1 July 2017: tax recoverable of A$7,769,000) and A$4,043,000 (2018: tax payable of A$1,356,000; 1 July 2017:
tax recoverable of A$4,249,000) respectively. The carrying amounts of the Group’s and Company’s deferred tax assets
and deferred tax liabilities as at 30 June 2019 are disclosed in Note 9 to the financial statements.
99
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
4. REVENUE FROM CONTRACTS WITH CUSTOMERS
(a) Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at a point in time as follows:
Over time:
Construction contract revenue
Revenue from rendering of services
At a point in time:
Revenue from sales of goods
The segment analysis of the Group is disclosed in Note 29 to the financial statements.
(b) Contract assets and liabilities
Contract assets
Contract liabilities
2019
A$’000
117,443
(69,333)
GROUP
2018
A$’000
680,039
21,467
701,506
909
702,415
1 JULY 2017
A$’000
84,553
(15,999)
2019
A$’000
483,943
3,031
486,974
1,537
488,511
GROUP
2018
A$’000
140,201
(30,989)
Contract assets primarily relate to the Group’s right to consideration for work completed but not yet billed at the reporting date
on construction contracts. The contract assets are transferred to trade receivables when the rights become unconditional, which
usually occurs when the customer certifies the progress claims.
Contract liabilities primarily relate to the Group’s obligation to transfer goods or services to customers for which the Group has
received advances from customers for construction contracts and progress billings issued in excess of the Group’s rights to the
consideration in respect of construction contract revenue.
(i) Significant changes in contract balances
Contract assets:
Contract assets reclassified to trade receivables
Changes in measurement of progress
Contract liabilities:
Revenue recognised in current period that was included in the contract liability
balance at the beginning of the period
Increase due to cash received, excluding amounts recognised as revenue during
the year
100
GROUP
2019
A$’000
(76,840)
54,082
2018
A$’000
(38,448)
94,096
17,653
8,167
(55,997)
(23,157)
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
4. REVENUE FROM CONTRACTS WITH CUSTOMERS (CONTINUED)
(b) Contract assets and liabilities (Continued)
(ii) Unsatisfied performance obligations
2019
A$’000
GROUP
2018
A$’000
1 JULY 2017
A$’000
Aggregate amount of the transaction price allocated to
contracts that are partially or fully unsatisfied as at 30 June
819,042
*
*
*As permitted under the transitional provisions in SFRS(I) 15, the transaction price allocated to partially or fully unsatisfied performance
obligations as of 30 June 2018 and 1 July 2017 is not disclosed.
The Group expects that the aggregate amount of the transaction price allocated to unsatisfied performance obligations as of 30 June
2019 will be recognised as revenue as the Group continue to perform to complete the construction, which is expected to occur over the
next few years up to 2029. The amount disclosed above does not include variable consideration which is subject to constraint.
As permitted under the SFRS(I) 15, the aggregated transaction price allocated to unsatisfied contracts of periods of one year or less, or
are billed based on time incurred, is not disclosed.
5. OTHER INCOME
Insurance recovery
Fuel tax rebate
Interest income:
- Bank balances
- Tax authorities
- Related party
Gain on disposal of property, plant and equipment
Gain on deconsolidation of a subsidiary (Note 16)
Net foreign exchange gain
Miscellaneous income
GROUP
2019
A$’000
1,764
485
407
210
72
689
-
2,091
95
265
5,389
2018
A$’000
7,219
596
334
20
-
354
272
-
-
16
8,457
The Group recognised other income of A$1,218,000 (2018: A$7,152,000) from an insurance claim relating to a fire incident in
September 2017. This claim has now been finalised.
101
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
6. PROFIT BEFORE INCOME TAX
The following items have been included in arriving at profit before income tax:
Included in cost of sales:
Direct materials
Employee benefits (Note 7)
Subcontract works
Workshop and other overheads
Depreciation of property, plant and equipment (Note 14)
Included in administrative expenses:
Audit fees:
- Auditor of the Company
- Other auditors
Non-audit fees:
- Auditor of the Company
- Other auditors
Business development
Communications
Depreciation of property, plant and equipment (Note 14)
Directors’ fees
Employee benefits (Note 7)
Occupancy expenses
Office costs
Other administrative expenses
Other professional fees
Tax fees
Net foreign exchange loss
GROUP
2018
A$’000
111,866
294,408
168,075
79,679
9,981
79
88
19
45
967
2,469
444
212
9,035
451
474
720
1,577
1,194
89
2019
A$’000
78,778
230,379
83,653
60,452
9,716
83
95
21
62
487
1,718
298
239
9,791
537
555
645
1,488
668
-
102
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
7. EMPLOYEE BENEFITS EXPENSES
Wages and salaries
Contributions to defined contribution plans
Other employee benefits
8. FINANCE COSTS
Bank bills
Trade finances
Line fees
Finance leases
Premium funding
Other finance costs
GROUP
2019
A$’000
222,416
15,492
2,262
240,170
2018
A$’000
230,318
14,467
58,658
303,443
GROUP
2019
A$’000
2018
A$’000
1,827
970
1,356
729
106
17
5,005
1,767
783
1,107
448
7
-
4,112
103
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
9. INCOME TAX EXPENSE
Current income tax
Deferred income tax
(Over)/under provision in prior years
- Current income tax
- Deferred income tax
GROUP
2019
A$’000
2018
A$’000
(352)
2,160
1,808
(16)
170
154
1,962
8,823
(1,804)
7,019
483
228
711
7,730
The Group’s tax on profit before income tax differs from the amount that would arise using the Australian standard rate of income tax
as follows:
Profit before income tax
Income tax at 30% (2018: 30%)
Add/(deduct) the tax effects of:
(Over)/under provision of income tax in respect of prior years
Under provision of deferred tax expense
Non-deductible expenses
GROUP
2019
A$’000
8,992
2,697
(16)
170
(889)
1,962
2018
A$’000
25,148
7,544
483
228
(525)
7,730
Weighted average effective tax rates
22.6%
30.7%
As at 30 June 2019, the Group has capital tax losses of approximately A$37,806 (2018: A$37,806; 1 July 2017: A$37,806) that are
available for offset against future capital gains 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 capital 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 capital losses amounted to A$11,342 (2018: A$11,342; 1 July 2017: A$11,342) and are not recognised as there is no
reasonable certainty that future capital gains will be available to utilise the capital tax losses.
The tax rate used for the 2019 and 2018 reconciliations above is the corporate tax rate of 30% payable by corporate entities in Australia
on taxable profits under the tax law in that jurisdiction. The Group’s operations are located in Australia.
Current tax recoverable
Current tax recoverable mainly arose from the Group’s overprovision of income taxes in respect of the prior year and was recovered in
the current financial year.
104
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
9. INCOME TAX EXPENSE (CONTINUED)
Deferred taxes
OPENING
A$’000
CHARGED
TO PROFIT
OR LOSS
A$’000
CLOSING
A$’000
Group
2019
Property, plant and equipment
Receivables
Trade and other payables
Provisions
Carried forward tax losses
Unrealised foreign exchange losses
Others
2018
Property, plant and equipment
Receivables
Trade and other payables
Provisions
Carried forward tax losses
Unrealised foreign exchange losses
Others
Company
2019
Cast at bank
Loan receivables
Trade and other payables
Carried forward tax losses
Others
2018
Cast at bank
Trade and other payables
Others
(3,421)
1
1,609
4,205
57
(13)
82
(678)
2
(705)
(981)
376
13
21
2,520
(1,952)
(1,197)
10
739
1,920
(7)
(17)
(25)
(4,099)
3
904
3,224
433
-
103
568
(3,421)
1
1,609
4,205
57
(13)
82
(2,224)
(9)
870
2,285
64
4
107
1,097
(13)
-
(24)
-
5
16
4
7
-
11
1,423
2,520
13
3
(13)
377
(2)
378
(17)
17
5
5
-
3
11
377
3
394
(13)
24
5
16
105
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
10. 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
2019
2018
Profit attributable to the owners of the Company (A$’000)
6,075
18,112
Share capital
29,807,000
29,807,000
Weighted average number of ordinary shares issued
- Basic
- Diluted
Earnings per ordinary share (A$ cents)
- Basic
- Diluted
500,985,000
500,985,000
500,985,000
500,985,000
1.21
1.21
3.62
3.62
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 2019 and 2018, the diluted earnings per share is the same as the basic earnings per share as it does not include the
effect of 4,000,000 (2018: 4,000,000) unissued ordinary shares granted under the CESOS (Note 23(c)). The effect of the inclusion is
anti-dilutive.
106
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
11. TRADE AND OTHER RECEIVABLES
Current:
Trade receivables
- Third parties
- Retention sum receivables
Receivables from subsidiaries
Loan to a former subsidiary, now a
related party
Other receivables
Non-current:
Retention sum receivables
GROUP
COMPANY
2019
A$’000
2018
A$’000
1 JULY
2017
A$’000
2019
A$’000
2018
A$’000
1 JULY
2017
A$’000
52,432
648
53,080
-
1,803
8,675
63,558
124,255
1,190
125,445
-
-
217
125,662
50,953
354
51,307
-
-
879
52,186
-
-
-
29,488
-
25
29,513
-
-
-
34,262
-
23
34,285
-
-
-
27,612
-
-
27,612
-
-
153
-
-
-
63,558
125,662
52,339
29,513
34,285
27,612
The receivables from subsidiaries are non-trade, unsecured, interest-free and repayable on demand in cash.
The Group provided working capital funding to a former subsidiary, now a related party, Civtec Africa Ltd. The loan is unsecured, interest
bearing at a market rate of Australian Bank Bill Swap Bid Rate (‘BBSY’) plus 2% and repayable on demand.
Included in the Group’s other receivables as at 30 June 2019, are cost recoveries from sub-contractors for delays under the contract
amounting to A$6,700,000. Management has assessed that there is no significant expected credit loss for the financial year ended 30
June 2019.
The Group’s internal credit evaluation practices and basis for recognition and measurement for expected credit losses are disclosed in
Note 30(a) to the financial statements.
12. OTHER ASSETS
Current:
Prepayments
Consumables inventory
GROUP
COMPANY
2019
A$’000
2018
A$’000
413
650
1,063
1,115
632
1,747
1 JULY
2017
A$’000
778
414
1,192
2019
A$’000
2018
A$’000
1 JULY
2017
A$’000
9
-
9
-
-
-
3
-
3
13. CASH AND CASH EQUIVALENTS
GROUP
COMPANY
2019
A$’000
2018
A$’000
1 JULY
2017
A$’000
2019
A$’000
2018
A$’000
1 JULY
2017
A$’000
Cash at banks and in hand
40,662
23,369
22,712
6
5
24
Cash at banks earn interest at floating rates ranging from 0.01% to 1.5% (2018: 0.01% to 1.5%; 1 July 2017: 0.01% to 1.5%)
per annum.
A floating charge over cash and cash equivalents has been provided for certain debt.
107
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
14. PROPERTY, PLANT AND EQUIPMENT
Cost
At 1 July 2018
Additions
Adjustment
Transfer
Disposals
At 30 June 2019
Accumulated
depreciation
At 1 July 2018
Depreciation for
the year
Transfer
Adjustment
Disposals
At 30 June 2019
Net carrying
amount
At 30 June 2019
Cost
At 1 July 2017
Additions
Transfer
Disposals
At 30 June 2018
Accumulated
depreciation
At 1 July 2017
Depreciation for
the year
Disposals
At 30 June 2018
Net carrying
amount
At 30 June 2018
LAND
A$’000
BUILDINGS
A$’000
PLANT AND
EQUIPMENT
A$’000
SMALL
TOOLS
A$’000
MOTOR
VEHICLES
A$’000
OFFICE
EQUIPMENT
A$’000
IT
EQUIPMENT
A$’000
16,254
-
-
-
-
16,254
55,576
-
-
10,781
-
66,357
54,636
4,139
450
11,070
(1,652)
68,643
16,729
144
-
(9,526)
(248)
7,099
7,137
-
-
-
(92)
7,045
-
-
-
-
-
-
(10,663)
(2,590)
(19,955)
(5,515)
(7,204)
(852)
(3,880)
(726)
-
-
-
(13,253)
(2,716)
(187)
513
(27,860)
2,697
-
235
(5,124)
14
-
67
(4,525)
1,405
10
-
4
(5)
1,414
(853)
(150)
5
–
–
(998)
2,373
66
-
(29)
-
2,410
(1,928)
(182)
-
-
-
(2,110)
ASSETS
UNDER CON-
STRUCTION
A$’000
34,084
63,868
-
(12,300)
-
85,652
-
-
-
-
-
-
TOTAL
A$’000
188,194
68,227
450
-
(1,997)
254,874
(44,483)
(10,015)
-
(187)
815
(53,870)
16,254
53,104
40,783
1,975
2,520
416
300
85,652
201,004
16,254
-
-
-
16,254
55,522
-
54
-
55,576
49,488
-
6,691
(1,543)
54,636
13,422
-
4,305
(998)
16,729
6,599
-
970
(432)
7,137
-
-
-
-
(8,239)
(2,424)
(16,067)
(4,401)
(5,615)
(2,297)
(3,485)
(805)
-
(10,663)
513
(19,955)
708
(7,204)
410
(3,880)
16,254
44,913
34,681
9,525
3,257
1,371
–
146
(112)
1,405
(794)
(171)
112
(853)
552
577
2,041
23
346
(37)
2,373
(1,638)
(327)
37
(1,928)
19,665
26,931
(12,512)
-
34,084
-
-
-
-
164,362
26,954
-
(3,122)
188,194
(35,838)
(10,425)
1,780
(44,483)
445
403
34,084
143,711
19,665
128,524
At 1 July 2017
16,254
47,283
33,421
7,807
3,114
108
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
14. 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
A$21,879,000 (2018: A$23,919,000; 1 July 2017: A$19,742,000) (Note 21).
(b) The carrying amount of property, plant and equipment that are pledged for security are as follows.
DESCRIPTION
BORROWINGS
Leased plant and equipment
Finance lease
Remaining property, plant and equipment
Bank bills
The details of the borrowings are disclosed in Note 21 to the financial statements.
15. INTANGIBLE ASSETS
GROUP
2019
A$’000
2018
A$’000
21,879
23,919
179,125
119,792
201,004
143,711
1 JULY
2017
A$’000
19,742
108,782
128,524
2019
A$’000
GROUP
2018
A$’000
1 JULY 2017
A$’000
Goodwill
10
10
10
Goodwill arose from the excess of the consideration paid for a business acquired from a third party. Goodwill has been allocated
to the cash-generating unit, Metals and Minerals division.
Management is of the opinion that the recoverable amount will exceed the carrying amount on the basis that this cash generating
unit has been generating profit since acquisition and management forecasts the results of this subsidiary to be in a net profit
position for the financial year ended 30 June 2019. In arriving at this assessment, management has determined the recoverable
amount using a two years (2018: two years; 1 July 2017: two years) forecasting process based on the current order book,
projected orders and a consumer price index (‘CPI’) factor of 1.9% (2018: 1.9%; 1 July 2017: 1.9%) per annum on direct costs
and overhead costs.
16. INVESTMENT IN SUBSIDIARIES
COMPANY
2019
A$’000
2018
A$’000
1 JULY 2017
A$’000
Unquoted equity shares, at cost
7,579
7,579
7,579
There is no material non-controlling interest to be disclosed for the financial year ended 30 June 2019.
109
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
16. INVESTMENT IN SUBSIDIARIES (CONTINUED)
The details of the Company’s subsidiaries are as follows:
NAME OF ENTITY
Held by the Company
PRINCIPAL
ACTIVITIES
COUNTRY OF
INCORPORATION
Civmec Construction & Engineering
Pty Ltd*
Engineering and
construction services
Australia
Civmec Construction & Engineering,
Singapore Pte Ltd**
Engineering and
construction services
Singapore
% OF EQUITY HELD
BY THE GROUP
2019
2018
2017
100
100
100
100
100
100
Held by Civmec Construction
& Engineering, Singapore Pte Ltd
Civmec-Mala PNG**
Held by Civmec Construction
& Engineering Pty Ltd
Civmec Holdings Pty Ltd*
Multidiscipline Solutions Pty Ltd*
Civmec Pipe Products Pty Ltd*
Engineering and
construction services
Papua New Guinea
88
88
88
Asset holding
company
Asset holding
company and labour
supply
Asset holding
company
Australia
Australia
100
100
100
100
100
100
Australia
83.5
83.5
83.5
Civmec Electrical and Instrumentation
Pty Ltd*
Civmec DLG Pty Ltd*
Electrical services
Australia
Engineering and
construction services
Australia
Forgacs Marine and Defence Pty Ltd* Marine and defence
Australia
services
Civmec Construction & Engineering
Africa Ltd*
Asset holding
company
Mauritius
Australian Maritime Shipbuilding and
Export Group Ltd (AMSEG)*
Held by Forgacs Marine and
Defence Pty Ltd
Shipbuilding
Australia
100
100
100
100
49
100
100
100
100
49
100
50
100
100
-
Forgacs Valco Pty Ltd*
Valve services
Australia
50
50
50
Held by Civmec Construction
& Engineering Africa Ltd
Civmec Construction & Engineering
Uganda Ltd*
Asset holding
company
* Audited by Moore Stephens (WA) Pty Ltd, Australia.
** Audited by Moore Stephens LLP, Singapore.
Uganda
100
100
100
110
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
16. INVESTMENT IN SUBSIDIARIES (CONTINUED)
Deconsolidation a Subsidiary
On 3 September 2018, the Company announced it did not subscribe for additional shares in an equity raising of an indirect
subsidiary, Civtec Africa Ltd (‘Civtec’). Consequent to the share issue, the interest of the Group in Civtec was diluted from 50% to
31.9%. Civtec remains as an associated company of the subsidiary, Civmec Construction and Engineering Uganda Ltd.
In compliance to the applicable accounting standards, the Group has deconsolidated its 50% interest in Civtec and its interest is
now accounted for using the equity method.
(a) Financial performance and cash-flow information
The financial performance and cash flow information presented reflects the operations for the two-month period ended 31 August
2018 and subsequent adjustments to the contingent consideration receivable.
Profit & Loss
Revenue & other income
Costs of sales
Administrative & other expenses
Loss before income tax
Income tax expense
Loss from deconsolidation
Exchange differences on translation of deconsolidation
Total comprehensive loss from deconsolidation
Cash Flow
Net cash (outflow)/inflow from operating activities
Net cash outflow from investing activities
Net cash outflow from financing activities
Net cash (decrease)/increase generated by the former subsidiary
Basic earnings per share from deconsolidation
Diluted earnings per share from deconsolidation
GROUP
2019
A$’000
2018
A$’000
283
(227)
(159)
(103)
-
(103)
(188)
(291)
(292)
(4)
-
(296)
75
-
(1,002)
(927)
-
(927)
-
(927)
65
-
-
65
CENTS
CENTS
(0.06)
(0.06)
(0.18)
(0.18)
111
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
16. INVESTMENT IN SUBSIDIARIES (CONTINUED)
Deconsolidation a Subsidiary (Continued)
(b) Details of deconsolidation of the subsidiary
Consideration received of receivable:
Cash or shares
Fair value of 31.9% interest held in subsidiary
Total consideration
Add: carrying amount of net liabilities on deconsolidation, net of NCI
Gain on deconsolidation before income tax and reclassification of foreign
currency translation reserve
Reclassification of foreign currency translation reserve to profit or loss
Income tax expense on gain on deconsolidation
Gain on deconsolidation
The Company’s share of Civtec’s comprehensive loss from 1 July to 3 September 2018
Total gain on deconsolidation attributable to the Group
17. INVESTMENT IN JOINT VENTURES
2019
A$’000
-
-
-
2,327
2,327
(91)
-
2,236
(145)
2,091
2019
A$’000
GROUP
2018
A$’000
1 JULY 2017
A$’000
-
41
41
(19)
19
-
41
122
260
382
(432)
-
50
-
368
(246)
122
-
-
-
122
Unquoted cost of investment
Share of profit/(loss)
Cash distribution to shareholders
Written off
Other reconciling items
As at 30 June
112
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
17. INVESTMENT IN JOINT VENTURES (CONTINUED)
Details of the Group’s joint ventures 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
2019
2018
1 JULY
2017
% OF OWNERSHIP INTEREST
HELD BY THE GROUP
Held by Civmec Construction & Engineering Pty Ltd
Sedgman Civmec Joint Venture(1)
Brown & Root Civmec Pty Ltd(2)
(1) Dissolved on 28 February 2019
Engineering and
construction services
Engineering and
construction services
Australia
Australia
(2) Incorporated with Kellogg Brown & Root Pty Ltd on 13 April 2019
-
49
50
-
50
-
The summarised financial information below represents amounts shown in the joint ventures’ financial statements.
Sedgman Civmec Joint Venture
Summarised statement of financial position presented up to 28 February 2019:
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Trade and other payables - current
Net assets/(liabilities)
2019
A$’000
2018
A$’000
1 JULY 2017
A$’000
37
-
-
37
-
37
77
77
2,556
2,710
2,812
(102)
68
1,446
4,057
5,571
5,328
243
Proportion of the Group’s ownership in the joint venture
Carrying amount of the Group’s interest in the joint venture
50.0%
19*
50.0%
(51)*
50.0%
122
* Reported as Nil
Summarised statement of comprehensive income presented up to 28 February 2019:
Revenue
Operating expenses
Other income
Profit before tax
Other comprehensive income
Total comprehensive income
The joint venture has distributed the final payout to the Group in March 2019.
2019
A$’000
2018
A$’000
-
-
139
139
-
139
1,119
(604)
5
520
-
520
113
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
17. INVESTMENT IN JOINT VENTURES (CONTINUED)
Brown & Root Civmec Pty Ltd
Summarised statement of financial position.
Other receivables
Total current assets
Other payables - current
Net assets
2019
A$’000
2018
A$’000
1 JULY 2017
A$’000
82
82
-
82
-
-
-
-
-
-
-
-
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
Proportion of the Group’s ownership in the joint venture
Carrying amount of the Group’s interest in the joint venture
82
49.0%
41
-
-
-
-
-
-
Summarised statement of comprehensive income:
Revenue
Operating expenses
Administrative expenses
Profit before tax
Other comprehensive income
Total comprehensive income
2019
A$’000
2018
A$’000
557
(471)
(4)
82
-
82
-
-
-
-
-
-
18. INVESTMENT IN ASSOCIATE
Details of the Group’s associate that is accounted for using the equity method at the end of the reporting period are as follows:
NAME OF ENTITY
Held by Civmec Construction &
Engineering Uganda Ltd
Civtec Africa Ltd
PRINCIPAL
ACTIVITIES
COUNTRY OF
INCORPORATION
2019
2018
1 JULY
2017
% OF OWNERSHIP INTEREST
HELD BY THE GROUP
Engineering and
construction services
Uganda
32
50
50
Civtec Africa Ltd
Civtec Africa Ltd, previously an indirect subsidiary of the Company with equity from Civmec Construction & Engineering
Uganda Ltd (‘CCE Uganda’), an indirect subsidiary of the Company and other investors, has increased its issued shares from
175,704,642 to 274,999,624 through the issue and allotment of an additional 99,294,982 shares at UGX2.53 each (the
‘Share issue’).
114
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
18. INVESTMENT IN ASSOCIATE (CONTINUED)
Civtec Africa Ltd (Continued)
CCE Uganda did not subscribe for additional shares in the Share Issue. Consequent to the Share Issue, the interest of the Group
in Civtec has been diluted from 50% to 31.9% (the ‘Dilution’). Pursuant to the Dilution, Civtec remains as an associated company
of CCE Uganda.
The summarised financial information below represents amounts shown in the associate’s financial statements.
Statement of financial position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
2019
A$’000
648
20
(349)
(1,955)
The carrying amount of investment in associate has been reduced to Nil on the basis that the associate reported a net liability
position as at 30 June 2019.
Statement of comprehensive income:
Revenue
Profit or loss from continuing operations
Profit/(loss) for the period
Total comprehensive income for the period
03.09.2018
TO
30.06.2019
A$’000
2,906
(115)
(720)
(720)
The Group has not recognised its share of losses of an associate amounting to A$228,000 (2018: A$ Nil) because the
Group’s cumulative share of losses exceeds its interest in that entity and the Group has no obligation in respect of those losses.
The cumulative unrecognised losses amount to A$228,000 (2018: A$ Nil) at the reporting date.
19. JOINT OPERATIONS
The Group has interests in the following joint operations which are proportionately consolidated:
% OF OWNERSHIP INTEREST
HELD BY THE GROUP
NAME OF JOINT OPERATION
PRINCIPAL
ACTIVITIES
COUNTRY OF
INCORPORATION
2019
2018
1 JULY
2017
Black & Veatch Civmec JV
(‘BCJV’)
Amec Foster Wheeler Civmec JV
(‘ACJV’)
Swan River Bridge Alliance Civmec JV
(‘SRBA’)
Engineering and
construction services
Engineering and
construction services
Engineering and
construction services
Australia
Australia
Australia
50
50
33
50
50
33
50
50
-
BCJV project is for the design and construction of the wastewater treatment plant upgrade.
ACJV is for the design, procurement and installation of a process plant, administration office and warehouse.
SRBA project is for the fabrication of the pedestrian footbridge over the Swan River.
The Group is entitled to a proportionate share of the construction contract revenue earned and bears a proportionate share of
the joint operations’ expenses.
115
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
20. TRADE AND OTHER PAYABLES
Trade creditors
Sundry payables and accruals
Goods and services tax payable
Other taxes payable
GROUP
COMPANY
2019
AS$’000
2018
AS$’000
26,675
24,786
2,808
3,274
66,577
41,405
6,631
5,268
1 JULY
2017
AS$’000
35,235
17,766
3,003
3,230
2019
AS$’000
2018
AS$’000
1 JULY
2017
AS$’000
6
168
-
-
-
136
-
-
-
145
-
-
57,543
119,881
59,234
174
136
145
Trade and other payables are usually paid within 45 days.
21. BORROWINGS
Current:
Finance lease liabilities – secured (Note 21(a))
Bank bills – secured (Note 21(b))
Loan from related party – unsecured (Note 21(d))
Non-current:
Finance lease liabilities – secured (Note 21(a))
Bank bills – secured (Note 21(b))
Secured notes (Note 21(c))
Loan from related party – unsecured (Note 21(d))
2019
A$’000
6,358
2,252
320
8,930
12,804
35,444
60,000
-
108,248
117,178
GROUP
2018
A$’000
4,959
38,316
-
43,275
8,422
55,694
-
318
64,434
107,709
1 JULY 2017
A$’000
4,892
91
-
4,983
5,888
47,331
-
336
53,555
58,538
(a) Finance lease liabilities
The Group (the lessee) leases motor vehicles, workshop equipment and office fit out from non-related parties under finance
leases. The Group will obtain the ownership of the leased assets from the lessor at no extra cost at the end of the lease term.
The average lease term is between 4 and 5 years at interest rates ranging from 3.52% to 6.30% per annum (2018: 3.52% to
6.30%; 1 July 2017: 3.52% to 7.77%).
The finance lease liabilities are secured by the underlying leased assets:
Property, plant and equipment (Note 14)
2019
A$’000
21,879
2018
A$’000
23,919
1 JULY 2017
A$’000
19,742
116
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
21. BORROWINGS (CONTINUED)
(a) Finance lease liabilities (Continued)
The present values of finance lease liabilities are analysed as follows:
MINIMUM LEASE
PAYMENTS
A$’000
FUTURE FINANCE
CHARGES
A$’000
NET PRESENT
VALUE OF
MINIMUM LEASE
PAYMENTS
A$’000
7,121
13,873
20,994
5,438
9,032
14,470
5,253
6,129
11,382
(763)
(1,069)
(1,832)
(479)
(610)
(1,089)
(361)
(241)
(602)
6,358
12,804
19,162
4,959
8,422
13,381
4,892
5,888
10,780
2019
Not later than one year
Between one and five years
2018
Not later than one year
Between one and five years
1 July 2017
Not later than one year
Between one and five years
(b) Bank bills
Banking Covenants
The Group is required by the banks to maintain certain financial ratios such as loan value ratio and interest cover ratio.
As at 30 June 2019, the Group met all of these financial covenants.
As at 30 June 2019, the Group has a commercial bank facility amounting to A$44,444,000 (2018: A$100,000,000; 1 July 2017:
A$52,800,000) which was 81% (2018: 94%; 1 July 2017: 90%) utilised. Interest rates are variable and ranged between 3.07% to
3.28% (2018: 2.65% to 4.16%; 1 July 2017: 2.72% to 3.08%) per annum during the current financial year.
The bank bills are secured by certain property, plant and equipment as disclosed in Note 14 to the financial statements.
(c) Senior secured notes
The Group secured A$60,000,000 offering of 4-year secured notes (‘senior secured notes’) on 23 November 2018 to restructure
existing finance and provide funding for a portion of a world-class shipbuilding and maintenance facility at Henderson Western
Australia. The senior secured notes are unconditionally and irrevocably guaranteed by the Company and are redeemable after two
years at the Company’s option. The senior secured notes are collectively under a security trust deed and hold first ranking over all
assets held with the subsidiary, Civmec Holdings Pty Ltd, including interests in land at the Company’s Stuart Drive Henderson site
in Western Australia and the Tomago site in New South Wales Australia.
The senior secured notes bear a fixed interest rate of 7% per annum.
(d) Loan from related party
Loan from related party is non-trade, unsecured, interest-free and repayable on demand.
22. PROVISIONS
Current:
Provision for employee benefits
Non-current:
Provision for employee benefits
2019
A$’000
GROUP
2018
A$’000
1 JULY 2017
A$’000
5,557
9,197
4,634
10,191
3,935
13,132
4,831
2,955
7,786
117
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
22. PROVISIONS (CONTINUED)
The movements in provisions are as follows:
Current:
At the beginning of the year
Provisions made during the year
- Included in employee benefits
Provisions utilised during the year
At the end of the year
Non-current:
At the beginning of the year
Provisions made during the year
- Included in employee benefits
Provisions utilised during the year
At the end of the year
GROUP
2019
A$’000
2018
A$’000
9,197
4,831
18,281
(21,921)
5,557
3,935
1,019
(320)
4,634
16,705
(12,339)
9,197
2,955
1,012
(32)
3,935
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
ranges from 1.46% to 2.73% (2018: 2.51% to 3.94%; 1 July 2017: 2.28% to 4.00%).
23. SHARE CAPITAL
(a) Fully paid ordinary shares.
GROUP AND COMPANY
2019
2018
NO. OF
SHARES
A$’000
NO. OF
SHARES
A$’000
At the beginning and end of the year
501,000,000
29,807
501,000,000
29,807
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 a First and Final dividend of 0.7 Singapore cents per ordinary share (2018: 0.7 Singapore
cents) amounting to S$3,507,000 (2018: S$3,507,000) equivalent to A$3,631,000 (2018: A$3,450,000) for the financial year
ended 30 June 2018. The dividend payment was made on 13 December 2018.
The Board has recommended a first and final dividend of 0.7 Singapore cents per ordinary share for the financial year ended
30 June 2019, subject to shareholders’ approval at the forthcoming Annual General Meeting.
(b) Treasury shares
GROUP AND COMPANY
2019
2018
NO. OF
SHARES
A$’000
NO. OF
SHARES
A$’000
At the beginning and end of the year
15,000
10
15,000
10
Treasury shares relate to ordinary shares of the Company that are held by the Company.
118
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
23. SHARE CAPITAL (CONTINUED)
(c) Share options
At the beginning of the year
Options cancelled during the year
At the end of the year
GROUP AND COMPANY
2019
2018
NO. OF
SHARES
EXERCISE
A$
NO. OF
SHARES
EXERCISE
A$
4,000,000
-
4,000,000
0.65
-
0.65
4,500,000
(500,000)
4,000,000
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 disclosed in
Note 24(b) to the financial statements.
24. 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 equivalent to A$0.74 per share were fully allotted out
of treasury shares issued by the Company on 13 June 2014.
No issuance of share-based payment transactions in the current financial year.
(b) Employee Share Option Scheme
The Civmec Employee Share Option Scheme (the ‘CESOS’) was established on 27 March 2012 and formed part of the Civmec
Limited prospectus dated 5 April 2012. The CESOS is a long term incentive scheme to reward and retain key management
and employees of the Group whose service are integral to the success and the continued growth of the Group. Executive and
non-executive directors (including independent directors) and employees of the Company, who are not controlling shareholders
or their associates, are eligible to participate in the scheme. Controlling shareholders or their associates cannot participate in the
scheme unless certain conditions are satisfied and shareholder approval is obtained.
The options are issued for no consideration and carry no entitlements to voting rights or dividends of the Group and are
not transferable. The number of options granted is subject to approval by the Remuneration Committee and is based on a
performance framework which incorporates financial and/or non-financial performance measurement criteria.
Options are forfeited immediately after the holder ceases to be employed by the Group (except in the case of ill health, retirement,
redundancy or bankruptcy), unless the committee determines otherwise.
The options are issued with a strike price that is at the Remuneration Committee’s discretion, set at a price as quoted on the
Singapore Exchange for three market days immediately preceding the relevant date of grant of the option or at a discount to the
market price (subject to a maximum discount of 20%).
The vesting period for options issued with no discount to market price is over one year.
On 11 September 2013, 6,000,000 options were granted to employees under the CESOS to take up ordinary shares at an
exercise price of S$0.65 equivalent to A$0.68 per share. The options are exercisable on or before 11 September 2023.
Options granted to employees are as follows:
GRANT DATE
TOTAL NUMBER GRANTED
VESTING PERIOD
11 September 2013
6,000,000
1 year
119
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
24. SHARE-BASED PAYMENTS (CONTINUED)
(b) Employee Share Option Scheme (Continued)
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in share options
during the year:
2019
2018
1 JULY 2017
NO.
WAEP
NO.
WAEP
NO.
WAEP
Outstanding at the beginning of the year
4,000,000
0.65
4,500,000
0.65
5,000,000
Cancelled during the year
-
-
(500,000)
-
(500,000)
Outstanding at the end of the year
4,000,000
0.65
4,000,000
0.65
4,500,000
Exercisable at the end of the year
4,000,000
4,000,000
4,500,000
0.65
-
0.65
The weighted average remaining contractual life of options outstanding as at 30 June 2019 is 4 years (2018: 5 years).
The exercise price of outstanding shares was S$0.65 (2018: S$0.65) equivalent to A$0.68 (2018: A$0.64).
The fair value of the options granted to employees is deemed to represent the value of the employee services received over
the vesting period.
The weighted average fair value of options granted was S$0.38 (2018: S$0.0472) equivalent to A$0.40 (2018: A$0.40).
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$0.65
5.9 years
26%
2.68%
The expected volatility of the Company has been determined having regard to the historical volatility of the market price of the
Company’s shares and the mean reversion tendency of volatilities.
The life of the options is based on the expected exercise patterns, which may not eventuate in the future.
A liquidity discount has also been applied to the value of the options to account for historically low trading volume of the shares.
(c) Performance Rights Plan
The Civmec Limited Performance Rights Plan (the ‘CPRP’) for key senior executives of the Group was approved and adopted
by shareholders at the Annual General meeting held on 25 October 2018.
8,109,993 Performance Rights were issued during the year (FY2018: Nil).
GRANT
FY2019
Total
BALANCE AT
30 JUNE 2018
ISSUED
VESTED
FORFEITED/
LAPSED /
EXPIRED
BALANCE AT
30 JUNE 2019
-
-
8,109,993
8,109,993
-
-
-
-
8,109,993
8,109,993
The Committee has the discretion to decide if Performance Rights will lapse or vest.
120
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
25. OTHER RESERVES
GROUP
COMPANY
2019
AS$’000
2018
AS$’000
1 JULY
2017
AS$’000
2019
AS$’000
2018
AS$’000
1 JULY
2017
AS$’000
Merger reserve
7,578
7,578
7,578
7,578
Foreign currency translation reserve
Waiver of interest receivable from a subsidiary
Share option reserve
-
-
240
7,818
93
-
240
7,911
-
-
240
7,818
7,578
30
7,578
-
-
(3,335)
(3,335)
(3,335)
240
4,483
240
4,513
240
4,483
(a) Merger reserve
Pursuant to the completion of the Restructuring Exercise, the share capital of Civmec Construction & Engineering Pty Ltd and
Controlled Entities is adjusted to merger reserve based on the ‘pooling of interest method’.
(b) Foreign currency translation reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their functional currency to
the Group’s presentation currency (i.e. A$) 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.
(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 24 to the financial statements.
121
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
26. 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 one year
Between one and five years
Later than five years
2019
A$’000
2,240
13,034
50,749
66,023
GROUP
2018
A$’000
3,265
13,533
54,182
70,980
1 JULY 2017
A$’000
2,436
13,612
53,847
69,895
The Group has below commercial operating leases:
•
•
•
•
The Henderson land lease at Lot 804 (16) Nautical Drive & 2 Sepia Close, Henderson, Western Australia is for a 35-year
period from July 2009 with an option to renew for a further 35 years. Rent increases as per the CPI Index.
The Broome property lease at 266-268 Port Drive, Minyirr is for a 5-year period from August 2014. Rent increases as per
the CPI index.
The New South Wales leases at Suite 4.02, level 4, 657 Pacific Highway Street Leonards and 48 Villiers Street, Grafton,
New South Wales are for a 3-year period and 1-year period respectively.
The Group entered into two short-term leases in Western Australia: 21/43 Rockingham Beach Road and Unit 8 Stockton
Bend, Cockburn Central, for a period of less than 12 months.
(b) Capital expenditure commitments
The Group has contracted capital expenditure commitments at the reporting date but not recognised in the financial statement
as follows:
Plant and equipment purchases
Capital projects
2019
A$’000
131
10,298
10,429
GROUP
2018
A$’000
4,763
19,973
24,736
1 JULY 2017
A$’000
1,638
20,906
22,544
Not later than one year
10,429
21,429
22,544
122
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
27. 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 2019, the Group has given the following:
Group
Bank guarantee
Surety bond facility
Company
Senior secured notes
2019
A$’000
1,806
180,948
182,754
GROUP
2018
A$’000
3,701
126,854
130,555
1 JULY 2017
A$’000
9,903
99,425
109,328
60,000
-
-
The surety bond facility is provided for the provision of performance bonds to customers of the Group. It has a limit of A$250
million as at 30 June 2019 (2018: A$175 million; 1 July 2017: A$125 million).
The Company provided guarantee in respect of the senior secured notes issued to a subsidiary.
28. RELATED PARTY TRANSACTIONS
The Group’s main related parties are as follows:
Entities exercising control over the Group
The largest shareholders are James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as trustees for the JF & OT Fitzgerald
Family Trust) (19.47%) and Goldfirm Pty Ltd (acting as trustee for the Kariong Investment Trust) (19.47%).
Key management personnel
Any person having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly,
including any director (whether executive or otherwise) of that entity is considered key management personnel.
Remuneration paid to key management personnel is as follows:
Directors’ remuneration
- Salaries and other related costs
- Directors’ fees
- Benefits including defined contribution plans
Other key management personnel
- Salaries and other related costs
- Benefits including defined contribution plans
GROUP
2019
A$’000
2018
A$’000
2,031
239
130
1,604
168
4,172
1,723
212
120
2,096
298
4,449
123
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
28. RELATED PARTY TRANSACTIONS (CONTINUED)
Directors’ interest in employee share benefit plans
At the end of the reporting date, the total number of outstanding share options and performance rights that were issued/allocated
to the directors and key management personnel under existing employee benefit schemes is given below:
Share options
Directors
Key management personnel
Performance rights
Directors*
Key management personnel
2019
NO.
GROUP
2018
NO.
1 JULY 2017
NO.
-
-
-
2,000,000
2,000,000
3,000,000
2,250,000
2,544,000
-
-
-
-
*1,500,000 are pending shareholders’ approval at AGM 2019.
Other related parties
Other related parties include immediate family members of key management personnel and entities that are controlled or
significantly influenced by those key management personnel, individually or collectively with their immediate family members.
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated.
The following transactions occurred with related parties:
Purchase of goods and services
- Consultant fee paid to a related party (who is a director of the Company)
(8)
(7)
GROUP
2019
A$’000
2018
A$’000
29. 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.
124
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
29. FINANCIAL INFORMATION BY SEGMENTS (CONTINUED)
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.
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 2019,
the Group supplies to a single external customer in Metals and Minerals segment who accounts for 14.3% of external
revenue (2018: Metals and Minerals. 18.5%). The next most significant client accounts for 10.7% (2018: 8.9% and 8.7%)
of external revenue.
125
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
29. FINANCIAL INFORMATION BY SEGMENTS (CONTINUED)
2019
2018
METALS
AND
MINERALS
A$’000
INFRA-
STRUCTURE
AND
DEFENCE
A$’000
OIL
& GAS
A$’000
TOTAL
A$’000
OIL
& GAS
A$’000
METALS
AND
MINERALS
A$’000
INFRA-
STRUCTURE
AND
DEFENCE
A$’000
TOTAL
A$’000
66,545
357,085
64,881
488,511
131,077
429,584
141,754
702,415
(60,459)
(332,772)
(60,031)
(453,262)
(123,718)
(397,911)
(132,399)
(654,028)
(1,629)
(7,057)
(1,030)
(9,716)
(1,877)
(6,095)
(2,009)
(9,981)
4,457
-
17,256
-
3,820
-
-
41
-
(2)
-
-
25,533
3,298
2,091
39
(5,005)
(16,388)
(299)
(277)
8,992
(1,962)
7,030
5,482
-
25,578
-
7,346
-
38,406
8,457
-
-
-
260
-
-
-
260
(4,112)
(17,419)
(444)
-
25,148
(7,730)
17,418
-
10
-
10
-
10
-
10
426,732
1,063
1,930
429,735
128,238
117,178
10,191
255,607
68,227
438,256
1,747
2,520
442,533
150,870
107,709
13,132
271,711
26,954
Revenue – external sales
Cost of sales
(excluding depreciation)
Depreciation expense
Segment results
Other income
Gain on deconsolidation
of a subsidiary
Share of profit/(loss) of
joint venture/associate
Unallocated costs
Finance costs
Administrative expenses
Depreciation in admin
expenses
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
126
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group and the Company financial risk management policies set out the Group’s and the Company’s overall business
strategies and its risk management philosophy. The Group and the Company are exposed to financial risks arising from its
operations and the use of financial instruments. The key financial risks include credit risk, interest rate risk and liquidity risk.
The Group’s and the Company’s overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise adverse effects from the unpredictability of financial markets on the Group’s and the Company’s financial
performance.
The Board of Directors reviews and agrees policies and procedures for the management of these risks. The Audit Committee
provides independent oversight to the effectiveness of the risk management process.
The Group and the Company do not hold or issue derivative financial instruments for speculative purposes.
As at 30 June 2019, the Group’s and the Company’s financial instruments mainly consisted of cash and cash equivalents,
trade and other receivables, contract assets, trade and other payables, contract liabilities and borrowings.
There has been no change to the Group’s and the Company’s exposures to these financial risks or the manner in which it
manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below.
(a) Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group’s exposure to credit risk arises primarily from trade and other receivables, contract assets and cash and cash
equivalents. The Group adopts the policy of dealing only with:
•
Customers of appropriate credit standing and history, and obtaining sufficient collateral or buying credit insurance where
appropriate to mitigate credit risk; and
• High credit quality counterparties of at least an ‘A’ rating by external credit rating companies.
Financial assets that potentially subject to concentration of credit risk consist principally bank deposits and receivables.
The Group places its deposits with financial institutions and other creditworthy issuers and limits the amount of credit exposure to
any one party. As at 30 June 2019, the Group has concentration of credit risk on one debtor (2018: one debtor; 1 July 2017: one
debtor) that individually represents more than 35% (2018: 20%; 1 July 2017: 17%) of total trade and other receivables
and contract assets.
As the Group and the Company do not hold any collateral, the maximum exposure to credit risk for each class of financial
instruments is the carrying amount of that class of financial instruments presented on the statement of financial position, except
for financial guarantees as disclosed in Note 27 to the financial statements.
The following sets out the Group’s internal credit evaluation practices and basis for recognition and measurement for expected
credit losses (‘ECL’):
INTERNAL RATING
GRADES
i. Performing
ii. Under-performing
iii. Non-performing
iv. Write-off
DEFINITION
BASIS FOR RECOGNITION AND
MEASUREMENT OF ECL
The counterparty has a low risk of default and
does not have any past-due amounts.
12-month ECL
There has been a significant increase in credit risk
since initial recognition.
There is evidence indicating that the asset is
credit-impaired.
There is evidence indicating that there is no
reasonable expectation of recovery as the debtor
is in severe financial difficulty.
Lifetime ECL (not credit-impaired)
Lifetime ECL (credit-impaired)
Asset is written off
Trade receivables and contract assets
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure.
The Group has adopted the policy of dealing with customers with an appropriate credit history as a means of mitigating the credit risk
exposures. Credit evaluation which takes into account qualitative and quantitative profile of each customer is performed and approved by
management before credit is being granted. The Group also closely monitors customers’ payment pattern and credit exposures on
an on-going basis.
127
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(a) Credit risk (Continued)
Trade receivables and contract assets (Continued)
The Group applies the simplified approach to provide for the ECL for all trade receivables and contract assets. The simplified
approach requires the loss allowance to be measured at an amount equal to the lifetime ECL.
The Group uses a provision matrix to measure the lifetime ECL allowance for trade receivables and contract assets. In measuring
the ECL, trade receivables and contract assets are grouped based on shared credit risk characteristics and days past due.
The contract assets relate mainly to unbilled work in progress, which have substantially the same risk characteristics as the
trade receivables for the same type of contracts.
The Group has therefore concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss
rates for the contract assets.
In calculating the ECL rates, the Group considers historical loss rates for each category of customers, and adjusts for forward-
looking macroeconomic data. The Group has identified the gross domestic product (‘GDP’) growth of the countries in which
it sells goods and services to be the most relevant factor, and accordingly adjust the historical loss rates based on expected
changes in this factor.
The Group considers a financial asset as in default when the counterparty fail to make contractual payments for a prolonged
period of time when they fall due, and the Group may also consider internal and external information, such as significant adverse
changes in business, financial or economic conditions that are expected to cause a significant change to the debtor’s ability to
meet its obligation. Financial assets are written off when there is no reasonable expectation of recovering the contractual cash
flow, such as a debtor failing to engage in a repayment plan with the Group and it is becoming probable that the debtor will
enter bankruptcy or other financial reorganisation. Where receivables have been written off, the Group continues to engage in
enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognised in profit or loss.
Management has assessed and concluded that the ECL rate for trade receivables past due less than 1 year approximates Nil and
is immaterial, while the ECL rate for trade receivables past due more than 1 year approximates 50% to 100%, except for specific
cases where management has assessed the amount is still fully recoverable.
The Group’s credit risk exposure in relation to trade receivables and contract assets under SFRS(I) 9 as at 30 June 2019 are set
out in the provision matrix as follows:
Group
2019
Trade receivables
Loss allowance
PAST DUE
CURRENT
A$’000
WITHIN
60 DAYS
A$’000
61 TO 90
DAYS
A$’000
MORE
THAN 90
DAYS
A$’000
TOTAL
A$’000
44,945
-
44,945
5,661
-
5,661
111
-
111
2,363
-
2,363
53,080
-
53,080
There is no ageing analysis for contract assets as these mainly relate to variable considerations which have yet to be invoiced.
The Group has assessed and concluded that trade receivables are subject to immaterial credit loss.
There has been no change in the estimation techniques or significant assumptions made during the current reporting year.
Other receivables and receivables from subsidiaries and a related party
The Group applies the general approach to provide for the ECL for other receivables and receivables from subsidiaries and a
related party. Under the general approach, the loss allowance is measured at an amount equal to the 12-month ECL at initial
recognition.
At each reporting date, the Group assesses whether the credit risk of a financial instrument has increased significantly since initial
recognition. When credit risk has increased significantly since initial recognition, loss allowance is measured at an amount equal to
lifetime ECL.
128
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(a) Credit risk (Continued)
Other receivables and receivables from subsidiaries and a related party (Continued)
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and
informed credit assessment and includes forward-looking information.
If credit risk has not increased significantly since initial recognition or if the credit quality of the financial instruments improves such
that there is no longer a significant increase in credit risk since initial recognition, loss allowance is measured at an amount equal
to 12-month ECL.
Impairment of these balances have been measured on the 12-month ECL basis which reflects the low credit risk of exposures.
These amounts are subject to immaterial credit loss.
Cash and cash equivalents
The cash and bank balances are entered into with bank and financial institution counterparties, which are rated at least AA, based
on international credit rating agencies.
For the purpose of impairment, cash and cash equivalents has been measured on the 12-month expected loss basis and reflects
the short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit risk based on the
external credit ratings of the counterparties.
Financial guarantees
The Company has issued financial guarantees to financial institutions for borrowings of its subsidiaries. These guarantees are
subject to the impairment requirements of SFRS(I) 9. The Company has assessed that its subsidiaries have the financial capacity
to meet the contractual cash flow obligations in the near future and hence, does not expect significant credit losses arising from
these guarantees.
Previous accounting policy for impairment of loans and receivables
In 2018, the impairment of financial assets was assessed based on the incurred loss impairment model. Individual receivables
which were known to be uncollectible were written off by reducing the carrying amount directly. The other receivables were
assessed collectively, to determine whether there was objective evidence that an impairment had been incurred but not
yet identified.
The Group considered that there was evidence if any of the following indicators were present:
• Significant financial difficulties of the debtor;
• Probability that the debtor will enter bankruptcy or financial reorganisation; and
• Default or delinquency in payments.
Financial assets that are neither past due nor impaired
Cash and cash equivalents that are neither past due nor impaired are mainly deposits with banks with high credit ratings assigned
by international credit rating agencies. Trade and other receivables that are neither past due nor impaired are substantially from
companies with a good collection track record with the Group.
Financial assets that are past due but not impaired
There is no other class of financial assets that is past due but not impaired except for trade receivables.
The Group’s credit risk exposure in relation to trade receivables under SFRS 39 as at 30 June 2018 and 1 July 2017 are set out
as follows:
Group
2018
Trade receivables
1 July 2017
Trade receivables
PAST DUE
CURRENT
A$’000
WITHIN
60 DAYS
A$’000
61 TO 90
DAYS
A$’000
MORE
THAN 90
DAYS
A$’000
TOTAL
A$’000
60,321
57,193
6,901
1,030
125,445
30,570
18,808
908
1,021
51,307
129
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(a) Credit risk (Continued)
Previous accounting policy for impairment of loans and receivables (Continued)
Financial assets that are past due but not impaired (Continued)
The Group believes that the unimpaired amounts that are past due are still collectible based on historic payment behaviour and
extensive analyses of customer credit risk, including underlying customers’ credit ratings, when available. Based on the Group’s
monitoring of customer credit risk, the Group believes that, apart from the above, no impairment allowance is necessary in
respect of receivables which are past due.
(b) Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period
whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
The Group is also exposed to earnings volatility on floating rate instruments.
Interest rate risk is managed using a mix of fixed and floating rate debt. At 30 June 2019, approximately 68% (2018: 12%; 1
July 2017: 19%) of the Group’s debt is fixed. The Group’s borrowings at variable rates are denominated mainly in A$. If the A$
interest rates increase/decrease by 1% (2018: 1%) with all other variables remain constant, the Group’s profit before tax will be
approximately lower/higher by A$377,000 (2018: A$899,000) as a result of higher/lower interest expenses on these borrowings.
The Group and the Company has cash balances placed with reputable banks and financial institutions. Such balances are placed
on varying maturities and generate interest income for the Group and the Company.
The Group obtains additional financing through bank borrowings and leasing arrangements. Information relating to the Group’s
interest rate exposure is also disclosed in the notes on the Group’s borrowings and leasing obligations. They are both fixed and
floating rates of interest. The policy is to retain flexibility in selecting borrowings at both fixed and floating rates interest.
VARIABLE RATES
FIXED RATES
WITHIN
1 YEAR
A$’000
BETWEEN
2 AND 5
YEARS
A$’000
WITHIN
1 YEAR
A$’000
BETWEEN
2 AND 5
YEARS
A$’000
NON-
INTEREST
BEARING
A$’000
TOTAL
A$’000
40,656
-
-
40,656
-
-
-
-
-
-
-
-
-
-
-
-
2,252
35,444
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,358
-
-
-
12,804
60,000
-
-
6
63,558
40,662
63,558
117,443
117,443
181,007
221,663
51,461
69,333
-
-
-
320
51,461
69,333
19,162
60,000
37,696
320
2,252
35,444
6,358
72,804
121,114
237,972
Group
2019
Financial assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Financial liabilities
Trade and other payables
Contract liabilities
Borrowings
- Finance lease
- Senior secured notes
- Bank bills
- Related party
130
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
b) Interest rate risk (Continued)
VARIABLE RATES
FIXED RATES
WITHIN
1 YEAR
A$’000
BETWEEN
2 AND 5
YEARS
A$’000
WITHIN
1 YEAR
A$’000
BETWEEN
2 AND 5
YEARS
A$’000
NON-
INTEREST
BEARING
A$’000
TOTAL
A$’000
Group
2018
Financial assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Financial liabilities
Trade and other payables
Contract liabilities
Borrowings
- Finance lease
- Bank bills
- Related party
Group
1 JULY 2017
Financial assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Financial liabilities
Trade and other payables
Contract liabilities
Borrowings
- Finance lease
- Bank bills
- Related party
23,363
-
-
23,363
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6
23,369
125,662
125,662
140,201
140,201
265,869
289,232
107,982
107,982
30,989
30,989
4,959
8,422
38,316
55,694
-
318
-
-
-
-
-
-
-
13,381
94,010
318
38,316
56,012
4,959
8,422
138,971
246,680
22,688
-
-
22,688
-
-
-
91
-
91
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,892
5,888
47,331
336
-
-
-
-
24
52,339
84,553
22,712
52,339
84,553
136,916
159,604
53,001
15,999
-
-
-
53,001
15,999
10,780
47,422
336
47,667
4,892
5,888
69,000
127,538
131
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(b) Interest rate risk (Continued)
VARIABLE RATES
FIXED RATES
WITHIN
1 YEAR
A$’000
BETWEEN
2 AND 5
YEARS
A$’000
WITHIN
1 YEAR
A$’000
BETWEEN
2 AND 5
YEARS
A$’000
NON-
INTEREST
BEARING
A$’000
TOTAL
A$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6
29,513
29,519
6
29,513
29,519
174
174
174
174
5
34,285
34,290
5
34,285
34,290
136
136
136
136
24
27,612
27,636
24
27,612
27,636
145
145
145
145
Group
2019
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
2018
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
1 July 2017
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
(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.
132
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(c) Liquidity risk (Continued)
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may
therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect the earliest
contractual settlement dates and do not reflect management’s expectations that banking facilities will be rolled forward. Balances
due within 12 months equal their carrying amount as the impact of discounting is not significant.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Group
Financial liabilities
2019
Trade and other payables
Contract liabilities
Borrowings
- Finance lease
- Secured notes
- Bank bills
- Related party
CONTRACTUAL UNDISCOUNTED CASH FLOWS
CARRYING
AMOUNT
A$’000
WITHIN
1 YEAR
A$’000
BETWEEN
2 AND 5 YEARS
A$’000
TOTAL
A$’000
51,461
69,333
19,162
60,000
37,696
320
51,461
69,333
7,121
4,200
2,320
320
-
-
13,873
73,503
37,603
-
51,461
69,333
20,994
77,703
39,923
320
Total financial liabilities
237,972
134,755
124,979
259,734
2018
Trade and other payables
Contract liabilities
Borrowings
- Finance lease
- Bank bills
- Related party
107,982
30,989
13,381
94,010
318
107,982
30,989
5,438
39,465
-
Total financial liabilities
246,680
183,874
1 July 2017
Trade and other payables
Contract liabilities
Borrowings
- Finance lease
- Bank bills
- Related party
Total financial liabilities
53,001
15,999
10,780
47,422
336
127,538
53,001
15,999
5,253
91
-
74,344
-
-
9,032
59,086
347
68,465
-
-
6,129
50,256
367
56,752
107,982
30,989
14,470
98,551
347
252,339
53,001
15,999
11,382
50,347
367
131,096
133
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(c) Liquidity risk (Continued)
Company
Financial liabilities
2019
Trade and other payables
Total financial liabilities
2018
Trade and other payables
Total financial liabilities
1 July 2017
Trade and other payables
Total financial liabilities
CONTRACTUAL UNDISCOUNTED CASH FLOWS
CARRYING
AMOUNT
A$’000
WITHIN
1 YEAR
A$’000
BETWEEN
2 AND 5 YEARS
A$’000
TOTAL
A$’000
174
174
136
136
145
145
174
174
136
136
145
145
-
-
-
-
-
-
174
174
136
136
145
145
The Group’s undrawn borrowings facilities and guarantee are disclosed in Note 21(b) and 27 to the financial
statements respectively.
(d) Capital Management
Management controls the capital of the Group in order to maintain a good debt-to-equity ratio, provide the shareholders
with adequate returns and to ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
The Group and the Company have no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure
in response to changes in these risks and in the market. These responses include the management of debt levels, distribution
to shareholders and share issues.
The net debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as total financial liabilities
less cash and cash equivalents.
Net debt
Total equity
Net debt-to-equity ratio
2019
A$’000
197,310
174,128
1.13
GROUP
2018
A$’000
223,311
170,822
1.31
1 JULY 2017
A$’000
104,826
156,761
0.67
There were no changes in the Group’s approach to capital management during the current financial year.
134
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(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.
31. LITIGATION
Perth Stadium Project
In February 2019, the Group lodged a writ in the Supreme Court of Western Australia against Brookfield Multiplex Engineering
and Infrastructure Pty Ltd (‘Brookfield Multiplex’), in relation to the valuation of additional time and changes to the works
undertaken in the delivery of the new Perth Stadium project in Western Australia.
The Group is seeking a determination from the Supreme Court to recover costs associated with the changes in scope and nature
of the works required to be completed and for the granting of Practical Completion.
Management, in consultation with legal advisors, is of the view that the Group has merit against Brookfield Multiplex. The Group
has also engaged specialist consultants to support its pursuit of the matter.
135
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
32. TRANSITION TO SFRS(I) AND ADOPTION OF NEW STANDARDS
In December 2017, the Accounting Standards Council (‘ASC’) issued the Singapore Financial Reporting Standards (International)
(‘SFRS(I)’). SFRS(I) comprises standards and interpretations that are equivalent to International Financial Reporting Standards
(‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’) at 31 December 2017 that are applicable for annual
period beginning on 1 January 2018. Singapore-incorporated companies that have issued, or are in the process of issuing, equity
or debt instruments for trading in a public market in Singapore, will apply SFRS(I) with effect from annual periods beginning on or
after 1 January 2018.
As stated in Note 2(a), these are the first financial statements of the Group and of the Company prepared in accordance
with SFRS(I).
The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended
30 June 2019, the comparative information presented in these financial statements for the year ended 30 June 2018 and in the
preparation of the opening SFRS(I) statement of financial position at 1 July 2017 (the Group’s date of transition), subject to the
mandatory exceptions and optional exemptions under SFRS(I) 1.
In preparing the opening SFRS(I) statement of financial position, the Group has adjusted amounts reported previously in the
financial statements prepared in accordance with previous SFRS.
In addition to the adoption of the new framework, the Group also concurrently applied the following SFRS(I)s, interpretations of
SFRS(I)s and requirements of SFRS(I)s which are mandatorily effective from the same date.
•
•
•
•
•
•
SFRS(I) 15 Revenue from Contracts with Customers which includes clarifications to IFRS 15 Revenue from Contracts with
Customers issued by the IASB in April 2016;
SFRS(I) 9 Financial Instruments which includes amendments arising from IFRS 4 Insurance Contracts issued by the IASB in
September 2016;
requirements in SFRS(I) 2 Share-based Payment arising from the amendments to IFRS 2 Classification and Measurement of
Share-based Payment Transactions issued by the IASB in June 2016;
requirements in SFRS(I) 1-40 Investment Property arising from the amendments to IAS 40 – Transfers of Investment Property
issued by the IASB in December 2016;
requirements in SFRS(I) 1 arising from the amendments to IFRS 1 – Deletion of short-term exemptions for first-time adopters
issued by the IASB in December 2016;
requirements in SFRS(I) 1-28 Investments in Associates and Joint Ventures arising from the amendments to IAS 28 –
Measuring an associate or joint venture at fair value issued by the IASB in December 2016; and
• SFRS(I) INT 22 Foreign Currency Transactions and Advance Consideration.
136
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
32. TRANSITION TO SFRS(I) AND ADOPTION OF NEW STANDARDS (CONTINUED)
The application of SFRS(I) 1 and the above standards and interpretations do not have a material effect on the consolidated
financial statements, except for SFRS(I) 15.
The following reconciliations summarise the impacts on initial application of SFRS(I) 15 on the Group’s financial position as
at 1 July 2017 and 30 June 2018, and the Group’s statement of comprehensive income for the year ended 30 June 2018.
There were no material adjustments to the Group’s statement of cash flows for the year ended 30 June 2018 arising on
transition to SFRS(I).
Reconciliation of the Group’s consolidated statement of financial position:
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Amount due from customers for contracts in progress
Other assets
Current tax recoverable
Non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Amount due to customers for contracts in progress
Borrowings
Provisions
Current tax payable
Non-current liabilities
Total liabilities
Equity attributable to owners of the Company
Share capital
Treasury shares
Other reserves
Retained earnings
Non-controlling interest
Total equity
Total liabilities and equity
30 JUNE 2018
NOTE
SFRS
FRAMEWORK
A$’000
SFRS(I) 15
A$’000
SFRS(I)
FRAMEWORK
A$’000
(b)(i), (ii)
(b)(i), (ii)
(b)(i)
(b)(ii)
(b)(i)
(b)(i)
(b)(i)
(b)(ii)
(b)(ii)
23,369
136,766
-
151,352
1,747
-
313,234
146,241
459,475
127,692
-
23,178
43,275
9,197
1,363
204,705
68,369
273,074
29,807
(10)
7,911
149,726
187,434
(1,033)
186,401
459,475
-
(11,104)
140,201
(151,352)
-
5,313
(16,942)
-
(16,942)
(7,811)
30,989
(23,178)
-
-
(1,363)
(1,363)
-
(1,363)
-
-
-
(15,579)
(15,579)
-
(15,579)
(16,942)
23,369
125,662
140,201
-
1,747
5,313
296,292
146,241
442,533
119,881
30,989
-
43,275
9,197
-
203,342
68,369
271,711
29,807
(10)
7,911
134,147
171,855
(1,033)
170,822
442,533
137
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
32. TRANSITION TO SFRS(I) AND ADOPTION OF NEW STANDARDS (CONTINUED)
Reconciliation of the Group’s consolidated statement of financial position: (Continued)
1 JULY 2017
NOTE
SFRS
FRAMEWORK
A$’000
SFRS(I) 15
A$’000
SFRS(I)
FRAMEWORK
A$’000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Amount due from customers for contracts in progress
Other assets
Current tax recoverable
Non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Amount due to customers for contracts in progress
Borrowings
Provisions
Non-current liabilities
Total liabilities
Equity attributable to owners of the Company
Share capital
Treasury shares
Other reserves
Retained earnings
Non-controlling interest
Total equity
Total liabilities and equity
(b)(i), (ii)
(b)(i), (ii)
(b)(i)
(b)(ii)
(b)(i)
(b)(i)
(b)(i)
22,712
62,304
-
86,255
1,192
4,223
176,686
129,906
306,592
71,169
-
4,064
4,983
4,831
85,047
56,510
141,557
29,807
(10)
7,818
127,759
165,374
(339)
165,035
306,592
-
(10,118)
84,553
(86,255)
-
3,546
(8,274)
-
(8,274)
(11,935)
15,999
(4,064)
-
-
-
-
-
-
-
-
(8,274)
(8,274)
-
(8,274)
(8,274)
22,712
52,186
84,553
-
1,192
7,769
168,412
129,906
298,318
59,234
15,999
-
4,983
4,831
85,047
56,510
141,557
29,807
(10)
7,818
119,485
157,100
(339)
156,761
298,318
138
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
32. TRANSITION TO SFRS(I) AND ADOPTION OF NEW STANDARDS (CONTINUED)
Reconciliation of the Group’s consolidated statement of comprehensive income:
Revenue
Cost of sales
Gross profit
Other income
Share of profit of a joint venture
Administrative expenses
Finance costs
NOTE
(b)(ii)
30 JUNE 2018
SFRS
FRAMEWORK
A$’000
SFRS(I) 15
A$’000
SFRS(I)
FRAMEWORK
A$’000
712,850
(664,009)
(10,435)
-
702,415
(664,009)
48,841
(10,435)
38,406
8,457
260
(17,863)
(4,112)
-
-
–
-
8,457
260
(17,863)
(4,112)
Profit before tax
35,583
(10,435)
25,148
Income tax expense
(b)(ii)
(10,860)
3,130
(7,730)
Profit for the year
Profit attributable to:
Owners of the Company
Non-controlling interest
Earnings per share attributable to equity holders of the
Company (cents per share):
- Basic
- Diluted
Other comprehensive income:
Item that may be reclassified subsequently to profit or loss
Exchange differences on re-translation from functional
currency to presentation currency
24,723
(7,305)
17,418
25,417
(694)
24,723
5.07
5.07
(7,305)
-
(7,305)
(1.45)
(1.45)
18,112
(694)
17,418
3.62
3.62
93
-
93
Total comprehensive income for the year
24,816
(7,305)
17,511
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interest
25,510
(694)
24,816
(7,305)
-
(7,305)
18,205
(694)
17,511
139
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
32. TRANSITION TO SFRS(I) AND ADOPTION OF NEW STANDARDS (CONTINUED)
Adoption of new standards
(a) SFRS(I) 9
The Group adopted SFRS(I) 9 from 1 July 2018. In accordance with the exemption in SFRS(I) 1, the Group elected not to restate
information for 2018. Accordingly, the information presented for 2018 is presented, as previously reported, under SFRS 39
Financial Instruments: Recognition and Measurement.
Arising from this election, the Group is exempted from providing disclosures required by SFRS(I) 7 Financial Instruments:
Disclosures for the comparative period to the extent that these disclosures relate to items within the scope of SFRS(I) 9. Instead,
disclosures under SFRS 107 Financial Instruments: Disclosures relating to items within the scope of SFRS 39 are provided for the
comparative period.
Changes in accounting policies resulting from the adoption of SFRS(I) 9 have been generally applied by the Group retrospectively,
except as described below.
•
The following assessments were made on the basis of facts and circumstances that existed at 1 July 2018:
- The determination of the business model within which a financial asset is held;
- The determination of whether the contractual terms of a financial asset give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding;
- The designation of an equity investment that is not held-for-trading as at FVOCI; and
- The designation and revocation of previous designations of certain financial assets and financial liabilities measured
at FVPL.
•
If a debt investment has low credit risk at 1 July 2018, the Group had assumed that the credit risk on the asset has not
increased significantly since its initial recognition.
(b) SFRS(I) 15
SFRS(I) 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised.
It also introduces new cost guidance which requires certain costs of obtaining and fulfilling contracts to be recognised as
separate assets when specified criteria are met.
The Group adopted SFRS(I) 15 in its financial statements using the retrospective approach. All requirements of SFRS(I) 15 have
been applied retrospectively, except for the application of the practical expedients as described below.
The Group has applied the following practical expedients as allowed under SFRS(I) 1:
•
•
•
Completed contracts that began and ended in the same annual reporting period in 2018 and contracts completed at
1 July 2017 are not restated;
For completed contracts that have variable consideration, the Group used the transaction price at the date the contract
was completed to restate comparative information; and
For the year ended 30 June 2018, the Group did not disclose the amount of the transaction price allocated to the remaining
performance obligations and an explanation of when the Group expects to recognise that amount as revenue.
The impact upon the adoption of SFRS(I) 15, including the corresponding tax effects, are described below.
(i) Presentation of contract assets and liabilities
On adopting SFRS(I) 15, the Group has also changed the presentation of the following amounts:
• ‘Amount due from customers for contracts in progress’ classified as ‘Contract assets’ of A$151,352,000 as at
30 June 2018 and A$86,225,000 as at 1 July 2017;
• ‘Amount due to customers for contracts in progress’ classified as ‘Contract liabilities’ of A$23,178,000 as at
30 June 2018 and A$4,064,000 as at 1 July 2017;
• Retention sum receivables’ classified as “Contract assets” of A$4,957,000 as at 30 June 2018 and A$4,957,000 as at
1 July 2017; and
• ‘Advance billings’ classified as ‘Contract liabilities’ of A$7,811,000 as at 30 June 2018 and A$11,935,000 as at
1 July 2017.
140
CIVMEC ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
32. TRANSITION TO SFRS(I) AND ADOPTION OF NEW STANDARDS (CONTINUED)
Adoption of new standards (Continued)
(b) SFRS(I) 15 (Continued)
(ii) Accounting for construction contracts
The contracted terms and the way in which the Group operates its construction and services contracts results in revenue
predominantly being derived from projects containing one performance obligation. Construction and service revenue will continue
to be recognised over time, however, the new standard provides new requirements for variable consideration such as incentives
and contract modifications (variations and claims) which all impart a higher threshold of probability for recognition.
Revenue was previously recognised when it was probable that work performed will result in revenue, whereas under the new
standard, revenue is recognised when it is highly probable that a significant reversal of revenue will not occur. The adjustments
made to comparatives, as reflected above, arise from these new requirements applying to variable consideration.
The adjustments are subject to tax effect accounting and therefore the net deferred tax position has also been reflected in
these adjustments.
This resulted in a decrease of A$10,435,000 and A$3,130,000 in revenue and income tax expense respectively for the financial
year ended 30 June 2018, and a corresponding decrease in total equity of A$15,579,000 as at 1 July 2018.
33. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
A number of new standards and interpretations and amendments to standards are effective for annual periods beginning after
1 January 2018 and earlier application is permitted; however, the Group has not early adopted the new or amended standards
and interpretations in preparing these financial statements.
The following new SFRS(I)s, interpretations and amendments to SFRS(I)s are effective for annual periods beginning after
1 January 2018.
Effective for annual periods beginning on or after 1 January 2019:
• SFRS(I) 16 Leases;
• SFRS(I) INT 23 Uncertainty over Income Tax Treatments;
• Long-term Interests in Associates and Joint Ventures (Amendments to SFRS(I) 1-28);
• Prepayment Features with Negative Compensation (Amendments to SFRS(I) 9);
• Previously Held Interest in a Joint Operation (Amendments to SFRS(I) 3 and 11);
•
Income Tax Consequences of Payments on Financial Instruments Classified as Equity (Amendments to SFRS(I) 1-12);
• Borrowing Costs Eligible for Capitalisation (Amendments to SFRS(I) 1-23); and
• Plan Amendment, Curtailment or Settlement (Amendments to SFRS(I) 1-19).
Effective for annual periods beginning on or after 1 January 2020:
• Definition of a Business (Amendments to SFRS(I) 3); and
• Definition of Material (Amendments to SFRS(I) 1-1 and SFRS(I) 1-8).
Effective for annual periods beginning on or after 1 January 2021:
• SFRS(I) 17 Insurance Contracts.
Mandatory effective date deferred:
•
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to SFRS(I) 10
and SFRS(I) 1-28).
141
CIVMEC ANNUAL REPORT 2019 NOTES TO THE
FINANCIAL STATEMENTS
For the year ended 30 June 2019
33. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED (CONTINUED)
The Group has assessed that the adoption of the above SFRS(I)s, SFRS(I) INTs and amendments to SFRS(I) in future periods
will not have a material impact on the financial statements of the Group and of the Company in the period of their initial adoption
except for the following.
(a) SFRS(I) 16
SFRS(I) 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use (‘ROU’)
asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments.
There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to
the current standard – i.e. lessors continue to classify leases as finance or operating leases. SFRS(I) 16 replaces existing lease
accounting guidance, including SFRS(I) 1-17 Leases, SFRS(I) INT 4 Determining whether an Arrangement contains a Lease,
SFRS(I) INT 1-15 Operating Leases – Incentives and SFRS(I) INT 1-27 Evaluating the Substance of Transactions Involving
the Legal Form of a Lease. The standard is effective for annual periods beginning on or after 1 January 2019, with early
adoption permitted.
The Group and the Company plan to apply SFRS(I) 16 initially on 1 July 2019, using the modified retrospective approach.
Therefore, the cumulative effect of adopting SFRS(I) 16 will be recognised as an adjustment to the opening balance of retained
earnings at 1 July 2019, with no restatement of comparative information. The Group and the Company plan to apply the practical
expedient to grandfather the definition of a lease on transition. This means that they will apply SFRS(I) 16 to all contracts entered
into before 1 July 2019 and identified as leases in accordance with SFRS(I) 1-17 and SFRS(I) INT 4.
(i) The Group as lessee
The Group and the Company expect to measure lease liabilities by applying a single discount rate to their portfolio of warehouse
and factory facilities leases. Furthermore, the Group and the Company are likely to apply the practical expedient to recognise
amounts of ROU assets equal to their lease liabilities at 1 July 2019. For lease contracts that contain the option to renew, the
Group and the Company are expected to use hindsight in determining the lease term.
The Group and the Company expect their existing operating lease arrangements to be recognised as ROU assets with
corresponding lease liabilities under SFRS(I) 16. Lease payments that are increased every five years to reflect market rentals,
and those that are based on changes in local price index, are included in the measurement of lease liabilities as at date of initial
application. In addition, the Group will no longer recognise provisions for operating leases that it assessed to be onerous.
Instead, the Group will include the payments due under the lease in their lease liability.
As at the reporting date, the Group has non-cancellable operating lease commitments of $66,023,000 as disclosed in Note 26(a)
to the financial statements. Of these commitments, approximately $147,000 relate to short-term leases which will be recognised
on a straight-line basis as expense in profit or loss. For the remaining lease commitments, the Group expects an increase in
ROU assets of approximately $26,862,000, an increase in lease liability of $29,857,000, an increase in deferred tax assets of
$614,000 and a decrease in opening retained earnings of $2,048,000. Overall net assets will be approximately $5,286,000
lower as at 1 July 2019.
The Group expects that net profit after tax will decrease by approximately $400,000 for financial year 2020 as a result of adopting
the new rules. Adjusted EBITDA used to measure segment results is expected to increase by approximately $2,576,000 as the
operating lease payments were included in EBITDA, but the amortization of the ROU asset and interest on the lease liability are
excluded from this measure. Operating cash flows will increase and financing cash flows decrease by approximately $2,592,000
as repayment of the principal portion of the lease liabilities will be classified as cash flows from financing activities.
The Company expects no impacts on its financials as it has no non-cancellable operating leases as at 1 July 2019.
The nature of expenses related to those leases will change as SFRS(I) 16 replaces the straight-line operating lease expense with
depreciation charge for ROU assets and interest expense on lease liabilities.
No significant impact is expected for the Group’s and the Company’s finance leases. The Group and the Company do not expect
the adoption of SFRS(I) 16 to impact their ability to comply with the revised maximum loan value ratio and interest cover ratio loan
covenant described in Note 21 to the financial statements.
142
CIVMEC ANNUAL REPORT 2019 STATISTICS OF
SHAREHOLDERS
SHAREHOLDERS’ STATISTICS AND DISTRIBUTION AS AT 16 SEPTEMBER 2019
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
:
:
:
:
:
NO. OF
SHAREHOLDERS
DISTRIBUTION OF SHAREHOLDINGS
SIZE OF
SHAREHOLDINGS
1 - 99
100 - 1,000
1,001 – 10,000
10,001 – 1,000,000
1,000,001 and Above
TOTAL
3
32
323
401
28
787
%
0.38
4.07
41.04
50.95
3.56
100.00
NO. OF
SHARES
40
24,419
1,962,767
41,071,153
457,926,621
500,985,000
%
0.00
0.00
0.39
8.20
91.41
100.00
TWENTY LARGEST SHAREHOLDERS AS AT 16 SEPTEMBER 2019
NAME OF SHAREHOLDER
CGS-CIMB SECURITIES (SINGAPORE) PTE LTD
CHESS DEPOSITARY NOMINEES PTY LIMITED
DBS NOMINEES PTE LTD
CITIBANK NOMINEES SINGAPORE PTE LTD
RAFFLES NOMINEES (PTE) LIMITED
MAYBANK KIM ENG SECURITIES PTE LTD
FOO SIANG GUAN
LEE TECK LENG
UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED
NG KEE CHOE
GOH GEOK LING
LAI VOON NEE
POH ENG CHOO MARY
LEYAU LAY HOON
HENG KHENG LONG
PHILLIP SECURITIES PTE LTD
OCBC SECURITIES PRIVATE LTD
PANG CHIN FATT
UOB KAY HIAN PTE LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20 WONG YEW MENG
TOTAL
NO. OF
SHARES
152,618,822
119,149,510
48,894,259
39,337,371
29,915,000
7,674,574
7,415,249
5,700,200
4,722,400
3,700,134
3,425,134
3,300,000
3,277,400
3,260,399
3,255,845
2,922,900
2,902,400
2,273,000
2,102,200
1,906,000
447,752,797
% OF
SHARES
30.46
23.78
9.76
7.85
5.97
1.53
1.48
1.14
0.94
0.74
0.68
0.66
0.65
0.65
0.65
0.58
0.58
0.45
0.42
0.38
89.35
Note: The percentage is based on 500,985,000 shares (excluding 15,000 shares held as treasury shares)
as at 16 September 2019.
143
CIVMEC ANNUAL REPORT 2019 STATISTICS OF
SHAREHOLDERS
SUBSTANTIAL SHAREHOLDERS
NAME
JF & OT Fitzgerald Family Trust (1)
Kariong Investment Trust (2)
Michael Lorrain Vaz (3)
James Finbarr Fitzgerald (and Olive Teresa Fitzgerald) (1)
Goldfirm Pty Ltd (2)
Patrick John Tallon (2)
Note:
DIRECT INTEREST
DEEMED INTEREST
NO. OF
SHARES
97,720,806
97,566,806
15,013,000
-
-
%
19.51
19.47
3.00
-
-
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 is 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 has deemed interest in 23,812,000 shares which are held by Clarendon Pacific Ventures Pte. Ltd.
PERCENTAGE OF SHAREHOLDING IN PUBLIC’S HANDS
Based on Shareholders’ Information as at 16 September 2019 and to the best knowledge of the Directors, approximately
50.6% 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.
144
CIVMEC ANNUAL REPORT 2019 NOTICE OF
ANNUAL GENERAL MEETING
CIVMEC LIMITED
Company Registration No. 201011837H
(Incorporated in the Republic of Singapore)
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the
Carlton Hotel, Level 2, 76 Bras Basah Road, Singapore 189558 on Tuesday, 29 October 2019 at 2:30pm
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 2019 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 2019.
Ordinary Resolution 2
To approve the payment of Directors’ fees of S$231,000 for the financial year ending
30 June 2020, to be paid quarterly in arrears. (FY2019: S$220,000)
Ordinary Resolution 3
To re-elect the following Directors retiring pursuant to Article 118 of the Company’s
Constitution and for the purposes of ASX Listing Rule 14.5:
(a) Mr James Finbarr Fitzgerald
[See Explanatory Note (iv)]
(b) Mr Patrick John Tallon
[See Explanatory Note (iv)]
(c) Mr Kevin James Deery
[See Explanatory Note (iv)]
(d) Mr Chong Teck Sin
[See Explanatory Notes (i) and (iv)]
(e) Mr Wong Fook Choy Sunny
[See Explanatory Notes (ii) and (iv)]
(f) Mr Douglas Owen Chester
[See Explanatory Notes (iii) and (iv)]
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6
Ordinary Resolution 7
Ordinary Resolution 8
Ordinary Resolution 9
5
To re-appoint Messrs Moore Stephens LLP as the Auditors of the Company
and to authorise the Directors to fix their remuneration.
Ordinary Resolution 10
145
CIVMEC ANNUAL REPORT 2019 NOTICE OF
ANNUAL GENERAL MEETING
AS SPECIAL BUSINESS:
To consider and, if thought fit, to pass with or without modifications the following resolutions, of which Resolutions 11, 12, 13, 14
and 15 will be proposed as Ordinary Resolutions and Resolution 16 will be proposed as a Special Resolution:
6
Authority to allot and issue shares
That pursuant to Section 161 of the Companies Act, Chapter 50 of Singapore (the
‘Companies Act’), and the listing rules of the Singapore Exchange Securities Trading
Limited (‘SGX-ST’), and subject to the Company’s compliance with the requirements of
the ASX Listing Rules, authority be and is hereby given for the Directors of the Company
(‘Directors’) 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:
Ordinary Resolution 11
(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:
(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 (v)]
146
CIVMEC ANNUAL REPORT 2019 NOTICE OF
ANNUAL GENERAL MEETING
AS SPECIAL BUSINESS: (CONTINUED)
7
Proposed Renewal of the Share Purchase Mandate
That:
(a) for the purposes of Sections 76C and 76E of the Companies Act, and such
other laws and regulations as may for the time being be applicable, the exercise
by the 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 from time to time up to the Maximum Price
(as hereafter defined), whether by way of:
Ordinary Resolution 12
(i) on-market purchases (‘On-Market Share Purchase’) transacted on the SGX-ST;
and/or
(ii) off-market purchases (‘Off-Market Share Purchase’) (if effected otherwise
than on the SGX-ST) in accordance with an equal access scheme(s) as may
be determined or formulated by the Directors as they may consider fit, which
scheme(s) shall satisfy all the conditions prescribed by the Companies Act
and the Listing Manual of the SGX-ST,
(the ‘Share Purchase Mandate’);
(b) any Share that is purchased or otherwise acquired by the Company pursuant to the
Share Purchase Mandate shall, at the discretion of the Directors, either be cancelled
or held in treasury and dealt with in accordance with the Companies Act;
(c) the authority conferred on the Directors pursuant to the Share Purchase Mandate
may be exercised by the Directors at any time and from time to time during the
period commencing from the passing of this Resolution and the expiring on the
earliest of:
(i) the date on which the next Annual General Meeting of the Company is held or
required by law to be held;
(ii) the date on which the share purchases are carried out to the full extent
mandated; or
(iii) the date on which the authority contained in the Share Purchase Mandate is
varied or revoked;
(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;
147
CIVMEC ANNUAL REPORT 2019 NOTICE OF
ANNUAL GENERAL MEETING
AS SPECIAL BUSINESS: (CONTINUED)
7
Proposed Renewal of the Share Purchase Mandate (continued)
(d) in this Ordinary Resolution (continued)
Ordinary Resolution 12
‘Relevant Period’ means the period commencing from the date the last annual
general meeting of the Company was held before the date of passing of this
Resolution, and expiring on the date the next annual general meeting of the Company
is held or is required by law to be held, whichever is the earlier, after the date of passing
of this Resolution;
‘Maximum Price’ in relation to a Share to be purchased, means an amount
(excluding related brokerage, commission, applicable goods and services tax, stamp
duties, clearance fees and other related expenses) not exceeding 105% of the Average
Closing Price, excluding related expenses of the share purchases, and where:
‘Average Closing Price’ means the average of the closing market prices of a Share
over the last five (5) Market Days, on which transactions in the Shares were recorded,
immediately preceding the date of making the On-Market Share Purchase or, as the
case may be, the day of the making of an offer pursuant to the Off-Market Share
Purchase, and deemed to be adjusted, in accordance with the rules of the SGX-ST,
for any corporate action that occurs after the relevant five (5) Market Days;
‘day of the making of the offer’ means the day on which the Company announces
its intention to make an offer for the purchase of Shares from Shareholders, stating the
purchase price (which shall not be more than the Maximum Price calculated on the
foregoing basis) for each Share and the relevant terms of the equal access scheme
for effecting the Off-Market Share Purchase; and
‘Market Day’ means a day on which the SGX-ST is open for trading in securities; and
(e) the Directors and/or any of them be and are hereby authorised to complete and do
all such acts and things (including without limitation, executing such documents as
may be required) as they may consider desirable, expedient or necessary to give
effect to the transactions contemplated by this Ordinary Resolution.
[See Explanatory Note (vi)]
8
Proposed Grant of Performance Rights to Mr James Finbarr Fitzgerald, a
Controlling Shareholder and Director of the Company, under the Civmec Key
Senior Executives Performance Rights Plan
That, for the purposes of ASX Listing Rule 10.14, and for all other purposes:
Ordinary Resolution 13
(a) approval be given for the grant of performance rights (‘Performance Rights’)
covering 750,000 fully-paid Shares to Mr James Finbarr Fitzgerald, a Controlling
Shareholder (as defined in the Listing Manual of the SGX-ST) of the Company,
upon such terms to be determined by the Remuneration Committee of the Board
of Directors of the Company (the ‘Remuneration Committee’), in accordance with
the rules of the Civmec Key Senior Executives Performance Rights Plan
(the ‘Civmec PRP’); and
148
CIVMEC ANNUAL REPORT 2019 NOTICE OF
ANNUAL GENERAL MEETING
AS SPECIAL BUSINESS: (CONTINUED)
8
Proposed Grant of Performance Rights to Mr James Finbarr Fitzgerald, a
Controlling Shareholder and Director of the Company, under the Civmec Key
Senior Executives Performance Rights Plan (continued)
That, for the purposes of ASX Listing Rule 10.14, and for all other purposes: (continued)
Ordinary Resolution 13
(b) the Directors be and are hereby authorised to allot and issue from time to time such
number of fully-paid Shares as may be required to be delivered pursuant to the
vesting of such Performance Rights under the Civmec PRP.
See Explanatory Note (vii)]
Voting Exclusion: The Company will disregard any votes cast in favour of the Resolution by or on
behalf of any Director who is eligible to participate in the employee incentive scheme in respect
of which the approval is sought, or any associates of those Directors (‘Resolution 13 Excluded
Party’). However, the Company need not disregard a vote if it is cast by a person as a proxy for a
person who is entitled to vote, in accordance with the directions on the Proxy Form, or, provided the
Chair is not a Resolution 13 Excluded Party, it is cast by the person chairing the meeting as proxy
for a person who is entitled to vote, in accordance with a direction on the Proxy Form to
vote as the proxy decides.
9
Proposed Grant of Performance Rights to Mr Patrick John Tallon, a Controlling
Shareholder and Director of the Company, under the Civmec Key Senior
Executives Performance Rights Plan
That, for the purposes of ASX Listing Rule 10.14, and for all other purposes:
Ordinary Resolution 14
(a) approval be given for the grant of Performance Rights covering 750,000 fully-paid
Shares to Mr Patrick John Tallon, a Controlling Shareholder (as defined in the Listing
Manual of the SGX-ST) of the Company, upon such terms to be determined by the
Remuneration Committee, in accordance with the rules of the Civmec PRP; and
(b) the Directors be and are hereby authorised to allot and issue from time to time such
number of fully-paid Shares as may be required to be delivered pursuant to the
vesting of such Performance Rights under the Civmec PRP.
See Explanatory Note (viii)]
Voting Exclusion: The Company will disregard any votes cast in favour of the Resolution by or on
behalf of any Director who is eligible to participate in the employee incentive scheme in respect
of which the approval is sought, or any associates of those Directors (‘Resolution 14 Excluded
Party’). However, the Company need not disregard a vote if it is cast by a person as a proxy for a
person who is entitled to vote, in accordance with the directions on the Proxy Form, or, provided the
Chair is not a Resolution 14 Excluded Party, it is cast by the person chairing the meeting as proxy
for a person who is entitled to vote, in accordance with a direction on the Proxy Form to
vote as the proxy decides.
149
CIVMEC ANNUAL REPORT 2019 NOTICE OF
ANNUAL GENERAL MEETING
AS SPECIAL BUSINESS: (CONTINUED)
10
Proposed Grant of Performance Rights to Mr Kevin James Deery, a Director of the
Company, under the Civmec Key Senior Executives Performance Rights Plan
That, for the purposes of ASX Listing Rule 10.14, and for all other purposes:
Ordinary Resolution 15
(a) approval be given for the grant of Performance Rights covering 750,000 fully-
paid Shares to Mr Kevin James Deery, upon such terms to be determined by the
Remuneration Committee, in accordance with the rules of the Civmec PRP; and
(b) the Directors be and are hereby authorised to allot and issue from time to time such
number of fully-paid Shares as may be required to be delivered pursuant to the
vesting of such Performance Rights under the Civmec PRP.
[See Explanatory Note (ix)]
Voting Exclusion: The Company will disregard any votes cast in favour of the Resolution by or
on behalf any Director who is eligible to participate in the employee incentive scheme in respect
of which the approval is sought, or any associates of those Directors (“Resolution 15 Excluded
Party”). However, the Company need not disregard a vote if it is cast by a person as a proxy for a
person who is entitled to vote, in accordance with the directions on the Proxy Form, or, provided the
Chair is not a Resolution 15 Excluded Party, it is cast by the person chairing the meeting as proxy
for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the
proxy decides.
11
Approval of 10% Placement Capacity under ASX Listing Rule 7.1A
That, for the purposes of ASX Listing Rule 7.1A and for all other purposes, approval
is given for the Company to issue up to that number of Equity Securities equal to 10%
of the issued capital of the Company at the time of issue, calculated in accordance
with the formula prescribed in ASX Listing Rule 7.1A.2 and otherwise on the terms
and conditions set out in the Explanatory Notes.
Special Resolution 16
[See Explanatory Note (x)]
Voting Exclusion: The Company will disregard any votes cast in favour of the Resolution by or on
behalf of a person who is expected to participate in, or who will obtain a material benefit as a result
of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities
in the Company) or an associate of that person (or those persons). However, the Company will
not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in
accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting
as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to
vote as the proxy decides.
12
To transact any other business which may properly be transacted at an
Annual General Meeting.
BY ORDER OF THE BOARD
James Finbarr Fitzgerald
Executive Chairman
7 October 2019
150
CIVMEC ANNUAL REPORT 2019 NOTICE OF
ANNUAL GENERAL MEETING
Explanatory Notes:
(i)
(ii)
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 the SGX-ST. Key information on Mr Chong can be found on page 43 of
the Annual Report 2019. There are no relationships (including family relationship) between Mr Chong and the other Directors
of the Company or its 10% shareholders.
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 the SGX-ST. Key information on Mr Wong can be found
on page 43 of the Annual Report 2019. There are no relationships (including family relationship) between Mr Wong and the
other Directors of 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 the SGX-ST. Key information on Mr Douglas Chester can
be found on page 43 of the Annual Report 2019. There are no relationships (including family relationship) between Mr Douglas
Chester and the other Directors of the Company or its 10% shareholders.
(iv) Each of Resolutions No. 4 to 9 are also included for the purpose of ASX Listing Rule 14.5, which provides that an entity which
has directors must hold an election of directors at each annual general meeting.
(v) Resolution No. 11, if passed, will empower the Directors of the Company from the date of the passing of 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.
Any issue of securities pursuant to Resolution No. 11 will be made subject to the Company’s compliance with ASX Listing
Rule requirements including, but not limited to, the Company’s ability to issue securities under ASX Listing Rule 7.1 at any
given time. Resolution No. 11 is not a prior approval for the issue of securities pursuant to ASX Listing Rule 7.1.
(vi) Resolution No. 12, 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 Shares 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 7 October 2019.
(vii) Resolution No. 13 seeks shareholders’ approval for the grant of Performance Rights covering 750,000 Shares to Mr James
Finbarr Fitzgerald upon such terms to be determined by the Remuneration Committee of the Company in accordance with
the rules of the Civmec PRP, and the allotment and issuance from time to time such number of fully-paid Shares as may
be required to be delivered pursuant to the vesting of such Performance Rights under the Civmec PRP. Mr James Finbarr
Fitzgerald is a Controlling Shareholder and Executive Chairman of the Company. Further details of the Performance Rights
proposed to be granted to Mr James Finbarr Fitzgerald pursuant to the Civmec PRP are set out in the Company’s Letter to
Shareholders dated 7 October 2019.
ASX Listing Rule 10.14 requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities
under an employee incentive scheme to a director of the entity, an associate of the director, or a person whose relationship
with the entity, director or associate of the director is, in ASX’s opinion, such that approval should be obtained.
Pursuant to and in accordance with the requirements of ASX Listing Rule 10.15, the following information is provided in
relation to the proposed grant of the Performance Rights.
(a) The maximum number of Performance Rights to be issued is 750,000.
(b) The Performance Rights will be granted for nil cash consideration; accordingly, no funds will be raised.
(c)
The Civmec PRP was adopted by shareholders on 25 October 2018. No Performance Rights have previously
been issued to persons referred to in ASX Listing Rule 10.14 under the Civmec PRP.
151
CIVMEC ANNUAL REPORT 2019
NOTICE OF
ANNUAL GENERAL MEETING
(d)
Key Senior Executives (including Controlling Shareholders and Associates of such Controlling Shareholders, each
as defined in the Listing Manual of the SGX-ST) who have attained the age of 21 years and hold such rank as may
be designated by the Remuneration Committee from time to time, will be eligible to participate in the Civmec PRP.
Directors, James Finbarr Fitzgerald, Patrick John Tallon and Kevin James Deery, are eligible to participate in the Civmec
PRP. Non-Executive Directors are not eligible to participate in the Civmec PRP. Subject to the absolute discretion of
the Remuneration Committee, Controlling Shareholders and their Associates who meet the criteria as set out above
are eligible to participate in the Civmec PRP, provided that (i) the participation of each Controlling Shareholder or his
Associate, and (ii) the actual number and terms of the Performance Rights to be granted to them have been approved
by independent shareholders in separate resolutions for each such person – accordingly approval is being sought for the
issue of Performance Rights to Mr James Finbarr Fitzgerald.
(e)
The Performance Rights will be issued to Mr James Finbarr Fitzgerald no later than 12 months after the date of the
Annual General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and
it is anticipated the Related Party Performance Rights will be issued on one date.
(f)
The terms of the Performance Rights are in accordance with the Civmec PRP subject to the key terms and conditions of
the Performance Rights set out below.
The Performance Rights to be granted to Mr James Finbarr Fitzgerald, Mr Patrick John Tallon and Mr Kevin James
Deery will vest in two tranches of fifty per centum each, based on the performance of Mr James Finbarr Fitzgerald, Mr
Patrick John Tallon and Mr Kevin James Deery over two performance periods, as follows:
Tranche 1 (50%): 2-year performance period (1 July 2018 to 30 June 2020); and
Tranche 2 (50%): 3-year performance period (1 July 2018 to 30 June 2021).
The aggregate number of Performance Rights which shall vest in favour of Mr James Finbarr Fitzgerald, Mr Patrick John
Tallon and Mr Kevin James Deery respectively, will be based on the achievement of certain predetermined performance
targets (which are based on absolute earnings per share (‘aEPS’)) as determined by the Committee in accordance with the
Civmec PRP. The vesting schedule is as follows:
Long Term Incentive Proportion
Vesting – Number of Performance
Rights to be vested, calculated
as a percentage of the number
of Performance Rights for each
performance period
50%
Absolute Earnings per Share
Target – If the aEPS achieved is equal to 90% of the three-year average
annual result
On a pro rata basis between 50%
and 100%
Between Target and Stretch – If the aEPS achieved is more than 90% but not
more than 110% of the three-year average annual result
100%
Stretch – If the aEPS achieved is more than 110% of the three-year average
annual result
Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Performance Rights to Mr James Finbarr
Fitzgerald as approval is being obtained under ASX Listing Rule 10.15. Accordingly, the issue of the Performance Rights to
Mr James Finbarr Fitzgerald will not be included in the 15% calculation of the Company’s annual placement capacity
pursuant to ASX Listing Rule 7.1.
(viii) Resolution No. 14 seeks Shareholders’ approval for the grant of Performance Rights covering 750,000 Shares to Mr Patrick
John Tallon upon such terms to be determined by the Remuneration Committee of the Company in accordance with the
rules of the Civmec PRP, and the allotment and issuance from time to time such number of fully-paid Shares as may be
required to be delivered pursuant to the vesting of such Performance Rights under the Civmec PRP. Mr Patrick John Tallon is
a Controlling Shareholder and Chief Executive Officer of the Company. Further details of the Performance Rights proposed to
be granted to Mr Patrick John Tallon pursuant to the Civmec PRP are set out in the Company’s Letter to Shareholders dated
7 October 2019.
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NOTICE OF
ANNUAL GENERAL MEETING
A summary of ASX Listing Rule 10.14 is set out in Explanatory Note (vii) above.
Pursuant to and in accordance with the requirements of ASX Listing Rule 10.15, the following information is provided in
relation to the proposed grant of the Performance Rights.
(a) The maximum number of Performance Rights to be issued is 750,000.
(b) The Performance Rights will be granted for nil cash consideration; accordingly, no funds will be raised.
(c)
(d)
The Civmec PRP was adopted by Shareholders on 25 October 2018. No Performance Rights have previously been
issued to persons referred to in ASX Listing Rule 10.14 under the Civmec PRP.
Key Senior Executives (including Controlling Shareholders and Associates of such Controlling Shareholders, each
as defined in the Listing Manual of the SGX-ST) who have attained the age of 21 years and hold such rank as may
be designated by the Remuneration Committee from time to time, will be eligible to participate in the Civmec PRP.
Directors, James Finbarr Fitzgerald, Patrick John Tallon and Kevin James Deery, are eligible to participate in the Civmec
PRP. Non-Executive Directors are not eligible to participate in the Civmec PRP. Subject to the absolute discretion of
the Remuneration Committee, Controlling Shareholders and their Associates who meet the criteria as set out above
are eligible to participate in the Civmec PRP, provided that (i) the participation of each Controlling Shareholder or his
Associate, and (ii) the actual number and terms of the Performance Rights to be granted to them have been approved
by independent shareholders in separate resolutions for each such person – accordingly approval is being sought for the
issue of Performance Rights to Mr Patrick John Tallon.
(e)
The Performance Rights will be issued to Mr Patrick John Tallon no later than 12 months after the date of the Annual
General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is
anticipated the Related Party Performance Rights will be issued on one date.
(f)
The terms of the Performance Rights are in accordance with the Civmec PRP subject to the key terms and conditions
of the Performance Rights set out in Explanatory Note (vii)(f).
Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Performance Rights to Mr Patrick John Tallon
as approval is being obtained under ASX Listing Rule 10.15. Accordingly, the issue of the Performance Rights to Mr Patrick
John Tallon will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing
Rule 7.1.
(ix) Resolution No. 15 seeks Shareholders’ approval for the grant of Performance Rights covering 750,000 Shares to Mr Kevin
James Deery upon such terms to be determined by the Remuneration Committee in accordance with the rules of the Civmec
PRP, and the allotment and issuance from time to time such number of fully-paid Shares as may be required to be delivered
pursuant to the vesting of such Performance Rights under the Civmec PRP. Mr Kevin James Deery is the Chief Operating
Officer of the Company.
A summary of ASX Listing Rule 10.14 is set out in Explanatory Note (vii) above.
Pursuant to and in accordance with the requirements of ASX Listing Rule 10.15, the following information is provided in
relation to the proposed grant of the Performance Rights.
(a) The maximum number of Performance Rights to be issued is 750,000.
(b) The Performance Rights will be granted for nil cash consideration; accordingly, no funds will be raised.
(c) The Civmec PRP was adopted by Shareholders on 25 October 2018. No Performance Rights have previously been
issued to persons referred to in ASX Listing Rule 10.14 under the Civmec PRP.
(d) Key Senior Executives (including Controlling Shareholders and Associates of such Controlling Shareholders, each
as defined in the Listing Manual of the SGX-ST) who have attained the age of 21 years and hold such rank as may
be designated by the Remuneration Committee from time to time, will be eligible to participate in the Civmec PRP.
Directors, James Finbarr Fitzgerald, Patrick John Tallon and Kevin James Deery, are eligible to participate in the Civmec
PRP. Non-Executive Directors are not eligible to participate in the Civmec PRP. Subject to the absolute discretion of
the Remuneration Committee, Controlling Shareholders and their Associates who meet the criteria as set out above
are eligible to participate in the Civmec PRP, provided that (i) the participation of each Controlling Shareholder or his
Associate, and (ii) the actual number and terms of the Performance Rights to be granted to them have been approved
by independent shareholders in separate resolutions for each such person – accordingly approval is being sought for
the issue of Performance Rights to Mr Kevin James Deery.
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CIVMEC ANNUAL REPORT 2019
NOTICE OF
ANNUAL GENERAL MEETING
(e) The Performance Rights will be issued to Mr Kevin James Deery no later than 12 months after the date of the Annual
General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is
anticipated the Related Party Performance Rights will be issued on one date.
(f)
The terms of the Performance Rights are in accordance with the Civmec PRP subject to the key terms and conditions of
the Performance Rights set out in Explanatory Note (vii)(f).
Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Performance Rights to Mr Kevin James Deery
as approval is being obtained under ASX Listing Rule 10.15. Accordingly, the issue of the Performance Rights to Mr Kevin
James Deery will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing
Rule 7.1.
(x) ASX Listing Rule 7.1A provides that an Eligible Entity (as defined below) may seek shareholder approval by special resolution
passed at an annual general meeting to have the capacity to issue up to that number of Equity Securities (as defined below)
equal to 10% of its issued capital (10% Placement Capacity) without using that company’s existing 15% annual placement
capacity granted under ASX Listing Rule 7.1.
An Eligible Entity is one that, as at the date of the relevant annual general meeting:
(a)
is not included in the S&P/ASX 300 Index; and
(b)
has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement
basis) of $300,000,000.
As at the date of this Notice, the Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a
current market capitalisation of $180,360,000 (based on the number of Shares on issue and the closing price of Shares
on the ASX on 6 September 2019).
An Equity Security is a share, a unit in a trust, a right to a share or unit in a trust or option, an option over an issued or
unissued security, a convertible security, or, any security that ASX decides to classify as an equity security.
Any Equity Securities issued under the 10% Placement Capacity must be in the same class as an existing class of quoted
Equity Securities.
As at the date of this Notice of Annual General Meeting, the Company currently has one class of quoted Equity Securities
on issue, being the Shares (ASX Code: CVL).
If shareholders approve Resolution No. 16, the number of Equity Securities the Company may issue under the 10%
Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2. In exercising
the authority conferred by this Resolution, the Company must also comply with the applicable provisions of the Listing Manual
of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST).
Resolution No. 16 is a special resolution. Accordingly, at least 75% of votes cast by shareholders present and eligible to vote
at the Annual General Meeting must be in favour of Resolution No. 16 for it to be passed.
Technical information required by ASX Listing Rule 7.1A
Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution
No. 16:
(a) Minimum Price
The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of
Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded
immediately before:
(i)
(ii)
the date on which the price at which the Equity Securities are to be issued is agreed; or
if the Equity Securities are not issued within 5 ASX trading days of the date in paragraph (a)(i), the date on which
the Equity Securities are issued.
(b) Date of Issue
The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Annual
General Meeting and expiring on the first to occur of the following:
(i)
ii)
12 months after the date of this Annual General Meeting; and
the date of approval by shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the
nature or scale of the Company’s activities) or 11.2 (disposal of the Company’s main undertaking) (after which date,
an approval under Listing Rule 7.1A ceases to be valid),
(10% Placement Capacity Period).
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CIVMEC ANNUAL REPORT 2019
NOTICE OF
ANNUAL GENERAL MEETING
(c) Risk of voting dilution
Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of shareholders who do not
receive any Shares under the issue.
If Resolution No. 16 is approved by shareholders and the Company issues the maximum number of Equity Securities
available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in
the table below.
The table below shows the dilution of existing shareholders calculated in accordance with the formula outlined in
ASX Listing Rule 7.1A(2), on the basis of the market price of Shares and the number of Equity Securities on issue as at
18 September 2018.
The table also shows the voting dilution impact where the number of Shares on issue (Variable A in the formula)
changes and the economic dilution where there are changes in the issue price of Shares issued under the 10%
Placement Capacity.
501,000,000
(Current Variable A)
751,500,000
(50% increase in Variable A)
1,002,000,000
(100% increase in Variable A)
DILUTION
$0.18
50%
DECREASE IN
ISSUE PRICE
50,100,000
Shares
$0.36
50,100,000
Shares
$0.54
50% INCREASE
IN ISSUE PRICE
50,100,000
Shares
ISSUE PRICE
(PER SHARE)
Shares issued
- 10% voting
dilution
Funds raised
$9,018,000
$18,036,000
$27,054,000
Shares issued
- 10% voting
dilution
Funds raised
Shares issued
- 10% voting
dilution
Funds raised
75,150,000
Shares
75,150,000
Shares
75,150,000
Shares
$13,527,000
100,200,000
Shares
$27,054,000
100,200,000
Shares
$40,581,000
100,200,000
Shares
$18,036,000
$36,072,000
$54,108,000
*The number of Shares on issue (Variable A in the formula) could increase as a result of the issue of Shares that do not
require shareholder approval (such as under a pro-rata rights issue or scrip issued under a takeover offer) or that are
issued with shareholder approval under Listing Rule 7.1.
The table above uses the following assumptions:
1.
2.
3.
4.
5.
6.
7.
8.
9.
There are currently 501,000,000 Shares on issue.
The issue price set out above is the closing price of the Shares on the ASX on 6 September 2019.
The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity.
The Company has not issued any Equity Securities in the 12 months prior to the Annual General Meeting that were not issued
under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.
The issue of Equity Securities under the 10% Placement Capacity consists only of Shares. It is assumed that no Options are
exercised into Shares before the date of issue of the Equity Securities.
The calculations above do not show the dilution that any one particular shareholder will be subject to. All shareholders should
consider the dilution caused to their own shareholding depending on their specific circumstances.
This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.
The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue.
This is why the voting dilution is shown in each example as 10%.
The table does not show an example of dilution that may be caused to a particular shareholder by reason of placements under the
10% Placement Capacity, based on that shareholder’s holding at the date of the Annual General Meeting.
Shareholders should note that there is a risk that:
(i)
the market price for the Company’s Shares may be significantly lower on the issue date than on the date of the
Annual General Meeting; and
(ii)
the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.
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CIVMEC ANNUAL REPORT 2019
NOTICE OF
ANNUAL GENERAL MEETING
(d) Purpose of Issue under 10% Placement Capacity
The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes:
(i)
(ii)
as cash consideration in which case the Company intends to use funds raised for the acquisition of new assets
and investments (including expenses associated with such an acquisition), continued capital expenditure on the
Company’s current assets, general working capital; or
as non-cash consideration for the acquisition of new assets and investments in such circumstances the Company
will provide a valuation of the non-cash consideration as required by listing Rule 7.1A.3.
The Company will comply with the disclosure obligations under Listing Rules 7.1A(4) and 3.10.5A upon issue of any
Equity Securities.
(e) Allocation policy under the 10% Placement Capacity
The recipients of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined.
However, the recipients of Equity Securities could consist of current shareholders or new investors (or both), none of
whom will be related parties of the Company.
The Company will determine the recipients at the time of the issue under the 10% Placement Capacity, having regard to
the following factors:
(i)
(ii)
the purpose of the issue;
alternative methods for raising funds available to the Company at that time, including, but not limited to, an
entitlement issue or other offer where existing shareholders may participate;
(iii)
the effect of the issue of the Equity Securities on the control of the Company;
(iv)
the circumstances of the Company, including, but not limited to, the financial position and solvency of
the Company;
(v) prevailing market conditions; and
(vi) advice from corporate, financial and broking advisers (if applicable).
Further, if the Company is successful in acquiring new resources, assets or investments, it is likely that the recipients
under the 10% Placement Capacity will be vendors of the new resources, assets or investments.
(f) Previous approval under ASX Listing Rule 7.1A
The Company previously obtained approval from its shareholders pursuant to ASX Listing Rule 7.1A at its annual general
meeting held on 25 October 2018 (Previous Approval).
The Company has not issued any Equity Securities pursuant to the Previous Approval.
During the 12-month period preceding the date of the Annual General Meeting, being on and from 25 October 2018,
the Company has not issued any Equity Securities under any other purpose.
(g) Compliance with ASX Listing Rules 7.1A.4 and 3.10.5A
When the Company issues Equity Securities pursuant to the 10% Placement Capacity, it must give to ASX:
(i)
a list of the recipients of the Equity Securities and the number of Equity Securities issued to each (not for release to
the market), in accordance with Listing Rule 7.1A.4; and
(ii)
the information required by Listing Rule 3.10.5A for release to the market.
Voting Exclusion
A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing
shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing shareholders will
be excluded from voting on Resolution No. 16.
For the purpose of Resolution No. 16 and Explanatory Note (x), the following terms apply:
Equity Securities includes a share, a right to a share or option to acquire a share (Option), an Option, a convertible security
and any security that ASX decides to classify as an Equity Security.
Ordinary Securities has the meaning set out in the ASX Listing Rules.
Variable A means ‘A’ as set out in the formula in ASX Listing Rule 7.1A(2).
156
CIVMEC ANNUAL REPORT 2019
NOTICE OF
ANNUAL GENERAL MEETING
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, Chapter 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)
(ii)
(iii)
a banking corporation licensed under the Banking Act, Chapter 19 of Singapore, 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
a person holding a capital markets services license to provide custodial services for securities under the Securities and
Futures Act, Chapter 289 of Singapore, and who holds shares in that capacity; or
the Central Provident Fund Board established by the Central Provident Fund Act, Chapter 36 of Singapore, 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, Chapter 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 seventy-two (72) hours before the time appointed for holding the Annual
General Meeting.
(h) In the case of joint shareholders, all shareholders must sign the instrument appointing a proxy or proxies.
(i)
Voting by holders of CDIs: Holders of CHESS Depositary Interests over Shares (‘CDIs’) are entitled to attend the
Annual General Meeting, provided that they cannot vote at the meeting, and if they wish to vote they must direct
CHESS Depositary Nominees Pty Ltd (‘CDN’), the holder of legal title of the CDIs, how to vote in advance of the meeting
pursuant to the instructions set out in the accompanying voting instruction form. If you are a holder of CDIs, please sign and
date the enclosed voting instruction form and return it in accordance with the instructions on your voting instruction form.
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.
157
CIVMEC ANNUAL REPORT 2019
DISCLOSURE OF INFORMATION ON
DIRECTORS SEEKING RE-ELECTION
James Finbarr Fitzgerald, Patrick John Tallon, Kevin James Deery, Chong Teck Sin, Wong Fook Choy Sunny and Douglas Owen
Chester are the Directors seeking re-election at the forthcoming Annual General Meeting of the Company to be convened on
29 October 2019 (‘AGM’) (collectively, the ‘Retiring Directors’ and each a ‘Retiring Director’).
Pursuant to Rule 720(6) of the Listing Manual of the SGX-ST, the following is the information relating to the Retiring Directors
as set out in Appendix 7.4.1 to the Listing Manual of the SGX-ST:
Date of Appointment
James
Finbarr
Fitzgerald
Patrick
John Tallon
Kevin
James
Deery
27 March
2012
27 March
2012
27 March
2012
Chong
Teck Sin
Wong Fook
Choy Sunny
Douglas
Owen Chester
27 March 2012
27 March 2012
2 November
2012
25 October
2018
Date of last re-appointment
25 October
2018
25 October
2018
25 October
2018
25 October
2018
25 October
2018
Age
55
49
48
64
63
67
Country of principal residence
Australia
Australia
Australia
Singapore
Singapore
Australia
The Board’s comments on
this appointment (including
rationale, selection criteria,
and the search and nomination
process)
Whether appointment is
executive, and if so, the area
of responsibility
Refer to Report on Corporate Governance (Board Membership) included in this Annual Report
(pages 58 to 60).
Refer to overview of Board of Directors included in this Annual Report (pages 42 and 43).
Job Title (e.g. Lead ID, AC
Chairman, AC Member etc.)
Executive
Chairman
Chief
Executive
Officer
Chief
Operating
Officer
Lead
Independent
Director
• Audit
Committee
Chairman
• Nominating
Committee
Member
• Remuneration
Committee
Member
• Risks and
Conflicts
Committee
Chairman
Independent
Director
• Audit
Committee
Member
• Nominating
Committee
Member
Independent
Director
• Audit
Committee
Member
• Nominating
Committee
Chairman
• Remuneration
Committee
Chairman
• Risks and
Conflicts
Committee
Member
• Remuneration
Committee
Member
• Risks and
Conflicts
Committee
Member
Professional qualifications
Refer to overview of Board of Directors included in this Annual Report (pages 42 and 43).
Refer to overview of Board of Directors included in this Annual Report (pages 42 and 43).
97,720,806
97,620,806
13,295,250
Nil
Nil
50,000
None
None
None
None
None
None
Working experience and
occupation(s) during the past
10 years
Shareholding interest in
the listed issuer and its
subsidiaries
Any relationship (including
immediate family relationships)
with any existing director,
existing executive officer,
the issuer and/or substantial
shareholder of the listed
issuer or of any of its principal
subsidiaries
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CIVMEC ANNUAL REPORT 2019 DISCLOSURE OF INFORMATION ON
DIRECTORS SEEKING RE-ELECTION
James
Finbarr
Fitzgerald
Patrick
John Tallon
Conflict of Interest (including
any competing business)
None
None
Kevin
James
Deery
None
Chong
Teck Sin
None
Wong Fook
Choy Sunny
Douglas
Owen Chester
None
Mr Wong is a
director and
shareholder
of WTML
Management
Services, which
periodically
provide some
legal services to
Civmec. Neither
the nature of
such services
nor the amount
of the fees are
material.
Undertaking (in the format
set out in Appendix 7.7)
under Rule 720(1) has been
submitted to the listed issuer
Other Principal Commitments
Including Directorships
Past (for the last 5 years)
Present
Yes
Yes
Yes
Yes
Yes
Yes
Refer to Report on Corporate Governance (Board Membership) included in this Annual Report
(pages 58 to 60).
Disclose the following matters concerning an appointment of director, chief executive officer, chief financial officer,
chief operating officer, general manager or other officer of equivalent rank. If the answer to any question is ‘yes’,
full details must be given.
No
No
No
No
No
No
No
No
No
No
No
No
a) Whether at any time during the
last 10 years, an application or
a petition under any bankruptcy
law of any jurisdiction was
filed against him or against a
partnership of which he was a
partner at the time when he was
a partner or at any time within 2
years from the date he ceased
to be a partner?
b) Whether at any time during the
last 10 years, an application or
a petition under any law of any
jurisdiction was filed against an
entity (not being a partnership)
of which he was a director or
an equivalent person or a key
executive, at the time when he
was a director or an equivalent
person or a key executive
of that entity or at any time
within 2 years from the date
he ceased to be a director or
an equivalent person or a key
executive of that entity, for the
winding up or dissolution of that
entity or, where that entity is the
trustee of a business trust, that
business trust, on the ground of
insolvency?
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CIVMEC ANNUAL REPORT 2019 DISCLOSURE OF INFORMATION ON
DIRECTORS SEEKING RE-ELECTION
James
Finbarr
Fitzgerald
Patrick
John Tallon
Kevin
James
Deery
Chong
Teck Sin
Wong Fook
Choy Sunny
Douglas
Owen Chester
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
c) Whether there is any unsatisfied
judgment against him?
d) Whether he has ever been
convicted of any offence,
in Singapore or elsewhere,
involving fraud or dishonesty
which is punishable with
imprisonment, or has been
the subject of any criminal
proceedings (including any
pending criminal proceedings
of which he is aware) for
such purpose?
e) Whether he has ever been
convicted of any offence,
in Singapore or elsewhere,
involving a breach of any law
or regulatory requirement that
relates to the securities or
futures industry in Singapore
or elsewhere, or has been
the subject of any criminal
proceedings (including any
pending criminal proceedings
of which he is aware) for
such breach?
f) Whether at any time during
the last 10 years, judgment
has been entered against
him in any civil proceedings
in Singapore or elsewhere
involving a breach of any law
or regulatory requirement that
relates to the securities or
futures industry in Singapore or
elsewhere, or a finding of fraud,
misrepresentation or dishonesty
on his part, or he has been the
subject of any civil proceedings
(including any pending civil
proceedings of which he is
aware) involving an allegation
of fraud, misrepresentation or
dishonesty on his part?
g) Whether he has ever been
convicted in Singapore or
elsewhere of any offence in
connection with the formation
or management of any entity or
business trust?
h) Whether he has ever been
No
No
No
No
No
No
disqualified from acting as a
director or an equivalent person
of any entity (including the
trustee of a business trust),
or from taking part directly or
indirectly in the management of
any entity or business trust?
i) Whether he has ever been
the subject of any order,
judgment or ruling of any court,
tribunal or governmental body,
permanently or temporarily
enjoining him from engaging in
any type of business practice
or activity?
160
No
No
No
No
No
No
CIVMEC ANNUAL REPORT 2019 DISCLOSURE OF INFORMATION ON
DIRECTORS SEEKING RE-ELECTION
James
Finbarr
Fitzgerald
Patrick
John Tallon
j) Whether he has ever, to his
No
No
Kevin
James
Deery
No
Chong
Teck Sin
No
Wong Fook
Choy Sunny
Douglas
Owen Chester
No
No
knowledge, been concerned
with the management or
conduct, in Singapore or
elsewhere, of the affairs of:
i. any corporation which has
been investigated for a breach
of any law or regulatory
requirement governing
corporations in Singapore or
elsewhere; or
ii. any entity (not being a
corporation) which has been
investigated for a breach
of any law or regulatory
requirement governing such
entities in Singapore or
elsewhere; or
iii. any business trust which has
been investigated for a breach
of any law or regulatory
requirement governing
business trusts in Singapore
or elsewhere; or
iv. any entity or business trust
which has been investigated
for a breach of any law or
regulatory requirement that
relates to the securities or
futures industry in Singapore
or elsewhere
in connection with any matter
occurring or arising during that
period when he was so concerned
with the entity or business trust?
k) Whether he has been the
No
No
No
No
No
No
subject of any current or past
investigation or disciplinary
proceedings, or has been
reprimanded or issued any
warning, by the Monetary
Authority of Singapore or any
other regulatory authority,
exchange, professional body or
government agency, whether in
Singapore or elsewhere?
Disclosure applicable to the appointment of Director only
Any prior experience as a director
of a listed company?
N/A
N/A
N/A
N/A
N/A
N/A
If yes, please provide details of
prior experience.
If no, please state if the director
has attended or will be attending
training on the roles and
responsibilities of a director of
a listed issuer as prescribed by
the Exchange.
Please provide details of relevant
experience and the nominating
committee’s reasons for not
requiring the director to undergo
training as prescribed by the
Exchange (if applicable).
161
CIVMEC ANNUAL REPORT 2019 Company Registration No. 201011837H
(Incorporated in the Republic of Singapore)
PROXY FORM
ANNUAL GENERAL MEETING 2019
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CIVMEC LIMITED
Company Registration No. 201011837H
(Incorporated in the Republic of Singapore)
PROXY FORM
ANNUAL GENERAL MEETING 2019
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. For CPF/SRS investors who have used their CPF/SRS monies to buy the Company’s shares, this form of proxy is not valid for use and shall
be ineffective for all intents and purposes if used or purported to be used by them. CPF/SRS investors should contact their respective
Agent Banks/SRS Operators if they have any queries regarding their appointment as proxies.
3. By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy
terms set out in the Notice of Annual General Meeting dated 7 October 2019.
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*I/We (name):
NRIC/Passport/Company Reg Number:
of (Address):
being *a member/members of Civmec Limited (the ‘Company’), hereby appoint:
Name:
Address:
* and/or
Name:
Address:
NRIC/Passport No:
NRIC/Passport No:
Proportion of Shareholdings
to be represented by proxy
Number
of Shares
%
Proportion of Shareholdings
to be represented by proxy
Number
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 vote for *me/us on *my/our behalf at the Annual General Meeting of the Company to be held at the Carlton Hotel,
Level 2, 76 Bras Basah Road, Singapore 189558 on Tuesday, 29 October 2019 at 2.30pm and at any adjournment thereof.
CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES
The Chair intends to vote undirected proxies in favour of all Resolutions. In exceptional circumstances the Chair may
change his/her voting intention on any Resolution. In the event this occurs an ASX and SGX-T announcement will be
made immediately disclosing the reasons for the change.
*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.
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PROXY FORM
ANNUAL GENERAL MEETING 2019
No.
Ordinary Resolutions
For#
Against#
Abstain#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Adoption of the Audited Financial Statements of the Company for the
financial year ended 30 June 2019 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 2019.
Approval of the payment of Directors’ fees of S$231,000 for the financial year
ending 30 June 2020 to be paid quarterly in arrears.
Re-election of Mr James Finbarr Fitzgerald as a Director of the Company.
Re-election of Mr Patrick John Tallon as a Director of the Company.
Re-election of Mr Kevin James Deery as a Director of the Company.
Re-election of Mr Chong Teck Sin as a Director of the Company.
Re-election of Mr Wong Fook Choy Sunny as a Director of the Company.
Re-election of Mr Douglas Owen Chester as a Director of the Company.
Re-appointment of Messrs Moore Stephens LLP as the Auditors.
Authority to allot and issue shares.
Renewal of Share Purchase Mandate.
Grant of Performance Rights to Mr James Finbarr Fitzgerald, a Controlling
Shareholder and Director of the Company, under the Civmec Key Senior
Executives Performance Rights Plan.
Grant of Performance Rights to Mr Patrick John Tallon, a Controlling
Shareholder and Director of the Company, under the Civmec Key Senior
Executives Performance Rights Plan.
Grant of Performance Rights to Mr Kevin James Deery, a Director of the
Company, under the Civmec Key Senior Executives Performance Rights Plan.
Special Resolution
For#
Against#
Abstain#
16
Approval of 10% Placement Capacity under ASX Listing Rule 7.1A.
Dated this
day of
2019
Total number of shares in
No. of Shares
(a) CDP Register
(b) Register of Members
Signature(s) of Member(s)/Common Seal
* Delete accordingly
# If you wish to 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. If you mark the ‘Abstain’ box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of
hands or on a poll and your votes will not be counted in computing the required majority on a poll.
PROXY FORM
ANNUAL GENERAL MEETING
IMPORTANT. PLEASE READ NOTES BELOW.
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. If you have shares registered in your name in the Register of Members of the
Company, you should insert that number. 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. If no number is inserted, this form of proxy will 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 his 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.
3. A proxy need not be a member of the Company.
4.
5.
6.
7.
8.
9.
The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 80 Robinson Road #02-00 Singapore
068898 not less than seventy-two (72) hours before the time appointed for the Annual General Meeting.
The instrument appointing a proxy or proxies must be under the hand of the appointor or 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 by the signatures of
authorised persons in the manner prescribed under the Act as an alternative to sealing) or under the hand of its attorney or a duly authorised officer.
Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an 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.
A corporation that is a member may 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.
The submission of an instrument or form appointing a proxy by a shareholder does not preclude him from attending and voting in person at the
Annual General Meeting if he so wishes.
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.
10. The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or where the true intentions
of the appointor are not ascertainable from the instructions of the appointor specified on the instrument of proxy. In addition, in the case of shares
entered in the Depository Register, the Company may reject an instrument of proxy if the member, being the appointor, is not shown to have shares
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.
11. Holders of CHESS Depositary Interests over Shares (‘CDIs’) are entitled to attend the Annual General Meeting, provided that they cannot vote at
the meeting, and if they wish to vote they must direct CHESS Depositary Nominees Pty Ltd (‘CDN’), the holder of legal title of the CDIs, how to
vote in advance of the meeting pursuant to the instructions set out in the accompanying voting instruction form. If you are a holder of CDIs, please
sign and date the enclosed voting instruction form and return it in accordance with the instructions on your voting instruction form.
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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