Annual Report
2014
EVZ Limited and Controlled Entities
ABN 87 010 550 357
EVZ Limited and Controlled Entities Annual Report 2014
CONTENTS
CORPORATE DIRECTORY
CHAIRMAN’S REPORT
CEO’S REPORT
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO AND FORMING PART OF THE ACCOUNTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
ADDITIONAL SHAREHOLDER INFORMATION
3
4
5
7
16
24
26
27
28
29
30
31
65
66
68
EVZ LIMITED Annual Report FY14 l 1
2 l EVZ LIMITED Annual Report FY14
Corporate Directory
DIRECTORS
Max Findlay (Non-Executive Chairman)
Graham Burns (Non-Executive Director)
Rob Edgley (Non-Executive Director)
Raelene Murphy (Non-Executive Director)
M Findlay, Chairman G Burns R Edgley R Murphy
CHIEF EXECUTIVE OFFICER
Scott Farthing
S Farthing
CHIEF FINANCIAL OFFICER and
COMPANY SECRETARY
Ian Wallace
REGISTERED & PRINCIPAL OFFICE
15 Clifford Street
HUNTINGDALE VIC 3166
Telephone: (03) 9545 5288
Facsimile: (03) 9558 9944
Email: corporate@evz.com.au
SHARE REGISTRY
Computershare Investor Services Pty Ltd
452 Johnston Street,
ABBOTSFORD. VIC. 3067
Telephone: 1300 137 328
Facsimile: 1300 137 341
AUDITORS
Crowe Horwath Melbourne
Level 3
799 Springvale Road
MULGRAVE VIC 3170
BANKERS
Commonwealth Bank of Australia
STOCK EXCHANGE LISTING
Australian Securities Exchange Limited
(Home Exchange – Melbourne)
ASX Code: EVZ
EVZ LIMITED Annual Report FY14 l 3
Chairman’s Report
The progress made by the EVZ Group in the financial year to 30 June 2014 is yet to be reflected in
profit performance and Scott Farthing, in his CEO Report, will provide greater details as to this
progress.
During FY14 a substantial restructure and turnaround in the fortunes of the Brockman Engineering
business commenced which included new management, a restructure of the workforce, targeted
expansion of its offering both geographically and customer-based, and capital expenditure in new
equipment to enhance productivity.
This restructure gained momentum in the second half of the financial year with Brockman winning
a number of projects, which played out in the last quarter of the financial year and into the new
financial year.
Pleasingly Brockman continues to win work, has a strong current forward order book and is
competitive in the marketplace. This is expected to underpin its improved budget expectations for
FY15 and beyond.
Our Syfonic roof drainage business, Syfon Systems, both in Australia and Asia, continues to be an
industry leader and has expanded into roof refurbishment (including associated drainage). Profit
performance for this group was in line with budget expectations and it also enters the new financial
year with record forward work-in-hand which provides visibility on its expected FY15 performance.
During FY14 the TSF Engineering business continued the rollout of the Melbourne Airport Tri-generation
project and the project is nearing completion with commissioning now commencing. From TSF’s
perspective, the project is being delivered as per forecast.
Unfortunately the current higher gas prices and the government’s inaction with respect to formulating
a policy on a national clean energy strategy has seen TSF’s clean energy offering stall. Potential
customers for TSF’s Tri-generation offering are reluctant to invest in this capital expenditure until
government policy is set and there is more certainty around gas prices.
This current lack of energy projects has resulted in your Directors reassessing the carrying values and
subsequent impairment of a number of assets in the TSF business. During FY14 a book loss of $4.6m
in TSF resulting from impairment impacted on the Group’s overall result.
Substantial progress has been made in the TSF Maintenance business during the financial year and
there is an ongoing focus to further expand this recurring revenue operation.
The Directors and management continue with the debt reduction strategy and various alternatives
towards achieving an appropriate debt reduction level are being considered. To this end the
Commonwealth Bank of Australia has been extremely supportive of the strategy and has extended
the Group’s banking facilities until 31 October 2015 to allow the Group to pursue various opportunities
to maximise shareholder value. Directors will continue to keep shareholders abreast of developments.
The EVZ Group enters FY15 with considerable forward work-in-hand which is expected to result in a
turnaround in the Group’s profit performance. I wish to thank our shareholders for their constant
support of EVZ Limited and my fellow Directors, management and our employees for their ongoing
efforts and hard work.
Max Findlay
Chairman
4 l EVZ LIMITED Annual Report FY14
CEO’s Report
The 2013/14 financial year was a period of change. A combination of tough operating conditions in
the construction industry combined with rising gas prices and manufacturer closures in the Geelong
precinct created the scenery for embarking on structural change within EVZ. In response to these
factors we embarked upon a repositioning of the Brockman business and replanned our approach
to the clean energy industry through TSF Engineering. In contrast Syfon Systems continued to
deliver record growth and profit performance in Australia and Asia.
The EVZ Group continued to focus on our core value of safety and achieved a record safety
performance across the group. Our Lost Time Injury Frequency Rate (LTIFR) is now 1.08, an 89%
improvement over previous years, the group’s best ever result. This is an outstanding outcome and
was generated through a higher level of engagement with our staff on safe working practices.
The EVZ Group continues to assess the most appropriate manner in which to reduce our long-term
debt; several strategies remain active for resolution in the current financial year.
Brockman Engineering
Brockman Engineering has undergone a transformational restructure to create a revitalised high
quality provider of bulk storage tanks and pipework serving blue chip clients in the oil, gas and water
sectors across Australia. The new management team have improved productivity and safety by
investing in new technology automated welding equipment, stronger and safer work platforms and
profitable project management techniques.
The business is now delivering a wide range of recently secured projects in all regions of Australia
and, in taking advantage of the changing landscape of the oil industry supply chain, has steadily
increased contracted work in hand that will support a profitable financial year ahead.
Syfon Systems
Syfon Systems maintained market leadership in Australia and continues a high rate of growth in Asia.
The Syfon group concluded the financial year with record contracted work in hand, beyond $20M,
equally balanced across Asia and Australia. In support of maintaining the market leadership, Syfon
has invested in new pipe welding gear and safer and more efficient pipe lifting techniques. New
drainage inlet products launched in late-2013 have been well received by building designers and
specifiers and are now featuring on many of our larger institutional and high rise residential projects.
Syfon Asia’s continued growth through geographic expansion into regions neighbouring our base in
Malaysia has provided new opportunities for further profitable growth as economic growth progresses
in the region.
TSF Engineering & Maintenance
TSF continues to deliver the landmark trigeneration energy centre at Melbourne Airport; this plant is
currently the largest trigeneration system under development in Australia and will provide the airport
with a clean energy future establishing a new paradigm for modern airports. The project is
progressing to budget and schedule.
The wider clean energy market is progressively tightening as the impact of a higher gas prices and
government climate change policy uncertainty slow procurement of new energy solutions. In support
of regionally located food manufacturing, TSF have developed technology partnerships in organic and
anaerobic gas production technologies that provide low cost gas energy solutions for food industry
manufacturers by re-use of waste streams.
TSF Maintenance recorded 30% growth in the financial period through expanding the recurrent
contract base and providing value added solutions to existing customers. Further investment to
expand our recurrent income base in Queensland, Victoria and Western Australia will complement the
NSW position.
On behalf of the Directors and General Managers, I thank all stakeholders in EVZ Limited for their
loyalty and support as we transform the business to a new future.
Scott Farthing
Chief Executive Officer
EVZ LIMITED Annual Report FY14 l 5
6 l EVZ LIMITED Annual Report FY14
Directors’ Report
The Directors present their report on the financial statements of the Company and economic entity
for the year ended 30 June 2014. In order to comply with the provisions of the Corporations Act,
the Directors report as follows:
DIRECTORS
The following persons were Directors of the Company during the financial year and up to the date
of this report:
Maxwell FINDLAY
Graham BURNS
Robert EDGLEY
Raelene MURPHY
INFORMATION ON DIRECTORS
Details of the Directors of the Company in office at the date of this report are:
Maxwell Findlay
Appointed 14 May 2008 – Non-Executive Chairman.
Mr Findlay, age 69, was the Managing Director of Programmed Maintenance Services Limited from
1988 to 2008 and accumulated significant and relevant experience in the strategy, planning,
management and marketing of a growing industrial organisation.
Mr Findlay holds a Bachelor’s degree in Economics and is a Fellow of the Australian Institute of
Company Directors.
Mr Findlay is a member of the Audit Committee, Nomination Committee and Remuneration
Committee.
Mr Findlay is also a non-executive Director of Skilled Group Ltd, an ASX listed company.
Interest in Shares: 1,644,500 ordinary shares.
Graham Burns
Appointed 1 February 2008 – Non-Executive Director.
Mr Burns, age 59, has extensive managerial skills and experience in the property, retail and
manufacturing sectors. He is currently the Chief Executive of Hunter Land which is a significant
industrial developer in regional New South Wales.
Mr Burns is Chairman of the Remuneration Committee and a member of the Nomination
Committee.
Interest in Shares: 10,000,000 ordinary shares.
Robert Edgley
Appointed 26 August 2011 – Non-Executive Director.
Mr Edgley, age 49, holds a Bachelor’s degree in Economics from Monash University together with
a second degree in Japanese language. Mr Edgley’s career has been predominantly focused in
International Finance and Investment Banking in Australia, the UK and throughout Asia.
Mr Edgley has significant experience and skills in strategic planning, performance management
and marketing and has proven abilities in building businesses.
Mr Edgley is a member of the Audit, Remuneration and Nomination Committees.
Mr Edgley is also a non-executive Director of Praemium Limited, an ASX listed company.
Interest in Shares: 3,741,232 ordinary shares.
EVZ LIMITED Annual Report FY14 l 7
Directors’ Report
Raelene Murphy
Appointed 28 September 2012 – Non-Executive Director.
Ms Murphy, age 54, acted as the Interim CEO for EVZ from 10 February 2012 until the
commencement of Scott Farthing as Group CEO on 24 September 2012.
Ms Murphy specialises in the provision of management capability for operational, strategic and
financial advice. Her background is in managing diverse groups and financial and operational
performance improvement across a number of industry sectors, including building and
construction and in the private and public arena.
Ms Murphy has been appointed Chairperson of the Audit Committee and is a member of the
Nomination Committee.
Interest in Shares: 42,500 ordinary shares.
DIRECTORS’ MEETINGS
The following table sets out the number of Directors’ Meetings (including meetings of any committee
of Directors) held during the financial year and the number of meetings attended by each Director
(whilst they were a Director or Committee member):
DIRECTORS’ MEETINGS
Total number of meetings held:
M Findlay – Chairman
G Burns
R Edgley
R Murphy
No. Attended
14
13
14
13
14
No. Held Whilst a Director
14
14
14
14
REMUNERATION COMMITTEE MEETINGS
Total number of meetings held:
G Burns – Chairman
M Findlay
R Edgley
No. Attended
2
2
2
2
No. Held Whilst a Member
2
2
2
AUDIT COMMITTEE MEETINGS
Total number of meetings held:
R Murphy – Chairperson
M Findlay
R Edgley
No. Attended
2
2
2
2
No. Held Whilst a Member
2
2
2
There were no meetings of the Nomination Committee held during the year.
8 l EVZ LIMITED Annual Report FY14
Directors’ Report
COMPANY SECRETARY
The Company Secretary is Ian Wallace. Mr Wallace is a Bachelor of Economics (Hons), and a
Chartered Accountant with accounting and company secretarial experience in listed and unlisted
companies.
PRINCIPAL ACTIVITIES
The economic entity operates in the energy and engineering services sectors and its principal
activities are:
• Design, installation and maintenance of clean energy solutions, base and back-up power
generation equipment, communications equipment, marine installations and provision of mobile
generation capabilities.
• Design and installation of syfonic roof drainage systems to major buildings including airports,
shopping centres and sporting venues throughout Australia and South East Asia.
• Design, manufacture, service and maintenance of large steel tanks for use in the water,
petrochemical and chemical industries.
• Design, construction, on-site installation, maintenance and shutdown engineering services to the
mining, wood chip, petrochemical, aluminium, glass, cement, defence and agriculture industries.
OPERATING RESULTS
The net loss for the economic entity for the year after income tax expense was $6,211,495 compared
to a net profit after income tax expense in 2013 of $889,768. The current year net loss includes
impairments taken of $4,630,602.
EVZ Ltd was successful in extending its current banking facilities with the Commonwealth Bank of
Australia until 1 October 2015. This extension will allow the Group to continue with its debt reduction
strategy and pursue a number of opportunities to their full extent.
Whilst FY2014 was a difficult year for the EVZ Group, a number of important hurdles were overcome
which will form the platform for the Group for FY15 and beyond.
The annual EBIT loss was $1,125k (EBIT loss of $780k for the six months to 31 December 2013)
driven by difficult trading conditions in the Geelong Region and high uncertainty in government
policy in relation to carbon tax, energy strategy and gas pricing, which specifically impacted on
the rollout of our clean energy strategy. The second half performance was achieved by better
performances across all businesses in the Group.
The turnaround in the Brockman Engineering business gained momentum in the second half of
the year following significant management change, targeted geographic expansion and a restructure
of the workforce to underpin profitability going forward. The investment in business development
has recently been successful in securing a number of new projects. The total value of these
contracts is estimated to be in excess of $10m, which is expected to contribute to revenue and
profit during FY15. In addition, the restructure and marketing of the capabilities of this business is
yielding significant contract opportunities in the nationwide storage tank industry. A targeted and
modest investment in new equipment in the first quarter of FY15 will also enable significant
productivity improvements going forward.
The Syfon business continues to resist difficult trading conditions and has performed to budget
expectations for FY14. In addition to its FY14 EBIT result, Syfon enters FY15 with record contracted
work-in-hand both in Australia and Asia. This record level of contracts will strongly contribute revenue
and profit during the financial year to 30 June 2015. Strategic expansion into Asian markets and
holding a dominant position in the Australian market provide a firm base for further growth.
EVZ LIMITED Annual Report FY14 l 9
Directors’ Report
The TSF businesses returned to a positive EBIT for FY14, supported by a strong contribution from
its maintenance operation and the rollout of the Melbourne Airport Trigeneration project. This project
being delivered by TSF Engineering is progressing to schedule and budget, recently achieving the
milestone of all significant plant and equipment having been delivered and installed. Commissioning
on the project is expected to commence in the second quarter of FY2015.
The current uncertainty which persists with respect to the Government’s position on energy and its
pricing has significantly delayed the roll out of the Group’s clean energy strategy. The clean energy
solutions being offered by TSF have supportable benefits to prospective clients. However, there is
a general reluctance to commit to invest in these solutions by the end users until the Federal
Government establishes its energy and pricing position. As such TSF continues to face protracted
lead times on clean energy opportunities.
Given these prevailing externally driven hurdles which the Group’s clean energy strategy is facing,
the Directors considered it prudent to impair at 30 June 2014 a number of assets being held in
the TSF business. In particular, the carrying value of goodwill in TSF was reduced by $3.9m. The
Directors believe the carrying value of the TSF goodwill at 30 June 2014 is now appropriate
given the delayed progress of its clean energy strategy
DIVIDENDS
No dividends were declared or paid during the year.
REVIEW OF ACTIVITIES
During the year under review the Company:
• Continued to roll out its clean energy strategy to targeted clients.
• Faced difficult trading conditions resulting from the prevailing economic conditions which have
resulted in delays in the awarding and commencement of contracted work.
• Continued to expand its customer, product and geographic base from an increased investment
in business development.
CHANGES IN STATE OF AFFAIRS
There was no change in the state of affairs.
SUBSEQUENT EVENTS
There have not been any matters or circumstances, other than those referred to in the financial
statements or notes thereto, that have arisen since the end of the financial year, that have
significantly affected, or may significantly affect, the operations of the economic entity, the results
of those operations, or the state of affairs of the economic entity in future financial years after this
financial year.
FUTURE DEVELOPMENTS
The Group will continue its focus on rebuilding the Brockman business and its clean energy
solutions strategy.
PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought or intervened in on behalf of the Company with leave of the
Court under Section 237 of the Corporations Act 2001.
SHARE OPTIONS
There are no share options.
10 l EVZ LIMITED Annual Report FY14
Directors’ Report - Remuneration Report
ENVIRONMENTAL REGULATIONS
The economic entity is not subject to any significant environmental regulations under a
Commonwealth, State or Territory Law.
INSURANCE OF OFFICERS
During the financial year the Company insured the Directors and Officers of the Company against
legal costs that may be brought against the Directors and Officers in their capacity as Officers of
the Company. The policy provides for confidentiality with respect to its premium.
NON-AUDIT SERVICES
During the current and prior year there were no non-audit services provided by the
Company’s Auditors.
AUDITOR’S INDEPENDENCE DECLARATION
As required under Section 307C of the Corporations Act 2001, EVZ Limited has obtained an
Independence Declaration from its auditors, Advantage Advisors. This is included on page 24
of this financial report.
REMUNERATION REPORT
This report details the nature and amount of remuneration for each Director of EVZ Limited and for
key management personnel.
Remuneration policy
The remuneration policy of EVZ Limited has been designed to align Director and Executive
remuneration with shareholder and business objectives by providing a fixed remuneration
component and where appropriate offering specific short and long-term incentives based on
key performance areas affecting the economic entity’s financial results. The Board believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the best
Directors and Executives to govern and manage the economic entity, as well as to create goal
congruence between Directors, Executives and Shareholders.
Executive remuneration
The Board’s policy for determining the nature and amount of remuneration for key senior
Executives for the economic entity is as follows:
• The remuneration policy, setting the terms and conditions for Executive officers, was developed
by the Remuneration Committee and approved by the Board after seeking professional advice
where appropriate from independent external consultants.
• All Executives receive a base salary (which is based on factors such as length of service and
experience), superannuation, fringe benefits and where appropriate performance incentives.
The Remuneration Committee reviews Executive remuneration packages annually with reference
to the economic entity’s performance, each Executive’s performance and comparable information
from industry sectors and listed companies in similar industries. The performance of each Executive is
measured against criteria agreed with each Executive and is based predominantly on forecast
growth of the economic entity’s profits and shareholders’ value. Bonuses and incentives will be
linked to predetermined performance criteria. The Board may, however, exercise its discretion in
relation to approving incentives, bonuses and options, and can recommend changes to the
Remuneration Committee’s recommendations. Any changes must be justified by reference to
measurable performance criteria. The policy is designed to attract the highest calibre of Executives
and reward them for performance that results in long-term growth in shareholder wealth.
EVZ LIMITED Annual Report FY14 l 11
Directors’ Report - Remuneration Report
The Remuneration Committee set certain key performance indicators for the key Executives in the
Group. The key performance indicators were both quantitative and qualitative measures. Certain
Executives met some of these key performance indicators and the Remuneration Committee
approved short term incentive payments totaling $41,750 (2013: $Nil).
Long term incentives, linked with performance rights issued under the EVZ Directors’ and
Employees’ Benefits Plan, were not met during the year and no performance rights, options or
shares were issued.
Executives receive a superannuation guarantee contribution as required by the Government and
do not receive any other retirement benefits. Individuals may choose to sacrifice part of their salary
to increase payments towards superannuation. All remuneration paid to Executives is valued at
the cost to the Company and expensed.
Director remuneration
The Board’s policy is to remunerate Non-Executive Directors at appropriate market rates. The
Remuneration Committee recommends the fee structure for Non-Executive Directors which will be
determined by reference to market practice, duties performed, time, commitment and accountability.
Director fees are reviewed annually by the Remuneration Committee.
The Remuneration Committee may seek independent advice in determining appropriate fee
structures for Directors.
The maximum aggregate amount of fees payable to Non-Executive Directors is subject to approval
by shareholders at the Annual General Meeting. Fees for Non-Executive Directors are not linked to
the performance of the economic entity. However, to align Directors’ interests with shareholder
interests, the Directors are encouraged to hold shares in the Company and may be able to participate
in any employee share/option plan introduced.
All remuneration paid to Directors is valued at the cost to the Company and expensed.
Shares and options issued as part of remuneration
Shareholders had previously approved the EVZ Directors’ and Employees’ Benefits Plan (the
“Plan”) which allows employees, Directors and others (“Eligible Persons”) to be granted shares,
options and performance rights in the Company. The object of this Plan is to help the Company
recruit, reward, retain and motivate its employees and Directors.
Such shares, options and performance rights would be offered only to those Eligible Persons
entitled to receive an invitation. Those Eligible Persons would be:
• a Director or Secretary of a Group Company;
• an employee in permanent full-time or permanent part-time employment of a Group Company;
or
• a contractor to a Group Company who is selected by the Board to participate in the Plan.
Invitations to Eligible Persons will be made by the Board and may be made subject to such
conditions and rules as the Board determines, including:
• In the case of Options, the exercise period, the exercise price and the exercise conditions.
• In the case of Shares, the issue price payable on acceptance of the application by the Company
and issue of the shares and any other specific terms and conditions of issue.
• In the case of Performance Rights, the performance criteria and the performance period in which
those performance criteria must be satisfied.
12 l EVZ LIMITED Annual Report FY14
Directors’ Report - Remuneration Report
The issue of any securities (including options or performance rights) issued to any Director or their
associates will still require shareholder approval under ASX Listing Rule 10.14.
The maximum number of shares issued pursuant to the Plan would be not more than 5% of the
equity interests in the Company.
There were no other share-based payments in the year ended 30 June 2014.
Performance based remuneration
During the year to 30 June 2014, performance based remuneration paid/payable totaled $41,750.
These short term performance based payments were based on achieving certain key performance
indicators which were both quantitative and qualitative measures. There was no share based
remuneration.
Company performance, Shareholder wealth and Directors’ and Executives’ remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders and
Directors and Executives.
EVZ LIMITED Annual Report FY14 l 13
Directors’ Report - Remuneration Report
Details of remuneration for the year ended 30 June 2014
The remuneration for each Director and each of key management personnel of the economic entity
during the year was as follows:
Directors 2014
M Findlay
G Burns
R Edgley
R Murphy
Short Term
Employee Benefits
Fees
Salary
$
$
120,000
-
45,000
-
45,000
-
45,000
-
255,000
-
Post Employment
Benefits
Superanuation Contributions
$
-
-
-
-
-
Directors 2013
M Findlay
G Burns
R Edgley
R Murphy (appointed 28/9/12)
P Jones (resigned 28/8/12)
-
-
-
-
-
120,000
45,000
45,000
33,750
7,500
251,250
-
-
-
-
-
Total
$
120,000
45,000
45,000
45,000
255,000
120,000
45,000
45,000
33,750
7,500
251,250
14 l EVZ LIMITED Annual Report FY14
Directors’ Report - Remuneration Report
Key management personnel of the economic entity
2014
S Farthing (Chief Executive Officer)
I Wallace (Chief Financial Officer and Company Secretary)
A Bellgrove (General Manager Syfon Systems Group)
C Bishop (General Manager Brockman Engineering Pty Ltd - appointed 1/7/13)
A Green (General Manager TSF Engineering Group)
C Flanagan (Manager, TSF Maintenance Pty Ltd - resigned 1/5/14)
Short Term Employee Benefits
Post Employment
Benefits
Salary
$
358,530
234,000
273,041
255,782
244,802
159,717
Profit share
& bonus
$
33,750
-
8,000
-
-
-
Non cash
benefits
$
2,998
1,793
-
-
-
-
Superanuation
Contributions
$
17,775
25,000
15,775
24,519
22,841
14,148
1,525,872
41,750
4,791
120,058
2013
S Farthing (Chief Executive Officer – appointed 24/9/12)
I Wallace (Chief Financial Officer and Company Secretary)
A Bellgrove (General Manager Syfon Systems Group)
M Goddard (General Manager Brockman Engineering Pty Ltd)
A Green (General Manager TSF Engineering Group)
C Flanagan (Manager, TSF Maintenance Pty Ltd)
275,792
218,946
266,643
251,178
239,942
180,435
1,432,936
32,000
-
-
-
-
32,000
859
12,147
22,782
13,204
-
-
48,992
12,669
25,000
15,775
20,518
21,365
16,200
111,527
From 1 July 2013, Mr Goddard ceased being a Key Management Personnel.
Termination
Benefits
$
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
413,053
260,793
296,816
280,301
267,643
173,865
1,692,471
321,320
256,093
305,200
284,900
261,307
196,635
1,625,455
During the 2013 financial year, Ms Murphy acted as interim Chief Executive Officer (1 July 2012 to 24 September 2012). Ms Murphy
was engaged on a contract basis through 333 Management Pty Ltd. Fees paid to 333 Management Pty Ltd relating to Ms Murphy’s
engagement as interim Chief Executive Officer were $77,172. Further fees of $150,000 were paid/payable to 333 Consulting
Management Pty Ltd for other consulting services.
Remuneration and other terms of employment for key Executives are formalised in employment service agreements. Each of these
agreements may provide for the provision of other benefits including car allowances. These agreements have no fixed term. There
are no other standard termination provisions excluding notice periods. Notice periods are generally between three and six months.
Signed in accordance with a resolution of the Board of Directors.
Director - M Findlay
Signed at Melbourne this 30th day of September 2014.
EVZ LIMITED Annual Report FY14 l 15
Corporate Governance Statement
for the year ended 30 June 2014
Introduction
The board of EVZ Limited is committed to protecting shareholders’ interests and ensuring investors
are fully informed about the performance of the company’s business. The directors have
undertaken to perform their duties with honesty, integrity, care and diligence, according to the law
and in a manner that reflects the highest standards of corporate governance.
The directors have established the processes to protect the interests and assets of shareholders
and to ensure the highest standard of integrity and corporate governance of the company.
The Australian Securities Exchange Corporate Governance Council sets out best practice
recommendations including corporate governance practices and suggested disclosures.
ASX Listing Rules require companies to disclose the extent to which they have complied with the
ASX recommendations and to give reasons for not following them.
Unless otherwise indicated, the best practice recommendations of the ASX Corporate Governance
Council, including corporate governance practices and suggested disclosures, have been
adopted by the company for the year ended 30 June 2014 as relevant to the size and complexity of
the company and its operations. The board has adopted a formal board charter, audit committee
charter, remuneration committee charter, nomination committee charter, external communications
policy, continuous disclosure policy, securities trading policy and code of conduct for Directors
and Officers.
PRINCIPLE 1: LAY A SOLID FOUNDATION FOR MANAGEMENT AND OVERSIGHT
Recommendation 1.1: Companies should establish the functions reserved to the board
and those delegated to senior executives and disclose those functions
The EVZ Limited board charter sets out the function and responsibilities of the board. The directors
of the company are accountable to shareholders for the proper management of business and affairs
of the company.
The key responsibilities of the board are to:
• establish, monitor and modify the corporate strategies of the company;
• ensure proper corporate governance;
• monitor and evaluate the performance of management of the company;
• ensure that appropriate risk management systems, internal control and reporting systems and
compliance frameworks are in place and are operating effectively;
• assess the necessary and desirable competencies of board members, review board succession
plans, evaluate its own performance and consider the appointment and removal of directors;
• consider executive remuneration and incentive policies, the company’s recruitment, retention
and termination policies and procedures for senior management and the remuneration
framework for non-executive directors;
• monitor financial performance;
• approve decisions concerning the capital, including capital restructures, and dividend policy of
the company; and
• comply with the reporting and other requirements of the law.
The board delegates responsibility for day-to-day management of the company to the chief
executive officer (CEO), subject to certain financial limits. The CEO must consult the board on
matters that are sensitive, extraordinary, of a strategic nature or matters outside the permitted
financial limits.
16 l EVZ LIMITED Annual Report FY14
Corporate Governance Statement
for the year ended 30 June 2014
Recommendation 1.2: Companies should disclose the process for evaluating the
performance of senior executives
The company has a duly appointed remuneration committee. The committee operates pursuant to
the remuneration committee charter.
The primary responsibilities of the remuneration committee are:
• Establish appropriate remuneration policies for directors, the CEO and other senior executives
which are effective in attracting and/or retaining the best directors and executives to monitor and
manage EVZ Limited, whilst ensuring goal congruence between shareholders, directors and
executives.
• Ensuring appropriate disclosure of remuneration in line with the Corporations Act, ASX Listing
Rules and Corporate Governance guidelines.
All senior executives were reviewed during the financial year in accordance with the general
process of review. In addition, pursuant to the board charter, the board conducted an annual re-
view of itself during the financial year, taking into account developments, trends and standards set
in the external market place.
PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE
Recommendation 2.1: A majority of the board should be independent directors
During the financial year, the board comprised of four directors, all of whom, including the chairman,
are non-executive and independent directors. Profiles of the directors are set out in this annual
report. All directors are subject to retirement by rotation in accordance with the Company’s constitution
but may stand for re-election by the shareholders.
The composition of the board is determined by the board and, where appropriate, external advice is
sought. The board has adopted the following principles and guidelines in determining the composition
of the board:
To be independent, a director ought to be non-executive and:
• not a current executive of the company;
• ideally not held an executive position in the company in the previous three years;
• not a nominee or associate of a shareholder holding more than 10% of the company’s shares;
• not significantly involved in the value chain of the organisation, either upstream or downstream;
and
• not a current advisor to the company receiving fees or some other benefit, except for approved
director’s fees.
Recommendation 2.2: The chair should be an independent director
The chairman, Max Findlay, is an independent director. He is responsible for the leadership of the
board and he has no other positions that hinder the effective performance of this role.
Recommendation 2.3: The roles of chair and CEO should not be exercised by the
same individual
The role of chairman is held by Max Findlay whilst the role of CEO is held by Scott Farthing.
EVZ LIMITED Annual Report FY14 l 17
Corporate Governance Statement
for the year ended 30 June 2014
Recommendation 2.4: The board should establish a nomination committee
The company has a duly appointed nomination committee. The committee operates pursuant to a
nomination committee charter. The charter sets out the responsibilities of the committee including
reviewing board succession plans to ensure an appropriate balance of skills and expertise,
developing policies and procedures for the appointments of directors and identifying directors
with appropriate qualifications to fill board committee vacancies. The term of non-executive
directorships is set out in the company’s constitution.
Given the size of the board, the board has determined it appropriate for the nomination committee
to consist of the full board of directors.
Recommendation 2.5: Companies should disclose the process for evaluating the
performance of the board, its committees and individual directors
The board and its committees undertook self-assessment in accordance with their relevant charters
during the financial year. Max Findlay conducts annual one-on-one personal performance discussions
with each of the individual directors.
The board was provided with all company information it needed in order to effectively discharge its
responsibilities and were entitled to, and did, request additional information when considered
necessary or desirable.
PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING
Recommendation 3.1: Companies should establish a code of conduct and disclose the
code or a summary of the code to guide the directors, CEO, the chief financial officer
(CFO) and other key executives in responsible decision-making
The company has developed codes of conduct to guide all of the company’s employees, particularly
directors, the CEO, the CFO and other senior executives, in respect of ethical behaviour. These
codes are designed to maintain confidence in the company’s integrity and the responsibility and
accountability of all individuals within the company for reporting unlawful and unethical practices.
These codes of conduct embrace such areas as:
• conflicts of interest
• corporate opportunities
• confidentiality
• fair dealing and trade practices
• protection of assets
• compliance with laws, regulations and industry codes
• ‘whistle-blowing’
• security trading
• commitment to and recognition of the legitimate interests of stakeholders
18 l EVZ LIMITED Annual Report FY14
Corporate Governance Statement
for the year ended 30 June 2014
Recommendation 3.2: Companies should establish a policy concerning trading in
company securities by directors, senior executives and employees and disclose
the policy
Directors and Officers are encouraged to be long-term holders of the company’s shares. For
Directors and Officers, the company has adopted a formal securities trading policy. Directors and
Officers may not deal in any of the company’s securities at any time if they have inside information.
A director or officer may not trade in securities during black-out periods as determined by the
board of directors. These periods generally relate to periods prior to the release to the ASX of
the half-yearly and annual results or where the directors are aware of any price sensitive information.
A director or officer may trade in securities at other times only if they are personally satisfied that
they are not in possession of inside information.
Directors and Officers must immediately advise the company secretary in writing of the details of
completed transactions. Such notification is necessary whether or not prior authority has been
required. The secretary must maintain a register of securities transactions. The company must
comply with its obligations to notify the ASX in writing of any changes in the holdings of securities
or interest in securities by directors.
PRINCIPLE 4: SAFEGUARD THE INTEGRITY IN FINANCIAL REPORTING
Recommendation 4.1: The board should establish an audit committee
The board-appointed audit committee operates in accordance with the audit committee charter.
The details of the committee meetings held during the year and attendance at those meetings are
detailed in the directors’ meeting schedule in the directors’ report.
Recommendation 4.2: The audit committee should be structured so that it consists only
of non-executive directors, consists of a majority of independent directors, is chaired by
an independent chair, who is not chair of the board, and has at least three members
The composition of the company’s audit committee was consistent in all aspects relating to
recommendation 4.1. The audit committee consists of:
• Raelene Murphy (Chairperson)
• Max Findlay
• Robert Edgley
Each of the members of the committee is an independent, non-executive director and the
chairman of the committee is not the chairman of the board. The CEO and the CFO/company
secretary may attend the meetings at the invitation of the committee.
All members of the committee are financially literate (i.e. they are able to read and understand
financial statements) and have an understanding of the industry in which the company operates.
The audit committee provides an independent review of:
• financial information produced by the company;
• the accounting policies adopted by the company;
• the effectiveness of the accounting and internal control systems and management reporting
which are designed to safeguard company assets;
• the quality of the external audit functions;
• external auditor’s performance and independence as well as considering such matters as
replacing the external auditor where and when necessary; and
• identifying risk areas.
EVZ LIMITED Annual Report FY14 l 19
Corporate Governance Statement
for the year ended 30 June 2014
Recommendation 4.3: The audit committee should have a formal charter
A formal audit committee charter has been adopted by the board. This charter sets out the roles,
responsibilities, composition, structure and membership requirements of the audit committee.
PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
Recommendation 5.1: Companies should establish written policies and procedures
designed to ensure compliance with ASX Listing Rules disclosure requirements and
to ensure accountability at a senior executive level for that compliance and disclose
those policies
The board recognises that the company, as an entity listed on the ASX, has an obligation to make
timely and balanced disclosure in accordance with the requirements of the Australian Securities
Exchange Listing Rules and the Corporations Act 2001. The board also is of the view that an
appropriately informed shareholder base and market is essential to an efficient market for the
company’s securities. The board is committed to ensuring that shareholders and the market have
timely and balanced disclosure of matters concerning the company. In demonstration of this
commitment, the company has adopted a formal external communications policy including a
continuous disclosure policy.
In order to ensure the company meets its obligations of timely disclosure of such information, the
company has adopted the following policies:
• immediate notification to the ASX of information concerning the company that a reasonable
person would expect to have a material effect on the price or value of the company’s securities
as prescribed under listing rule 3.1, except where such information is not required to be
disclosed in accordance with the exception provisions of the listing rules;
• the company has a website where all relevant information disclosed to the ASX will be promptly
placed on the website following receipt of confirmation from the ASX and, where it is deemed
desirable, released to the wider media; and
• the company will not respond to market rumours or speculation, except where required to do so
under the listing rules.
Based on information provided to the company secretary by directors, officers and employees, the
company secretary is responsible for determining which information is to be disclosed and for the
overall administration of this policy.
PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS
Recommendation 6.1: Companies should design a communications policy for promoting
effective communication with shareholders and encouraging their participation at general
meetings and disclose that policy
The board recognises that shareholders are the beneficial owners of the company and respects
their rights and is continually seeking ways to assist shareholders in the exercise of those rights.
The board also recognises that as owners of the company the shareholders may best contribute
to the company’s growth, value and prosperity if they are appropriately informed. To this end the
board seeks to empower shareholders by:
• communicating effectively with shareholders;
• enabling shareholders to have access to balanced and understandable information about the
company and its operations; and
• promoting shareholder participation in general meetings.
20 l EVZ LIMITED Annual Report FY14
Corporate Governance Statement
for the year ended 30 June 2014
All shareholders are entitled to receive a copy of the company’s annual report. In addition, the
company’s website will provide opportunities to shareholders to access company announcements,
media releases and financial reports.
The board is committed to assisting shareholders’ participation in meetings and has adopted the
following measures:
• adoption of the ASX Corporate Governance Council’s recommendation and guidelines as
published in the Council’s Principles of Good Governance and Best Practice Recommendations
in respect of notices of meetings; and
• ensuring that a representative of the company’s external auditor, subject to availability, is
present at all annual general meetings and that shareholders have adequate opportunity to ask
questions of the auditor at that meeting concerning the audit and preparation and content of the
auditor’s report.
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
Recommendation 7.1: Companies should establish policies for the oversight and
management of material business risks and disclose a summary of those policies
The board has overall responsibility to all stakeholders for the identification, assessment,
management and monitoring of the risks faced by the company. The company currently has
informal policies and procedures for risk management but the audit committee seeks to ensure
compliance with regulatory requirements. The operational risks are managed at the senior
management level and escalated to the board for direction where the issue is exceptional,
non-recurring or may impose a material financial or operational burden on the company.
The relatively small size of the company means that communication and decision-making is
predominantly centralised allowing early identification of risks by senior management. It also
allows senior management to respond to each risk as appropriate without the need for a written
risk management policy.
Recommendation 7.2: The board should require management to design and implement
the risk management and internal control system to manage the company’s material
business risks and report to it on whether those risks are being managed effectively.
The board should disclose that management has reported to it as to the effectiveness
of the company’s management of its material business risks
Given the relatively small and centralised management team, the nature of the business of the
company and that a majority of independent directors sits on the audit committee, the board is
continuously kept informed of the effectiveness of the company’s internal control systems.
The board continues to formalise risk management policies. In addition, the CEO and CFO
have informed the board that the integrity of the financial statements is founded on a system of
risk management and internal control which supports the policies adopted by the board and that
the company’s risk management and internal control system is operating effectively in all material
respects to manage the company’s material business risks.
EVZ LIMITED Annual Report FY14 l 21
Corporate Governance Statement
for the year ended 30 June 2014
PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY
Recommendation 8.1: The board should establish a remuneration committee
The company has a duly appointed remuneration committee. The committee operates pursuant to
the remuneration committee charter.
The remuneration committee consists of:
• Graham Burns (Chairman)
• Max Findlay
• Rob Edgley
The primary responsibilities of the remuneration committee are:
• Establish appropriate remuneration policies for directors, the CEO and other senior executives
which are effective in attracting and/or retaining the best directors and executives to monitor and
manage EVZ Limited, whilst ensuring goal congruence between shareholders, directors and
executives.
• Ensuring appropriate disclosure of remuneration in line with the Corporations Act, ASX Listing
Rules and Corporate Governance guidelines.
Recommendation 8.2: Companies should clearly distinguish the structure of non-executive
directors’ remuneration from that of executive directors and senior executives
Non-executive directors are remunerated by way of fees. They may receive options (subject to
shareholder approval) but there is no scheme for retirement benefits, other than statutory
superannuation. Executives are paid a salary and may be provided with shares and/or options
and bonuses as part of their remuneration and incentive package.
There are no executive directors.
22 l EVZ LIMITED Annual Report FY14
Corporate Governance Statement
for the year ended 30 June 2014
DIVERSITY POLICY
The Group’s ultimate success is under-pinned by its employees. To maximise success, the Group
encourages a diverse population of employees within its operations.
Diversity is defined to include race, ethnicity, gender, sexual orientation, socio-economic status,
culture, age, physical ability, education, skill levels, family status, religious, political and other
beliefs and work styles. The Group recognises that differences in ideas, backgrounds, patterns of
thinking and approaches to work can generate value for the Group’s stakeholders: its customers,
shareholders, personnel and the communities in which it operates. It is the Group’s policy to
promote these differences within a productive, inclusive and performance-based environment in
which everybody feels valued, where their skills are fully utilised, their performance is recognised,
professional accountability is expected and organisational goals are met.
The Group’s approach to diversity is based on the following objectives:
• retain, promote and hire the best people possible, focusing on actual and potential contribution
in terms of performance, competence, collaboration and professional accountability;
• foster an inclusive culture and ensure that current and future employee opportunities are based
on competence and performance, irrespective of race, ethnicity, gender, sexual orientation,
socio-economic status, culture, age, physical ability, education, family status, religious, political
and other beliefs and work styles. This includes being intolerant of behaviour that denigrates
or otherwise diminishes such attributes or that discriminates on the basis of such attributes;
• create and manage appropriate human resource processes which take a unified and
talent-based approach to recruitment, training and development, performance management,
retention and succession planning;
• provide a fair level of reward in order to attract and retain high calibre people – and build a
culture of achievement by providing a transparent link between reward and performance; and
• be compliant with all mandatory diversity reporting requirements.
The Group’s Measurable Objective and Current Gender Profile:
The Group’s measurable objective for increasing gender diversity is to increase the representation
of women at all levels of its organisation over time. The Group’s progress towards achieving that
objective, along with the proportion of women employees within the Group, women in senior
executive positions and women non-executive directors, is set out in the table below:
Measure
Women employees
Women senior executives *
Women non-executive directors
2014
No.
17
0
1
%
5
0
25
2013
No.
16
0
1
%
6
0
25
(cid:1) This includes both employees and specific contractors engaged by the Group.
EVZ LIMITED Annual Report FY14 l 23
Auditor’s Independence Declaration
24 l EVZ LIMITED Annual Report FY14
Financial Statements
EVZ Limited and Controlled Entities
ABN 87 010 550 357
EVZ LIMITED Annual Report FY14 l 25
Consolidated Statement of Profit or Loss
for the year ended 30 June 2014
Revenue
Cost of sales
Gross profit
Other income
Administration and business development costs
Corporate costs
Impairment of other assets
Impairment of plant and equipment
Impairment of intangibles
Profit/(Loss) before finance costs and income tax
Net finance costs
Profit /(Loss) before income tax from continuing operations
Income tax (expense)/benefit
Profit/(Loss) for year attributed to members
Overall operations
Basic earnings per share
Diluted earnings per share
Continuing operations
Basic earnings per share
Diluted earnings per share
Notes
Economic Entity
2014
$
64,433,155
(53,051,154)
Economic Entity
2013
$
57,202,336
(45,067,324)
11,382,001
12,135,012
2(a)
2(c)
3
17
17
17
17
109,397
(11,434,477)
(1,439,895)
(373,712)
(343,409)
(3,913,481)
(6,013,576)
(1,099,611)
(7,113,187)
901,692
(6,211,495)
90,981
(9,020,818)
(1,233,751)
-
-
-
1,971,424
(1,229,749)
741,675
148,093
889,768
Cents per
share
Cents per
share
(2.98)
(2.98)
(2.98)
(2.98)
0.43
0.43
0.43
0.43
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
26 l EVZ LIMITED Annual Report FY14
Consolidated Statement of Profit or Loss and
Other Comprehensive Income for the year ended 30 June 2014
Profit/(Loss) for the year
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations
Non-controlling interest
Total comprehensive income/(loss) for the year attributable to
owners of the company
Notes
16(b)
Economic Entity
2014
$
(6,211,495)
Economic Entity
2013
$
889,768
(64,987)
-
(6,276,482)
135,026
72,419
1,097,213
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
EVZ LIMITED Annual Report FY14 l 27
Consolidated Statement of
Financial Position as at 30 June 2014
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Plant and equipment
Deferred tax assets
Intangible assets
Financial assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Tax liabilities
Short-term borrowings
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Long-term borrowings
Deferred tax liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
22
4
5
6
4
7
8
9
6
10
8
11
13
12
8
13
14
16
16
Economic Entity
2014
$
2,047,109
16,373,386
1,983,863
9,947
20,414,305
Economic Entity
2013
$
2,607,853
15,424,497
1,703,463
82,851
19,818,664
525,189
4,648,282
4,313,415
16,075,809
52,091
25,614,786
46,029,091
13,817,399
750
3,666,849
2,380,563
19,865,561
7,455,614
47,219
60,595
7,563,428
27,428,989
387,796
5,586,374
3,404,715
19,989,290
27,604
29,395,779
49,214,443
10,106,056
29,391
11,758,306
2,162,396
24,056,149
176,188
49,588
55,934
281,710
24,337,859
18,600,102
24,876,584
46,055,159
(105,920)
(27,349,137)
46,055,159
(40,933)
(21,137,642)
18,600,102
24,876,584
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
28 l EVZ LIMITED Annual Report FY14
Consolidated Statement of Changes
in Equity for the year ended 30 June 2014
ECONOMIC ENTITY
Issued
Capital
Accumulated
Losses
Capital
Reserves
$
46,055,159
$
(21,137,642)
-
-
-
(6,211,495)
-
(6,211,495)
-
-
46,055,159
-
-
(27,349,137)
$
-
-
-
-
-
-
-
Foreign Currency
Translation
Reserve
$
(40,933)
Sub-Total
$
24,876,584
Non
Controlling
Interest
$
-
-
(6,211,495)
(64,987)
(64,987)
(64,987)
(6,276,482)
-
-
(105,920)
-
-
18,600,102
-
-
-
-
-
-
Total
$
24,876,584
(6,211,495)
(64,987)
(6,276,482)
-
-
18,600,102
46,023,159
(22,226,110)
198,700
(175,959)
23,819,790
(72,419)
23,747,371
-
-
-
-
-
889,768
198,700
-
(198,700)
-
-
-
-
-
-
135,026
-
889,768
-
135,026
-
-
-
-
72,419
889,768
-
135,026
72,419
1,088,468
(198,700)
135,026
1,024,794
72,419
1,097,213
32,000
-
46,055,159
-
-
(21,137,642)
-
-
-
-
-
(40,933)
32,000
-
24,876,584
-
-
-
32,000
-
24,876,584
30 June 2014
Balance at 1 July 2013
Total comprehensive
loss for year
Loss for year
Foreign currency
translation reserve
Total comprehensive
loss for year
Transactions with owners,
recorded directly in equity
Shares issued
Dividends
Balance at 30 June 2014
30 June 2013
Balance at 1 July 2012
Total comprehensive
loss for year
Profit for year
Transfer from capital reserve
Foreign currency
translation reserve
Non-controlling interest
Total comprehensive
loss for year
Transactions with owners,
recorded directly in equity
Shares issued
Dividends
Balance at 30 June 2013
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
EVZ LIMITED Annual Report FY14 l 29
Consolidated Statement of Cash Flows
for the year ended 30 June 2014
Notes
Economic Entity
2014
$
Economic Entity
2013
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
Payments to suppliers & employees (inclusive of GST)
Income tax paid
Interest received
Finance costs
NET CASH FLOWS PROVIDED/(USED) BY OPERATING ACTIVITIES
22(ii)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of plant and equipment
Purchase of plant and equipment
Proceeds from disposal of controlled entity
NET CASH FLOWS (USED) BY INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of bank loans
Proceeds from lease financing
Payments for lease financing
NET CASH FLOWS PROVIDED/(USED) BY FINANCING ACTIVITIES
NET DECREASE IN CASH HELD
Cash at beginning of financial year
CASH AT END OF FINANCIAL YEAR
22(i)
69,219,847
(67,610,243)
(28,641)
7,345
(1,106,956)
481,352
327,754
(557,819)
-
(230,065)
(1,000,000)
110,929
(82,553)
(971,624)
(720,337)
192,758
(527,579)
58,409,897
(56,906,095)
(33,813)
68,726
(1,298,475)
240,240
24,800
(749,994)
196,075
(529,119)
(1,000,000)
148,637
(146,195)
(997,558)
(1,286,437)
1,479,195
192,758
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
30 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
This financial report includes the consolidated financial
statements and notes of EVZ Limited and controlled entities
(‘Economic Entity’ or ‘Group’).
Basis of Preparation
The financial report is a general purpose financial report that
has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies
that the AASB has concluded would result in a financial report
containing relevant and reliable information about transactions,
events and conditions to which they apply. Compliance with
Australian Accounting Standards ensures that the financial
statements and notes also comply with International Financial
Reporting Standards. Material accounting policies adopted in
the preparation of this financial report are presented below.
They have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis
and is based on historical costs, modified where applicable,
by the measurement at fair value of selected non-current
assets, financial assets and financial liabilities.
Accounting Policies
(a) Principles of Consolidation
A controlled entity is any entity EVZ Limited has the power
to control the financial and operating policies of so as to
obtain benefits from its activities. A list of controlled entities
is contained in Note 29 to the financial statements.
All controlled entities have a June financial year-end.
All inter-company balances and transactions between
entities in the economic entity, including any unrealised
profits or losses, have been eliminated on consolidation.
Accounting policies of subsidiaries have been changed
where necessary to ensure consistencies with those
policies applied by the parent entity.
Where controlled entities have entered or left the economic
entity during the year, their operating results have been
included/excluded from the date control was obtained or
until the date control ceased.
Business Combinations
Business combinations occur where an acquirer obtains
control over one or more businesses and results in the
consolidation of its assets and liabilities.
A business combination is accounted for by applying
the acquisition method, unless it is a combination
involving entities or businesses under common control.
The acquisition method requires that for each business
combination one of the combining entities must be
identified as the acquirer (ie parent entity). The business
combination will be accounted for as at the acquisition
date, which is the date that control over the acquiree is
obtained by the parent entity. At this date, the parent shall
recognise, in the consolidated accounts, and subject to
certain limited exceptions, the fair value of the identifiable
assets acquired and liabilities assumed. In addition,
contingent liabilities of the acquiree will be recognised
where a present obligation has been incurred and its fair
value can be reliably measured.
The acquisition may result in the recognition of goodwill
(refer to Note 1(i)) or a gain from a bargain purchase.
The method adopted for the measurement of goodwill will
impact on the measurement of any non-controlling interest
to be recognised in the acquiree where less than 100%
ownership interest is held in the acquiree.
The acquisition date fair value of the consideration
transferred for a business combination plus the acquisition
date fair value of any previously held equity interest shall
form the cost of the investment in the separate financial
statements. Consideration may comprise the sum of the
assets transferred by the acquirer, liabilities incurred by
the acquirer to the former owners of the acquiree and the
equity interests issued by the acquirer.
Fair value uplifts in the value of pre-existing equity holdings
are taken to the statement of comprehensive income.
Where changes in the value of such equity holdings had
previously been recognised in other comprehensive
income, such amounts are recycled to profit or loss.
EVZ LIMITED Annual Report FY14 l 31
Notes to and forming part of the accounts
for the year ended 30 June 2014
Included in the measurement of consideration transferred
is any asset or liability resulting from a contingent
consideration arrangement. Any obligation incurred
relating to contingent consideration is classified as either
a financial liability or equity instrument, depending upon
the nature of the arrangement. Rights to refunds of
consideration previously paid are recognised as a receivable.
Subsequent to initial recognition, contingent consideration
classified as equity is not remeasured and its subsequent
settlement is accounted for within equity. Contingent
consideration classified as an asset or a liability is
remeasured each reporting period to fair value through
the statement of comprehensive income unless the change
in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business
combination are expensed to the statement of profit or
loss and other comprehensive income.
(b) Income Tax
The income tax expense (revenue) for the year comprises
current income tax expense (income) and deferred tax
expense (income). Current income tax expense charged
to the profit or loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or
substantially enacted, as at reporting date. Current tax
liabilities (assets) are therefore measured at the amounts
expected to be paid to (recovered from) the relevant tax
authority.
Deferred income tax expense reflects movements in
deferred tax asset and deferred tax liability balances during
the year as well as unused tax losses. Current and deferred
income tax expense (income) is charged or credited directly
to equity instead of the profit or loss when the tax relates
to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based
on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the
financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax
deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect
on accounting or taxable profit or loss.
32 l EVZ LIMITED Annual Report FY14
Deferred tax assets and liabilities are calculated at the tax
rates that are expected to apply to the period where the
asset is realised or the liability is settled, based on tax
rates enacted or substantively enacted at reporting date.
Their measurement also reflects the manner in which
management expects to recover or settle the carrying
amount of the related asset or liability.
Deferred tax assets relating to temporary differences and
unused tax losses are recognised only to the extent that
it is probably that future taxable profit will be available
against which the benefits of the deferred tax asset can be
utilised. Where temporary differences exist in relation to
investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are not
recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the
reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of
the respective asset and liability will occur. Deferred tax
assets and liabilities are offset where a legally enforceable
right of set-off exists, the deferred tax assets and liabilities
relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities
where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and
liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are expected
to be recovered or settled.
EVZ Limited and its wholly-owned Australian subsidiaries
have formed an income tax consolidated group under
the tax consolidation regime. Each entity in the group
recognises its own current and deferred tax liabilities,
except for any deferred tax liabilities resulting from unused
tax losses and credits which are immediately assumed by
EVZ Limited. The current tax liability of each group entity
is then subsequently assumed by EVZ Limited. The group
notified the Australian Taxation Office that it had formed an
income tax consolidated group to apply from 7 June 2004.
The tax consolidated group has entered a tax sharing
arrangement whereby each company in the group
contributes to the income tax payable in proportion to
their contribution to the net profit before tax of the tax
consolidated group.
Notes to and forming part of the accounts
for the year ended 30 June 2014
(c) Inventories
Inventories are measured at the lower of cost and net
realisable value. The cost of manufactured products
includes direct materials, direct labour and an appropriate
portion of variable and fixed overheads. Overheads are
applied on the basis of normal operating capacity. Costs
are assigned on the basis of weighted average costs.
The carrying amount of inventories is reviewed annually by
Directors to ensure it is not in excess of the recoverable
amount from these assets.
(d) Construction Contracts and Work in Progress
Construction work in progress is valued at cost, plus
profit recognised to date less any provision for anticipated
future losses. Cost includes both variable and fixed costs
relating to specific contracts, and those costs that are
attributable to the contract activity in general and that can
be allocated on a reasonable basis.
Construction profits are recognised on the stage of
completion basis and measured using the proportion of
costs incurred to date as compared to expected actual
costs. Where losses are anticipated they are provided for
in full. Construction revenue has been recognised on the
basis of the terms of the contract adjusted for any variations
or claims allowable under the contract.
and maintenance are charged to the income statement
during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets and capitalised
lease assets, is depreciated on a straight-line basis over
their useful lives to the economic entity commencing
from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either
the unexpired period of the lease or the estimated useful
lives of the improvements.
The depreciation rates used for each class of depreciable
assets are:
Class of Fixed Asset
• Plant and equipment
Depreciation Rate
5 to 30%
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 and
losses are included in the income statement.
(e) Plant and Equipment
(f) Leases
Each class of plant and equipment is carried at cost less
where applicable, any accumulated depreciation and
impairment losses.
Plant and equipment is measured on the cost basis.
The carrying amount of plant and equipment is reviewed
annually by Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable
amount is assessed on the basis of the expected net cash
flows that will be received from the assets employment
and subsequent disposal. The expected net cash flows
have been discounted to their present values in determining
recoverable amounts.
The cost of fixed assets constructed within the economic
entity 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
Leases of fixed assets where substantially all the risks
and benefits incidental to the ownership of the asset, but
not the legal ownership, are transferred to entities in the
economic entity are classified as finance leases.
Finance leases are capitalised by recording an asset and
a liability at the lower of the amounts equal to the fair value
of the leased property or the present value of the minimum
lease payments, including any guaranteed residual values.
Lease payments are allocated between the reduction of
the lease liability and the lease interest expense for the
period.
Leased assets are depreciated on a straight-line basis
over their estimated useful lives.
Lease payments for operating leases, where substantially
all the risks and benefits remain with the lessor, are
charged on a straight line basis over the period of the
lease.
Lease incentives under operating leases are recognised
as a liability and amortised on a straight-line basis over the
life of the lease term.
EVZ LIMITED Annual Report FY14 l 33
Notes to and forming part of the accounts
for the year ended 30 June 2014
(g) Financial instruments
(h) Impairment of Assets
Recognition and Initial Measurement
Financial instruments, incorporating financial assets
and financial liabilities, are recognised when the entity
becomes a party to the contractual provisions of the
instrument. Trade date accounting is adopted for financial
assets that are delivered within timeframes established by
marketplace convention.
Financial instruments are initially measured at fair value
plus transactions costs where the instrument is not
classified as at fair value through profit or loss. Transaction
costs related to instruments classified as at fair value
through profit or loss are expensed to profit or loss
immediately. Financial instruments are classified and
measured as set out below.
Derecognition
Financial assets are derecognised where the contractual
rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer
has any significant continuing involvement in the risks and
benefits associated with the asset. Financial liabilities are
derecognised where the related obligations are either
discharged, cancelled or expire. The difference between
the carrying value of the financial liability extinguished
or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash
assets or liabilities assumed, is recognised in profit
or loss.
Financial Assets
Loans and Receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market and are stated at amortised cost using
the effective interest rate method.
Financial Liabilities
Non-derivative financial liabilities are recognised at
amortised cost, comprising original debt less principal
payments and amortisation.
Impairment
At each reporting date, the group assesses whether
there is objective evidence that a financial instrument has
been impaired. Impairment losses are recognised in the
income statement.
34 l EVZ LIMITED Annual Report FY14
At each reporting date, the group reviews the carrying
values of its tangible and intangible assets to determine
whether there is any indication that those assets have
been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair
value less costs to sell and value in use, is compared to
the asset’s carrying value. Any excess of the asset’s
carrying value over its recoverable amount is expensed
to the income statement.
Impairment testing is performed annually for goodwill and
intangible assets with indefinite lives.
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.
It has been determined that the balances of the goodwill
have an indefinite life. The excess of the fair value of net
assets over the purchase price of the businesses acquired
has been allocated to goodwill rather than be allocated to
other intangible assets. The acquisition of the businesses
that generate the goodwill was determined on the abilities
of the entities, as a whole, to generate future profits and
hence other intangibles have not been recognised.
Goodwill is allocated to cash-generating units which are
based on the Group’s individual companies. All businesses
operate in the engineering services industry sector.
(i) Intangibles
Goodwill
Goodwill and goodwill on consolidation are initially
recorded at the amount by which the purchase price for a
business or for an ownership interest in a controlled entity
exceeds the fair value attributed to its net assets at date of
acquisition. Goodwill on the acquisitions of subsidiaries is
included in intangible assets. Goodwill is tested annually
for impairment and carried at cost less accumulated
impairment losses. Gains and losses on the disposal of
an entity include the carrying amount of goodwill relating
to the entity sold.
(j) Foreign Currency Transactions and Balances
Functional and Presentation Currency
The functional currency of each of the group’s entities is
measured using the currency of the primary economic
environment in which that entity operates. The consolidated
financial statements are presented in Australian dollars
which is the parent entity’s functional and presentation
currency.
Notes to and forming part of the accounts
for the year ended 30 June 2014
Transaction and Balances
Foreign currency transactions are translated into functional
currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are
translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at
the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary
items are recognised in the income statement, except
where deferred in equity as a qualifying cash flow or net
investment hedge.
Exchange differences arising on the translation of
non-monetary items are recognised directly in equity to
the extent that the gain or loss is directly recognised in
equity; otherwise the exchange difference is recognised
in the income statement.
Group Companies
The financial results and position of foreign operations
whose functional currency is different from the group’s
presentation currency are translated as follows:
• assets and liabilities are translated at year-end
exchange rates prevailing at that reporting date;
• income and expenses are translated at average
exchange rates for the period; and
• retained profits are translated at the exchange rates
prevailing at the date of the transaction.
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 the income
statement in the period in which the operation is disposed.
(k) Employee Benefits
Provision is made for the economic entity’s liability for
employee benefits arising from services rendered by
employees to balance date. 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, plus related on-costs. 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.
Defined Contribution Plans
Contributions to defined superannuation plans are
expensed when incurred.
The group operates an equity-settled share-based payment
employee share scheme. The fair value of the equity to
which employees become entitled is measured at grant
date and recognised as an expense with a corresponding
increase to an equity account. The shares issued under
the employee share scheme vest immediately.
(l) Provisions
Provisions are recognised when the group has a legal or
constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits
will result and that outflow can be reliably measured.
(m) 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 two months
or less, and bank overdrafts. Bank overdrafts are shown
within short-term borrowings in current liabilities on the
balance sheet.
(n) Revenue
Revenue from the sale of goods is recognised upon the
delivery of goods to customers. Interest revenue is
recognised on a proportional basis taking into account
the interest rates applicable to the financial assets.
Contract revenue is recognised in accordance with
Note 1(d).
(o) Borrowing Costs
Borrowing costs directly attributable to the acquisition,
construction or production of assets that necessarily take
a substantial period of time to prepare for their intended
use or sale, are added to the cost of those assets, until
such time as the assets are substantially ready for their
intended use or sale. All other borrowing costs are
recognised in the income statement in the period in which
they are incurred.
(p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of
the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office.
In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of an item of
the expense. Receivables and payables in the balance
sheet are shown inclusive of GST. Cash flows are
presented in the statement of cash flows on a gross
basis, except for the GST component of investing and
financing activities, which are disclosed as operating
cash flows.
EVZ LIMITED Annual Report FY14 l 35
Notes to and forming part of the accounts
for the year ended 30 June 2014
Expected final costs are estimated following an assessment
of each contract and a determination of expected costs
still to be incurred.
Whilst expected final costs can vary, the Group believes
that the expected final costs in its various construction
contracts are appropriate at 30 June 2014.
(s) Going Concern
The financial report for the year ended 30 June 2014 has
been prepared on a going concern basis, which assumes
continuity of normal business activities and realisation of
assets and the settlement of liabilities in the ordinary
course of business.
Both the Group and our financier, the Commonwealth
Bank of Australia, desire to pursue a structured debt
reduction. To achieve this, the Commonwealth Bank of
Australia has extended the Group’s facilities to 1 October
2015.
EVZ is currently determining the optimum strategy for a
structured debt reduction which may include a change to
the capital structure and/or the orderly divestment of
some of the Group’s operations and assets.
Based on the extension of the facility to 1 October 2015
and the matters outlined above, the Directors are of the
view that it is appropriate that the financial report of EVZ
Limited and its controlled entities as at 30 June 2014 are
prepared on a going concern basis.
(t) New and Amended Accounting Standards
During the current year the Group adopted all of the
new and revised Australian Accounting Standards and
Interpretations applicable to its operations which became
mandatory. There has been no financial impact on their
adoption. Refer to Note 33 for new, revised or amending
Accounting Standards or Interpretations that are not yet
mandatory and have not been early adopted.
The financial report was authorised for issue on 30 September
2014 by the Board of Directors.
(q) Comparative Figures
When required by Accounting Standards, comparative
figures have been adjusted to conform to changes in
presentation for the current financial year.
(r) Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments
incorporated into the financial report based on historical
knowledge and best available current information.
Estimates assume a reasonable expectation of future
events and are based on current trends and economic
data, obtained both externally and within the group.
Key Estimates – Impairment
The Group assesses impairment at each reporting date
by evaluating conditions specific to the Group that may
lead to impairment of assets. Where an impairment trigger
exists, the recoverable amount of the cash generating
unit is determined. Value-in-use calculations performed
in assessing recoverable amounts incorporate a number
of key estimates. Refer Note 9 for key estimates used in
the assessment of Goodwill. Following the impairment
assessment, the carrying value of Goodwill was impaired
by $3,913,481.
At 30 June 2014, receivables from continuing operations
were impaired by $189,005.
An impairment of $343,409 was recognised in respect of
plant and equipment in the year ended 30 June 2014.
An impairment of $373,712 was recognised in respect of
other assets in the year ended 30 June 2014.
Recognition of Deferred Tax Assets
The Group has recognised deferred tax assets in
relation to Provisions ($891,679), Other ($60,571) and
Un-recouped tax losses ($3,361,165).
The realisation of these deferred tax assets is dependent
upon generating sufficient taxable profit in the coming
year.
The Group has projected its profits over the next five
years and believes that future taxable profit will be
available against which the benefits of the deferred tax
assets can be utilised.
Construction Contracts and Work-in-Progress
Construction profits are recognised on the stage-of-
completion basis and measured by comparing construction
contract costs incurred to date against expected final
costs of the construction contract.
36 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
2. PROFIT/(LOSS) FROM CONTINUING OPERATIONS
(a) OTHER INCOME
Sundry income
(b) EXPENSES
Movement in employee benefits
Bad debts
Impairment – receivables
Total employee costs
Defined contribution superannuation expense
Foreign exchange losses
Losses on sale of plant and equipment
Operating lease payments
Depreciation of plant and equipment
Impairment – other assets
Impairment – plant and equipment
Impairment – goodwill
(c) NET FINANCE COSTS
Finance costs – other persons
Interest income – other persons
Economic Entity
2014
$
Economic Entity
2013
$
109,397
109,397
222,828
91,495
189,005
29,575,151
2,163,004
(36,130)
2,144
1,020,594
807,481
373,712
343,409
3,913,481
1,106,956
(7,345)
1,099,611
90,981
90,981
138,083
14,516
(190,704)
28,637,645
2,025,322
27,725
28,653
849,031
746,783
-
-
-
1,298,475
(68,726)
1,229,749
EVZ LIMITED Annual Report FY14 l 37
Notes to and forming part of the accounts
for the year ended 30 June 2014
3. INCOME TAX
(a) The prima facie tax on profit/(loss) before income tax from
continuing operations is reconciled to income tax as follows:
Profit/(Loss) before Income Tax
Income tax calculated at 30% (2013: 30%)
Tax effect of permanent differences
Under provision/(over provision) in prior years
Taxation expense - offshore subsidiary
Income tax expense/(benefit)
The applicable weighted average effective tax rates are as follows:
(b) The components of tax expense comprise:
Current tax
Deferred tax
Under provision/(over provision) in prior years
4. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Provision for impairment
Amounts due from customers for construction contracts (refer Note 31)
Retention receivables
Other debtors and prepayments
Non-Current
Retention receivables
Economic Entity
2014
$
Economic Entity
2013
$
(7,113,187)
(2,133,956)
1,209,051
16,205
7,008
(901,692)
-
(687,434)
(230,463)
16,205
(901,692)
10,280,936
(273,309)
10,007,627
2,359,617
437,064
12,804,308
3,569,078
16,373,386
525,189
525,189
741,675
222,503
(445,338)
5,277
69,465
(148,093)
-
(148,977)
(4,393)
5,277
(148,093)
12,604,515
(84,304)
12,520,211
1,871,742
331,773
14,723,726
700,771
15,424,497
387,796
387,796
All trade and other receivables are classified as financial assets (refer Note 27).
Market practices provide for the retention of monies from progress and final billings on certain construction contracts. The monies
are received after a contracted period of time has elapsed following completion of the construction.
Current trade receivables are non-interest bearing and generally on 30 days’ terms. Non-current trade receivables are assessed for
recoverability based on the underlying terms of the contract. A provision for impairment is recognised when there is objective
evidence that an individual trade or term receivable is impaired.
There are no other balances other than those impaired within trade and other receivables that contain assets that are impaired.
It is expected these balances will be received when due. Impaired assets are provided for in full.
38 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
4. TRADE AND OTHER RECEIVABLES (Continued)
Credit Risk – Trade and Other Receivables
The group has no significant concentration of credit risk with respect to any single counter party or group of counter parties. The
class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the group.
On a geographical basis, the group has credit risk exposures in Australia and Asia given the substantial operations in those
regions. The group’s exposure to credit risk for receivables at reporting date in those regions is as follows:
Australia
Asia
Economic Entity
2014
$
14,100,962
2,797,613
16,898,575
Economic Entity
2013
$
13,943,795
1,868,498
15,812,293
The following table details the group’s trade and other receivables exposed to credit risk with ageing analysis and impairment
provided for thereon. Amounts are considered as ‘past due’ when the debt has not been settled within the terms and conditions
agreed between the group and the customer or counter party to the transaction. Receivables that are past due are assessed for
impairment by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the
debt may not be fully repaid to the group.
Gross
Amount
$
Past Due
and Impaired
$
Past Due not Impaired (Days Overdue)
> 61 days
31 - 60 days
$
$
< 30 days
$
Within
Trading Terms
$
Economic entity
2014
Trade and term receivables
Other receivables
2013
Trade and term receivables
Other receivables
13,602,806
3,569,078
17,171,884
15,195,826
700,771
15,896,597
273,309
-
273,309
2,248,772
-
2,248,772
938,730
-
938,730
1,521,496
-
1,521,496
84,304
-
84,304
1,923,611
-
1,923,611
404,602
-
404,602
1,512,154
-
1,512,154
8,620,499
3,569,078
12,189,577
11,271,155
700,771
11,971,926
The economic entity holds no financial assets with terms that have been negotiated, but which would otherwise be past
due or impaired.
Trade and other receivables pertaining to the Australian entities in the group, as disclosed in Note 32, are provided as security
against the group’s bank facilities. Also refer Notes 11 and 12.
Provision for Impairment of Receivables
Opening balance
Charge for year
Closing balance
Economic Entity
2014
$
84,304
189,005
273,309
Economic Entity
2013
$
275,008
(190,704)
84,304
EVZ LIMITED Annual Report FY14 l 39
Notes to and forming part of the accounts
for the year ended 30 June 2014
5. INVENTORIES
Current
Raw materials and stores – at cost
Economic Entity
2014
$
1,983,863
1,983,863
Economic Entity
2013
$
1,703,463
1,703,463
Inventories pertaining to the Australian entities in the group, as disclosed in Note 32, are provided as security against the group’s
bank facilities. Also refer Notes 11 and 12.
6. FINANCIAL ASSETS
Current assets
Funds on deposit
Non-current assets
Funds on deposit
9,947
9,947
52,091
52,091
Funds on deposit represent a security deposit covering a guarantee for property lease obligations and security
deposits against contract performance bonds.
7. PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Movement in carrying amounts
Carrying amount – opening balance
Additions
Disposals
Depreciation
Impairment of plant and equipment
Exchange rate adjustment
Carrying amount – closing balance
9,752,888
(5,104,606)
4,648,282
5,586,374
557,819
(329,898)
(807,481)
(343,409)
(15,123)
4,648,282
82,851
82,851
27,604
27,604
9,984,690
(4,398,316)
5,586,374
6,273,610
749,994
(727,412)
(746,783)
-
36,965
5,586,374
Plant and equipment pertaining to the Australian entities in the group, as disclosed in Note 32, are provided as security against the
group’s bank facilities. Also refer Notes 11 and 12.
40 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
8. TAX ASSETS
NON-CURRENT
Deferred tax assets
Deferred tax assets comprise:
Provisions
Other
Un-recouped tax losses
Economic Entity
2014
$
Economic Entity
2013
$
4,313,415
891,679
60,571
3,361,165
4,313,415
3,404,715
670,918
50,868
2,682,929
3,404,715
647,555
23,363
670,918
78,627
(27,759)
50,868
2,460,975
227,231
(5,277)
2,682,929
3,404,715
The movement in deferred tax assets for each temporary difference during the year is as follows:
Provisions
Opening balance
Credited/(expensed) to income account
Other
Opening balance
Credited/(expensed) to income account
Unrecouped tax losses
Opening balance
Tax losses recognised/(recouped)
Prior year adjustment
Closing balance
670,918
220,761
891,679
50,868
9,703
60,571
2,682,929
694,441
(16,205)
3,361,165
4,313,415
The carrying value of deferred tax assets of $4,313,415 (2013: $3,404,715) of which $3,361,165 (2013: $2,682,929) is supported by
taxable income projections over the next five years.
TAX LIABILITIES
CURRENT
Income Tax
NON-CURRENT
Provision for deferred tax
Opening balance
Additional provisions raised during year
Exchange rate movement
Closing balance
750
47,219
49,588
(119)
(2,250)
47,219
29,391
49,588
19,838
27,250
2,500
49,588
EVZ LIMITED Annual Report FY14 l 41
Notes to and forming part of the accounts
for the year ended 30 June 2014
9. INTANGIBLE ASSETS
Goodwill on consolidation – at cost
Less accumulated impairment
Goodwill on acquisition – at cost
Less accumulated impairment
Movements in carrying amounts
Goodwill on consolidation
Opening balance
Movement in the year
Closing balance
Goodwill on acquisition
Opening balance
Movement in year:
Impairment – TSF Engineering
Closing balance
Economic Entity
2014
$
3,282,532
-
3,282,532
24,606,758
(11,813,481)
12,793,277
16,075,809
3,282,532
-
3,282,532
16,706,758
(3,913,481)
12,793,277
Economic Entity
2013
$
3,282,532
-
3,282,532
24,606,758
(7,900,000)
16,706,758
19,989,290
3,282,532
-
3,282,532
16,706,758
-
16,706,758
It has been determined that the balances of the goodwill have an indefinite life. The excess of the fair value of net assets over the
purchase price of the businesses acquired has been allocated to goodwill rather than be allocated to other intangible assets. The
acquisition of the businesses that generate the goodwill was determined on the abilities of the entities, as a whole, to generate future
profits and hence other intangibles have not been recognised.
Goodwill is allocated to cash-generating units which are based on the group’s individual companies. All businesses operate in the
engineering services industry sector.
Water Group – Syfon Systems
Engineering Group – Brockman Engineering
Energy Group – TSF Engineering
Impairment – TSF Engineering
3,282,532
8,789,478
15,817,280
(11,813,481)
16,075,809
3,282,532
8,789,478
15,817,280
(7,900,000)
19,989,290
The current uncertainty which persists with respect to the Government’s position on energy and its pricing has significantly delayed the roll
out of the Group’s clean energy strategy. The clean energy solutions being offered by TSF have supportable benefits to prospective
clients. However, there is a general reluctance to commit to invest in these solutions by the end users until the Federal Government
establishes its energy and pricing position. As such TSF continues to face protracted lead times on clean energy opportunities.
Given these prevailing externally driven hurdles which the Group’s clean energy strategy is facing, the Directors considered it prudent to
impair at 30 June 2014 a number of assets being held in the TSF business. In particular, the carrying value of goodwill in TSF was reduced
by $3.9m. The Directors believe the carrying value of the TSF goodwill at 30 June 2014 is now appropriate given the delayed progress of
its clean energy strategy.
Impairment Disclosures
The EVZ Group assesses at each annual reporting date the potential impairment to the carrying value of Goodwill of the relevant cash
generating unit (CGU).
42 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
9. INTANGIBLE ASSETS (Continued)
The recoverable amount of each CGU (Brockman Engineering, Syfon Systems and TSF Engineering) is determined based on
value-in-use calculations. Value-in-use is calculated based on the present value of cash flow projections over a five year period
adjusted for the estimated terminal value of the cash generating unit. The cash flows are discounted using a rate reflecting the
Group’s weighted average cost of capital plus an appropriate margin for risk factors at the beginning of the budget period.
All discount rates are pre-tax.
Budgets use estimated weighted average growth rates to project revenue. Costs are calculated taking into account historical gross
margins as well as estimated weighted average inflation rates over the periods which are consistent with inflation rates applicable to
the locations in which the businesses operate.
The following assumptions were used in the value-in-use calculations:
Syfon Systems Group
Brockman Engineering Group
TSF Engineering Group
Growth Rates
2014
5%
5%
1 to 5%
Discount Rates
2014
18%
18%
18%
Growth Rates
2013
5%
5%
5%
Discount Rates
2013
20%
20%
20%
The Risk factor incorporated in the Discount rate is consistent with the prior year.
The growth rates used in the value-in-use calculations are conservative rates reflecting the minimum expected growth in each of the
relevant CGUs. These rates are based on forward work-in-hand levels, weighted project prospects and/or historical growth rates
achieved. In addition, each CGU is in a niche market which has limited competitive influence.
Sensitivity Analysis
In performing impairment testing on the carrying values of goodwill, certain discount rates and growth rates have been assumed as
part of the value-in-use calculations.
The following table illustrates sensitivities to changes in those discount rates and growth rates. The discount and growth rates used
in the sensitivity analysis are:
Syfon Systems Group
Brockman Engineering Group
TSF Engineering Group
Syfon Systems Group
Brockman Engineering Group
TSF Engineering Group
Growth Rates
Discount Rates
3%
3%
1 to 3%
25%
25%
25%
Impairment to Carrying Value of Goodwill
-
3,751,732
1,759,233
EVZ LIMITED Annual Report FY14 l 43
Notes to and forming part of the accounts
for the year ended 30 June 2014
10. TRADE AND OTHER PAYABLES
Current – unsecured
Trade payables
Sundry payables and accrued expense
11. BORROWINGS - SHORT TERM
Bank loans – secured
Bank overdraft – secured
Lease liabilities (Note 24) – secured
Economic Entity
2014
$
Economic Entity
2013
$
10,139,039
3,678,360
13,817,399
1,000,000
2,574,688
92,161
3,666,849
5,220,074
4,885,982
10,106,056
9,250,000
2,415,095
93,211
11,758,306
Bank Loans - Secured
Bank loans are in the form of Commercial Bank Bill facilities. The maturity schedule for the Commercial Bank Bill facilities is
as follows:
Current
1 to 2 years
2 to 3 years
Total Bank Loans
1,000,000
7,250,000
-
8,250,000
9,250,000
-
-
9,250,000
The interest rates on outstanding Commercial Bank Bills totalling $1,500,000 have been fixed as follows:
Commercial Bank Bills
2014
$
-
1,500,000
1,500,000
Commercial Bank Bills
2013
$
4,250,000
2,500,000
6,750,000
Interest Rates
2014
Interest Rates
2013
-
3.63%
4.55%
3.63%
The interest rates on Commercial Bank Bills totalling $6,750,000 are variable at balance date. These bills are based on 30 day
rollover terms with the interest rates locked in for the 30 day term.
The Commonwealth Bank accepted covenant breaches at 30 June 2014 and extended its facilities to the Group to 1 October 2015.
During this time, the Group will continue to pursue various strategies to reduce its current debt.
The current bank covenants are as follows:
Current ratio 1.25 times
•
Interest cover ratio 3.00 times
•
The facilities have been extended on the same terms, conditions and principal reduction requirements as existed for the matured facility.
Bank loans are secured by a registered equitable mortgage over the assets and undertakings of EVZ Limited and an unlimited
guarantee from EVZ Limited’s Australian controlled entities: Syfon Systems Pty Ltd, Brockman Engineering Pty Ltd, NuSource Water
Pty Ltd, A.C.N. 124919508 Pty Ltd, TSF Engineering Pty Ltd and TSF Maintenance Services Pty Ltd. Also refer to Note 32 for
quantification of assets secured by Australian entities.
At 30 June 2014 the economic entity has $Nil in undrawn commercial bill facilities (2013: Nil).
44 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
12. BORROWINGS - LONG TERM
Bank loans – secured
Lease liabilities (Note 24) – secured
Also refer to Note 11 for further information on bank loans.
Economic Entity
2014
$
7,250,000
205,614
7,455,614
Economic Entity
2013
$
-
176,188
176,188
13. PROVISIONS
Current
Employee benefits
Movement in employee benefits:
Opening employee balance
Provisions created/(utilised) during year
Closing balance
Non-current
Employee benefits
Movement in employee benefits:
Opening employee balance
Provisions created/(utilised) during year
Closing balance
2,380,563
2,380,563
2,162,396
218,167
2,380,563
60,595
60,595
55,934
4,661
60,595
2,162,396
2,162,396
1,912,385
250,011
2,162,396
55,934
55,934
167,862
(111,928)
55,934
A provision has been recognised for employee entitlements relating to long service leave. 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 on historical data. The measure
and recognition criteria relating to employee benefits are disclosed in Note 1(k).
EVZ LIMITED Annual Report FY14 l 45
Notes to and forming part of the accounts
for the year ended 30 June 2014
14. ISSUED CAPITAL
Issued and paid up
208,439,414 ordinary shares
(2013: 208,439,414 ordinary shares) – refer Note 14(a)
(a) Issued and fully paid up ordinary shares
Opening balance
Issue
Closing balance
Opening balance
Issue
Closing balance
Economic Entity
2014
$
Economic Entity
2013
$
46,055,159
46,055,159
46,055,159
46,055,159
46,055,159
-
46,055,159
2014
No.
208,439,414
-
208,439,414
46,023,159
32,000
46,055,159
2013
No.
207,939,414
500,000
208,439,414
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of
shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands. The ordinary shares have no par value.
(b) Share options
There are no share options on issue at 30 June 2014 (2013: Nil).
(c) Capital management:
Management controls the capital of the economic entity in order to maintain a good debt to equity ratio, provide shareholders
with adequate returns and ensure the economic entity can fund its operations and continue as a going concern. The economic
entity’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements. Management effectively manages the economic entity’s capital by
assessing the economic entity’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, distributions to shareholders and share issues.
The economic entity’s gearing ratio is represented as net debt as a percentage of total capital and is determined as follows:
•
•
Net debt is total borrowings less cash and cash equivalents.
Total capital is total equity and net debt.
As at 30 June 2014 the economic entity’s gearing ratio was 33% (2013: 27%).
46 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
15. DIVIDENDS
Interim fully franked ordinary dividend
Final fully franked ordinary dividend
Balance of Franking Account
Economic Entity
2014
$
-
-
-
1,813,797
Economic Entity
2013
$
-
-
-
1,847,610
16. RESERVES AND ACCUMULATED LOSSES
(a) Accumulated Losses
Accumulated losses at the beginning of the financial year
Transfer from capital reserves
Net profit/(loss) attributable to members of the parent entity
Accumulated losses at the end of the financial year
(b) Reserves
Capital Reserve
Reserve at beginning of year
Movement for year
Reserves at end of year
Foreign Currency Translation Reserve
Reserve at beginning of year
Movement for year
Reserve at end of year
(21,137,642)
-
(6,211,495)
(27,349,137)
-
-
-
(40,933)
(64,987)
(105,920)
(105,920)
(22,226,110)
198,700
889,768
(21,137,642)
198,700
(198,700)
-
(175,959)
135,026
(40,933)
(40,933)
Capital reserves representing capital profits were transferred to accumulated losses in the prior year.
17. EARNINGS PER SHARE
(a) Weighted average number of ordinary shares
outstanding during the year used in calculation
of Basic Earnings per Share
(b) Weighted average number of ordinary shares
outstanding during the year used in calculation
of Diluted Earnings per Share
2014
No.
2013
No.
208,439,414
208,125,715
208,439,414
208,125,715
EVZ LIMITED Annual Report FY14 l 47
Notes to and forming part of the accounts
for the year ended 30 June 2014
18. KEY MANAGEMENT PERSONNEL
Names and positions of directors and key management personnel in office at any time during the financial year are:
Mr M Findlay
Mr G Burns
Mr R Edgley
Ms R Murphy
Mr S Farthing
Mr I Wallace
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Chief Financial Officer and Company Secretary
Mr A Bellgrove
Mr C Bishop (appointed 1/7/13)
Mr A Green
General Manager of Syfon Systems Group
General Manager of Brockman Engineering
General Manager of TSF Engineering Group
Mr C Flanagan (resigned 1/5/14)
Manager of TSF Maintenance Services
Remuneration of key management personnel is:
Short term employee benefits
Post employment benefits
Consulting fees
Economic Entity
2014
$
1,827,413
120,058
-
1,947,471
Economic Entity
2013
$
1,765,178
111,527
77,172
1,953,877
Refer to disclosures in Note 20 for other transactions with directors and Key Management Personnel.
The number of ordinary shares held by each key management personnel of the Group during the financial year is as follows:
30 June 2014
M Findlay
G Burns
R Edgley
Ms R Murphy
S Farthing
I Wallace
C Bishop
M Goddard
A Bellgrove
A Green
C Flanagan (resigned 1/5/14)
Balance at
beginning of year
1,644,500
8,999,021
2,800,000
42,500
1,000,000
75,008
-
421,949
4,401,949
132,000
6,500
19,523,427
Granted as
Remuneration
-
-
-
-
-
-
-
-
-
-
-
-
Other
Changes
-
1,000,979
941,232
-
-
-
-
(421,949)
-
-
(6,500)
1,513,762
Balance at
end of year
1,644,500
10,000,000
3,741,232
42,500
1,000,000
75,008
-
-
4,401,949
132,000
-
21,037,189
From 1 July 2013, Mr Goddard ceased being a Key Management Personnel.
48 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
18. KEY MANAGEMENT PERSONNEL (Continued)
30 June 2013
M Findlay
G Burns
R Edgley
Ms R Murphy (appointed 28/9/12)
P Jones (resigned 28/8/12)
S Farthing
I Wallace
M Goddard
A Bellgrove
A Green
C Flanagan
Balance at
beginning of year
1,345,000
8,546,389
975,000
-
8,000,000
-
75,008
421,949
4,401,949
54,000
-
23,819,295
Granted as
Remuneration
-
-
-
-
-
500,000
-
-
-
-
-
500,000
Other
Changes
299,500
452,632
1,825,000
42,500
(8,000,000)
500,000
-
-
-
78,000
6,500
(4,795,868)
Balance at
end of year
1,644,500
8,999,021
2,800,000
42,500
-
1,000,000
75,008
421,949
4,401,949
132,000
6,500
19,523,427
In the 2013 financial year, Ms Murphy acted as interim Chief Executive Officer to 24 September 2012. Ms Murphy was engaged on
a contract basis through 333 Management Pty Ltd. Fees paid to 333 Management Pty Ltd relating to Ms Murphy’s engagement as
interim Chief Executive Officer were $77,172. Further fees totalling $150,000 were also paid to 333 Management Consulting
Services Pty Ltd for other services.
There are no share options issued at 30 June 2014 (2013: Nil).
Remuneration Policy
The remuneration policy of EVZ Limited has been designed to align Director and Executive remuneration with shareholder and
business objectives by providing a fixed remuneration component and where appropriate offering specific short and long-term
incentives based on key performance areas affecting the economic entity’s financial results. The Board believes the remuneration
policy to be appropriate and effective in its ability to attract and retain the best Directors and Executives to govern and manage the
economic entity, as well as to create goal congruence between Directors, Executives and Shareholders.
Executive Remuneration
The Board’s policy for determining the nature and amount of remuneration for key senior Executives for the economic entity is as
follows:
• The remuneration policy, setting the terms and conditions for Executive officers, was developed by the Remuneration Committee
and approved by the Board after seeking professional advice where appropriate from independent external consultants.
• All Executives receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe
benefits and where appropriate performance incentives.
The Remuneration Committee reviews Executive remuneration packages annually with reference to the economic entity’s performance,
each Executive’s performance and comparable information from industry sectors and listed companies in similar industries. The
performance of each Executive is measured against criteria agreed with each Executive and is based predominantly on forecast
growth of the economic entity’s profits and shareholders’ value. Bonuses and incentives will be linked to predetermined performance
criteria. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend
changes to the Remuneration Committee’s recommendations. Any changes must be justified by reference to measurable performance
criteria. The policy is designed to attract the highest calibre of Executives and reward them for performance that results in long-term
growth in shareholder wealth.
The Remuneration Committee set certain key performance indicators for the key Executives in the Group. The key performance
indicators were both quantitative and qualitative measures. Certain Executives met some of these key performance indicators and
the Remuneration Committee approved short term incentive payments totaling $41,750 (2013: $Nil).
EVZ LIMITED Annual Report FY14 l 49
Notes to and forming part of the accounts
for the year ended 30 June 2014
18. KEY MANAGEMENT PERSONNEL (Continued)
Long term incentives, linked with performance rights issued under the EVZ Directors’ and Employees’ Benefits Plan, were not met
during the year and no performance rights, options or shares were issued.
Executives receive a superannuation guarantee contribution as required by the Government and do not receive any other retirement
benefits. Individuals may choose to sacrifice part of their salary to increase payments towards superannuation. All remuneration
paid to Executives is valued at the cost to the Company and expensed.
Director Remuneration
The Board’s policy is to remunerate Non-Executive Directors at appropriate market rates. The Remuneration Committee recommends
the fee structure for Non-Executive Directors which will be determined by reference to market practice, duties performed, time,
commitment and accountability. Director fees are reviewed annually by the Remuneration Committee.
The Remuneration Committee may seek independent advice in determining appropriate fee structures for Directors.
The maximum aggregate amount of fees payable to Non-Executive Directors is subject to approval by shareholders at the Annual
General Meeting. Fees for Non-Executive Directors are not linked to the performance of the economic entity. However, to align
Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company and may be able to
participate in any employee share/option plan introduced.
All remuneration paid to Directors is valued at the cost to the Company and expensed.
19. AUDITORS’ REMUNERATION
Remuneration paid/payable to Auditors for:
- audit or review of financial report
- taxation services
Economic Entity
2014
$
100,426
-
100,426
Economic Entity
2013
$
74,635
-
74,635
20. RELATED PARTY DISCLOSURES
(a) The directors of EVZ Limited during the financial year were:
Mr M Findlay
Mr G Burns
Mr R Edgley
Ms R Murphy
(b) Transactions with director related entities
• Consulting fees of $100,000 (2013: $100,000) were paid and $65,000 (2013: $45,000) is payable to M Findlay.
• Consulting fees of $45,000 (2013: $45,000) were paid and $11,250 (2013: $11,250) is payable to G Burns.
• Consulting fees of $41,250 (2013: $45,000) were paid and $7,500 (2013: $3,750) is payable to R Edgley.
• Consulting fees of $11,250 (2013 $22,500) were paid and $45,000 (2013: $11,250) is payable to R Murphy.
50 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
21. SEGMENT REPORTING
Segment Information
Identification of reportable segments
The group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors
(chief operating decision makers) in assessing performance and determining the allocation of resources.
The group is managed primarily on the basis of product category and service offerings as the diversification of the group’s
operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore
determined on the same basis.
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
Types of products and services by segment
i. Engineering
The engineering segment designs, manufactures and installs large steel tanks, silos, cooling towers, pipe spooling, pressure
vessels and fabricates structural steel. All products produced are aggregated as one reportable segment as the products are
similar in nature, manufactured and distributed to similar types of customers and subject to a similar regulatory environment.
The engineering segment is also involved in the installation process and provides ongoing support and maintenance for its
products. Support is provided to existing customers for maintenance required for products under warranty.
ii. Energy
The energy segment designs and installs constant load power stations, back-up power generation equipment and
sustainable/clean energy solutions. In addition, the segment services, maintains and hires all types of generators and associated
equipment.
iii. Water
The water segment designs syfonic roof drainage systems for large and/or complex roof structures, supplies and installs fibreglass
panel tanks and prefabricated hydraulic systems.
Basis of accounting for purposes of reporting by operating segments
i. Accounting policies adopted
Unless stated otherwise, all amounts reported to the board of directors, being the chief decision makers with respect to operating
segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial
statements of the Group.
ii. Inter-segment transactions
Inter-segment sales are based on values that 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. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on
market interest rates. This policy represents a departure from that applied to the statutory financial statements.
iii. Segment assets
Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from
that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.
EVZ LIMITED Annual Report FY14 l 51
Notes to and forming part of the accounts
for the year ended 30 June 2014
21. SEGMENT REPORTING (Continued)
iv. Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the
segment. Tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include
trade and other payables and certain direct borrowings.
v. Unallocated items
The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered
part of the core operations of any segment:
• Derivatives
• Net gains on disposal of available-for-sale investments
• Impairment of assets and other non-recurring items of revenue or expense
• Income tax expense
• Current tax liabilities
• Other financial liabilities
• Discontinuing operations
Segment Reporting – Continuing Operations
30 June 2014
REVENUE
External sales
Inter-segment sales
Total segment revenue
Engineering
$
19,376,766
1,675,373
21,052,139
Energy
$
23,413,989
-
23,413,989
Water
$
21,642,400
-
21,642,400
Corporate
$
-
-
-
Total
$
64,433,155
1,675,373
66,108,528
Reconciliation of segment revenue to Group revenue
Inter-segment elimination
Total Group revenue
Included in segment net profit before interest and tax
Depreciation
Impairment
• Receivables
• Plant and equipment
• Other assets
• Goodwill
Segment net profit/(loss) before interest and tax
Reconciliation of segment result to Group
net profit before tax
Unallocated items
• Net finance costs
• Other costs
Net loss before tax from continuing operations
(1,675,373)
64,433,155
392,363
172,109
233,078
9,931
807,481
1,791
-
-
-
(1,701,533)
-
343,409
373,712
3,913,481
(4,282,061)
187,214
-
-
-
1,847,515
-
-
-
-
(1,439,895)
189,005
343,409
373,712
3,913,481
(5,575,974)
(1,099,611)
(437,602)
(7,113,187)
52 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
21. SEGMENT REPORTING (Continued)
30 June 2013
REVENUE
External sales
Inter-segment sales
Total segment revenue
Engineering
$
26,633,305
-
26,633,305
Energy
$
13,375,459
-
13,375,459
Water
$
17,193,572
-
17,193,572
Corporate
$
-
-
-
Total
$
57,202,336
-
57,202,336
Reconciliation of segment revenue to Group revenue
Inter-segment elimination
Total Group revenue
Included in segment net profit before interest and tax
Depreciation
Impairment
• Receivables
Segment net profit/(loss) before interest and tax
Reconciliation of segment result to Group
net profit before tax
Unallocated items
• Net finance costs
Net profit before tax from continuing operations
-
57,202,336
426,680
125,159
187,906
7,038
746,783
(59,937)
-
(130,767)
-
(190,704)
1,918,559
(224,231)
1,472,506
(1,195,410)
1,971,424
(1,229,749)
741,675
EVZ LIMITED Annual Report FY14 l 53
Notes to and forming part of the accounts
for the year ended 30 June 2014
21. SEGMENT REPORTING (Continued)
Secondary Reporting (including Discontinued Operations)
30 June 2014
ASSETS
Segment assets
Reconciliation of segment assets to Group assets
Inter-segment eliminations
Total group assets
Segment asset increases for the period
Capital expenditure
LIABILITIES
Segment liabilities
Reconciliation of segment liabilities to Group liabilities
Inter-segment eliminations
Total Group liabilities
30 June 2013
ASSETS
Segment assets
Reconciliation of segment assets to Group assets
Inter-segment eliminations
Total Group assets
Segment asset increases for the period
Capital expenditure
LIABILITIES
Segment liabilities
Reconciliation of segment liabilities to Group liabilities
Inter-segment eliminations
Total Group liabilities
Engineering
$
Energy
$
Water
$
Corporate
$
Total
$
18,683,863
9,048,242
16,089,982
29,598,347
73,420,434
(27,391,343)
46,029,091
106,813
106,813
53,669
53,669
397,337
397,337
-
-
557,819
557,819
23,593,839
19,312,407
6,518,311
9,596,550
59,021,107
(31,592,118)
27,428,989
21,268,725
13,497,438
11,752,186
31,289,712
77,808,061
(28,593,618)
49,214,443
119,516
119,516
256,505
256,505
351,125
351,125
22,848
22,848
749,994
749,994
24,992,766
18,864,376
3,836,241
9,408,959
57,102,342
REVENUE BY GEOGRAPHICAL REGION
Revenue, including revenue from discontinued operations, attributable
to external customers is disclosed below, based on the location of the
external customer:
Australia
Asia
Total revenue
ASSETS BY GEOGRAPHICAL REGION
The location of segment assets by geographical location of the assets is
disclosed below:
Australia
Asia
Total assets
54 l EVZ LIMITED Annual Report FY14
(32,764,483)
24,337,859
Economic Entity
2013
$
52,846,013
4,356,323
57,202,336
Economic Entity
2014
$
60,613,175
3,819,980
64,433,155
40,942,022
5,087,069
46,029,091
45,409,095
3,805,348
49,214,443
Notes to and forming part of the accounts
for the year ended 30 June 2014
21. SEGMENT REPORTING (Continued)
Major Customers
The Group has a number of customers to whom it provides products and services. In the current year, the Group has a single customer
in the Energy segment who accounts for 77% (2013: 27%) of external revenue. There are no other significant client accounts.
22. STATEMENT OF CASH FLOWS
(i) Cash balances comprise:
Cash on hand
Bank overdraft
Closing cash balance
(ii) Reconciliation of the operating profit/(loss) after
tax to net cash flows from operations:
Operating profit/(loss) after tax
Gain/loss on sale of plant and equipment
Employee share issue
Gain on disposal of controlled entity
Depreciation - plant & equipment
Foreign currency translation
Impairment - receivables
Impairment - plant and equipment
Impairment – other assets
Impairment - goodwill
Changes in assets and liabilities adjusted for
effects of acquisition/disposal of operations
during financial year
Increase/(Decrease) in provisions for employee entitlements
(Increase)/Decrease in inventories
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in deferred tax assets
Increase/(Decrease) in payables
Increase/(Decrease) in tax liabilities
Net cash provided/(used) by operating activities
Economic Entity
2014
$
2,047,109
(2,574,688)
(527,579)
(6,211,495)
2,144
-
-
807,481
(49,864)
189,005
343,409
373,712
3,913,481
222,828
(280,400)
(1,600,582)
(908,700)
3,711,343
(31,010)
481,352
Economic Entity
2013
$
2,607,853
(2,415,095)
192,758
889,768
28,653
32,000
(72,419)
746,783
98,061
(190,704)
-
-
-
138,083
188,569
(4,073,443)
(217,558)
2,613,306
59,141
240,240
EVZ LIMITED Annual Report FY14 l 55
Notes to and forming part of the accounts
for the year ended 30 June 2014
23. STANDBY ARRANGEMENTS AND UNUSED CREDIT FACILITIES
Controlled entities in the economic entity have Contingent Liability Bank Guarantee facilities totalling $7,730,332 available to them
as at 30 June 2014 (2013: $7,493,305). Of this total facility, $5,498,920 has been utilised and $2,231,412 (2013: $2,900,874)
remains unused and available for the controlled entities use as at 30 June 2014. The facilities are secured by a registered equitable
mortgage over the assets and undertakings of all Australian companies in the economic entity.
Controlled entities in the economic entity have Bank Overdraft facilities totaling $2,629,668 available to them as at 30 June 2014
(2013: $2,956,695). Of the total available facilities, $54,980 (2013: $541,600) remains unused and available for use. The facilities
are secured by registered equitable mortgages over the assets and undertakings of all Australian companies in the economic entity.
24. LEASE COMMITMENTS
Leases are payable as follows:
Not later than 12 months
Later than 12 months but not later than 2 years
Later than 2 years but not later than 5 years
Later than 5 years
Future lease finance charges
Lease liabilities recognised in the statement of financial position:
Current
Non-current
Total lease liability
Economic Entity
2014
$
Economic Entity
2013
$
108,949
91,162
131,136
4,974
336,221
(38,446)
297,775
92,161
205,614
297,775
104,374
65,190
119,992
10,398
299,954
(30,555)
269,399
93,211
176,188
269,399
The weighted average interest rate implicit in these leases is 5.82% pa (2013: 4.95% pa). Leases pertain to various plant,
equipment and motor vehicles and are secured against the asset to which they relate.
25. OPERATING LEASE COMMITMENTS
Property
Not later than 12 months
Between 12 months but not later than 5 years
Plant and equipment
Not later than 12 months
Between 12 months but not later than 5 years
Total commitments not recognised in the financial statements
764,636
874,550
1,639,186
77,436
137,847
215,283
1,854,469
805,772
1,183,876
1,989,648
76,344
99,936
176,280
2,165,928
Property leases and plant and equipment leases are non-cancellable with a maximum five year term, with rent payable in advance.
Property leases have contingent rental provisions within the lease agreement which require the minimum lease payments to be
increased by at least the CPI per annum. Options exist to renew certain leases at the end of their lease term. With the approval of
the lessors the property leases may be extended for further terms.
56 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
26. CONTINGENT LIABILITIES
Apart from drawn bank guarantee facilities (refer Note 23), there were no contingent liabilities as at 30 June 2014 (2013: Nil).
27. FINANCIAL INSTRUMENTS
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments,
accounts receivable and payable, loans to and from subsidiaries, bank bills and leases.
The main purpose of non-derivative financial instruments is to raise finance for Group operations.
(i) Treasury Risk Management
The Board of Directors is responsible for monitoring treasury risk. Currency and interest rate exposures are reviewed regularly to
ensure any risk associated with these exposures is minimized.
(ii) Financial Risks
The main risks the economic entity is exposed to through its financial instruments are interest rate risk, foreign currency risk,
liquidity risk and credit risk.
• Interest rate risk
The majority of the economic entity’s borrowings take the form of bank accepted bills of exchange. Fixed interest bank loans
account for 18% (2013: 73%) of the total bank loans currently outstanding.
• Foreign currency risk
The economic entity is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services
in currencies other than the economic entity’s measurement currency. The economic entity monitors its foreign exchange
exposure on a regular basis.
• Liquidity risk
The economic entity manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash reserves
are maintained.
• Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised
financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of
financial position and notes to the financial statements. The economic entity does not have any material credit risk exposure
to any single receivable or Group of receivables under financial instruments entered into by the economic entity.
(a) Interest Rate Risk Exposures
The economic entity’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial
assets and financial liabilities is set out opposite. Exposures arise predominantly from assets and liabilities bearing variable
interest rates as the economic entity intends to hold fixed rate, assets and liabilities to maturity.
EVZ LIMITED Annual Report FY14 l 57
Notes to and forming part of the accounts
for the year ended 30 June 2014
27. FINANCIAL INSTRUMENTS (Continued)
Floating
Interest Rate
Fixed Interest
Non Interest
Bearing
Total
1 year
or less
$
1-5
years
$
More than
5 years
$
$
$
2014
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Weighted average interest rate
Financial Liabilities
Trade and other payables
Borrowings
Lease liabilities
Weighted average interest rate
Net Financial Assets
(Liabilities)
2013
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Weighted average interest rate
Financial Liabilities
Trade and other payables
Borrowings
Lease liabilities
Weighted average interest rate
Net Financial Assets
(Liabilities)
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,574,688
-
2,574,688
-
8,250,000
92,161
8,342,161
-
-
201,082
201,082
-
-
-
-
-
-
-
4,532
4,532
2,047,109
16,898,575
62,038
19,007,722
-
13,817,399
-
-
13,817,399
2,047,109
16,898,575
62,038
19,007,722
-
13,817,399
10,824,688
297,775
24,939,862
12.48%
6.7%
6.75%
5.82%
-
-
(2,574,688)
(8,342,161)
(201,082)
(4,532)
5,190,323
(5,932,140)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,607,853
15,812,293
110,455
18,530,601
2,607,853
15,812,293
110,455
18,530,601
-
-
-
2,415,095
-
2,415,095
-
9,250,000
93,211
9,343,211
-
-
166,910
166,910
-
-
9,278
9,278
10,106,056
-
-
10,106,056
10,106,056
11,665,095
269,399
22,040,550
10.23%
7.71%
4.95%
4.95%
-
-
(2,415,095)
(9,343,211)
(166,910)
(9,278)
8,424,545
(3,509,949)
Reconciliation of Net Financials Assets/(Liabilities) to Net Assets
Net financial assets/(liabilities)
Add/(subtract) non-financial assets and liabilities:
Inventories
Plant and equipment
Intangible assets
Deferred tax assets
Provisions
Net Assets
58 l EVZ LIMITED Annual Report FY14
Economic Entity
2014
$
(5,932,140)
Economic Entity
2013
$
(3,509,949)
1,983,863
4,648,282
16,075,809
4,313,415
(2,489,127)
18,600,102
1,703,463
5,586,374
19,989,290
3,404,715
(2,297,309)
24,876,584
Notes to and forming part of the accounts
for the year ended 30 June 2014
27. FINANCIAL INSTRUMENTS (Continued)
(b) Net fair value of financial assets and liabilities
The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities of the
economic entity approximate their carrying value.
(c) Liquidity risk
Refer to Note 27(a) for a maturity analysis of financial assets and liabilities. All floating interest rate balances and all non-interest
bearing balances are current and due within 12 months.
(d) Sensitivity analysis
The interest rate on Commercial Bank Bills totalling $1,500,000 (2013: $6,750,000) has been fixed. The Group believes it has
minimal exposure to interest rate risk for the remainder of the facility term given the current economic stability in interest rates.
(e) Foreign currency risk
Refer Note 21 for a breakdown of revenue and assets by geographical location. Whilst the economic entity monitors its foreeign
exchange risk, it does not believe there is any material risk associtated with its foreign exchange exposure.
(f) Price risk
The ecomomic entity believes it has minimal exposure to price risk as costs of major materials and components are set at the
time of project tender.
28. SHARE BASED PAYMENTS
There were no share-based payments in the year ended 30 June 2014 (2013: $32,000).
29. INVESTMENT IN CONTROLLED ENTITIES
Name of Entity
Country of
Incorporation
Class of
Shares
Equity Holdings
2013
2014
Syfon Systems Pty Ltd
Syfon Systems Sdn Bhd
Brockman Engineering Pty Ltd
NuSource Water Pty Ltd
Danum Engineering Pty Ltd
A.C.N. 124919508 Pty Ltd
TSF Engineering Pty Ltd
Syfon Systems Pte Ltd
EVZ Engineering Pty Ltd
EVZ Energy Pty Ltd
Australia
Malaysia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Cost of Parent Entity’s Investment
2013
$
3,700,650
34,504
-
-
-
2014
$
3,700,650
34,504
-
-
-
-
-
-
-
3,735,154
-
-
-
-
3,735,154
EVZ Engineering Pty Ltd, EVZ Energy Pty Ltd and NuSource Water Pty Ltd did not trade during the year.
EVZ LIMITED Annual Report FY14 l 59
Notes to and forming part of the accounts
for the year ended 30 June 2014
30. SUBSEQUENT EVENTS
There have not been any matters or circumstances, other than that referred to in the financial statements or notes thereto, that have
arisen since the end of the financial year, that have significantly affected, or may significantly affect, the operations of the economic
entity, the results of those operations, or the state of affairs of the economic entity in future financial years after this financial year.
31. CONSTRUCTION CONTRACTS
Aggregate amount of contract revenue recognised during the financial year
Aggregate of contract costs incurred and profits recognised (including losses
recognised) to date on contracts in progress
Progress billings
Receipts in advance
Amounts due from customers for contract work in progress
Total receivable from customers for contract work in progress as included in Note 4
Retention Receivables as included in Note 4
Economic Entity
2014
$
52,186,677
74,356,908
71,717,282
280,009
2,359,617
7,795,685
962,253
Economic Entity
2013
$
43,989,108
41,424,827
39,553,085
-
1,871,742
10,588,615
719,569
32. DEED OF CROSS GUARANTEE
During the financial year, a deed of cross guarantee between EVZ Ltd (Parent Entity) and TSF Engineering Pty Ltd, TSF Maintenance
Services Pty Ltd, Brockman Engineering Pty Ltd, Danum Engineering Pty Ltd, A.C.N. 124919508 Pty Ltd, Syfon Systems Pty Ltd,
NuSource Water Pty Ltd, EVZ Energy Pty Ltd and EVZ Engineering Pty Ltd (Group Entities) existed and relief is obtained from
preparing financial statements for those Group Entities under ASIC Class Order 98/1418. Under the deed, EVZ Ltd and the Group
Entities jointly guarantee to support the liabilities and obligations of the Group Entities. EVZ Ltd and the Group Entities are the only
parties to the Deeds of Cross Guarantee and form the Closed Group. The following are the aggregate totals, for each category,
relieved under the deed:
Closed Group & Parties to Deed of Cross Guarantee
Financial information in relation to:
i.
ii.
iii.
Statement of Profit or Loss and Other Comprehensive Income
Profit/(Loss) before income tax
Income tax expense/(benefit)
Profit/(Loss) after income tax
Profit/(Loss) attributable to members of the parent entity
Retained Earnings
Retained losses at the beginning of the year
Profit/(Loss) after income tax
Transfer from capital profits reserve
Retained losses at the end of the year
Statement of Financial Position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
2014
$
(7,212,102)
908,700
(6,303,402)
(6,303,402)
(22,314,376)
(6,303,402)
-
(28,617,778)
1,939,540
14,037,368
1,553,249
17,530,157
2013
$
486,063
(217,558)
703,621
703,621
(23,216,697)
703,621
198,700
(22,314,376)
2,391,685
13,943,390
1,402,085
17,737,160
60 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
32. DEED OF CROSS GUARANTEE (Continued)
Closed Group & Parties to Deed of Cross Guarantee
2013
$
2014
$
Non-current assets
Property, plant and equipment
Deferred tax asset
Other receivables
Financial assets
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Short term borrowings
Total current liabilities
Non-current liabilities
Long-term borrowings
Long-term provisions and other payables
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained losses
4,344,691
4,313,415
1,140,837
23,449
16,246,094
26,068,486
43,598,643
15,039,710
3,646,538
18,686,248
7,414,419
60,595
7,475,014
26,161,262
17,437,381
46,055,159
(28,617,778)
17,437,381
5,253,187
3,404,715
1,278,416
97,952
20,159,575
30,193,845
47,931,005
12,284,002
11,737,464
24,021,466
112,822
55,934
168,756
24,190,222
23,740,783
46,055,159
(22,314,376)
23,740,783
33. NEW AND AMENDED ACCOUNTING STANDARDS
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new, revised or amending
Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards and
Interpretations is disclosed below. The adoption of these Accounting Standards and Interpretations did not have any significant
impact on the financial performance or position of the consolidated entity.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
• AASB 10 Consolidated Financial Statements
The consolidated entity has applied AASB 10 from 1 July 2013, which has a new definition of 'control'. Control exists when the
reporting entity is exposed, or has the rights, to variable returns from its involvement with another entity and has the ability to
affect those returns through its 'power' over that other entity. A reporting entity has power when it has rights that give it the
current ability to direct the activities that significantly affect the investee's returns. The consolidated entity not only has to
consider its holdings and rights but also the holdings and rights of other shareholders in order to determine whether it has the
necessary power for consolidation purposes.
EVZ LIMITED Annual Report FY14 l 61
Notes to and forming part of the accounts
for the year ended 30 June 2014
33. NEW AND AMENDED ACCOUNTING STANDARDS (Continued)
• AASB 11 Joint Arrangements
The consolidated entity has applied AASB 11 from 1 July 2013. The standard defines which entities qualify as joint arrangements
and removes the option to account for joint ventures using proportional consolidation. Joint ventures, where the parties to the
agreement have the rights to the net assets, are accounted for using the equity method. Joint operations, where the parties to
the agreements have the rights to the assets and obligations for the liabilities, will account for its share of the assets, liabilities,
revenues and expenses separately under the appropriate classifications.
• AASB 12 Disclosure of Interests in Other Entities
The consolidated entity has applied AASB 12 from 1 July 2013. The standard contains the entire disclosure requirement
associated with other entities, being subsidiaries, associates, joint arrangements (joint operations and joint ventures) and
unconsolidated structured entities. The disclosure requirements have been significantly enhanced when compared to the
disclosures previously located in AASB 127 'Consolidated and Separate Financial Statements', AASB 128 'Investments in
Associates', AASB 131 'Interests in Joint Ventures' and Interpretation 112 'Consolidation - Special Purpose Entities'.
• AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising
from AASB 13
The consolidated entity has applied AASB 13 and its consequential amendments from 1 July 2013. The standard provides a
single robust measurement framework, with clear measurement objectives, for measuring fair value using the 'exit price' and
provides guidance on measuring fair value when a market becomes less active. The 'highest and best use' approach is used to
measure non-financial assets whereas liabilities are based on transfer value. The standard requires increased disclosures where
fair value is used.
• AASB 119 Employee Benefits (September 2011) and AASB 2011-10 Amendments to Australian Accounting
Standards arising from AASB 119 (September 2011)
The consolidated entity has applied AASB 119 and its consequential amendments from 1 July 2013. The standard eliminates
the corridor approach for the deferral of gains and losses; streamlines the presentation of changes in assets and liabilities
arising from defined benefit plans, including requiring re-measurements to be presented in other comprehensive income; and
enhances the disclosure requirements for defined benefit plans. The standard also changed the definition of short-term
employee benefits, from 'due to' to 'expected to' be settled within 12 months. Annual leave that is not expected to be wholly
settled within 12 months is now discounted allowing for expected salary levels in the future period when the leave is expected to
be taken.
• AASB 127 Separate Financial Statements (Revised), AASB 128 Investments in Associates and Joint Ventures
(Reissued) and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and
Joint Arrangements Standards
The consolidated entity has applied AASB 127, AASB 128 and AASB 2011-7 from 1 July 2013. AASB 127 and AASB 128 have
been modified to remove specific guidance that is now contained in AASB 10, AASB 11 and AASB 12 and AASB 2011-7 makes
numerous consequential changes to a range of Australian Accounting Standards and Interpretations. AASB 128 has also been
amended to include the application of the equity method to investments in joint ventures.
• AASB 2012-2 Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets and
Financial Liabilities
The consolidated entity has applied AASB 2012-2 from 1 July 2013. The amendments enhance AASB 7 'Financial Instruments:
Disclosures' and requires disclosure of information about rights of set-off and related arrangements, such as collateral
agreements. The amendments apply to recognised financial instruments that are subject to an enforceable master netting
arrangement or similar agreement.
62 l EVZ LIMITED Annual Report FY14
Notes to and forming part of the accounts
for the year ended 30 June 2014
33. NEW AND AMENDED ACCOUNTING STANDARDS (Continued)
• AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle
The consolidated entity has applied AASB 2012-5 from 1 July 2013. The amendments affect five Australian Accounting
Standards as follows: Confirmation that repeat application of AASB 1 'First-time Adoption of Australian Accounting Standards' is
permitted; Clarification of borrowing cost exemption in AASB 1; Clarification of the comparative information requirements when
an entity provides an optional third column or is required to present a third statement of financial position in accordance with
AASB 101 'Presentation of Financial Statements'; Clarification that servicing of equipment is covered by AASB 116 'Property,
Plant and Equipment', if such equipment is used for more than one period; Clarification that the tax effect of distributions to
holders of equity instruments and equity transaction costs in AASB 132 'Financial Instruments: Presentation' should be
accounted for in accordance with AASB 112 'Income Taxes'; and Clarification of the financial reporting requirements in AASB 134
'Interim Financial Reporting' and the disclosure requirements of segment assets and liabilities.
• AASB 2012-10 Amendments to Australian Accounting Standards - Transition Guidance and Other Amendments
The consolidated entity has applied AASB 2012-10 amendments from 1 July 2013, which amends AASB 10 and related
standards for the transition guidance relevant to the initial application of those standards. The amendments clarify the
circumstances in which adjustments to an entity's previous accounting for its involvement with other entities are required and
the timing of such adjustments.
• AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel
Disclosure Requirement
The consolidated entity has applied 2011-4 from 1 July 2013, which amends AASB 124 'Related Party Disclosures' by
removing the disclosure requirements for individual Key Management Personnel ('KMP'). Corporations and Related Legislation
Amendment Regulations 2013 and Corporations and Australian Securities and Investments Commission Amendment
Regulation 2013 (No.1) now specify the KMP disclosure requirements to be included within the directors' report.
EVZ LIMITED Annual Report FY14 l 63
Notes to and forming part of the accounts
for the year ended 30 June 2014
34. PARENT ENTITY DISCLOSURES
Information relating to the Parent Entity, EVZ Limited, is as follows:
(i) Financial Position
Parent Entity
2014
$
Parent Entity
2013
$
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Reserves
Total equity
(ii) Financial Performance
Comprehensive income
Profit/(Loss) for the year
Transfer from capital profits reserve
Total comprehensive income/(loss)
101,770
19,315,799
19,417,569
2,375,292
7,250,000
9,625,292
46,055,159
(36,262,882)
-
9,792,277
(4,188,476)
-
(4,188,476)
128,080
23,261,632
23,389,712
9,395,197
13,762
9,408,959
46,055,159
(32,074,406)
-
13,980,753
(1,037,072)
198,700
(838,372)
(iii) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
A deed of cross guarantee between EVZ Ltd (Parent Entity) and TSF Engineering Pty Ltd, TSF Maintenance Services Pty Ltd,
Brockman Engineering Pty Ltd, Danum Engineering Pty Ltd, A.C.N. 124919508 Pty Ltd (formerly National Engineering Pty Ltd),
Syfon Systems Pty Ltd, NuSource Water Pty Ltd, EVZ Energy Pty Ltd (previously Cellular Beams Pty Ltd) and EVZ Engineering
Pty Ltd (Group Entities) is enacted and relief was obtained from preparing financial statements for those Group Entities under
ASIC Class Order 98/1418. Under the deed, EVZ Ltd and the Group Entities jointly guarantee to support the liabilities and
obligations of the Group Entities. EVZ Ltd and the Group Entities are the only parties to the Deeds of Cross Guarantee and form
the Closed Group.
There are no contingent liabilities of the Parent Entity or commitments for the acquisition of property, plant and equipment by the
Parent Entity.
35. COMPANY DETAILS
The registered office and principal place of business of EVZ Limited is 15 Clifford Street, Huntingdale, 3166.
The principal place of business of
Syfon Systems Pty Ltd
is 22 Hargreaves St, Huntingdale, 3166
The principal place of business of
Brockman Engineering Pty Ltd
is 340 Forest Rd, Corio, 3214
The principal place of business of
TSF Engineering Pty Ltd
is Unit A, 31-33 Sirius Road, Lane Cove, 2066
The principal place of business of
TSF Maintenance Services Pty Ltd
is Unit A, 31-33 Sirius Road, Lane Cove, 2066
64 l EVZ LIMITED Annual Report FY14
Directors’ Declaration
The Directors of EVZ Limited declare that:
(a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable;
(b) the financial statements are in compliance with International Financial Reporting Standards, as stated in Note 1 to the
financial statements;
(c) in the Directors’ opinion, the financial statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true and fair view of the financial position and performance of the
consolidated entity; and
(d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.
At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of
the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of
any debt in accordance with the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class
Order applies, as detailed in Note 32 to the financial statements will, as a group, be able to meet any obligations or liabilities to
which they are, or may become, subject by virtue of the deed of cross guarantee.
SIGNED in accordance with a resolution of the Board of Directors made pursuant to s.295(5) of the Corporations Act 2001.
Director - M Findlay
Signed at Melbourne this 30th day of September 2014.
EVZ LIMITED Annual Report FY14 l 65
Independent Auditor's Report to the members of EVZ Limited
66 l EVZ LIMITED Annual Report FY14
Independent Auditor's Report to the members of EVZ Limited
EVZ LIMITED Annual Report FY14 l 67
Additional shareholders’ information
as at 31 August 2014
1. Substantial Shareholders
UBS Nominees Pty Ltd
2. Distribution of Shareholding
Range of Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of shareholders with less than a
marketable parcel of $500 at $0.04/unit
3. Names of the 20 largest shareholders
1. UBS Nominees Pty Ltd
2.
Stuart Andrew Pty Ltd (Campaspe Family A/c)
Powis Superannuation Pty Ltd (Powis Super Fund A/c)
3.
Smithley Super Pty Ltd (Smith Super Fund A/c)
4.
Linwierik Super Pty Ltd (Linton Super Fund A/c)
5.
6. Myall Resources Pty Ltd (Myall Group Super Fund A/c)
Airlie Beach Holdings Pty Limited (ABI Super Fund A/c)
7.
8.
Airlie Beach Holdings Pty Limited (Burns Family A/c)
9. Mr Keith Andrew Fagg & Mrs Heather Elizabeth Fagg (KA & HE Fagg S/Fund A/c)
CJ Arms Superannuation Fund Pty Ltd (CJ Arms Super Fund A/c)
10.
11. Mr Adam Bernard Bellgrove (Ingodwi Family A/c)
12. Onmell Pty Ltd (ONM PBSF A/c)
13.
14.
15.
16.
17.
18.
19. Mr Peter Howells
20. Mr James John Ischia & Mrs Kathlyn Dawn Ischia (Ischia Family Super Fund A/c)
Rangeworthy Pty Ltd (The Edgley Family A/c)
BT Portfolio Services Limited (Juchima Super Fund A/c)
TRB Management Pry Ltd (Bowden Super Fund A/c)
DIP Holdings Pty Ltd
NLA Investments Pty Ltd (N & L Allen Family A/c)
Suntaneous Pty Ltd (GB Clients Emp S/F A/c)
17,620,429 Ordinary Shares
No. of Shareholders
Ordinary Shares
284
774
264
583
200
2,105
Shares held
17,620,429
8,700,000
8,571,949
7,000,000
5,855,181
5,198,760
5,000,000
5,000,000
4,828,001
4,570,178
4,400,000
3,612,581
3,466,232
3,285,654
3,000,000
2,600,000
2,576,853
2,474,937
2,300,000
2,260,000
102,320,755
1,394
% Holding
8.45
4.17
4.11
3.36
2.81
2.49
2.40
2.40
2.32
2.19
2.11
1.73
1.66
1.58
1.44
1.25
1.24
1.19
1.10
1.08
49.09
4. Voting Rights
A registered holder of shares in the company may attend general meetings of the company in person or by proxy and on a poll
may exercise one vote for each share held. There are no voting rights attached to options for ordinary shares until the options
have been exercised.
5. Unlisted Options
There are no unlisted options on issue.
68 l EVZ LIMITED Annual Report FY14
Additional shareholders’ information
as at 31 August 2014
6. General
The name of the Company Secretary is Ian Wallace.
The address of the principal registered office is:
15 Clifford Street, Huntingdale, Victoria, 3166
Telephone Number: (03) 9545 5288
Facsimile Number: (03) 9558 9944
Email:corporate@evz.com.au
A register of securities is kept at Computershare Investor Services Pty Ltd,
452 Johnston Street, Abbotsford, Victoria, 3067.
Telephone Number: 1300 137 328
7. Stock Exchange Listing
The company’s ordinary securities are listed on the Australian Securities Exchange Limited.
EVZ LIMITED Annual Report FY14 l 69
EVZ Limited and Controlled Entities
15 Clifford Street, Huntingdale, Victoria, 3166
Telephone Number: (03) 9545 5288
Facsimile Number: (03) 9558 9944
Email: corporate@evz.com.au
www.evz.com.au