years
LISTED
Delivering consistent growth,
development and stakeholder returns
ANNUAL REPORT
2022
FOR THE YEAR ENDED 30 JUNE 2022
COMPANY REGISTRATION NO: 201011837H
Our Values
Our vision is to grow sustainably, delivering mutually
beneficial outcomes for all stakeholders. Our culture, the
way we think and operate, is underpinned by our values.
COMMITMENT
INNOVATION
Our individual
commitment facilitates
our success
Our innovative approach
drives continuous
improvement
VALUE DRIVEN
Our performance
driven culture
delivers value
MAKE A DIFFERENCE
EXCELLENCE
COLLABORATION
Our ability to influence
and challenge drives
sustainability
Our pursuit of excellence
makes us a world-class
service provider
Our focus on working
together drives sustainable
partnerships
Contents
1.0 OUR BUSINESS
1.1 ABOUT CIVMEC
1.2 OUR FACILITIES
1.3 PROJECTS AND LOCATIONS
1.4 FY22 HIGHLIGHTS
1.5 FINANCIAL SUMMARY
4
6
8
10
12
1.6 EXECUTIVE CHAIRMAN’S STATEMENT
14
1.7 CHIEF EXECUTIVE OFFICER’S REPORT
16
2.0 OUR OPERATING SECTORS
2.1 ENERGY
2.2 RESOURCES
2.3 INFRASTRUCTURE, MARINE
AND DEFENCE
3.0 OUR SUSTAINABILITY
3.1 HSEQ
3.2 PEOPLE
3.3 COMMUNITY
3.4 SUSTAINABILITY REPORTING
3.5 INVESTOR RELATIONS
3.6 BOARD OF DIRECTORS
3.7 EXECUTIVE TEAM
4.0 FINANCIAL REPORT
4.1 DIRECTORS’ STATEMENT
22
26
30
36
42
46
48
50
52
54
58
4.2 REPORT ON CORPORATE GOVERNANCE 64
4.3 INDEPENDENT AUDITOR’S REPORT
87
4.4 CONSOLIDATED INCOME STATEMENT
94
4.5 CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
95
4.6 STATEMENTS OF FINANCIAL POSITION 96
4.7 CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
4.8 CONSOLIDATED STATEMENT
OF CASH FLOWS
97
98
4.9 NOTES TO THE FINANCIAL STATEMENTS 100
4.10 STATISTICS OF SHAREHOLDERS
156
4.11 NOTICE OF ANNUAL GENERAL MEETING 158
4.12 DISCLOSURE OF INFORMATION ON
DIRECTORS SEEKING RE-ELECTION
4.13 CORPORATE REGISTRY
4.14 PROXY FORM
172
175
176
CIVMEC ANNUAL REPORT 2022
1
2
CIVMEC ANNUAL REPORT 2022
Our
Business
1.1 ABOUT CIVMEC
1.2 OUR FACILITIES
1.3 PROJECTS AND LOCATIONS
1.4 FY22 HIGHLIGHTS
1.5 FINANCIAL SUMMARY
1.6 EXECUTIVE CHAIRMAN’S STATEMENT
1.7 CHIEF EXECUTIVE OFFICER’S REPORT
CIVMEC ANNUAL REPORT 2022
3
1.0 About
Civmec
Civmec is a multidisciplinary heavy engineering and
construction company, providing a broad suite of
high-quality, integrated services to the Energy,
Resources, Infrastructure, Marine and Defence sectors.
With a diverse and all-encompassing range of capabilities, we offer clients innovative and efficient solutions,
including a complete turnkey service. Established and commencing operations in 2009, Civmec listed on
the Singapore Exchange (SGX) in 2012 and, in 2018, achieved dual listing status, listing on the Australian
Securities Exchange (ASX).
In the ten years since our initial listing, we have built world-class facilities in strategic locations on both the
west and east coasts of Australia, invested in quality equipment and technology, and developed leading-
edge systems and methodologies that always incorporate the safety and wellbeing of our people. We have
put together a skilled team who, through the delivery of some of Australia’s largest and most iconic projects,
has helped us to cement our reputation as one of the nation’s leading top tier contractors in construction,
manufacturing and maintenance.
&
M
C
A
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I
T
T
A
E
L
N
A
N
W
O
C
R
E
K
S
S U P P O R T
S E R V I C E S
4
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
5
Our
Facilities
Civmec has four major facilities, strategically located
in prime activity hubs in Western Australia (Perth and
Port Hedland), New South Wales (Newcastle) and
Queensland (Gladstone).
Our main headquarters is located in Henderson, 30 kilometres south of Perth, on 200,000 square metres (m2)
of oceanfront land with direct access to port and road. It contains our 53,000m2 (usable floor area) assembly
hall, 29,300m2 manufacturing hall, blast and paint workshops, exotic metals and site support workshops,
and four-storey head office with over 12,000m2 of office space. Located within the Australian Marine
Complex (AMC), our Henderson facility has access to the AMC’s ports, heavy lift facilities and transportation
equipment, as well as use of 440,000m2 of Common User Facility land, on an ‘as required’ basis.
In Newcastle, our major east coast base, we have developed a cutting-edge facility featuring 30,000m2
of undercover space, including a 22,500m2 manufacturing hall. With the capacity to cater for steel and
concrete production requirements, it effectively services our east coast clients, in addition to supporting
our west coast operations. By working collaboratively, the two facilities have the capacity and capability to
deliver to clients’ schedules, often fulfilling acceleration requirements.
Our two regional facilities at Gladstone and Port Hedland are located in Queensland and Western Australia’s
Pilbara region, respectively. The close proximity of these facilities to the assets and ports of our Energy
and Resources clients ensures we are poised for fast and efficient mobilisation to maintenance requests,
and we also have a solid workforce and equipment base for construction and capital works requirements.
Development of our new five-hectare Port Hedland site, acquired in 2021, will shortly commence, with
completion of the 4,000m2 operational workshop and supporting office projected for Q3 CY2023.
6
CIVMEC ANNUAL REPORT 2022
REVENUE
BY LOCATION
NSW
QLD
WA
REVENUE
BY SECTOR
Energy
Infrastructure, Marine
and Defence
Resources
20%
INCREASE
FY22 SALES
REVENUE
COMPARED
TO FY21
CIVMEC ANNUAL REPORT 2022
7
Projects and
Locations
Singapore
Registered Office
E
10 11
Port Hedland
30
26
D
3
13 14
17
7
15
18 19
Newcastle NSW
29
Gladstone
27
C
28
25
31
23
Perth
32
33
34
22
13
14
9
21
6
12
8
16
A
1 2
4 5
35
Newcastle
24
16
14
20
36
8
B
31
Henderson WA
LOCATIONS
A
B
C
D
E
Perth
Newcastle
Gladstone
Port Hedland
Singapore
8
CIVMEC ANNUAL REPORT 2022
WANTSAQLDNSWVICTAS Our key projects in delivery or completed in FY22 include:
ENERGY
RESOURCES
INFRASTRUCTURE, MARINE AND DEFENCE
PROJECT
Scarborough Project – subsea structures
Gorgon Stage Two (GS2) Subsea Installation Project –
tie-in, jumper spools and spreader beams
CLIENT/OWNER
LOCATION
Subsea7
executed by Subsea
Integration Alliance
TechnipFMC
(for Chevron Australia)
Henderson, WA
Henderson, WA
Five-year term agreement, with two one-year extension options Woodside Energy
Henderson, WA
Kemerton Lithium Project – hydromet and utilities SMP
Albemarle Lithium
Kemerton, WA
Kemerton Lithium Project – refractory installation
Albemarle Lithium
Kemerton, WA
Nelson Point Car Dumper 3 (CD3) Replacement Project
Port Debottlenecking Project Stage One (PDP1) –
civils and bulk earthworks
Shiploader and Berth Replacement (SABR) Project –
shiploader replacement
Lithium Refinery Project
10
Iron Bridge Magnetite Project – dry plant detailed
earthworks and concrete package
BHP
BHP
Henderson, WA
Pilbara, WA
BHP Mitsubishi Alliance
(BMA)
Covalent Lithium
Pty Ltd
Henderson, WA and
Newcastle, NSW
Kwinana, WA
Iron Bridge JV (IBJV)
Marble Bar, WA
11
Iron Bridge Magnetite Project – SMPEI
Iron Bridge JV (IBJV)
Marble Bar, WA
12
Iron Bridge Magnetite Project – module fabrication –
CV truss and trestles
Iron Bridge JV (IBJV)
Henderson, WA
13 Mesa A – SMPEI
14 Mesa A – wet plant and fixed plant workshop
15 Mesa A – heavy vehicle refuelling facility (HVRF)
16
Gudai-Darri (Koodaideri) Project – trusses, platework
and stick steel
17 Roy Hill De-Bottlenecking Project – civil package
18 Roy Hill Ultrafine Project 1.5 – SMPEI
19 Roy Hill ROM4 Crushing Station 5 – SMPEI
20 Dumper tray bodies
Rio Tinto
Rio Tinto
Rio Tinto
Rio Tinto
Roy Hill
Roy Hill
Roy Hill
DT Hiload, Duratray
International Pty Ltd,
and Austin Engineering
21 Calciner maintenance, major overhaul and repair services
Alcoa Australia
Henderson, WA and
Robe Valley, WA
Henderson, WA and
Newcastle, NSW, and
Robe Valley, WA
Robe Valley, WA
Henderson, WA and
Newcastle, NSW
Pilbara, WA
Pilbara, WA
Pilbara, WA
Newcastle, NSW
Pinjarra, Wagerup and
Kwinana, WA
22 Mechanical maintenance works to support major shutdowns
Cockburn Cement
Cockburn, WA
23
Maintenance agreement for mechanical maintenance services
across the Murrin Murrin mine site
Glencore
24 Refractory de-scale and installation works – lime kiln repairs
Graymont (Australia)
Pty Ltd
North Eastern
Goldfields, WA
Galong, NSW
25 Maintenance agreement for Karara mine site
Karara Mining Ltd
Mid West, WA
26 Onslow Salt – workshop upgrade
Onslow Salt
Onslow, WA
27 Mechanical maintenance works to support major shutdowns
28
Maintenance and refractory term contract for
Boyne Island Smelters (BIS)
Queensland Alumina
Limited
Gladstone, QLD
Rio Tinto
Gladstone, QLD
29 Mechanical maintenance works to support major shutdowns
Rio Tinto
Yarwun, QLD
Maintenance agreement for shutdown and maintenance
support services for fixed plant assets across the Roy Hill Port
(Facility) and PSA (Mine)
Roy Hill
Pilbara, WA
Shiploader and Berth Replacement (SABR) Project –
berth replacement
BHP Mitsubishi Alliance
(BMA)
Henderson, WA and
Newcastle, NSW
SEA 1180 Offshore Patrol Vessel Program
Luerssen Australia
Henderson, WA
Perth Kids’ Bridge (‘Koolangka’ Bridge)
34 Causeway Pedestrian and Cyclist Bridges
Main Roads WA
Main Roads WA
Perth, WA
Perth, WA
1
2
3
4
5
6
7
8
9
30
31
32
33
35
36
Sydney Gateway Project SB31 Bridge and Viaduct
Transport for NSW
Newcastle, NSW
Various Transport for NSW Projects
Transport for NSW
NSW
CIVMEC ANNUAL REPORT 2022
9
FY22
Highlights
128
PROJECTS
IN DELIVERY
DURING FY22
years
LISTED
Celebrated
ten years listed
In April, Civmec marked a milestone of ten
years since our initial listing on the SGX in 2012.
Over this time – through our various expansion
phases, and despite the challenges of the
pandemic – we are pleased to have consistently
grown, continuously improved, and always
delivered profitable outcomes to our shareholders.
Major contract awards
across more sectors
With growing recognition of our Tier 1 status, we
were awarded several major contracts across both
the public and private sectors this financial year,
largely from repeat clients. Each of our operating
sectors had significant wins, to be delivered from
our manufacturing facilities, on construction sites
and through maintenance activities on client sites.
A$843m
OF CONTRACTS
AWARDED OR
EXTENDED IN
FY22
Continued to make a
difference
One of Civmec’s core values is to ‘make a
difference’, so we were proud to continue
our support of various community groups
and charities throughout FY22. Most notably,
Civmec became the highest fundraising
team in Western Australia at the Vinnies CEO
Sleepout 2022, with the team raising more than
$100,000 for charity. Civmec CEO Pat Tallon
was also recognised for being the single largest
fundraiser in Western Australia and in the top
ten Australia wide.
Maintained order book
over A$1 billion
With strong tendering activity and a focus on
contract replenishment, we maintained an
order book over A$1.0 billion throughout FY22,
finishing on A$1.04 billion as we enter FY23.
Effective management
of COVID-19
The impact of COVID-19 on the business was
again controlled, owing largely to effective
management and the cooperation of our
people. During the year, we successfully
implemented an internally developed tracing
application, which allowed employees and
contractors to monitor and report any close
contacts. We also sought to protect the health
and wellbeing of our people as much as
possible, taking all available HSE precautions
and offering convenient, accessible onsite
vaccinations.
10
CIVMEC ANNUAL REPORT 2022
Improved synergy
between manufacturing
facilities
Great effort was made during FY22 to improve
the synergy between our manufacturing
operations in Henderson and Newcastle. We
are pleased that this has resulted in significant
schedule and cost benefits to our clients.
Strengthened our
maintenance service
offering
Having identified maintenance as a significant
growth area, we implemented a strengthened
maintenance service offering throughout FY22,
investing in more resources and re-structuring
the organisation to include two dedicated
Executive General Managers for maintenance
and capital works.
80,000
TONNES
OF STEEL
THROUGH OUR
WORKSHOPS
Skill Hire awards
The growth and development of people is vitally
important, and Civmec is proud to play a role
in the career progression of many employees
across our facilities. We were therefore thrilled
when two of our apprentices triumphed at the
Skill Hire 2021 awards. The awards received
were in recognition of the ‘Best Second Year
Apprentice 2021’ and ‘Best Fourth Year
Apprentice 2021’.
Completed several major
projects
This financial year saw Civmec close out a number
of successful projects, including the Perth Kids’
Bridge, now known as ‘Koolangka’ bridge, which
means ‘children’ in Noongar (the official language of
the Aboriginal people of the south-west of Western
Australia). We also worked on the fabrication and
assembly of the world’s largest shiploader, weighing
2,300 tonnes, which will be delivered to its final
destination in Queensland in H1 FY23.
Provided employment for
2,800 people
Continuing as a significant Australian employer,
in FY22 we consistently employed in the region
of 2,800 people, including 130 apprentices,
trainees, graduates and undergraduates. We
also celebrated a number of our long-term
employees reaching their ten-year anniversary
with the company.
EMPLOYED
2,800
PEOPLE
Christmas spirit
Coming together for the community, Civmec again supported a number of
worthy charities at Christmas time, including the St Patrick’s Community
Support Centre, Foodbank, United and Youth Focus. Once again, our people
shone, volunteering to pack Christmas hampers, decorate the homeless
shelter and run errands, as well as donate food and other non-perishables.
CIVMEC ANNUAL REPORT 2022
11
Financial
Summary
The Group’s revenue for the financial year ended
30 June 2022 (FY22) was A$809.3 million, an increase
of A$135.1 million from the previous financial year.
Net profit after tax (NPAT) was A$50.7 million, rising
by 47 per cent from FY21.
The results take the net profit margin from 5.1 per
cent in FY21 to 6.3 per cent and are reflective of the
Group’s persistent efforts to deliver positive growth in
revenue and profit.
Efforts to establish re-occurring revenue streams
across the business, including the maintenance
and capital works division, has helped to strengthen
revenue, demonstrating the company’s growth
plans and allowing the company to have a more
even percentage split of revenue return between
manufacturing, construction and maintenance activities.
Earnings before interest, tax, depreciation
and amortisation (EBITDA) was A$94.5 million,
an increase of A$20.7 million from FY21. Net
cash generated from operating activities was
A$1.8 million, with cash in the bank of
A$40.8 million.
Capital expenditure remained steady, while
the value of property, plant and equipment
and investment properties increased from
A$412.0 million to A$464.9 million.
Financial Performance
A$M
Sales revenue
EBITDA
Net profit after tax
Operating cash flow
Earnings per share (cents)
Dividend per share (cents)
Return on equity (%)
2022
2021
CHANGE %
A$809.3
A$674.2
20.0%
A$94.5
A$50.7
A$36.2
10.11
3.0
13.7
A$73.8
A$34.6
A$72.9
6.94
2.0
11.9
28.1%
46.5%
(50.3%)
45.7%
50.0%
15.1%
1.0c
2.0c
3.0c
174m
263m
292m
371m
2020
2021
2022
2019
2020
2021
2022
0.7c
2019
Dividend CPS (A$)
Net Asset Value (A$)
12
CIVMEC ANNUAL REPORT 2022
Debt remained controlled at A$74.0 million, with
the Group redeeming A$60.0 million of secured
notes in November 2021 and replacing with
a commercial loan through the Group’s usual
supporting bank facilities.
Prudent cash flow management and an unwavering
commitment to contract replenishment saw the
order book sustained at more than A$1.0 billion
throughout FY22.
The Group continued to effectively navigate the
challenges presented by the global pandemic,
which included an increased level of cases within
the organisation when Western Australian borders
opened, in addition to limitations on labour
availability while borders were closed. For the third
consecutive year, the impact of COVID-19 was well
controlled and, although it caused some activities to
be extended, it did not have a material impact on the
business’s operations or returns.
Maintaining a positive trajectory of revenue and profit
through FY23, and beyond, is one of the Group’s key
focus areas, with the company now well positioned
to capitalise on opportunities across all sectors –
from public spend on Infrastructure, Marine and
Defence projects, to high levels of private spend by
Resources and Energy clients in both construction
and maintenance.
As at 30 June 2022, the Group had total assets of
A$725.7 million, net assets of A$371.1 million and net
tangible assets backing per share of 73.92 cents.
28% increase
FY22 EBITDA compared
to FY21
47% increase
FY22 NPAT compared
to FY21
$33m increase
FY22 Order Book compared
to FY21
Operating Currency (A$)
CPS: Cents Per Share
NPAT: Net Profit After Tax
EBITDA: Earnings Before Interest, Tax, Depreciation
and Amortisation
489m
392m
674m
809m
51m
35m
7m
18m
2019
2020
2021
2022
2019
2020
2021
2022
Revenue (A$)
NPAT (A$)
95m
819m
899m
1006m
1039m
74m
39m
2020
2021
2022
2019
2020
2021
2022
24m
2019
EBITDA (A$)
Order Book (A$)
CIVMEC ANNUAL REPORT 2022
13
Executive
Chairman’s
Statement
On behalf of the Civmec Limited Board of Directors,
it is my pleasure to present the FY22 Annual Report.
As we mark ten years since our initial listing on the Singapore Exchange (SGX)
in April 2012, it gives me immense pride to reflect on our achievements over
this time. Through the dedication and commitment of so many that have been
with us on this journey, we have consistently delivered solid results. We’ve certainly
come a long way since our humble beginnings, but I can attest that our motivation
and commitment towards growth and improvement has never changed.
For the tenth consecutive year on the SGX, I am delighted to reflect on the fact that
we have consistently delivered positive results. Indeed, FY22 has been one of our
best years yet, with growth in both the top and bottom lines and the highest revenue
and profit returns since our inception.
14
CIVMEC ANNUAL REPORT 2022
Financial Performance
Revenue for FY22 exceeded A$809 million, which
represented an increase of more than A$135 million
on the previous year. Our net profit after tax (NPAT)
was A$50.7 million.
We closed the year with over A$1.0 billion work in
hand, supported by significant contract awards
across all of our operating sectors.
The value of all new and extended contracts
awarded in FY22 was A$843 million.
In a rewarding testament to our increased focus
on maintenance, nearly 20 per cent of the total
contracts awarded in FY22 were for maintenance,
capital works and refractory.
The change of banking arrangements from secured
notes to a commercial loan has unlocked significant
cost savings.
Dividends
The Board of Directors has recommended a final
cash dividend of A$2.0 cents per share, subject
to shareholders’ approval at our Annual General
Meeting on 28 October 2022. This takes our full year
dividend to A$3.0 cents, representing a 30 per cent
payout ratio and will be paid on 19 December 2022.
People
By providing ongoing employment and training
opportunities, we have continued to support the
Australian economy and development of future
generations. This financial year, we employed more
than 2,800 people and delivered in excess of 2,500
units through our in-house RTO.
In yet another year impacted by COVID-19, we had
to consistently review and, on occasion, modify
our practices to ensure the safety and wellbeing of
each other, and all those we work alongside. It took
careful and thoughtful management, and I applaud
our entire team for each playing a part in handling
the challenges of the pandemic with patience, care
and empathy for those worst affected.
As we continue in our growth, I look forward to
Civmec providing more training and development
programs – not only for our own employees,
but for young people, Indigenous Australians, and
those who may otherwise be disadvantaged. It is
my hope that Civmec can make a genuine
difference and leave a lasting legacy for the families
and communities of Australia, particularly in the
areas we operate.
Future
As we see the upswing in engineering,
construction and maintenance activity continue
throughout Australia, we anticipate there will also be
increasing demand for high-quality, value-for-money
local manufacturing.
We will maintain our efforts to pursue long-term
growth and sustainability, targeting repeat-order
opportunities and constantly striving to strengthen
our balance sheet, increase revenue and profits,
and reduce net debt.
With strong avenues of potential growth in
maintenance and capital works areas, we will
continue to dedicate resources to targeting these
opportunities, in addition to pursuing the strong
pipeline of tendering prospects we have already
identified.
Federal and state government spend on
Infrastructure, Marine and Defence assets presents
a great opportunity, particularly as we build on our
experience in the public sector, with significant
works already underway across the country for Main
Roads WA and Transport for NSW. I also believe
we are well placed to secure manufacturing and
construction contracts for hydrogen and further
lithium opportunities as they emerge in future years.
To conclude, I would like to thank all those who
share our vision and values. I look at the Civmec
team as a family – all working together, looking
out for one another, collaborating and innovating.
Our people are truly exceptional. To our suppliers,
contractors, clients, investors, Civmec management
and my fellow directors, I thank you for your support.
Reflecting on our achievements over the past year
and prior, to when we first listed, I am truly proud
of what we have created together, and I am grateful
to you all.
James Fitzgerald
Executive Chairman
Civmec Limited
CIVMEC ANNUAL REPORT 2022
15
CEO’s
Report
The 2022 financial year was a year of
continued success, as we maintained the
profitable operations we’ve had since we
became a publicly listed company in 2012
and, indeed, since our inception in 2009.
Evolving our reputation as a top tier
contractor, we were awarded numerous
contracts across all of our operating
sectors. Pleasingly, this included a
number of significant maintenance and
capital works projects – evidence that our
intensified focus and commitment to this
area has not gone unnoticed.
16
CIVMEC ANNUAL REPORT 2022
We have continued to apply discipline in our bid selection, and maintained our early
contractor involvement with blue-chip clients who seek high-quality, turnkey solutions. The
broad variety of contracts awarded in FY22 highlights our diversity as a business; deemed
reliable and accomplished for the integrated, multidisciplinary services we provide.
In the Infrastructure, Marine and Defence sector,
we have continued to undertake fabrication and
block construction activities for the Royal Australian
Navy’s Offshore Patrol Vessel (OPV) program, as
well as major works on the berth fabrication for the
Shiploader and Berth Replacement (SABR) Project
from both our west and east coast facilities. In
Newcastle, we were awarded a significant contract
for Transport for NSW for the supply, fabrication and
onsite assembly of several bridge girders for the
Sydney Gateway Project SB31 Bridge, as well as
the Viaduct.
We were thrilled to be awarded another iconic
Western Australian Infrastructure project in the
design and construction of the 1,000-metre
Causeway Pedestrian and Cyclist Bridges, which
will stretch across the Swan River in East Perth.
The design acknowledges the rich Aboriginal
heritage of the area, and, once complete, will
provide both pedestrians and cyclists with a safe
passage across the river. The works will be delivered
in an integrated alliance, with construction due to
commence in FY23.
People
We continued to invest in the training and
development of our people, retaining our
commitment to making opportunities and career
pathways available to all. This year, we are
proud to have trained and provided employment
to 130 apprentices, trainees, graduates and
undergraduates.
Business Performance
Throughout FY22, we continued to work on and
were awarded a number of exciting projects. Most
construction projects will be delivered in the next
two years, with some maintenance extending to five
years, and Defence with a longevity to 2029.
In the Energy space, we delivered subsea
components for the Chevron-operated Gorgon
Stage Two (GS2) Subsea Installation Project, and
continued to support Woodside Energy onshore
and offshore production facilities and capital
projects. We entered the second year of our five-
year term agreement with Woodside Energy, which
includes two further one-year extension options.
Our capabilities in the subsea sector were
further realised with the award of a contract by
Subsea7 and executed by Subsea Integration
Alliance on the Woodside Energy-operated
Scarborough Project to provide more than 1,700
tonnes of subsea structures.
Our Resources division demonstrated its strength
as we continued site works at Iron Bridge, Mesa A,
Gudai-Darri and Roy Hill, while our manufacturing
facilities on both the west and east coasts fabricated
and assembled many outstanding structures for
these and other Resources projects. These include
dumper tray bodies and various site modules, along
with one of the world’s largest shiploaders, which
will be shipped to Hay Point in late 2022. Witnessing
this 2,300-tonne structure come together in our
Henderson assembly hall is undoubtedly one of the
year’s biggest highlights for me.
Our long-standing relationships with major blue-
chip clients facilitated the awarding of several
new Resources contracts in FY22, including
debottlenecking and car dumper projects for BHP
at Nelson Point, and a major construction contract
with Covalent Lithium.
Our maintenance and capital works division was
awarded more than A$150 million in contracts
this year, for clients that include BHP, Roy Hill,
Rio Tinto, Onslow Salt, Glencore and Karara Mining
Ltd. This welcome boost adds to the already solid
order book of maintenance and refractory works
we had coming into FY22, and aligns with our
strategic vision to increasingly target maintenance
and capital upgrades. We will also continue to
tender and deliver on the many major construction
projects presented to us from our trusted client base.
CIVMEC ANNUAL REPORT 2022
17
OUR BUSINESS | CEO’S REPORT
At Civmec, we have always sought to retain, nurture
and develop the talent we have. Rewarding loyalty
with opportunity has proven one of our most
successful strategies, and I can proudly say that
a good proportion of our team have been with us
since our earliest days, including 236 employees
who have been recognised for their five-year and
ten-year tenure status.
In March, we introduced a new Leadership
Development Program, aimed at developing our
next generation of leaders, beyond management,
in a one-year course with a six-month portion
that is intensive and action oriented. The leaders
and managers selected are those who share our
values, are committed to our Never Assume culture,
and have demonstrated their positive influence
at Civmec. Fifteen candidates have so far been
selected to take part, and we are excited to see this
program grow and develop in future years.
Our internal LEAD program has continued, with
55 supervisors and 33 leading hands undertaking
the course over the financial year.
Efforts to increase diversity within the company
has seen the proportion of females to males at its
highest ever levels. In FY22, at peak, 52 per cent
of our corporate head office was female, while the
percentage of female apprentices doubled to 7.7
per cent. I am pleased to see our efforts to improve
diversity and, in particular, grow more meaningful
engagement with females in blue collar operations,
is achieving results.
While we managed the pandemic to the extent that
it did not have a material impact on the business,
we, nonetheless, faced the same challenges felt
across the industry: absence caused by COVID-19
illness and a general lack of labour availability due to
border restrictions for much of the year. To mitigate
these challenges, we took every practicable step to
maintain the health and wellbeing of the workforce
and keep operations running, including modifying
our processes and work environments, providing
vaccinations onsite and allowing working from
home arrangements. To this end, the effects of the
pandemic on our operations were controlled.
Going forward, we will continue to focus our efforts
on promoting organic growth and sustainability from
within, in addition to seeking the best and brightest
minds in the industry to join and collaborate with us.
Sustainability
During FY22, and driven by our own internal
sustainability action taskforce, we continued to
operate with environmental, social and governance
(ESG) factors top of mind, endeavouring to
continually initiate new ways in which we can
become as ‘green’ a construction company
as possible.
Along with investigating integrated energy network
systems, such as solar panels, electric equipment
and battery charging stations, we have identified the
substantial value of continuous improvement and
lessons learned – where doing jobs right the first
Civmec team at Roy Hill Ultrafine Project
18
CIVMEC ANNUAL REPORT 2022
time eliminates both material and time wastage.
By curtailing the excessive consumption of energy
and consumables, we will reduce waste and protect
the environment for future generations.
This year, we continued to support a wide variety of
community organisations and charities; volunteering,
fundraising and donating to causes, such as
homelessness, poverty, disadvantaged youth and
mental illness. Once again, I have been astounded
by the generosity and kindness of those around me.
It is truly humbling to take part in these events and
see firsthand the difference that can be made.
Our commitment to caring for the health, safety
and wellbeing of people, communities and the
environment is matched only by our commitment to
quality on this sustainability journey. These elements
will remain our major focus as we strive to meet
future sustainability expectations.
Future Focus
As we move into our second decade on the SGX,
and fifth year on the ASX, we will continue to seek
stable revenue and consistency in profit and returns.
With the development of our Port Hedland facility on
the immediate horizon and a wide range of imminent
opportunities in the public and private sectors, I am
excited when I consider what the future will bring.
I am confident that our maintenance and capital
works division has the foundations for solid growth
in FY23, and I anticipate strong delivery across all
operating sectors – particularly in Infrastructure,
Marine and Defence – as our accreditations in
manufacturing and construction increase. With
several longstanding contracts in place, our
outlook in the medium to long term remains
strong. Progressing into the next financial year
and beyond, we will seek an increased portion of
diversified projects with sustained revenue, aiming
to continually replenish our order book as we make
advancements in sustainability and further mature
as a business overall.
I would like to take this opportunity to thank those
who have made our last ten years so consistently
positive. Without the support of our people, delivery
partners, clients, shareholders and the greater
community, our success would not have been
possible. I also extend immense gratitude to my
fellow Board members and Executives for your
guidance and dedication.
Here’s to the next ten years.
Patrick Tallon
Chief Executive Officer
Civmec Limited
CIVMEC ANNUAL REPORT 2022
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20
20
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022 Our
Operating
Sectors
2.1 ENERGY
2.2 RESOURCES
2.3 INFRASTRUCTURE, MARINE AND DEFENCE
CIVMEC ANNUAL REPORT 2022
21
21
CIVMEC ANNUAL REPORT 20222.0 OUR OPERATING SECTORS | ENERGY
Energy
Retaining a firm foothold in the Energy Sector through
FY22 saw us continue to build on our reputation as
one of Australia’s leading providers of premium-quality,
tailored upstream and downstream project solutions.
A$30m
Total annual revenue for the
Energy sector in FY22
22
CIVMEC ANNUAL REPORT 2022
We have worked with numerous
major Energy clients over the years;
our diverse capability set and cutting-edge
facilities facilitating the successful delivery
of fabrication and modularisation of
specialist subsea equipment, onshore
manufacturing support, and maintenance
and turnaround solutions.
This financial year, we finalised our works on subsea
components for the Chevron-operated Gorgon
Stage Two (GS2) Subsea Installation Project. GS2 is
part of the original development plan for Gorgon
and includes the expansion of the subsea gas
gathering network required to maintain long-term
natural gas supply to the LNG plant and domestic
gas plant on Barrow Island. The components
manufactured by Civmec included spool piping and
spreader bars, weighing from 30 to 230 tonnes
each, with the longest spool measuring 100 metres.
Utilising 16 separate barge loadouts at the
Australian Marine Complex (AMC), the works were
delivered successfully.
Our manufacturing division continued to support
Woodside Energy’s onshore and offshore production
facilities, under a five-year term agreement, which
has two further one-year extension options.
The works encompass a wide range of separate
brownfield packages, including structural steel
fabrication, miscellaneous piping, surface treatment
and assembly scopes.
In May, we announced the award of a subsea
contract on the Woodside Energy-operated
Scarborough Project by Subsea7 and executed by
the Subsea Integration Alliance, a non-incorporated
global alliance between Subsea7 and OneSubsea,
the subsea technologies, production and processing
systems business of Schlumberger. The work will
be undertaken from our Henderson fabrication
and assembly facilities, and involves more than
1,700 tonnes of subsea structures in total. Project
development and material procurement commenced
in FY22, with fabrication of modules due to
commence in FY23.
With future optimism in the sector, we will continue
to target manufacturing and onsite activity, including
maintenance and capital works, as well as emerging
hydrogen and ammonia projects. Our highly technical
offering and delivery certainty, coupled with the solid
relationships we have forged, ensures we are well
positioned for any heavy engineering requirements
and onsite opportunities that transpire in the
coming years.
Gorgon Stage Two (GS2) Subsea
Installation Project
Tie-In, Jumper Spools and Spreader Beams
CLIENT
TechnipFMC (for Chevron Australia)
LOCATION
Henderson, WA
DURATION
September 2019 – February 2022
alloy (CRA) Inconel clad material, 2-inch to 4-inch
solid Inconel and 2-inch to 8-inch carbon steel.
The spools weighed 900 tonnes in total.
We also supplied, fabricated and tested 1,300
tonnes of rigid spreader beams, with all works
completed at our Henderson facility prior to loadout
at the AMC.
OVERVIEW
We completed the production of tie-in and jumper
spools for GS2, including the fabrication and testing
of 26 spools of 8-inch to 26-inch corrosion resistant
The completed works add to the number of
manufacturing, construction and maintenance
works previously delivered by Civmec on the
Gorgon Project.
CIVMEC ANNUAL REPORT 2022
23
OUR OPERATING SECTORS | ENERGY
Woodside Energy Packages
Five-Year Term Agreement
(with two one-year extension options)
CLIENT
Woodside Energy
LOCATION
Henderson, WA
DURATION
2021 – 2026 (with possibility to extend to 2027 or 2028)
OVERVIEW
Various brownfield remediation works packages to
support Woodside Energy’s onshore and offshore
production facilities. Works include structural steel
fabrication, miscellaneous piping, surface treatment
and assembly scopes.
Scarborough Project
Subsea Structures
CLIENT
Subsea7 executed by Subsea Integration Alliance
LOCATION
Henderson, WA
DURATION
2022 – 2024
OVERVIEW
The scope of work includes a riser base manifold
and foundation, six flowline end terminations (FLETs)
complete with mud mats, seven inline tees (ILTs) and
two pig launcher receivers (PLRs).
The project deliverables, welding procedure
qualification campaign and shop detailing
commenced in FY22, with fabrication, testing and
progressive loadout ongoing until FY24. The project
will employ 80 at peak.
Image credit: Woodside Energy
Conceptual image, not to scale
24
CIVMEC ANNUAL REPORT 2022
Woodside Energy’s Pluto LNG Plant
CIVMEC ANNUAL REPORT 2022
Photo credit: Woodside Energy
25
OUR OPERATING SECTORS | RESOURCES
Resources
The Resources sector remained a strong area of
performance for the business throughout FY22,
despite the ongoing pressures felt across the
industry due to the pandemic.
A$631m
Total annual revenue for the
Resources sector in FY22
26
CIVMEC ANNUAL REPORT 2022
We continued in the delivery of several
major construction projects, including the
fabrication, modularisation and assembly of
the shiploader for BHP Mitsubishi Alliance
(BMA). The weight of the structure totals
2,300 tonnes, with the boom alone weighing
approximately 400 tonnes. Our Newcastle
facility supported the project with the
manufacture and delivery of some of the
specialised components for the structures.
During FY22, we completed our extensive
construction scope on the Kemerton Lithium Project,
the largest lithium hydroxide plant to be built in
Australia. The major project utilised a workforce of
approximately 500 at peak, as we provided 120,000
cubic metres (m3) of earthworks, 26,500m3 of
concrete, 10,000 tonnes of steel and 52 kilometres
of piping. We also delivered 16 tanks, 32 buildings,
720 tonnes of platework and completed a refractory
package, in addition to manufacturing kilns (delivered
in a separate contract with Metso).
Our civil works on the Iron Bridge Magnetite Project
progressed, which includes the construction of the
structural concrete components for the dry plant,
including the primary, secondary and tertiary crushing
areas, screening areas, air classification and primary
grinding areas, course ore stockpile, dry rejects,
conveyors and all related earthing. At the end of
FY22, we had placed approximately 50,000m3 of
concrete, utilising more than 200 of Civmec’s skilled
civil workforce. Works on the structural, mechanical,
piping, electrical and instrumentation (SMPE&I)
components have commenced and will continue
into FY23.
At Robe Valley, we completed delivery of a number of
packages at the Mesa A mine site, awarded by long-
term client Rio Tinto. This included SMPE&I works on
the wet plant, design and construction of the fixed
plant workshop, and design and construction of the
heavy vehicle refuelling facility (HVRF).
Roy Hill Ultrafine Project 1.5
CIVMEC ANNUAL REPORT 2022
During FY22, we also delivered structural,
mechanical and piping (SMP) works on Rio Tinto’s
Gudai-Darri Project. Our scope on the project
included the manufacture and assembly
of modularised structural steel and platework chute
components, initially comprising 600 tonnes of steel,
which was later increased to 1,600 tonnes.
By utilising and coordinating our west and east coast
facilities simultaneously, we delivered the scope in
an accelerated time frame, achieving a successful
outcome for both Civmec and our client. The mine
officially opened in June 2022 and is now Rio Tinto’s
most technologically-advanced iron ore mine,
capable of producing up to 43 million tonnes of
iron ore per year.
In addition to debottlenecking civil works at the Roy
Hill mine site, we were awarded two new packages,
including a greenfield construction contract on the
Roy Hill Ultrafine Project 1.5, consisting of greenfield
installation and pre-commissioning of pre-assembled
modules, piping, electrical and tie-in works. A
collaborative and well-planned effort, it was delivered
to a high quality standard, allowing production by
the client to commence in June. We were also
contracted to provide capital upgrades on Roy Hill’s
ROM4 Crusher 5 Project, comprising structural,
mechanical, piping and electrical. Mobilisation
commenced in the fourth quarter of FY22, with
completion scheduled for FY23.
In late 2021, we were awarded a substantial
package on the Mount Holland Lithium Project
for Covalent Lithium Pty Ltd, a 50:50 joint venture
between subsidiaries of Wesfarmers and Sociedad
Química y Minera de Chile S.A., to be constructed
at Kwinana, Western Australia. Our scope of work
on the new refinery involves the assembly and
delivery of kiln sections for processing trains 1 and
2, including structural and piping fabrication, SMP
erection, refractory lining, insulation, and electrical
and instrumentation (E&I) installation.
Later in the financial year, BHP awarded us a
contract for the procurement, fabrication and surface
treatment of their Car Dumper 3 (CD3), with works
to continue into 2023. Additionally, BHP awarded us
a civil and earthworks package at Nelson Point, as
part of their Port Debottlenecking Project Stage 1
(PDP1). The project commenced in September and
will continue until late 2023.
With a re-structuring that now sees both our
Henderson and Newcastle manufacturing facilities
managed as one cohesive team, we have seen
an upturn in efficiency and synergy between the
two workplaces with their increased ability to work
together, simultaneously. One of the projects to
specifically benefit this year was the Iron Bridge
Project, where we utilised both facilities for the
fabrication and timely delivery of modules.
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OUR OPERATING SECTORS | RESOURCES
We continued our delivery of dumper tray bodies
for various clients in the Hunter Valley region of New
South Wales, including DT Hiload, Austin Engineering
and Duratray International Ltd. In total, 65 tray bodies
were completed this financial year, on time and
within budget, which has further strengthened our
relationships with these clients and reinforced our
reputation for reliable, quality delivery.
Our maintenance division undertook numerous
works around Australia, including the aforementioned
refractory installation works on the Kemerton Lithium
Project, a major shutdown at Queensland Alumina
Limited (QAL), and an extensive maintenance
overhaul at Alcoa’s Kwinana refinery. We also
successfully and safely completed refractory
de-scale and installation works for new client
Graymont (Australia) Pty Ltd at their Galong, New
South Wales, operations.
In addition, new contract awards, including four-year
maintenance services contracts each for Karara
Mining Ltd and Glencore, significantly bolstered
our work in hand in the maintenance and capital
works space. Both contracts include the provision
of multidisciplinary shutdown and maintenance
services. We were awarded a contract for a
workshop upgrade at Onslow Salt, along with a term
contract to supply refractory and maintenance trades
for Rio Tinto’s Boyne Island Smelters in Queensland,
further adding to our growing order book in
this division.
With considerable progression made in maintenance
and capital works throughout FY22, and with
finalisation and design aspects for our new Port
Hedland facility forecast for completion in FY24, we
are well positioned for continued and sustainable
growth in the sector as we enter 2023 and beyond.
SABR Project
Shiploader replacement
Kemerton
Lithium Project
OWNER
BHP Mitsubishi Alliance (BMA)
LOCATION
Henderson, WA and Newcastle, NSW
DURATION
August 2020 – Late 2022
CLIENT
Albemarle
LOCATION
Kemerton, WA
DURATION
June 2019 – March 2022
OVERVIEW
Civmec was awarded a contract by BMA to
fabricate, modularise and commission a 2,300-tonne
shiploader for the Shiploader and Berth Replacement
(SABR) Project.
The scope includes the supply, fabrication, surface
treatment, assembly and no-load commissioning of
the shiploader. Commissioning is currently underway,
with delivery scheduled for late 2022 FAS (free
alongside) a heavy lift ship at the Australian Marine
Complex (AMC).
OVERVIEW
Our extensive scope on the project comprised site
civil works; fabrication and onsite installation of tanks;
structural, mechanical, piping and insulation for the
hydromet; and final product, reagents and utilities
for Trains 1 and 2. We also supplied and installed
refractory lining.
Under a separate contract directly with Metso, we
manufactured kilns required for the processing plant.
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CIVMEC ANNUAL REPORT 2022
Iron Bridge Magnetite Project
Civil and Concrete Package, Supply of Modules and SMPE&I
CLIENT
Iron Bridge JV (IBJV)
LOCATION
Marble Bar, WA
DURATION
August 2020 – Late 2022
OVERVIEW
Civmec was awarded a civil and concrete package,
comprising detailed earthworks and 53,000 cubic
metres of structural concrete components for the
dry plant, including two primary, two secondary and
two tertiary crushing areas, two air classification and
two primary grinding areas, course ore stockpile, dry
magnetic separation building, dry rejects, conveyors
and all related earthing.
This was followed with the award of a fabrication/
modularisation package for the supply and modular
assembly of 4,700 tonnes of conveyor, trusses,
trestles and modules; and later, contracts for
onsite structural, mechanical, module installation
and hook-up of 30,000 tonnes of components,
and approximately 630 kilometres of electrical and
instrumentation works for the dry plant.
Mesa A
Wet Plant, Fixed Plant Workshop and
Heavy Vehicle Refuelling Facility (HVRF)
CLIENT
Rio Tinto
LOCATION
Robe Valley, WA
DURATION
May 2020 – August 2022
OVERVIEW
Civmec completed the supply, fabrication,
modularisation, transportation to site, erection,
modification, installation, and commissioning of
over 10,000 tonnes of structural, mechanical,
piping (SMP), 225 kilometres of electrical and
instrumentation, and communication work for the
Mesa A Wet Plant.
We then completed design and construction of a
fixed plant workshop on the same site, as well as the
upgrade of the HVRF, which included installation and
maintenance of a temporary facility while the new
facility was under construction.
CIVMEC ANNUAL REPORT 2022
29
OUR OPERATING SECTORS | INFRASTRUCTURE, MARINE AND DEFENCE
Infrastructure,
Marine and
Defence
Owning one of the largest undercover workshop
facilities in Australia, with 53,000 square metres of
usable floor area and cutting-edge equipment,
Civmec offers the Infrastructure, Marine and Defence
sector a highly unique and specialised service offering.
A$148m
Total annual revenue for the
Infrastructure, Marine and
Defence sector in FY22
30
CIVMEC ANNUAL REPORT 2022
Our multidisciplinary, integrated works
have been ongoing throughout FY22 on
the Shiploader and Berth Replacement
(SABR) Project for the BHP Mitsubishi
Alliance (BMA) as we continued delivery of
approximately 15,000 tonnes of modules
on the project, made up of 54 individual
modules. Perhaps most notably this
year, that has included the fabrication
and assembly of three jacket structures,
the largest modules we have ever fully
fabricated and assembled undercover,
standing 33 metres high, 37 metres wide
and weighing approximately 2,100 tonnes.
The modules are a prime example of the
infrastructure that Civmec is capable
of producing and will be shipped to
Queensland from the Australian Marine
Complex (AMC) in Henderson.
Fabrication and assembly of the majority of
components for the project is being undertaken at
our Henderson facility, while complex stainless steel
handrails, topside module box girders and dogbone
connectors are being, or have been, fabricated in
our Newcastle facility and shipped to Henderson for
installation. The dogbone connectors are the largest
components to ever be built in our NSW workshop,
each weighing 520 tonnes, and were transported by
sea to their final destination in Queensland.
The Sydney Gateway Project SB31 Bridge, awarded
to Civmec this financial year for Transport for NSW,
has been highly successful for our Newcastle
operations, as we near completion of our scope of
work on the project. This has included the supply,
fabrication and onsite assembly of three steel
trough girders for the SB31 Bridge off ramp over the
Alexandra Canal. The bridge consists of six steel
segments, each measuring approximately 40 metres
in length, and four external bracings. The company
was subsequently awarded other bridge sections for
the Viaduct as part of this significant project.
We finalised our works on the Perth Kids’ Bridge
Project, now referred to as ‘Koolangka’ Bridge, in
early FY22. A colourful bridge connecting the Perth
Children’s Hospital to Kings Park, the completed
bridge measures 217 metres, comprising 11
segments, 320 tonnes of steel, and 400 cubic
metres of concrete. The project, which was delivered
to Main Roads WA (MRWA), encountered several
logistical and environmental challenges; however,
these were all overcome with timely collaboration
and innovation, placing us in very good stead for
future public infrastructure opportunities.
In early 2022, our proven bridge delivery experience
was further recognised, with MRWA awarding us a
design and construction contract for the Causeway
Pedestrian and Cyclist Bridges. The project will allow
us to further demonstrate our capabilities and skill in
delivering iconic projects in the Infrastructure sector.
The contract will be delivered in an integrated alliance
with MRWA and our construction and engineering
alliance partners. Once complete, the bridges will
provide safer access for the more than 1,400 cyclists
and 1,900 pedestrians who use the path on the
existing Causeway Bridge daily.
In May, we announced the formation of an alliance
agreement with global Defence contractor, Serco, as
we pursue the Australian Government’s LAND-8710
contract and look to further expand our Sovereign
shipbuilding and sustainment capabilities. The
alliance agreement brings together an expert national
team, with complementary capabilities, and aspires
to bring Australian industry skills and capabilities to
the forefront.
We have continued to undertake fabrication and
block construction activities for the SEA 1180 Arafura
Class Offshore Patrol Vessel (OPV) program from
our Henderson workshops, with a major milestone
celebrated in December 2021 when OPV1 was
launched in South Australia. The OPV6 block build is
scheduled for commencement in Q1 FY23, and we
are pleased to continue supporting the program.
Looking ahead, the company is well placed for
public and private sector spend, as federal and
state governments look to stimulate post-pandemic
economic recovery. This includes projects, such as
the Australian Government’s announced A$4.3 billion
investment into maritime infrastructure at Henderson.
The mammoth project, which will be built in
close proximity to our own facilities, consists of a
large vessel dry dock and significant associated
infrastructure. At Civmec, we are optimistic and
excited for the opportunities that this, and other
future projects, could bring.
As opportunities increase in the Infrastructure, Marine
and Defence sector, we will seek to further expand
our accreditations, growing and developing our solid
reputation as a prime, national Tier 1 contractor that
can be trusted to deliver efficiently, innovatively, and
to the highest of standards.
The Causeway Pedestrian and Cyclist Bridges (artist impression)
CIVMEC ANNUAL REPORT 2022
31
OUR OPERATING SECTORS | INFRASTRUCTURE, MARINE AND DEFENCE
Sydney Gateway
Project
SB31 Bridge and Viaduct
CLIENT
Transport for NSW
LOCATION
Sydney, NSW
DURATION
December 2021 – 2023
OVERVIEW
Our scope on the SB31 Bridge includes the supply,
fabrication, and onsite assembly of three steel trough
girders. The bridge consists of six segments – two
for each girder – and four external bracings. We will
complete the loading and transport of the completed
segments to designated assembly areas; the design,
installation, and removal of temporary works in the
workshop, including jigs, trestle, and temporary
support systems; and the protective treatment
of the steelwork in accordance with the relevant
specifications and the design requirements.
In February 2022, we were awarded a subsequent
contract for the supply, fabrication and onsite
assembly of 20 steel trough girders for the Viaduct.
SABR Project
Berth replacement
OWNER
BHP Mitsubishi Alliance (BMA)
LOCATION
Mackay, QLD
DURATION
December 2020 – Late 2022
OVERVIEW
Civmec was awarded by McConnell Dowell the berth
replacement contract on the Shiploader and Berth
Replacement (SABR) Project. The package involves
the manufacture of approximately 15,000 tonnes of
modules made up of 54 individual modules, including
three jacket frames, topside modules, conveyor
modules and transfer towers.
Our scope includes detailing, fabrication,
surface treatment, mechanical and electrical and
instrumentation assembly.
Components are being manufactured in both
our west and east coast facilities, with assembly
undertaken in Henderson.
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CIVMEC ANNUAL REPORT 2022
Offshore Patrol Vessels
CLIENT
Luerssen Australia
LOCATION
Henderson, WA
DURATION
October 2018 – 2029
OVERVIEW
In April 2018, Luerssen Australia awarded Civmec
a contract to perform works for the Royal Australian
Navy’s SEA 1180 Offshore Patrol Vessel (OPV) program.
In November 2021, Civmec commenced construction
on OPV5, with OPV6 scheduled for commencement
in Q1 FY23.
Causeway Pedestrian and Cyclist Bridges
CLIENT
Main Roads WA (MRWA)
LOCATION
Perth, WA
DURATION
April 2022 – Late 2024
OVERVIEW
The project comprises two cable-stayed bridges,
approach embankments and connects Victoria Park
foreshore with Heirisson Island and the Perth CBD.
The completed bridges will be approximately 1,000
metres long and 6 metres wide.
The scope includes the completion of the architectural
and engineering design; fabrication and transportation
to site of approximately 1,500 tonnes of complex steel
structures; ground preparation, earthworks and piling
for approach embankments; in-river works, including
piling, pile caps and pylon structures; and structural
erection and electrical installation.
The contract will be delivered in an integrated alliance
with Civmec, Seymour Whyte Constructions, WSP
and MRWA.
CIVMEC ANNUAL REPORT 2022
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CIVMEC ANNUAL REPORT 2022
Our
Sustainability
3.1 HSEQ
3.2 PEOPLE
3.3 COMMUNITY
3.4 SUSTAINABILITY REPORTING
3.5 INVESTOR RELATIONS
3.6 BOARD OF DIRECTORS
3.7 EXECUTIVE TEAM
CIVMEC ANNUAL REPORT 2022
35
3.0 HSEQ
By integrating our Health, Safety,
Environment and Quality (HSEQ)
principles and practices, we
proactively manage the successful
delivery of projects, driving long-
term sustainability and continuous
improvement, while operating with
a mindset that genuinely believes
it is possible for people and the
environment to stay harm free,
every day at work.
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CIVMEC ANNUAL REPORT 2022
Health and Safety
The health, safety, and physical and mental wellbeing
of our people is critically important to Civmec. Our
Health and Safety Management System is certified to
ISO 45001:2018 and we are committed to providing
adequate processes and procedures, training and
equipment to ensure a safe and healthy environment
for all stakeholders.
Our Never Assume principle forms the base of
this philosophy, reminding our employees,
contractors and visitors to ‘never assume’ an
action, workplace or condition is safe. It gives every
single person the right and responsibility to stop
work if they feel that any task carries a level of
risk that they are uncomfortable with or if they
see an unsafe behaviour or working environment.
We encourage people to put safety first in every
circumstance and to be part of the best practice
outcomes by giving their inputs so the job can be
done safely. Our business also has six ‘Critical Safety
Essentials’ – a set of rules that govern our behaviour
and how we operate.
As we have witnessed the impacts of COVID-19,
both in Australia and around the globe, we have
been reminded of the importance of health above
all. Civmec was not impervious to this, and so we
needed to adapt in order to ensure our people
were safe and provided with appropriate support
and flexibility. Our Western Australian operations
experienced an increased challenge in latter Q1
FY22, as the borders re-opened and COVID-19
cases rose significantly across the state. This
caused an increase in absences and, at times,
required people to quarantine in their onsite fly-in,
fly-out accommodation.
Our management teams, supported by our HR
and HSE teams, were efficient in their handling of
individual cases and close contact tracing.
This, in turn, helped us to limit the spread of the
virus. Our Business Management Systems team
developed an in-house contact tracing application,
which was implemented successfully and allowed
us to promptly track and trace any positive cases.
Employees in isolation were offered support through
our HR department, which included welfare checks
and reminders that every Civmec employee – along
with their immediate family members – have access
to our confidential Employee Assistance Program (EAP)
services. We also offered our employees free COVID-19
and flu vaccinations onsite at our Henderson office,
administered by an external provider.
With the implementation of our formalised, three-year
Mental Health Strategy last year, we have continued
to focus on the broad range of challenges our people
may be facing. The strategy takes into account any
psychosocial and workplace factors which may
contribute to poor mental health, sets goals and
targets for the business, and has an overall vision to
promote improved mental health and wellbeing.
Key elements of the strategy include:
• setting responsibilities within management
and resources to facilitate the achievement of
strategy objectives;
• conducting risk assessments to identify critical
psychosocial risks, ensuring appropriate
control measures are implemented;
• our ongoing partnership with industry support
group, MATES in Construction, who offer
suicide prevention education, peer-to-peer
support, case management, and access to a
24/7 helpline;
• procedural documents required to ensure
corporate and operational level integration of
requirements;
• continuation of a targeted auditing program
to ensure implementation of the program is
consistent across different areas of the
business;
•
formal training and awareness packages to
help promote mental health in the workplace;
and
• offering a range of support services to our
workforce to ensure that if help is needed, it is
readily available and user friendly.
CIVMEC ANNUAL REPORT 2022
37
One of Civmec’s onsite blue trees in the Pilbara, WA
OUR SUSTAINABILITY | HSEQ
Since its implementation, the Mental Health Strategy
has seen more than 800 people trained through
MATES in Construction ‘General Awareness’ training,
with some employees furthering their study with
targeted ‘Connector’ and ‘ASIST’ training. This
important training of personnel offers support and
practical guidance as well as raising awareness
around suicide prevention and will continue as
we progress into FY23. We also rolled out Mental
Health First Aid Training to key personnel across our
corporate office, manufacturing facilities and project
sites, providing our people with important knowledge
and tools to help themselves and those around
them. In an additional testament to our commitment
to employee mental health and wellbeing,
psychosocial risks were incorporated into our
corporate and project risk assessment documents
and procedures this year.
We have continued to support the Blue Tree Project,
with blue trees located across Civmec project sites
and facilities that remind people to reach out for
support if they need it, as well as R U OK? Day; a
day that reminds people that it’s ‘okay to not be
okay’ and encourages everyone to check in on
themselves and those around them.
Furthermore, we were nominated as a finalist in the
MATES in Construction Resources/Civil category;
an award that recognises outstanding leadership in
improving mental health outcomes for workers and
their families in the WA Building and Construction
Industry. At this same event, one of our employees
was awarded the Outstanding Service Award 2021,
primarily for assisting to deliver MATES training to
employees who do not hold English as their first
language so they could understand the teachings, as
well as helping to promote mental health awareness
to our west coast facility workforce.
Proactive measures were taken throughout the
year, in regard to the physical health of our people,
which included onsite skin cancer screenings and
vaccinations. The skin cancer screenings undertaken
by an external medical provider in early 2022 saw
more than 100 people screened at the Henderson
facility. In addition to the COVID-19 vaccinations
offered, we also arranged for onsite administration
of flu vaccines, with nearly 350 vaccinations
administered in total this financial year.
Following an update to the Western Australia WHS
legislation in March, it was imperative that we
reviewed, updated and communicated all changes
effectively and efficiently to both management
and operations. We did this through educational
sessions, HSE reports, and updated procedures.
We also held a leadership forum in October 2021,
which incorporated an HSE presentation about
driving safety through lead indicators and actively
leading safety to help shape a positive safety
culture. To better prepare us for potential crises in
the future, this year we held an executive level crisis
exercise – a high level potential crisis event in line
with a COVID-19 outbreak that affected facilities and
operations, involving executive leaders and senior
management.
Throughout the year, we ran a number of intensive
safety campaigns, including a campaign in the
lead-up to and return from Christmas, as well as
our successful ‘Stop the Drops’ campaign, which
promoted better utilisation of dropped object
prevention checklists, revised barricading standards
and improved the use of tool lanyards.
As we advance into FY23, we will continue to seek
improvements and enhancements to our health and
safety systems and processes. We plan to roll out
an updated Workplace Behaviour Program across
the organisation to address non-physical workplace
hazards, company behaviour expectations and
mitigation strategies. By remaining resolute in our
approach to health and safety, we will continue to be
sustainable as we grow and develop as a business.
R U OK? Day at the Henderson corporate office
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CIVMEC ANNUAL REPORT 2022
One of Civmec’s electric forklifts
Environment
Civmec is committed to operating in an
environmentally-conscious manner at all times,
continually seeking ways in which we can improve,
in order to best conduct our operations for long-term
sustainability. We are certified to ISO 14001:2015,
which is the internationally recognised standard
for environmental management. We have also
maintained our platinum certification with the
Australian Steel Institute Environmental Sustainability
Charter.
During FY22, we undertook a range of activities in an
effort to deliver strong environmental performance,
including our ongoing participation in the ‘Containers
for Change’ recycling program, and taking part,
once again, in Clean Up Australia’s annual ‘Step Up
to Clean Up’ event. Held in March 2022, a group of
Civmec volunteers collected litter from around our
facilities, which improved the local environment and
helped prevent rubbish from entering our waterways.
We researched and implemented a number of new
initiatives to enhance the long-term environmental
sustainability of the business, including:
•
introducing a fleet of electric (battery-powered)
forklifts at our Henderson facility – a clean energy
substitution to the usual gas-powered versions;
• conducting an energy usage assessment of the
Henderson facility and investigating the cost and
benefits of electric vehicle charging stations;
• completing a feasibility study for the installation
of solar panels at our Henderson, Newcastle
and Port Hedland facilities, in order to become
more carbon neutral and supplement grid power
usage; and
• promoting a new range of sustainable
consumable items to phase out single-use
plastics within our business, in line with the
Western Australian state government’s two-phase
plan to ban non-recyclable plastics.
CIVMEC ANNUAL REPORT 2022
39
Clean Up Australia Day 2022
We continued to improve our electronic efficiency
and reduce paper-based systems wherever possible,
encouraging everyone in the company to think
before printing any kind of document. We have a
strong focus on waste reduction at all levels, from
the corporate offices to our sites and manufacturing
facilities.
Through our focus on continuous improvement in
this space, we remain committed to measuring and
monitoring our inputs of energy, water and materials,
as well as our outputs of waste and emissions;
consistently striving to uncover new and innovative
ways to minimise our impact on the environment.
We will also continue to develop and expand
our training materials and programs, to better
communicate and promote best practice amongst
our team.
Always seeking to grow and improve, we recently
appointed a full time Sustainability and Environmental
Advisor to help drive the company’s sustainability
goals, actions and commitments. Going forward,
we remain focused on exploring ways to improve
our environmental performance throughout all our
facilities and sites.
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CIVMEC ANNUAL REPORT 2022
OUR SUSTAINABILITY | HSEQ
Quality
Working on a diverse range of projects that are, at
times, highly technical and complex, we continue
to uphold the highest quality standards across
our business. Our Quality Management System
is certified to ISO 9001:2015, the internationally
recognised standard for quality management, and
our facilities across Australia hold certification to
ISO 3834.2:2008, ‘Quality requirements for fusion
welding of metallic materials (Part 2: Comprehensive
quality requirements)’, demonstrating that our
welding management system meets the most
stringent requirements. We also hold CC3
certification to the requirements of AS/NZS
5131:2016 ‘Structural Steelwork - Fabrication and
Erection’.
This year has seen the implementation of several
quality-focused initiatives, such as:
•
•
•
the roll out of Quality Essentials – a program
encouraging all employees and contractors to
‘plan, do, check and act’ so that high quality
outcomes can always be achieved;
the incorporation of Quality Assurance and
Quality Control into our Never Assume
philosophy, helping to educate, inform and
promote greater awareness of the quality
requirements across the business; and
the continual consultation with internal and
external stakeholders urging the use of
electronic submissions to, not only minimise
the use of paper, but to increase efficiency and
reduce costs.
Our integrated, proprietary web-based project
control system, Civtrac, continues to facilitate high
quality, seamless delivery by allowing us to track,
monitor, report and view real-time project data
throughout the entire project life cycle.
Through our ongoing software development, we
have also been able to leverage cloud technologies
that optimise, digitise, and automate business
processes. This year, new modules have been
rolled out to provide greater visibility on overall
project performance, increasing productivity and
collaboration across the business.
Our quality team are continuously reviewing and
revising our processes and procedures throughout
the life of the project and ensuring they develop
and implement quality programs that identify and
manage risks, while driving improvement. They also
ensure that our systems meet industry certification
standards and best practices. Our forward focus
will be on revising and improving NCR reporting
to ensure root causes are clearly identified, and
associated corrective and preventative actions are
implemented to prevent reoccurrence. In addition
to this, we aim to more accurately capture direct
and indirect costs and, ultimately, improve process
efficiency.
Finally, we have re-structured our HSEQ division
as we enter FY23, with all disciplines now to be
overseen by a Group Manager HSEQ. We believe
this integration will increase the synergy between
HSE and Quality, which were previously managed by
separate people, and drive continuous improvement
in the years ahead.
Civmec’s Civtrac barcode tracking system
CIVMEC ANNUAL REPORT 2022
41
People
At Civmec, we recognise that every person in the
company plays a part in our success. We are proud to
be a significant Australian employer, providing high-
quality career and training opportunities to the local
community, with a focus on diversity, sustainability,
growth and development.
A number of our long-term employees celebrated
their ten-year anniversary with the company this year,
many of whom have experienced great personal
development and career progression in this time, and
who have undoubtedly helped to shape Civmec into
what it is today.
In recognition of their accomplishments and
achievements, four of our apprentices were chosen
this year as finalists at the Skill Hire Awards 2022,
with two of those apprentices going on to win
Fourth Year Apprentice of the Year and Second Year
Apprentice of the Year.
Training and Development
Our priority remains as it always has been; to
consistently seek the best and most enthusiastic
talent available, while simultaneously retaining,
training, developing and rewarding those we have.
During FY22, we consistently employed in the region
of 2,800 people, including 130 apprentices, trainees,
graduates and undergraduates. This includes
apprentices in the metal, mechanical, electrical,
bricklaying, carpentry and surface treatment trades.
Of our apprentices this year, 13 completed their
apprenticeships, with the majority of those continuing
on at Civmec with their new qualifications, including
as Boilermakers, and Electrical and Refractory
Tradespeople.
At our Iron Bridge operations, our female Aboriginal
apprentice successfully progressed into year two of
her Mechanical Fitter apprenticeship with Civmec.
We also welcomed three new female apprentices
across our facilities, who are training to become
either Boilermakers or Painters.
By increasing the number of Australian traineeships
and broadening the qualifications we offer, we were
able to provide greater opportunities for our trainees
this financial year. This resulted in our number of
trainees increasing from the previous year, from 8
to 15. Our trainees are completing a range of Certificate
IV courses, including in Business Administration –
such as HSE, Quality Control, Document Control,
and Learning and Development – through to
Leadership and Management, and Logistics.
Our Registered Training Organisation (RTO)
continued in its delivery of nationally accredited
qualifications and courses, reinforcing our reputation
as a quality training provider for the engineering,
construction, resources and defence industries.
Over the financial year, the RTO delivered 240
courses and had 2,145 new enrolments, with
2,598 units completed in total. We also employed
additional staff within the RTO to cater for the
growing demand in training, and acquired a
dedicated Learning Management System for first
aid and CPR training.
Our internal LEAD program continues to drive our
leadership development within operations. The
program, which includes four nationally accredited
units delivered through our RTO, identifies and
upskills emerging leaders within the blue collar side
of the business, providing opportunities for personal
development and career growth in a real-world
setting. In FY22, 55 Supervisors and 33 Leading
Hands were upskilled through the course.
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CIVMEC ANNUAL REPORT 2022
In March 2022, Civmec launched its inaugural
Leadership Development Program, which aims to
shape and develop the next generation of executive
leaders within the company. The initial six-month
phase (Phase 1) is intensive and deals evidence
based and action oriented tasks. The following
six-month (Phase 2) period is based around
follow-on training and external courses that are
targeted towards the areas of individual development
that are identified as required during Phase 1.
The course is designed for ambitious leaders who
are already having a positive impact within the
company and who seek to reach the highest levels.
Fifteen candidates were selected to take part in the
program, with the first cohort of five commencing
in early FY23.
The Civmec Reward and Recognition program
celebrated a number of outstanding employees
throughout the year, culminating in our overall
‘Employee of the Year 2021’ award, which was
awarded to a dedicated member of the Civmec
HSE team for his unwavering commitment to
ensuring the health, safety and wellbeing of all,
and for the outstanding way in which he represents
the company.
CIVMEC ANNUAL REPORT 2022
43
OUR SUSTAINABILITY | PEOPLE
Diversity and Inclusion
At Civmec, we understand that ensuring diversity
and inclusion in the workplace is not only the right
thing to do, it genuinely creates a more positive
working environment whereby the thoughts and
experience of all employees contribute to the overall
business’s success. By respecting and celebrating
the unique individuality and differences of one
another, we know we can unlock greater innovation,
creativity and productivity.
In addition to employing a wide range of people
with diverse backgrounds, ethnicities, ages and
experience, we are committed to equal opportunity
and gender diversity. In recent years, we have
endeavoured to increase female participation – not
only in the more typically male-dominated operations
and project delivery roles, but also across the entire
company.
This year, we are pleased to report that our female
apprenticeship figures increased to 7.7 per cent
at peak, nearly double our FY21 figure, and
the proportion of females within the head office
increased to as high as 52 per cent. Approximately
one third of those undertaking a Graduate program
with Civmec during FY22, such as Engineering or
HSE, were female.
Indigenous engagement remains a key priority, as
we aim to increase career and training opportunities
across our operations for Aboriginal and Torres Strait
Islander (ATSI) people. We currently have indigenous
employees in a range of different roles, including
Senior Shutdown Superintendent, HSE Advisor,
Scaffolder, Site Administrator, Boilermaker, Mobile
Plant Operation and Trades Assistant.
ATSI apprentices represent more than five per cent of
our total number of apprentices and demonstrate our
focus on commencing engagement at the grassroots
level, offering those of ATSI descent the opportunity
to grow and develop within the company whilst they
pursue their formal qualifications.
Participating in national days of ATSI recognition
is fundamentally important as it demonstrates our
commitment to indigenous engagement and outlines
our expectations and values. During Reconciliation
Week this year, we celebrated one of our Senior
Shutdown Superintendents, who is Indigenous and
has been with Civmec for the past seven years,
progressing from a Boilermaker in 2015 to the senior
position he now holds in Gladstone. When asked for
his perspective on Reconciliation Week, he replied,
“For me, Reconciliation Week means speaking up
for the things you believe in…I try to encourage non-
indigenous people to buy into the culture because, in
a way, it’s their culture too and should be enjoyed by
everyone.”
In July, we celebrated the theme of Heal Country!
during NAIDOC Week, acknowledging two special
partnerships we have with indigenous businesses:
East West Pilbara Group Pty Ltd (EPG) and Yalagan
Group Pty Ltd (Yalagan Group). Yalagan Group was
engaged as a subcontractor to Civmec to supply
various trades personnel on a package of works at
Iron Bridge.
We remain committed to seeking meaningful and
sustainable partnerships with ATSI businesses and
community groups, engaging indigenous contractors
and suppliers where possible and cultivating
respectful relationships within the ATSI communities
in which we operate.
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CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
45
Community
Throughout the year, our business also supported
the St Patrick’s Community Support Centre, a
charity local to our Henderson facility that provides
accommodation, meals and other support
services to vulnerable and homeless members
of the community. Groups of Civmec employees
volunteered their time to pack hampers and help out
in the lead up to Christmas, as well as embraced
our ‘Containers for Change’ program throughout the
year. The program pays ten cents for every eligible
container collected at Civmec sites, with the money
raised going to St Patrick’s.
The Civmec team at Vinnies CEO Sleepout 2022
Jeans for Genes Day 2021
Civmec is committed to building meaningful
partnerships with community groups and
supporting a range of worthy charities and
local sporting clubs, with the aim of making a
positive difference to the community around
us. We recognise this as an integral part of
our sustainability as a business.
Homelessness
Civmec is proud to regularly support the St Vincent
de Paul Society in their quest to end homelessness
in Australia, taking part in the Vinnies CEO Sleepout
event annually. This year, Civmec CEO Pat Tallon
attended his fourth event – joined by two Civmec
colleagues – as we set our most ambitious
fundraising target yet: A$100,000. Our campaign
was generously supported by many, including
our own employees, suppliers, stakeholders and
the general public, with our final tally exceeding
A$109,000. We ended the campaign as the highest
fundraising team in Western Australia, and the fifth
highest nationwide; but, more importantly, we made
a difference to some of those who need it most, as
the money raised will help the charity provide food,
emergency accommodation and essential services
to those experiencing or vulnerable to homelessness
in Australia.
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CIVMEC ANNUAL REPORT 2022
Hunger
Foodbank is a worthy charity that is fighting hunger
by sourcing food for people in need, and which
is regularly supported by Civmec and our people.
In FY22, Civmec undertook a donation drive at
Henderson before Christmas, with our employees
generously donating a large amount of food and
other non-perishables to Foodbank, which went on
to become care hampers.
Mental Health
Civmec places great emphasis on the mental health
and wellbeing of our people, so it is appropriate that
this support extends to the wider community. Uniting
WA was one of the charities we made a financial
contribution to at Christmas; a charity that supports
people in the community experiencing complex
challenges, such as mental health, family issues and
homelessness.
We took part in R U OK? Day in September,
encouraging our employees to reach out to one
another and ask, “Are you okay?”.
In addition to this and our Mental Health Strategy, we
partner with MATES in Construction, who provide
suicide prevention, training and support services
to construction workers. It is our aim that if we
can promote continued discussion and awareness
around mental health and wellbeing, we can reduce
any stigma and motivate people to seek support
when they need it.
Young People
Young people are our future, so as well as providing
training and employment opportunities, we were
pleased to support Youth Focus this year. The
organisation offers a range of services for young
people with mental health issues, including youth
counselling, education, individual placement support,
mentoring programs, and group-based therapy.
Children’s Medical Research
We take part annually in Jeans for Genes Day
at Civmec, with our people donning jeans and
donating money to the Children’s Medical Research
Institute (CMRI), which is dedicated to advancing the
treatment and prevention of childhood diseases.
Community Sports
Civmec is proud to sponsor the Kwinana Knights
women’s Australian Rules football team, the team of
two of our Henderson employees, and the Bunbury
Barbarians Rugby Club in Western Australia’s
south west. We were especially happy to hear that
our sponsorship donation this year enabled the
Barbarians to buy one-off pink jerseys for a charity
match, which were later sold at a silent auction and
raised more than A$3,000 for charity.
Clockwise: Volunteering at St Patrick’s Community
Support Centre, Youth Focus donation, Bunbury
Barbarians and Kwinana Knights sponsorships
CIVMEC ANNUAL REPORT 2022
47
Sustainability
Reporting
At Civmec, we recognise the importance of
sustainability in business and that it is an integral
consideration as we evolve and strive for long-term
growth and development.
It is our responsibility, to people and the planet, that
sustainable practices are integrated holistically into
everything we do. By striving for optimal management
of environmental, social and governance (ESG)
risks, opportunities and obligations, we can have
a positive impact on the community, economy and
environment.
At Civmec, more than 98 per cent of our
procurement is sourced from within Australia. We
also support the Australian economy in other ways,
such as providing employment to around 2,800
people and contributing to the welfare of so many
more through our supply chain.
We are focused on training and providing
opportunities to future generations, coupled with
our strong commitment to limiting and reducing the
environmental impacts we have in our operations.
Civmec conducts a materiality assessment and
comprehensive review of sustainability annually,
releasing a Sustainability Report in line with each
financial reporting period.
Civmec’s FY22 Sustainability Report will be released
in November 2022.
The report will outline our sustainability performance
and identify key material issues in relation to ESG
performance, providing stakeholders with detailed
information of our actions, performance, strategies
and goals. It is prepared in accordance with the
Global Reporting Initiative (GRI) Sustainability
Reporting Standards 2016 core-level reporting.
Consistent with previous years, our sustainability
agenda will focus 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 HSE, people, community,
governance and financial targets.
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CIVMEC ANNUAL REPORT 2022
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CIVMEC ANNUAL REPORT 2022 Investor
Relations
In a year when businesses worldwide were grappling
with runaway inflation, rising capital costs and
COVID-19, delivering our best set of financial results
was no mean feat in FY22.
While we were confident our disciplined approach
in project tendering and execution would yield
favourable results, even in spite of these challenges,
we were conscious that our shareholders and
investors needed the same assurance.
This was why we actively engaged with the
investment community and media throughout the
year, keeping them up to date with our progress and
the developments across the sectors we operate in.
In meetings with investors, we emphasised that we
would not pursue market share at the expense of
profitability. Our focus instead was on increasing both
revenue and earnings, and doing so sustainably,
keeping in mind that manpower was becoming
costlier and no longer as readily available as before,
given the fallout from the pandemic.
We also shared with investors that our efforts to
develop recurring income streams – so that we do
not rely solely on projects-driven income – were
paying off. This was evident in the fact that we were
awarded more work to maintain and sustain our
clients’ plants, facilities and infrastructure.
Sustainment may, in fact, be our next engine of
growth. This is a natural progression as we have
a thorough understanding of how to keep these
assets operating effectively since, often, we were
the ones who built them. Moreover, such work
typically does not require significant outlays on
our part.
Investor Outreach
We held a number of virtual meetings throughout
the financial year with the investment communities
in Australia and Singapore. These included
briefings of financial results, presentations at
various stockbroking houses, and meetings
with sell-side analysts.
In March 2022, we took part in the annual Euroz
Hartleys three-day investor conference in
Western Australia, presenting to analysts and
brokers alongside other ASX-listed companies.
We also participated in four non-deal roadshows
to acquaint a number of Asia-based money
managers with our business.
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CIVMEC ANNUAL REPORT 2022
These were put together separately by UOB Kay
Hian (21 October 2021), CGS-CIMB Securities
(22 March 2022), RHB Bank (12 May 2022) and
Maybank (23 June 2022).
We were included in RHB Bank’s annual compilation
of the Top 20 Singapore small-cap companies for
2022. This was the first time Civmec made the list,
where more than 60 per cent of the stock picks
were companies not featured in RHB Bank’s
previous compilations.
Additionally, we took part in Lim & Tan Securities’
2021 Investment Webinar, held on 18 November
2021, where several hundred retail clients of the
broking house dialled in to listen to the senior
management of three Singapore-listed companies,
including Civmec, expound on their business.
Research Coverage
Our active investor outreach played no small role
in attracting research coverage for Civmec. The
research teams of five securities firms in Singapore
initiated rated coverage of our company in FY2022.
KGI Securities was the first, with UOB Kay Hian next,
followed by Lim & Tan Securities, Maybank and
DBS Group Research.
Media Coverage
Throughout FY22, we actively engaged the media to
better profile ourselves to the investment community
and to reach a wider audience throughout both
Australia and Singapore.
This included the dissemination of financial results to
media outlets, as well as engagement with the media
through one-on-one interviews.
CEO Pat Tallon was interviewed by the Rock Yarns
podcast and Beauty and the Stock Channel, where
he spoke about Civmec’s view on the future of
Australian industry, including Defence. We also had
a full-page feature by The Edge Singapore, in March
2022, detailing the leadership styles of our Executive
Chairman and CEO and their approach to business.
The research initiation of several securities firms was
also covered by the press in Singapore.
Full-page feature in ‘The Edge’ Singapore, March 2022
CIVMEC ANNUAL REPORT 2022
51
Board of
Directors
MR JAMES FINBARR FITZGERALD
Executive Chairman
Mr James Finbarr Fitzgerald was appointed to the Civmec Limited Board on 27 March
2012. With more than 35 years of industry experience, he is responsible for providing
leadership to the Board and guiding the Company’s corporate direction, as well as
ensuring all relevant procedures are in place for compliance with corporate governance.
Mr Fitzgerald has been a Board member of the Centre for Defence Industry Capability
(CDIC), a Defence industry policy initiative that assisted Australian businesses entering
or working in the Defence industry and supported sector-wide projects to improve
the capacity and capability of the Defence industry. He also served as a Defence
Panel Expert for the AusIndustry Modern Manufacturing Initiative. He is a passionate
supporter of various charities, with a strong belief in the training and development of
young people; a key aspect of the Company’s growth and success.
In 2019, his business acumen was recognised with joint award of the EY Entrepreneur
of the Year in the Sustained Excellence category in the Western Region.
MR 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. He has been a key driver in operational innovation, productivity
improvement and the waste elimination programs within the business.
Over the last 12 years, Mr Tallon has refined his expertise across the Energy,
Resources, Infrastructure, Marine and Defence sectors, building a keen understanding
of key stakeholder requirements at all levels. He is committed to working with and
encouraging apprentices, trainees, undergraduates and graduates to achieve their
goals. He also devotes his time to the community, supporting various charities and
events, with a particular focus on the homeless.
Mr Tallon was named CEO Magazine Construction Executive of the Year in 2014 and
was jointly awarded EY Entrepreneur of the Year in the Sustained Excellence category
in the Western Region in 2019.
MR KEVIN JAMES DEERY
Chief Operating Officer/Acting Chief Financial Officer
Appointed to the Board on 27 March 2012, Mr Kevin James Deery oversees the
Group’s operational activity. He is responsible for ensuring a safety-focused workplace
and delivering projects to strict quality, budget and schedule expectations.
With a Bachelor of Engineering (Mechanical) from Curtin University, he has more than
30 years’ experience managing fabrication and construction projects for numerous
clients across Australia.
As Acting Chief Financial Officer, he governs the Company’s strong and experienced
accounts team and manages the purchase and disposal of assets.
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CIVMEC ANNUAL REPORT 2022
MR CHONG TECK SIN
Lead Independent Director
Mr Chong Teck Sin was appointed to the Board on 27 March 2012. He is currently an
Independent Director of Changan Minsheng APLL Logistics Co Ltd, InnoTek Limited
and AIMS APAC REITS Management Limited, and a Director of Civmec Construction
& Engineering, Singapore 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.
MR 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
a consultant with Wong Tan & Molly Lim LLC, a legal firm he co-founded in 1994.
He is also an Independent Director of Excelpoint Technology Ltd, Mencast Holdings
Ltd and InnoTek Limited.
Mr Wong holds a Bachelor of Law (Honours) from the National University of
Singapore.
MR 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.
CIVMEC ANNUAL REPORT 2022
53
Executive
Team
MR ADAM GOLDSMITH
Executive Group Manager – Operational Support
Mr Adam Goldsmith joined the Group in 2017 and has made significant contributions
to the Company. He is a Fellow of the Royal Institute of Chartered Surveyors, with
quantity surveying and construction law qualifications.
With more than 25 years’ commercial and risk management experience, gained with
major Australian and UK companies, Mr Goldsmith brings a wealth of knowledge and
experience to the executive team.
MR RODNEY BOWES
Executive Group Manager – Proposals
Mr Rodney Bowes joined the Group in 2010 and since then has been responsible
for managing the Group’s proposals and estimating divisions, demonstrating an
unwavering commitment to securing a strong and profitable order book for the
Group.
After a long and illustrious career, Mr Bowes retired from the Group on 30 June
2022. From 1 July 2022, Mr Peter Ricciardello will take on the role of Executive
Group Manager – Proposals and Growth. Mr Ricciardello is a seasoned engineering
professional with more than 20 years’ experience leading and managing large scale
engineering and construction projects.
We would like to take this opportunity to, again, thank Rodney for his unwavering
input to the Company and wish him the best for the future.
MR CHARLES SWEENEY
Executive General Manager – Construction
Responsible for the effective leadership of the Group’s construction division,
Mr Charles Sweeney has played an instrumental role in the successful completion
of many key projects. He is committed to upholding the highest standards in
safety, quality and productivity and has a keen focus on developing the operations
department and offering innovative client solutions.
Mr Sweeney has grown with the Company, having joined at its inception. He is also
the Company nominee for electrical and building licences.
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CIVMEC ANNUAL REPORT 2022
MR DAVID POWER
Executive General Manager – Manufacturing
With more than 15 years’ experience in the construction industry, Mr David Power has
been with the company since 2011. Having worked on a number of major projects,
he has developed a strong background in various management positions and places
acute focus on HSEQ within the workplace.
Mr Power manages the Company’s west and east coast manufacturing divisions,
providing guidance and support to project teams and striving for high-quality, value-
driven solutions for all clients.
MR DANIEL KENNEDY
Executive General Manager – Maintenance and Capital Works,
Resources and Energy
With 28 years’ experience across Australia and South East Asia, Mr Daniel Kennedy
joined the Company in 2021 and was soon appointed to the executive team. He is
responsible for the growth and delivery of maintenance and capital works projects
within the Resources and Energy sectors.
A passionate leader with a strong commitment to safety and delivery, Mr Kennedy
manages all areas of fixed plant maintenance and small to medium-sized project
work, such as incremental upgrades and sustaining capital projects.
MR MYLON MANUSIU
Executive General Manager – Maintenance and Capital Works,
Refineries and Smelters
Mr Mylon Manusiu has been with the Company since 2015. He is responsible
for managing the Company’s maintenance and capital works division in the way
of refineries, smelters and the delivery of minor projects. Predominantly based on the
East coast, he has played a significant role in expanding the Group’s maintenance
offering nationwide and securing long-term maintenance contracts.
With more than 20 years’ experience, Mr Manusiu applies his broad specialist
knowledge to ensuring the optimal delivery of maintenance, shutdown and
refractory works, whilst motivating his team to meet all safety, environmental
and quality targets.
CIVMEC ANNUAL REPORT 2022
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56
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CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022 Financial
Report
4.1 DIRECTORS’ STATEMENT
4.2 REPORT ON CORPORATE GOVERNANCE
4.3 INDEPENDENT AUDITOR’S REPORT
4.4 CONSOLIDATED INCOME STATEMENT
4.5 CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
4.6 STATEMENTS OF FINANCIAL POSITION
4.7 CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
4.8 CONSOLIDATED STATEMENT OF
CASH FLOWS
4.9 NOTES TO THE FINANCIAL STATEMENTS
4.10 STATISTICS OF SHAREHOLDERS
4.11 NOTICE OF ANNUAL GENERAL MEETING
4.12 DISCLOSURE OF INFORMATION ON
DIRECTORS SEEKING RE-ELECTION
4.13 CORPORATE REGISTRY
4.14 PROXY FORM
CIVMEC ANNUAL REPORT 2022
57
57
CIVMEC ANNUAL REPORT 20224.0
Directors’ Statement
(Incorporated in Singapore)
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 2022 and the
statement of financial position of the Company as at 30 June 2022.
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 2022 and the financial
performance, changes in equity and cash flows of the Group for the financial year ended on that date; and
(b)
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they fall due.
1. Directors
The Directors of the Company in office at the date of this report are as follows:
Mr. James Finbarr Fitzgerald
Mr. Patrick John Tallon
Mr. Kevin James Deery
Mr. Chong Teck Sin
Mr. Wong Fook Choy Sunny
Mr. Douglas Owen Chester
Executive Chairman
Chief Executive Officer
Chief Operating Officer / Acting Chief Financial Officer
Lead Independent Director
Independent Director
Independent Director
2. Arrangements to enable directors to acquire shares or debentures
Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to
enable the Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company
or any other body corporate, other than as disclosed under ‘Share Options’ and ‘Performance Share Plan’ and ‘Performance
Rights Plan’ 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:
The Company
Mr. James Finbarr Fitzgerald
Mr. Patrick John Tallon
Mr. Kevin James Deery
Mr. Douglas Chester
Holdings registered in the
name of directors
Holdings in which a director is
deemed to have an interest
At 1.7.21
At 30.6.22
At 1.7.21
At 30.6.22
-
54,000
-
-
No. of Ordinary shares
-
54,000
228,000
-
97,720,806
97,566,806
13,295,250
70,000
97,720,806
97,566,806
13,295,250
70,000
There was no change in any of the above-mentioned interests between the end of the financial year and report date.
Except as disclosed in this report, no Director who held office at the end of the financial year had interests in shares, share
options, warrants or debentures of the Company, or of related corporations, either at the beginning of the financial year, or date
of appointment, if later or at the end of the financial year.
4. 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.
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CIVMEC ANNUAL REPORT 2022
Directors’ Statement
Directors’ Statement
(Incorporated in Singapore)
4. Share options (continued)
Civmec Limited Employee Share Option Scheme (continued)
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 2022, 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
2022 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 Extraordinary General Meeting held on 25 October 2012.
The Remuneration Committee (the ‘RC’) administering the Scheme comprises Directors, Mr. Wong Fook Choy Sunny (Chairman
of the Committee), Mr. Chong Teck Sin and Mr. Douglas Owen Chester.
The CPSP forms an integral and important component of the employee compensation plan, which is designed to primarily reward
and retain key management and employees of the Company whose services are integral to the success and the continued
growth of the Company.
Principal terms of the Scheme
(i) Participants
Under the rules of the Scheme, employees including Executive Directors and Associated Company Employees, who are not
Controlling Shareholders or their associates, are eligible to participate in the Scheme.
Persons who are Controlling Shareholders and their Associates shall be eligible to participate in the Civmec Performance Share
Plan if:
(a)
their participation in the Civmec Performance Share Plan; and
(b)
the actual number and terms of the Awards to be granted to them have been approved by independent Shareholders of the
Company in separate resolutions for each such person.
CIVMEC ANNUAL REPORT 2022
59
Directors’ Statement
(Incorporated in Singapore)
5. Performance share plan (continued)
Civmec Limited Performance Share Plan (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 2019.
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.
Performance rights are a right to one issued ordinary share of the Company granted under the CPRP.
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.
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Directors’ Statement
Directors’ Statement
(Incorporated in Singapore)
6. Performance rights plan (continued)
Civmec Limited Performance Rights Plan (continued)
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 Performance Rights Plan; and
(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 CPRP grated 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
A Performance Right refers to a right to one issued ordinary share of the Company granted under the scheme for no
consideration. 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
CIVMEC ANNUAL REPORT 2022
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61
61
Directors’ Statement
(Incorporated in Singapore)
6. Performance rights plan (continued)
Civmec Limited Performance Rights Plan (continued)
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. aEPS is based on the achievement of certain predetermined performance targets determined by the Committee.
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 the discretion to determine whether the performance targets have been met.
(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.
Awards Granted under the Scheme
The details of the awards granted under the Scheme are as follows:
Year of Award
No. of rights
FY 2019/20
FY 2020/21
FY 2021/22
7,359,993
8,578,000
1,773,000
FY2020 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)
FY2021 Performance rights grant
Rights will vest in two tranches as follows:
•
•
Tranche 3 (50%): 2 year performance period (1 July 2020 to 30 June 2022)
Tranche 4 (50%): 3 year performance period (1 July 2020 to 30 June 2023)
FY2022 Performance rights grant
Rights will vest as follows:
•
Tranche 5: 3 year performance period (1 July 2021 to 30 June 2024)
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Directors’ Statement
Directors’ Statement
(Incorporated in Singapore)
6. Performance rights plan (continued)
Civmec Limited Performance Rights Plan (continued)
The number of performance rights in the Company held during the financial year by each director and KMP of the consolidated
entity, is set out below:
Balance at
appointment
date or 1.07.2021
Granted
Vested
Expired/ Other
Directors
James Fitzgerald
Patrick Tallon
Kevin Deery
Key management personnel:
Rodney Bowes
Charles Sweeney
Adam Goldsmith
David Power
Mylon Manusiu
Daniel Kennedy(1)
1,803,000
1,803,000
1,565,000
908,000
908,000
908,000
730,000
730,000
-
-
-
-
-
334,000
(228,000)
167,000
167,000
167,000
167,000
167,000
167,000
(190,000)
(190,000)
(190,000)
(82,000)
(82,000)
-
(375,000)
(375,000)
(147,000)
(122,000)
(122,000)
(122,000)
(52,000)
(52,000)
-
Notes:
(1) Appointed on 26/08/2021 as Executive General Manager for Maintenance and Capital Works, Energy and Resources.
7. Audit committee
The members of the Audit Committee (‘AC’) at the end of the financial year are as follows:
Balance
30.06.2022
1,428,000
1,428,000
1,524,000
763,000
763,000
763,000
763,000
763,000
167,000
Mr. Chong Teck Sin
Mr. Wong Fook Choy Sunny
Mr. Douglas Owen Chester
Chairman
Member
Member
All members of the Audit Committee are non-executive Directors. The Audit Committee performs the functions specified by the
Listing Manual of the Singapore Exchange Securities Trading Limited (‘SGX-ST’), 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 Report on Corporate Governance
set out in the Annual Report of the Company.
8. Independent auditor
The independent auditor, Moore Stephens LLP, Public Accountants and Chartered Accountants, have expressed their willingness
to accept reappointment as auditors.
On behalf of the Board of Directors,
James Finbarr Fitzgerald
Executive Chairman
Civmec Limited
29 August 2022
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
Patrick John Tallon
Chief Executive Officer
Civmec Limited
29 August 2022
63
63
Report on
Corporate Governance
30 June 2022
Introduction
The Board of Directors (the ‘Board’) and the senior 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 framework and practices that were
in place during the financial year ended 30 June 2022 (‘FY2022’) with specific reference to the Principles and Provisions of the
Singapore Code of Corporate Governance 2018 (the ‘Code’) and the 4th edition of the Australian Securities Exchange (‘ASX’)
Corporate Governance Principles and Recommendations (‘ASX Principles and Recommendations’), which is also available on the
Company’s corporate website.
In line with the commitment of the Company to maintaining high standards of corporate governance, the Company continually
reviews its corporate governance processes to strive to comply with the Code. To the extent the Company’s practices may vary
from the provisions of the Code for FY2022, the Company has explained how its practices are consistent with the intent of the
relevant principles of 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 ASX, where applicable, except where otherwise stated.
Board Matters
The Board’s Conduct of Affairs
Principle 1: The company is headed by an effective Board which is collectively responsible and works with
Management for the long-term success of the company.
Provision 1.1 Directors are fiduciaries who act objectively in the best interests of the company and hold Management
accountable for performance. The Board puts in place a code of conduct and ethics, sets appropriate tone-from-the-top and
desired organisational culture, and ensures proper accountability within the company. Directors facing conflicts of interest
recuse themselves from discussions and decisions involving the issues of conflict.
The Board’s primary role is to protect and enhance shareholders’ value and ensure that the Company is run according to the
best international management and corporate governance practices, appropriate to the needs and development of the Group.
The Board works closely with the senior management for the Company’s long-term success and continuously maintains the
highest standards of behaviour and ethical conduct within the Group. The Board has adopted a formal code of conduct, and it
requires all the Directors, senior management and employees to abide by the Company’s Standard Code of Conduct, which is
available on its corporate website.
Apart from its statutory duties and responsibilities, the Board’s functions include:
•
•
•
•
overseeing the management and affairs of the Group and approving the Group’s corporate strategy and directions;
implementing policies in relation to financial matters, which include risk management and internal control and compliance;
reviewing the financial performance of the Group, approving investment proposals and setting values and standards,
including ethical standards for the Company and the Group;
ensuring that the Group has in place an appropriate risk management framework and setting the risk appetite within which
the Board expects senior management to operate;
•
approving the appointment, and when necessary replacement, of the senior management personnel; and
• developing and reviewing corporate governance principles and policies.
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. Directors who face conflicts of interest disclose their interests
and voluntarily recuse themselves from discussions and decisions involving the issues of conflict.
Provision 1.2 Directors understand the company’s business as well as their directorship duties (including their roles as
executive, non-executive and independent directors). Directors are provided with opportunities to develop and maintain
their skills and knowledge at the company’s expense. The induction, training and development provided to new and existing
directors are disclosed in the company’s annual report.
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Report on
Corporate Governance
Report on
Corporate Governance
30 June 2022
Board Matters (continued)
The Board’s Conduct of Affairs (continued)
Principle 1 (continued)
Provision 1.2 (continued)
The Company encourages the Directors to learn and develop their directorship skills. 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.
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.
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 and have undertaken
all appropriate checks (including the person’s character, experience, education, criminal record and bankruptcy history).
In addition, newly appointed senior management personnel are subject to the same orientation, induction programme and
appropriate checks in accordance with our internal onboarding policies and procedures before the personnel are introduced
to the senior management team. Upon appointment of each Director and key management personnel, (senior executive), the
Company provides a services agreement to the Director and key management personnel (senior executive) setting out their
duties and obligations.
Provision 1.3 The Board decides on matters that require its approval and clearly communicates this to Management in
writing. Matters requiring board approval are disclosed in the company’s annual report.
The Board has delegated the day-to-day management of the Group to the senior management, headed by the Executive
Chairman, Mr James Finbarr Fitzgerald, the Chief Executive Officer, Mr Patrick John Tallon and the Chief Operating Officer/ acting
Chief Financial Officer, Mr Kevin James Deery. The Board has reviewed and adopted the delegation of authority (‘DOA’) during
FY2022 regarding the signing authority and limits. The DOA sets out the authorisation level required for specific transactions,
including those requiring Board approval.
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 the annual report and audited financial statements;
• monitoring senior 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.
Provision 1.4 Board committees, including Executive Committees (if any), are formed with clear written terms of reference
setting out their compositions, authorities and duties, including reporting back to the Board. The names of the committee
members, the terms of reference, any delegation of the Board’s authority to make decisions, and a summary of each
committee’s activities, are disclosed in the company’s annual report.
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.
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Report on
Corporate Governance
30 June 2022
Board Matters (continued)
The Board’s Conduct of Affairs (continued)
Principle 1 (continued)
Provision 1.5 Directors attend and actively participate in Board and board committee meetings. The number of such
meetings and each individual director’s attendances at such meetings are disclosed in the company’s annual report. Directors
with multiple board representations ensure that sufficient time and attention are given to the affairs of each company.
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 2022 is set out below:
Board
Audit Committee
Remuneration
Committee
Nominating
Committee
Risks and
Conflicts
Committee
Board Committees
No. of Meetings Held
No. of Meetings Attended
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Wong Fook Choy Sunny
Douglas Owen Chester
*By Invitation
4
4
4
4
4
4
4
4
4*
4*
4*
4
4
4
2
2*
2*
2*
2
2
2
2
2*
2*
2*
2
2
2
4
4*
4*
4*
4
4
4
Provision 1.6 Management provides directors with complete, adequate and timely information prior to meetings and on
an on-going basis to enable them to make informed decisions and discharge their duties and responsibilities.
The Board is informed of all material events and transactions as and when they occur. The senior 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.
The senior 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.
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Board Matters (continued)
The Board’s Conduct of Affairs (continued)
Principle 1 (continued)
Provision 1.6 (continued)
All Directors are updated regularly on changes to the Company’s policies and are kept updated on relevant new laws and
regulations including Directors’ duties and responsibilities, corporate governance and financial reporting standards. Newly
appointed Directors are given briefings by the Management on the business activities of the Group.
Provision 1.7 Directors have separate and independent access to Management, the company secretary, and external advisers
(where necessary) at the company’s expense. The appointment and removal of the company secretary is a decision of the
Board as a whole.
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 senior management.
The Company Secretaries are appointed by the Board and are accountable to the Board, through the Chairman, on all matters
to do with the proper functioning of the Board. The removal of the Company Secretaries are subject to the approval of the Board.
The Company Secretaries work closely with the Chairman to manage the flow of information between the Board, its committees
and senior management across the Company.
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.
Board Composition and Guidance
Principle 2: The Board has an appropriate level of independence and diversity of thought and background in its
composition to enable it to make decisions in the best interests of the company.
Provision 2.1 An ‘independent’ director is one who is independent in conduct, character and judgement, and has no
relationship with the company, its related corporations, its substantial shareholders or its officers that could interfere, or be
reasonably perceived to interfere, with the exercise of the director’s independent business judgement in the best interests of
the company.
The independence of each Director is reviewed annually by the Nominating Committee (“NC”) in accordance with the Code’s
definition of independence. Each independent director is required to declare their independence by duly completing and
submitting a ‘Confirmation of Independence’ form. The declaration requires each Director to assess whether they consider
themselves independent and not having any of the relationships identified in the Code. Each Director is required to declare
any circumstances in which they may be considered non-independent. The NC reviews the Confirmation of Independence to
determine whether a Director is independent. The NC also considers the actions and conduct of the independent directors,
including in formal Board meetings, to assess their independence.
As at FY2022, Mr Chong Teck Sin and Mr Wong Fook Choy Sunny have served on the Board for more than 9 years from the date
of their first appointment; and Mr Douglas Owen Chester has served on the Board for 9 years as at 2 November 2021. Based
on Mr Chong Teck Sin, Mr Wong Fook Choy Sunny and Mr Douglas Owen Chester (“Independent Directors”) declaration, the
Independent Directors do not have relationships or circumstances that are likely to affect or that could affect their judgement that
could compromise their independence on board matters.
In line with the SGX-ST Listing Rule 210(5)(d)(iii) which will take effect from 1 January 2022, the continued appointment of an
independent director who has served the Board for an aggregate of more than 9 years was subject to the approval of (a) all
shareholders and (b) shareholders, excluding shareholders who are directors and chief executive officer of the Company (“Two-
Tier Voting”).
In this respect, the approval of the shareholders was obtained through a Two-Tier Voting at the annual general meeting (“AGM”)
on 29 Oct 2021 for Mr Chong Teck Sin, Mr Wong Fook Choy Sunny and Mr Douglas Owen Chester to continue in office as an
independent non-executive director of the Company, notwithstanding that they have served as an independent non-executive
director of the Company for an aggregate term of more than nine years. Such resolutions approved by the Two-Tier Voting remain
in force for three years from the conclusion of the AGM following the passing of the resolutions or the retirement or resignation of
the Director, whichever is earlier.
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Board Matters (continued)
Board Composition and Guidance (continued)
Principle 2 (continued)
Provision 2.1 (continued)
The Independent Directors have, over time, not only gained valuable insight into the Group, its business, markets and industry
but have brought the breadth and depth of their business experience to the Company. Their length of service has not in any way
interfered with their exercise of independent judgment nor hindered their ability to act in the best interests of the Company. The
Board has concluded that Independent Directors continue to remain objective and independent-minded in Board determinations.
Taking into account the above after due consideration and careful assessment, and also having weighed the need for Board
refreshment against tenure for relative benefit, the NC and the Board are of the view that the Independent Directors continue to be
considered an Independent Director notwithstanding that they have served on the Board for more than 9 years.
Provision 2.2 Independent directors make up a majority of the Board where the Chairman is not independent.
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. No individual, or group of individuals, dominates
the Board’s decision-making as half of the Board consist of Independent Directors.
The majority of the Company’s Board are not Independent Directors, including the Chairman. The Board’s current composition
offers a good balance of diversity and professional background of Directors. It brings a range of longer-term benefits to the
Company than having a majority 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.
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.
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.
Provision 2.3 Non-executive directors make up a majority of 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.
While non-executive directors do not make up a majority of the Board, the Board considers the management and oversight
function with Executive Directors heavily involved in management activities while non-executive directors exercise an oversight role
which brings a range of longer term benefits to the Company more than a majority number of non-executive directors. Diversity of
thought and professional background of Directors allow decisions to be made in the best interest of the Company.
The Non-Executive Directors provide constructive review and assist the Board to facilitate and develop proposals on strategy
and monitor the performance of senior management in meeting agreed objectives. The Non-Executive Directors have full access
to and co-operation from the Company’s senior management and officers. They have full discretion to have separate meetings
without the presence of senior management and to invite any Director or officer to the meetings as and when warranted.
Provision 2.4 The Board and board committees are of an appropriate size and comprise directors who as a group provide the
appropriate balance and mix of skills, knowledge, experience, and other aspects of diversity such as gender and age, so as
to avoid groupthink and foster constructive debate. The board diversity policy and progress made towards implementing the
board diversity policy, including objectives, are disclosed in the company’s annual report.
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.
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Board Matters (continued)
Board Composition and Guidance (continued)
Principle 2 (continued)
Provision 2.4 (continued)
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 various policies in place (which includes the diversity policy, equal
opportunity policy, and aboriginal peoples policy, that are available on its corporate website) to ensure that its Board, senior
management and 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. Nevertheless, the Company endeavours to include further additional attributes when there is a need
to bring in fresh perspectives and enhancements. The composition and renewal of the Board, including the need for progressive
refreshing of the Board, is reviewed on an annual basis by the NC to ensure that the Board has the appropriate balance and mix
of skills, knowledge, expertise, experience and other aspects of diversity such as gender and age, so as to avoid group think and
foster constructive debate and possesses the necessary competencies for effective decision making. The Company’s annual
Sustainability Report clearly articulates the Company’s strategy, targets, performance and future focus in relation to diversity.
Provision 2.5 Non-executive directors and/or independent directors, led by the independent Chairman or other independent
director as appropriate, meet regularly without the presence of Management. The chairman of such meetings provides
feedback to the Board and/or Chairman as appropriate.
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.
The Independent Directors communicate regularly without the presence of the other Executive Directors and senior 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.
To facilitate an effective review of the senior management, the Non-Executive Directors meet as and when necessary and at least
once a year with Auditors without the presence of the senior management.
The Board and senior 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 senior management on its assumptions and
proposals.
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Board Matters (continued)
Chairman and Chief Executive Officer
Principle 3: There is a clear division of responsibilities between the leadership of the Board and Management, and no
one individual has unfettered powers of decision-making.
Provision 3.1 The Chairman and the Chief Executive Officer (‘CEO’) are separate persons to ensure an 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 Executive Chairman and the Chief Executive Officer are not related.
Provision 3.2 The Board establishes and sets out in writing the division of responsibilities between the Chairman and
the CEO.
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.
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.
Provision 3.3 The Board has a lead independent director to provide leadership in situations where the Chairman is conflicted,
and especially when the Chairman is not independent. The lead independent director is available to shareholders where they
have concerns and for which contact through the normal channels of communication with the Chairman or Management are
inappropriate or inadequate.
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. In addition, all the Board Committees are led and solely comprise of Independent
Directors.
Board Membership
Principle 4: The Board has a formal and transparent process for the appointment and re-appointment of directors,
taking into account the need for progressive renewal of the Board.
Provision 4.1 The Board establishes a Nominating Committee (‘NC’) to make recommendations to the Board on relevant
matters relating to:
(a) the review of succession plans for directors, in particular the appointment and/or replacement of the Chairman, the CEO
and key management personnel;
(b) the process and criteria for evaluation of the performance of the Board, its board committees and directors;
(c)
the review of training and professional development programmes for the Board and its directors; and
(d) the appointment and re-appointment of directors (including alternate directors, if any).
The Company had established an NC to make recommendations to the Board on all board appointments.
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Board Matters (continued)
Board Membership (continued)
Principle 4 (continued)
Provision 4.1 (continued)
The formal terms of reference of the NC are to:
•
•
•
nominate senior management personnel, 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 annually as a whole and the individual contribution of each Director and senior
management personnel to the effectiveness of the Board;
review and recommend succession plans for Directors and senior management, in particular the Executive Chairman
and the CEO; and
review and recommend training and professional development programmes for the Board and senior management
personnel.
The Company does not have a practice of appointing alternate Directors.
During the reporting period of the year, the NC has:
•
•
•
•
•
•
reviewed the structure, size and composition of the Board and Board Committees;
reviewed the independence of Directors;
reviewed and undertaken the process for evaluating the Board, individual Directors, and senior management personnel
performance;
reviewed results of performance evaluation and provided feedback to the Chairman and Board Committees;
reviewed the need for progressive refreshing of the Board and provided feedback to the Chairman and Board Committees;
reviewed succession planning for the Chairman, CEO and senior management personnel and notified the Board; and
• discussed information required to be reported under the 2018 Code or Listing Manual.
Provision 4.2 The NC comprises at least three directors, the majority of whom, including the NC Chairman, are independent.
The lead independent director, if any, is a member of the NC.
The NC comprises of three members, all of whom including the NC Chairman are Independent Non-Executive Directors:
Mr. Douglas Owen Chester – NC Chairman
Mr. Chong Teck Sin
– Member and Lead Independent Director
Mr. Wong Fook Choy Sunny – Member
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Board Matters (continued)
Board Membership (continued)
Principle 4 (continued)
Provision 4.3 The company discloses the process for the selection, appointment and re-appointment of directors to the
Board, including the criteria used to identify and evaluate potential new directors and channels used in searching for
appropriate candidates in the company’s annual report.
The process for the selection and appointment (or re-appointment) of 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 (or re-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:
1. James Finbarr Fitzgerald
2. Patrick John Tallon
3. Kevin James Deery
4. Chong Teck Sin
5. Wong Fook Choy Sunny
6. Douglas Owen Chester
Provision 4.4 The NC determines annually, and as and when circumstances require, if a director is independent, having
regard to the circumstances set forth in Provision 2.1. Directors disclose their relationships with the company, its related
corporations, its substantial shareholders or its officers, if any, which may affect their independence, to the Board. If the
Board, having taken into account the views of the NC, determines that such directors are independent notwithstanding the
existence of such relationships, the company discloses the relationships and its reasons in its annual report.
The independence of each Director is reviewed annually by the Nominating Committee (‘NC’) in accordance with the Code’s
definition of independence. Each Independent Director is required to declare their independence by duly completing and
submitting a ‘Confirmation of Independence’ form. The declaration requires each Director to assess whether they consider
themselves independent and not having any of the relationships identified in the Code. Each Director is required to declare
any circumstances in which they may be considered non-independent. The NC reviews the Confirmation of Independence to
determine whether a Director is independent. The NC also 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 namely Mr Chong Teck Sin, Mr Wong Fook Choy Sunny and Mr Douglas Owen Chester, are
independent.
Provision 4.5 The NC ensures that new directors are aware of their duties and obligations. The NC also decides if a director
is able to and has been adequately carrying out his or her duties as a director of the company. The company discloses in its
annual report the listed company directorships and principal commitments of each director, and where a director holds a
significant number of such directorships and commitments, it provides the NC’s and Board’s reasoned assessment of the
ability of the director to diligently discharge his or her duties.
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Board Matters (continued)
Board Membership (continued)
Principle 4 (continued)
Provision 4.5 (continued)
The dates of Director’s initial appointment, last re-election and their directorships are set out below:
Date of Initial
Appointment
Date of Last
Re-election
Present Directorships in
Listed Companies
Past Directorships in
Listed Companies(2)
Name of Director
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
27 Mar 2012
27 Mar 2012
27 Mar 2012
27 Mar 2012
29 Oct 2021
29 Oct 2021
29 Oct 2021
29 Oct 2021
Wong Fook Choy Sunny
27 Mar 2012
29 Oct 2021
Douglas Owen Chester
2 Nov 2012
29 Oct 2021
Notes:
(2)
(2) Past Directorships within the past 3 years
Listed on Hong Kong Stock Exchange
-
-
-
Changan Minsheng APLL
Logistics Co., Ltd(1)
InnoTek Limited
AIMS APAC REITS
Management Limited
Mencast Holdings Ltd
Excelpoint Technology Ltd
InnoTek Limited
-
-
-
-
-
KTL Global Ltd
-
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 three (3) directorships in other
listed companies.
In addition, the NC also determines annually whether a Director with multiple board representations is able to and has been
adequately carrying out their duties as a Director of the Company. The NC takes into account the results of the assessment of
the effectiveness of the individual Director and the respective Directors’ actual conduct on the Board. The NC is satisfied that for
FY2022 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: The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its
board committees and individual directors.
Provision 5.1 The NC recommends for the Board’s approval the objective performance criteria and process for the evaluation
of the effectiveness of the Board as a whole, and of each board committee separately, as well as the contribution by the
Chairman and each individual director to the Board.
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.
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Board Matters (continued)
Board Performance (continued)
Principle 5 (continued)
Provision 5.2 The company discloses in its annual report how the assessments of the Board, its board committees and each
director have been conducted, including the identity of any external facilitator and its connection, if any, with the company or
any of its directors.
The NC undertakes an annual formal review and evaluation of both the Board’s performance as a whole, as well as individual
Director’s performance, such as Board commitment, standard of conduct, competency, training & development and interaction
with other Directors, senior 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, 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 the 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 FY2022 consistent with this process and
determined that all directors have demonstrated full commitment to their roles and contributed effectively in the discharge their
duties. Both the NC and the Board are of the view that the Board has met its performance objectives for FY2022.
Remuneration Matters
Principle 6: The Board has a formal and transparent procedure for developing policies on director and executive
remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No
director is involved in deciding his or her own remuneration.
Provision 6.1 The Board establishes a Remuneration Committee (‘RC’) to review and make recommendations to the
Board on:
(a) a framework of remuneration for the Board and key management personnel; and
(b) the specific remuneration packages for each director as well as for the key management personnel.
The Company has established a Remuneration Committee (RC) to make recommendations to the Board on remuneration
packages of individual Directors and key senior management personnel. The Company has developed a remuneration policy for
fixing the remuneration packages of Directors and senior executives.
The formal terms of reference of the RC, are to:
•
recommend to the Board a framework of remuneration for the Directors and key senior management personnel;
• determine specific remuneration packages for each Executive Director;
•
review annually the remuneration of employees related to the Directors and substantial shareholders to ensure that their
remuneration packages are in line with the staff remuneration guidelines and commensurate with their respective job scopes
and level of responsibilities; and
• perform such other acts as may be required by the SGX-ST and the Code, 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.
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Remuneration Matters (continued)
Principle 6 (continued)
Provision 6.2 The RC comprises at least three directors. All members of the RC are non-executive directors, the majority of
whom, including the RC Chairman, are independent.
The RC comprises of three members, all of whom including the RC Chairman are Independent Non-Executive Directors:
Mr. Wong Fook Choy Sunny – RC Chairman
Mr. Chong Teck Sin
– Member and Lead Independent Director
Mr. Douglas Owen Chester – Member
Provision 6.3 The RC considers all aspects of remuneration, including termination terms, to ensure they are fair.
The RC has established a framework of remuneration for the Board and key senior 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 2019 respectively, with a 10-year tenure commencing on the establishment date.
The Company has a policy that governs the Directors and senior management personnel dealing in securities trading.
The securities trading policy reflects the Corporations Act 2001 prohibition on senior management personnel and their closely
related parties from hedging the senior management personnel’s incentive remuneration. The senior management personnel,
and their immediate family and controlled entities are prohibited from entering into any arrangement that would have the effect
of limiting the senior management personnel’s exposure to risk relating to an element of the senior management personnel’s
remuneration that is unvested, or is vested but remains subject to a holding lock.
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 senior 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 senior management personnel in the event of such exceptional circumstances of breach of fiduciary duty.
During the reporting period of the year, the RC has:
•
•
•
•
reviewed and approved remuneration for Executives which includes salary, Short Term and Long Term incentives;
reviewed benchmarking of fees for directors;
reviewed the remuneration packages of employees in the Group which includes salary adjustments and bonus; and
reviewed the remuneration package of the Executive Directors and CEO which includes salary, Short Term and
Long Term incentives.
Provision 6.4 The company discloses the engagement of any remuneration consultants and their independence in the
company’s annual report.
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.
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Remuneration Matters (continued)
Level and Mix Remuneration
Principle 7: The level and structure of remuneration of the Board and key management personnel are appropriate
and proportionate to the sustained performance and value creation of the company, taking into account the strategic
objectives of the company.
Provision 7.1 A significant and appropriate proportion of executive directors’ and key management personnel’s remuneration
is structured so as to link rewards to corporate and individual performance. Performance-related remuneration is aligned with
the interests of shareholders and other stakeholders and promotes the long-term success of the company.
Executive Directors and key senior 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 Group. 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 Group. 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.
During FY2022, 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 senior management personnel.
Provision 7.2 The remuneration of non-executive directors is appropriate to the level of contribution, taking into account
factors such as effort, time spent, and responsibilities.
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 the Audit Committee
Other Independent Director
Annual Fees (S$)
93,000
82,000
Provision 7.3 Remuneration is appropriate to attract, retain and motivate the directors to provide good stewardship of the
company and key management personnel to successfully manage the company for the long term.
In making its recommendations to the Board on the level and mix of remuneration, the RC strives to be competitive, linking
rewards with performance. It takes into consideration the essential factors to attract, retain and motivate the Directors and senior
management needed to run the Company successfully, linking rewards to corporate and individual performance, and aligning their
interest with those of the shareholders.
The 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.
Pursuant to Article 118 of the Company’s Constitution, all the directors (including independent directors) are required to retire from
office at every AGM of the Company, meaning that the independent directors are appointed for a one year term when elected.
The remuneration packages of the Executive Directors and the key senior management personnel are based on service
agreements and their remuneration is determined having due regard to the performance of the individuals, the Group as well as
market trends.
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Remuneration Matters (continued)
Level and Mix Remuneration (continued)
Principle 8 The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for
setting remuneration, and the relationships between remuneration, performance and value creation.
Provision 8.1 The company discloses in its annual report the policy and criteria for setting remuneration, as well as names,
amounts and breakdown of remuneration of:
(a) each individual director and the CEO; and
(b) at least the top five key management personnel (who are not directors or the CEO) in bands no wider than S$250,000
and in aggregate the total remuneration paid to these key management personnel.
For competitive reasons and the sensitive nature of such information, the Board is of the opinion that it is in the best interests of
the Company to not disclose remuneration of each individual Director for the year ended 30 June 2022. Instead, the Company
discloses the bands of remuneration in the following tables to avoid such information being exploited by competitors and to
maintain personal confidentiality on remuneration matters:
For the year ended 30 June 2022
Name of Director
Salary
Bonus
Directors’ Fees
Allowances and
Other Benefits
A$1,000,000 to A$1,250,000
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Below A$250,000
Chong Teck Sin
Douglas Owen Chester
Wong Fook Choy Sunny
56%
56%
55%
-
-
-
40%
40%
41%
-
-
-
-
-
-
100%
100%
100%
4%
4%
4%
-
-
-
Total
100%
100%
100%
100%
100%
100%
Details of remuneration paid to key senior management personnel (who are not Directors of the Company) of the Group for the
financial year ended 30 June 2022 are set out below:
For the year ended 30 June 2022
Name of Key
Executive
A$500,000 to A$750,000
Designation
Salary
Bonus
Rodney Bowes
Executive Group Manager Proposals
Adam Goldsmith
Executive Group Manager Operational Support
Mylon Manusiu
Executive General Manager – Maintenance and
Capital Works, Refineries and Smelters
David Power
Executive General Manager Manufacturing
Charles Sweeney
Executive General Manager Construction
A$250,000 to A$500,000
Daniel Kennedy(1)
Executive General Manager – Maintenance and
Capital Works, Resources and Energy
56%
56%
69%
63%
59%
90%
37%
37%
27%
29%
35%
4%
Notes:
(1)
Appointed on 26/08/2021.
Allowances
and Other
Benefits
7%
7%
4%
8%
6%
6%
Total
100%
100%
100%
100%
100%
100%
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Remuneration Matters (continued)
Level and Mix Remuneration (continued)
Principle 8 (continued)
Provision 8.1 (continued)
The annual aggregate remuneration paid to all the above-mentioned Directors and key senior management personnel of the
Group is A$7,292,000 (2021: A$5,218,000).
The procedures for developing remuneration policies and for fixing the remuneration packages of individual directors have been
set out under principle 6 of the Corporate Governance Report above.
The relationships between the remuneration of the Board and key senior management personnel and the performance and value
creation of the Company have been set out under principle 6 of the Corporate Governance Report above.
Provision 8.2 The company discloses the names and remuneration of employees who are substantial shareholders of the
company, or are immediate family members of a director, the CEO or a substantial shareholder of the company, and whose
remuneration exceeds S$100,000 during the year, in bands no wider than S$100,000, in its annual report. The disclosure
states clearly the employee’s relationship with the relevant director or the CEO or substantial shareholder.
Name of Employee
Designation
Relationship
A$150,000 to A$249,999
Thomas Tallon
Supervisor
Brother of CEO Patrick Tallon
The RC is of the view that the remuneration of these family members is in line with the company remuneration guidelines and
commensurate with their job scope and level of responsibilities.
Provision 8.3 The company discloses in its annual report all forms of remuneration and other payments and benefits, paid
by the company and its subsidiaries to directors and key management personnel of the company. It also discloses details of
employee share schemes.
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.
Accountability and Audit
Risk Management and Internal Controls
Principle 9: The Board is responsible for the governance of risk and ensures that Management maintains a sound
system of risk management and internal controls, to safeguard the interests of the company and its shareholders.
Provision 9.1 The Board determines the nature and extent of the significant risks which the company is willing to take in
achieving its strategic objectives and value creation. The Board sets up a Board Risk Committee to specifically address this,
if appropriate.
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 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 the review risk assessment model used to monitor the
risk exposures and senior 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 reporting period of the year, the RCC has:
•
reviewed the Risk Register and Risk Management Framework;
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Accountability and Audit (continued)
Risk Management and Internal Controls (continued)
Principle 9 (continued)
Provision 9.1 (continued)
•
requested revisions to the Risk Mitigation Plan presented by senior 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 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 RCC comprises three members, all of whom, including the RCC Chairman are Independent Non-Executive Directors:
Mr. Chong Teck Sin
– RCC Chairman and Lead Independent Director
Mr. Douglas Owen Chester – Member
Mr. Wong Fook Choy Sunny – Member
Provision 9.2 The Board requires and discloses in the company’s annual report that it has received assurance from:
(a) the CEO and the Chief Financial Officer (‘CFO’) 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
(b) the CEO and other key management personnel who are responsible, regarding the adequacy and effectiveness of the
company’s risk management and internal control systems.
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
recommendations for improvement, are reported to the AC and RCC.
The Company’s internal audit function prepares an annual internal audit plan, which takes account of the Company’s key
risks and other assurance activities performed, enabling internal audit resources to be targeted to areas of greatest value
across the Company’s operations, including group and subsidiary structures. Processes subject to internal audit include
financial, administrative, operational and project specific activities and systems. The internal audit function provides advice on
the effectiveness of risk management processes and material internal controls, recommends corrective actions and control
improvements and follows up on the implementation of action plans designed by management to address any control deficiencies
or improvement opportunities. Internal audit reports containing internal audit results, recommendations and agreed action plans
are presented to the AC on a quarterly basis.
The Company 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.
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Accountability and Audit (continued)
Risk Management and Internal Controls (continued)
Principle 9 (continued)
Provision 9.2 (continued)
The Board has received assurances from the CEO and acting Chief Financial Officer that:
(i)
the financial records have been properly maintained (and the financial statements comply with the appropriate accounting
standards) and the financial statements give a true and fair view of the Company’s operations and finances; and
(ii) 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 2022, which will further consider the management of any material
economic, environmental and social sustainability risks faced by the Group.
Audit Committee
Principle 10: The Board has an Audit Committee (‘AC’) which discharges its duties objectively.
Provision 10.1 The duties of the AC include:
(a) reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial
statements of the company and any announcements relating to the company’s financial performance;
(b) reviewing at least annually the adequacy and effectiveness of the company’s internal controls and risk management
systems;
(c) reviewing the assurance from the CEO and the acting CFO on the financial records and financial statements;
(d) making recommendations to the Board on:
(i)
the proposals to the shareholders on the appointment and removal of external auditors; and
(ii)
the remuneration and terms of engagement of the external auditors;
(e) reviewing the adequacy, effectiveness, independence, scope and results of the external audit and the company’s internal
audit function; and
(f)
reviewing the policy and arrangements for concerns about possible improprieties in financial reporting or other matters
to be safely raised, independently investigated and appropriately followed up on. The company publicly discloses, and
clearly communicates to employees, the existence of a whistle-blowing policy and procedures for raising such concerns.
The AC is governed by terms of reference with its primary responsibilities as follows:
•
•
•
•
to assist the Board in discharging its responsibility to safeguard the Group’s assets, maintain adequate accounting records,
and develop and maintain effective systems of internal control with the overall objective of ensuring that our management
creates and maintains an effective control environment in the Group;
to provide a channel of communication between the Board, the management team, the external auditors and internal
auditors on matters relating to audit;
to monitor senior 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;
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Accountability and Audit (continued)
Audit Committee (continued)
Principle 10 (continued)
Provision 10.1 (continued)
•
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 our management where
necessary);
review and consider the appointment or re-appointment of the external auditors and matters relating to resignation or
dismissal of the auditors;
review and consider the appointment or re-appointment of the internal auditors and matters relating to resignation or
dismissal of the auditors;
review interested person transactions (if any);
review the Groups’ hedging policies, procedures and activities (if any) and monitor the implementation of the hedging
procedure/policies, including reviewing the instruments, processes and practices in accordance with any hedging polices
approved by the Board;
review potential conflicts of interest, if any, and to set out a framework to resolve or mitigate such potential conflicts of
interests;
undertake such other reviews and projects as may be requested by the Board and report to the Board its findings from time
to time on matters arising and requiring the attention of the Audit Committee;
review and discuss with investigators, any suspected fraud, irregularity, or infringement of any relevant laws, rules or
regulations, which has or is likely to have a material impact on the Group’s operating results or financial position, and the
management’s response thereto;
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 a 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 to discharge of its responsibilities at the
Company’s expenses.
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.
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Accountability and Audit (continued)
Audit Committee (continued)
Principle 10 (continued)
Provision 10.1 (continued)
As at the reporting period of the year, the AC has:
•
•
•
reviewed the scope of work of the external auditors;
reviewed the scope of work of the internal auditors;
reviewed audit plans and discussed the results of the respective findings and their evaluation of the Company’s system
of internal accounting controls;
•
reviewed interested person transactions of the Company;
• met with the Company’s external auditors and internal auditors without the presence of the management;
•
•
reviewed the external auditors’ independence and objectivity; and
reviewed the Company’s procedures for detecting fraud and whistle-blowing matters and to ensure that arrangements are
in place by which any employee, may in confidence, raise concerns about improprieties in matters of financial reporting,
financial control, or any other matters. A report is presented to the AC on 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 FY2022 is A$110,000
(equivalent S$110,000) which comprises audit fee of A$90,000 (equivalent S$90,000) and A$20,000 (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.
The AC is kept abreast by the external auditors of changes to accounting standards, SGX-ST Listing Manual and ASX Listing
Rules, and other regulations which could have an impact on the Group’s business and financial statements.
The Company has a whistle-blowing policy where people may, in confidence, raise concerns about possible improprieties in
matters of financial reporting, fraudulent acts, bribery/ corruption conduct, breach of code of conduct 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 two reports received through the whistle-blowing system during FY2022. These reports were related to breach of
code of conduct and misuse of company resources / asset misappropriation. The reports were investigated and found to be
unsubstantiated and no action was required to be taken in relation to the reports.
Provision 10.2 The AC comprises at least three directors, all of whom are non-executive and the majority of whom, including
the AC Chairman, are independent. At least two members, including the AC Chairman, have recent and relevant accounting
or related financial management expertise or experience.
The Audit Committee comprises the following three members, all of whom, including the AC Chairman, are Non-Executive
Independent Directors:
Mr. Chong Teck Sin
– AC Chairman and Lead Independent Director
Mr. Douglas Owen Chester
Mr. Wong Fook Choy Sunny
– Member
– Member
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.
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Accountability and Audit (continued)
Audit Committee (continued)
Principle 10 (continued)
Provision 10.3 The AC does not comprise former partners or directors of the company’s existing auditing firm or auditing
corporation:
(a) within a period of two years commencing on the date of their ceasing to be a partner of the auditing firm or director of
the auditing corporation; and in any case,
(b) for as long as they have any financial interest in the auditing firm or auditing corporation.
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.
Provision 10.4 The primary reporting line of the internal audit function is to the AC, which also decides on the appointment,
termination and remuneration of the head of the internal audit function. The internal audit function has unfettered access to
all the company’s documents, records, properties and personnel, including the AC, and has appropriate standing within the
company.
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, which is one of the Big Four multinational accounting
organisations and it is independent of the Company’s business activities. The internal audit team that provide expertise and
industry insights to strengthen the Company’s governance and risk management on an annual basis and comprises a director,
a senior manager and supported by other staff, which have more than 30 years of relevant experience combined. 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 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 and has unfettered access to the Company’s
documents, records, properties and personnel.
The AC is satisfied with the effectiveness of the existing internal control systems put in place by senior management to meet the
needs of the Group in its current business environment.
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.
Provision 10.5 The AC meets with the external auditors, and with the internal auditors, in each case without the presence of
Management, at least annually.
The AC has met with the Company’s external auditors and internal auditors without the presence of the management and has
full unfettered access to do so.
Shareholders’ Rights and Engagement
Shareholders’ Rights and Conduct of General Meetings
Principle 11: The company treats all shareholders fairly and equitably in order to enable them to exercise
shareholders’ rights and have the opportunity to communicate their views on matters affecting the company. The
company gives shareholders a balanced and understandable assessment of its performance, position and prospects.
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Shareholders’ Rights and Engagement (continued)
Shareholders’ Rights and Conduct of General Meetings (continued)
Principle 11 (continued)
Provision 11.1 The company provides shareholders with the opportunity to participate effectively in and vote at general
meetings of shareholders and informs them of the rules governing general meetings of shareholders.
Annual General Meeting (‘AGM’) and other shareholders’ meetings will always be held at a reasonable place and time.
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. Shareholders
are able to send and receive communications electronically with the Company through its respective share registries platform in
Singapore and Australian, details for doing so are available on the corporate website at www.civmec.com.au
Due to the COVID-19 pandemic crisis and in line with the joint statement by the Accounting and Corporate Regulatory Authority,
Monetary Authority of Singapore and Singapore Exchange Regulation of 13 April 2020 (and subsequently updated on 27 April
2020, 22 June 2020 and 1 October 2020), the AGM was held by electronic means via live webcast during this period. The AGM
was conducted on 29 October 2021 in accordance with the COVID-19 (Temporary Measures) (Alternative Arrangements for
Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debentures Holders) Order 2020.
At AGM and other shareholders’ meetings, the Executive Chairman ensures constructive dialogue between the Board and
shareholders and upholds high standards of corporate governance. 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. Shareholders are
also informed of the rules and voting procedures governing such meetings under the relevant notice of meeting.
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.
Provision 11.2 The company tables separate resolutions at general meetings of shareholders on each substantially separate
issue unless the issues are interdependent and linked so as to form one significant proposal. Where the resolutions are
‘bundled’, the company explains the reasons and material implications in the notice of meeting.
Resolutions are, as far as possible, structured separately and may be voted on independently.
Provision 11.3 All directors attend general meetings of shareholders, and the external auditors are also present to address
shareholders’ queries about the conduct of audit and the preparation and content of the auditors’ report. Directors’
attendance at such meetings held during the financial year is disclosed in the company’s annual report.
The Directors and the external auditors are available at the AGM to answer shareholders’ queries. In FY2022, all Directors and
the external auditor attended the AGM.
Provision 11.4 The company’s Constitution (or other constitutive documents) allow for absentia voting at general meetings
of shareholders.
The Group fully supports the Code’s principle to encourage shareholders’ participation in and vote at all the general meetings.
The AGM will always be held at a reasonable place and time. 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 measures to allow shareholders who are unable to vote in person at the
Company’s AGM the option to vote in absentia, such as via mail, electronic mail or facsimile transactions as the authentication of
shareholder indemnity information and other related security issues remain a concern. The Company will review its Constitution
from time to time. Where an amendment to its Constitution is required to align the relevant provisions with the requirements of the
SGX-ST Listing Manual and the ASX Listing Rules, shareholders’ approval will be obtained.
During the COVID-19 pandemic crisis period, the shareholders could only exercise their option to appoint the Chairman of the
AGM as their proxies to attend and vote on behalf of the AGM of the Company held via live webcast regarding their directions to
vote. If the shareholders gave no specific direction for voting, the proxy would be disregarded and abstained from voting on any
matter arising at the AGM.
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CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
Report on
Corporate Governance
Report on
Corporate Governance
30 June 2022
Shareholders’ Rights and Engagement (continued)
Shareholders’ Rights and Conduct of General Meetings (continued)
Principle 11 (continued)
Provision 11.4 (continued)
Where an amendment to its Constitution is required to align the relevant provisions with the requirements of the SGX-ST Listing
Manual and the ASX Listing Rules, shareholders’ approval will be obtained.
Provision 11.5 The company publishes minutes of general meetings of shareholders on its corporate website as soon as
practicable. The minutes record substantial and relevant comments or queries from shareholders relating to the agenda of the
general meeting, and responses from the Board and Management.
The Company Secretaries 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 senior 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.
Minutes of general meetings will be published on the Company’s corporate website within 30 days of the date of the meeting.
Provision 11.6 The company has a dividend policy and communicates it to shareholders.
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’s dividend policy is published on the Company’s corporate website at www.civmec.com.au.
The Company has proposed a tax exempt (foreign source) Final Dividend of A$0.02 per ordinary share for the financial year ended
30 June 2022, payment of which is subject to shareholders’ approval at the forthcoming AGM. This dividend is fully franked for
Australian tax resident shareholders.
Engagement with Shareholders
Principle 12: The company communicates regularly with its shareholders and facilitates the participation of
shareholders during general meetings and other dialogues to allow shareholders to communicate their views on
various matters affecting the company.
Provision 12.1 The company provides avenues for communication between the Board and all shareholders and discloses in
its annual report the steps taken to solicit and understand the views of shareholders.
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 half yearly 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. 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 Company’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 Board will also receive copies of all material market announcements promptly after they have
been made by the Company. The Company also updates shareholders of its corporate developments and Continuous Disclosure
Policy through its corporate website at www.civmec.com.au
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.
CIVMEC ANNUAL REPORT 2022
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85
Report on
Corporate Governance
30 June 2022
Shareholders’ Rights and Engagement (continued)
Engagement with Shareholders (continued)
Principle 12 (continued)
Provision 12.2 The company has in place an investor relations policy which allows for an ongoing exchange of views so as to
actively engage and promote regular, effective and fair communication with shareholders.
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 in-house professionals that support the Company to promote relations with, and act as liaison for,
institutional investors and public shareholders.
Provision 12.3 The company’s investor relations policy sets out the mechanism through which shareholders may contact the
company with questions and through which the company may respond to such questions.
Relevant contact information through which shareholders may contact the Company are published on its corporate website at
https://www.civmec.com.au/investors/shareholder-services/.
Principle 13 The Board adopts an inclusive approach by considering and balancing the needs and interests of
material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served.
Provision 13.1 The company has arrangements in place to identify and engage with its material stakeholder groups and to
manage its relationships with such groups.
Provision 13.2 The company discloses in its annual report its strategy and key areas of focus in relation to the management of
stakeholder relationships during the reporting period.
Provision 13.3 The company maintains a current corporate website to communicate and engage with stakeholders.
The Company engages its stakeholders through different channels to establish, address and monitor the material environmental,
social and governance (ESG) factors of the Company’s operations and its impact on the various stakeholders. Such stakeholders
include employees, community, government, regulators, shareholders and investors.
The Company engages stakeholders through the various channels that are already in place, understanding its stakeholders’
concerns better, and addressing any issues that they may face. In addition, engagement channels and frequencies are reviewed
periodically to ensure that they are sufficient to deal with current identified stakeholders’ ESG-related issues.
The Company is committed to enhance and improve the current engagement initiatives, while staying abreast of new trends
or developments that may affect the sustainability standing of the Company, and eventually devise corresponding measures to
resolve the new ESG issues.
The Company’s website can be found at www.civmec.com.au. and includes a tab labelled ‘Investors’ which provides investors
with all the information they may require.
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 during FY2022.
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 was no material interested person transactions for FY2022.
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CIVMEC ANNUAL REPORT 2022
Report on
Corporate Governance
Independent Auditor’s Report
to the Members of Civmec Limited
(Incorporated in Singapore)
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 2022, 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 1967
(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
2022 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.
CIVMEC ANNUAL REPORT 2022
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87
Independent Auditor’s Report
to the Members of Civmec Limited
(Incorporated in Singapore)
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 and
Note 34 to the financial statements.
During the financial year ended 30 June 2022,
revenue from construction contracts amounted
to A$649.7 million which represented 80.3% of
the total revenue of the Group.
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.
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.
• We performed procedures to understand the projects
through discussions with management and examination
of key project documents including contracts and
correspondences with customers on delays and
extension of time. We evaluated the 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:
o Traced the contract sums to the contracts and
variation orders entered into by the Group and its
customers.
o Challenged the appropriateness of the Group’s
judgement on the variations and claims included in
the computation of the construction contract revenue
via scrutiny of relevant customer correspondence,
legal/specialist consultant correspondence and
inspecting key clauses in the contracts and variation
orders.
o Held discussions with senior operational and financial
management, as well as 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.
o 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. We have also
held discussions with senior operational and financial
management, where appropriate on these projects.
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CIVMEC ANNUAL REPORT 2022
Independent Auditor’s Report
to the Members of Civmec Limited
(Incorporated in Singapore)
Key Audit Matters (continued)
Key Audit Matter
How our audit addressed the key audit matter
Accounting for construction contracts (continued)
Our response (continued)
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.
• In relation to total contract costs, on a sample basis,
we have:
o Tested costs incurred to date and agreed these to
supporting documentation.
o Evaluated the appropriateness of inputs, amongst
others, materials, subcontractor and labour costs
used by management in their estimation of the total
cost to complete the contract or project, and obtained
supporting documentation on the major inputs.
o 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.
Our audit findings:
We are satisfied that the judgements applied by
management in accounting for construction contracts
are reasonable.
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89
Independent Auditor’s Report
to the Members of Civmec Limited
(Incorporated in Singapore)
Key Audit Matters (continued)
Key Audit Matter
How our audit addressed the key audit matter
Recoverability of trade and other receivables and
contract assets
Our response
We refer to Note 3(a)(i) under ‘Critical Accounting
Judgements and Key Sources of Estimation Uncertainty’,
Note 4(b), Note 11 and Note 33(a) to the financial
statements.
• 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
The carrying amount of trade and other receivables
and contract assets of the Group was A$95.0 million
and A$121.7 million as at 30 June 2022 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.
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 audit 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.
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CIVMEC ANNUAL REPORT 2022
Independent Auditor’s Report
to the Members of Civmec Limited
(Incorporated in Singapore)
Key Audit Matters (continued)
Key Audit Matter
How our audit addressed the key audit matter
Valuation of property, plant and equipment and
investment properties
Our response
We refer to Note 3(a)(vi), Note 5, Note 14, Note 15 and
Note 27 to the financial statements.
The carrying amount of property, plant and equipment and
investment properties of the Group was A$448.1 million
and A$16.8 million respectively as at 30 June 2022, of
which the fair value of the freehold land and buildings and
investment properties had been assessed as having a fair
value of A$349.9 million and A$14.8 million respectively.
The valuation of property, plant and equipment and
investment properties is significant to our audit due to
the use of various valuation techniques which involve
significant judgements and critical estimates.
The key assumptions used in the fair valuation are
also disclosed in Note 14 and Note 15 to the financial
statements.
Management relied on independent external valuations
for the fair valuation of its freehold land and buildings and
investment properties.
•
•
•
•
•
We assessed the competence, capabilities and
independence
of the professional valuer engaged by the Group.
We discussed and considered the reasonableness
of the valuation methodologies used, as well as
reviewed the key assumptions and inputs used with
the professional valuer in determining the valuation of
each property.
We assessed the reasonableness of the market value
of properties by benchmarking them against those of
comparable properties when there are comparable
market sales evidence.
We evaluated the reasonableness of the key data and
assumptions used in the Depreciated Replacement
Cost approach by the valuer when there are no
comparable market sales evidence.
We also assessed the appropriateness of the
disclosures relating to the valuation techniques and
key inputs applied by the professional valuer.
Our audit findings:
The external valuer is a member of a recognised
body for professional valuers. We found that the
valuation methodologies used to be appropriate and
the key assumptions used were within the range of
market data.
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91
Independent Auditor’s Report
to the Members of Civmec Limited
(Incorporated in Singapore)
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.
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CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
Independent Auditor’s Report
to the Members of Civmec Limited
(Incorporated in Singapore)
•
•
•
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the
financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries
incorporated in Singapore of which we are the auditor have been properly kept in accordance with the provisions of the Act.
The engagement partner on the audit resulting in this independent auditor’s report is Christopher Bruce Johnson.
Moore Stephens LLP
Public Accountants and Chartered Accountants
Singapore
29 August 2022
CIVMEC ANNUAL REPORT 2022
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93
93
Consolidated Income
Statement
For the Year Ended 30 June 2022
Revenue
Cost of sales
Gross profit
Other income
Share of loss of joint venture
Administrative expenses
Other write-back/(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
2021
A$’000
674,186
(599,148)
75,038
2,572
(97)
(18,987)
(1,848)
(6,481)
50,197
(15,569)
34,628
34,771
(143)
34,628
2022
A$’000
809,295
(718,458)
90,837
2,919
(5)
(20,052)
1,152
(4,868)
69,983
(19,242)
50,741
50,762
(21)
50,741
10.11
10.11
6.94
6.94
Note
4(a)
5
18
8
9
10
10
94
94
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
Consolidated Statement of
Comprehensive Income
For the Year Ended 30 June 2022
Profit for the year
Other comprehensive income:
Item that will not be reclassified subsequently to profit or loss
Net gain on revaluation of freehold land and buildings
Total comprehensive income for the year
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interest
The accompanying notes form an integral part of the financial statements.
Note
Group
2022
A$’000
50,741
37,119
87,860
87,881
(21)
87,860
2021
A$’000
34,628
1,871
36,499
36,642
(143)
36,499
95
CIVMEC ANNUAL REPORT 2022 Statements of Financial
Position
As at 30 June 2022
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Other current assets
Non-current assets
Investment in subsidiaries
Investment in joint venture
Property, plant and equipment
Investment properties
Intangible assets
Deferred tax assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Borrowings
Income tax payable
Provisions
Non-current liabilities
Lease liabilities
Borrowings
Provisions
Deferred tax liabilities
TOTAL LIABILITIES
Capital and Reserves
Share capital
Treasury shares
Asset revaluation reserve
Other reserves
Retained earnings
Total equity attributable to the
Owners of the Company
Non-controlling interest
TOTAL EQUITY
Group
Company
Note
2022
A$’000
2021
A$’000
2022
A$’000
2021
A$’000
13
11
4(b)
12
17
18
14
15
16
9
21
4(b)
24
22
23
24
22
23
9
25(a)
25(b)
27
28
40,841
95,030
121,654
1,829
259,354
-
-
448,092
16,805
10
1,401
466,308
725,662
111,671
43,325
10,564
28,000
3,774
11,350
208,684
45,357
46,000
4,726
49,781
145,864
354,548
29,807
(10)
117,477
11,570
212,549
371,393
(279)
371,114
48,172
87,488
82,642
1,903
220,205
-
57
412,030
-
10
4,637
416,734
636,939
87,413
80,138
10,385
-
14,978
8,950
201,864
44,372
60,000
4,429
34,406
143,207
345,071
29,807
(10)
80,358
10,135
171,836
292,126
(258)
291,868
7
34,831
-
-
34,838
7,579
-
-
-
-
86
7,665
42,503
192
-
-
-
3,774
-
3,966
-
-
-
-
-
3,966
29,807
(10)
-
7,958
782
38,537
-
38,537
42,503
28
50,481
-
-
50,509
7,579
-
-
-
-
260
7,839
58,348
192
-
-
-
17,835
-
18,027
-
-
-
-
-
18,027
29,807
(10)
-
6,523
4,001
40,321
-
40,321
58,348
TOTAL LIABILITIES AND EQUITY
725,662
636,939
The accompanying notes form an integral part of the financial statements.
96
96
CIVMEC ANNUAL REPORT 2022 Consolidated Statement
of Changes in Equity
For the Year Ended 30 June 2022
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9797
CIVMEC ANNUAL REPORT 2022
Consolidated Statement
of Cash Flows
For the Year Ended 30 June 2022
Cash Flows from Operating Activities
Profit before income tax
Adjustments for:
Depreciation of property, plant and equipment and investment properties -
leasehold land
Gain on disposal of property, plant and equipment
Share of loss of a joint venture
Impairment loss on loan to an associate
Trade receivables written off
Fair value gain on investment property at fair value through profit or loss
Write-back of bad debt
Write-back of impairment loss on loan to an associate
Write-back of revaluation loss on freehold land and buildings
Finance cost
Interest income
Share based payment
Foreign exchange differences
Operating cash flow before working capital changes
Changes in working capital:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in contract assets
(Increase)/decrease in other current assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in contract liabilities
Increase/(decrease) in provisions
Cash generated from operations
Interest received
Finance cost paid
Income tax refund
Income tax paid
Net cash generated from operating activities
The accompanying notes form an integral part of the financial statements.
Group
Note
2022
A$’000
2021
A$’000
69,983
50,197
14, 15
5
18
6,11
6
15
6
6, 11
6,8
5
16,600
(176)
5
127
37
(1,640)
(23)
(328)
(967)
7,947
(156)
1,435
83
92,927
(7,227)
(39,012)
74
23,566
(36,813)
2,697
36,212
29
(7,310)
598
(27,755)
1,774
14,174
(404)
97
200
1,646
-
-
-
-
9,399
(230)
2,040
(55)
77,064
(14,613)
12,475
148
(3,003)
(3,128)
3,924
72,867
31
(8,391)
-
(6,244)
58,263
98
98
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Consolidated Statement
of Cash Flows
For the Year Ended 30 June 2022
(continued)
Group
Cash Flows from Investing Activities
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Repayment of loan to a joint venture
Cash distribution from joint venture
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Repayment of principal lease liability
Dividends paid
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Note
14
25(a)
13
2022
A$’000
334
(6,904)
-
52
2021
A$’000
632
(21,616)
493
88
(6,518)
(20,403)
154,437
(139,452)
(7,533)
(10,037)
(2,585)
(7,331)
48,172
40,841
20,000
(20,334)
(7,045)
(10,021)
(17,400)
20,460
27,712
48,172
The reconciliation of movements of liabilities to cash flows arising from financing activities is presented below:
Cash flows
Non-cash changes
Opening
A$’000
Proceeds
A$’000
Repayment
A$’000
Reclassification
A$’000
Addition
A$’000
Others
A$’000
Closing A$’000
60,000
54,757
154,437
(139,452)
-
(7,533)
(985)
985
62,387
54,061
20,000
972
(20,334)
(7,045)
(1,776)
1,776
-
7,829
-
3,368
-
423
74,000
55,921
(277)
1,625
60,000
54,757
2022
Borrowings
Lease liabilities
2021
Borrowings
Lease liabilities
The accompanying notes form an integral part of the financial statements.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
99
99
Notes to the
Financial Statements
30 June 2022
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 1967 (the ‘Act’) as an investment holding company for the purpose of acquiring the subsidiary companies pursuant to the
Restructuring Exercise. On 29 March 2012 the company changed its name to Civmec Limited. The Company has been listed
on the Singapore Exchange Securities Ltd (‘SGX-ST’) since 13 April 2012. On 20 June 2018, the Company was listed on the
Australian Securities Exchange (‘ASX’). The Company now holds dual listing status. The Company has provided an option for
shareholders to convert their shares with SGX-ST for shares with ASX, at the ratio of 1:1.
The registered office of the Company is at 80 Robinson Road #02-00, Singapore 068898 and the principal place of business is at
16 Nautical Drive, Henderson, WA 6166 Australia.
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 Notes 17, 18, 19 and 20 respectively.
The financial statements for the financial year ended 30 June 2022 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 1967 and
Singapore Financial Reporting Standards (International) (‘SFRS(I)’) under the historical cost convention, except for the revaluation
on freehold land and buildings and investment properties.
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.
The Group has adopted the new or amended SFRS(I) and SFRS(I) Interpretations (‘SFRS(I) INTs’) that are mandatory for
application for the financial year. The details are disclosed in Note 35 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
100
100
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies
(b) Basis of consolidation (continued)
(i) Subsidiaries (continued)
equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in
the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of
the recognised amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity
interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement
are recognised in profit or loss. Any contingent consideration to be transferred by the Group is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or
liability are 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 have been eliminated.
Unrealised losses have also been 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.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
101
101
Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(b) Basis of consolidation (continued)
(ii) Joint arrangements (continued)
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.
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 contributes assets to a joint operation, the Group recognises gains or losses on the sale or contribution of
assets that are 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 its 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 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.
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Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(e) Revenue recognition (continued)
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 the 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.
The amount of revenue recognised is based on the estimated transaction price, which comprises the contractual price, adjusted
for expected returns. Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change.
Any resulting increases or decreases in estimated revenues or costs are reflected in the profit or loss in the period in which the
circumstances that give rise to the revision become known by management 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.
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 exceeds 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 is 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.
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2. Significant accounting policies (continued)
(e) Revenue recognition (continued)
Sale of goods and services (continued)
The 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. The 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.
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.
Rental income
Rent revenue from investment properties is recognised on a straight-line basis over the lease term. Lease incentives granted are
recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned.
(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. When 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 current tax expense and deferred tax expense.
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.
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The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(h) Income tax (continued)
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
tax losses, to the extent that it is probable that future taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilised except where the deferred tax asset
relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect
of deductible temporary differences associated with investments in subsidiaries and interest in joint venture, deferred tax assets
are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable
profit will be available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are measured:
(i)
(ii)
at the tax rates that are expected to apply when the related deferred tax asset is realised or the deferred income tax liability is
settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and
based on the tax consequence that would follow from the manner in which the Group expects, at the balance sheet date,
to recover or settle the carrying amounts of its assets and liabilities.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
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$’), which is the functional currency of the Company.
Prior to 1 July 2019, the financial statements were presented in Singapore Dollars (‘S$’). With effect from 1 July 2019, 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 2019, the change provides 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;
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Notes to the
Financial Statements
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2. Significant accounting policies (continued)
(i) Foreign currency translation (continued)
Functional and presentation currency (continued)
•
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.
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
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.
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The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(j) Financial assets (continued)
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 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
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.
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Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(j) Financial assets (continued)
Credit-impaired financial assets (continued)
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
i. Recognition and measurement
Freehold land and buildings
Before 1 July 2019, the Group was using cost model for this class of property. Freehold land and buildings were stated on the
cost basis and are therefore carried at cost less accumulated depreciation and accumulated impairment losses. The cost includes
construction costs and borrowing cost that are eligible to be capitalised.
From 1 July 2019, under the revaluation model, freehold land and buildings are initially recognised at cost. Such costs, including
the construction costs and borrowing costs that are eligible for capitalisation, are subsequently carried at their revalued amount,
being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated
impairment losses.
Revaluations are performed with sufficient regularity such that the carrying amount do not differ materially from those that would
be determined using fair values at the end of the reporting period.
Freehold land and buildings are revalued by independent professional valuers on triennial basis and whenever their carrying
amounts are likely to differ materially from their revalued amounts. When an asset is revalued, any accumulated depreciation at the
date of revaluation is eliminated against the gross carrying amount of the asset. The net amount is then restated to the revalued
amount of the asset.
Increases in carrying amounts arising from revaluation are recognised in other comprehensive income, unless they offset previous
decreases in the carrying amounts of the same asset, in which case, they are recognised in profit or loss. Decreases in carrying
amounts that offset previous increases of the same asset are recognised in other comprehensive income. All other decreases in
carrying amounts are recognised in profit or loss.
Other property, plant and equipment
All other items of property 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 recognized either in profit or loss or as a revaluation
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The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(l) Property, plant and equipment (continued)
Other property, plant and equipment (continued)
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.
ii. 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 as they are not yet ready for their intended use as at the end of
the reporting period.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Assets
Buildings
Plant and equipment
Leasehold land
Leased assets
Small tools
Motor vehicles
Office and IT equipment
Depreciation Rate
2% - 33%
3% - 33%
1% - 2%
5% - 33%
5% - 50%
6% - 33%
5% - 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) Investment properties
Investment properties, which are properties held to earn rental income and/or for capital appreciation (including property under
construction for such purposes and land under operating leases that is held for long-term capital appreciation or for a current
indeterminate use), are measured initially at its cost, including transaction costs.
Buildings
Subsequent to initial recognition, investment properties are measured at fair value, determined annually by independent
professional valuers on the highest-and-best use basis. Gains and losses arising from changes in the fair value of investment
properties are included in profit or loss in the period in which they arise.
Leasehold land
Subsequent to initial recognition, investment properties are accounted for in accordance with the cost model that is cost less
accumulated depreciation and less accumulated impairment losses. The depreciation is calculated on a straight-line basis over its
lease term.
Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and
improvements are capitalised and the carrying amounts of the replaced components are recognised in profit or loss. The cost of
maintenance, repairs and minor improvements are recognised in profit or loss when incurred.
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Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(m) Investment properties (continued)
Investment properties are derecognised when either they have been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of
an investment property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
recognised in profit or loss in the year of retirement or disposal.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property
to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use.
When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and
reclassified accordingly. Any gain arising on remeasurement is recognised in profit or loss to the extent that it reverses a previous
impairment loss on the specific property, with any remaining gain recognised in other comprehensive income and presented in
the revaluation reserve in equity. Any loss is recognised immediately in profit or loss.
When the property is sold, the related amount in the revaluation reserve is transferred to retained earnings.
(n) Impairment of non-financial assets
Non-financial assets are tested for impairment whenever there is any indication that these assets may be impaired.
At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine whether there
is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any), on an individual asset.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. The difference between the carrying amount
and recoverable amount is recognised as an impairment loss in profit or loss.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses
may no longer exist or may have decreased.
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.
(o) 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.
(p) 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.
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The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(p) Financial liability and equity instruments issued by the Group (continued)
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.
(q) 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.
(r) Leases
The Group as Lessee
At the inception of the contract, the Group assesses if the contract contains a lease. A contract contains a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Reassessment is only
required when the terms and conditions of the contract are changed.
The Group recognises right-of-use assets and lease liabilities at the date which the underlying assets become available for use.
Right-of-use assets are measured at cost, which comprises the initial measurement of lease liabilities adjusted for any lease
payments made at or before the commencement dates, plus any initial direct costs incurred, less any lease incentives received.
Any initial direct costs that would not have been incurred if the lease had not been obtained are added to the carrying amount of
the right-of-use assets.
Right-of-use assets are subsequently depreciated using the straight-line method from the commencement dates to the earlier of
the end of the useful lives of the right-of-use assets or the end of the lease terms. The estimated useful lives of right-of-use assets
are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use assets are periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the corresponding lease liabilities. The Group
presents its right-of-use assets in ‘Property, plant and equipment’ and lease liabilities in ‘Lease liabilities’ in the statements of
financial position.
The initial measurement of lease liabilities is measured at the present value of the lease payments discounted using the implicit
rate in the lease, if the rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental
borrowing rate.
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Financial Statements
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2. Significant accounting policies (continued)
(r) Leases (continued)
The Group as Lessee (continued)
Lease payments included in the measurement of the lease liability comprise the following:
•
•
Fixed payments (including in-substance fixed payments), less any lease incentives receivables;
Variable lease payments that are based on an index or rate, initially measured using the index or rate as at the
commencement date;
• Amounts expected to be payable under residual value guarantees;
•
The exercise price of a purchase option if it is reasonably certain to exercise the option; and
• Payment of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
For contracts that contain both lease and non-lease components, the Group allocates the consideration to each lease component
on the basis of the relative stand-alone price of the lease and non-lease components. The Group has elected not to separate
lease and non-lease components for property leases; instead, these are accounted for as one single lease component.
Lease liabilities are measured at amortised cost, and are remeasured when:
•
•
•
•
There is a change in future lease payments arising from changes in an index or rate;
There is a change in the Group’s assessment of whether it will exercise lease extension and termination options;
There is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or
There is a modification to the lease term.
When lease liabilities are remeasured, corresponding adjustments are made against the right-of-use assets. If the carrying
amounts of the right-of-use assets have been reduced to zero, the adjustments are recorded in profit or loss. The Group has
elected not to recognise right-of-use assets and lease liabilities for short-term leases that have lease terms of 12 months or less,
as well as leases of low value assets.
Variable lease payments that are based on an index or a rate are included in the measurement of the corresponding right-of-use
assets and lease liabilities. Other variable lease payments are recognised in profit or loss when incurred.
The Group as Lessor
Leases of investment properties where the Group retains substantially all risks and rewards incidental to ownership are classified
as operating leases. Rental income from operating leases (net of any incentives given to the lessees) is recognised in income on a
straight-line basis over the lease term.
(s) 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.
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The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(s) Employee benefits (continued)
Share-based payments (continued)
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.
(t) 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.
(u) 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.
(v) 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.
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Notes to the
Financial Statements
30 June 2022
2. Significant accounting policies (continued)
(v) Related parties (continued)
b. An entity is related to a reporting entity if any of the following conditions applies:
i.
ii.
iii.
iv.
v.
the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow
subsidiary is related to the others);
one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of
which the other entity is a member);
both entities are joint ventures of the same third party;
one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
the entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity
related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the
reporting entity;
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.
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 2022, the Group’s trade and other receivables and contract assets amounted to A$95,030,000 (2021:
A$87,488,000) and A$121,654,000 (2021: A$82,642,000) respectively, net of allowance for impairment, if any, arising from the
Group’s different revenue segments as disclosed in Note 32 to the financial statements.
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. An allowance for impairment of A$127,000 (2021: A$200,000) and
A$37,000 (2021: A$1,646,000) write off for trade and other receivables were recognised as at 30 June 2022. During the year, the
Group has partially recovered an amount of A$328,000 from the impaired loan to an associate. No allowance for impairment of
contract assets was recognised as at 30 June 2022 (2021: Nil).
Notwithstanding the above, the Group evaluates the expected credit loss on customers in financial difficulties separately. So far as
management is aware, there is no major customer in financial difficulties during the financial year except for those customers with
impairment loss being recognised.
The Group’s and the Company’s credit risk exposure for trade receivables by different revenue segment are set out in Note 33(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
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The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
3. Critical accounting judgements and key sources of estimation uncertainty (continued)
(a) Critical judgements in applying the Group’s accounting policies (continued)
(ii) Judgement and method used in estimating construction contract revenue (continued)
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.
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, 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
(iv) Impairment of property, plant and equipment and investment properties
The Group assesses impairment of property, plant and equipment and investment properties at each year end by evaluating
conditions specific to the Group that may lead to impairment of assets. Adjustments are made when considered necessary.
Impairment assessment of property, plant and equipment and investment properties 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 and investment properties was recorded for the financial years ended
30 June 2022 and 2021. The carrying amount of property, plant and equipment and investment properties at 30 June 2022 is
A$448,092,000 (2021: A$412,030,000) and A$16,805,000 (2021: Nil) respectively.
(v) Determination of the lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise
an extension option, or not to exercise a termination option. Extension options (or periods after termination options) are only
included in the lease term if the lease term is reasonably certain to be extended (or not terminated). The lease term is reassessed
if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment
of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects the
assessment, and that is within the control of the lessee. For leases of the leasehold land and buildings, the following factors are
normally the most relevant:
•
If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or not terminate).
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Notes to the
Financial Statements
30 June 2022
3. Critical accounting judgements and key sources of estimation uncertainty (continued)
(a) Critical judgements in applying the Group’s accounting policies (continued)
(v) Determination of the lease term (continued)
•
•
If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain to
extend (or not terminate).
Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption
required to replace the leased asset.
(vi) Valuation of freehold land and buildings and investment properties
The Group carries its freehold land and building and investment properties at fair values which are determined by an independent
real estate valuation expert using the highest-and-best use approach which is generally the sales comparison approach (i.e. the
basis of market value). In arriving at the valuation figure, the valuer has taken into consideration the prevailing market conditions
and differences between the freehold land and building and investment properties and the comparables in terms of location,
tenure, size, shape, design and layout, age and condition of the buildings, dates of transactions and other factors affecting
their values. The most significant inputs in this valuation approach are the selling price per square meter and the usage of the
properties. The estimates are based on local market conditions existing at the reporting date.
Fair values of buildings with no available market information are determined by the independent real estate valuation expert using
the depreciated replacement cost method, which involves estimating the current replacement cost of the buildings and from
which deductions are made to allow for depreciation due to age, condition and functional obsolescence. The replacement cost is
then added to the land value to derive the fair value. The land value is determined based on the direct comparison method with
transactions of comparable plots of land within the vicinity and elsewhere. In arriving at the valuation figure, the valuation expert
has taken into consideration the prevailing market condition and differences between the freehold land and buildings and the
comparable in terms of location, tenure, size, shape, design and layout, age and condition, dates of transactions and other factors
affecting their values. The most significant inputs into this valuation approach are the estimated construction costs, depreciation
rates and developer profit margin.
The carrying amount of the freehold land and buildings and investment properties at the reporting date is disclosed in Note 14 and
Note 15. If the selling prices and price per unit measurement of the freehold land and buildings determined by valuation experts
had been 5% higher/lower, the carrying amount of the freehold land and buildings and investment properties would have been
A$18,239,000 higher/lower.
(b) Key sources of estimation uncertainty
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 contracts
The Group has significant ongoing construction contracts as at 30 June 2022 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.
The Group includes incremental costs of fulfilling the contracts which are the cost of materials and labour required to construct
the projects. In estimating the forecast costs, the management exercised judgement in considering costs that relate directly to the
contracts.
If the estimated total contract sum decreases by 1% from management’s estimates, the Group’s profit before income tax will
decrease by approximately A$8,100,000 (2021: A$6,200,000).
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Notes to the
Financial Statements
30 June 2022
3. Critical accounting judgements and key sources of estimation uncertainty (continued)
(b) Key sources of estimation uncertainty (continued)
(i) Estimation of total contract costs for contracts (continued)
If the remaining estimated contract costs increase by 1% from management’s estimates, the Group’s profit before income tax
will decrease by approximately A$7,180,000 (2021: A$5,991,000).
(ii) Estimation of useful lives of property, plant and equipment and investment properties – leasehold land
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 and investment properties – leasehold land during the current financial year.
The carrying amount of the Group’s property, plant and equipment and investment properties – leasehold land as at 30 June 2022
was A$448,092,000 (2021: A$412,030,000) and A$1,965,000 (2021: Nil) respectively. A 10% difference in the expected useful
lives of these assets from management’s estimate would result in an approximately A$1,660,000 (2021: A$1,417,000) 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 2022 were current income tax payable of A$3,774,000 (2021: A$14,978,000).
The carrying amounts of the Group’s and Company’s deferred tax assets and deferred tax liabilities as at 30 June 2022 are
disclosed in Note 9 to the financial statements.
(iv) Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on
the Group based on known information. This consideration extends to the nature of the products and services offered, customers,
supply chain, staffing and geographic regions in which the Group operates. Other than as addressed in specific notes, there does
not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect
to events or conditions which may impact the Group unfavorably as at the reporting date or subsequently as a result of the
Coronavirus (COVID-19) pandemic.
4. Revenue from contracts with customers
(a) Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at a point in time as follows:
Over time:
Construction contract revenue
Revenue from rendering of services
At a point in time:
Revenue from rendering of services
Revenue from sales of goods
Group
2021
A$’000
620,019
53,284
673,303
-
883
674,186
2022
A$’000
649,677
157,432
807,109
1,180
1,006
809,295
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Notes to the
Financial Statements
30 June 2022
4. Revenue from contracts with customers (continued)
(a) Disaggregation of revenue from contracts with customers (continued)
Revenue from the rendering of services
Contracts where payment is made for the provision of labour and materials without any risk or penalty for performance is classified
as revenue from the rendering of services.
Segment analysis
The segment analysis of the Group is disclosed in Note 32 to the financial statements.
(b) Contract Assets and Liabilities
Contract assets
Contract liabilities
Group
2022
A$’000
121,654
(43,325)
2021
A$’000
82,642
(80,138)
Contract assets primarily relate to the Group’s right to consideration for work completed but not yet billed at the reporting date
on construction contracts. The contract assets are transferred to trade receivables when the rights become unconditional, which
usually occurs when the customer certifies the progress claims.
Contract liabilities primarily relate to the Group’s obligation to transfer goods or services to customers for which the Group has
received advances from customers for construction contracts and progress billings issued in excess of the Group’s rights to the
consideration in respect of construction contract revenue.
(i) Significant changes in contract balances
Contract assets:
Contract assets reclassified to trade
receivables
Changes in measurement of progress
Contract liabilities:
Revenue recognised in the current year that
was included in the contract liability balance
at the beginning of the year
Increase due to cash received, excluding
amounts recognised as revenue during
the year
Group
2022
A$’000
(12,708)
51,720
2021
A$’000
(28,740)
16,264
58,224
51,711
(21,411)
(48,583)
In accordance with Note 2(e) to the financial statements, contract assets adjustments relating to changes in the estimated
transaction price were made following receipt of revised independent legal and expert advice on completed contracts.
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The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
4. Revenue from contracts with customers (continued)
(b) Contract Assets and Liabilities (continued)
(ii) Unsatisfied performance obligations
Aggregate amount of the transaction price
allocated to contracts that are partially or fully
unsatisfied as at 30 June
Group
2022
A$’000
2021
A$’000
1,038,556
1,005,664
The Group expects that the aggregate amount of the transaction price allocated to unsatisfied performance obligations as of
30 June 2022 will be recognised as revenue as the Group continues to perform to complete the construction, which is expected
to occur over the next few years up to 2029. The amount disclosed above does not include variable consideration which is
subject to constraint.
As permitted under the SFRS(I) 15, the aggregated transaction price allocated to unsatisfied contracts of periods of one year or
less, or are billed based on time incurred, is not disclosed.
5. Other income
Insurance recoveries
Fuel tax rebate
Interest income:
- Bank balances
- Related party
Gain on disposal of property, plant and
equipment
Fair value gain on investment property at fair
value through profit or loss
Subsidies and incentives
Net foreign exchange gain
Miscellaneous income
Group
2022
A$’000
595
171
29
127
156
176
1,640
171
-
10
2,919
2021
A$’000
1,605
183
31
199
230
404
-
37
54
59
2,572
Insurance recoveries
During the current financial year, the Group recognised an insurance recovery of A$523,000 from an incident which damaged
company owned mobile plant and an incident that damaged equipment while in transit.
During the previous financial year, the Group recognised other income of A$1,605,000 from an insurance claim recovered for
property repairs and business interruptions which were caused by a storm.
Subsidies and incentives
The Group received Wage Subsidy and Jobs and Skills WA Employer Incentives from the Government for hiring eligible
participants.
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Notes to the
Financial Statements
30 June 2022
6. Profit before income tax
The following items have been included in arriving at profit before income tax:
Group
Included in cost of sales:
Direct materials
Employee benefits (Note 7)
Subcontract works
Workshop and other overheads
Depreciation of property, plant and equipment
(Note 14, 15)
Finance costs on lease liabilities (Note 8)
Included in administrative expenses:
Audit fees:
- Auditor of the Company
- Other auditors
Non-audit fees:
- Auditor of the Company
- Other auditors*
Business development
Communications
Depreciation of property, plant and
equipment (Note 14)
Directors’ fee
Employee benefits (Note 7)
Occupancy expenses
Office costs
Other administrative expenses
Other professional fees
Tax fees
Net foreign exchange loss
*includes internal audit
Included in other (write-back)/expenses:
Trade receivables written off
Impairment loss on loan to an associate
(Note 11)
Write-back of bad debt
Write-back of impairment loss on loan to an
associate (Note 11)
Write-back of revaluation loss on freehold
land and buildings
Other expenses
2022
A$’000
128,735
356,223
109,961
104,073
16,387
3,079
90
105
20
153
106
2,930
213
261
12,703
551
784
178
1,106
769
83
37
127
(23)
(328)
(967)
2
2021
A$’000
134,984
289,405
83,984
73,926
13,931
2,918
87
98
20
154
237
2,497
243
241
12,113
382
599
141
1,565
610
-
1,646
200
-
-
-
2
120
120
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
7. Employee benefits expenses
Included in cost of sales: (Note 6)
Wages and salaries
Contributions to defined contribution plans
Other employee benefits
Included in administrative expenses: (Note 6)
Wages and salaries
Contributions to defined contribution plans
Other employee benefits
Share based payment
8. Finance costs
Corporate market loan and line fees
Trade finances
Lease liabilities
Secured notes
Other finance costs
Group
Group
2021
A$’000
272,280
15,025
2,100
289,405
7,706
2,111
256
2,040
12,113
2021
A$’000
1,190
4
994
4,200
93
6,481
2022
A$’000
335,859
18,021
2,343
356,223
8,753
2,231
284
1,435
12,703
2022
A$’000
1,502
164
757
2,350
95
4,868
Included in cost of sales:
Lease liabilities (Note 6)
3,079
2,918
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
121
121
Notes to the
Financial Statements
30 June 2022
9. Income tax expense
Current income tax
Deferred income tax
(Over)/under provision in prior years
- Current income tax
- Deferred income tax
Deferred income tax expense on revaluation
of freehold land and buildings recognised in
other comprehensive income
Group
2022
A$’000
17,771
3,279
21,050
(1,232)
(576)
(1,808)
19,242
15,908
2021
A$’000
18,375
(2,506)
15,869
1
(301)
(300)
15,569
802
The Group’s tax on profit before income tax differs from the amount that would arise using the Australian standard rate of
income tax as follows:
Profit before income tax
Income tax at 30%
Add/(deduct) the tax effects of:
Under provision of current tax expense
in prior years
Over provision of current tax expense
in prior years
Over provision of deferred tax expense
in prior years
Non-assessable income
Non-deductible expenses
Deferred tax asset not recognised
Weighted average effective tax rates
Group
2022
A$’000
69,983
20,995
-
(1,232)
(576)
(474)
529
-
19,242
27.5%
2021
A$’000
50,197
15,059
1
-
(301)
-
665
145
15,569
31.0%
As at 30 June 2022, the Group has capital tax losses of approximately A$2,080,000 (2021: A$2,094,000) 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$624,000 (2021: A$628,000) and are not recognised as there is no reasonable
certainty that future capital gains will be available to utilise the capital tax losses.
The non-deductible expenses of the Group mainly relate to share option expenses which are being treated as non-deductible for
tax purposes.
The tax rate used for the 2022 and 2021 reconciliations above is the corporate tax rate of 30% payable by corporate entities in
Australia on taxable profits under the tax law in that jurisdiction. The Group’s operations are primarily located in Australia.
122
122
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
9. Income tax expense (continued)
Deferred taxes
Group
2022
Property, plant and equipment
Receivables
Trade and other payables
Provisions
Carried forward tax losses
Others
2021
Property, plant and equipment
Receivables
Trade and other payables
Provisions
Carried forward tax losses
Others
*Other Comprehensive Income
Company
2022
Loan receivables
Trade and other payables
Carried forward tax losses
Investment in subsidiaries
Others
2021
Loan receivables
Trade and other payables
Carried forward tax losses
Investment in subsidiaries
Others
Opening
A$’000
Charged to
profit or loss
A$’000
Charged to OCI*
A$’000
Closing
A$’000
(41,550)
437
5,700
5,111
1
532
(29,769)
(37,046)
551
1,005
3,218
142
356
(31,774)
(1,223)
(520)
(3,331)
598
(1)
1,774
(2,703)
(3,702)
(114)
4,695
1,893
(141)
176
2,807
(15,908)
-
-
-
-
-
(15,908)
(802)
-
-
-
-
-
(802)
(58,681)
(83)
2,369
5,709
-
2,306
(48,380)
(41,550)
437
5,700
5,111
1
532
(29,769)
Opening
A$’000
Charged to
profit or loss
A$’000
Closing
A$’000
24
10
1
224
1
260
17
1
2
-
2
22
52
-
(1)
(224)
(1)
(174)
7
9
(1)
224
(1)
238
76
10
-
-
-
86
24
10
1
224
1
260
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
123
123
Notes to the
Financial Statements
30 June 2022
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.
Profit attributable to the owners of
the Company (A$’000)
Share capital (A$’000)
Weighted average number of ordinary
shares issued
- Basic
- Diluted
Earnings per ordinary share (A$ cents)
- Basic
- Diluted
Group
2022
50,762
29,807
2021
34,771
29,807
502,239,178
502,266,373
501,083,288
501,094,247
10.11
10.11
6.94
6.94
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, which includes the effect of
1,350,000 (30 June 2021: 100,000) ordinary shares granted under CPRP (Note 26 (c)).
As at 30 June 2022, the diluted earnings per share includes the effect of 9,926,000 unissued ordinary shares granted under
CPRP due to the performance targets are likely to be met (30 June 2021: Nil) (Note 26(c)). The effect of the inclusion is dilutive.
As at 30 June 2022, the diluted earnings per share does not include the effect of 4,000,000 (30 June 2021: 4,000,000, dilutive)
unissued ordinary shares granted under CESOS (Note 26(b)). The effect of the inclusion is anti-dilutive.
11. Trade and other receivables
Group
Company
Current:
Trade receivables
- Third parties
- Retention sum receivables
Allowance for impairment loss
Receivables from subsidiaries
Loan to an associate
Allowance for impairment loss
Other receivables
2022
A$’000
94,432
5
(11)
94,426
-
1,766
(1,766)
604
95,030
2021
A$’000
87,064
173
(11)
87,226
-
1,967
(1,967)
262
87,488
2022
A$’000
2021
A$’000
-
-
-
-
34,831
-
-
-
34,831
-
-
-
-
50,481
-
-
-
50,481
The receivables from subsidiaries are non-trade, unsecured, interest-free and repayable on demand in cash.
The Group provided working capital funding to an associate, Civtec Africa Ltd. As at 30 June 2022, the loan balance of
A$1,766,000 (30 June 2021: A$1,967,000) is fully impaired due to cashflow constraints of the borrower caused by the COVID-19
limiting their ability to repay the loan.
124
124
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
30 June 2022
11. Trade and other receivables (continued)
The movements in allowance for impairment loss of trade and other receivables during the year are as follows:
Trade receivables
A$’000
Other receivables
A$’000
Total
A$’000
Group
2022
Balance as at 1 July 2021
Impairment loss recognised in profit or loss
during the year on
- Changes in credit risk (Note 6)
Write-back of impairment loss on loan to
an associate
As at 30 June 2022
2021
Balance as at 1 July 2020
Impairment loss recognised in profit or loss
during the year on:
- Changes in credit risk (Note 6)
- Written off
As at 30 June 2021
11
-
-
11
911
-
(900)
11
1,967
1,978
127
(328)
1,766
127
(328)
1,777
1,767
2,678
200
-
1,967
200
(900)
1,978
Apart from the credit allowance provided, management has assessed that there is no other significant expected credit loss for
the financial year ended 30 June 2022.
The Group’s internal credit evaluation practices and basis for recognition and measurement for expected credit losses are
disclosed in Note 33(a) to the financial statements.
12. Other current assets
Prepayments
Consumables inventory
13. Cash and cash equivalents
Group
Company
2022
A$’000
1,297
532
1,829
2021
A$’000
1,311
592
1,903
2022
A$’000
-
-
-
2021
A$’000
-
-
-
Cash at banks and on hand
Group
Company
2022
A$’000
40,841
2021
A$’000
48,172
2022
A$’000
7
2021
A$’000
28
Cash at banks earn interest at floating rates ranging from 0.01% to 0.85% (2021: 0.01% to 0.35%) per annum.
A floating charge over cash and cash equivalents has been provided for certain debt.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
125
125
Notes to the
Financial Statements
30 June 2022
30 June 2022
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CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
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A
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
127
127
Notes to the
Financial Statements
30 June 2022
14. Property, plant and equipment (continued)
Depreciation expenses are classified as follows:
Included in cost of sales
Included in administrative expenses
2022
A$’000
16,346
213
16,559
2021
A$’000
13,931
243
14,174
At the balance sheet date, the details of the Group’s freehold land and buildings are as follows:
Location
Description/Existing use
2-8 Stuart Drive, Henderson,
Western Australia
16 Nautical Drive, Henderson,
Western Australia
Land and buildings / Operational readiness
and logistics support facility
Buildings on leasehold land / Undercover
waterfront, manufacturing, modularisation
and maintenance facility
Tenure
Freehold
Leasehold land leases:
i. 34-years lease from August 2010,
with further 35 years option
ii. 30-years lease from March 2014,
with further 35 years option
iii. 28-years lease from December 2016,
with further 45 years option
35-39 Old Punt Road, Tomago,
New South Wales
Land and buildings / Manufacturing facility
and modular assembly laydown area
Freehold
Freehold land and buildings carried at fair value
At 30 June 2022, an independent valuation was carried out by Griffin Valuation Advisory on all the freehold land and buildings
of the Group. The fair value is determined by the valuer on the highest and best use approach of each asset. Such valuation was
determined using the Sales Comparison approach (to market-type properties), Hypothetical Development approach, Income
Capitalisation approach and Depreciated Replacement Cost (‘DRC’) approach (to non-market-type properties). The fair value
has been derived through a mix of Level 2 inputs where applicable and Level 3 inputs where the Valuer has deemed Level 2
inputs to be not applicable.
Details of the Group’s freehold land and buildings and information about the fair value hierarchy as at 30 June 2022 and
30 June 2021 are as follows:
Freehold land
Buildings
Freehold land
Buildings
Level 1
A$’000
-
-
Level 1
A$’000
-
-
Level 2
A$’000
21,200
2,600
Level 2
A$’000
17,950
1,917
Level 3
A$’000
-
326,134
Level 3
A$’000
-
305,346
Fair Value as
at 30 June 2022
A$’000
21,200
328,734
Fair Value as
at 30 June 2021
A$’000
17,950
307,263
Level 2 fair value of the Group’s freehold land and building have been derived using the market data approach. Sales prices
of comparable properties in close proximity are adjusted for differences in key attributes as disclosed in Note 3(a)(vi) to the
financial statements. The most significant input in this valuation approach is the selling price per square meter and the usage
of the property.
128
128
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
14. Property, plant and equipment (continued)
Freehold land and buildings carried at fair value (continued)
Valuation techniques used to derive Level 3 fair values
The following table shows the information about fair value measurements using significant unobservable inputs (Level 3) as at
30 June 2022 and 2021:
Fair value as at
30 June 2022
A$’000
Description
Buildings
326,134
Fair value as at
30 June 2021
A$’000
Description
Buildings
305,346
Valuation
techniques
Unobservable
inputs
Range of inputs
Depreciation rates
2% to 33%
Depreciated
Replacement Cost
(DRC
$1,079 to $5,571
Relationship of unobservable
inputs to fair value
The higher the depreciation
rates, the lower the fair value.
The higher the construction
costs, the higher the fair value.
5% to 8%
The higher the profit margin,
the higher the fair value.
Valuation
techniques
Unobservable
inputs
Range of inputs
Depreciation rates
2% to 33%
Depreciated
Replacement Cost
(DRC)
$984 to $4,857
Relationship of unobservable
inputs to fair value
The higher the depreciation
rates, the lower the fair value.
The higher the construction
costs, the higher the fair value.
4% to 6%
The higher the profit margin,
the higher the fair value.
Estimated
construction costs
per square metre
Developer profit
margin
Estimated
construction costs
per square metre
Developer profit
margin
The following table represents the changes in level 3 items for the financial year ended 30 June 2022 and 30 June 2021:
Freehold buildings at cost before revaluation model
Net book value
Acquisition
Depreciation
Transfer from assets under construction
Total cost of buildings
At the beginning of the year
Acquisition
Depreciation
Transferred to investment property (Note 15)
Gain on revaluation of buildings
Closing balance
2022
A$’000
305,346
-
(15,508)
(13,200)
49,496
326,134
There were no transfers between Level 1 and Level 2 during the year.
Buildings
2020
A$’000
50,162
57,365
(2,215)
85,607
190,919
2021
A$’000
299,002
9,236
(7,115)
-
4,223
305,346
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
129
129
Notes to the
Financial Statements
30 June 2022
14. Property, plant and equipment (continued)
Freehold land and buildings carried at fair value (continued)
If the freehold land and building were stated on the historical cost basis, the carrying amount would be as follows:
Freehold land
Buildings
Accumulated depreciation
Transfer to investment property
Transfer to plant and equipment
Net book value
2022
A$’000
16,254
218,565
(28,554)
(8,756)
(8,866)
188,643
2021
A$’000
16,254
218,565
(21,461)
-
-
213,358
Right-of-use assets
Right-of-use assets acquired under leasing arrangements are presented together with the owned assets of the same class.
Details of such leased assets are also disclosed in Note 24.
(a)
As at the balance sheet date, the net book value of property, plant and equipment that were under lease liabilities was
A$60,490,000 (2021: A$55,063,000) (Note 24).
(b) The carrying amount of property, plant and equipment that are pledged for security are as follows:
Description
Borrowings
Leased plant and equipment
Remaining property, plant and equipment
Lease liabilities
Corporate market loan, multi-option
The details of the borrowings are disclosed in Note 22 to the financial statements.
Group
2022
A$’000
33,996
414,096
448,092
2021
A$’000
27,472
384,558
412,030
15.
Investment properties
Cost or valuation
At 1 July 2021
Transfer from property, plant and equipment (Note 14)
Addition – ROU
Revaluation increase – recognised in profit and loss
At cost at 30 June 2022
At valuation at 30 June 2022
At 30 June 2022
Accumulated depreciation
At 1 July 2021
Depreciation for the year
At 30 June 2022
Net carrying amount
At cost
At valuation
At 30 June 2022
Buildings
A$’000
Leasehold land
A$’000
Total
A$’000
-
13,200
-
1,640
-
14,840
14,840
-
-
-
14,840
14,840
-
1,912
94
-
2,006
-
2,006
-
(41)
(41)
1,965
-
1,965
-
15,112
94
1,640
2,006
14,840
16,846
-
(41)
(41)
1,965
14,840
16,805
130
130
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
15.
Investment properties (continued)
Buildings carried at fair value
At 30 June 2022, an independent valuation was carried out by Griffin Valuation Advisory on the investment property of the
Group. The fair value is determined based on significant unobservable inputs and is categorised under Level 3 of the fair value
measurement hierarchy due to its specialised nature which is not readily traded in the marketplace.
At the balance sheet date, the investment property held by the Group is as follows:
Location
1 Welding Pass, Henderson,
Western Australia
Description/
Existing use
Tenure
Buildings on leasehold
land / Submarine
rescue facility
Leasehold land leases: 28-years lease from April 2020, with further 22
years option
Leasehold land sub-lease: 26-years and 4 months lease from July 2021,
with 2 options to renew for a further 3 years each
The fair value measurement for the investment property of A$14,840,000 (2021: Nil) has been categorized as a level 3 fair value
based on the inputs to the valuation technique used.
Valuation techniques used to derive Level 3 fair values
The following table shows the information about fair value measurements using significant unobservable inputs (Level 3):
Fair value as at
30 June 2022
A$’000
Valuation
techniques
Description
Buildings
14,840
Depreciated
Replacement Cost
(DRC)
Unobservable inputs
Range of inputs
Depreciation rates
2%
Estimated construction
costs per square metre
Developer profit margin 5% to 8%
$1,318
Relationship of unobservable
inputs to fair value
The higher the depreciation
rates, the lower the fair value.
The higher the construction
costs, the higher the fair value.
The higher the profit margin, the
higher the fair value.
Leasehold land carried at cost.
The asset is depreciated on a straight-line basis over its lease term. The depreciation rate used is 2%.
(a)
Investment property is leased to non-related parties under operating leases.
Amounts recognised in profit or loss for investment properties
Rental income
Direct operating expenses from property that generated rental income
Group
2022
A$’000
329
(273)
(b) The carrying amount of investment properties that are pledged for security is as follows:
Description
Borrowings
Investment properties
Corporate market loan, multi-option
2022
A$’000
16,805
16.
Intangible assets
Goodwill
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
Group
2022
A$’000
10
2021
A$’000
10
131
131
Notes to the
Financial Statements
30 June 2022
Intangible assets (continued)
16.
Goodwill arose from the excess of the consideration paid for a business acquired from a third party. Goodwill has been allocated
to the cash-generating unit, Metals and Minerals division.
Management is of the opinion that the recoverable amount will exceed the carrying amount on the basis that this cash generating
unit has been generating profit since acquisition and management forecasts the results of this subsidiary to be in a net profit
position for the financial year ended 30 June 2022. In arriving at this assessment, management has determined the recoverable
amount using a two (2021: two) years forecasting process based on the current order book, projected orders and a consumer
price index (‘CPI’) factor of 6.1% (2021: 3.8%) per annum on direct costs and overhead costs.
17.
Investment in subsidiaries
Unquoted equity shares, at cost
Interest-free loan receivable
Less: impairment loss
Company
2022
A$’000
2021
A$’000
7,579
-
7,579
-
7,579
7,579
746
8,325
(746)
7,579
During the current financial year, the Company has written off the impairment loss of A$746,000.
There is no material non-controlling interest to be disclosed for the financial year ended 30 June 2022.
The details of the Company’s subsidiaries are as follows:
Equity held by the Group
Principal Activities
Country of
incorporation
2022
%
Name of Entity
Held by the Company
Civmec Construction & Engineering Pty Ltd*
Civmec Construction & Engineering Singapore Pte Ltd**
Held by Civmec Construction & Engineering Pty Ltd
Civmec Holdings Pty Ltd*
Multidiscipline Solutions Pty Ltd*
Civmec Pipe Products Pty Ltd*
Engineering and
construction services
Engineering and
construction services
Asset holding company
Asset holding company and
labour supply
Asset holding company
Australia
Singapore
Australia
Australia
Australia
Australia
Australia
Civmec Electrical and Instrumentation Pty Ltd*
Electrical services
Civmec DLG Pty Ltd(2)
Engineering and
construction services
Forgacs Marine and Defence Pty Ltd*
Marine and defence services
Australia
Civmec Construction & Engineering Africa Ltd***
Asset holding company
Mauritius
Civmec-Mala PNG***
Engineering and
construction services
Papua New
Guinea
Held by Forgacs Marine and Defence Pty Ltd
Forgacs Valco Pty Ltd*(1)
Valve services
Australia
Held by Civmec Construction & Engineering Africa Ltd
Civmec Construction & Engineering Uganda Ltd***
Asset holding company
Uganda
Audited by Moore Australia (WA) Pty Ltd, Australia.
Audited by Moore Stephens LLP, Singapore.
*
**
*** Reviewed by Moore Australia (WA) Pty Ltd, Australia for the purpose of consolidation.
(1)
(2)
The company was deregistered on 15 August 2021.
The company was deregistered on 10 September 2021.
2021
%
100
100
100
100
83.5
100
100
100
100
88
50
100
100
100
100
100
83.5
100
-
100
100
88
-
100
132
132
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
18.
Investment in joint venture
Unquoted cost of investment
Share of loss
Cash distribution to shareholders
As at 30 June
Group
2021
A$’000
242
(97)
145
(88)
57
2022
A$’000
57
(5)
52
(52)
-
Details of the Group’s joint venture that is accounted for using the equity method at the end of the reporting period are as follows:
Name of Entity
Principal Activities
Held by Civmec Construction & Engineering Pty Ltd
Australian Maritime Shipbuilding and Export
Group Ltd (AMSEG)(1)
Shipbuilding
Brown & Root Civmec Pty Ltd(2)
Engineering and
maintenance services
(1) Not a significant component.
(2)
The company was deregistered on 11 April 2022.
Ownership interest
held by the Group
Country of
incorporation
2022
%
Australia
Australia
50
-
2021
%
50
49
The summarised financial information below represents amounts shown in the joint venture’s financial statements.
Brown & Root Civmec Pty Ltd
Summarised statement of financial position:
Current assets
Total assets
Other payables
Net assets
2022
A$’000
-
-
-
-
2021
A$’000
115
115
-
115
Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint venture recognised
in the consolidated financial statements:
Net assets
Proportion of the Group’s ownership interest
in the joint venture
Carrying amount of the Group’s interest in the
joint venture
11 Apr 2022
A$’000
-
49.0%
-
2021
A$’000
115
49.0%
57
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
133
133
Notes to the
Financial Statements
30 June 2022
Investment in joint venture (continued)
18.
Summarised statement of comprehensive income:
Administrative expenses
Loss before tax
Income tax expense
Loss after tax
1 Jul 2021
to
11 Apr 2022
A$’000
(10)
(10)
-
(10)
2021
A$’000
(8)
(8)
(189)
(197)
Investment in associate
19.
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
Principal Activities
Held by Civmec Construction & Engineering Uganda Ltd
Ownership interest
held by the Group
Country of
Incorporation
2022
%
2021
%
Civtec Africa Ltd
Engineering and construction services Uganda
32
32
Civtec Africa Ltd
As at 30 June 2022, Civtec Africa Ltd has reported an estimated net equity deficit of A$3,572,000 (30 June 2021: A$3,088,000
net equity deficit) with assets of A$2,077,000 (30 June 2021: A$297,000) and liabilities of A$5,649,000 (30 June 2021:
A$3,385,000), and a total comprehensive loss for the year ended 30 June 2022 of A$1,941,000 (2021: A$922,000 loss).
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 2022.
The Group has not recognised its share of loss of A$620,000 for the financial year ended 30 June 2022 (2021: A$294,000)
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 loss amount to A$958,000 (2021: A$338,000) at reporting date.
A settlement agreement was entered on 29 November 2021 for the exit of Civmec Group from Civtec Africa Ltd upon the
fulfillment of the terms and conditions by Civtec Africa Ltd.
134
134
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
20. Joint operations
The Group has interests in the following joint operation which is proportionately consolidated:
Name of Entity
Black & Veatch Civmec JV (‘BCJV’)
Principal Activities
Engineering and
construction services
Ownership interest
held by the Group
Country of
incorporation
Australia
2022
%
50
2021
%
50
BCJV project is for the design and construction of a wastewater treatment plant upgrade.
The Group is entitled to a proportionate share of the construction contract revenue earned and bears a proportionate share of the
joint operations’ expenses.
21. Trade and other payables
Trade creditors
Sundry payables and accruals
Goods and services tax payable
Other taxes payable
2022
A$’000
57,303
44,605
3,524
6,239
111,671
Trade and other payables are usually paid within 45 days.
22. Borrowings
Current:
Corporate market loan – secured [Note 22(a)]
Trade finance [Note 22(b)]
Non-current:
Senior secured notes [Note 22(c)]
Corporate market loan - secured [Note 22(a)]
Group
2022
A$’000
8,000
20,000
28,000
-
46,000
46,000
74,000
Group
Company
2022
A$’000
32
160
-
-
192
2021
A$’000
60
132
–
-
192
2021
A$’000
41,293
38,303
2,601
5,216
87,413
2021
A$’000
-
-
-
60,000
-
60,000
60,000
(a) Corporate market loan
The Group is required by the banks to maintain certain financial ratios such as leverage ratio, tangible net worth and debt service
cover ratio. As at 30 June 2022, the Group met all of these financial covenants.
As at 30 June 2022, the Group has a commercial bank facility amounting to A$54 million (30 June 2021: A$40 million) which was
fully utilised (30 June 2021: not utilised). The facility is repaid at an amount of A$8 million per annum. Interest rates are variable
and ranged between 1.37% to 1.53% (2021: 1.34% to 4.13%) per annum during the current financial year.
CIVMEC ANNUAL REPORT 2022
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135
135
Notes to the
Financial Statements
30 June 2022
22. Borrowings (continued)
(b) Trade finance
The Group has a multi-option facility of A$40 million which was 50.0% utilised as at 30 June 2022 (30 June 2021: not utilised). It
can be used for trade financing, bank guarantees and letters of credit. Interest rates are fixed at the time of drawing and ranged
between 1.29% to 1.80% per annum during the current financial year.
(c) Senior secured notes
The Group secured a A$60 million offering of 4-year secured notes (‘senior secured notes’) on 23 November 2018 to restructure
existing finance and provide funding for a portion of a world-class shipbuilding and maintenance facility at Henderson, Western
Australia. The senior secured notes were unconditionally and irrevocably guaranteed by the Company and are redeemable after
two years at the Company’s option. The notes were repaid in full in November 2021.
General security deed
Both the commercial bank and multi-option facilities are secured by certain property, plant and equipment and investment
properties as disclosed in Note 14 and Note 15 to the financial statements.
23. Provisions
Current:
Provision for employee benefits
Non-current:
Provision for employee benefits
The movements in provisions are as follows:
Current:
At the beginning of the year
Provisions made during the year
- Included in employee benefits
Provisions utilised during the year
At the end of the year
Non-current:
At the beginning of the year
Provisions made during the year
- Included in employee benefits
Adjustment due to change in probability %
Provisions utilised during the year
At the end of the year
Group
2022
A$’000
2021
A$’000
11,350
8,950
4,726
16,076
4,429
13,379
Group
2022
A$’000
2021
A$’000
8,950
6,103
28,035
(25,635)
11,350
4,429
1,792
(916)
(579)
4,726
16,567
(13,720)
8,950
3,352
1,381
(52)
(252)
4,429
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 3.61 % to 5.26% (2021: 0.18 % to 2.66%).
136
136
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
24. Leases
(a) The Group as Lessee
Nature of the Group’s leasing activities
The Group has entered into leases of land and buildings in respect of its offices, facilities and workshops. The Group has the
following leases:
•
•
•
•
•
The Henderson land lease at Lot 804 (16) Nautical Drive, Henderson, Western Australia is for a 34-year period from August
2010 with an option to renew for a further 35 years (reasonably certain to be exercised). Rent increases as per the CPI Index.
The Henderson land lease on extended area at Lot 804 (16) Nautical Drive, Henderson, Western Australia is for a 28-year
period from December 2016 with an option to renew for a further 45 years (reasonably certain to be exercised).
Rent increases as per the CPI Index.
A workshop lease at 1 Boys Road, Gladstone in Queensland for 2-year period and 1-year option (exercised).
The Henderson land lease at Lot 101 (1) Welding Pass, Henderson, Western Australia is 28-year lease from November 2019
with further 22 years option (reasonably certain to be exercised). Rent increases as per the CPI Index.
A workshop lease at 4/379 Spearwood Avenue, Bibra Lake, Western Australia is for 3-year lease from July 2022 with a first
further 2 years option and a second further 3 years option (reasonably certain to be exercised). Rent increases 2.5% on each
anniversary of the start date on the initial lease term and subsequently increases as per CPI index.
The Group also leases motor vehicles, workshop equipment and office fitout from non-related parties under lease liabilities.
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.
The present values of lease liabilities are analysed as follows:
2022
Within one year
Between two and five years
Later than five years
2021
Within one year
Between two and five years
Later than five years
Minimum lease
payments
A$’000
Future finance
charges
A$’000
Net present value
of minimum lease
payments
A$’000
14,340
44,234
151,444
195,678
210,018
14,060
43,272
97,666
140,938
154,998
(3,776)
(16,128)
(134,193)
(150,321)
(154,097)
(3,675)
(15,433)
(81,133)
(96,566)
(100,241)
10,564
28,106
17,251
45,357
55,921
10,385
27,839
16,533
44,372
54,757
CIVMEC ANNUAL REPORT 2022
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137
137
Notes to the
Financial Statements
30 June 2022
24. Leases (continued)
(a) The Group as Lessee (continued)
Nature of the Group’s leasing activities (continued)
Lease liabilities are presented in the statement of financial position as follows:
Present value of lease liabilities
Within one year
Between two and five years
Later than five years
Group
2022
A$’000
10,564
28,106
17,251
45,357
55,921
2021
A$’000
10,385
27,839
16,533
44,372
54,757
The effective interest rates range from 2.14% to 8.6% (2021: 2.14% to 8.6%) per annum.
Carrying amount of right-of-use assets within Property, Plant and Equipment
Leasehold land & buildings
Small tools
Plant and equipment
Motor vehicles
Office equipment
Group
2022
A$’000
26,494
885
30,597
2,514
-
60,490
2021
A$’000
27,560
-
26,138
1,339
26
55,063
Carrying amount of right-of-use assets within Investment Properties
Leasehold land
Group
2022
A$’000
1,965
2021
A$’000
-
There was an addition of A$8,180,000 to right-of-use assets during the year (Note 14 and Note 15).
Amounts recognised in profit or loss
Depreciation charged for the year:
- Small tools
- Plant and equipment
- Motor vehicles
- Office equipment
- Leasehold land & building
Interest on lease liabilities (Note 8)
Expenses relating to short-term leases
Other disclosures
Total cash outflow for leases
138
138
Group
2022
A$’000
2021
A$’000
94
2,139
462
-
677
3,836
249
7,533
-
2,018
296
27
595
3,912
371
7,045
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
24. Leases (continued)
(b) The Group as lessor
The Group sub-leased its investment property under an operating lease which also included pay to build and occupy conditions.
A net amount of A$9,236,000 was received in advance during the year ended 30 June 2021 from the sub-lessee as part of the
pay to build conditions. Revenue from the advance is being recognised over the tenure of the land. The sub-lessee does not have
an option to purchase the property at the expiry of the lease period. This lease is classified as an operating lease because the risk
and rewards incidental to ownership of the assets are not substantially transferred.
Rental income from investment properties is disclosed in Note 15.
Future minimum rental receivables under non-cancellable operating leases as at the end of the reporting period are as follows:
Group
2022
A$’000
214
207
184
184
184
1,724
2,697
Present value of rental receivables
Within one year
Between one year and two years
Between two years and three years
Between three years and four years
Between four years and five years
Later than five years
25. Share capital
(a) Fully paid ordinary shares
Group and Company
2022
2021
At the beginning and end of the year
Share issued during the year
- Conversion of performance rights
At the end of the year
No. of shares
501,100,000
1,350,000
502,450,000
A$’000
29,807
-
29,807
No. of shares
501,000,000
100,000
501,100,000
A$’000
29,807
-
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.
During the financial year, 1,350,000 shares were issued pursuant to vesting and conversion of performance rights held by key
management personnel (KMP) and other management.
On 17 December 2021 the Company paid a Final dividend of 1.0 Australia cents per ordinary share (30 June 2021: 1.0 Australia
cents) amounting to A$5,024,350 for the financial year ended 30 June 2021. On 4 April 2022, the Company also paid an Interim
dividend of 1.0 Australia cents per ordinary share amounting to A$5,024,350 for the financial year ended 30 June 2022.
The Board has recommended a Final dividend of 2.0 Australian cents per ordinary share for the financial year ended 30 June
2022, subject to shareholders’ approval at the forthcoming Annual General Meeting.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
139
139
Notes to the
Financial Statements
30 June 2022
25. Share capital (continued)
(b) Treasury shares
At the beginning and end of the year
No. of shares
15,000
A$’000
10
No. of shares
15,000
A$’000
10
Group and Company
2022
2021
Treasury shares relate to ordinary shares of the Company that are held by the Company.
(c) Share options
Group and Company
2022
2021
At the beginning and end of the year
4,000,000
S$0.65
4,000,000
S$0.65
No. of shares
Exercise Price
No. of shares
Exercise Price
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. The exercise price is Singapore dollars $0.65 per share.
Further details of the employee option plan are disclosed in Note 26(b) to the financial statements.
26. Share-based payments
(a) 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 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 Limited 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 manage-
ment 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 sharehold-
ers 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 trans-
ferable. 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$0.64 per share. The options are exercisable on or before 11 September 2023.
140
140
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
26. Share-based payments (continued)
(b) Employee share option scheme (continued)
Options granted to employees are as follows:
Grant date
11 September 2013
Total number granted
6,000,000
Vesting period
1 year
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in share options
during the year:
Outstanding at the beginning of the year
- Cancelled during the year
Outstanding at the end of the year
Exercisable at the end of the year
2022
2021
No. of shares
4,000,000
-
4,000,000
4,000,000
WAEP
S$0.65
S$0.65
No. of shares
4,000,000
-
4,000,000
4,000,000
WAEP
S$0.65
S$0.65
The weighted average remaining contractual life of options outstanding as at 30 June 2022 is 1 (2021: 2) years. The exercise
price of outstanding shares was S$0.65 (2021: S$0.65) equivalent to A$0.68 (2021: 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$0.35 (2021: S$0.35) equivalent to A$0.37 (2021: A$0.35).
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
11 September 2013
1 year
11%
S$0.65
S$0.65
Expected average life of the option
5.9 years
Expected share price volatility
Risk-free interest rate
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 2019.
A Performance Right refers to a right to one issued ordinary share of the Company granted under the scheme for no
consideration. To the extent the gateway hurdles are satisfied, 100% of the vesting will be based on the absolute earnings per
share (aEPS) outcome. aEPS is based on the achievement of certain predetermined performance targets determined by the
Committee. The Committee has the discretion to determine whether the performance targets have been met.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
141
141
Notes to the
Financial Statements
30 June 2022
26. Share-based payments (continued)
(c) Performance rights plan (continued)
The balances of Performance Rights are as follows:
Performance period 1 July 2018 to 30 June
2021 (Granted in FY2020)
Performance period 1 July 2020 to 30 June
2022 (Granted in FY2021)
Performance period 1 July 2020 to 30 June
2023 (Granted in FY2021)
Performance period 1 July 2021 to 30 June
2024 (Granted in FY2022)
Balance as at 30 June 2022
Issued
3,061,000
4,289,000
4,289,000
1,773,000
Vested
Forfeited
/Lapsed
/Expired
(1,350,000)
(1,711,000)
Balance
-
-
-
-
(179,000)
4,110,000
(179,000)
4,110,000
(67,000)
1,706,000
9,926,000
For the financial year ended 30 June 2022, the Group has recognised A$1,435,000 of share-based payment expense
(2021: A$2,040,000).
27. Asset revaluation reserve
Balance at beginning of year
Gain on revaluation of freehold land and
buildings
Deferred tax liability arising on revaluation
(Note 9)
Balance at end of year
Group and Company
2022
A$’000
80,358
53,027
(15,908)
117,477
2021
A$’000
78,487
2,673
(802)
80,358
2022
A$’000
2021
A$’000
-
-
-
-
-
-
-
-
142
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CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
28. Other reserves
Merger reserve
Waiver of interest receivable from a subsidiary
Waiver of loan payable to a related party
Equity-settled employee benefits reserve
Group
Company
2022
A$’000
7,578
-
277
3,715
11,570
2021
A$’000
7,578
-
277
2,280
10,135
2022
A$’000
7,578
(3,335)
-
3,715
7,958
2021
A$’000
7,578
(3,335)
-
2,280
6,523
(a) Merger reserve
Pursuant to the completion of the Restructuring Exercise, the share capital of Civmec Construction & Engineering Pty Ltd and
Controlled Entities was adjusted to merger reserve based on the ‘pooling of interest method’.
(b) Equity-settled employee benefits
The equity-settled employee benefits reserve relates to share options granted to employees under the employee share option
plan and performance rights.
29. Capital expenditure commitments
The Group has contracted capital expenditure commitments at the reporting date but not recognised in the financial statement
as follows:
Group
2022
A$’000
816
3,013
3,829
2021
A$’000
1,862
3,068
4,930
Plant and equipment purchases
Capital projects
30. Guarantees
Group
The Group is, in the normal course of business, required to provide guarantees in respect of their contractual performance related
obligations. These guarantees and indemnities only give rise to a liability in the event that it is unable to perform its contractual
obligations.
Company
The Company also provides parent company guarantee (PCG) to clients from time to time when a subsidiary enters into a
contractual agreement. These guarantees and indemnities only give rise to a liability in the event that the subsidiary is unable to
perform its contractual obligations.
During the course of business, the Company also provides letters of credit for international trading when required.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
143
143
Notes to the
Financial Statements
30 June 2022
30. Guarantees (continued)
As at 30 June 2022, the Group has given the following:
Group
Bank guarantees
Surety bond facility
Letters of credit
Company
Senior secured notes
Group
2021
A$’000
1,879
160,885
380
163,144
2022
A$’000
1,567
163,192
60
164,819
-
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$370
million (30 June 2021: A$305 million) as at 30 June 2022.
31. Related party transactions
The Group’s main related parties are as follows:
Entities exercising control over the Group
The largest shareholders are James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as trustees for the JF & OT Fitzgerald
Family Trust) (19.45%) and Goldfirm Pty Ltd (acting as trustee for the Kariong Investment Trust) (19.43%). Patrick John Tallon is a
beneficiary of the Kariong Investment Trust.
Key management personnel
Any person having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly,
including any director (whether executive or otherwise) of that entity is considered key management personnel.
Remuneration paid to key management personnel is as follows:
Directors’ remuneration
- Salaries and other related costs
- Directors’ fees
- Share-based payment
- Benefits including defined contribution plans
Other key management personnel
- Salaries and other related costs
- Share-based payment
- Benefits including defined contribution plans
Group
2022
A$’000
2021
A$’000
3,034
261
160
140
2,948
514
235
7,292
2,420
241
-
125
2,243
-
189
5,218
144
144
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
31. Related party transactions (continued)
Directors’ interest in employee share benefit plans
At the end of the reporting date, the total number of outstanding share options and performance rights that were issued/allocated
to the directors and key management personnel under existing employee benefit schemes is given below:
Share options
Directors
Key management personnel
Performance rights
Directors
Key management personnel
Group
2022
No.
2021
No.
-
2,000,000
-
2,000,000
4,380,000
3,982,000
5,171,000
4,184,000
Other related parties
Other related parties include immediate family members of key management personnel and entities that are controlled or
significantly influenced by those key management personnel, individually or collectively with their immediate family members.
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available
to other parties unless otherwise stated.
The following transactions occurred with related parties:
Waiver of loan payable to a related party
Purchase of goods and services
- Consultant fee paid to a related party
(in which a director has an interest in
the related party)
Group
2022
A$’000
-
-
2021
A$’000
277
(15)
32. 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, Acting 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.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
145
145
Notes to the
Financial Statements
30 June 2022
32. Financial information by segments (continued)
The Group is organised into the following main business segments:
• Energy
• Resources
•
Infrastructure, Marine and Defence
The business activities include heavy engineering, shipbuilding, modularisation, SMP (structural, mechanical, piping), EIC
(electrical, instrumentation and control), precast concrete, site civil works, industrial insulation, maintenance, surface treatment,
refractory and access solutions.
Although the Operations Management receives separate reports for each project in the Energy, Resources, and Infrastructure,
Marine and Defence businesses, these have been aggregated into the respective reportable segments as they have similar long-
term average gross margins.
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)
Revenue is based on the location of customers regardless of where the services are rendered. Non-current assets are based
on the location of those assets:
Australia
Revenue
Non-current assets
2022
A$’000
809,295
2021
A$’000
674,186
2022
A$’000
466,308
2021
A$’000
416,734
Major customers
The Group has a number of customers to whom it provides both products and services. For the year ended 30 June 2022,
the Group supplies to two (2021: three, Resources) external customers in the Resources segment and one external customer in
Infrastructure, Marine and Defence segment. The major customers account for approximately 52.0% (2021: 55.1%) of external
revenue.
146
146
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
32. Financial information by segments (continued)
2022
2021
Energy
A$’000
30,192
(25,850)
Resources
A$’000
630,902
(547,421)
Infra-
structure,
Marine and
Defence
A$’000
148,201
(128,800)
Total
A$’000
809,295
(702,071)
Energy
A$’000
38,317
(32,447)
Resources
A$’000
559,781
(486,096)
Infra-
structure,
Marine and
Defence
A$’000
76,088
(66,674)
Total
A$’000
674,186
(585,217)
(929)
(12,155)
(3,303)
(16,387)
(1,581)
(8,197)
(4,153)
(13,931)
3,413
71,326
16,098
(5)
-
-
-
-
-
(37)
(127)
23
328
-
-
-
-
-
90,837
2,919
(5)
(19,839)
(213)
(4,868)
(37)
(127)
23
328
967
(2)
69,983
(19,242)
50,741
4,289
65,488
5,261
(97)
-
-
-
-
-
(1,646)
(200)
-
-
-
-
-
-
-
75,038
2,572
(97)
(18,744)
(243)
(6,481)
(1,646)
(200)
-
-
-
(2)
50,197
(15,569)
34,628
-
10
-
10
-
10
-
10
722,422
1,829
1,401
725,662
264,472
74,000
16,076
354,548
6,904
630,389
1,903
4,637
636,939
271,692
60,000
13,379
345,071
21,616
Revenue – external sales
Cost of sales (excluding
depreciation)
Depreciation expense
Segment results
Other income
Share of loss of joint venture
Unallocated costs
Administrative expenses*
Depreciation in admin expenses*
Finance costs
Trade receivables written off
Impairment loss on loan to an
associate
Write back of:
- bad debt
- impairment loss on loan to an
associate
- revaluation loss on freehold
land and buildings
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 expenditure
during the year
*Administrative expenses above exclude depreciation which is disclosed separately above.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
147
147
Notes to the
Financial Statements
30 June 2022
33. 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 2022, 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, lease 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 are potentially subject to concentration of credit risk consist are 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 2022, the Group has a concentration of credit risk on two debtors (2021: one debtor) that
individually represents 26.8% and 26.0% (2021: 49.1%) 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 30 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
Definition
i. Performing
ii. Under-performing
iii. Non-performing
iv. Write-off
Basis for
recognition and
measurement of ECL
12-month ECL
Lifetime ECL
(not credit-impaired)
The counterparty has a low risk of default
and does not have any past-due amounts.
There has been a significant increase in
credit risk since initial recognition (>60
days past due).
There is evidence indicating that the asset
is credit-impaired (>90 days past due).
Lifetime ECL
(credit-impaired)
There is evidence indicating that there is
no reasonable expectation of recovery as
the debtor is in severe financial difficulty.
Asset is written off
148
148
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
33. Financial risk management objectives and policies (continued)
(a) Credit risk
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.
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 under SFRS(I) 9 as at 30 June 2022 and 2021 are set out in the
provision matrix as follows:
Group
2022
Trade receivables
Loss allowance
2021
Trade receivables
Loss allowance
Current
A$’000
90,733
-
90,733
83,878
-
83,878
Within
60 days
A$’000
3,684
-
3,684
3,283
-
3,283
Past due
61 to
90 days
A$’000
More than
90 days
A$’000
-
-
-
18
-
18
20
(11)*
9
58
(11)*
47
Total
A$’000
94,437
(11)
94,426
87,237
(11)
87,226
* Risk profile of the corresponding receivable is assessed separately from the other trade receivables.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
149
149
Notes to the
Financial Statements
30 June 2022
33. Financial risk management objectives and policies (continued)
(a) Credit risk (continued)
Trade receivables and contract assets (continued)
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.
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.
Impact of COVID-19
Judgement has been exercised in considering the impacts that COVID-19 pandemic has had, or may have, on the Group
based on known information. This consideration extends to the nature of the products and services offered, customers, supply
chain, staffing and geographic regions in which the Group operates. Unless otherwise addressed in specific notes, it has had no
significant impact on the Group’s overall credit risk.
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.
(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 2022, approximately 28% (2021: 83%) 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% (2021: 1%) with all other variables remain constant, the Group’s profit before tax will be approximately lower/
higher by A$540,000 (2021: Nil) as a result of higher/lower interest expenses on these borrowings.
The Group and the Company has cash balances placed with reputable banks and financial institutions. Such balances are placed
on varying maturities and generate interest income for the Group and the Company.
The Group obtains additional financing through bank borrowings and leasing arrangements. Information relating to the Group’s
interest rate exposure is also disclosed in the notes on the Group’s borrowings and leasing obligations. They are both fixed and
floating rates of interest. The policy is to retain flexibility in selecting borrowings at both fixed and floating rates interest.
150
150
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
33. Financial risk management objectives and policies (continued)
(b) Interest rate risk (continued)
Group
2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Borrowings
- Corporate market loan
-Trade finance
Group
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Borrowings
- Senior secured notes
Variable rates
Fixed rates
Within
1 year
A$’000
Between
2 to 5 years
A$’000
Within
1 year
A$’000
Between
2 to 5 years
A$’000
Non-interest
bearing
A$’000
Total
A$’000
40,834
-
40,834
-
-
-
8,000
-
8,000
48,144
-
48,144
-
-
7,190
-
7,190
-
-
-
-
-
-
46,000
-
-
-
-
-
-
10,565
-
20,000
-
-
-
-
-
45,356
-
-
7
95,030
95,037
101,908
43,325
-
-
-
40,841
95,030
135,871
101,908
43,325
55,921
54,000
20,000
46,000
30,565
45,356
145,233
275,154
-
-
-
-
-
12,933
-
12,933
-
-
-
-
-
3,195
-
3,195
-
-
-
-
-
31,439
60,000
91,439
28
87,488
87,516
79,596
80,138
-
-
159,734
48,172
87,488
135,660
79,596
80,138
54,757
60,000
274,491
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
151
151
Notes to the
Financial Statements
30 June 2022
33. Financial risk management objectives and policies (continued)
(b) Interest rate risk (continued)
Company
2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Variable rates
Fixed rates
Within
1 year
A$’000
Between
2 to 5 years
A$’000
Within
1 year
A$’000
Between
2 to 5 years
A$’000
Non-interest
bearing
A$’000
Total
A$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7
34,831
34,838
192
192
28
50,481
50,509
192
192
7
34,831
34,838
192
192
28
50,481
50,509
192
192
(c) Liquidity risk
Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting its commitments concerning its
financial liabilities. The Group and the Company manages this risk through the following mechanism:
• Preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities;
• Monitoring undrawn credit facilities;
• Maintaining credit risk related to financial assets;
• Obtaining funding from a variety of sources;
• Only investing surplus cash with major financial institutions; and
• Comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may
therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect the earliest
contractual settlement dates and do not reflect management’s expectations that banking facilities will be rolled forward.
Balances due within 12 months equal their carrying amount as the impact of discounting is not significant.
152
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CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
33. Financial risk management objectives and policies (continued)
(c) Liquidity risk (continued)
The table below reflects an undiscounted contractual maturity analysis for financial liabilities (exclude contract liabilities).
Contractual undiscounted cash flows
Carrying
amount
A$’000
Within
1 year
A$’000
Between
2 to 5 years
A$’000
More than
5 years
A$’000
Total
A$’000
101,908
55,921
54,000
20,000
231,829
79,596
54,757
60,000
194,353
101,908
14,340
8,123
20,018
144,389
79,596
14,060
4,200
97,856
-
44,234
46,704
-
90,938
-
43,272
64,200
107,472
-
151,444
-
-
151,444
-
97,666
-
97,666
101,908
210,018
54,827
20,018
386,771
79,596
154,998
68,400
302,994
Contractual undiscounted cash flows
Carrying
amount
A$’000
Within
1 year
A$’000
Between
2 to 5 years
A$’000
Total
A$’000
192
192
192
192
192
192
192
192
-
-
-
-
192
192
192
192
Group
2022
Financial liabilities
Trade and other payables
Lease liabilities
Borrowings
- Corporate market loan
- Trade finance
Total financial liabilities
Group
2021
Financial liabilities
Trade and other payables
Lease liabilities
Borrowings
- Senior secured notes
Total financial liabilities
Company
2022
Financial liabilities
Trade and other payables
Total financial liabilities
Company
2021
Financial liabilities
Trade and other payables
Total financial liabilities
The Group’s undrawn borrowings facilities and guarantees are disclosed in Notes 22 and 30 to the financial statements
respectively.
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
153
153
Notes to the
Financial Statements
30 June 2022
33. Financial risk management objectives and policies (continued)
(d) Capital management
Management controls the capital of the Group in order to maintain a good debt-to-equity ratio, provide the shareholders with
adequate returns and to ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
The Group and the Company have no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure
in response to changes in these risks and in the market. These responses include the management of debt levels, distribution to
shareholders and share issues.
The net debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as total financial liabilities less
cash and cash equivalents.
Net debt
Total equity
Net debt-to-equity ratio
Group
2022
A$’000
234,313
371,114
0.63
2021
A$’000
226,319
291,868
0.78
There were no changes in the Group’s approach to capital management during the current financial year.
(e) Fair value estimation
Financial instruments
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.
Fair value hierarchy
The Group categories fair value measurement using a fair value hierarchy that is depend on the valuation inputs used as follows:
•
•
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the
measurement date;
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly; and
•
Level 3 – Unobservable inputs for the asset or liability
Fair value measurements that use inputs of different hierarchy levels are categorised in its entirety in the same level of the fair
value hierarchy as the lowest level input that is significant to the entire measurement.
154
154
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
The accompanying notes form an
integral part of the financial statements
Notes to the
Financial Statements
30 June 2022
34. 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.
35. Adoption of new and revised standards
The accounting policies adopted are consistent with those of the previous financial year except that in the current financial
year, the Group has adopted all the new and revised standards which are effective for annual financial periods beginning on or
after 1 July 2021.
• Amendments to SFRS(I) 9, SFRS(I) 1-39 and SFRS(I) 7, SFRS(I) 16 Interest rate benchmark reform – Phase 2;
• Amendments to SFRS(I) 16 Related rent concessions
The directors of the Company have assessed that the interest rate benchmark reform does not have material impact to the Group
during the current financial year.
36. New standards and interpretations not yet adopted
A number of new standards and interpretations and amendments to standards are effective for annual periods beginning on or
after 1 July 2022 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 on or after
1 July 2022:
Applicable to 2023 financial statements:
• Amendments to SFRS(I) 1-16 Property, Plant and Equipment – Proceeds before Intended Use
• Amendments to SFRS(I) 1-37 Provisions – Onerous Contracts – Cost of Fulfilling a Contract
• Amendments to SFRS(I) 3 Business Combination – Reference to the Conceptual Framework
•
Annual improvements to SFRS(I)s 2018 – 2020 SFRS(I) 9 Financial Instruments – Fees in the ‘10 per cent’ test
for derecognition
Applicable to 2024 financial statements:
• Amendments to SFRS(I) 1-1 Classification of Liabilities as Current or Non-current
•
•
Amendments to SFRS(I) 1-1 Disclosure of Accounting Policies and SFRS(I) Practice Statement 2 Making
Materiality Judgements
Amendments to SFRS(I) 1-8 Accounting Policies, Changes in Accounting Estimates and Errors -Definition of
Accounting Estimates
• Amendments to SFRS(I) 1-12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
155
155
Statistics of
Shareholders
For the Year Ended 30 June 2022
Shareholders’ Statistics and Distribution as at 16 September 2022
Class of Shares:
Ordinary Shares
Voting Rights (excluding treasury shares):
One vote per Ordinary Share
No. of issued shares:
505,132,000
No. of issued shares excluding treasury shares:
505,117,000
No. of treasury shares:
15,000
Distribution of Shareholdings
SIZE OF
SHAREHOLDINGS
NO. OF
SHAREHOLDERS
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 1,000,000
1,000,001 and Above
TOTAL
4
37
392
472
29
934
%
0.43
3.96
41.97
50.54
3.10
100.00
NO. OF
SHARES
139
28,719
2,463,067
42,969,468
459,655,607
505,117,000
Twenty Largest Shareholders as at 16 September 2022
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
NAME OF SHAREHOLDER
CHESS DEPOSITORY NOMINEES PTY LIMITED
CITIBANK NOMINEES SINGAPORE PTE LTD
DBS NOMINEES PTE LTD
CGS-CIMB SECURITIES (SINGAPORE) PTE LTD
MAYBANK SECURITIES PTE. LTD.
RAFFLES NOMINEES (PTE) LIMITED
LEE TECK LENG
FOO SIANG GUAN
GOH GEOK LING
UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED
PHILLIP SECURITIES PTE LTD
NG KEE CHOE
LAI VOON NEE
HENG KHENG LONG
HSBC (SINGAPORE) NOMINEES PTE LTD
PANG CHIN FATT
HO KONG CHEW
DB NOMINEES (SINGAPORE) PTE LTD
DIANA SNG SIEW KHIM
WONG YEW MENG
Total:
%
0.00
0.00
0.49
8.51
91.00
100.00
% OF
SHARES
47.81
9.71
9.65
6.98
4.24
1.30
1.13
0.99
0.99
0.79
0.73
0.66
0.65
0.62
0.48
0.45
0.41
0.40
0.39
0.38
NO. OF
SHARES
241,486,076
49,052,173
48,754,934
35,281,364
21,422,974
6,571,900
5,700,200
5,015,249
4,994,434
3,999,100
3,682,100
3,330,134
3,300,000
3,130,845
2,418,600
2,273,000
2,050,000
2,000,000
1,962,700
1,916,000
Note: The percentage is based on 505,117,000 shares (excluding shares held as treasury shares) as at 16 September 2022.
156
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CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
448,341,783
88.76
Statistics of
Shareholders
For the Year Ended 30 June 2022
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)
Direct Interest
No. of Shares
%
Deemed interest
%
No. of Shares
97,720,806
19.35%
97,566,806
19.32%
-
-
13,938,000
2.76%
23,812,000
4.71%
-
-
-
-
97,720,806
19.35%
97,566,806
19.32%
54,000
0.01%
97,566,806
19.32%
Note:
1.
2.
3.
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.
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.
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 2022 and to the best knowledge of the Directors, approximately
51.0% 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.
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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 Carlton Hotel Singapore,
76 Bras Basah Road, Singapore on Friday, 28 October 2022 at 10:30 a.m. to transact the following businesses:
As Ordinary Business:
1
2
3
4
To receive and adopt the Audited Financial Statements of the Company for the financial year
ended 30 June 2022 together with the Directors’ Statement and Independent Auditors’ Report
thereon.
Ordinary
Resolution 1
To approve the payment of a tax exempt (foreign sourced) Final Dividend of 2.0 Australian
cents per ordinary share for the financial year ended 30 June 2022.
To approve the payment of Directors’ fees of S$257,000 for the financial year ending
30 June 2023, to be paid quarterly in arrears. (FY2022: S$257,000)
[See Explanatory Note (i)]
Ordinary
Resolution 2
Ordinary
Resolution 3
For the purposes of ASX Listing Rule 10.17, to approve the increase in payment of non-
executive Directors’ fees of S$8,000 (i.e. aggregate of S$265,000) for the financial year ending
30 June 2023, to be paid quarterly in arrears. (FY2022: S$257,000).
Ordinary
Resolution 4
[See Explanatory Note (ii)]
Voting Exclusion: In accordance with ASX Listing Rule 14.11, the Company will disregard
any votes cast in favour of the resolution set out by or on behalf of a Director or an associate
of that person or those persons. However, this does not apply to a vote cast in favour of the
Resolution by:
(a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in
accordance with the directions given to the proxy or attorney to vote on the Resolution in
that way; or
(b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in
accordance with a direction given to the Chair to vote on the Resolution as the Chair
decides; or
(c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf
of a beneficiary provided the following conditions are met:
(i) the beneficiary provides written confirmation to the holder that the beneficiary is not
excluded from voting, and is not an associate of a person excluded from voting, on the
Resolution; and
(ii) the holder votes on the Resolution in accordance with directions given by the
beneficiary to the holder to vote in that way.
5
To re-elect the following Directors retiring pursuant to Regulation 118 of the Company’s
Constitution and for the purposes of ASX Listing Rule 14.5:
(a) Mr James Finbarr Fitzgerald
[See Explanatory Note (vi)]
(b) Mr Patrick John Tallon
[See Explanatory Note (vi)]
(c) Mr Kevin James Deery
[See Explanatory Note (vi)]
Ordinary
Resolution 5
Ordinary
Resolution 6
Ordinary
Resolution 7
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As Ordinary Business:
6
7
8
9
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, and Rule 210(5)(d)(iii)(A) of the
Listing Manual of the SGX-ST:
(a) Mr Chong Teck Sin
[See Explanatory Notes (iii) and (vi)]
(b) Mr Wong Fook Choy Sunny
[See Explanatory Notes (iv) and (vi)]
(c) Mr Douglas Owen Chester
[See Explanatory Notes (v) and (vi)]
Subject to and contingent upon Resolution 8 being passed, shareholders (excluding Directors
and the Chief Executive Officer (‘CEO’) of the Company, and their associates) to approve
Mr Chong Tek Sin’s continued appointment as an Independent Director in accordance with
Rule 210(5)(d)(iii) of the SGX-ST Listing Manual, and such Resolution shall remain in force until
the earlier of the following: (i) Mr Chong Tek Sin’s retirement or resignation; or (ii) the conclusion
of the third AGM following the passing of this Resolution in 2025.
[See Explanatory Notes (iii) and (vi)]
Voting Exclusion: For the purposes of this Resolution, the Directors and the CEO of the
Company and their respective associates (as defined in the Listing Manual of the SGX-ST):
(a) shall abstain from voting; and
(b) must not accept appointment as proxies unless specific instructions as to voting are given.
Any votes cast by such persons in contravention of the foregoing shall be disregarded for
the purposes of determining if this Resolution has been passed in accordance with Rule
210(5)(d)(iii)(B) of the Listing Manual of the SGX-ST.
Ordinary
Resolution 8
Ordinary
Resolution 9
Ordinary
Resolution 10
Ordinary
Resolution 11
Subject to and contingent upon Resolution 9 being passed, shareholders (excluding Directors
and the CEO of the Company, and their associates) to approve Mr Wong Fook Choy Sunny’s
continued appointment as an Independent Director in accordance with Rule 210(5)(d)(iii) of
the SGX-ST Listing Manual, and such Resolution shall remain in force until the earlier of the
following: (i) Mr Wong Fook Choy Sunny’s retirement or resignation; or (ii) the conclusion of the
third AGM following the passing of this Resolution in 2025.
[See Explanatory Notes (iv) and (vi)]
Ordinary
Resolution 12
Voting Exclusion: For the purposes of this Resolution, the Directors and the CEO of the
Company and their respective associates (as defined in the Listing Manual of the SGX-ST):
(a) shall abstain from voting; and
(b) must not accept appointment as proxies unless specific instructions as to voting are given.
Any votes cast by such persons in contravention of the foregoing shall be disregarded for
the purposes of determining if this Resolution has been passed in accordance with Rule
210(5)(d)(iii)(B) of the Listing Manual of the SGX-ST.
Subject to and contingent upon Resolution 10 being passed, shareholders (excluding Directors
and the CEO of the Company, and their associates) to approve Mr Douglas Owen Chester’s
continued appointment as an Independent Director in accordance with Rule 210(5)(d)(iii) of
the SGX-ST Listing Manual, and such Resolution shall remain in force until the earlier of the
following: (i) Mr Douglas Owen Chester’s retirement or resignation; or (ii) the conclusion of
the third AGM following the passing of this Resolution in 2025.
[See Explanatory Notes (v) and (vi)]
Ordinary
Resolution 13
Voting Exclusion: For the purposes of this Resolution, the Directors and the CEO of the
Company and their respective associates (as defined in the Listing Manual of the SGX-ST):
(a) shall abstain from voting; and
(b) must not accept appointment as proxies unless specific instructions as to voting are given.
Any votes cast by such persons in contravention of the foregoing shall be disregarded for
the purposes of determining if this Resolution has been passed in accordance with Rule
210(5)(d)(iii)(B) of the Listing Manual of the SGX-ST.
10
To re-appoint Messrs Moore Stephens LLP as the Auditors of the Company and to authorise
the Directors to fix their remuneration.
Ordinary
Resolution 14
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Notice of
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As Special Business:
To consider and, if thought fit, to pass with or without modifications the following resolutions, will be proposed as
Ordinary Resolutions:
11
Authority to allot and issue shares
THAT pursuant to Section 161 of the Companies Act 1967 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 15
(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 this Resolution may have ceased to be in
force) issue shares in pursuant to any Instrument made or granted by the Directors while the
Resolution 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;
Adjustments in accordance with (i), (ii) and (iii) above are only to be made in respect of new
shares arising from convertible securities, share options or share awards which were issued
and outstanding or subsisting at the time of the passing of this resolution.
(b) in exercising the authority conferred by this Resolution, the Company shall comply with
the 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) and the Constitution for the time being of the
Company; and
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 (vii)]
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As Special Business:
12
Proposed Grant of Performance Rights to Mr Kevin James Deery, a Director of the
Company, under the Civmec Key Senior Executives Performance Rights Plan
Ordinary
Resolution 16
THAT, for the purposes of ASX Listing Rule 10.14, and for all other purposes:
(a) approval be given for the grant of Performance Rights covering 417,000 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 (viii)]
Voting Exclusion: In accordance with ASX Listing Rule 14.11, the Company will disregard any
votes cast in favour of the Resolution by or on behalf any person referred to in ASX Listing
Rule 10.14.1, 10.14.2 or 10.14.3 who is eligible to participate in the employee incentive
scheme in question (including Mr Kevin James Deery) or an associate of that person or those
persons. However, this does not apply to a vote cast in favour of the Resolution by:
(a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in
accordance with the directions given to the proxy or attorney to vote on the Resolution in
that way; or
(b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in
accordance with a direction given to the Chair to vote on the Resolution as the Chair
decides; or
(c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf
of a beneficiary provided the following conditions are met:
(i) the beneficiary provides written confirmation to the holder that the beneficiary is not
excluded from voting, and is not an associate of a person excluded from voting, on the
Resolution; and
(ii) the holder votes on the Resolution in accordance with directions given by the
beneficiary to the holder to vote in that way.
13
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
6 October 2022
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Explanatory Notes:
(i)
Ordinary Resolution 3 seeks Shareholder approval for the payment of fees to directors. The Singapore Companies Act 1967
requires shareholders’ approval to approve the payment of fees to directors each year.
(ii)
Ordinary Resolution 4 seeks Shareholder approval for the purposes of ASX Listing Rule 10.17 to increase the total aggregate
amount of fees payable to non-executive Directors to S$265,000.
ASX Listing Rule 10.17 provides that an entity must not increase the total aggregate amount of directors’ fees payable to all
of its non-executive directors without the approval of holders of its ordinary securities.
Directors’ fees include all fees payable by the entity or any of its child entities to a non-executive director for acting as a
director of the entity or any of its child entities (including attending and participating in any board committee meetings),
superannuation contributions for the benefit of a non-executive director and any fees which a non-executive director agrees
to sacrifice for other benefits. It does not include reimbursement of genuine out of pocket expenses, genuine ‘special
exertion’ fees paid in accordance with an entity’s constitution, or securities issued to a non-executive director under the
ASX Listing Rules 10.11 or 10.14 with the approval of the holders of its ordinary securities.
If Ordinary Resolution 4 is passed, the maximum aggregate amount of fees payable to the non-executive Directors will
increase by S$8,000 to S$265,000. The increase to maximum aggregate amount of fees payable may enable the Company
to:
(a)
fairly remunerate both existing and any new non-executive directors joining the Board;
(b)
(c)
remunerate its non-executive Directors appropriately for the expectations placed upon them both by the Company and
the regulatory environment in which it operates; and
have the ability to attract and retain non-executive directors whose skills and qualifications are appropriate for a
company of the size and nature of the Company.
If Ordinary Resolution 4 is not passed, this may inhibit the ability of the Company to remunerate, attract and retain
appropriately skilled non-executive directors.
In the past three years, the Company has not issued any securities to non-executive Directors pursuant to ASX Listing Rules
10.11 and 10.14.
(iii)
Ordinary Resolution 8 and 11 relate to Mr Chong Teck Sin’s re-election as a Director of the Company and his continued
designation as an Independent Non-Executive Director. Mr Chong has been a Director of the Company for an aggregate
period of more than 9 years and will cease to be regarded as independent on the date of the AGM pursuant to Rule 210(5)
(d)(iii) of the Listing Manual of the SGX-ST unless Resolution 8 and Resolution 11 are both passed. The Company is seeking
at this AGM to obtain the required approval in separate resolutions by (A) all shareholders and (B) the shareholders, excluding
the directors, the CEO and their associates as required for his continued appointment as an Independent Director.
If only Resolution 8 is passed but Resolution 11 is not passed, Mr Chong shall be re-designated as a Non-Independent
Non-Executive Director, and a member of the Audit Committee and Risks and Conflicts Committee as of and from the date
of the AGM.
If Resolution 8 and Resolution 11 are both passed, Mr Chong will continue to be designated as an Independent Non-
Executive Director of the Company in accordance with Rule 210(5)(d)(iii) of the SGX-ST Listing Manual until the earlier of
(i) Mr Chong Teck Sin’s retirement or resignation; or (ii) the conclusion of the 2025 AGM. Mr Chong will, upon re-election as
Director of the Company, remain as Chairman of the Audit Committee and the Risks and Conflicts Committee and a member
of the Nominating and Remuneration Committees. Key information on Mr Chong can be found on the section ‘Board of
Directors’ of the Annual Report 2022.
(iv) Ordinary Resolution 9 and 12 relate to Mr Wong Fook Choy’s re-election as a Director of the Company and his continued
designation as an Independent Non-Executive Director. Mr Wong has been a Director of the Company for an aggregate
period of more than 9 years and will cease to be regarded as independent on the date of the AGM pursuant to Rule 210(5)
(d)(iii) of the Listing Manual of the SGX-ST unless Resolution 9 and Resolution 12 are both passed. The Company is seeking
at this AGM to obtain the required approval in separate resolutions by (A) all shareholders and (B) the shareholders, excluding
the directors, the CEO and their associates as required for his continued appointment as an Independent Director.
If only Resolution 9 is passed but Resolution 12 is not passed, Mr Wong shall be re-designated as a Non-Independent
Non-Executive Director and member of the Remuneration Committee as of and from the date of the AGM.
If Resolution 9 and Resolution 12 are both passed, Mr Wong will continue to be designated as an Independent Non-
Executive Director of the Company in accordance with Rule 210(5)(d)(iii) of the SGX-ST Listing Manual until the earlier of
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(i) Mr Wong Fook Choy’s retirement or resignation; or (ii) the conclusion of the 2025 AGM. Mr Wong will, upon re-election as
Director of the Company, remain as Chairman of the Remuneration Committee and a member of the Audit, Risks and Conflicts
and Nominating Committees. Key information on Mr Wong can be found on the section ‘Board of Directors’ of the Annual
Report 2022.
(v)
Ordinary Resolution 10 and 13 relate to Mr Douglas Owen Chester’s re-election as a Director of the Company and his
continued designation as an Independent Non-Executive Director. Mr Chester has been a Director of the Company for an
aggregate period of more than 9 years and will cease to be regarded as independent on the date of the AGM pursuant
to Rule 210(5)(d)(iii) of the Listing Manual of the SGX-ST unless Resolution 10 and Resolution 13 are both passed. The
Company is seeking at this AGM to obtain the required approval in separate resolutions by (A) all shareholders and (B)
the shareholders, excluding the directors, the CEO and their associates as required for his continued appointment as an
Independent Director.
If only Resolution 10 is passed but Resolution 13 is not passed, Mr Chester shall be re-designated as a Non-Independent
Non-Executive Director and a member of the Nominating Committee as of and from the date of the AGM.
If Resolution 10 and Resolution 13 are both passed, Mr Chester will continue to be designated as an Independent
Non-Executive Director of the Company in accordance with Rule 210(5)(d)(iii) of the SGX-ST Listing Manual until the earlier of
(i) Mr Chester’s retirement or resignation; or (ii) the conclusion of the 2025 AGM. Mr Chester, will, upon re-election as Director
of the Company, remain as Chairman of the Nominating Committee and a member of the Audit, Risks and Conflicts and
Remuneration Committees. Key information on Mr Chester can be found on the section ‘Board of Directors’ of the Annual
Report 2022.
(vi) Each of Resolutions No. 5 to 10 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.
(vii) Resolution No. 15, if passed, will empower the Directors of the Company from the date of the passing of Resolution No.
15 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.
Upon the passing of Resolution No. 15, pursuant to SGX Listing Rule 806, approval by an issuer’s shareholders under SGX
Listing Rule 805(1) is not required as the shareholders had, by ordinary resolution in a general meeting, given a general
mandate to the directors of the issuer to issue shares or convertible securities.
However, any issue of securities pursuant to Resolution No. 15 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. 15 is not a prior approval for the issue of securities pursuant to ASX Listing Rule 7.1.
(viii) Resolution No. 16 seeks shareholders’ approval for the grant of Performance Rights covering 417,000 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 Chief Operating Officer
of the Company.
ASX Listing Rule 10.14 provides that an entity must not permit any of the following persons to acquire equity securities under
an employee incentive scheme without the approval of the holders of its ordinary securities:
10.14.1
a director of the entity; or
10.14.2
an associate of a director of the entity; or
10.14.3
a person whose relationship with the entity or a person referred to in ASX Listing Rules 10.14.1 to 10.14.2 is
such that, in ASX’s opinion, the acquisition should be approved by security holders.
The issue of Performance Rights to Mr Kevin James Deery falls within ASX Listing Rule 10.14.1 and therefore requires the
approval of shareholders under ASX Listing Rule 10.14.
If Resolution No. 16 is passed, the Company will be able to proceed with the issue of the Performance Rights to Mr Kevin
James Deery under the Civmec PRP within 3 years after the date of the Meeting (or such later date as permitted by any ASX
waiver or modification of the Listing Rules). As approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the
Performance Rights (because approval is being obtained under ASX Listing Rule 10.14), the issue of the Performance Rights
will not use up any of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.
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If Resolution No. 16 is not passed, the Company will not be able to proceed with the issue of the Performance Rights to
Mr Kevin James Deery under the Civmec PRP.
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 Performance Rights will be issued to Mr Kevin James Deery, who falls within the category set out in Listing Rule
10.14.1, by virtue of being a Director.
(b) The maximum number of Performance Rights to be issued to Mr Kevin James Deery is 417,000.
(c)
(d)
The current total fixed annual remuneration package for Mr Kevin James Deery is $595,292, comprising of salary and
allowances of $570,000 and a superannuation payment of $25,292. Mr Deery is also eligible to up to $250,000 in short
term incentives if certain performance measures are met. If the Performance Rights are issued, the total remuneration
package of Mr Kevin James Deery will increase by $219,925.80 to a maximum of $1,065,217.80, being the value of the
Performance Rights (based on the Black-Scholes methodology).
The Civmec PRP was last adopted by shareholders on 29 October 2021. 2,274,000 Performance Rights have
previously been issued to Mr Kevin James Deery for nil cash consideration under the Civmec PRP. Of those
Performance Rights previously issued, 522,000 have been cancelled, 228,000 have vested and been converted to
shares and 1,524,000 remain.
(e)
The Performance Rights are unquoted performance rights. The Company has chosen to grant the Performance Rights
to Mr Kevin James Deery for the following reasons:
a. the Performance Rights are unlisted, therefore the grant of the Performance Rights has no immediate dilutionary
impact on shareholders;
b. the issue of Performance Rights to Mr Kevin James Deery will align the interests of Mr Kevin James Deery with those
of shareholders;
c. the issue of the Performance Rights is a reasonable and appropriate method to provide cost effective remuneration
as the non-cash form of this benefit will allow the Company to spend a greater proportion of its cash reserves on its
operations than it would if alternative cash forms of remuneration were given to Mr Kevin James Deery; and
d. it is not considered that there are any significant opportunity costs to the Company or benefits foregone by the
Company in granting the Performance Rights on the terms proposed.
(f) The Company values the Performance Rights at A$219,926 (being A$0.53 per Performance Right) based on the
Black-Scholes methodology using the following assumptions:
Valuation of the underlying Shares
Valuation date
Commencement of performance/vesting period
Performance measurement/vesting date
Expiry date
Term of the Performance Right
Volatility (discount)
Risk free interest rate
Gross Dividend Yield
S$0.60
01 July 2022
01 July 2022
30 June 2025
30 June 2032
3 Years
25%
2.5%
5.71%
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(g)
The issue price of the Performance Rights will be nil, as such no funds will be raised from the issue of the
Performance Rights.
(h) A summary of the material terms and conditions of the Civmec PRP is set out in the Schedule.
(i) No loan is being made to Mr Kevin James Deery in connection with the acquisition of the Performance Rights.
(j)
(k)
(l)
Details of any Performance Rights issued under the Civmec PRP will be published in the annual report of the Company
relating to the period in which they were issued, along with a statement that approval for the issue was obtained under
ASX Listing Rule 10.14.
Any additional persons covered by ASX Listing Rule 10.14 who become entitled to participate in an issue of
Performance Rights under the Civmec PRP after Resolution No. 16 is approved and who were not named in this Notice
will not participate until approval is obtained under ASX Listing Rule 10.14.
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.
(m) 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 Performance Rights will be issued on one date.
(n)
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 Kevin James Deery will vest based on the performance of Mr Kevin James
Deery over a three (3) year performance period from 1 July 2022 to 30 June 2025.
The aggregate number of Performance Rights which shall vest in favour of Mr Kevin James Deery, will be based on the
achievement of certain predetermined performance targets (which are based on absolute earnings per share (‘aEPS’))
as determined by the Remuneration Committee in accordance with the Civmec PRP. The vesting schedule is as follows:
Long Term Incentive Proportion Vesting – Number of Perfor-
mance Rights to be vested, calculated as a percentage of the
number of Performance Rights for each performance period
Absolute Earnings per Share
50%
On a pro rata basis between 50% and 100%
100%
Target – If the aEPS achieved is equal to 90% of the three-year
average annual result
Between Target and Stretch – If the aEPS achieved is more than
90% but not more than 110% of the three-year average annual
result
Stretch – If the aEPS achieved is more than 110% of three-year
average annual result
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In addition:
•
•
•
•
•
•
Upon satisfaction of the relevant vesting condition attached to a Performance Right, the Performance Right shall vest and will
convert into 1 fully paid ordinary share in the capital of the Company.
A Performance Right does not entitle a holder (in their capacity as a holder of a Performance Right) to participate in new
issues of capital offered to holders of Shares such as bonus issues and entitlement issues.
The Performance Rights are not transferable.
If at any time the issued capital of the Company is reconstructed, all rights of a holder will be changed in a manner consistent
with the applicable ASX Listing Rules at the time of reorganisation.
The Performance Rights do not confer on the holder an entitlement to vote (except as otherwise required by law) or receive
dividends.
If the vesting condition attached to the relevant Performance Right has not been satisfied within the relevant time period set
out above, the relevant Performance Rights will automatically lapse.
Notes:
i.
ii.
iii.
iv.
v.
vi.
Save for members which are nominee companies, a member of the Company shall not be entitled to appoint more than two proxies to attend and vote at the
general meeting of the Company. A proxy need not be a member of the Company.
Where a member appoints two proxies, they shall specify the proportion of their shares (expressed as a percentage of the whole) to be represented by
ach proxy.
Pursuant to Section 181 of the Companies Act 1967, 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).
A corporation which is a member may appoint an authorised representative or representatives in accordance with Section 179 of the Companies Act 1967, to
attend and vote for and on behalf of such corporation.
In the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy lodged if the member, being the appointor,
is not shown to have Shares entered against his name in the Depository Register as at seventy-two (72) hours before the time appointed for holding the AGM
(i.e. by 10:30am. on 25 October 2022), as certified by The Central Depository (Pte) Limited to the Company.
An investor who holds shares under the Supplementary Retirement Scheme (‘SRS Investor’) who wish to vote at the AGM should approach their respective
agent banks to submit their votes at least seven (7) working days before the date of the AGM (i.e. by 10:30 am. on 18 October 2022). SRS Investors are
requested to contact their respective agent banks for any queries they may have with regard to the appointment of a proxy for the AGM.
vii.
In the case of joint shareholders, all shareholders must sign the instrument appointment a proxy or proxies
viii.
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.
ix.
The instrument appointing a proxy, together with the power of attorney or other authority under which it is signed (if applicable) or a duly certified copy
thereof, must:
(a)
be deposited at the registered office of the Company at 80 Robinson Road #02-00, Singapore 068898; or
(b)
send electronic mail to agm@civmec.com.au enclosing signed PDF copy of the Proxy Form;
not less than seventy-two (72) hours before the time appointed for the AGM.
* A Relevant Intermediary is:
(a)
(b)
(c)
a banking corporation licensed under the Banking Act 1970 or a wholly-owned subsidiary of such a banking corporation, whose business includes the provision
of nominee services and who holds shares in that capacity;
a person holding a capital markets services licence to provide custodial services for securities under the Securities and Futures Act 2001 and who holds shares
in that capacity; or
the Central Provident Fund Board established by the Central Provident Fund Act 1953, in respect of shares purchased under the subsidiary legislation made
under that Act providing for the making of investments from the contributions and interest standing to the credit of members of the Central Provident Fund, if the
Central Provident Fund Board holds those shares in the capacity of an intermediary pursuant to or in accordance with that subsidiary legislation.
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RECORD DATE:
Subject to members’ approval to the proposed final dividend at the forthcoming Annual General Meeting, the Register of
Members and Share Transfer Books of Civmec Limited (the ‘Company’) will be closed on 9 December 2022, for the preparation
of dividend warrants to the proposed tax exempt (Foreign Sourced) Final dividend of A$0.02 for the financial year ended 30 June
2022 (‘Final Dividend’).
Duly completed registrable transfers in respect of the shares in the Company received up to 5:00 p.m. on 8 December 2022
(‘Record Date’) by the Company’s Singapore Share Registrar, Tricor Barbinder Share Registration Services (a division of Tricor
Singapore Pte. Ltd.), 80 Robinson Road, #02-00 Singapore 068898 will be registered to determine Members’ entitlements to the
Final Dividend. Members whose Securities Accounts with The Central Depository (Pte) Limited are credited with shares in
the Company as at 5:00 p.m. on the Record Date will be entitled to the Final Dividend.
The Proposed Final Dividend, if approved at the forthcoming Annual General Meeting, will be paid on 19 December 2022.
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.
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SCHEDULE – SUMMARY OF CIVMEC PRP:
The key terms of the Civmec PRP are as follows:
(a) Eligibility
Key Senior Executives (including Controlling Shareholders and Associates of such Controlling Shareholders, each as defined
in the Listing Manual) who have attained the age of 21 years and hold such rank as may be designated by the Committee
from time to time, will be eligible to participate in the Civmec PRP.
Subject to the absolute discretion of the 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.
Non-Executive Directors shall not be eligible to participate in the Civmec PRP.
(b) Performance Rights
Performance Rights represent the right of a Participant to receive fully paid Shares free of charge, provided that certain
prescribed performance targets are met and/or after expiry of the prescribed vesting period(s) (where applicable), in
accordance with the rules of the Civmec PRP.
A Performance Right shall be personal to the Participant to whom it is granted and, prior to the delivery to the Participant of
the Award Shares, shall not be transferred, charged, assigned, pledged or otherwise disposed of, in whole or in part, except
with the prior approval of the Committee.
(c) Participants
The selection of a Participant and the number of Award Shares to be granted to a Participant in accordance with the Civmec
PRP shall be determined at the discretion of the Committee, which may take into account such criteria as it considers fit,
including (but not limited to) his rank, job performance, creativity, innovativeness, entrepreneurship, resourcefulness, years of
service and potential for future development, his contribution to the success and development of the Group and the degree
of difficulty of fulfilling the performance condition(s) within the performance period.
(d) Details of Performance Rights
The Committee shall decide, in relation to each Performance Right to be granted to a Participant:
(i)
the Award Date;
(ii)
the performance condition(s) and relevant performance period;
(iii)
the number of Performance Rights which shall vest on the performance condition(s) being satisfied (whether fully or
partially) or exceeded or not being satisfied, as the case may be, at the end of the performance period;
(iv)
the vesting date(s);
(v)
the vesting period(s), if any; and
(vi) whether:
(1) the Award Shares shall be delivered within the prescribed automatic timeline stipulated in the Civmec PRP; or
(2) the Participant has the ability to elect to choose a deferred timeline whereby the Company shall deliver the Award
Shares to the Participant, subject to the following:
(a) such election must be made by the Participant and notified to the Company prior to expiration of the Relevant
Period; and
(b) in the event that no election is made by the Participant in respect of a vested Performance Right prior to the
expiration of the Relevant Period, the Company shall deliver the aggregate number of Award Shares underlying the
aggregate corresponding number of vested Performance Rights within [14] calendar days from the expiration of
the Relevant Period;
(vii)
the time and circumstances when Performance Rights lapse, provided that once vested, the Performance Rights shall
not lapse; and
(viii) any other condition which the Committee may determine in relation to that Performance Right.
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(e) Timing
The Committee may grant Performance Rights at any time during the period when the Civmec PRP is in force. An Award
Letter confirming the Performance Right and specifying, inter alia, the Award Date, the number of Award Shares, the
prescribed performance condition(s), the performance period during which the prescribed performance condition(s) is/
are to be attained or fulfilled, the extent to which the Award Shares will vest on satisfaction of the prescribed performance
condition(s), the vesting date(s) and the vesting period(s) (if any) will be sent to each Participant as soon as is reasonably
practicable after the grant of a Performance Right.
(f) Events Prior to Vesting
Special provisions for the vesting and lapsing of Performance Rights apply in certain circumstances including the following:
(i)
(ii)
the Participant ceasing to be in the employment of the Group for any reason whatsoever (other than as specified in
paragraphs (vi), (vii) and (viii) below);
the bankruptcy of a Participant or the happening of any other event which results in his being deprived of the legal or
beneficial ownership of the Performance Right;
(iii)
the misconduct on the part of a Participant as determined by the Committee in its discretion;
(iv)
an order being made or a resolution passed for the winding-up of the Company on the basis, or by reason,
of its insolvency;
(v) any breach of the rules of the Civmec PRP by the Participant;
(vi)
the retirement of the Participant;
(vii)
the Participant ceasing to be in the employment of the Group by reason of retirement, or ill health, injury or disability
(in each case, evidenced to the satisfaction of the Committee) or death, or redundancy, or any other reason approved in
writing by the Committee; or
(viii) the Participant ceasing to be in the employment of the Group by reason of:
(1) the company by which he is employed ceasing to be a company within the Group or the undertaking or part of the
undertaking of such company being transferred otherwise than to another company within the Group;
(2) (where applicable) the Participant’s transfer of employment between members of the Group; or
(3) any other event approved by the Committee.
Upon the occurrence of any of the events specified in paragraphs (i), (ii), (iii), (iv) and (v) above, a Performance Right then held
by a Participant shall, as provided in the rules of the Civmec PRP and to the extent not yet vested, lapse without any claim
whatsoever against the Company.
Upon the occurrence of any of the events specified in paragraphs (vi), (vii) and (viii) above, the Committee may, in its
discretion, determine whether a Performance Right then held by such Participant, to the extent not yet vested, shall lapse
or that all or any part of such Performance Right shall be vested. If the Committee determines that a Performance Right (to
the extent not yet vested) shall lapse, then such Performance Right shall lapse without any claim whatsoever against the
Company. If the Committee determines that a certain number of, or all Performance Rights shall be vested, the aggregate
number of Award Shares underlying that aggregate number of vested Performance Rights shall be delivered to the
Participant within the prescribed automatic timeline stipulated in the Civmec PRP.
In exercising its discretion, the Committee will have regard to all circumstances on a case-by-case basis, including (but not
limited to) the contributions made by that Participant and the extent to which the prescribed performance condition(s) has/
have been satisfied.
(g) Size and Duration
The total number of Award Shares which may be delivered pursuant to Performance Rights granted under the Civmec PRP
on any date, when added to:
(i)
(ii)
the total number of new Shares allotted and issued and/or to be allotted and issued and issued Shares delivered and/or
to be delivered, pursuant to Performance Rights granted under the Civmec PRP; and
the number of new Shares allotted and issued and/or to be allotted and issued and issued Shares delivered and/or to
be delivered, in respect of any other options or grants under share option schemes or share schemes adopted by the
Company for the time being in force, as the case may be,
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shall not exceed 15% of the total number of issued Shares (excluding treasury shares and subsidiary holdings) (or such
other limit as may be prescribed by the SGX-ST) of the Company on the date preceding the date of grant of the relevant
Performance Right.
The maximum limit of 15% will provide for sufficient Shares to support the use of Performance Rights in the Company’s
overall long-term incentive and compensation strategy. In addition, it will provide the Company with the means and flexibility
to grant Performance Rights as incentive tools in a meaningful and effective manner to encourage staff retention and to align
Participants’ interests more closely with those of Shareholders.
Furthermore, the aggregate number of Award Shares available to Controlling Shareholders and their Associates shall not
exceed 25% of all Award Shares available under the Civmec PRP, and the number of Award Shares available to each
Controlling Shareholder or his Associate shall not exceed 10% of all Awards Shares available under the Civmec PRP.
The Civmec PRP shall continue in force at the absolute discretion of the Committee, subject to a maximum of 10 years
commencing from the date it is adopted by the Company in general meeting, provided always that the Civmec PRP may
continue beyond this stipulated period with the approval of Shareholders in general meeting and relevant authorities which
may then be required.
Notwithstanding the expiry or termination of the Civmec PRP, any Performance Rights granted to Participants prior to such
expiry or termination, whether such Performance Rights have been vested (whether fully or partially) or not, will continue to
remain valid.
(h) Operation
Subject to the prevailing legislation and the Listing Manual, the Company will have the flexibility to deliver Award Shares to
Participants by way of:
(a) an issue of new Shares; and/or
(b)
the delivery of existing Shares (including treasury shares).
New Shares allotted and issued, and existing Shares procured by the Company for transfer, pursuant to the vesting of a
Performance Right, shall rank in full for all entitlements, including dividends or other distributions declared or recommended
in respect of the then existing Shares, the record date for which is on or after the relevant vesting date, and shall in all other
respects rank pari passu with other existing Shares then in issue.
The Committee shall have the discretion to determine whether the performance condition has been satisfied (whether fully
or partially) or exceeded and in making any such determination, the Committee may make reference to the audited results
of the Company or the Group (as the case may be), taking into account such factors as the Committee may determine to
be relevant, such as changes in accounting methods, taxes and extraordinary events, and further, the Committee shall have
the right to amend the performance condition if the Committee decides that a changed performance target would be a fairer
measure of performance from the Company’s perspective.
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In this Schedule, the following definitions apply unless otherwise stated:
Associate:
Award Date:
Award Letter:
Associate shall bear the same meaning as set out in the Listing Manual.
The date on which the Performance Right is granted pursuant to the Civmec PRP.
A letter in such form as the Committee shall approve confirming a Performance Right granted to
a Participant.
Award Shares:
Means a fully paid Ordinary Share in the capital of the Company.
Board:
CDP:
The board of Directors of the Company from time to time.
The Central Depository (Pte) Limited.
Companies Act:
The Companies Act 1967.
Controlling Shareholder: A person who:
(a) holds directly or indirectly 15% or more of the total number of issued Shares (excluding treasury
shares and subsidiary holdings) in the Company. The SGX-ST may determine that a person
who satisfies the aforesaid is not a Controlling Shareholder; or
(b) in fact exercises control over the Company.
The Civmec Key Senior Executives Performance Rights Plan.
A committee comprising Directors duly authorised and appointed by the Board of Directors to
administer the Civmec PRP.
Civmec PRP:
Committee:
Directors:
The directors of the Company for the time being.
Executive Director:
A Director who performs an executive function.
Group:
The Company and its subsidiaries.
Key Senior Executive:
Means:
(a) the Executive Chairman;
(b) the Chief Executive Officer (‘CEO’);
(c) Executives who report directly to the CEO; and
(d) selected other individuals, being employees of any member of the Group holding the rank of
senior manager (or such other equivalent rank which may from time to time be determined by
the Committee) and above, who do not fall within the ambit of paragraphs (a) to (c) above, who
have been selected to participate in the Civmec PRP.
Listing Manual:
The listing manual of the SGX-ST.
Non-Executive Director:
A Director, other than an Executive Director, and ‘Non-Executive Directors’ shall be
construed accordingly.
Participant:
A Key Senior Executive who has been granted a Performance Right or Performance Rights
Performance Right:
A right to one Share granted under, and which shall be subject to the satisfaction of performance
conditions in accordance with, the rules of the Civmec PRP and ‘Performance Rights’ shall be
construed accordingly.
Relevant Period:
In relation to a Performance Right, a period of ten (10) years from the Award Date.
Shareholders:
Registered holders of Shares except that where the registered holder is CDP, the term
‘Shareholders’ shall, in relation to such Shares and where the context admits, mean the Depositors
whose securities accounts are credited with Shares.
Shares:
Issued ordinary shares of the Company.
Subsidiary holdings:
Shares referred to in Sections 21(4), 21(4B), 21(6A) and 21(6C) of the Companies Act.
% or per cent:
Per centum or percentage.
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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
28 October 2022 (‘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:
James
Finbarr
Fitzgerald
Patrick
John
Tallon
Kevin
James
Deery
Chong
Teck
Sin
Wong
Fook Choy
Sunny
Douglas
Owen
Chester
Date of Appointment
Date of last
re-appointment
Age
27 March
2012
27 March
2012
27 March
2012
27 March
2012
29 October
2021
29 October
2021
29 October
2021
29 October
2021
27 March
2012
29 October
2021
2 November
2012
29 October
2021
58
52
51
67
66
70
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 70 to 73).
Refer to overview of Board of Directors included in this Annual Report
(pages 52 and 53).
Job Title (e.g. Lead ID, AC
Chairman, AC Member etc.)
Executive
Chairman
Chief
Executive
Officer
Chief
Operating
Officer /
acting Chief
Financial
Officer
Lead Independent
Director
Independent
Director
Independent
Director
• Audit Committee
Chairman
• Nominating
Committee Member
• Remuneration
Committee Member
Risks and Conflicts
Committee Chairman
• Audit Committee
Member
• Nominating
Committee Member
• Remuneration
Committee Chairman
• Risks and Conflicts
Committee Member
• Audit Committee
Member
• Nominating
Committee Chairman
• Remuneration
Committee Member
Risks and Conflicts
Committee Member
Professional qualifications
Refer to overview of Board of Directors included in this Annual Report (pages 52 and 53).
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
Conflict of Interest (including
any competing business)
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
Refer to overview of Board of Directors included in this Annual Report (pages 52 and 53).
97,720,806
97,620,806
14,118,250
Nil
None
None
None
None
None
None
None
None
Yes
Yes
Yes
Yes
Nil
None
None
Yes
70,000
None
None
Yes
Refer to Report on Corporate Governance (Board Membership) included in this Annual Report
(pages 70 to 73).
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Disclosure of Information on
Directors Seeking Re-Election
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.
a) Whether at any time during the last 10 years, an
No
No
No
No
No
No
James
Finbarr
Fitzgerald
Patrick
John
Tallon
Kevin
James
Deery
Chong
Teck
Sin
Wong
Fook Choy
Sunny
Douglas
Owen
Chester
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
No
No
No
No
No
No
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?
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 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?
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
No
No
No
No
No
No
i) Whether he has ever been the subject of any order,
No
No
No
No
No
No
judgment or ruling of any court, tribunal or governmental
body, permanently or temporarily enjoining him from
engaging in any type of business
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Disclosure of Information on
Directors Seeking Re-Election
j) Whether he has ever, to his knowledge, been concerned
No
No
No
No
No
No
James
Finbarr
Fitzgerald
Patrick
John
Tallon
Kevin
James
Deery
Chong
Teck
Sin
Wong
Fook Choy
Sunny
Douglas
Owen
Chester
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 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
No
No
No
No
No
No
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).
174
174
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
Corporate
Registry
30 June 2022
Board of Directors
Mr James Finbarr Fitzgerald
(Executive Chairman)
Mr Patrick John Tallon
(Chief Executive Officer)
Mr Kevin James Deery
(Chief Operating Officer)
Mr Chong Teck Sin
(Lead Independent Director)
Mr Wong Fook Choy Sunny
(Independent Director)
Mr Douglas Owen Chester
(Independent Director)
Audit Committee
Mr Chong Teck Sin
(Chairman)
Mr Douglas Owen Chester
Mr Wong Fook Choy Sunny
Remuneration Committee
Mr Wong Fook Choy Sunny
(Chairman)
Mr Douglas Owen Chester
Mr Chong Teck Sin
Nominating Committee
Mr Douglas Owen Chester
(Chairman)
Mr Wong Fook Choy Sunny
Mr Chong Teck Sin
Risks & Conflicts Committee
Mr Chong Teck Sin
(Chairman)
Mr Douglas Owen Chester
Mr Wong Fook Choy Sunny
Company Secretaries
Ms Chan Lai Yin
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
Auditor
Moore Stephens LLP
10 Anson Road, #29-15 International Plaza
Singapore 079903
Partner in Charge: Christopher Bruce
Johnson
(Appointed since the financial year ended
30 June 2021)
Principal Banker
National Australia Bank
Level 14
100 St Georges Terrace
Perth WA 6000
Australia
Corporate Website
http://www.civmec.com.au
CIVMEC ANNUAL REPORT 2022
CIVMEC ANNUAL REPORT 2022
175
175
Proxy Form
2022 Annual General Meeting
Company Registration No. 201011837H
(Incorporated in the Republic of Singapore)
CIVMEC LIMITED
Company Registration No. 201011837H
(Incorporated in the Republic of Singapore)
Proxy Form
2022 Annual General Meeting
IMPORTANT:
1.
2.
Relevant intermediaries (as defined in Section 181 of the Companies Act 1967) may appoint more than two proxies to attend, speak and vote at
the Annual General Meeting.
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 6 October 2022.
*I/We (name):
NRIC/Passport No./Co. Registration No.:
of (Address):
being *a member/members of Civmec Limited (the ‘Company’), hereby appoint
Name
Address:
and/or:
Name
Address:
NRIC/Passport No.
Proportion of Shareholdings to be
represented by proxy
No. of Shares
%
NRIC/Passport No.
Proportion of Shareholdings to be
represented by proxy
No. of Shares
%
or failing him/her, the Chairman (the ‘Chair’) 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 Carlton Hotel Singapore, 76 Bras Basah Road, Singapore on Friday, 28 October 2022 at 10:30 a.m. and at any
adjournment thereof.
Proxy Form
2022 Annual General Meeting
CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES WHERE THE CHAIR
IS APPOINTED AS THE PROXY
The Chair intends to vote undirected proxies where the Chair has been appointed as the proxy 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.
For#
Against# Abstain#
Voting will be conducted by poll.
*Please delete accordingly
No. Ordinary Resolutions
1.
2.
3.
4.
5.
6.
7.
8.
9.
Adoption of the Audited Financial Statements of the Company for the financial year ended
30 June 2022 together with the Directors’ Statement and Independent Auditors’ Report thereon.
Approval of payment of a tax exempt (foreign sourced) Final Dividend of 2.0 Australian cents per
ordinary share for the financial year ended 30 June 2022.
Approval of the payment of Directors’ fees of S$257,000 for the financial year ending 30 June
2023 to be paid quarterly in arrears.
For the purposes of ASX Listing Rule 10.17, to approve the increase in payment of non-executive
Directors’ fees of S$8,000 (i.e. aggregate of S$265,000) for the financial year ending 30 June
2023, 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.
10. Re-election of Mr Douglas Owen Chester as a Director of the Company.
11.
12.
13.
Approval of Mr Chong Teck Sin’s continued appointment as an Independent Non-Executive
Director by shareholders (excluding Directors, Chief Executive Officer and their associates).
Approval of Mr Wong Fook Choy Sunny’s continued appointment as an Independent
Non-Executive Director by shareholders (excluding Directors, Chief Executive Officer and their
associates).
Approval of Mr Douglas Owen Chester’s continued appointment as an Independent
Non-Executive Director by shareholders (excluding Directors, Chief Executive Officer and
their associates).
14. Re-appointment of Messrs Moore Stephens LLP as the Auditor.
15.
Authority to allot and issue shares.
16. Grant of Performance Rights to Mr Kevin James Deery, a Director of the Company, under the
Civmec Key Senior Executives Performance Rights Plan.
Dated this
day of October 2022
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 poll and your votes will not be counted in
computing the required majority on a poll.
Proxy Form
2022 Annual General Meeting
IMPORTANT. PLEASE READ NOTES BELOW.
Notes :
a.
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.
b.
c.
d.
e.
f.
g.
h.
i.
Save for members which are nominee companies, a member of the Company shall not be entitled to appoint more than two proxies
to attend and vote at the general meeting of the Company. A proxy need not be a member of the Company.
Where a member appoints two proxies, they shall specify the proportion of their shares (expressed as a percentage of the whole) to
be represented by each proxy.
Pursuant to Section 181 of the Companies Act 1967, 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).
A corporation which is a member may appoint an authorised representative or representatives in accordance with Section 179 of the
Companies Act 1967, to attend and vote for and on behalf of such corporation.
In the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy lodged if the
member, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at seventy-two (72)
hours before the time appointed for holding the AGM (i.e. by 10:30am. on 25 October 2022), as certified by The Central Depository
(Pte) Limited to the Company.
An investor who holds shares under the Supplementary Retirement Scheme (‘SRS Investor’) who wish to vote at the AGM should
approach their respective agent banks to submit their votes at least seven (7) working days before the date of the AGM (i.e. by 10:30
am. on 18 October 2022). SRS Investors are requested to contact their respective agent banks for any queries they may have with
regard to the appointment of a proxy for the AGM.
In the case of joint shareholders, all shareholders must sign the instrument appointment a proxy or proxies
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.
j.
The instrument appointing a proxy, together with the power of attorney or other authority under which it is signed (if applicable) or a
duly certified copy thereof, must:
(a) be deposited at the registered office of the Company at 80 Robinson Road #02-00, Singapore 068898; or
(b) send electronic mail to agm@civmec.com.au enclosing signed PDF copy of the Proxy Form;
not less than seventy-two (72) hours before the time appointed for the AGM.
k.
By submitting an instrument appointing a proxy or proxies and/or representative(s) to attend, speak and vote at the Annual General
Meeting and/or any adjournment thereof, the member accepts and agrees to the personal data privacy terms set out in the Notice of
Annual General Meeting dated 6 October 2022.
civmec.com.au