ANNUAL REPORT
2018
VEEM LTD
ACN 008 944 009
CORPORATE INFORMATION
ABN 51 008 944 009
Directors
Brad Miocevich
Mark Miocevich
Ian Barsden
Peter Torre
Michael Bailey
Non-Executive Chairman
Managing Director
Non-Executive Director
Independent Non-Executive Director (appointed 12 April 2018)
Independent Non-Executive Director (appointed 17 July 2018)
Joint Company Secretaries
Tracy Caudwell
Peter Torre
Registered office
22 Baile Road
Canning Vale
WA 6155
Telephone:
+ 61 8 9455 9355
Facsimile:
+61 8 9455 9333
Principal place of business
22 Baile Road
Canning Vale
WA 6155
Telephone:
+ 61 8 9455 9355
Facsimile:
+61 8 9455 9333
Share registry
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace PERTH WA 6000
Telephone:
+61 8 9323 2000
Facsimile:
+ 61 8 9323 2033
Solicitors
Steinpreis Paganin
Level 4
The Read Buildings
16 Milligan Street
PERTH WA 6000
Telephone:
+61 8 9321 4000
Facsimile:
+ 61 8 9321 4333
Bankers
ANZ Banking Corporation
Level 7
77 St Georges Terrace
PERTH WA 6000
Telephone:
+61 8 6298 3987
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Telephone:
+61 8 9227 7500
Securities Exchange Listing
VEEM Ltd shares are listed on the
Australian Securities Exchange (ASX: VEE)
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V E E M LT D
DIRECTORS' REPORT CONTENTS
Corporate Information
Chairman's Letter
Directors’ Report
Auditor’s Independence Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
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4
6
16
17
18
19
20
21
49
50
54
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CHAIRMAN'S LETTER
Dear Shareholders
I am immensely proud to
present our company’s
annual report for its 50th
year in business.
50 YEARS
VEEM was launched in
October 1968, by founders Voyka and Elizabeth Elsie
Miocevich. From humble, family-company beginnings,
VEEM has expanded to be an internationally-
recognised manufacturer of marine gyrostabilizer and
propulsion systems.
The VEEM team has steadily built a solid, stable
company, based on a strong work ethic and
commitment to our art. We invest significantly in
organisational knowledge and have fostered a healthy
culture, which values enterprise and focus upon
customer needs. The stability of our organisation
is reflected in the stability of our team – 28% of our
personnel have been part of the VEEM journey for
longer than 10 years; 14% longer than 15 and an
impressive 8% longer than 20 years. Many of our
employees are now also shareholders of our company.
Our company has an extensive history of not only
creating significant profits but also in retaining those
profits to be applied to the development of world-
leading manufacturing technologies and new, high-
technology products. Prime examples of this can be
found in our patented, robotic propeller manufacturing
and our revolutionary, high-capacity marine
gyrostabilizer systems. This philosophy of creating
sufficient profits to internally fund the development of
our key technologies and products is a cornerstone of
our stable growth strategy.
It brings me great pleasure to be the Chairman of a
company which has been involved in some of the
most significant engineering projects of our time,
including the construction of the largest machine ever
made by humans: the Large Hadron Collider. VEEM
manufactured the radiation shield components for the
Atlas Detector, which is, to date, the largest-volume
particle detector ever constructed and using which, the
existence of the Higgs boson particle was confirmed..
2018 HIGHLIGHTS
After we demonstrated the technical veracity of our
new, large-capacity marine gyrostabilizers; the next
step was to secure commercial acceptance. As
previously announced, such approval was achieved this
year from the superyacht, commercial offshore and
defence sectors. Europe’s most prestigious names in
superyachts placed new orders for our gyrostabilizers:
French superyacht builder Couach Shipyards and 3
Dutch, leading boat builders: Feadship Royal De Vries,
Royal Huisman and Talsma Shipyard. As testament to
the acceptance of our product, superyacht builder
Large Hadron
Collider – The
largest machine
in the world.
A man stands in
the Atlas Detector,
which sits in a
cavern 100 m
below ground near
the main CERN
site, close to the
village of Meyrin
in Switzerland.
VEEM supplied
the radiation
shield components.
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V E E M LT D
C H A I R M A N ' S L E T T E R
Van Der Valk Shipyard has placed their 3rd repeat order.
Couach (Fr) and Westport (USA) have requested quotes
for their next supply and Feadship and Royal Huisman
have placed orders with multiple unit installations.
Europe’s second-largest shipbuilder, Damen,
confirmed successful sea trial results utilising VEEM
gyrostabilizers on board a Damen Fast Crew Supplier
vessel. Damen has developed a similar vessel capable
of travelling at 45 knots through 2.5 m seas, designed
to replace the more expensive and riskier practice of
helicopter transfers. VEEM’s gyrostabilizer technology
is key to extending the operating envelope of this
‘Walk to Work’ philosophy. Damen’s portfolio includes
significant work in building defence vessels and is
a prospective client for VEEM’s advanced marine
propulsion systems.
In the defence sector, Friere Shipyards in Spain has
ordered one of our gyrostabilizer systems, to be
installed in a 42 m Fisheries Patrol vessel, destined for
the Kuwait Government. The number of vessels of this
class to be built has not yet been announced.
Technical Committee. Mr Torre brings considerable
public company and board governance experience.
In July 2018, Mr Mike Bailey joined our Board. Mr
Bailey holds a Bachelor of Science with first class
Honours and a Master’s Degree in Naval Architecture.
He is a Chartered Engineer (UK), Member of the Royal
Institution of Naval Architects and a former Member
of the Royal Corps of Naval Constructors (1968-78).
Mr Bailey is well known and respected within the
marine and defence sectors and brings more than 30
years’ experience in contract negotiation and project
management.
Finally, I would like to acknowledge that our
company strength is our people – it is the dedication,
commitment and focus of our team working together
which brings success. A particular note of thanks
to those team members who have spent extended
time away from home for business travels on our
behalf. I know from personal experience that this can
be difficult on families, especially those with young
children. Thank you to those staff and their families.
BOARD STRENGTHENED
This year we have welcomed two, independent, non-
executive directors to the Board of the company.
Mr Peter Torre, who joined the board in April 2018 is
a Chartered Accountant, a Chartered Secretary and
a Member of the Australian Institute of Company
Directors. Mr Torre has been our joint Company
Secretary since our listing. He was previously a
partner of an internationally-affiliated firm of Chartered
Accountants and was chairman of the firm’s National
BRAD MIOCEVICH
NON-EXECUTIVE CHAIRMAN
C H A I R M A N S ' L E T T E R
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D I R E C TO R S ' R E P O RT
DIRECTORS’
REPORT
The Directors present their report together with the
financial statements of the Company for the financial
year ended 30 June 2018. In order to comply with the
provisions of the Corporations Act 2001, the Directors
report as follows:
The names of Directors who held office during or since
the end of the year and until the date of this report are
as follows. Directors were in office for this entire period
unless otherwise stated.
DIRECTORS
NON-EXECUTIVE
CHAIRMAN
Mr John Bradley Miocevich
B.Comm, FAICD
Brad has been a Director of VEEM Ltd since 1983.
Combining trade qualifications with a Commerce
Degree in Finance and Banking, Brad has the unique
skills suitable for the management of an engineering
company. With a focus on strategic planning, he was
a member of the team responsible for the acquisition
of several companies over the 20 years including
S&S Foundry & Engineering and Timcast Foundry
and Engineering. Taking on the role of Director Marine
Propulsion in 2000, he has been the driving force in
creating VEEM’s now very successful international
propeller business. Brad provided the vision for VEEM’s
highly automated manufacturing processes making
VEEM the benchmark of propeller manufacturing
worldwide. Brad brings to the Board expertise in finance,
manufacturing engineering and marketing along with
practical knowledge of the Company and its markets.
In the 3 years immediately before the end of the
financial year, Brad has not served as a Director of any
other listed company.
MANAGING DIRECTOR
Mr Mark David Miocevich
B.App.Sc (Mech Eng) FIE Aust
Mark has been a director and senior manager of VEEM
for over thirty years. Commencing as Production
Director from 1983 and until 1995 he was responsible
for the implementation of the Quality Assurance
systems in 1987, the integration of SS Engineering
into the company in 1989, and defining the Company
management model based on the Australian Business
Excellence framework guideline in 1994. From 1995
until present he has been the Managing Director of
VEEM and for a period during that time, the Managing
Director of GA Perry and a Director of Thomassen
Services Australia. He was responsible for the
integration of Timcast Engineering into VEEM during
2002. He brings to the Board intimate knowledge of
the comp any, its systems and strategic plan.
In the 3 years immediately before the end of the
financial year, Mark has not served as a Director of any
other listed company.
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V E E M L I M I T E D
D I R E C TO R S ' R E P O RT
NON-EXECUTIVE
DIRECTOR
Mr Ian Henry Barsden
CA
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
Appointed 17 July 2018
Mr Michael Robert Bailey
MSc; CEng; MRINA
Ian is a member of the Chartered Accountants Australia
and New Zealand and is a former partner of a mid-tier
accounting firm. Ian brings over 30 years’ experience
in the accounting profession, advising and consulting
to a wide variety of businesses and industries
as to business structuring, taxation and financial
management. Ian has provided advisory services to
VEEM as a consultant since 1980 and become an
employee of the Company in 2011.
In the 3 years immediately before the end of the
financial year, Ian has not served as a Director of any
other listed company.
INDEPENDENT
NON-EXECUTIVE
DIRECTOR/JOINT
COMPANY SECRETARY
Appointed 12 April 2018
Mr Peter Patrick Torre
B.Bus (Accounting), CA, AGIA
Peter was appointed Company Secretary of the
Company in September 2016 and as a Director of
the Company on 12 April 2018. He is a Chartered
Accountant, a Chartered Secretary and a member
of the Australian institute of Company Directors. He
was previously a partner of an internationally affiliated
firm of Chartered Accountants. Peter is the Company
Secretary of several ASX listed companies. Peter is
the principal of Torre Corporate, a specialist corporate
advisory firm providing corporate secretarial services to
a range of listed companies.
In the 3 years immediately before the end of the
financial year, Peter has served as a Director of Mineral
Commodities Ltd, Volt Power Group Limited and West
Star Industrial Limited.
Mike brings 45 years experience in areas of naval
architecture, marine engineering, project and company
management. He has operated in the defence and
offshore oil and gas sectors in Europe, Asia and
Australia with multinational and private companies
and as a consultant. Mike also held the Business
Development role in VEEM Engineering in the
1990's. He has, since 2000, been instrumental in the
establishment and operations of the highly successful
Australian Marine Complex - Common User Facility.
In the 3 years immediately before the end of the
financials year, Mike has not served as a Director of
any listed company. Mike has served as a director of
AMC Management (WA) Pty Ltd, Facility Manager of the
Australian Marine Complex - Common User Facility.
JOINT COMPANY
SECRETARY
Mrs Tracy Pauline Caudwell
Cert.Bus.Stud, Assoc Dip Acct,
B.Acct, AGIA
Tracy joined VEEM in June 2005. Tracy has over 30
years experience in the finance field and is responsible
for managing the administration, accounting and
finance department providing the management team
and Board of Directors with accurate Key Performance
Indicators and financial performance.
D I R E C TO R S ’ R E P O RT
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D I R E C TO R S ' R E P O RT
INTERESTS IN THE SHARES OF THE
COMPANY AND RELATED BODIES CORPORATE
The following relevant interests in shares of the Company or a related body corporate were held by the Directors
as at the date of this report.
FULLY PAID ORDINARY SHARES
Directors
John Bradley Miocevich
Mark David Miocevich
(i)
(i)
Ian Henry Barsden
Peter Patrick Torre
Michael Robert Bailey
Number
80,000,000
80,000,000
50,000
60,000
-
(i) Mr Brad Miocevich and Mr Mark Miocevich have a relevant interest in VEEM Corporation Pty Ltd ATF the
Miocevich Family Trust which holds 80,000,000 fully paid ordinary shares in the Company.
SHARES UNDER OPTION OR ISSUED ON EXERCISE OF OPTIONS
At the date of this report there were no unissued ordinary shares or interests of the Company under option.
PRINCIPAL ACTIVITIES
The principal activities of the Company during the course of the year were:
• Production of propulsion and stabilization systems; and
• Manufacturing bespoke products and services for the marine, defence and mining industries.
OVERVIEW
The financial results of the Company for the 2018 financial year demonstrate another consistent performance
from the Company’s operations. The results are underpinned by the Company’s core engineering services which
will provide a consistent base for the years to come.
The most pleasing outcome of the financial year, whilst not yet reflected in the Company’s financial performance,
was the acceptance of the Company’s Gyrostabilizers by some of the World’s leading shipyards. This acceptance
followed a strong marketing push throughout the year, with the relocation of the VEEM Viking vessel to Europe, to
allow the representatives of the leading shipyards to see first-hand the VEEM Gyrostabilizer at work. The costs of
this exercise were borne in this financial year, and the benefits will flow in the years to come.
Dr Michael
Andrewartha,
VEEM’s Principal
Engineer for Gyro
Development
inspects the
VG260SD Gyro
during the Damen
Sea Trials in
Rotterdam
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V E E M LT D
The vindication of the performance of the VEEM Gyros
by Damen Shipyards as announced immediately
following the year end, sets the turning point in the drive
to establish VEEM Gyros as the dominate player in the
gyro stabilization market. This followed with news of
VEEM Gyro orders by the world’s leading super yacht
builders. These, along with further marketing efforts will
see sales on VEEM Gyros significantly lift in the 2019
financial year and into the future.
CORPORATE
The Company’s governance framework was bolstered
during and immediately following the year end with
the appointment of two independent non-executive
directors to the Board of the Company.
Mr Peter Torre, who was acting as the joint company
secretary since the time of listing, was appointed as a
director in April 2018. Peter brings a wealth of public
company governance experience to the Board and is
strategic in his approach to Company matters.
Mr Mike Bailey was appointed as a director in July 2018.
Mike, a naval architect, has extensive experience in
managing highly-complex projects across the defence, oil
and gas, and mining sectors. He is well respected in the
industry.
With these new appointments, the Board will continue
to assess its governance framework to further comply
with the ASX Corporate Governance Principles and
Recommendations at the appropriate time.
The Company maintained its dividend policy
throughout the year with the payment of a final
dividend for FY 2017 and an interim FY2018 dividend.
FINANCIAL AND OPERATING PERFORMANCE
The company is pleased to report the following key
metrics for the financial year 2018:
FY17
FY18
Operating Revenue
38,082,604
40,712,292
EBITDA
7,800,413
4,924,321
Statutory NPAT
3,848,750
2,756,918
EPS
3.21
2.12
The Company reported a Profit After Tax (PAT) for the
year of $2,756,918 (2017: $3,848,750) underpinned by
revenue of $40,712,292 (2017: $38,082,604).
Net Assets increased to $29.5 million with a large
build up of inventory primarily associated with the
preparation for future gyro stabilizer sales.
As indicated at the half year, the result includes
an increase in advertising and marketing costs of
approximately $489,000 resulting from the additional
efforts on the promotion and sales efforts for the
Company’s gyrostabilizer range as aforementioned.
Net operating cash flows report a deficit of $1.4 million
which primarily is a result of the continued build
up of Gyro inventory during the period, taking total
inventories from $8.4 million in 2017 to $13.3 as at the
end of the 2018 financial year.
Due to the cyclical nature of the submarine refit
program, revenue for FY2018 was impacted by
lower sales in this area, however other sales in the
Company’s traditional services resulted in total sales
for the year being higher than 2017. Delays in some
defence contracts exacerbated the fall in profits from
FY2107, along with a slower build up on Gyro inventory
as the Company awaited orders of these products.
The production and supply of VEEM’s new range of
conquest propellers continued during the year and the
Company expects to see a continuation of the sales
growth of this replacement model of propeller. VEEM
propellers continued to grow with sales increasing by
7.2% for FY2018. Overall propeller sales increased by
11.6% over FY2017.
The defence submarine refit program commenced late
in FY2017 and continued into FY2018. Although the
bulk of the manufacturing occurred during FY2017,
licensor parts were supplied during FY2018, which
have a lower GP%. This is reflected in the overall GP for
the company being reduced by 8% against last year.
In addition, contributing to the lower GP was the delay
of certain defence related contracts which resulted
in lower productivity of the VEEM workforce until the
contracts commenced late in FY2018.
As earlier noted, Gyro operation in the field was a
particular highlight for the year. Thorough research
and design have led to all installed units being
commissioned quickly and running reliably from the
first day. Technical issues have been very minor giving
rise to a high level of confidence from the market.
In particular the actual Gyro performance measured
in the field has very closely matched or exceeded the
predicted levels. This was particularly evident during
the Damen trials. Damen has extensively developed
internal software to evaluate the stabilization
characteristics of their vessels. This led to the
very successful sea trials of two VEEM VG260SD
Gyrostabilizers in the Netherlands in June 2018
on a Damen 5009 crew vessel. VEEM is currently
negotiating the supply of the first VG1000SD for the
new Damen 7011 high speed crew vessel.
The commencement of sales to Shipbuilders such
as Friere Shipyards, Couach Yachts, Fead Ship and
Van Der Valk Yachts has been largely on the back of
accurate performance predictions and the extremely
high build quality.
D I R E C TO R S ’ R E P O RT
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DIRECTORS' REPORT D I R E C TO R S ' R E P O RT
“Wirin”, the
nine metre
high sculpture
embodying the
spirit and culture of
the Noongar people
in Yagan Square,
Perth, which was
manufactured by
VEEM
As indicated at the half year, of cultural interest was the
casting of the statue for Yagan square in Northbridge
Perth, Wirin by Tjyllyungoo/Lance Chadd and cast
by the foundry at VEEM. The nine-metre high Wirin
expresses this in a tall, Aboriginal figure of smooth
contemporary lines. His ‘Gidji' (spear) and ‘Mirro' (spear
thrower) are one with his body, connecting to Boodja,
depicting unity and connective continuity of spirit.
The VEEM foundry also has the privilege of working
on the new ANZAC bell to be installed in the Swan Bell
Tower in Perth. The bell, which is cast from copper and
tin, is to be funded by a Lottery west grant, investment
from private donors and VEEM. The ANZAC bell will be
the largest operating bell in the Southern Hemisphere
once completed and would be a lasting legacy to
acknowledge the ANZAC centenary. The casting was
completed in July 2018.
In line with its historical approach to ensuring the
Company remains at the forefront of engineering
technology, VEEM was pleased to advise of it entering
into an Industry Partner Agreement with Aurora Labs
to gain access to large scale 3D metal printing. VEEM
and Aurora will investigate the potential of Aurora’s 3D
printing and large format technology to deliver cost
and efficiency savings for the manufacture of VEEM’s
specialist technology, including its propellers, fin
systems and gyrostabilizers.
OUTLOOK
The VEEM gyrostabilizers are now starting to gain
traction in sales. This sales growth is expected to
continue going forward. The Company is preparing for
the increase in sales and production and is considering
the expansion of its facilities to accommodate this.
Defence contracting in Australia continues to build with
contracts for the SEA 1180 Phase 1 Offshore Patrol
Vessels (OPV) Offshore Patrol boats, the new Sea 5000
Future Frigate contract and the Land 400 Phase 3 for
450 tracked Infantry Fighting Vehicles (IFV) all being
awarded. These are in addition to the future submarine
project and the Pacific Patrol Boat project.
VEEM is active in all of these spaces and will be
tendering on multiple components on each. VEEM has
already won work on the Pacific Patrol Boat project.
There has been a significant increase in orders and
predicted work load in the ride control space for the
next two financial years and there will be a full cycle
docking of a submarine during this same period.
Work already won for supply during FY2019 places
VEEM in a strong position to deliver a strong financial
performance going forward which will be underpinned
by the traditional engineering services with additional
Gyro sales.
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
Other than disclosed elsewhere in this report, there
have been no significant changes in the state of affairs
of the Company to the date of this report.
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SIGNIFICANT EVENTS AFTER
BALANCE DATE
Other than disclosed elsewhere in this report, there has
not been any matter or circumstance that has arisen
after balance date that has significantly affected,
or may significantly affect, the operations of the
Company, the results of those operations, or the state
of affairs of the Company in future financial periods.
LIKELY DEVELOPMENTS AND
EXPECTED RESULTS
The Company will continue with its strategy as set out
in its Prospectus lodged with the ASX on 24 October
2016. The commercialisation of the Company’s Gyro
Stabilizing will be a key priority during the 2019
financial year.
ENVIRONMENTAL LEGISLATION
The Company is not subject to any significant
environmental legislation.
DIVIDENDS
Dividends paid to members during the financial year
were as follows:
An interim ordinary dividend of $487,500 was paid
on 27 April 2018.
Since the end of the financial year the Directors have
recommended the payment of a final fully franked
ordinary dividend of $338,000 to be paid on or around
28 September 2018.
INDEMNIFICATION AND
INSURANCE OF DIRECTORS
AND OFFICERS
The Company has agreed to indemnify all the Directors
of the Company for any liabilities to another person
(other than the Company or related body corporate)
that may arise from their position as Directors of the
Company and its controlled entities, except where the
liability arises out of conduct involving a lack of good
faith.
During the financial year the Company paid a premium
in respect of a contract insuring the Directors and
officers of the Company and its controlled entities
against any liability incurred in the course of their
duties to the extent permitted by the Corporations Act
2001. The contract of insurance prohibits disclosure
of the nature of the liability and the amount of the
premium.
D I R E C TO R S ' R E P O RT
REMUNERATION REPORT
This report, which forms part of the Directors’ report,
outlines the remuneration arrangements in place for
the key management personnel (“KMP”) of VEEM
Ltd for the financial year ended 30 June 2018. The
information provided in this remuneration report has
been audited as required by Section 308(3C) of the
Corporations Act 2001.
The remuneration report details the remuneration
arrangements for KMP who are defined as those
persons having authority and responsibility for
planning, directing and controlling the major
activities of the Company, directly or indirectly,
including any Director (whether executive or
otherwise) of the Company.
KEY MANAGEMENT PERSONNEL
The Directors set out below were the only key
management personnel of the Company during or
since the end of the financial year.
Directors
John Bradley Miocevich Chairman (non-executive)
Mark David Miocevich
Managing Director
Ian Henry Barsden
Non-Executive Director
Peter Patrick Torre
Independent
Non-Executive Director
(appointed 12 April 2018)
Independent
Non-Executive Director
(appointed 17 July 2018)
Except as noted, the named persons held their current
positions for the whole of the financial year and to the
date of this report.
REMUNERATION PHILOSOPHY
The performance of the Company depends upon the
quality of the Directors and executives. The philosophy
of the Company in determining remuneration levels is
to set competitive remuneration packages to attract
and retain high calibre employees.
REMUNERATION COMMITTEE
The Company did not have a separate Remuneration
and Nomination Committee during the year. The
full Board fulfilled the role typically undertaken by
a Remuneration Committee and was responsible
for determining and reviewing compensation
arrangements for the Directors.
The Board assesses the appropriateness of the
nature and amount of remuneration of Directors
and executives on a periodic basis by reference to
relevant employment market conditions with an
overall objective of ensuring maximum stakeholder
benefit from the retention of a high quality Board and
executive team.
A final ordinary dividend of $1,599,000 was paid on
21 September 2017.
Michael Robert Bailey
•
•
D I R E C TO R S ’ R E P O RT
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D I R E C TO R S ' R E P O RT
REMUNERATION STRUCTURE
In accordance with best practice corporate
governance, the structure of non-executive Director
and executive remuneration is separate and distinct.
SENIOR MANAGER AND EXECUTIVE DIRECTOR
REMUNERATION
Remuneration consists of reasonable fixed
remuneration only.
USE OF REMUNERATION CONSULTANTS
FIXED REMUNERATION
The Board has not used any independent remuneration
consultants during the year ended 30 June 2018.
NON-EXECUTIVE DIRECTOR REMUNERATION
The Board seeks to set aggregate remuneration at
a level that provides the Company with the ability to
attract and retain Directors of the highest calibre, whilst
incurring a cost that is acceptable to shareholders.
The ASX Listing Rules specify that the aggregate
remuneration of non-executive Directors shall be
determined from time to time by a general meeting. The
Constitution of the Company as at the time of listing in
October 2016 provides that the aggregate remuneration
of non-executive Directors be set at $400,000.
The amount of aggregate remuneration sought to be
approved by shareholders and the manner in which it
is apportioned amongst Directors is reviewed annually
leading up to the Company’s Annual General Meeting.
The Board considers advice from external shareholders
as well as the fees paid to non-executive Directors of
comparable companies when undertaking the annual
review process.
Each Director receives a fee for being a Director of the
Company. Given there are no committees currently in
place, no additional fees are paid.
Fixed remuneration is reviewed annually by the
Board. The process consists of a review of relevant
comparative remuneration in the market and internally
and, where appropriate, external advice on policies
and practices. The Board has access to external,
independent advice where necessary.
Senior managers are given the opportunity to receive
their fixed (primary) remuneration in a variety of forms
including cash and fringe benefits such as motor
vehicles and expense payment plans. It is intended that
the manner of payment chosen will be optimal for the
recipient without creating undue cost for the Company.
The fixed remuneration component is detailed in Key
Management Personnel remuneration for the years
ended 30 June 2018 and 30 June 2017 tables.
2018 ANNUAL GENERAL MEETING
The Remuneration Report for the year ended 30
June 2017 was approved by in excess of 75% of
shareholders at the Annual General Meeting.
EMPLOYMENT CONTRACTS
Details of employment contracts with executive KMP:
Agreement with M. Miocevich (date of commencement
1 September 2016)
NAME
TERM OF AGREEMENT AND
TERMINATION PROVISIONS
BASE SALARY INCLUDING
SUPERANNUATION
TERMINATION
BENEFIT
M. Miocevich
This agreement has no set term.
Termination of the agreement
is 1 month’s notice by the
Executive or 3 months’ notice by
the Company and includes a
6 month restraint of trade.
Base: $385,000 per annum
plus $35,000 superannuation
3 Months salary
Executive remuneration at this stage consists only of fixed remuneration which has been set at moderate levels for the
managing director. This is cognisant of the stage of development as a listed company and as the Company moves to
establish itself into new markets. The Company will continue to assess the executive remuneration and appropriately
incentivise key management with variable remuneration aligned to shareholder wealth in the periods to come.
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V E E M LT D
REMUNERATION OF KEY MANAGEMENT PERSONNEL
Key Management Personnel remuneration for the years ended 30 June 2018 and 30 June 2017
SHORT-TERM
EMPLOYEE BENEFITS
POST-
EMPLOYMENT
BENEFITS
LONG
TERM
BENEFITS
SHARE
BASED
BENEFITS
30 June
2018
Salary & fee
Bonus
Non-
monetary
benefits
Directors
$
Bradley
Miocevich
Mark
Miocevich
109,589
381,520
Ian Barsden
54,794
Peter Torre
38,266
Michael
Bailey
-
$
-
-
-
-
-
$
-
-
-
-
-
Long
service
leave
Share
options
Other
Superannuation
$
$
50,000
10,411
$
-
-
-
-
-
24,759
6,358
5,206
-
-
-
-
-
Total
$
$
170,000
100%
412,637
100%
60,000
100%
38,266
100%
-
-
$
-
-
-
-
-
RELATIVE PROPORTIONS
OF REMUNERATION OF
KMP THAT ARE LINKED
TO PERFORMANCE
Fixed
remuneration
Remuneration
linked to
performance
SHORT-TERM
EMPLOYEE BENEFITS
POST-
EMPLOYMENT
BENEFITS
LONG
TERM
BENEFITS
SHARE
BASED
BENEFITS
30 June
2017
Salary & fee
Bonus
Non-
monetary
benefits
Other
Superannuation
Long
service
leave
Share
options
Directors
$
Bradley
Miocevich
Mark
Miocevich
89,824
314,390
Ian Barsden
63,737
$
-
-
-
$
-
-
-
$
-
-
-
$
9,150
34,260
6,055
$
-
-
-
$
-
-
-
Total
$
$
98,974
100%
348,650
100%
69,792
100%
RELATIVE PROPORTIONS
OF REMUNERATION OF
KMP THAT ARE LINKED
TO PERFORMANCE
Fixed
remuneration
Remuneration
linked to
performance
$
-
-
-
-
-
$
-
-
-
No member of key management personnel appointed during the period received a payment as part of his or her
consideration for agreeing to hold the position.
No cash bonuses were granted during 2018 or 2017.
D I R E C TO R S ’ R E P O RT
| 13
DIRECTORS' REPORT D I R E C TO R S ' R E P O RT
EMPLOYEE SHARE OPTION PLAN
There were no employee share options granted as compensation in the current or prior financial year.
FULLY PAID ORDINARY SHARES
BALANCE AT
BEGINNING
OF YEAR
GRANTED AS
COMPEN
SATION
RECEIVED ON
EXERCISE OF
OPTIONS
NET CHANGE
OTHER
BALANCE AT
END OF YEAR
BALANCE
HELD
NOMINALLY
30 June
2018
Directors
$
Bradley
Miocevich
Mark
Miocevich
80,000,0001
80,000,0001
Ian Barsden
50,000
Peter Torre
Michael
Bailey
-
-
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
$
80,000,0001
80,000,0001
50,000
60,000
60,000
-
-
$
-
-
-
-
-
BALANCE AT
BEGINNING
OF YEAR
GRANTED AS
COMPEN
SATION
RECEIVED ON
EXERCISE OF
OPTIONS
NET CHANGE
OTHER
BALANCE AT
END OF YEAR
BALANCE
HELD
NOMINALLY
30 June
2017
Directors
$
Bradley
Miocevich
Mark
Miocevich
82,955,330
82,955,330
Ian Barsden
-
$
-
-
-
$
-
-
-
$
$
(2,955,330)
80,000,0001
(2,955,330)
80,000,0001
50,000
50,000
$
-
-
-
1. Mr Brad Miocevich and Mr Mark Miocevich have a
relevant interest in VEEM Corporation Pty Ltd ATF
the Miocevich Family Trust which holds 80,000,000
fully paid ordinary shares in the Company. During the
prior year, their original shareholding was divided into
a larger number and then partially sold down as part
of the initial public offering in October 2016. The net
result of this was a movement of (2,955,330) fully
paid ordinary shares.
The Company has entered into a lease agreement
with Voyka Pty Ltd, an entity controlled by an entity
related to Mr Mark Miocevich and Mr Brad Miocevich.
The Company pays Voyka Pty Ltd monthly rent of
$115,307 including GST, totalling $1,383,684 for the
twelve months to June 2018. The rent is exclusive of
any outings including rates, taxes, insurance premiums
and maintenance costs. The lease was
made on commercial terms.
END OF REMUNERATION REPORT
14 |
V E E M LT D
D I R E C TO R S ' R E P O RT
DIRECTORS’ MEETINGS
The number of meetings of Directors held during the year and the number of meetings attended by each Director
were as follows:
Number of meetings held:
Number of meetings attended:
John Bradley Miocevich
Mark David Miocevich
Ian Henry Barsden
Peter Patrick Torre
Meetings Held
Eligible to Attend
Meetings Attended
12
12
12
12
2
12
11
11
2
1. Mr Torre was present during all other meetings in his capacity as Joint Company Secretary.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings.
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in Note 20 to the financial statements. The Directors are satisfied that the provision of non-audit services
is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit
services have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and
none of the services undermine the general principles relating to auditor independence as set out in Code of
Conduct APES 110: Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical
Standards Board.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of
the Company with Independence Declaration in relation to the audit of the annual report. This Independence
Declaration is set out on page 12 and forms part of this Directors’ report for the year ended 30 June 2018.
Signed in accordance with a resolution of the Directors.
MARK DAVID MIOCEVICH
Managing Director
Perth, 30 August 2018
D I R E C TO R S ’ R E P O RT
| 15
VEEM Managing Director, Mark Miocevich with a
new VG120 Gyro being manufactured in VEEM”s
state of the art Factory
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of VEEM Ltd for the year ended 30 June 2018, I
declare that to the best of my knowledge and belief, there have been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
HLB Mann Judd
Chartered Accountants
D I Buckley
Partner
Perth, Western Australia
30 August 2018
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
16 | AU D I TO R ' S I N D E P E N D E N C E D E C L A R AT I O N
V E E M LT D
12
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of VEEM Ltd for the year ended 30 June 2018, I
declare that to the best of my knowledge and belief, there have been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
HLB Mann Judd
Chartered Accountants
D I Buckley
Partner
Perth, Western Australia
30 August 2018
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
NOTES
2018 ($)
2017 ($)
Continuing operations
Revenue
Other income
Change in inventories of finished goods and work
in progress
Raw materials and consumables
Employee benefits expense
Depreciation and amortisation expense
Repairs and maintenance expenses
Occupancy expenses
Borrowing costs expense
Listing expenses
Share registry expenses
Other expenses
Profit before income tax expense
Income tax expense
2
2
2
2
3
40,712,292
(352,517)
38,082,604
192,533
1,308,949
2,949,758
(19,622,628)
(11,737,682)
(1,607,638)
(829,951)
(2,252,722)
(408,412)
-
(20,371)
(2,281,049)
(13,517,085)
(15,138,843)
(1,441,418)
(844,610)
(2,171,640)
(228,773)
(1,500,409)
(9,664)
(1,730,361)
2,908,271
4,642,092
(151,353)
(793,342)
Net profit for the year
2,756,918
3,848,750
Other comprehensive income, net of income tax
-
-
Total comprehensive income for the year
2,756,918
3,848,750
Basic earnings per share (cents per share)
5
2.12
3.21
The accompanying notes form part of these financial statements
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
12
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E
| 17
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018
NOTES
2018 ($)
2017 ($)
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Current tax assets
Total current assets
Non-current assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Current tax liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained earnings
Total equity
7
8
9
10
11
3
12
13
14
15
14
3
304,708
8,873,661
13,352,264
892,605
1,016,048
587,586
7,951,188
8,429,143
366,051
-
24,439,286
17,333,968
14,313,086
14,987,968
1,036,683
1,031,271
11,922,950
10,826,643
27,272,719
26,845,882
51,712,005
44,179,850
-
6,709,914
5,259,379
1,176,569
373,431
5,155,109
4,815,690
1,098,649
13,145,862
11,442,879
8,111,442
978,494
9,089,936
3,169,910
761,272
3,931,182
22,235,798
15,374,061
29,476,207
28,805,789
16
5,140,616
5,140,616
24,335,591
23,665,173
29,476,207
28,805,789
The accompanying notes form part of these financial statements
18 | S TAT E M E N T O F F I N A N C I A L P O S I T I O N
V E E M LT D
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Balance at 1 July 2016
Profit for the year
Other comprehensive income, net of income tax
Total comprehensive income for the year
Shares issued during the year
Shares issued costs
Dividend paid or provided for
Balance as at 30 June 2017
Profit for the year
Other comprehensive income, net of income tax
Total comprehensive income for the year
Dividend paid or provided for
Balance as at 30 June 2018
NOTES
ISSUED
CAPITAL
($)
RETAINED
EARNINGS
($)
TOTAL
EQUITY
($)
400,637
23,816,423
24,217,060
-
-
-
3,848,750
3,848,750
-
-
3,848,750
3,848,750
5,000,000
(260,021)
-
-
5,000,000
(260,021)
-
(4,000,000)
(4,000,000)
5,140,616
23,665,173
28,805,789
-
-
-
-
2,756,918
2,756,918
-
-
2,756,918
2,756,918
(2,086,500)
(2,086,500)
5,140,616
24,335,591
29,476,207
6
6
The accompanying notes form part of these financial statements
VEEM’s Sportfish C Propellers ensure that the Powerplay
has a smooth ride, no matter the sea conditions
S TAT E M E N T O F C H A N G E S I N E Q U I T Y
| 19
STATEMENT OF CASH FLOWS FOR THE YEAR
ENDED 30 JUNE 2018
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income tax paid
GST paid
NOTES
2018 ($)
2017 ($)
42,720,344
40,334,844
(41,830,494)
(35,871,557)
-
(408,412)
12,279
(228,774)
(1,329,022)
(1,595,697)
(597,379)
(61,455)
Net cash (outflow)/inflow from operating activities
7
(1,444,963)
2,589,640
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
(739,780)
(980,361)
(1,183,940)
(3,897,090)
Proceeds from sale of property, plant and equipment
27,309
-
Net cash (outflow) from investing activities
(1,896,411)
(4,877,451)
Cash flows from financing activities
Proceeds from issue of shares
Capital raising costs
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Repayments of related party loans
Net cash inflow from financing activities
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
7
The accompanying notes form part of these financial statements
-
-
6,000,000
(1,120,438)
5,000,000
(260,021)
-
(1,495,363)
(2,086,500)
(4,000,000)
-
2,793,062
2,750,061
1,994,677
(548,312)
344,932
(121,361)
(324,741)
(293,134)
646,970
(8,904)
344,932
20 |
V E E M LT D
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT
ACCOUNTING POLICIES
A. BASIS OF PREPARATION
These financial statements are general purpose
financial statements, which have been prepared in
accordance with the requirements of the Corporations
Act 2001, Accounting Standards and Interpretations
and comply with other requirements of the law.
The accounting policies detailed below have been
consistently applied to all of the years presented
unless otherwise stated. For the purpose of
preparing the financial statements, the Company
is a for-profit entity.
The financial statements have been prepared on a
historical cost basis. Historical cost is based on the
fair values of the consideration given in exchange for
goods and services.
The Company is a listed public Company, incorporated
in Australia and operating in Australia selling into the
domestic and global markets. The entity’s principal
activities are described in the Directors’ Report.
B. ADOPTION OF NEW AND
REVISED STANDARDS
Standards and Interpretations applicable to
30 June 2018
In the year ended 30 June 2018, the Directors have
reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant
to the Company and effective for the reporting periods
beginning on or after 1 July 2017.
As a result of this review, the Directors have
determined that there is no material impact of the new
and revised Standards and Interpretations in issue not
yet adopted on the Company and therefore no material
change is necessary to Company accounting policies.
Standards and Interpretations in issue not yet
adopted applicable to 30 June 2018
The Directors have also reviewed all of the new and
revised Standards and Interpretations in issue not
yet adopted that are relevant to the Company and
effective for the reporting periods beginning on or
after 1 July 2017.
As a result of this review, the Directors have determined
that AASB16 “Leases” may have a material effect on
the application in future periods. AASB 16 replaces the
AASB 117 Leases, Interpretation 4 Determining whether
an Arrangement contains a Lease, Interpretation 115
Operating Leases-Incentives and Interpretation 127
Evaluating the Substance of Transactions Involving
the Legal Form of a Lease. AASB 16 removes the
classification of leases as either operating leases or
finance leases- for the lessee - effectively treating all
leases as finance leases. Most leases will be capitalised
on the balance sheet by recognising a lease liability for
the present value obligation and a 'right-of-use' asset.
The right of use assets is calculated based on the lease
liability plus initial direct costs, prepaid lease payments
and estimated restoration costs less lease incentives
received. This will result in an increase in the recognised
assets and liabilities in the statement of financial
position as well as a change in expense recognition,
with interest and deprecation replacing operating lease
expense. There are exemptions for short-term leases
and leases of low-value items.
Lessor accounting remains similar to current practice,
i.e. lessors continue to classify leases as finance
and operating leases. This standard will primarily
affect the accounting for the Group's operating
lease. As at 30 June 2018, the Group has $1,165,273
of non-cancellable operating lease commitments,
predominantly relating to a property lease. The Group
is considering the available options to account for this
transition which may result in a change in reported
earnings before interest, tax, depreciation and
amortisation (EBITDA) and increase in lease assets and
liabilities recognition. The lease standard may also have
an impact on deferred tax balances. This will however
be dependent on the lease arrangements in place
when the new standard is effective. The Group has
commenced the process of evaluating the impact of
the new lease standard.
AASB 16 is effective from annual reporting periods
beginning on or after 1 January 2019, with early
adoption permitted for entities that also adopt AASB
15. A lessee can choose to apply the standard using a
full retrospective or a modified retrospective approach.
Other than the above, there is no material impact of
the new and revised Standards and Interpretations
on the Company and therefore no material change is
necessary to Company accounting policies.
Early adoption of Standards
The Company has early adopted AASB 15 “Revenue
from Contracts with Customers” which is mandatory
for years beginning on or after 1 January 2018. There
is no material impact to profit or loss or net assets on
the adoption of this new standard in the current or
comparative years.
N OT E S TO T H E F I N A N C I A L S TAT E M E N T S
| 21
C. STATEMENT OF COMPLIANCE
The financial report was authorised for issue by the
Board of VEEM Ltd on 30 August 2018.
The financial report complies with Australian
Accounting Standards, which include Australian
equivalents to International Financial Reporting
Standards (AIFRS). Compliance with AIFRS ensures
that the financial report, comprising the financial
statements and notes thereto, complies with
International Financial Reporting Standards (IFRS).
D. SIGNIFICANT ACCOUNTING ESTIMATES
AND JUDGEMENTS
The application of accounting policies requires the
use of judgements, estimates and assumptions
about carrying values of assets and liabilities that
are not readily apparent from other sources. The
estimates and associated assumptions are based
on historical experience and other factors that are
considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions are recognised
in the period in which the estimate is revised if it affects
only that period, or in the period of the revision and
future periods if the revision affects both current and
future periods.
Except as described below, in preparing the full-year
financial report, the significant judgments made by
management in applying the Company’s accounting
policies and the key sources of estimation uncertainty
were the same as those that applied to the financial
report for the year ended 30 June 2018.
Amortisation of product development
Product development is amortised based on units
of production as the Board has determined that this
appropriately apportions the costs of development
across the units produced to meet customer orders
and building of inventory to meet future orders.
Product development costs continue to be monitored
to ensure there are any indicators that these costs
may be impaired or whether the amortisation rate
needs to be accelerated
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible
temporary differences as management considers
that it is probable that sufficient future tax profits will
be available to utilise those temporary differences.
Significant management judgement is required to
determine the amount of deferred tax assets that can
be recognised, based upon the likely timing and the
level of future taxable profits.
Inventories
Management estimates the net realisable values
of inventories, taking into account the most reliable
evidence available at each reporting date. The future
realisation of these inventories may be affected by
future technology or other market-driven changes that
may reduce future selling prices.
Capitalisation of internally developed products
Distinguishing the research and development phases
of a new products and determining whether the
recognition requirements for the capitalisation of
development costs are met requires judgement. After
capitalisation, management monitors whether the
recognition requirements continue to be met and
whether there are any indicators that capitalised costs
may be impaired.
E. SEGMENT REPORTING
Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision maker. The chief operating
decision maker, who is responsible for allocating
resources and assessing performance of the operating
segments, has been identified as the Board of Directors
of VEEM Ltd.
The Board has determined the operating segments
based on the reports reviewed by the Board of
directors that are used to make strategic decision. The
entity does not have any operational segments with
discrete financial information.
The Board of Directors review internal management
reports on a monthly basis that are consistent
with the information provided in the statement
of comprehensive income, statement of financial
position and statement of cash flows. As a result no
reconciliation is required because the information
as presented is what is used by the Board to make
strategic decisions.
F. FOREIGN CURRENCY TRANSLATION
Both the functional and presentation currency of VEEM
Ltd is Australian dollars.
Transactions in foreign currencies are initially recorded
in the functional currency by applying the exchange
rates ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the
balance date.
All exchange differences in the financial report are
taken to profit or loss. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are translated using the exchange rate as at
the date of the initial transaction.
Non-monetary items measured at fair value in a
foreign currency are translated using the exchange
rates at the date when the fair value was determined.
Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain
or loss.
22 |
V E E M LT D
G. REVENUE RECOGNITION
Interest income
Revenue from contracts with customers is measured
at fair value of the consideration received or receivable.
Amounts disclosed as revenue are net of returns, trade
allowances, rebates and amounts collected on behalf
of third parties. Contract liabilities are recognised where
applicable in relation to sales.
Point in time recognition - sale of goods – propulsion
& stabilization
Revenue is recognised when the goods are delivered
and titles have passed, at which time all the following
conditions are satisfied:
• the Company has transferred to the buyer the
significant risks and rewards of ownership of
the goods;
• the Company retains neither continuing managerial
involvement to the degree usually associated
with ownership nor effective control over the
goods sold;
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated
with the transaction will flow to the Company; and
• the costs incurred or to be incurred in respect of
the transaction can be measured reliably.
Over time recognition - Sale of goods and rendering of
services - mining & industrial engineering, propulsion
& stabilization, and defence
In determining whether performance obligations
are satisfied over time the company considers
the following:
• Legal control is often retained by the customer;
• VEEM products and services are highly specialised
and often do not have an alternate use; and
• Contracts are established with customers so that
VEEM has an enforceable right to payment for
performance completed to date, including profit
margin.
Revenue is recognised by reference to the stage of
completion of the performance obligation. The stage
of completion of the performance obligation is
determined as follows:
• Contract income is recognised by reference to
the total actual costs incurred at the end of the
reporting period relative to the proportion of the
total costs expected to be incurred over the life of
the performance obligation;
• Servicing fees are recognised by reference to the
proportion of the total cost of providing the service
for the product sold; and
• Revenue from time and material contracts are
recognised at the contractual rates as labour hours
are delivered and direct expenses are incurred.
Interest income from a financial asset is recognised
when it is probable that the economic benefits will flow
to the Company and the amount of revenue can be
reliably measured. Interest income is accrued on a time
basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
assets’ net carrying amount on initial recognition.
H. GOVERNMENT GRANTS
Grants from the government are recognised at their
fair value where there is a reasonable assurance that
the grant will be received and the Company will comply
with all attached conditions.
Government grants relating to costs are deferred and
recognised in profit or loss over the period necessary
to match them with the costs that they are intended
to compensate.
I. BORROWING COSTS
Borrowing costs are capitalised that are directly
attributable to the acquisition, construction or
production of qualifying assets where the borrowing
cost is added to the cost of those assets until such
time as the assets are substantially ready for their
intended use or sale.
Investment income earned on the temporary
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or
loss in the period in which they are incurred.
J. LEASES
Leases are classified as finance leases whenever the
terms of the lease transfer substantially all the risks
and rewards of ownership to the lessee. All other leases
are classified as operating leases.
Assets held under finance leases are initially
recognised at their fair value or, if lower, the
present value of the minimum lease payments,
each determined at the inception of the lease.
The corresponding liability to the lessor is included
in the statement of financial position as a finance
lease obligation.
Lease payments are apportioned between finance
charges and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged
directly against income, unless they are directly
attributable to qualifying assets, in which case they are
capitalised in accordance with the general policy on
borrowing costs, refer Note 1(i).
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| 23
Finance lease assets are depreciated on a straight line
basis over the estimated useful life of the asset.
Operating lease payments are recognised as an
expense on a straight line basis over the lease term,
except where another systematic basis is more
representative of the time pattern in which economic
benefits from the leased asset are consumed.
In the event that lease incentives are received to enter
into operating leases, such incentives are recognised
as a liability. The aggregate benefit of incentives is
recognised as a reduction of rental expense on a
straight-line basis, except where another systematic
basis is more representative of the time pattern in
which economic benefits from the leased asset are
consumed.
K. INCOME TAX
The income tax expense or benefit for the period is
the tax payable on the current period’s taxable income
based on the applicable income tax rate adjusted
by changes in deferred tax assets and liabilities
attributable to temporary difference and to unused
tax losses.
The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted
at the end of the reporting period. Management
periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and
prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute the
amount are those that are enacted or substantively
enacted by the balance date.
Deferred income tax is provided on all temporary
differences at the balance date between the tax bases
of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax liabilities are recognised for all
taxable temporary differences except:
• when the deferred income tax liability arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and
that, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is
associated with investments in subsidiaries,
associates or interests in joint ventures, and the
timing of the reversal of the temporary difference
can be controlled and it is probable that the
temporary difference will not reverse in the
foreseeable future.
Deferred income tax assets are recognised for all
deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences
and the carry-forward of unused tax credits and
unused tax losses can be utilised, except:
• when the deferred income tax asset relating to
the deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
The carrying amount of deferred income tax assets
is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are
reassessed at each balance date and are recognised
to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be
recovered.
Deferred income tax assets and liabilities are measured
at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been
enacted or substantively enacted at the balance date.
Income taxes relating to items recognised directly in
equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are
offset only if a legally enforceable right exists to set
off current tax assets against current tax liabilities and
the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
L. OTHER TAXES
Revenues, expenses and assets are recognised net of
the amount of GST except:
• when the GST incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case the GST is recognised as
part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
• receivables and payables, which are stated with the
amount of GST included.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables in the statement of financial position.
Cash flows are included in the statement of cash flows
on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is
recoverable from, or payable to, the taxation authority
are classified as operating cash flows.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to, the
taxation authority.
24 |
V E E M LT D
For the purposes of the statement of cash flows,
cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding
bank overdrafts.
O. TRADE AND OTHER RECEIVABLES
Trade receivables are measured on initial recognition at
fair value and are subsequently measured at amortised
cost using the effective interest rate method, less
any allowance for impairment. Trade receivables are
generally due for settlement within periods ranging
from15 days to 60 days.
Impairment of trade receivables is continually
reviewed and those that are considered to be
uncollectible are written off by reducing the carrying
amount directly. An allowance account is used when
there is objective evidence that the Company will not
be able to collect all amounts due according to the
original contractual terms.
Factors considered by the Company in making this
determination include known significant financial
difficulties of the debtor, review of financial information
and significant delinquency in making contractual
payments to the Company. The impairment allowance
is set equal to the difference between the carrying
amount of the receivable and the present value of
estimated future cash flows, discounted at theoriginal
effective interest rate. Where receivables are short-term
discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in
the statement of comprehensive income within other
expenses. When a trade receivable for which
an impairment allowance had been recognised
becomes uncollectible in a subsequent period, it is
written off against the allowance account. Subsequent
recoveries of amounts previously written off are
credited against other expenses in the statement of
comprehensive income.
M. IMPAIRMENT OF TANGIBLE AND
INTANGIBLE ASSETS
The Company assesses at each balance date whether
there is an indication that an asset may be impaired. If
any such indication exists, or when annual impairment
testing for an asset is required, the Company makes an
estimate of the asset’s recoverable amount. An asset’s
recoverable amount is the higher of its fair value less
costs to sell and its value in use and is determined for
an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from
other assets or group of assets and the asset's value in
use cannot be estimated to be close to its fair value. In
such cases the asset is tested for impairment as part
of the cash-generating unit to which it belongs. When
the carrying amount of an asset or cash-generating
unit exceeds its recoverable amount, the asset or
cash-generating unit is considered impaired and is
written down to its recoverable amount.
In assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. Impairment losses relating to
continuing operations are recognised in those expense
categories consistent with the function of the impaired
asset unless the asset is carried at revalued amount
(in which case the impairment loss is treated as a
revaluation decrease).
An assessment is also made at each balance date
as to whether there is any indication that previously
recognised impairment losses may no longer exist
or may have decreased. If such indication exists,
the recoverable amount is estimated. A previously
recognised impairment loss is reversed only if there has
been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment
loss was recognised. If that is the case the carrying
amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the
carrying amount that would have been determined,
net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is
recognised in profit or loss unless the asset is carried
at revalued amount, in which case the reversal is
treated as a revaluation increase. After such a reversal
the depreciation charge is adjusted in future periods to
allocate the asset’s revised carrying amount, less any
residual value, on a systematic basis over its remaining
useful life.
N. CASH AND CASH EQUIVALENTS
Cash comprises cash at bank and in hand. Cash
equivalents are short term, highly liquid investments
that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of
changes in value. Bank overdrafts are shown within
borrowings in current liabilities in the statement of
financial position.
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P. INVENTORIES
Held-to-maturity investments
(i) Raw material, stores and work in progress
Raw materials, stores and work in progress are
stated at the lower of cost and net realisable value.
Cost comprises direct materials, direct labour and an
appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis
of normal operating capacity. Costs are assigned to
individual items of stock mainly on the basis of
average cost.
(ii) Contract work in progress
Contract work in progress is stated at cost plus
attributable profit to date (based on percentage of
completion of each contract) less progress billings.
Cost includes all costs directly related to specific
contracts and an allocation of overhead expenses
incurred in connection with the company’s contract
operations. Where a loss on completion is indicated
that loss is brought to account in the current year.
Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to
make the sale.
Non-derivative financial assets with fixed or
determinable payments and fixed maturity are
classified as held-to-maturity when the Company
has the positive intention and ability to hold to
maturity. Investments intended to be held for an
undefined period are not included in this classification.
Investments that are intended to be held-to-maturity,
such as bonds, are subsequently measured at
amortised cost. This cost is computed as the amount
initially recognised minus principal repayments, plus or
minus the cumulative amortisation using the effective
interest method of any difference between the initially
recognised amount and the maturity amount. This
calculation includes all fees and points paid or received
between parties to the contract that are an integral
part of the effective interest rate, transaction costs
and all other premiums and discounts. For investments
carried at amortised cost, gains and losses are
recognised in profit or loss when the investments
are derecognised or impaired, as well as through the
amortisation process.
If the Company were to sell other than an insignificant
amount of held-to-maturity financial assets, the whole
category would be tainted and reclassified as available-
for-sale.
Q. FINANCIAL ASSETS
Loans and receivables
Financial assets in the scope of AASB 139 Financial
Instruments: Recognition and Measurement are
classified as either financial assets at fair value through
profit or loss, loans and receivables, held-to-maturity
investments, or available-for-sale investments, as
appropriate. When financial assets are recognised
initially, they are measured at fair value plus, in the
case of investments not at fair value through profit
or loss, directly attributable transaction costs. The
Company determines the classification of its financial
assets after initial recognition and, when allowed and
appropriate, re-evaluates this designation at each
financial year-end. All regular way purchases and sales
of financial assets are recognised on the trade date i.e.
the date that the Company commits to purchase the
asset. Regular way purchases or sales are purchases
or sales of financial assets under contracts that
require delivery of the assets within the period
established generally by regulation or convention in
the marketplace.
Financial assets at fair value through profit or loss
Financial assets classified as held for trading are
included in the category ‘financial assets at fair value
through profit or loss’ where applicable. Financial assets
are classified as held for trading if they are acquired
for the purpose of selling in the near term. Derivatives,
where applicable, are also classified as held for trading
unless they are designated as effective hedging
instruments. Gains or losses on investments held for
trading are recognised in profit or loss.
Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are
not quoted in an active market. Such assets are carried
at amortised cost using the effective interest method.
Gains and losses are recognised in profit or loss when
the loans and receivables are derecognised or impaired,
as well as through the amortisation process.
Available-for-sale investments
Available-for-sale investments are those non-derivative
financial assets that are designated as available-for-
sale or are not classified as any of the three preceding
categories. After initial recognition available-for sale
investments are measured at fair value with gains or
losses being recognised as a separate component of
equity until the investment is derecognised or until t
he investment is determined to be impaired, at which
time the cumulative gain or loss previously reported in
equity is recognised in profit or loss.
The fair value of investments that are actively traded
in organised financial markets is determined by
reference to quoted market bid prices at the close
of business on the balance date. For investments
with no active market, fair value is determined using
valuation techniques. Such techniques include using
recent arm’s length market transactions, reference to
the current market value of another instrument that is
substantially the same, discounted cash flow analysis
and option pricing models.
26 |
V E E M LT D
R. DERECOGNITION OF FINANCIAL ASSETS
S. IMPAIRMENT OF FINANCIAL ASSETS
The Company assesses at each balance date
whether a financial asset or Company of financial
assets is impaired.
Financial assets carried at amortised cost
If there is objective evidence that an impairment loss
on loans and receivables carried at amortised cost has
been incurred, the amount of the loss is measured as
the difference between the asset’s carrying amount
and the present value of estimated future cash flows
(excluding future credit losses that have not been
incurred) discounted at the financial asset’s original
effective interest rate (i.e. the effective interest rate
computed at initial recognition). The carrying amount
of the asset is reduced either directly or through use
of an allowance account. The amount of the loss is
recognised in profit or loss.
The Company first assesses whether objective
evidence of impairment exists individually for
financial assets that are individually significant, and
individually or collectively for financial assets that
are not individually significant. If it is determined
that no objective evidence of impairment exists for
an individually assessed financial asset, whether
significant or not, the asset is included in a Company of
financial assets with similar credit risk characteristics
and that Company of financial assets is collectively
assessed for impairment. Assets that are individually
assessed for impairment and for which an impairment
loss is or continues to be recognised are not included in
a collective assessment of impairment.
If, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be
related objectively to an event occurring after the
impairment was recognised, the previously recognised
impairment loss is reversed. Any subsequent reversal
of an impairment loss is recognised in profit or loss, to
the extent that the carrying value of the asset does not
exceed its amortised cost at the reversal date.
AND FINANCIAL LIABILITIES
Financial assets
A financial asset (or, where applicable, a part of a
financial asset or part of a Company of similar financial
assets) is de- recognised when:
• the rights to receive cash flows from the asset
have expired;
• the Company retains the right to receive cash flows
from the asset, but has assumed an obligation to
pay them in full without material delay to a third
party under a ‘pass-through’ arrangement; or
• the Company has transferred its rights to receive
cash flows from the asset and either:
• has transferred substantially all the risks and
rewards of the asset, or
• has neither transferred nor retained
substantially all the risks and rewards of the
asset, but has transferred control of the asset.
When the Company has transferred its rights to receive
cash flows from an asset and has neither transferred
nor retained substantially all the risks and rewards
of the asset nor transferred control of the asset, the
asset is recognised to the extent of the Company’s
continuing involvement in the asset. Continuing
involvement that takes the form of a guarantee over
the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum
amount of consideration received that the Company
could be required to repay.
When continuing involvement takes the form of a
written and/or purchased option (including a cash-
settled option or similar provision) on the transferred
asset, the extent of the Company’s continuing
involvement is the amount of the transferred asset that
the Company may repurchase, except that in the case
of a written put option (including a cash-settled option
or similar provision) on an asset measured at fair value,
the extent of the Company’s continuing involvement is
limited to the lower of the fair value of the transferred
asset and the option exercise price.
Financial liabilities
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by
another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as a derecognition of the original
liability and the recognition of a new liability, and
the difference in the respective carrying amounts is
recognised in profit or loss.
N OT E S TO T H E F I N A N C I A L S TAT E M E N T S
| 27
VEEM's Italian Agent Luca Signorini showing how the Gyro
works to prospective clients during the Croatian Sea Trials
Financial assets carried at cost
If there is objective evidence that an impairment loss
has been incurred on an unquoted equity instrument
that is not carried at fair value (because its fair value
cannot be reliably measured), or on a derivative asset
that is linked to and must be settled by delivery of
such an unquoted equity instrument, the amount of
the loss is measured as the difference between the
asset’s carrying amount and the present value of
estimated future cash flows, discounted at the current
market rate of return for a similar financial asset.
Such impairment loss shall not be reversed in
subsequent periods.
Available-for-sale investments
If there is objective evidence that an available-for-
sale investment is impaired, an amount comprising
the difference between its cost (net of any principal
repayment and amortisation) and its current fair value,
less any impairment loss previously recognised in profit
or loss, is transferred from equity to the statement of
comprehensive income. Reversals of impairment losses
for equity instruments classified as available-for-sale
are not recognised in profit. Reversals of impairment
losses for debt instruments are reversed through profit
or loss if the increase in an instrument's fair value can
be objectively related to an event occurring after the
impairment loss was recognised in profit or loss.
T. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment is stated at cost less accumulated
depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are
eligible for capitalisation when the cost of replacing the
parts is incurred. Similarly, when each major inspection
is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement
only if it is eligible for capitalisation.
Depreciation is calculated on a straight-line basis over
the estimated useful life of the assets as follows:
Motor vehicles
3-10 years
Plant and equipment
5-30 years
Computer equipment
3-5 years
The assets' residual values, useful lives and
amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
Impairment
The carrying values of plant and equipment are
reviewed for impairment at each balance date, with
recoverable amount being estimated when events or
changes in circumstances indicate that the carrying
value may be impaired.
The recoverable amount of plant and equipment is the
higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments
of the time value of money and the risks specific to
the asset.
For an asset that does not generate largely
independent cash inflows, recoverable amount is
determined for the cash- generating unit to which the
asset belongs, unless the asset's value in use can be
estimated to approximate fair value.
An impairment exists when the carrying value of an
asset or cash-generating unit exceeds its estimated
recoverable amount. The asset or cash-generating unit
is then written down to its recoverable amount.
For plant and equipment, impairment losses are
recognised in the statement of comprehensive income
The VEEM
VG260 has been
successfully trialed
in the notoriously
rough North Sea
and is capable
of delivering
its staggering
260,000Nm of
torque whether
sitting at anchor or
barrelling down a
wave at 50 knts.
28 |
V E E M LT D
Subsequent to initial recognition, internally-generated
intangible assets are reported at cost less
accumulated amortisation and accumulated
impairment losses, on the same basis as intangible
assets acquired separately.
The following useful lives are used in the calculation
of amortisation:
Patents
10 – 20 years
Product Development
Expenditure
Software
Units of
production
10 years
V. TRADE AND OTHER PAYABLES
Trade payables and other payables are carried at
amortised cost and represent liabilities for goods and
services provided to the Company prior to the end of
the financial year that are unpaid and arise when the
Company becomes obliged to make future payments
in respect of the purchase of these goods and services.
Trade and other payables are presented as current
liabilities unless payment is not due within 12 months.
W. BORROWINGS
Borrowings are initially recognised at fair value,
net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction
costs) and the redemption amount is recognised
in profit or loss over the period of the borrowings
using the effective interest method. Fees paid on
the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw
down occurs. To the extent there is no evidence that
it is probable that some or all of the facility will be
drawn down, the fee is capitalised as a prepayment for
liquidity services and amortised over the period of the
facility to which it relates.
in the cost of sales line item. However, because land
and buildings are measured at revalued amounts,
impairment losses on land and buildings are treated as
a revaluation decrement.
Derecognition and disposal
An item of property, plant and equipment is
derecognised upon disposal or when no further
future economic benefits are expected from its use
or disposal.
Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the
asset) is included in profit or loss in the year the asset
is derecognised.
U. INTANGIBLE ASSETS
Intangible assets acquired separately
Intangible assets acquired separately are recorded at
cost less accumulated amortisation and impairment.
Amortisation is charged on a straight-line basis over
their estimated useful lives. The estimated useful life
and amortisation method is reviewed at the end of
each annual reporting period, with any changes in
these accounting estimates being accounted for on
a prospective basis.
Internally generated intangible assets
Expenditure on research activities is recognised as
an expense in the period in which it is incurred. Where
no internally- generated intangible asset can be
recognised, development expenditure is recognised as
an expense in the period as incurred.
An intangible asset arising from development (or
from the development phase of an internal project)
is recognised if, and only if, all of the following have
been demonstrated:
• The technical feasibility of completing the intangible
asset so that it will be available for use or sale;
• The intention to complete the intangible asset and
use or sell it;
• The ability to use or sell the intangible asset;
• How the intangible asset will generate probable
future economic benefits;
• The availability of adequate technical, financial and
other resources to complete development and to
use or sell the intangible asset; and
• The ability to measure reliably the expenditure
attributable to the intangible asset during its
development.
The amount initially recognised for internally-generated
intangible assets is the sum of the expenditure incurred
from the date when the intangible asset first meets the
recognition criteria listed above.
N OT E S TO T H E F I N A N C I A L S TAT E M E N T S
| 29
The VEEM Powerplay Boat at high speed during Sea Trials, showing
how effective the Gyro stabilization really is in rough conditions
Borrowings are removed from the statement of financial
position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between
the carrying amount of a financial liability that has
been extinguished or transferred to another party and
the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit
or loss as other income or finance costs.
and salaries, annual leave and sick leave expected to
be settled within 12 months of the balance date are
recognised in other payables in respect of employees’
services up to the balance date. They are measured at
the amounts expected to be paid when the liabilities are
settled. Liabilities for non- accumulating sick leave are
recognised when the leave is taken and are measured
at the rates paid or payable.
Borrowings are classified as current liabilities unless
the Company has an unconditional right to defer
settlement of the liability for at least 12 months after
the reporting period.
X. PROVISIONS
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made
of the amount of the obligation. Provisions are not
recognised for future operating losses.
When the Company expects some or all of a provision
to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a
separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision
is presented in the statement of comprehensive
income net of any reimbursement.
Provisions are measured at the present value or
management’s best estimate of the expenditure
required to settle the present obligation at the end of
the reporting period.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects the risks specific to the liability.
When discounting is used, the increase in the
provision due to the passage of time is recognised
as an interest expense.
Onerous contracts
Present obligations arising under onerous contracts are
recognised and measured as provisions. An onerous
contract is considered to exist where the Company
has a contract under which the unavoidable costs of
meeting the obligations under the contract exceed
the economic benefits expected to be received from
the contract.
Warranties
Provisions for the expected cost of warranty
obligations under local sale of goods legislation are
recognised at the date of sale of the relevant products,
at the Directors’ best estimate of the expenditure
required to settle the Company’s obligation.
Y. EMPLOYEE LEAVE BENEFITS
Wages, salaries, annual leave and sick leave
Liabilities accruing to employees in respect of wages
Liabilities accruing to employees in respect of wages
and salaries, annual leave, long service leave and sick
leave not expected to be settled within 12 months of
the balance date are recognised in non-current liabilities
in respect of employees’ services up to the balance
date. They are measured as the present value of the
estimated future outflows to be made by the Company.
Long service leave
The liability for long service leave is recognised in the
provision for employee benefits and measured as the
present value of expected future payments to be made
in respect of services provided by employees up to
the balance date. Consideration is given to expected
future wage and salary levels, experience of employee
departures, and period of service. Expected future
payments are discounted using market yields at the
balance date on national government bonds with terms
to maturity and currencies that match, as closely as
possible, the estimated future cash outflows.
z. DIVIDENDS
Provision is made for the amount of any dividend
declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of
the reporting period but not distributed at the end of
the reporting period.
AA. EARNINGS PER SHARE
Basic earnings per share is calculated as net profit
attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than
dividends) and preference share dividends, divided
by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings per share are calculated, where
applicable, as net profit attributable to members of the
parent, adjusted for:
• costs of servicing equity (other than dividends) and
preference share dividends;
• the after-tax effect of dividends and interest
associated with dilutive potential ordinary shares
that have been recognised as expenses; and
• other non-discretionary changes in revenues or
expenses during the period that would result from
the dilution of potential
• ordinary shares; divided by the weighted average
number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
30 |
V E E M LT D
NOTE 2: REVENUE AND EXPENSES
Revenue from contracts with customers
Sales revenue
Revenue – point in time
Revenue – over time
Other revenue
Apprentice subsidies
Commissions received
Interest received
Scrap metal
2018 ($)
2017 ($)
1,064,595
1,740,511
39,632,923
36,306,980
5,030
557
-
9,187
14,000
850
12,279
7,984
40,712,292
38,082,604
During the year, the Company recognised revenue
of $9,425,468 in relation to the prior years’ work in
progress. The Company has progress billings at 30
June 2018 of $2,356,643 (2017: $1,775,114).
The geographic distribution of sales for the FY17/18
was approximately 68% (2017: 68%) derived within
Australia and the remaining 32% (2017: 32%) were
derived predominantly from the USA, UK, Italy and NZ.
Contracts are received and executed generally within
12 months and hence are considered short term
contracts. Period contracts (those that extend greater
than 1 year) with customers are executed by discrete
purchase orders for required shipments and hence still
fall within the definition for short term contracts.
All sales are generated by direct contract with
customers. Sales agents are utilised in Europe to
introduce enquiries and leads and contracts are then
established direct with the buyer. Where distributors
are utilised the entity purchases and contracts
directly with VEEM Ltd.
The Company has contract assets, being work in
progress (overtime) at 30 June 2018 of $4,670,847
(2017: $3,060,509).
The Company will recognise revenue from contracts
with customers based on the following performance:
• the completion of the contracted work-scope
following factory acceptance testing in accordance
with contract terms and conditions and
• when applicable, completion of contracted
milestones and transfer of title generally based on:
milestone 1 - material acquisition, and/or
milestone 2 - completion of casting metal pour,
and/or
milestone 3 - factory acceptance testing (FAT)
The majority of customer contracts are from the
private sector and this accounts for approximately
80% of the revenue during FY17/18. Sales to
quasi-government and government instrumentalities
accounted for 25% (2017: 18%) and 7% (2017: 2%)
respectively.
N OT E S TO T H E F I N A N C I A L S TAT E M E N T S
| 31
NOTE 2: REVENUE AND EXPENSES (CONT'D)
OTHER INCOME
Other income
Foreign exchange gains (losses) (net)
OTHER EXPENSES
Insurance
Advertising and marketing
Travel
Bank Charges
Safety and first aid
Motor vehicle expenses
Accounting and secretarial
Telephone expenses
Employee related expenses
Legal expenses
Profit on disposal property, plant and equipment
Other general expenses
NOTE 3: INCOME TAX
Income tax recognised in profit or loss.
The major components of tax expense are:
2018 ($)
-
(352,517)
(352,517)
2018 ($)
291,747
821,911
281,560
136,739
70,905
161,600
165,352
63,341
74,707
45,966
(13,788)
181,009
2,281,049
2017 ($)
30,989
161,544
192,533
2017 ($)
276,026
332,739
193,372
141,368
75,243
28,712
141,685
49,845
82,784
74,111
(9,422)
343,898
1,730,361
Current tax expense/(income)
Deferred tax expense/(income) relating to the origination and
reversal of temporary differences
2018 ($)
(60,457)
211,810
2017 ($)
1,110,628
(317,286)
Total tax expense
151,353
793,342
32 |
V E E M LT D
NOTE 3: INCOME TAX (CONT'D)
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax
expense in the financial statements as follows:
Accounting profit before income tax
Income tax expense calculated at 30%
Tax effect of amounts which are not deductible/(taxable) in
calculating taxable income:
2018 ($)
2,908,271
872,481
2017 ($)
4,642,092
1,392,628
Prior year overprovision of income tax
(66,485)
-
• Effect of expenses that are not deductible in determining
taxable profit
• Effect of concessions – research and development
Income tax expense reported in the statement of
comprehensive income
3,226
(657,869)
151,353
102,982
(702,268)
793,342
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian tax law. There has been no change in this tax rate since the previous
reporting period.
CURRENT TAX LIABILITIES COMPRISE:
Income tax receivable/(payable)
DEFERRED TAX ASSETS COMPRISE:
Annual leave payable
Provision for long service leave
Accrued expenses
Unrealised foreign exchange (gain) / loss
Black hole expenditure and borrowing costs
DEFERRED TAX LIABILITIES COMPRISE:
Depreciable property, plant and equipment
Patents
2018 ($)
1,016,048
2017 ($)
(373,431)
2018 ($)
312,912
352,971
59,850
3,469
307,481
1,036,683
2018 ($)
894,844
83,650
978,494
2017 ($)
307,226
329,595
54,522
(6,445)
346,373
1,031,271
2017 ($)
676,523
84,749
761,272
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| 33
NOTE 3: INCOME TAX (CONT'D)
RECONCILIATION OF DEFERRED TAX ASSETS/ (LIABILITIES):
30 June 2018
Accrued expenses
Annual leave payable
Provision for long service leave
Property, plant and equipment
Unrealised foreign exchange (gain) / loss
Black hole expenditure and borrowing costs
Patents
30 June 2017
Accrued expenses
Annual leave payable
Provision for long service leave
Property, plant and equipment
Unrealised foreign exchange (gain) / loss
Black hole expenditure and borrowing costs
Patents
OPENING
BALANCE
($)
CHARGED TO
INCOME
($)
CLOSING
BALANCE
($)
54,522
307,226
329,595
5,328
5,686
23,376
59,850
312,912
352,971
(676,523)
(218,321)
(894,844)
(6,445)
346,373
(84,749)
269,999
9,914
(38,892)
1,099
(211,810)
3,469
307,481
(83,650)
58,189
OPENING
BALANCE
($)
CHARGED TO
INCOME
($)
CLOSING
BALANCE
($)
48,014
272,097
303,421
(598,370)
2,198
-
(74,647)
(47,287)
6,508
35,129
26,174
(78,153)
(8,643)
346,373
(10,102)
317,286
54,522
307,226
329,595
(676,523)
(6,445)
346,373
(84,749)
269,999
NOTE 4: SEGMENT REPORTING
Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision maker. The chief operating
decision maker, who is responsible for allocating
resources and assessing performance of the operating
segments, has been identified as the board of Directors
of VEEM Ltd.
The Board has determined the operating segments
based on the reports reviewed by the Board of
directors that are used to make strategic decision. The
entity does not have any operational segments with
discrete financial information.
The Board of Directors’ review internal management
reports on a monthly basis that are consistent
with the information provided in the statement
of comprehensive income, statement of financial
position and statement of cash flows. As a result no
reconciliation is required because the information
as presented is what is used by the Board to make
strategic decisions.
The Company has one customer where the revenue
from that customer was in excess of 10% of the
Company’s revenue. Customer A generated 25.4%
(2017: 17.7%) of the Company’s revenue for the year.
The total sales revenue for VEEM Ltd for FY2018
was $40,697,518. This can be broken down into the
following major sales categories. Engineering Services
is the mining and industrial engineering manufacture
and service portion of the business and sales for
FY2018 were $12,664,262. Propulsion and stabilization
consists of the manufacture of new propellers, shaft
lines, gyro stabilizers and fin stabilizers. The sales in this
category were $17,709,347. Defence related sales for
FY2018 totalled $13,325,408 with $3,001,496 of those
sales being both within the defence and propulsion/
stabilization category.
34 |
V E E M LT D
NOTE 5: EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share
There are no diluted earnings per share
Basic earnings per share
2018
2017
Cents per share
Cents per share
2.12
3.21
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share
is as follows:
Earnings
Earnings from continuing operations
2,756,918
3,848,750
2018 ($)
2017 ($)
Weighted average number of ordinary shares for the purpose of
basic earnings per share
NOTE 6: DIVIDENDS
Fully franked dividends paid
Fully unfranked dividends paid
Total dividends paid
2018 ($)
Number
2017 ($)
Number
130,000,000
119,893,048
2018 ($)
2,086,500
-
2,086,500
2017 ($)
142,000
3,858,000
4,000,000
Balance of franking account at period end adjusted for franking credits arising from the payment of provision for
income tax and dividends recognised as receivables, franking debits arising from payment of proposed dividends
and franking credits that may be prevented from distribution in a subsequent financial year.
FRANKING ACCOUNT BALANCE
The amount of franking credits available for subsequent financial years are:
Franking account balance as at the end of the financial year at
30% (2017: 30%)
913,949
1,539,053
The tax rate at which paid dividends have been franked is 30% (2017: 30%).
2018 ($)
2017 ($)
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| 35
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank
Cash on hand
2018 ($)
303,408
1,300
304,708
2017 ($)
586,786
800
587,586
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Reconciliation to the Statement of Cash Flows:
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank
and investments in money market instruments, net of outstanding bank overdrafts.
Cash and cash equivalents as shown in the statement of cash flows is reconciled to the related items in the
statement of financial position as follows:
Cash and cash equivalents
Bank overdraft (Note 14)
2018 ($)
304,708
(629,449)
(324,741)
2017 ($)
587,586
(242,654)
344,932
Non-cash financing and investing activities
The Company purchased assets with a value of $118,864 which were financed through hire purchase.
Cash balances not available for use
All cash balances are available for use.
Reconciliation of profit for the year to net cash flows from operating activities
Net profit for the year
Depreciation and amortisation expense
(Gain)/loss on sale or disposal of non-current assets, property, plant
& equipment
Provision for employee leave benefits
Foreign exchange (gain)/loss
(Increase)/decrease in assets:
Trade and other receivables
Inventories
Increase/(decrease) in liabilities:
Trade and other payables
Current and deferred tax
GST payable
2018 ($)
2,756,918
1,607,638
(13,788)
77,920
352,517
2017 ($)
3,848,750
1,441,418
(9,422)
87,247
(161,544)
(1,433,360)
127,573
(4,923,121)
(2,452,304)
1,468,363
(1,177,669)
(160,381)
380,547
(802,357)
129,732
Net cash from operating activities
(1,444,963)
2,589,640
36 |
V E E M LT D
NOTE 7: CASH AND CASH EQUIVALENTS (CONT'D)
Changes in liabilities arising from financing activities
BANK
LOANS
($)
HIRE
PURCHASE
LIABILITY
($)
TOTAL
($)
Balance as at 1 July 2017
3,500,000
4,242,946
7,742,945
Net cash from (used in) financing activities
6,000,000
(1,120,438)
(4,879,562)
Acquisition of plant and equipment by means of hire purchase
-
118,864
118,865
Balance as at 30 June 2018
9,500,000
3,241,372
12,741,372
NOTE 8: TRADE AND OTHER RECEIVABLES
Trade receivables (i)
GST recoverable
Other receivables
2018 ($)
8,596,812
178,572
98,277
2017 ($)
7,787,925
162,905
358
8,873,661
7,951,188
i.
the average credit period on sales of goods and rendering of services is 15-60 days
Aging of past due but not impaired
60 – 90 days
90 – 120 days
Total
2018 ($)
449,797
210,924
660,721
2017 ($)
553,738
176,721
730,459
In determining the recoverability of a trade receivable, the Company considers any changes in the credit quality of
the trade receivable from the date credit was initially granted up to the balance date. The concentration of credit
risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is
no further credit provision required in excess of the allowance for impairment.
NOTE 9: INVENTORIES
Work in progress – over time
Work in progress – point in time
Less: progress billings
Goods for resale, raw materials and stores
2018 ($)
4,670,847
1,151,358
(2,356,643)
3,465,562
9,886,702
13,352,264
2017 ($)
3,060,509
1,806,562
(1,775,114)
3,091,958
5,337,185
8,429,143
Inventory write-downs charged to cost of sales totalled $Nil (2017 Nil).
During the year, the Company recognised revenue of $9,425,468 in relation to the prior years’ work in progress.
Included in goods for resale, raw materials and stores inventories are inventories carried at net realisable value with
a carrying value of $7,754,225. The total impact to profit or loss of write downs to net realisable value is $33,098.
N OT E S TO T H E F I N A N C I A L S TAT E M E N T S
| 37
NOTE 10: OTHER ASSETS
Prepayments
Supplies paid in advance
2018 ($)
391,637
500,968
892,605
2017 ($)
366,051
-
366,051
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
PLANT AND
EQUIPMENT
($)
MOTOR
VEHICLES
($)
CAPITAL WORK
IN PROGRESS
($)
COMPUTER
EQUIPMENT
($)
TOTAL
($)
As at 30 June 2017
Cost
34,285,984
560,932
464,955
1,394,152
36,706,023
Accumulated depreciation
(20,107,009)
(428,157)
-
(1,182,889)
(21,718,055)
Closing carrying amount
14,178,975
132,775
464,955
211,263
14,987,968
Year ended 30 June 2018
Opening carrying amount
14,178,975
132,775
Additions
Disposals
Transfers
Depreciation charge
471,462
-
-
(13,522)
551,056
(1,437,872)
Closing carrying amount
13,763,621
As at 30 June 2018
464,955
126,653
-
-
(320,374)
211,263
14,987,968
29,848
627,963
-
-
(13,522)
230,682
(31,611)
87,642
-
(50,522)
(1,520,005)
271,234
190,589
14,313,086
Cost
35,207,615
547,376
271,234
1,424,000
37,450,225
Accumulated Depreciation
(21,443,994)
(459,734)
-
(1,233,411)
(23,137,139)
Carrying amount
13,763,621
87,642
271,234
190,589
14,313,086
The carrying value of plant and equipment held under purchase contracts at 30 June 2018 is $3,241,996 (2017:
$4,241,747). Additions during the year include $118,864 (2017: $4,365,325) of plant and equipment held under hire
purchase contracts.
Assets under hire purchase contracts are pledged as security for the related hire purchase liabilities.
38 |
V E E M LT D
NOTE 12: INTANGIBLE ASSETS
As at 30 June 2017
Cost
Accumulated amortisation
Closing carrying amount
Year ended 30 June 2018
Opening carrying amount
Net additions
Transfers
Amortisation charge
Closing carrying amount
As at 30 June 2018
Cost
Accumulated amortisation
Carrying amount
OTHER
INTELLECTUAL
PROPERTY
($)
PRODUCT
DEVELOPMENT
($)
TOTAL
($)
382,127
11,236,023
-
(791,507)
11,618,150
(791,507)
382,127
10,444,516
10,826,643
382,127
295,427
-
(35,595)
641,959
677,554
(35,595)
641,959
10,444,516
10,826,643
1,290,610
(402,097)
(52,038)
1,586,037
(402,097)
(87,633)
11,280,991
11,922,950
12,124,536
12,802,090
(843,545)
(879,140)
11,280,991
11,922,950
No impairment loss was recognised in the 2018 financial year (2017: $Nil).
NOTE 13: TRADE AND OTHER PAYABLES (CURRENT)
Trade payables (i)
Annual leave payable
GST Payable
Other creditors
2018 ($)
4,672,674
1,043,041
306,311
687,888
6,709,914
2017 ($)
3,125,221
1,024,088
451,025
554,775
5,155,109
(i) Trade payables are non-interest bearing and are normally settled on 30-day terms.
Information regarding the interest rate, foreign exchange and liquidity risk exposure is set out in Note 17.
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| 39
NOTE 14: BORROWINGS
Current
Bank overdraft (a)
Bill facility (a)
Hire purchase liability
Less: Unexpired charges
Non-current
Bill facility (a)
Hire purchase liability
Less: Unexpired charges
2018 ($)
2017 ($)
629,449
3,500,000
1,263,072
(133,142)
5,259,379
6,000,000
2,203,093
(91,651)
8,111,442
242,654
3,500,000
1,249,894
(176,858)
4,815,690
-
3,372,898
(202,988)
3,169,910
(a) The bank overdraft and bill facility are secured by a registered first mortgage over the assets and undertakings
of the Company.
The Company has a Multi Option Facility with a limit of $11,400,000 that may be allocated between the Overdraft
Facility and Commercial Bill Facility. In addition, there is an Electronic Payments Facility with a limit of $300,000.
The interest rate is currently at 3.56% (June 2017: 2.92%). The facility is renewed on an annual basis.
At 30 June 2018, the Company had available $1,596,150 (2017: $7,957,346) of undrawn committed borrowing
facilities in respect of which all conditions precedent had been met.
Dutch Wind Farms
in the distance
as the VG260SD
undergoes Sea
Trials with Damen
Shipyards
40 |
V E E M LT D
NOTE 14: BORROWINGS (CONT'D)
Financing facilities available
At balance date, the following financing facilities had been negotiated and were available:
Total facilities
Multi Option Facility
Electronic Payments facility
Commercial Card Facility
Facilities used at balance date
Bank overdraft (Multi Option Facility)
Bill facility (Multi Option Facility)
Commercial Card Facility
Facilities unused at balance date
Multi Option Facility
Electronic Payments facility
Commercial Card Facility
Total facilities
Facilities used at balance date
Facilities unused at balance date
2018 ($)
2017 ($)
11,400,000
11,400,000
300,000
50,000
300,000
-
11,750,000
11,700,000
629,449
242,654
9,500,000
3,500,000
24,401
-
10,153,850
3,742,654
1,270,551
300,000
25,599
1,596,150
7,657,346
300,000
-
7,957,346
10,153,850
1,596,150
3,742,654
7,957,346
11,750,000
11,700,000
The carrying value of plant and equipment held under hire purchase contracts at 30 June 2018 is $3,241,996
(2017: $4,241,747). Additions during the year include $118,864 (2017: $4,365,325 of plant and equipment held
under hire purchase contracts.
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| 41
NOTE 15: PROVISIONS
Balance at beginning of year
Net movements
Balance at the end of year
Current
Non-current
EMPLOYEE BENEFITS ($)
1,098,649
77,920
1,176,569
1,176,569
-
(i) The provision for employee benefits represents long service leave entitlements accrued.
NOTE 16: ISSUED CAPITAL
130,000,000 (2017: 130,000,000) Ordinary shares issued and fully paid
5,140,616
5,140,616
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one
vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
2018 ($)
2017 ($)
YEAR TO 30 JUNE 2018
YEAR TO 30 JUNE 2017
No.
$
No.
$
Movements in ordinary shares on issue
Opening balance
Share split (i)
Issue of fully paid ordinary shares at 50c
per share
Capital raising costs
130,000,000
5,140,616
82,955,330
400,587
-
-
-
-
-
-
37,044,670
50
10,000,000
5,000,000
-
(260,021)
Closing balance
130,000,000
5,140,616
130,000,000
5,140,616
Movements in B Class Shares on issue
Opening balance
Cancellation of B class shares (i)
Closing balance
-
-
-
YEAR TO 30 JUNE 2018
YEAR TO 30 JUNE 2017
No.
$
No.
-
-
-
100
(100)
-
-
$
50
(50)
(i) Prior to the IPO, the Company split its Ordinary Shares from 82,955,330 shares to 130,000,000 shares and
cancelled the B class shares.
42 |
V E E M LT D
NOTE 16: ISSUED CAPITAL (CONT'D)
Share options
The Company has a share-based payment Incentive Option Scheme which provides that the Board of the
Company, from time to time, in its absolute discretion, make an offer to any Eligible Participant to apply for Options,
upon the terms set out in the Incentive Option Plan and upon such additional terms and conditions as the Board
determined.
In exercising that discretion, the Board may have regard o the following (without limitation):
• The Eligible Participants length of service with the Company
• The contribution made by the Eligible Participant to the Company
• The potential contribution of the Eligible Participant to the Company; or
• Any other matter the Board considers relevant.
No options to subscribe for the Company’s shares have been granted during the period. There are no options on
issue at balance date.
NOTE 17: FINANCIAL INSTRUMENTS
Capital risk management
The Company manages its capital to ensure it will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Company consists of debt, cash and cash equivalents and equity attributable to equity
holders of the Company, comprising issued capital and retained earnings.
The Company is not subject to externally imposed capital requirements.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as
tax, dividends and general administrative outgoings.
Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital
and the risks associated with each class of capital.
Van Der Valk Yacht Builders 27M – “MY Anemeli” Yacht during Sea Trials
to test its VEEM VG120 off the coast of Rotterdam, Holland
N OT E S TO T H E F I N A N C I A L S TAT E M E N T S
| 43
NOTE 17: FINANCIAL INSTRUMENTS (CONT'D)
Categories of financial instruments
Financial assets
Cash and cash equivalents
Loans and receivables
Financial liabilities
Trade and other payables
Borrowings – Bill Facility
Borrowings – Bank overdraft
Hire purchase liability
2018 ($)
2017 ($)
304,708
8,793,661
587,586
7,951,188
6,709,914
9,500,000
629,449
3,241,372
5,155,109
3,500,000
242,654
4,242,946
Financial risk management objectives
The Company is exposed to market risk (including currency risk, fair value, risk and interest), credit risk, liquidity risk
and cash flow interest rate risk.
Foreign currency risk management
The Company undertakes certain transactions denominated in foreign currencies, hence exposures to exchange
rate fluctuations arise. This is managed by the Company’s operations having a natural hedge with materials
purchased and sold at prices fixed at the prevailing rate. The Company therefore has limited exposure to US Dollar
(USD), Euro (EUR), and Great British Pound (GBP) debtors and creditors currency fluctuations.
CASH
($)
RECEIVABLES
($)
PAYABLE
($)
USD
68,929
851,560
Impact of a 5% increase to profit or loss
Impact of a 5% decrease to profit or loss
EUR
33,215
158,396
Impact of a 5% increase to profit or loss
Impact of a 5% decrease to profit or loss
-
-
TOTAL
ASSETS
($)
920,489
(43,833)
48,447
191,612
(9,124)
10,085
GBP
199,562
432,309
373,675
1,005,545
Impact of a 5% increase to profit or loss
Impact of a 5% decrease to profit or loss
(47,883)
52,923
The Company’s sensitivity to foreign exchange has not changed significantly from the prior year.
44 |
V E E M LT D
NOTE 17: FINANCIAL INSTRUMENTS (CONT’D)
Market risk
The Company’s activities expose it primarily to the
financial risks of changes in foreign currency exchange
rates and exchange rates.
To negate some of this risk the company has embarked
on a global supply program the procurement of all
appropriate goods that form part of its manufactured
products. This includes but is not limited to the supply
of sub components, individual parts consumable
products used in production and stock items.
The Company also manages market risk by
keeping abreast of factors affecting its market on
a continual basis. Business improvement practices
continually evolve.
Interest rate risk management
The Company is exposed to interest rate risk as it
borrows funds at both fixed and floating interest rates.
The risk is managed by the Company by maintaining
an appropriate mix between fixed and floating rate
borrowings.
The Company’s exposures to interest rate on financial
assets and financial liabilities are detailed in the liquidity
risk management section of this note.
counterparties and obtaining sufficient collateral
where appropriate, as a means of mitigating the risk
of financial loss from defaults. The Company only
transacts with entities that are rated the equivalent
of investment grade and above. This information
is supplied by independent rating agencies where
available and, if not available, the Company uses
publicly available financial information and its own
trading record to rate its major customers. The
Company’s exposure and the credit ratings of its
counterparties are continuously monitored and the
aggregate value of transactions concluded is spread
amongst approved counterparties. Credit exposure is
controlled by counterparty limits that are reviewed and
approved by management annually.
The Company does not have any significant credit risk
exposure to any single counterparty or any group of
counterparties having similar characteristics. The credit
risk on liquid funds and derivative financial instruments
is limited because the counterparties are banks with
high credit ratings assigned by international credit
rating agencies.
The carrying amount of financial assets recorded in the
financial statements, net of any allowance for losses,
represents the Company’s maximum exposure to
credit risk without taking account of the value of any
collateral obtained.
Interest rate risk sensitivity analysis
Liquidity risk management
Ultimate responsibility for liquidity risk management
rests with the board of Directors, who have built an
appropriate liquidity risk management framework for
the management of the Company’s short, medium
and long-term funding and liquidity management
requirements. The Company manages liquidity risk by
maintaining adequate reserves, banking facilities and
reserve borrowing facilities by continuously monitoring
forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
Included in note 14 is a listing of additional undrawn
facilities that the Company has at its disposal to further
reduce liquidity risk.
The sensitivity analyses below have been determined
based on the exposure to interest rates for non-
derivative instruments at the balance date and the
stipulated change taking place at the beginning of
the financial year and held constant throughout the
reporting period. A 50 basis point increase or decrease
has been used when reporting interest rate risk
represents management’s assessment of the change
in interest rates.
At balance date, if interest rates had been 50 basis
points higher or lower and all other variables were held
constant, the Company’s net profit would increase by
$3,562 and decrease by $3,562 (2017:$1,871). This
is mainly attributable to the Company’s exposure to
interest rates on its variable rate borrowings.
The Company’s sensitivity to interest rates has
increased during the current period mainly due to the
increase in variable rate debt instruments.
Credit risk management
Credit risk refers to the risk that counterparty will
default on its contractual obligations resulting in
financial loss to the Company. The Company has
adopted a policy of only dealing with creditworthy
N OT E S TO T H E F I N A N C I A L S TAT E M E N T S
| 45
The warm blue glow of the back-lit Gyro shining up to the deck at night
NOTE 17: FINANCIAL INSTRUMENTS (CONT’D)
The following table details the Company’s expected contractual maturity for its non-derivative financial liabilities.
These have been drawn up based on undiscounted contractual maturities of the financial liabilities based on the
earliest date the Company can be required to repay. The tables include both interest and principal cash flows.
WEIGHTED AVERAGE INTEREST RATE
1 year or less
1–5 years
5+ years
30 June 2018
%
$
Non-interest bearing – Trade and other payables
6,709,915
$
-
Fixed interest rate – Hire purchase liabilities
4.4
1,263,072
2,203,093
Variable interest rate – Bill facility and bank overdraft
3.56
4,423,058
6,162,307
12,396,045
8,365,400
$
-
-
-
-
WEIGHTED AVERAGE INTEREST RATE
30 June 2017
Non-interest bearing - Trade and other payables
Fixed interest rate – Hire purchase liabilities
Variable interest rate – Bill facility and bank overdraft
1 year or less
1–5 years
5+ years
%
4.4
2.9
$
5,155,109
$
-
1,249,894
3,372,898
3,816,310
-
10,221,313
3,372,898
$
-
-
-
-
Fair value measurement
The directors consider that the carrying value of the financial assets and liabilities as recognised in the financial
statements approximate their fair values.
NOTE 18: COMMITMENTS AND CONTINGENCIES
Operating lease commitments – Company as lessee
The Company has entered into a commercial lease on its premises. This lease has a life of 1 year with options to
renew included in the contract. There are no restrictions placed upon the lessee by entering into these leases.
Future minimum rentals payable under non-cancellable operating leases as at 30 June 2018 are as follows:
(a) Operating lease commitments
• within one year
• after one year but not more than 5 years
2018 ($)
2017 ($)
1,165,273
-
1,393,553
962,293
1,165,273
2,355,846
Hire purchase commitments - Company as lessee
The Company has hire purchase contracts for various items of plant and machinery. These contracts have terms
of renewal but no purchase options and escalation clauses. Renewals are at the option of the specific entity that
holds the lease.
46 |
V E E M LT D
NOTE 18: COMMITMENTS AND CONTINGENCIES (CONT’D)
Future minimum lease payments under hire purchase contracts together with the present value of the net
minimum lease payments are as follows:
(b) Hire purchase commitments payable
- within one year
- after one year but not more than five years
- longer than five years
Minimum hire purchase payments
Less: Unexpired charges
Present value of net minimum lease payments
Represented by:
Current
Non-current
Capital commitments
2018 ($)
2017 ($)
1,263,072
2,203,093
-
1,249,894
3,372,898
-
3,466,165
4,622,792
(224,793)
3,241,372
1,129,931
2,111,441
(379,846)
4,242,946
1,073,036
3,169,910
3,241,372
4,242,946
At 30 June 2018 the Company has no capital commitments (2017: $Nil).
NOTE 19: RELATED PARTY DISCLOSURE
The Company’s related parties include key management personnel and their related entities as described below.
The aggregate compensation for Directors and other key management personnel of the Company are set out below:
Short-term employee benefits
Other long-term benefits
2018 ($)
634,169
46,734
680,903
2017 ($)
467,951
49,465
517,416
Key management personnel transactions
The Company has entered into a lease agreement with Voyka Pty Ltd, an entity controlled by an entity related to
Mr Mark Miocevich and Mr Brad Miocevich. The Company pays Voyka Pty Ltd monthly rent of $115,307 including
GST, totalling $1,383,684 for the twelve months to 30 June 2018. The rent is exclusive of any outgoings including
rates, taxes, insurance premiums and maintenance costs. The lease was made on commercial terms.
N OT E S TO T H E F I N A N C I A L S TAT E M E N T S
| 47
NOTE 20: AUDITOR’S REMUNERATION
The auditor of VEEM Limited is HLB Mann Judd.
Audit or review of the financial statements
Tax compliance services
Investigating accountant’s report
2018 ($)
89,500
31,700
-
121,200
2017 ($)
66,500
53,131
70,000
189,631
NOTE 21: SUBSEQUENT EVENTS
Subsequent to the end of year an ordinary dividend of $339,575 franked to 30% has been declared.
Other than the above, no matters or circumstances have arisen since the end of the financial year which have
significantly affected or may significantly affect the operating of the Company, the results of those operations, or
state of affairs of the Company in future financial years.
VEEM’s high
speed propellers
are fitted to the
Australian Navy’s
Armidale Class
Patrol Vessels to
achieve maximum
performance on
the water
48 |
V E E M LT D
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors of VEEM Limited (the ‘Company’):
b. the accompanying financial statements and notes are in accordance with the Corporations Act 2001
including:
i.
ii.
giving a true and fair view of the Company’s financial position as at 30 June 2018 and of its
performance for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2. This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is signed in accordance with a resolution of the board of Directors.
MARK DAVID MIOCEVICH
Managing Director
Dated this 30 day of August 2018
AU D I TO R ’ S I N D E P E N D E N C E D E C L A R AT I O N
C O M PA N Y S U M M A RY | 49
INDEPENDENT AUDITOR’S REPORT
To the Members of VEEM Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of VEEM Ltd (“the Company”) which comprises the statement of
financial position as at 30 June 2018, the statement of comprehensive income, the statement of changes in
equity and the statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations
Act 2001, including:
a)
giving a true and fair view of the Company’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Company in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the matters described below to be the key audit matters to
be communicated in our report.
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of the intangible asset
(product development expenditure)
Note 12 of the financial report
The Company has an intangible asset in relation to
capitalised expenditure on the development of
gyroscopic stabilisers.
The development expenditure of $11.281 million
has been deemed to be a key audit matter, given
the size of the balance, the technological change
Our procedures included but were not limited to
the following:
Assessing
for
intangible assets by challenging the key
assumptions used or estimates made in
capitalising development costs,
including
management’s assessment of the stage of
recognition
criteria
the
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
50 |
43
V E E M LT D
INDEPENDENT AUDITOR’S REPORT
To the Members of VEEM Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of VEEM Ltd (“the Company”) which comprises the statement of
financial position as at 30 June 2018, the statement of comprehensive income, the statement of changes in
equity and the statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations
Act 2001, including:
a)
giving a true and fair view of the Company’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Company in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the matters described below to be the key audit matters to
be communicated in our report.
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of the intangible asset
(product development expenditure)
Note 12 of the financial report
The Company has an intangible asset in relation to
Our procedures included but were not limited to
capitalised expenditure on the development of
gyroscopic stabilisers.
the following:
Assessing
The development expenditure of $11.281 million
has been deemed to be a key audit matter, given
the size of the balance, the technological change
the
recognition
criteria
for
intangible assets by challenging the key
assumptions used or estimates made in
capitalising development costs,
including
management’s assessment of the stage of
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
43
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of the intangible asset
(product development expenditure)
Note 12 of the financial report
in the industry, the gyroscopic stabiliser market
being relatively new and immature, VEEM itself
being a new entrant, as well as the specific criteria
that have to be met for capitalisation. This involves
management judgment, such as with respect to
distinguishing between research and development
phases, technical feasibility, intention and ability to
complete the intangible asset, ability to use or sell
the asset, generation of future economic benefits
and the ability to measure the costs reliably. In
is any
addition, determining whether
indication of impairment requires management
judgment and assumptions which are affected by
future market or economic developments.
there
Revenue recognition
Note 2 of the financial report
The Company has two distinct categories of
revenue with performance
revenue being
obligations recognised at a point in time and
revenue with performance obligations recognised
over time.
We focused on this area as a key audit matter due
to the number and type of estimation events that
may occur over the course of a contract life,
leading to complex and judgemental revenue
recognition and the direct impact on profit.
the project in the development phase and the
accuracy of costs included;
We considered management’s assessment of
whether any indicators of impairment were
present by understanding
the business
rationale for projects and performing reviews
for indicators of impairment;
We assessed
the
Company’s disclosure in the financial report;
and
the adequacy of
We ensured management applied an
appropriate
and
amortisation period to its finite life intangibles.
amortisation method
Our procedures included but were not limited to
the following:
We examined and tested the Company’s key
controls over revenue and related work-in-
progress;
We read and considered a sample of the
Company’s key contracts to determine if we
concurred with management’s assessment of
performance obligations,
transaction
price and any contract liabilities that may
arise, the allocation of the transaction price,
and when to recognise revenue, either at a
point in time, or over time;
the
recognition, we
For a sample of contracts designated for over
time
the
methodology and accuracy of recognising
profit at the stage of completion at balance
date;
assessed
We substantiated revenue transactions on a
sample basis by agreeing the transaction to
the customer’s contract, purchase order,
sales
invoice, delivery docket, customer
certification report, and bank receipt, where
relevant;
We tested the appropriateness of progress
claims on a sample basis; and
We assessed
the
Company’s disclosures in the financial report.
the adequacy of
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2018, but does not include the
financial report and our auditor’s report thereon.
44
| 51
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
52 |
45
V E E M LT D
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30 June 2018.
In our opinion, the remuneration report of VEEM Ltd for the year ended 30 June 2018 complies with section
300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing
Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
30 August 2018
D I Buckley
Partner
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
45
46
| 53
TWENTY LARGEST SHAREHOLDERS
Additional information required by the Australian Securities Exchange Ltd Listing Rules and not disclosed
elsewhere in this report. This information is current as at 21 September 2018.
RANK
NAME
UNITS % OF UNITS
VEEM CORPORATION PTY LTD
80,000,000
61.54
J P MORGAN NOMINEES AUSTRALIA LIMITED
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
14,459,821
7,444,206
7,165,144
3,417,473
BNP PARIBAS NOMINEES PTY LTD
2,763,995
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
ANACACIA CAPITAL
CITICORP NOMINEES PTY LIMITED
MR ALEXANDER PAUL CHANG
ACRES HOLDINGS PTY LTD
REDBROOK NOMINEES PTY LTD
MR DAVID ANDREW SLOBOM + MRS LINDA JANE SLOBOM
MISS AMY-JOY ABURN HARKEN
MR GEORGE CHARLES RILEY
BT PORTFOLIO SERVICES LIMITED
CATHER PTY LTD
MR PINO JOSEPH YOZZI + MRS EVELYN EDITH YOZZI
11.12
5.73
5.51
2.63
2.13
2.01
1.70
0.46
0.45
0.23
0.22
0.21
0.16
0.13
0.12
0.12
0.10
0.09
0.09
94.74
5.26
2,612,291
2,209,000
600,000
583,450
300,000
285,000
275,000
205,126
165,000
155,000
150,000
125,000
121,000
120,951
123,157,457
6,842,543
20.
WALSEC PTY LTD
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)
Total Remaining Holders Balance
TOTAL HOLDERS
Distribution of equity security holders
RANGE
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Rounding
Total
54 |
UNITS
5,967
148,316
467,930
5,836,748
123,541,039
22
49
55
165
23
314
130,000,000
% OF ISSUED
CAPITAL
0.00
0.11
0.36
4.49
95.03
0.01
100.00
V E E M LT D
MARKETABLE PARCELS
Number of shareholders holding less than a marketable parcel of ordinary shares is 18.
VOTING RIGHTS
Option holders have the right to attend meetings but have no voting rights until the options are exercised.
SUBSTANTIAL SHAREHOLDERS
The following shareholders are considered substantial shareholders:
VEEM Corporation Pty Ltd ATF The Miocevich Family Trust
61.54% of the issued ordinary shares
IOOF Holdings Limited
12.32% of the issued ordinary shares
Celeste Funds Management Limited
6.65% of the issued ordinary shares
RESTRICTED SECURITIES
There are no restricted securities.
SHARE BUY BACKS
There is no current on market share buyback.
CORPORATE GOVERNANCE STATEMENT
The Company’s 2018 Corporate Governance Statement is available on the Company’s website at www.veem.com.au.
| 55
22 Baile Rd,
Canning Vale WA 6155
Telephone: +61 8 9455 9355
+61 8 9455 9333
Facsimile:
Email:
Website:
veem@veem.com.au
www.veem.com.au