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C O R P O R A T E D I R E C T O R Y
Directors
Auditor
Mr Simon Farrell – Non-Executive Chairman
Mr Charles Chen – Managing Director
Mr Ivan Teo – Finance Director
Mr Oliver Cairns – Non-Executive Director
Mr Kaijian Chen – Non-Executive Director
Bentleys Audit & Corporate (WA) Pty Ltd
Level 1, 12 Kings Park Road
West Perth, Western Australia 6005
Australia
Company Secretary
Ms Shannon Coates
Banker
National Australia Bank
1238 Hay Street
West Perth, Western Australia 6005
Australia
Principal and Registered Office
Solicitors
Suite 1, Ground Floor
83 Havelock Street
West Perth, Western Australia 6005
Australia
Telephone: +61 8 9226 3865
Facsimile: +61 8 9322 5230
Nominated Advisor and Broker
finnCap Ltd
New Broad Street
London EC2M 1JJ
United Kingdom
Gilbert + Tobin
1202 Hay Street
West Perth, Western Australia 6005
Australia
Austin Haworth & Lexon Legal
Level 12, 87-89 Liverpool Street
Sydney, New South Wales 2000
Australia
K&L Gates
One New Change
London EC4M 9AF
United Kingdom
Share Registry
Securities Exchanges
Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St George’s Terrace
Perth, Western Australia 6000
Australia
Telephone: +61 8 9323 2000
Facsimile: +61 8 9323 2033
Computershare Investor Services Plc
PO Box 82, The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
United Kingdom
Telephone: +44 870 702 0003
Facsimile: +44 870 703 6101
Website and Email
Website: www.vmoto.com
Email: info@vmoto.com
Australian Securities Exchange
Level 8, Exchange Plaza
2 The Esplanade
Perth, Western Australia 6000
Australia
AIM – London Stock Exchange
10 Paternoster Square
London EC4M 7LS
United Kingdom
ASX Code: VMT, AIM Code: VMT
Vmoto Limited is a public company incorporated in
Western Australia and listed on the Australian
Securities Exchange and AIM market of the London
Stock Exchange.
Inside Cover
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C O N T E N T S
Corporate Directory
Chairman’s Letter
Operations Review
Directors’ Report
Remuneration Report
Corporate Governance Statement
Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
Additional Shareholder Information
Page
Inside cover
2
3
7
15
22
30
65
66
67
69
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C H A I R M A N ’ S L E T T E R
Dear Shareholders,
It is with great pleasure I present to you Vmoto Limited’s 2013 Annual Report.
This year’s major milestone is our maiden net profit of A$404,460. After years of hard work, this is a most rewarding
result.
During the year, 60,500 units were produced from the factory, a considerable increase from 2012 due to the escalation in
production of the PowerEagle scooters and the launch of 11 new models of electric two wheel vehicles for the domestic
Chinese market. Production at the Nanjing facility continues to ramp up and with the current infrastructure still running
at below 20% capacity, it leaves significant room for growth in 2014. In the second half of 2013, Vmoto opened 10 retail
stores in China, recording sales of over 3,700 units. Post the reporting period, further stores have been opened.
The success of the Company’s business model, led by the Managing Director and his management team, is apparent
with a 156% growth in revenue for 2013.
In August 2013, Vmoto delivered two trial electric four wheel street cleaning vehicles to the district government in Jianye
District, Nanjing. The trial is still ongoing, however the Company continues to receive interest from many companies
within China and internationally to collaborate with Vmoto. This is potentially a very exciting new market.
Vmoto still has one of the widest global distribution networks of any electric scooter manufacturer in the world, being
represented by more than 28 distributors in 27 countries in the geographic regions of Australia and New Zealand, Asia,
Europe, South America, South Africa and North America.
The global electric scoter market, lead predominantly by China and Asia, is growing at a rapid pace as governments,
businesses and day to day commuters look to reduce carbon emissions and reduce operating costs. The Company’s
competitive strategy is based on producing the highest quality and most technically innovative scooters available to the
market. It is this sector the Company believes will produce the most attractive returns over the long term. The forecast
growth numbers in electric scooters in China and the world continue to increase and Vmoto is now well positioned from
a competitive perspective.
In conclusion, I would like to thank my fellow Directors, the management team and our staff for their contributions
during the 2013 financial year. The Company is now well placed within the scooter market and I look forward with
enthusiasm to the year ahead as we build on our successes of 2013.
Yours faithfully
Simon Farrell
Chairman
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O P E R A T I O N S R E V I E W
OVERVIEW
Vmoto Limited (ASX:VMT, AIM:VMT), the global scooter manufacturing and distribution group specialising in "green"
electric powered scooters, provides the following operations review for the year ended 31 December 2013.
During the 2013 financial year, Vmoto continued with its strategy of designing, manufacturing and distributing high
quality “green” electric powered two wheel scooters from its manufacturing facilities in Nanjing, China.
The Company’s extensive sales pipeline began delivering rewards as customers such as Shanghai PowerEagle
International Co Ltd’s (PowerEagle) continued to ramp up orders under its cooperation agreement as announced on 3
July 2012. From mid way through the year, after the launch of 11 specifically designed low cost models, the Company
also began to focus on the huge domestic Chinese market, the world’s largest electric two wheel vehicle market, with 30
million units produced in 2012 and expected to increase to 40 million units in 20151.
As a result of the significant increase in production from factory, the opening of new retail stores, and more streamlined
processes, the Company is pleased to report a maiden net profit of A$404,460 on a turnover of A$25.2 million for the
2013 financial year.
Cash, facility and inventory
As at 31 December 2013, the Company had cash of A$4.4 million.
The Company’s total operating facility drawn down was RMB29.9 million (approximately A$5.5 million) and the total
undrawn operating facility was RMB4.1 million (approximately A$757,000). As at 31 December 2013 the inventory at the
factory stood at A$5.2 million.
EXISTING MARKETS AND SALES
Sales for the year were predominantly made in China. In particular, PowerEagle production ramped up and was
complimented by the launch of the Company’s own models and retail stores.
ASIA
China: During the year ended 31 December 2013, the Company fulfilled PowerEagle’s forecast production of 42,000
units for the year, with a total of 44,235 units produced and 42,051 units sold to end of December 2013.
In June 2013, Vmoto opened its first Chinese flagship retail store in Lishui District, Nanjing. Following this, the Company
opened a further 9 retail stores in various locations around Nanjing, Jurong, Shanghai and Kunshan.
The Company sold over 3,700 units of electric two wheel vehicles through its 10 Chinese retail stores during the financial
year and has shown that Vmoto’s electric two wheel vehicle products have been well received by retail customers in
China. Given the lead time each store requires for sales to start being generated, the number of units sold has been
encouraging and in line with management’s expectations.
The opening of Vmoto’s retail stores in China is a key milestone for the Company and is one of the strategies of the
Company to further penetrate into the world’s largest electric two wheel vehicles market. The Company is assessing a
number of other locations and expects to open more retail stores in 2014.
Vmoto’s own retail stores give customers a direct buying opportunity where they can test ride, touch and feel Vmoto’s
electric two wheel vehicles. Vmoto’s retail stores are also a one-stop shop offering a wide range of Vmoto electric two
wheel vehicle products that can meet the different requirements and budgets of customers, supply parts and accessories
and provide requisite after sales services.
1 Source: China Electric Two Wheel Vehicle Industry Research Report, 13 November 2012
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O P E R A T I O N S R E V I E W ( c o n t ’ d )
The Company also intends to seek collaborations and distribution agreements with other electric scooter companies
within China where a direct Vmoto retail outlet is not appropriate.
Indonesia: In November 2013, the Company signed an exclusive distribution agreement with the Indonesian company
PT. Garansindo Technologies to distribute, stock and market the Company’s Vmoto and E-Max range of electric scooter
products in Indonesia. The Company is in discussions with the Indonesian distributor to determine specific
requirements for their electric scooter products for the Indonesian market.
Malaysia: The Company sold 72 units of its delivery electric scooters in completely knocked down (“CKD”) form to its
Malaysian Original Equipment Manufacturer (“OEM”) customer during the year, with a further 72 units sold after the
end of the period.
The Company also shipped units to distributors in Thailand and South Korea and started discussions with potential
distributors in India.
EUROPE
Sales in Europe during 2013 were generally slower due to economic conditions.
Germany: The Company commenced the production of E-Tropolis electric scooters during the period. While orders
remained slow due to Europe’s economic conditions, by 31 December 2013, the Company had delivered 232 units to the
customer.
Netherlands: The Company secured B.V Nimag as its new exclusive distributor in the Netherlands. 38 units were
shipped to the Netherlands during the year.
The Company also shipped units to distributors in Cyprus, Italy and Slovenia.
NORTH AMERICA
USA: The Company delivered its first order of 75 units to KLD Energy in the USA where KLD will install their own
Samsung lithium battery packs and drive systems into the Vmoto “120” model. KLD’s engineers are performing further
tests on the drive system and visited Vmoto’s Nanjing Facility at the end of July 2013 for the required system update.
The Company also shipped units to distributors in Canada.
SOUTH AMERICA
Brazil: As announced on 24 April 2013, the Company signed a joint venture (“JV”) agreement with Riba Motors
Industria e Comercio Ltda (“Riba”), providing Vmoto access to Riba’s assembly facility with direct distribution to Latin
America, the world’s second fastest growing electric scooter market2.
The JV with Riba as a local partner offers significant cost savings for the Company and the opportunity for Vmoto to
leverage Riba’s expertise in the Latin American market.
Due to the unprecedented social turmoil and unrest in Brazil and the significant interest received in the domestic
Chinese market by Vmoto, the Company opted to defer its marketing efforts in Brazil and focus on the world’s biggest
market, China, which the Company anticipates will generate better returns in the short to medium term.
OTHER COUNTRIES
During the year, the Company also shipped to distributors in South Africa.
2 Source: Pike Research
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O P E R A T I O N S R E V I E W ( c o n t ’ d )
LAUNCH OF NEW MODELS/VERSIONS IN CHINA
In June 2013, Vmoto launched the first batch of five new models of electric two wheel vehicles in China. These new
models are updated versions of Vmoto’s E-Max classic 80S and 120S electric scooters and newly developed electric two
wheel vehicle models. The new models have been developed specifically to target the Chinese market, the design being
modern and fashionable and at a reasonable price point.
The Company now has a total of 11 models of electric two wheel vehicles and will be developing more models in 2014 to
keep up with demand.
COLLABORATIONS, TENDERS AND JOINT VENTURE OPPORTUNITIES
Joint Venture
Vmoto continued to progress toward execution of the necessary Chinese regulation agreements required to implement
the proposed joint venture with a private Chinese electronic technology company, as announced on 2 October 2013.
While formal operations have been delayed as a result of the collation of these agreements, Vmoto’s joint venture partner
is currently in situ at Vmoto’s Nanjing facility and both parties remain committed to formalising the joint venture.
Electric cleaning vehicles
As announced on 13 August 2013, the Company delivered two trial electric four-wheel street cleaning vehicles for the
district Government in Jianye District, Nanjing for trial. Trials and discussions with the Nanjing Government are
ongoing.
During the year, the Company received many leads within China and internationally from parties who have expressed
interest in cooperating with Vmoto. The Company is continuously evaluating these collaborations and opportunities to
expand sales in China and globally.
CORPORATE
During the year, the Company raised a total of A$6.8 million (before costs) with institutional and sophisticated investors
in Australia and the UK to assist the Company in meeting the electric two wheel vehicle market demand and continuing
expansion into China.
On 29 January 2013, the Company announced the appointment of Mr Simon Farrell and Mr Ivan Teo as Non-Executive
Chairman and Finance Director respectively.
Vmoto’s Australian registered office relocated to Suite 1, Ground Floor, 83 Havelock Street, West Perth, Western
Australia in March 2013 and Vmoto’s European after sales service, marketing and distribution centre moved from
Barcelona, Spain to Bremen, Germany in February 2013 in order to provide a more efficient after sales service to the
Company’s distributors and customers in Europe.
OUTLOOK
2013 was a significant year for Vmoto as production at the factory started ramping up leading to its maiden profit. The
Company continues to deliver on its existing OEM contract with PowerEagle and this has been complemented by the
launch of its own models and opening of its own stores in China. China is a huge market for the Company and there is
still significant room for growth with the current factory infrastructure, which is still below 20% capacity.
The Company is very excited about the opportunities in China and is executing a number of strategies to gain a stronger
foothold in China to further consolidate its position as a premium, quality brand for the Chinese market electric scooter
market.
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O P E R A T I O N S R E V I E W ( c o n t ’ d )
Vmoto certainly does not ignore the rest of the world and this is demonstrated by the global sales, albeit much smaller
than China, in more than 20 countries. The Board remains focussed on increasing sales outside of China and is excited by
the opportunities and discussions presenting themselves amongst others in Indonesia, India, Brazil, Europe and the US.
The Company has also been approached by a number of parties operating in the electric vehicles sector for collaborations
or joint ventures. Discussions with these parties are continuing and the Company is looking forward to progressing
these to see if any agreements can be secured to add long term value to the Company.
The continuous interest in Vmoto’s manufacturing capacity and electric scooters by customers has demonstrated their
confidence in Vmoto’s infrastructure, capabilities and products.
2014 is expected to be another year of growth for Vmoto as production at the factory increases for both domestic China
and overseas markets. It is an exciting time for the global electric scooter market and the Board consider Vmoto is now
well positioned to be at the forefront of it.
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D I R E C T O R S ’ R E P O R T
The Directors present their report together with the consolidated financial statements of Vmoto Limited (“Vmoto” or the
“Company”) and its controlled entities (the “Consolidated Entity”) for the financial period 1 January 2013 to 31 December
2013.
Directors
The Directors of the Company at any time during or since the end of the financial year are:
Name
Experience and responsibilities
Simon Farrell
Non-Executive Chairman
Mr Farrell was appointed as Non-Executive Chairman of the Company on 29 January
2013.
Charles Chen
Managing Director
Mr Farrell has over 30 years experience in private and public corporate business
especially in the mining industry at senior management and board level, principally in
the areas of finance, marketing and general management. He was previously managing
director of ASX, JSE and AIM listed Coal of Africa Limited, for which he was
responsible for growing to a market capitalisation of more than £1 billion.
Mr Farrell holds a BCom degree from the University of Western Australia and an MBA
from the Wharton School at the University of Pennsylvania. He is a Fellow of both the
Australian Society of Accountants and the Australian Institute of Company Directors.
Mr Farrell has very strong relationships with brokers and fund managers in the UK.
Mr Chen was appointed as Executive Director on 5 January 2007 and Managing
Director of the Company on 1 September 2011.
Mr Chen founded Freedomotor Corporation Limited in 2004, through a management
buyout of key assets, which were subsequently acquired by Vmoto. He holds a Bachelor
of Automobile Engineering from Wuhan University of Automobile Technology (China)
and a postgraduate Diploma of Business Administration from South Wales University
(UK).
From 1993 to 2002, Mr Chen held senior executive roles with Hainan Sundiro
Motorcycle Company Limited, the largest publicly listed industrial company in Hainan
Province. Hainan Sundiro was acquired by Honda Japan in 2001.
Mr Chen is based in Nanjing, China, and oversees all of the Company’s operations and
activities.
Ivan Teo
Finance Director
Mr Teo was appointed as Finance Director of the Company on 29 January 2013. Prior to
this appointment, Mr Teo was employed as the Company’s Chief Financial Officer from
17 June 2009.
Mr Teo is a qualified Chartered Accountant and has over 10 years experience in
accounting, audit, corporate finance and international business serving private and
public companies in a diverse range of industries including automobile, manufacturing,
mining and retail.
Mr Teo holds a BCom degree from the University of Adelaide and is based in Nanjing,
China.
7
Oliver Cairns
Independent
Non-Executive Director
Kaijian Chen
Independent
Non-Executive Director
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Mr Cairns was appointed as Non-Executive Director of the Company on 1 September
2011.
Mr Cairns has over 15 years’ experience in the small-mid cap corporate and capital
markets space, having joined Blue Oar Securities Plc (now Northland Capital) in July
1999, and was a corporate financier and Nominated Adviser for AIM companies in
London for over 8 years. In London, he was responsible for floating and advising
several resources and industrial companies before relocating to Perth in June 2007.
In May 2009, Mr Cairns set up Pursuit Capital, a corporate advisory and investment
house, which is focussed on long term corporate, capital and strategic involvement with
junior international companies.
Mr Cairns graduated with a degree in Classics from the University of Exeter and is a
member of the Securities Institute (UK).
Mr Cairns will be retiring and seeking re-election by shareholders at the Company’s
2014 Annual General Meeting.
Mr Chen was appointed as Non-Executive Director of the Company on 1 September
2011.
Mr Chen has extensive experience in the motorcycle manufacturing industry in China.
He was formerly vice president of Hainan Sundiro Motorcycle Co, which was the
second largest motorcycle manufacturer in China at the time, and which was
subsequently acquired by Honda in 2001.
Mr Chen also served as vice president for Changzhou Supaiqi E-Vehicle Co, Ltd for 5
years. Currently Mr Chen is vice president of Xinri E-Vehicle Co, Ltd, which is one of
the largest E-vehicle manufacturers in China at present. The annual production of Xinri
in 2010 was over 2 million units of electric bicycles and scooters for the Chinese
domestic market.
Mr Chen holds a degree from the Beijing Institute of Technology and is based in Wuxi,
China.
Mr Chen will be retiring and seeking re-election by shareholders at the Company’s 2014
Annual General Meeting.
Company Secretary
Shannon Coates
Ms Coates was appointed as Company Secretary on 10 May 2007.
Ms Coates completed a Bachelor of Laws through Murdoch University in 1993 and has
since gained over 18 years in-house experience in corporate law and compliance for
public companies. She is a Chartered Secretary and an Associate Member of both the
Institute of Chartered Secretaries & Administrators and Chartered Secretaries Australia.
Ms Coates is currently employed as Legal & Compliance Counsel with Evolution
Capital Partners, a company providing corporate advisory services and is also company
secretary to a number of ASX and AIM listed companies.
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Directorships in other listed entities
Directorships in other listed entities held by Directors of the Company during the last 3 years immediately before 31
December 2013 are as follows:
Period of directorship
Director
Company
Mr Simon Farrell
Mr Charles Chen
Mr Ivan Teo
Mr Oliver Cairns
Mr Kaijian Chen
Directors’ Meetings
Anglo-African Minerals Plc
Kenmare Resources Plc
Bellzone Mining Plc
Coal of Africa Limited
-
-
Zeta Petroleum Plc
-
From
2012
2000
2010
2000
-
-
2013
-
To
2013
2013
2011
2012
-
-
Current
-
The number of Directors’ meetings and the number of meetings attended by each of the Directors of the Company
during the period ended 31 December 2013 are:
Director
Held while Director
Attended
Board Meetings
Mr Simon Farrell
Mr Charles Chen
Mr Ivan Teo
Mr Oliver Cairns
Mr Kaijian Chen
5
6
5
6
6
5
6
5
6
1
There is presently no separate Audit, Nomination or Remuneration Committee, with all committee functions being
addressed by the full Board.
Principal Activity
The principal activity of the Consolidated Entity during the year ended 31 December 2013 was the development and
manufacture, and international marketing and distribution of electric powered scooters, petrol scooters and all terrain
vehicles.
Operating and Financial Review
Review of Operations
Vmoto Limited is a global scooter manufacturing and distribution group. The Company specialises in high quality
“green” electric powered scooters and manufactures a range of western designed electric scooters from its low cost
manufacturing facilities in Nanjing, China. Vmoto combines low cost Chinese manufacturing capabilities with European
design. The group operates through two primary brands: Vmoto (aimed at the value market in Asia) and E-Max
(targeting Western markets with a premium end product). As well as operating under its own brands, the Company also
sells to a number of customers on an original equipment manufacturer (“OEM”) basis.
Total consolidated sales of A$25.2 million were recorded for the Consolidated Entity for the year ended 31 December
2013. The revenue of the Consolidated Entity has increased by 447% as compared to the six months period ended 31
December 2012, largely as a result of the Company’s expansion into the Chinese electric scooter market. During the year
ended 31 December 2013, the Consolidated Entity achieved a profit of A$404,460 after income tax.
A more detailed review of operations for the year ended 31 December 2013 is set out in the Operations Review preceding
the Directors’ Report.
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Review of Financial Position
The Consolidated Entity’s net assets have increased by approximately A$7.4 million during the year ended 31 December
2013.
Cash balances increased by A$2.6 million during the year ended 31 December 2013 primarily as a result of the
Company’s successful placements during the financial year and partly offset by cash flow to build up stocks to mass
produce electric two-wheel products especially for China market.
Trade and other receivables have increased by A$1.8 million mainly due to higher accrued sales during the financial
year.
Inventories have increased by A$2.0 million and prepayments have increased by A$1.8 million mainly due increased
production level and requirements for higher stock level to mass produce electric two-wheel products to meet customers
demand.
Property, plant and equipment were consistent year on year.
Trade and other payables decreased by A$0.6 million during the period mainly due to higher level of payments to trade
and other payables.
Loans and borrowings have increased from A$4.2 million to A$5.5 million mainly due to movement of AUD:RMB
exchange rate from 6.4687 at 31 December 2012 to 5.4147 at 31 December 2013 as the bank operating facility are
denominated in Renminbi. An additional RMB3 million (approximately A$472,000) operating facility has been draw
down during the financial year and the bank operating facility drawn down was RMB29.9 million (A$5.5 million) at 31
December 2013.
Equity has increased by A$7.4 million during the year ended 31 December 2013 primarily as a result of the Company’s
successful placements during the year ended 31 December 2013.
No dividend has been declared or paid by the Company to the date of this Report in respect of the year ended 31
December 2013 and the six months ended 31 December 2012.
Business Strategies and Prospects for Future Financial Years
The Chinese market is the world’s largest electric two wheel vehicle market, with 30 million units produced in 2012 and
expected to increase to 40 million units in 20153. The Company has begun to focus on the huge domestic Chinese market
and expects to continue its expansion into China and to increase its presence in China. We have a number of strategies to
achieve this, including:
• Develop more retail stores, distributors and OEM customers in China; and
• Collaborations and cooperations with parties operating in the electric vehicles sector.
The Company also expects to increase its global sales by targeting B2B customers especially in the delivery and fast food
sectors and to appoint more international distributors. The Company is already in discussions and progressing with a
number of interested parties in many countries including Indonesia, India, Brazil, Vietnam, Europe and the US.
We are also continually considering ways of reducing the Company’s cost of manufacturing and operating costs by
improving efficiency.
The Chinese government has become increasingly focused on environmental protection to reduce pollution through
new-energy and clean technology. This was highlighted in the 2014 Chinese Government Work Report from the Chinese
People’s Political Consultative Conference annual session concluded on 12 March 2014.
3 Source: China Electric Two Wheel Vehicle Industry Research Report, 13 November 2012
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Chinese Government policies providing subsidies to purchasers of new-energy vehicles, accelerating the construction of
public electric charging stations and poles, and encouraging greater investment in electric car technology are reflective of
the Government’s greater focus in this sector. While a number of the new policies are centred on China’s electric car
market, Vmoto is monitoring developments closely as the Company expects to benefit from new Government policies
and initiatives that encourage the use of new-energy 4 wheel and 2 wheel electric vehicles.
The material business risks faced by the Company are likely to have an effect on the financial prospects of the Company.
The potential material business risks and how the Company manages these risks includes:
•
•
technological obsolescence – given the Company operates in industry involving green and electric vehicles
technology, any technological obsolescence could have impact on our financial results. We address this risk
through investment in research and development, patent appropriate and necessary research and development
results, recruit competent technicians and constantly monitoring the market. We see this risk as minimal as the
Company is constantly developing new technology and functions in its electric scooter products and have the
protection of trademarks and patents.
reduction in demand from China - given our reliance on the Chinese economy, reduction in demand from
China market for our electric scooter products could have impact on our financial results. Based on the views of
prominent economic commentators, we do not anticipate any significant slowdown in the Chinese economy for
the next few years. The Company also distribute its products in Europe and expanding sales in Asia regions. In
addition, the Company is investigating the option of expanding sales into other emerging economies such as
India and Vietnam to diversify its sales channel and reduce reliance on Chinese market.
Impact of legislation and other external requirements
The Consolidated Entity’s operations are not subject to any significant environmental regulations. The Board believes
that the Consolidated Entity has adequate systems in place for the management of its environmental regulations and is
not aware of any breach of those environmental requirements as they apply to the Consolidated Entity.
Clean Energy Legislative Package
The Clean Energy Legislative Package, which included the Clean Energy Act 2011, was passed by the Australian
Government in November 2011. It sets out the way that the government will introduce a carbon price to reduce
Australia’s carbon pollution and move to a clean energy future.
The Consolidated Entity’s manufacturing activities are primarily carried out in China and the Directors believe that the
Group will not be significantly affected by this legislation passed. The Consolidated Entity has not incorporated the
effect of any carbon price implementation in its impairment testing at 31 December 2013.
The Directors’ view is that there were no changes in environmental or other legislative requirements during the year that
have significantly affected the results or operations of the Consolidated Entity.
Events Subsequent to Balance Date
Vesting of Performance Rights
On 21 January 2014, the Company issued 1,000,000 fully paid ordinary shares to Mr Charles Chen and 1,000,000 fully
paid ordinary shares to Mr Oliver Cairns as a result of vesting of Class D incentive performance rights as approved by
shareholders on 31 July 2012.
Exercise of Options
On 13 February 2014, the Company issued 40,400 fully paid ordinary shares following the exercise of 40,400 listed
options exercisable at $0.04 on or before 31 December 2014.
Other than the above and as noted elsewhere in the financial statements, there has not arisen in the interval between the
end of the financial period and the date of this report any item, transaction or event of a material and unusual nature
likely, in the opinion of the Directors, to affect significantly the operations of the Consolidated Entity, the results of those
operations, or the state of affairs of the Consolidated Entity in future financial years.
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D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Likely Developments
Further information about likely developments in the operations of the Consolidated Entity and the expected results of
those operations in future financial years are discussed in the Operations Review.
Directors’ Interests
The relevant interests of each Director in the shares, options and performance rights issued by the Company at the date of
this report are as follows:
Director
Ordinary shares
Mr Simon James Farrell1
Mr Charles Chen2
Mr Ivan Teo3
Mr Oliver William Cairns 4
Mr Kaijian Chen 5
2,272,728
43,937,306
5,783,728
13,216,162
5,505,050
Options
10,000,000
13,221,526
2,425,000
5,000,000
2,777,777
Performance Rights
-
8,000,000
-
8,000,000
-
1
2
3
4
2,272,728 shares, 5,000,000 options exercisable at $0.04 each on or before 23 May 2018 and 5,000,000 options
exercisable at $0.08 on or before 23 May 2018 held indirectly by Newcove International Inc. Mr Farrell is a
director and beneficiary of Newcove International Inc.
15,647,306 shares, 3,791,526 options exercisable at $0.04 each on or before 31 December 2014 are held indirectly by
Pershing Australia Nominees Pty Ltd on behalf of Mr Charles Chen. 8,000,000 Performance
Rights are held directly by Mr Charles Chen. 28,290,000 shares and 9,430,000 options exercisable at $0.04 each on
or before 31 December 2014 are held indirectly by Mr Chen’s spouse, Huixin Zhou.
5,783,728 shares, 1,000,000 options exercisable at $0.025 each on or before 1 September 2014, 1,000,000 options
exercisable at $0.03 each on or before 23 November 2015 and 425,000 options exercisable at $0.04 each on or
before 31 December 2014 are held directly by Mr Ivan Teo.
1,488,888 shares are held directly by Mr Oliver Cairns. 10,363,637 shares, 5,000,000 options exercisable at $0.04
each on or before 31 December 2014 and 8,000,000 Performance Rights are held indirectly by Silverlight
Holdings Pty Ltd as trustee for Cairns Investment trust. Mr Cairns is a beneficiary of the Cairns Investment
trust. 1,363,637 shares are held indirectly by Mr OW and CH Cairns as trustee for OCCM Fund. Mr Cairns is a
beneficiary of the OCCM Fund.
5
5,505,050 shares and 2,777,777 options exercisable at $0.04 each on or before 31 December 2014 are held directly
by Mr Kaijian Chen.
Options
On 23 May 2013, 5,000,000 unlisted options (exercisable at $0.04 and expiring on 23 May 2018) and 5,000,000 unlisted
options (exercisable at $0.08 and expiring on 23 May 2018) were issued to Mr Simon Farrell pursuant to shareholder
approval at the Company’s 2013 Annual General Meeting.
On 15 July 2013, 3,241,527 unlisted options remained unexercised on their expiry date and lapsed pursuant to the terms
and conditions of the options.
On 15 November 2013, 500,000 listed options (exercisable at $0.04 and expiring on 31 December 2014) were issued to an
advisor in consideration for marketing services provided to the Company.
12
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
At the date of this report, options over unissued ordinary shares of the Company are:
Grant Date
Vesting Date
Expiry Date
Exercise Price
Number
1 September 2011
28 May 2012
5 June 2012
27 September 2012
23 November 2012
23 November 2012
23 May 2013
23 May 2013
15 November 2013
1 September 2012
28 May 2012
5 June 2012
27 September 2012
23 November 2013
23 November 2013
23 May 2014
23 May 2014
15 November 2013
1 September 2014
31 December 2014
31 December 2014
31 December 2014
23 November 2015
31 December 2014
23 May 2018
23 May 2018
31 December 2014
2.5 cents1
4 cents
4 cents
4 cents
3 cents1
4 cents
4 cents
8 cents
4 cents
8,500,000
59,638,850
25,957,341
54,070,654
11,500,000
5,725,385
5,000,000
5,000,000
500,000
1. These options do not confer the right to participate in any share issue or interest issue of the Company or any other
entity.
Performance Rights
On 17 December 2013, the Company issued 1,000,000 shares to Mr Charles Chen and 1,000,000 shares to Mr Oliver
Cairns as a result of vesting of 2,000,000 Class A incentive performance rights as approved by shareholders on 31 July
2012.
On 21 January 2014, the Company issued 1,000,000 shares to Mr Charles Chen and 1,000,000 shares to Mr Oliver Cairns
as a result of vesting of 2,000,000 Class D incentive performance rights as approved by shareholders on 31 July 2012.
All performance rights convert to fully paid ordinary shares for nil cash consideration, subject to performance based
vesting conditions. At the date of this report, performance rights over unissued ordinary shares of the Company are:
Class
Class B
Class C
Class E
Class F
Class G
Class H
Class I
Number
2,000,000
2,000,000
2,000,000
2,000,000
2,666,666
2,666,666
2,666,668
Indemnification and Insurance of Officers and Auditors
Indemnification
The Company has agreed to indemnify the current Directors and Officers of the Company against all liabilities to another
person (other than the Company or a related body corporate) that may arise from their position as Directors and Officers
of the Company, except where the liability arises out of conduct involving a lack of good faith.
The agreement stipulates that the Company will meet, to the maximum extent permitted by law, the full amount of any
such liabilities, including costs and expenses.
The Company has not agreed to indemnify their current auditors, Bentleys Audit & Corporate (WA) Pty Ltd.
Insurance Premiums
As at the date of this report, a Directors and Officers insurance policy has been secured. The insurance premium for this
policy during the year ended 31 December 2013 was A$20,000.
13
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
D I R E C T O R S ’ R E P O R T ( c o n t ’ d )
Contingent Liabilities
The Company is currently a defendant in a proceeding brought against the Company by a former employee in relation
to the employee’s past employment. Having considered legal advice, the Directors believe that the claim can be
successfully defended, without any losses (including for costs) being incurred by the Company.
Non-audit services
During the year, Bentleys Audit & Corporate (WA) Pty Ltd, the Company’s auditor, did not perform any non-audit
services in addition to their statutory duties.
Auditor’s Independence Declaration
The Auditor’s Independence Declaration is set out on page 66 and forms part of the Directors’ Report for the year ended
31 December 2013.
14
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T
This remuneration report outlines the Director and executive remuneration arrangements of the Company and the
Consolidated Entity.
Director and Key Management Personnel details
The following persons acted as Directors of the Company during or since the end of the financial year:
• Mr Simon Farrell (appointed 29 January 2013)
• Mr Charles Chen (appointed Executive Director 5 January 2007, appointed Managing Director 1 September 2011)
• Mr Ivan Teo (appointed Finance Director 29 January 2013)
• Mr Oliver Cairns (appointed 1 September 2011)
• Mr Kaijian Chen (appointed 1 September 2011)
The term ‘key management personnel’ is used in this remuneration report to refer to the Directors and the following
persons. Except as noted, the named persons held their position during or since the end of the financial year:
• Mr Patrick Davin (President of Strategic Business Development)
• Mr Michael Fulton (International Sales Manager)
• Mr George Hou (General Manager)
• Mr Zhengjie Wu (Vice General Manager)
Overview of remuneration policies
The Board as a whole is responsible for considering remuneration policies and packages applicable both to Directors and
executives of the Company and the Consolidated Entity.
Key management personnel have authority and responsibility for planning, directing and controlling the activities of the
Company and the Consolidated Entity, including Directors of the Company and other executives. Key management
personnel comprise the Directors of the Company, and executives for the Company and the Consolidated Entity
including the key management personnel.
Broadly, remuneration levels for key management personnel of the Company and key management personnel of the
Consolidated Entity are competitively set to attract and retain appropriately qualified and experienced Directors and
executives and reward the achievement of strategic objectives. The Board obtains independent advice on the
appropriateness of remuneration packages of both the Company and the Consolidated Entity given trends in
comparative companies both locally and internationally, and the objectives of the Company’s remuneration strategy.
Remuneration packages consist of fixed remuneration including base salary, employer contributions to superannuation
funds and non-cash benefits.
The Company has a variable remuneration package for Directors, which is known as the Performance Rights Plan. This
plan allows Directors to convert performance rights to fully paid ordinary shares for nil cash consideration, subject to
performance based vesting conditions.
Fixed remuneration
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any FBT charges
related to employee benefits including motor vehicle), as well as employer contributions to superannuation funds.
Remuneration levels are reviewed annually by the Board through a process that considers individual, segment and
overall performance of the Consolidated Entity. The Board has regard to remuneration levels external to the Consolidated
Entity to ensure the Directors’ and executives’ remuneration is competitive in the market place.
15
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Executive Directors are employed full time and receive fixed remuneration in the form of salary and statutory
superannuation or consultancy fees, commensurate with their required level of services.
Non-Executive Directors receive a fixed monthly fee for their services. Where Non-Executive Directors provide services
materially outside their usual Board duties, they are remunerated on an agreed daily rate basis.
Service agreements
It is the Consolidated Entity’s policy that service agreements for key management personnel are unlimited in term but
capable of termination on 3 months’ notice and that the Consolidated Entity retains the right to terminate the service
agreements immediately, by making payment equal to 3 months’ pay in lieu of notice.
The service agreement outlines the components of compensation paid to key management personnel but does not
prescribe how remuneration levels are modified year to year. Remuneration levels are reviewed annually on a date as
close as possible to 31 December of each year to take into account key management personnel’s performance.
Certain key management personnel will be entitled to bonuses as the Board may decide in its absolute discretion from
time to time, to a maximum of 50% of the key management personnel’s annual base salary per annum.
Non-Executive Directors
Total remuneration for all Non-Executive Directors, last voted upon by shareholders at the 2012 Annual General
Meeting, is not to exceed A$300,000 per annum and has been set at a level to enable the Company to attract and retain
suitably qualified Directors. The Company does not have any scheme relating to retirement benefits for Non-Executive
Directors.
Relationship between the remuneration policy and company performance
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and executives.
Two methods have been applied to achieve this aim, the first being a performance-based rights subject to performance
based vesting conditions, and the second being the issue of options or shares to key management personnel to encourage
the alignment of personal and shareholder interests. The Company believes this policy was effective in increasing
shareholder wealth.
The tables below set out summary information about the Consolidated Entity’s earnings and movements in shareholder
wealth for the last five reporting periods:
31 Dec 2013
31 Dec 2012
30 June 2012
30 June 2011
30 June 2010
12 months
6 months
12 months
12 months
12 months
In AUD
Revenue
Net profit / (loss) before tax
Net profit / (loss) after tax
$’000
25,175
404
404
$’000
4,603
(1,276)
(1,276)
$’000
8,242
(7,162)
(7,162)
$’000
7,112
(4,425)
(4,425)
$’000
17,942
(4,077)
(4,077)
In AUD
31 Dec 2013
31 Dec 2012
30 June 2012
30 June 2011
30 June 2010
Share price at start of period
Share price at end of period
Dividend
Basic and diluted earnings /
(loss) per share
12 months
6 months
12 months
12 months
12 months
$0.02
$0.03
-
0.04 cents
$0.01
$0.02
-
(0.16) cents
$0.02
$0.01
-
(1.14) cents
$0.14
$0.02
-
(0.79) cents
$0.07
$0.14
-
(0.80) cents
16
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Directors’ and executive officers’ remuneration
Details of the nature and amount of each major element of the remuneration of each Director of the Company and the named officers of the Company and the Consolidated Entity
for the year ended 31 December 2013 are:
SHORT-TERM
POST-
EMPLOYMENT
Salary & fees
$
Superannuation
benefits
$
SHARE BASED
PAYMENTS
Options /
Performance
Rights
$
In AUD
Executive Directors
Mr Charles Chen
Mr Ivan Teo
Non-Executive Directors
Mr Simon Farrell
Mr Oliver Cairns
Mr Kaijian Chen
Mr Blair Sergeant
12 months to Dec 2013
6 months to Dec 2012
12 months to Dec 2013
6 months to Dec 2012
12 months to Dec 2013
6 months to Dec 2012
12 months to Dec 2013
6 months to Dec 2012
12 months to Dec 2013
6 months to Dec 2012
12 months to Dec 2013
6 months to Dec 2012
207,861
93,492
122,440
51,456
22,317
-
80,000
40,000
40,000
20,000
-
14,667
Total
$
207,861
102,742
129,338
52,258
50,737
-
80,000
49,250
40,000
20,000
-
70,667
Value of
options/rights
as proportion of
remuneration %
% of
remuneration
based on
performance
-
9.0%
5.3%
1.5%
56.0%
-
-
18.8%
-
-
-
79.2%
7.0%
25.5%
-
9.0%
-
-
-
-
-
18.8%
-
-
-
-
-
6.3%
-
9,250
6,898
802
28,420
-
-
9,250
-
-
-
56,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
Total, all Directors
12 months to Dec 2013
6 months to Dec 2012
472,618
219,615
35,318
75,302
507,936
294,917
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
SHORT-TERM
POST-
EMPLOYMENT
SHARE BASED
PAYMENTS
Salary & fees
$
Superannuation
benefits
$
Shares /
Options
$
Total
$
Value of
options / rights
as proportion of
remuneration %
% of
remuneration
based on
performance
In AUD
Executives
Mr Patrick Davin
(President of Strategic Business
Development)
12 months to Dec 2013
6 months to Dec 2012
Mr Michael Fulton
(International Sales Manager)
12 months to Dec 2013
6 months to Dec 2012
Mr George Hou
(General Manager)
12 months to Dec 2013
6 months to Dec 2012
Mr Zhengjie Wu
(Vice General Manager)
12 months to Dec 2013
6 months to Dec 2012
62,487
24,006
64,357
52,616
52,414
25,646
40,305
26,686
Total, all Executives
12 months to Dec 2013
6 months to Dec 2012
219,563
128,954
-
-
-
-
-
-
-
-
-
-
-
-
6,898
802
13,972
1,203
-
-
20,870
2,005
62,487
24,006
71,255
53,418
66,386
26,849
40,305
26,686
240,433
130,959
-
-
9.7%
1.5%
21.0%
4.5%
-
-
8.7%
1.5%
-
-
-
-
-
-
-
-
-
-
18
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
Share-based payment arrangements
Options
The Company operates an Employee Share Option Plan (“ESOP”) for executives and senior employees of the
Consolidated Entity. In accordance with the provisions of the plan, executives and senior employees may be granted
options to purchase ordinary shares at an exercise price to be determined by the Board with regard to the market value
of the shares when it resolves to offer the options. The options may only be granted to eligible persons after the Board
considers the person’s seniority, position, length of service, record of employment, potential contribution and any
other matters which the Board considers relevant.
Each employee share option converts into one ordinary share of Vmoto Limited on exercise. No amounts are paid or
payable to the Company by the recipient on receipt of the option. The options carry neither rights to dividends nor
voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The number of options granted is determined by the Board.
To date, options granted under the ESOP expire within thirty six months of their issue, or immediately on the
resignation of the executive or senior employee, whichever is the earlier.
During the year ended 31 December 2013, the following ESOP arrangements were in existence:
Options
series
ESOP
ESOP
Total
Number
Grant date
Grant date
Expiry date
Exercise Price Vesting
fair value
date
8,500,000
11,500,000
20,000,000
01/09/2011
23/11/2012
A$0.010
A$0.011
01/09/2014
23/11/2015
A$0.025
A$0.030
01/09/2012
23/11/2013
There is no further service or performance criteria that need to be met in relation to ESOP options granted before the
beneficial interest vests in the recipient.
The following grants of share-based payment compensation under the ESOP arrangement to key management
personnel relate to the year ended 31 December 2013:
Name
Option
series
During the year ended 31 Dec 2013
No. granted
No. vested
% of grant
vested
% of grant
forfeited
I Teo
P Davin
M Fulton
G Hou
Z Wu
ESOP
ESOP
ESOP
ESOP
ESOP
-
-
-
-
-
1,000,000
n/a
1,000,000
1,500,000
n/a
100%
n/a
100%
100%
n/a
n/a
n/a
n/a
n/a
n/a
% of
compensation
for the period
consisting of
options
5.3%
n/a
9.7%
15.6%
n/a
19
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
The following table summarises the value of options to key management personnel granted, exercised or lapsed during
the year ended 31 December 2013:
Name
I Teo
P Davin
M Fulton
G Hou
Z Wu
Value of options granted
at the grant date 1
Value of options exercised
at the exercise date
Value of option lapsed at
the date of lapse 2
$
6,898
n/a
6,898
10,347
n/a
$
-
n/a
-
-
n/a
$
-
n/a
-
-
n/a
1. The value of options granted during the year is recognised in compensation over the vesting period of the
grant, in accordance with Australian Accounting Standards.
2. The value of options lapsing during the year due to the failure to satisfy a vesting condition is determined
assuming the vesting condition had been satisfied.
Performance Rights
On 6 August 2012, following shareholder approval at the Company’s general meeting held on 31 July 2012, the
Company granted a total of 32,000,000 performance rights to Directors Charles Chen, Blair Sergeant and Oliver Cairns.
The performance rights comprise:
a) 2,000,000 performance rights issued to Mr Blair Sergeant pursuant to his Non-Executive Director
Appointment Agreement; and
b) 30,000,000 performance rights issued under the Company’s Performance Rights Plan (10,000,000 each to Mr
Charles Chen, Mr Blair Sergeant, Mr Oliver Cairns), subject to the following performance conditions:
Number of
Performance Rights
per Director
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Class
Performance Conditions
Time of vesting
A
B
C
D
E
F
- The volume weighted average price of
the Shares for 10 consecutive trading
days on ASX (VWAP) exceeds 3 cents
at any time on or before 31 December
2013; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 3 cents at any time
on or before 31 December 2013; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 3 cents at any time
on or before 31 December 2013; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
20
The date the VWAP
first exceeds 3 cents
The date 12 months
after
the
the date
VWAP first exceeds 3
cents
The date 24 months
after
the
the date
VWAP first exceeds 3
cents
The date the VWAP
first exceeds 4 cents
The date 12 months
the
the date
after
VWAP first exceeds 4
cents
The date 24 months
after
the
the date
VWAP first exceeds 4
cents
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
R E M U N E R A T I O N R E P O R T ( c o n t ’ d )
1,333,333
1,333,333
1,333,334
G
H
I
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
The date the VWAP
first exceeds 5 cents
The date 12 months
after
the
the date
VWAP first exceeds 5
cents
The date 24 months
after
the
the date
VWAP first exceeds 5
cents
During the year ended 31 December 2013, the following performance rights arrangements were in existence:
Performance
rights series
Number
Grant date
Class A
Class B
Class C
Class D
Class E
Class F
Class G
Class H
Class I
Total
06/08/2012
06/08/2012
06/08/2012
06/08/2012
06/08/2012
06/08/2012
06/08/2012
06/08/2012
06/08/2012
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,666,666
2,666,666
2,666,668
20,000,000
Grant date
fair value
A$0.004
A$0.004
A$0.004
A$0.0015
A$0.0015
A$0.0015
A$0.0005
A$0.0005
A$0.0005
All performance rights convert to fully paid ordinary shares for nil cash consideration, subject to the above performance
based vesting conditions.
The following performance rights to key management personnel relate to the year ended 31 December 2013:
Name
Performance
rights series
During the year ended 31 Dec 2013
No. granted
No. vested
% of grant
vested
% of grant
forfeited
C Chen
O Cairns
Class A
Class A
-
-
1,000,000
1,000,000
100%
100%
n/a
n/a
This report is made with a resolution of the Directors pursuant to s298(2) of the Corporations Act 2001:
Charles Chen
Managing Director
Dated at China, Western Australia this 28th day of March 2014.
21
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
The Board of Directors of Vmoto Limited is responsible for the establishment of a corporate governance framework
that has regard to the best practice recommendations set by the ASX Corporate Governance Council. Vmoto’s objective
is to achieve best practice in corporate governance and the Company’s Board, senior executives and employees are
committed to achieving this objective.
This statement summarises the corporate governance practices that have been adopted by the Board. In addition to the
information contained in this statement, the Company’s website at www.vmoto.com contains additional details of its
corporate governance procedures and practices.
ASX Best Practice Recommendations
The ASX Listing Rules require listed companies to include in their Annual Report a statement disclosing the extent to
which they have complied with the ASX best practice recommendations in the reporting period. The recommendations
are not prescriptive and if a company considers that a recommendation is inappropriate having regard to its particular
circumstances, the company has the flexibility not to adopt it. Where Vmoto considered it was not appropriate to
presently comply with a particular recommendation the reasons are set out in the relevant section of this statement.
The Board has adopted a Corporate Governance policy that (except where expressly noted below) complies with the
Principles set out in the Second Edition of the “Corporate Governance Principles and Recommendations”, established
by the ASX Corporate Governance Council and published by the ASX in August 2007. Other than as noted below, this
Corporate Governance policy has been in effect for the entire reporting period.
Recommendation
Comply
Yes / No
Reference
explanation
/
ASX Listing Rule /
CGC
recommendations
Page 24
ASX CGC 1.1
Page 25
ASX CGC 1.2
Pages 24 - 25 ASX CGC 1.3
Page 26
ASX CGC 2.1
Page 25
ASX CGC 2.2
Page 25
ASX CGC 2.3
Page 25
Page 25
ASX CGC 2.4
ASX CGC 2.5
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Page 26
ASX CGC 2.6
Principle 1 — Lay solid foundations for management and oversight
Yes
1.1
1.3
1.2
Companies should establish the functions reserved to
the board and those delegated to senior executives
and disclose those functions.
Companies should disclose the process for evaluating
the performance of senior executives.
Companies should provide the information indicated
in the guide to reporting on Principle 1.
Principle 2 — Structure the board to add value
2.1
A majority of the board should be independent
directors.
The chair should be an independent director.
2.1
2.3
2.4
2.5
2.6
The roles of chair and chief executive officer (CEO)
should not be exercised by the same individual.
The board should establish a nomination committee.
Companies should disclose the process for evaluating
the performance of the board, its committees and
individual directors.
Companies should provide the information indicated
in the guide to reporting on Principle 2.
22
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
( c o n t ’ d )
Principle 3 — Promote ethical and responsible decision-making
3.1
Companies should establish a code of conduct and
disclose the code or a summary of the code as to:
The practices necessary to maintain
confidence in the company's integrity
The practices necessary to take into
account their legal obligations and the
reasonable
their
expectations
stakeholders
of
The responsibility and accountability of
and
for
unethical
reports
reporting
of
individuals
investigating
practices
3.2
3.3
the objectives and progress
Companies should establish a policy concerning
diversity and disclose the policy or a summary of that
policy. The policy should include requirements for
the board to establish measurable objectives for
achieving gender diversity for the board to assess
in
annually both
achieving them.
Companies should disclose in each annual report the
measurable objectives for achieving gender diversity
set by the board in accordance with the diversity
policy and progress towards achieving them.
Companies should disclose in each annual report the
proportion of women employees
in the whole
organisation, women in senior executive’s positions
and women on the board.
Companies should provide the information indicated
in the guide to reporting on Principle 3.
Principle 4 — Safeguard integrity in financial reporting
The board should establish an audit committee.
4.1
The audit committee should be structured so that it:
4.2
Consists only of non-executive directors
Consists of a majority of independent
3.5
3.4
directors
Is chaired by an independent chair, who
is not chair of the board
Has at least three members
4.3
4.4
The audit committee should have a formal charter.
Companies should provide the information indicated
in the guide to reporting on Principle 4.
Principle 5 — Make timely and balanced disclosure
should
5.1
Companies
establish written policies
designed to ensure compliance with ASX Listing Rule
disclosure requirements and to ensure accountability
at a senior executive level for that compliance and
disclose those policies or a summary of those policies.
Companies should provide the information indicated
in the guide to reporting on Principle 5.
Principle 6 — Respect the rights of shareholders
6.1
5.2
effective
Companies should design a communications policy
for promoting
communication with
shareholders and encouraging their participation at
general meetings and disclose their policy or a
summary of that policy.
Companies should provide the information indicated
in the guide to reporting on Principle 6.
6.2
Yes
Page 26
ASX CGC 3.1
Yes
Page 26
ASX CGC 3.2
Yes
Page 26
ASX CGC 3.3
Yes
Page 26
ASX CGC 3.4
Yes
Page 26
ASX CGC 3.5
No
No
No
No
No
Yes
Yes
Page 27
Page 27
ASX CGC 4.1
ASX CGC 4.2
ASX LR 12.7
Page 27
Page 27
ASX CGC 4.3
ASX CGC 4.4
Yes
Page 27
ASX CGC 5.1
Yes
Page 27
ASX CGC 5.2
Yes
Page 27
ASX CGC 6.1
Yes
Page 27
ASX CGC 6.2
23
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
( c o n t ’ d )
Principle 7 — Recognise and manage risk
7.1
the company's management of
Companies should establish policies for the oversight
and management of material business risks and
disclose a summary of those policies.
The board should require management to design and
implement the risk management and internal control
system to manage the company's material business
risks and report to it on whether those risks are being
managed effectively. The board should disclose that
management has reported to it as to the effectiveness
of
its material
business risks.
The board should disclose whether it has received
assurance from the CEO (or equivalent) and the Chief
Financial Officer (CFO) (or equivalent) that the
declaration provided in accordance with section 295A
of the Corporations Act is founded on a sound system
of risk management and internal control and that the
system is operating effectively in all material respects
in relation to financial reporting risks.
Companies should provide the information indicated
in the guide to reporting on Principle 7.
Principle 8 — Remunerate fairly and responsibly
8.1
should
The board
committee.
The remuneration committee should be structured so
that it:
remuneration
establish a
Yes
Page 28
ASX CGC 7.1
Yes
Page 28
ASX CGC 7.2
Yes
Page 28
ASX CGC 7.3
Yes
Page 28
ASX CGC 7.4
No
Page 28
ASX CGC 8.1
Page 28
ASX CGC 8.2
Consists of a majority of independent
No
directors
Is chaired by an independent chair
Has at least three members
Companies should clearly distinguish the structure of
non-executive director’s remuneration from that of
executive directors and senior executives.
Companies should provide the information indicated
in the guide to reporting on Principle 8.
No
No
Yes
Page 29
ASX CGC 8.3
Yes
Page 29
ASX CGC 8.4
7.2
7.3
7.4
8.2
8.3
8.4
Board of Directors
Role and Responsibilities of the Board
The Board is responsible for guiding and monitoring the Company on behalf of shareholders. The specific
responsibilities of the Board include:
(a)
(b)
(c)
(d)
appointment, evaluation, rewarding and if necessary the removal of the Managing Director, and
Chief Financial Officer (or equivalent) and the Company Secretary;
in conjunction with management, development of corporate objectives, strategy and operations
plans and approving and appropriately monitoring plans, new investments, major capital and
operating expenditures, capital management, acquisitions, divestitures and major funding
activities;
establishing appropriate levels of delegation to the Managing Director to allow him to manage
the business efficiently;
monitoring actual performance against planned performance expectations and reviewing
operating information at a requisite level, to understand at all times the financial and operating
conditions of the Company;
24
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O R P O R A T E G O V E R N A N C E S T A T E M E N T ( c o n t ’ d )
(e)
(f)
(g)
(h)
(i)
(j)
(k)
monitoring the performance of senior management including the implementation of strategy, and
ensuring appropriate resources are available;
via management, an appreciation of areas of significant business risk and ensuring that the
Company is appropriately positioned to manage those risks;
overseeing the management of safety, occupational health and environmental matters;
satisfying itself that the financial statements of the Company fairly and accurately set out the
financial position and financial performance of the Company for the period under review;
satisfying itself that there are appropriate reporting systems and controls in place to assure the
Board that proper operational, financial, compliance, and internal control processes are in place
and functioning appropriately;
to ensure that appropriate internal and external audit arrangements are in place and operating
effectively;
having a framework in place to help ensure that the Company acts legally and responsibly on all
matters consistent with the code of conduct; and
(l)
reporting to shareholders.
In accordance with ASX Principle 1, the Board has established a Board Charter which sets out functions reserved to
Board and those delegated to senior executives. This Charter is available on the Company’s website. The Board has
delegated responsibilities and authorities to management to enable management to conduct the Company’s day to day
activities. Matters which are not covered by these delegations, such as approvals which exceed certain limits, require
Board approval.
Evaluation of Board and Senior Executive performance
A process has been established to review and evaluate the performance of the Board, individual Directors and senior
executives. The Board is required to meet annually with the specific purpose of reviewing the role of the Board,
assessing the performance of the Board and individual Directors over the previous 12 months and examining ways in
which the Board can better perform its duties.
The Managing Director is responsible for assessing the performance of the key executives within the Company. This is
performed through a formal process involving a formal meeting with each senior executive.
Board composition
As at the date of this Report, the Board is comprised of two executive Directors and three non-executive Directors.
The Company’s website contains details on the procedures for the selection and appointment of new Directors and the
re-election of incumbent Directors, together with the Board’s policy for the nomination and appointment of Directors.
ASX Principle 2 recommends the Board establish a Nomination Committee to focus on the selection and appointment
practices of the Company. It is further recommended that the Nomination Committee have a formal Charter.
The Company has adopted a formal Nomination Committee Charter, available on the Company’s website, which
includes information on the Company’s approach to selection and appointment of Directors. However the Company
does not presently have a separate Nomination Committee. Given the current size and operations of the Company, the
full Board conducts the function of such a committee, in accordance with the Charter.
25
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
( c o n t ’ d )
The composition of the Board is reviewed at least annually to ensure the balance of skills and experience is
appropriate. The current Directors have a broad range of qualifications, experience and expertise in scooter and
motorcycle distribution and marketing and in the finance and corporate advisory industries. The skills, experience and
expertise of Directors are set out in the Directors’ Report. The Board considers that the current composition of the
Board is adequate for the Company’s current size and operations, and includes the appropriate mix of skills and
expertise, relevant to the Company’s business.
The names of the Directors in office at the date of this Report, the year they were first appointed, their status as non-
executive, executive or independent Directors and whether they are retiring by rotation and seeking re-election by
shareholders at the 2014 Annual General Meeting, are set out in the Directors’ Report.
Independence of non-executive directors
ASX Principle 2 recommends that a majority of the Board should be independent. The Board considers an independent
Director to be a non-executive Director who meets the criteria for independence included in Principle 2 of the ASX
Corporate Governance Principles and Recommendations. Materiality for these purposes is based on quantitative and
qualitative bases. An amount of over 5% of the annual turnover of the Company or 5% of the individual directors’ net
worth is considered material for these purposes.
The Board has reviewed and considered the positions and associations of each of the Directors in office at the date of
this report and consider that a majority of the Directors are independent.
Independent professional advice
The Board has adopted a formal policy on access to independent professional advice which provides that Directors are
entitled to seek independent professional advice for the purposes of the proper performance of their duties. The advice
is at the Company’s expense and advice so obtained is to be made available to all Directors.
Meetings
The Board held 6 scheduled meetings during the reporting period and no unscheduled meetings were held during that
period. Senior management attended and made presentations at the Board Meetings as considered appropriate and
were available for questioning by Directors.
The attendance of Directors at Board meetings during the financial year ended 31 December 2013 is detailed in the
Directors’ Report.
Code of Conduct
The Board encourages appropriate standards of conduct and behaviour from Directors, officers, employees and
contractors of the Company.
The Board has adopted a Code of Conduct in relation to Directors and employees, available from the Company’s
website. This Code of Conduct is regularly reviewed and updated as necessary to ensure that it reflects the highest
standards of behaviour and professionalism and the practices necessary to maintain confidence in the Company’s
integrity.
A fundamental theme is that all business affairs are conducted legally, ethically and with strict observance of the
highest standards of integrity and propriety.
ASX Principle 3 recommends companies establish a policy concerning diversity and disclose the policy or a summary
of that policy. It further recommends companies should disclose in each annual report measurable objectives for
achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving
them. Due to the current nature and scale of Vmoto’s activities, the Board has not established a diversity policy or
measurable objectives for achieving gender diversity to report against in this report for the period ending 31 December
2013. Notwithstanding, the Company notes that as at the date of this report, the proportion of women associated with
the Company is:
a) Board: Nil
b) Senior Executive: 17.6%
c) Employees: 48.7%
26
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
( c o n t ’ d )
Financial Reporting
ASX Principle 4 recommends the Board establish an Audit Committee to focus on issues relevant to the integrity of the
Company’s financial reporting. It is further recommended the Audit Committee have a formal Charter.
The Company has prepared a formal Audit Committee Charter, available from the Company’s website, which
promotes an environment consistent with best practice financial reporting and includes information on procedures for
the selection and appointment of the external auditor and for the rotation of external audit engagement partners. Given
the current size and operations of the Company, the Company does not presently have a separate Audit Committee.
The full Board conducts the function of such a committee, in accordance with the Charter.
Continuous Disclosure
In accordance with ASX Principle 5, the Board has an established Continuous Disclosure Policy which is available from
the Company’s website.
The Company is committed to:
(a)
(b)
(c)
(d)
complying with the general and continuous disclosure principles contained in the Corporations
Act and the ASX Listing rules;
preventing the selective or inadvertent disclosure of material price sensitive information;
ensuring shareholders and the market are provided with full and timely information about the
Company’s activities; and
ensuring that all market participants have equal opportunity to receive externally available
information issued by the Company.
Shareholder Communication
In accordance with ASX Principle 6, the Board has established a communications strategy which is available from the
Company’s website. The Board aims to ensure that shareholders are kept informed of all major developments affecting
the Company.
The Managing Director and Company Secretary have primary responsibility for communication with shareholders.
Information is communicated through:
(a)
(b)
(c)
(d)
(e)
(f)
continuous disclosure to relevant stock markets of all material information;
periodic disclosure through the annual report (or concise annual report), half year financial report
and quarterly reporting of corporate activities;
notices of meetings and explanatory material;
the annual general meeting;
periodic newsletters or letters from the Chairman or Managing Director; and
the Company’s website at www.vmoto.com
The Company is committed to the promotion of investor confidence by ensuring that trading in the Company’s
securities takes place in an efficient, competitive and informed market.
Shareholders are encouraged at annual general meetings to ask questions of Directors and senior management and also
the Company’s external auditors, who are requested to attend the Company’s annual general meetings.
27
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
( c o n t ’ d )
Risk Management
In accordance with ASX Principle 7, the Company has a policy for the oversight and management of material business
risks, which is available on the Company’s website.
Management determines the Company’s risk profile and is responsible for overseeing and approving risk management
strategy and policies, internal compliance and internal control. The Company’s process of risk management and
internal compliance and control includes:
(a)
(b)
(c)
(d)
establishing the Company’s goals and objectives, and implementing and monitoring strategies
and policies to achieve these goals and objectives;
continuously identifying and reacting to risks that might impact upon the achievement of the
Company’s goals and objectives, and monitoring the environment for emerging factors and
trends that affect these risks;
formulating risk management strategies to manage identified risks and designing and
implementing appropriate risk management policies and internal controls; and
monitoring the performance of, and continuously improving the effectiveness of, risk
management systems and internal compliance and controls, including an ongoing assessment of
the effectiveness of risk management and internal compliance and control.
Within the identified risk profile of the Company, comprehensive practices are in place that are directed towards
achieving the following objectives:
(a)
(b)
(c)
effectiveness and efficiency in the use of the Company’s resources;
compliance with applicable laws and regulations; and
preparation of reliable published financial information.
The Board oversees an ongoing assessment of the effectiveness of risk management and internal compliance and
control, requiring management appraise the Board of changing circumstances within the Company and within the
international business environment. During the reporting period, the Managing Director regularly reported to the
Board as to the effectiveness of the Company’s management of its material business risks. Further, in accordance with
Principle 7, the Managing Director and Finance Director have confirmed in writing to the Board that:
(a) the Company’s financial reports present a true and fair view, in all material respects, of the Company’s
financial condition and operational results are in accordance with relevant accounting standards.
(b) the above confirmation is founded on a sound system of risk management and internal compliance and
control which implements the policies of the Board;
(c) the Company’s risk management and internal compliance and control system is operating efficiently and
effectively in all material respects.
Remuneration
ASX Principle 8 recommends the Board establish a Remuneration Committee to focus on appropriate remuneration
policies. It is further recommended that the Remuneration Committee have a formal Charter.
The Company has adopted a formal Remuneration Committee Charter, available on the Company’s website, which
includes information on the Company’s approach to remuneration of Directors (executive and non-executive) and
senior executives. However the Company does not presently have a separate Remuneration Committee. Given the
current size and operations of the Company, the full Board conducts the function of such a committee, in accordance
with the Charter.
28
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
( c o n t ’ d )
In accordance with Principle 8, Executive Directors and key executives are remunerated by way of a salary or
consultancy fees, commensurate with their required level of services. Non-executive Directors receive a fixed monthly
fee for their services. Non-executive Directors’ fees are currently capped at $300,000 per annum.
The Company does not have any scheme relating to retirement benefits for non-executive Directors.
See the Remuneration Report for details of remuneration paid to Directors and key executives during the period.
Securities Trading
In compliance with Listing Rule 12.12, the Board has adopted a Securities Trading Policy which regulates dealings by
Directors, offices and employees in securities issued by the Company.
Under the policy, which is available on the Company’s website, general restrictions are imposed on Directors and
employees when in possession of inside information, while additional trading restrictions apply to Directors and some
employees.
The policy also regulates trading by key management personnel within defined closed periods, as well as providing
details of trading that is not subject to the policy, exceptional circumstances in which key management personnel may
be permitted to trade during a prohibited period with prior written clearance and the procedure for obtaining such
clearance.
Privacy
The Company has resolved to comply with the Australian Privacy Principles contained in the Privacy Act 1988, to the
extent required for a company the size and nature of Vmoto.
29
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E N T O F P R O F I T O R L O S S
A N D O T H E R C O M P R E H E N S I V E I N C O M E
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 01 3
Notes
Year ended
31 December 2013
$
6 months ended
31 December 2012
$
4,603,010
(3,530,274)
1,072,736
194,923
(720,290)
(692,335)
(905,550)
(43,186)
-
(181,879)
Continuing Operations
Revenue from sale of goods
Cost of sales
Gross Profit
Other income
Operational expenses
Marketing and distribution expenses
Corporate and administrative expenses
Occupancy expenses
Other expenses
Finance costs
Profit/(Loss) from continuing operations before tax
Income tax
2
4
25,174,809
(21,409,686)
3,765,123
2
453,418
(1,398,897)
(660,342)
(1,337,819)
(43,175)
(1,002)
(372,846)
404,460
(1,275,581)
-
-
Profit /(Loss) after tax from continuing operations
attributable to owners of the company
404,460
(1,275,581)
Other comprehensive income
Foreign currency translation differences
207,937
(706,991)
Other comprehensive income for the period, net
of tax
Total comprehensive income for the period
attributable to owners of the company
207,937
612,397
(706,991)
(1,982,572)
Basic and Diluted Earnings/(Loss) per Share from
Continuing Operations
19
0.04 cents
(0.16 cents)
The consolidated statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
30
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L
P O S I T I O N
A S A T 3 1 D E C E M B E R 2 0 1 3
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total Current Assets
NON CURRENT ASSETS
Property, plant and equipment
Intangible Assets
Total Non Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Loans and borrowings
Total Current Liabilities
Note
31 December 2013
$
31 December 2012
$
5
6
7
8
9
10
11
12
4,426,994
3,639,758
5,180,807
2,449,680
15,697,239
5,473,184
3,592,983
9,066,167
1,834,894
1,802,176
3,150,650
593,700
7,381,420
5,614,796
3,588,532
9,203,328
24,763,406
16,584,748
1,509,999
5,522,005
7,032,004
2,083,334
4,158,486
6,241,820
TOTAL LIABILITIES
7,032,004
6,241,820
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
17,731,402
10,342,928
13
13
15
57,725,955
(2,654,011)
(37,340,542)
17,731,402
51,060,622
(2,798,947)
(37,918,747)
10,342,928
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
31
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E NT O F C A S H F L O W S
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 3
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Other cash receipts
Note
Year ended
31 December 2013
$
6 months ended
31 December 2012
$
27,835,244
(31,324,457)
8,542
(375,681)
30,955
4,686,933
(6,639,288)
3,301
(181,738)
29,853
Net cash used in operating activities
22
(3,825,397)
(2,100,939)
Cash flows from investing activities
Payments for property, plant & equipment
Payments for intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of equity shares
Payments for share issue costs
Proceeds from borrowings
Repayment of borrowings
Net cash generated by financing activities
(402,528)
(5,486)
(408,014)
6,540,660
(438,298)
6,527,726
(6,043,162)
6,586,926
(280,847)
(40,593)
(321,440)
2,836,883
(63,976)
1,349,176
(1,066,021)
3,056,062
Net (decrease)/increase in cash and cash equivalents
2,353,515
633,683
Cash and cash equivalents at the beginning of the year
1,834,894
1,231,258
Effect of exchange rate fluctuations on cash held
238,585
(30,047)
Cash and cash equivalents at the end of the year
4,426,994
1,834,894
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
32
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
C O N S O L I D A T E D S T A T E M E N T S O F C H A N G E S I N E Q U I T Y
F O R T H E Y E A R D E N D E D 3 1 D E C E M B E R 2 0 1 3
Balance as at 1 July 2012
48,603,643
(1,290,467)
(37,512,457)
9,800,719
Issued Capital
$
Reserves
$
Accumulated
Losses
$
Total
$
Loss for the half year
Other comprehensive income for the year
Total comprehensive income for the year
Issue of ordinary shares
Share issue costs
Issue of options and performance rights
Transfer expired options reserve to
accumulated losses
-
-
-
3,058,940
(601,961)
-
-
-
(706,991)
(706,991)
-
-
67,802
(869,291)
(1,275,581)
-
(1,275,581)
-
-
-
869,291
(1,275,581)
(706,991)
(1,982,572)
3,058,940
(601,961)
67,802
-
Balance as at 31 December 2012
51,060,622
(2,798,947)
(37,918,747)
10,342,928
Balance as at 1 January 2013
51,060,622
(2,798,947)
(37,918,747)
10,398,928
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Issue of ordinary shares
Share issue costs
Issue of options
Transfer expired options reserve to
accumulated losses
-
-
-
7,006,800
(341,467)
-
-
-
207,937
207,937
-
-
110,744
(173,745)
404,460
-
404,460
-
-
-
173,745
404,460
207,937
612,397
7,006,800
(341,467)
110,744
-
Balance as at 31 December 2013
57,725,955
(2,654,011)
(37,340,542)
17,731,402
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
33
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Vmoto Limited (“Vmoto” or “the Company”) is a limited company incorporated in Australia. The consolidated financial
report of the Company as at and for the year ended 31 December 2013 comprises the Company and its subsidiaries
(together referred to as the “Consolidated Entity”).
(a) Basis of preparation
(i)
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. The consolidated financial report of the Consolidated
Entity complies with International Financial Reporting Standards (IFRSs) and interpretations adopted by the
International Accounting Standards Board (IASB).
The financial statements were approved by the Board of Directors on 27 March 2014.
(ii)
Basis of measurement
The consolidated financial statements of the Consolidated Entity are prepared on an accruals basis and are based
on historical costs except where otherwise stated.
(iii)
Functional and presentation currency
The consolidated financial statements of the Consolidated Entity are presented in Australian dollars, which is
different from its functional currency, determined to be Renminbi. The functional currency has changed from Euro
Dollar in the prior year to Renminbi in the current year, and is attributable to majority of sales and operation costs
are now predominantly denominated in Renminbi. A different presentation currency has been adopted as the
Board of Directors believe that financial statements presented in Australian dollar (which is the functional currency
of parent company) are more useful to the users and shareholders of the Company who are predominantly in
Australia.
(iv)
Standards and interpretations affecting amounts reported in current period (and/or prior periods)
During the year ended 31 December 2013, the Consolidated Entity adopted all of the new and revised Australian
Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of
these standards has not significantly impacted the recognition, measurement and disclosure of the transactions of
the Consolidated Entity and its consolidated financial statements for the year ended 31 December 2013.
New and revised Standards and amendments thereof and Interpretations effective for the year end included:
• AASB 10 ‘Consolidated Financial Statements’ and AASB 2011-7 ‘Amendments to Australian Accounting
Standards arising from the consolidation and Joint Arrangements standards’
• AASB 11 ‘Joint Arrangements’ and AASB 2011-7 ‘Amendments to Australian Accounting Standards arising
from the consolidation and Joint Arrangements standards’
• AASB 12 ‘Disclosure of Interests in Other Entities’ and AASB 2011-7 ‘Amendments to Australian Accounting
Standards arising from the consolidation and Joint Arrangements standards’
• AASB 127 ‘Separate Financial Statements’ (2011) and AASB 2011-7 ‘Amendments to Australian Accounting
Standards arising from the consolidation and Joint Arrangements standards’
• AASB 128 ‘Investments in Associates and Joint Ventures’ (2011) and AASB 2011-7 ‘Amendments to Australian
Accounting Standards arising from the consolidation and Joint Arrangements standards
• AASB 13 ‘Fair Value Measurement’ and AASB 2011-8 ‘Amendments to Australian Accounting Standards
arising from AASB 13’
• AASB 119 ‘Employee Benefits’ (2011) and AASB 2011-10 ‘Amendments to Australian Accounting Standards
arising from AASB 119 (2011)’
• AASB 2012-2 ‘Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets
and Financial Liabilities’ AASB 2012-5 ‘Amendments to Australian Accounting Standards arising from
Annual Improvements 2009–2011 Cycle’
34
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
• AASB 2012-10 ‘Amendments to Australian Accounting Standards – Transition Guidance and Other
Amendments’
(v)
Going concern basis
The Consolidated Entity has recorded a profit after tax for the year ended 31 December 2013 of $404,460 (six
months ended 31 December 2012: $1,275,581 loss after tax). At 31 December 2013, the Consolidated Entity had a
working capital surplus of $8,665,235 (31 December 2012: $1,195,600).
The Directors have prepared the financial statements on a going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of
business. The Directors believe this to be appropriate for the following reasons:
•
•
the Consolidated Entity has a significant working capital surplus;
the Consolidated Entity has long term supply agreements and demand for its electric powered scooter products
is increasing. As the units increase, this will further reduce the cost of goods manufactured due to achieving
higher levels of economies of scale, which will further improve the gross profit margins;
the Consolidated Entity achieved a profit during the financial year and it will further reduce corporate and
other non-sales resources without materially affecting revenue activities;
the Consolidated Entity’s Stage 1 and 2 of the Nanjing Facility have been completed and have been used as
security for its existing operating facility. As at the date of this report, RMB8.1 million (approximately AUD1.5
million) of the operating facility is still available for draw down if required;
the Directors have prepared cash flow forecasts that indicate the Consolidated Entity will be cash flow positive
for the year ending 31 December 2014 and will enable the Consolidated Entity to pay its debts as and when they
fall due.
•
•
•
At the date of this report and having considered the above factors, the Directors are confident that the Consolidated
Entity and the Company will be able to continue operations into the foreseeable future. The financial report does
not include adjustments relating to the recoverability and classification of the recorded assets and liabilities
amounts that might be necessary should the Consolidated Entity and the Company not continue as going concerns.
The accounting policies set out below have been applied consistently to all periods presented in the consolidated
financial statements, and have been applied consistently by all entities in the Consolidated Entity.
(b) Principles of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential
voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the date that control
ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies
adopted by the Consolidated Entity.
Non-controlling interests in equity and results of the entities that are controlled by the Company are shown as a
separate item in the consolidated financial statements.
In note 25, investments in subsidiaries are carried at cost and recoverable amount. Refer to Note (n).
Transactions eliminated on consolidation
Unrealised gains and losses and inter-entity balances resulting from transactions with or between subsidiaries are
eliminated in full on consolidation.
(c) Foreign currency translation
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian
dollars, which is the parent entity’s functional currency.
35
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Transactions in foreign currencies are initially recorded in the functional currency at 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 reporting date.
All differences in the consolidated financial report are taken to the profit & loss with the exception of differences on
foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken
directly to equity until the disposal of the net investment, at which time they are recognised in the profit & loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
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.
As at the reporting date the assets and liabilities of these overseas subsidiaries are translated into the presentation
currency of Vmoto at the rate of exchange ruling at the reporting date and the income statements are translated at
the weighted average exchange rates for the period where this rate approximates the rate at the date of the
transaction.
The exchange differences arising on the retranslation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular
foreign operation is recognised in the profit & loss.
(d) Revenue recognition
Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax
(GST) payable to the taxation authority. Exchange of goods or services of the same nature without any cash
consideration are not recognised as revenue.
Sale of goods
Revenue from the sale of goods is recognised upon delivery of goods to customers as this corresponds to the
transfer of significant risks and benefits of ownership of the goods and the cessation of all involvement in those
goods.
Interest income
Interest income is recognised using the effective interest method.
(e) Trade and other receivables
Trade and other receivables include amounts due from customers for goods sold in the ordinary course of business.
Receivables expected to be collected within 12 months of the end of the reporting period are classified as current
assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any provision for impairment.
(f) Acquisition of assets
All assets acquired including plant and equipment and intangibles other than goodwill are initially recorded at their
cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs
directly attributable to the acquisition.
When equity instruments are issued as consideration, their market price at the date of acquisition is used as fair
value. Transaction costs arising on the issue of equity instruments are recognised directly in equity subject to the
extent of proceeds received, otherwise expensed.
36
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(g) Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum
of:
•
the consideration transferred;
• any non-controlling interest; and
•
over the acquisition date fair value of net identifiable assets acquired.
the acquisition date fair value of any previously held equity interest;
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date
fair value of any previously held equity interest shall form the cost of the investment in the separate financial
statements.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of profit or loss and other
comprehensive income. Where changes in the value of such equity holdings had previously been recognised in
other comprehensive income, such amounts are recycled to profit or loss.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100%
interest will depend on the method adopted in measuring the non-controlling interest. The Group can elect in most
circumstances to measure the non-controlling interest in the acquiree either at fair value (full goodwill method) or at
the non-controlling interest's proportionate share of the subsidiary's identifiable net assets (proportionate interest
method). In such circumstances, the Group determines which method to adopt for each acquisition and this is stated
in the respective notes to these financial statements disclosing the business combination.
Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is
included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-
generating units, representing the lowest level at which goodwill is monitored not larger than an operating segment.
Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity disposed
of.
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do not affect the
carrying amounts of goodwill.
(h) Property, Plant and Equipment
• Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of assets may include
the cost of materials and direct labour, and any other costs directly attributable to bringing the assets to a working
condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which
they are located.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within
“other income” in profit or loss.
• Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the part will flow to the Consolidated
Entity and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment
are recognised in the profit & loss as incurred.
37
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
• Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each of
property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Consolidated Entity will obtain ownership by the end of the lease term.
Land is not depreciated. Assets will be depreciated once the asset is in the condition necessary for it to be capable of
operating in the manner intended by management.
The estimated useful lives for the current and comparative periods are as follows:
Plant and equipment
Motor vehicles
Office furniture & equipment
Building
Leasehold improvements
3 – 10 years
10 years
5 years
20 years
5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
•
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or
cash-generating units are written down to their recoverable amount.
The recoverable amount of property, plant and equipment is the greater 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.
(i) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(j) Payables
Payables, including goods received and services incurred but not yet invoiced, are recognised at the nominal
amount when the Consolidated Entity becomes obliged to make future payments as a result of a purchase of assets
or receipt of services.
(k) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or
payable to, the tax office is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the tax office are classified as
operating cash flows.
38
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
(l) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories includes expenditure
incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to
their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
(m) Operating Leases
Operating leases and the leased assets are not recognised on the Consolidated Entity’s statement of financial
position. Payments made under operating leases are recognised as an expense in the profit and loss.
(n) Recoverable amount of assets
At each reporting date, the Consolidated Entity assesses whether there is any indication that an asset may be
impaired. Where an indicator of impairment exists, the Consolidated Entity makes a formal estimate of recoverable
amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired
and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual
asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not
generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the
recoverable amount is determined for the cash-generating unit to which the asset belongs.
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.
(o) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs
associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount
or premium on settlement.
Gains and losses are recognised in the profit & loss when the liabilities are derecognised as well as through the
amortisation process.
(p) Share-based payment transactions
The Consolidated Entity provides benefits to employees (including Directors) of the Consolidated Entity in the form
of share-based payment transactions, whereby employees render services in exchange for shares or rights over
shares (‘equity-settled transactions’).
The Company operates an incentive scheme to provide these benefits, known as the Vmoto Employee Share Option
Plan (the “ESOP”).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at
which they are granted. The fair value is determined using a Black Scholes Option Valuation model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of Vmoto Limited (“market conditions”).
39
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the
Directors of the Consolidated Entity, will ultimately vest. This opinion is formed based on the best available
information at balance date. No adjustment is made for the likelihood of market performance conditions being met
as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of
the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award
are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding weighted average number of options as at the reporting date is considered
not material and accordingly the basic loss per share is the same as the diluted loss per share.
(q) Employee benefits
Liabilities for employee benefits for wages, salaries and annual leave represent present obligations resulting from
employees’ services provided to reporting date, calculated at undiscounted amounts based on remuneration, wage
and salary rates that the Consolidated Entity expects to pay as at reporting date including related on-costs, such as
workers compensation insurance and payroll tax.
(r) Income tax
Income tax expense recognised in the statement of profit or loss and other comprehensive income relates to current
tax and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.
Current tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences:
i.
the initial recognition of assets or liabilities 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; and
ii. differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable
that they will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
40
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on a different
tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Company and its subsidiaries have unused tax losses as at the reporting date. However, no deferred tax
balances have been recognised, as it is considered that asset recognition criteria have not been met at this time.
(s) Trademarks, licenses and production rights
Trademarks, licenses and production rights are recognised at cost of acquisition. They have an indefinite life and
are carried at cost less any accumulated impairment losses.
(t) Development Costs
Development costs are capitalised only when technical feasibility studies identify that the project is expected to
deliver future economic benefits and these benefits can be measured reliably. Capitalised development costs have a
finite useful life and are amortised on a systematic basis based on the future economic benefits over the useful life
of the project.
(u) Provisions
Provisions are recognised when the Consolidated Entity has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the
reporting period.
(v) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks and other short-term
highly liquid investments with maturities of 3 months or less.
(w) Comparative figures
This report relates to the year ended 31 December 2013. Comparatives are for the 6 months period ended 31
December 2012 as a result of the change in the Company’s financial year end from 30 June to 31 December, effective
31 December 2012.
(x) Critical judgements in applying accounting policies and key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the
end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
Contingent liabilities
The Company is currently a defendant in one proceeding brought against it by a former employee in relation to the
employee’s past employment. Having considered legal advice, the Directors believe that the claims can be
successfully defended, without any losses (including for costs) being incurred by the Company.
41
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Year ended
31 December 2013
$
6 months ended
31 December 2012
$
2. REVENUES AND EXPENSES
(a) Other income
Interest income
Contributions from customers
Government subsidies
Net foreign exchange gain
Other income
(b) Other expenses
Net foreign exchange loss
(c) Employee benefits expense
Wages and salaries costs
(d) Depreciation and amortisation
Depreciation
3. AUDITOR’S REMUNERATION
Audit services:
- audit of financial reports by William Buck Audit (WA)
Pty Ltd (previous auditor)
- audit of financial reports by Bentleys Audit & Corporate
(WA) Pty Ltd
8,514
351,189
29,660
-
64,055
453,418
1,002
1,002
1,423,229
1,423,229
484,112
484,112
3,374
102,066
-
22,813
66,670
194,923
-
-
737,932
737,932
254,360
254,360
20,200
40,000
48,000
-
60,200
48,000
42
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
4. INCOME TAX
(a) Income tax expense
Current
Non-current
Year ended
31 December 2013
$
6 months ended
31 December 2012
$
-
-
-
-
-
-
(b) Numerical reconciliation between tax benefit and pre-tax net
loss
Profit/(Loss) before income tax benefit
404,460
(1,275,581)
Income tax credit calculated at 30%
(121,338)
382,674
Tax effect on amounts which are not tax deductible:
Losses of foreign subsidiaries/operations not regarded as
deductible
Miscellaneous
Non-deductible items
Deferred tax asset utilised in current year
Deferred tax asset not brought to account
Income tax credit / (expense)
(c) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised (as recovery is currently not probable)
(6760)
(15,149)
-
143,246
-
-
(6,335)
(3,494)
-
-
(372,845)
-
Potential at 30% (31 December 2012: 30%)
4,724,255
4,867,501
(d) Unrecognised temporary differences
Temporary differences for which deferred tax assets have not
been recognised:
Employee benefits provision
Provision for doubtful receivables
Capital raising costs
Accrued superannuation
Unrecognised deferred tax assets relating to the above temporary
differences
(e) Tax Rates
-
25,890
7,230
-
33,120
-
7,138
62,678
-
69,816
The potential tax benefit at 31 December 2013 in respect of tax losses not brought into account has been calculated at
30% for Australian entities. This same rate applied for the six months ended 31 December 2012.
43
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
5. CASH AND CASH EQUIVALENTS
Cash and bank balances
6. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less: Provision for impairment loss
Other receivables
Less: Provision for impairment loss
Impaired Trade Receivables
31 December 2013
$
31 December 2012
$
4,426,994
1,834,894
2,500,182
-
2,500,182
1,185,876
(46,300)
3,639,758
840,191
-
840,191
985,779
(23,794)
1,802,176
Trade receivables are non-interest bearing and are generally on 30-60 days terms. A provision for impairment loss is
recognised when there is objective evidence that an individual trade receivable is impaired.
Movements in the provision for impairment of trade and other receivables were as follows:
At 1 January 2013
Provision for impairment during the period
Write off
Translation difference
At 31 December 2013
23,794
17,159
-
(5,347)
46,300
At 31 December 2013, the ageing analysis of trade and other receivables is as follows:
0 – 30 Days
31 – 60 Days
61 – 90 Days past due not impaired
+90 Days past due not impaired
+90 Days considered impaired
2,458,491
28,783
278,519
873,965
46,300
3,686,058
80,307
-
(56,816)
303
23,794
530,373
475,694
-
796,109
23,794
1,825,970
As of 31 December 2013, trade and other receivables of $1,152,484 (31 December 2012: $796,109) were past due but
not impaired. These relate to a number of independent customers for whom there is no recent history of default and
export/import taxes recoverable arising from the China and Europe operations, which can be claimed / used to
offset against future VAT payables.
44
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
7. INVENTORIES
Raw materials
Semi-finished goods
Finished goods
8. OTHER ASSETS
Prepayments
31 December 2013
$
31 December 2012
$
3,598,785
383,785
1,198,237
5,180,807
2,295,920
370,693
484,037
3,150,650
2,449,680
2,449,680
593,700
593,700
45
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
9. PROPERTY, PLANT & EQUIPMENT
Period ended 31 December 2012
At 1 July 2012, net of accumulated depreciation
Additions
Disposals
Depreciation for the period
Exchange differences
At 31 December 2012, net of accumulated depreciation
At 31 December 2012
Cost
Accumulated depreciation
Net carrying amount
Year ended 31 December 2013
At 1 January 2013, net of accumulated depreciation
Additions
Depreciation for the period
Exchange differences
At 31 December 2013, net of accumulated depreciation
At 31 December 2013
Cost
Accumulated depreciation
Net carrying amount
Plant &
equipment
Motor
vehicles
Office
furniture &
equipment
Land
Building
785,363
-
-
-
(3,128)
782,235
3,807,522
-
-
(35,467)
(105,839)
3,666,216
Leasehold
improvement
Total
5,867,243
29,186
(3,046)
(254,359)
(24,228)
5,614,796
-
-
-
-
-
-
1,301
-
-
(868)
-
433
82,886
(82,453)
782,235
-
3,839,736
(173,519)
278,041
(278,041)
7,499,161
(1,884,365)
433
782,235
3,666,217
433
-
(433)
-
-
782,235
-
-
-
782,235
3,666,217
265,590
(78,701)
(2,843)
3,850,263
-
-
-
-
-
-
5,614,796
5,614,796
373,075
(484,112)
(30,575)
5,473,184
1,256,640
29,186
(3,046)
(215,732)
85,270
1,152,318
2,497,336
(1,345,019)
1,152,317
1,152,317
87,940
(399,533)
(27,732)
812,992
16,417
-
-
(2,292)
(531)
13,594
18,927
(5,333)
13,594
13,594
19,545
(5,445)
-
27,694
2,407,697
(1,594,705)
38,472
(10,778)
82,886
(82,886)
782,235
-
4,102,483
(252,220)
278,041
(278,041)
7,691,814
(2,218,630)
812,992
27,694
-
782,235
3,850,263
-
5,473,184
An impairment test has been performed in conjunction with intangible assets and the details of assumptions used are in Note 10.
Assets pledged as security
Land and buildings with a carrying amount of approximately $4.6 million have been pledged to secure borrowings of the Group (see Note 12). The freehold land and buildings have
been pledged as security for the bank operating facility under a mortgage. The Group is not allowed to pledge these assets as security for other borrowings or to sell them to another
entity.
46
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
10. INTANGIBLES
Licences,
trademarks
and
production
rights
Goodwill
Development
costs
Total
Half year ended 31 December 2012
Balance at 1 July 2012
Additions
Amortisation and impairment
Reclassification
Exchange differences
Balance at 31 December 2012
1,414,951
-
-
-
-
1,414,951
1,867,148
22,634
-
-
283,799
2,173,581
-
-
-
-
-
-
3,282,099
22,634
-
-
283,799
3,588,532
At 31 December 2012
Cost
Accumulated amortisation and impairment
Net carrying amount
12,149,545
(10,734,594)
1,414,951
2,173,581
-
2,173,581
Year ended 31 December 2013
Balance at 1 January 2013
Additions
Amortisation and impairment
Reclassification
Exchange differences
Balance at 31 December 2013
1,414,951
-
-
-
-
1,414,951
2,173,581
4,451
-
-
-
2,178,032
376,192
(376,192)
14,699,318
(11,110,786)
-
-
-
-
-
-
-
3,588,532
3,588,532
4,451
-
-
-
3,592,983
At 31 December 2013
Cost
Accumulated amortisation and impairment
Net carrying amount
12,149,545
(10,734,594)
1,414,951
2,178,032
-
2,178,032
376,192
(376,192)
14,703,769
(11,110,786)
-
3,592,983
The goodwill on acquiring E-Max in January 2010 and licenses, trademarks and production rights, which are
indefinitely live assets are allocated to the cash generating unit within the Chinese geographical location segment as
the Company’s manufacturing facility and main operations are located in China. The recoverable amount of the these
intangible assets have been determined using value in use method based on the net present value of projected
earnings before interest, tax and depreciation using cash flow projections based on financial budgets approved by
senior management covering a three-year period and extrapolated to five years. The cash flow projections were
prepared based on past experience and contracts that are in place.
The pre-tax, risk free discount rate applied to cash flow projections is 15% (31 December 2012: 15%) and an average
growth rate used to extrapolate managements cash flow forecasts beyond three years is 3%. The calculated
recoverable amount exceeds the carrying amount of the goodwill of E-Max such that no impairment of the goodwill
on acquisition of E-Max has occurred. Sensitivity analysis was performed by varying the discount rate applied to the
cash flow projections by 5%. The calculated recoverable amount still exceeds the carrying amount of these assets.
Management believe that no reasonably possible change in any of the above key assumptions would cause the
carrying amount of the goodwill on acquisition of E-Max to materially exceed its recoverable amount.
47
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
11. TRADE AND OTHER PAYABLES
Current – unsecured
Trade creditors
Other creditors and accruals
12. INTEREST BEARING LOANS AND BORROWINGS
Current
Secured – Interest bearing
Bank operating facility
The carrying amounts of non-current assets
pledged as security are:
Land and buildings
Financing arrangements
The Consolidated Entity has access to the following facilities:
Total facilities available:
Bank operating facility
Facilities utilised at end of the period:
Bank operating facility
Facilities not utilised at end of the period:
Bank operating facility
31 December 2013
$
31 December 2012
$
796,451
713,548
1,509,999
848,307
1,235,027
2,083,334
5,522,005
4,158,486
5,522,005
4,158,486
4,632,497
4,632,497
4,448,451
4,448,451
6,279,203
6,279,203
5,522,005
5,522,005
757,198
757,198
5,248,858
5,248,858
3,535,260
3,535,260
1,713,598
1,713,598
48
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
12. INTEREST BEARING LOANS AND BORROWINGS (cont’d)
Bank operating facility
The Company secured a bank operating facility of RMB34 million (approximately AUD6.3 million) with China Rural
Credit Cooperative in May 2011. The bank operating facility is secured by the Company’s Nanjing Facility, including
the land, Stage 1 and Stage 2 of the manufacturing facility. This bank operating facility is a revolving line of credit
facility and the undrawn facility is available for draw down throughout the period.
The average interest rate for the bank operating facility is 7.8% per annum, payable quarterly.
13. ISSUED CAPITAL AND RESERVES
Issued capital
31 December 2013
$
31 December 2012
$
1,221,196,804 (31 December 2012: 897,087,712) fully paid ordinary
shares
57,725,955
51,060,622
The following movements in issued capital occurred during the period:
Balance at beginning of period
Issue of Shares at 4.0 cents each
Issue of Shares at 1.2 cents each
Issue of Shares at 2.0 cents each
Issue of Shares at 2.0 cents each
Issue of Shares at 2.8 cents each
Issue of Shares at 2.2 cents each
Issue of Shares at 2.2 cents each
Issue of Shares at 2.9 cents each
Issue of Shares at nil consideration
Share issue costs
a)
b)
c)
d)
e)
f)
g)
h)
i)
Number of
Shares
31 Dec 2013
Number of
Shares
31 Dec 2012
896,087,712
-
-
-
75,000,000
2,000,000
54,545,455
186,363,637
5,200,000
2,000,000
-
720,938,456
3,600
54,070,654
121,075,002
-
-
-
-
-
-
-
Year
ended
31 Dec 2013
$
51,060,622
-
-
-
1,500,000
56,000
1,200,000
4,100,000
150,800
-
(341,467)
6 months
ended
3 Dec 2012
$
48,603,643
144
648,848
2,409,948
-
-
-
-
-
-
(601,961)
Balance at end of period
1,221,196,804
896,087,712
57,725,955
51,060,622
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
a) 9 August 2012 - Issue 3,600 shares at $0.04 cents each as a result of exercise of listed options.
b) 27 September 2012 - Issue 54,070,654 shares at $0.012 each as a result of completion of placement.
c) 12 November 2012 - Issue 121,075,002 shares at $0.02 (1.3 pence) each as a result of completion of AIM listing
and placement.
d) 30 August 2013 - Issue 75,000,000 shares at $0.02 each as a result of completion of placement.
e) 30 August 2013 - Issue 2,000,000 shares at a deemed price of $0.028 each to Blair Sergeant for the provision of
professional services in 2012.
11 October 2013 - Issue 54,545,455 shares at $0.022 each as a result of completion of Tranche 1 of placement.
f)
g) 15 November 2013 - Issue 186,363,637 shares at $0.022 each as a result of completion of Tranche 2 placement.
h) 15 November 2013 - Issue 5,200,000 shares at a deemed price of $0.029 each to employees of the Company in
i)
recognition of their efforts and contribution to the Company.
17 December 2013 - Issue 2,000,000 shares at nil consideration as a result of vesting of 2,000,000 performance
rights.
49
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
( c o n t ’ d )
13. ISSUED CAPITAL AND RESERVES (cont’d)
Options
The movements of options over unissued ordinary shares of the Company for the year ended 31 December 2013 were:
Expiry Date
Exercise
Price
Balance at
1 Jan 2013
Granted/
Issued
Exercised/
Forfeited
Held at
31 Dec 2013
Class D options
ESOP options
Listed options
ESOP options
Class E options
Class F options
Total
14 July 2013
9.0 cents
1 September 2014
2.5 cents
4.0 cents
31 December 2014
23 November 2015 3.0 cents
4.0 cents
23 May 2018
8.0 cents
23 May 2018
3,241,527
8,500,000
145,392,230
11,500,000
N/A
N/A
168,633,757
-
-
500,000
-
5,000,000
5,000,000
10,500,000
3,241,527
-
-
-
-
-
3,241,527
-
8,500,000
145,892,230
11,500,000
5,000,000
5,000,000
175,892,230
On 23 May 2013, 5,000,000 unlisted options (exercisable at $0.04 and expiring on 23 May 2018) and 5,000,000 unlisted
options (exercisable at $0.08 and expiring on 23 May 2018) were issued to Mr Simon Farrell pursuant to shareholder
approval at the Company’s 2013 Annual General Meeting.
On 15 July 2013, 3,241,527 unlisted options remained unexercised on their expiry date and lapsed pursuant to the
terms and conditions of the options.
On 15 November 2013, 500,000 listed options (exercisable at $0.04 and expiring on 31 December 2014) were issued to
an advisor in consideration for marketing services provided to the Company.
The fair value of the options granted to Mr Simon Farrell is deemed to represent the value of the services provided
over the vesting period.
The weighted average fair value of options granted to Mr Simon Farrell during the year was $48,720. These values
were calculated using the Black-Scholes option pricing model applying the following inputs:
Weighted average exercise price:
Weighted average life of the option:
Expected share price volatility:
Risk-free interest rate:
$0.04 and $0.08
5 years
128%
3.19%
The fair value of the options granted to advisor is deemed to represent the value of the marketing services provided
to the Company.
The weighted average fair value of options granted during the half year was $3,000. These values were calculated
using the Black-Scholes option pricing model applying the following inputs:
Weighted average exercise price:
Weighted average life of the option:
Expected share price volatility:
Risk-free interest rate:
$0.04
1.125 years
74%
2.74%
Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is
indicative of future movements.
50
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Performance Rights
All performance rights convert to fully paid ordinary shares for nil cash consideration, subject to performance based
vesting conditions.
The movements of performance rights over unissued ordinary shares of the Company for the year ended 31
December 2013 were:
Performance
rights series
Balance at
1 Jan 2013
Vested
Forfeited
Held at
31 Dec 2013
Class A
Class B
Class C
Class D
Class E
Class F
Class G
Class H
Class I
Total
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,666,666
2,666,666
2,666,668
20,000,000
2,000,000
-
-
-
-
-
-
-
-
2,000,000
-
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,666,666
2,666,666
2,666,668
18,000,000
The above performance rights issued under the Company’s Performance Rights Plan (10,000,000 each to Mr Charles
Chen and Mr Oliver Cairns) are subject to the following performance conditions:
Number of
Performance Rights
per Director
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Class
Performance Conditions
Time of vesting
B
C
D
E
F
- The VWAP exceeds 3 cents at any time
on or before 31 December 2013; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 3 cents at any time
on or before 31 December 2013; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 4 cents at any time
on or before 31 December 2014; and
the Participating Director remains a
Director at the time of vesting.
-
The date 12 months
after
the
the date
VWAP first exceeds 3
cents
The date 24 months
after
the
the date
VWAP first exceeds 3
cents
The date the VWAP
first exceeds 4 cents
The date 12 months
after
the
the date
VWAP first exceeds 4
cents
The date 24 months
after
the
the date
VWAP first exceeds 4
cents
51
1,333,333
1,333,333
1,333,334
Reserves
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
G
H
I
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
- The VWAP exceeds 5 cents at any time
on or before 31 December 2015; and
the Participating Director remains a
Director at the time of vesting.
-
The date the VWAP
first exceeds 5 cents
The date 12 months
after
the
the date
VWAP first exceeds 5
cents
The date 24 months
after
the
the date
VWAP first exceeds 5
cents
Reserves at the beginning of the period
Movements in share-based payment reserve
Transfer share-based payment reserve to accumulated losses
Movements in foreign currency translation reserve
Reserves at the end of the period
Comprises of:
Share-based payment reserve
Foreign currency translation reserve
Reserves at the end of the period
31 December 2013
$
31 December 2012
$
(2,798,947)
110,744
(173,745)
207,937
(2,654,011)
238,047
(2,892,058)
(2,654,011)
(1,290,467)
67,802
(869,291)
(706,991)
(2,798,947)
301,047
(3,099,994)
(2,798,947)
The share-based payments reserve is used to recognise the fair value of options issued but not exercised and
performance rights issued.
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign operations.
52
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
14. CAPITAL RISK MANAGEMENT
The Consolidated Entity manages its capital to ensure their ability to continue as a going concern and to achieve
returns to the shareholders and benefits for other stakeholders through the optimisation of debt and equity balance.
The capital structure of the Consolidated Entity is adjusted to achieve its goals whilst ensuring the lowest cost of the
capital.
Management monitors capital on the basis of the gearing ratio (net debt / total capital). During the year ended 31
December 2013, the Consolidated Entity’s strategy is to utilise its operating facility and also achieve its expansion
program. The gearing ratios at 31 December 2013 and 31 December 2012 were as follows:
Total borrowings & trade and other payables
Less: cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
31 December 2013
$
31 December 2012
$
7,032,004
(4,426,994)
2,605,010
17,731,402
20,336,412
6,241,820
(1,834,894)
4,350,926
10,342,928
14,693,854
12.8%
29.6%
The gearing ratio of the Company has reduced from 29.6% to 12.8% during the year ended 31 December 2013.
15. ACCUMULATED LOSSES
Accumulated losses at the beginning of the period
Profit/(Loss) for the period
Transfer from share-based payment reserve
Accumulated losses at the end of the period
16. SEGMENT REPORTING
Year ended
31 December 2013
$
Six months ended
31 December 2012
$
(37,918,747)
404,460
173,745
(37,340,542)
(37,512,457)
(1,275,581)
869,291
(37,918,747)
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group
that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and
to assess their performance.
The continuing operations of the Consolidated Entity are predominantly in the scooter including electric and petrol
scooters and ATV manufacture and distribution industry.
In prior years, reported segments were based on the geographical segments of the Group, being Australia, Spain and
China. This assessment of identifiable segments has not changed in the current period, as management accounts and
forecasts submitted to the chief operating decision maker for the purpose of resource allocation and assessment of
segment performance are split into these same components.
The scooter, ATV and engine segments are managed on a worldwide basis, but operate in three principal
geographical areas: Australia, China and Spain. In China, manufacturing facilities are operated in Nanjing.
53
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
16. SEGMENT REPORTING (cont’d)
Continuing Operations
Australia
$A
China
$A
Spain
$A
Intersegment
elimination $A
Consolidated
$A
Revenue
Segment revenue
Result
Segment result
Assets
Segment assets
Liabilities
Segment liabilities
Year
ended
31/12/2013
6 months
ended
31/12/2012
Year
ended
31/12/2013
6 months
ended
31/12/2012
Year
ended
31/12/2013
6 months
ended
31/12/2012
Year
ended
31/12/2013
6 months
ended
31/12/2012
Year
ended
31/12/2013
6 months
ended
31/12/2012
-
2,184
25,174,809
4,596,391
-
4,435
(911,751)
(395,262)
1,338,744
(803,201)
(22,533)
(21,118)
-
-
-
25,174,809
4,603,010
-
404,460
(1,219,581)
2,754,810
511,340
42,182,395
32,773,829
114,302
278,010
(20,288,101) (16,978,431)
24,763,406
16,584,748
(85,465)
(320,325)
(26,354,897)
(21,956,384)
(879,743)
(887,542)
20,288,101
16,978,431
(7,032,004)
(6,185,820)
Acquisition of non-current assets
21,500
-
87,940
29,186
-
-
Depreciation/impairment of non-
current assets
(2,172)
(286)
(459,407)
(209,007)
(22,533)
(45,066)
-
-
-
-
109,440
29,186
(484,112)
(254,359)
The principal activity of the continuing Consolidated Entity is the manufacture, marketing and distribution of:
•
•
Scooter including electric and petrol scooters; and
All terrain vehicles.
Information about major customers
Included in revenues arising from the sales of goods of $25,174,809 (2012: $4,603,010) are revenues of approximately $13,843,527 (2012: $1,030,563) which arose from sales to the group’s
largest customer. No other single customer contributed 10% or more to the group’s revenue for 2013 and 2012.
54
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Consolidated Entity’s principal financial instruments comprise bank and other loans, cash and short-term
deposits. The main purpose of these financial instruments is to raise finance for the Consolidated Entity’s operations.
The Consolidated Entity has various other financial instruments such as trade debtors and trade creditors, which
arise directly from its operations.
It is, and has been throughout the period under review, the Consolidated Entity’s policy that no trading in derivative
instruments shall be undertaken.
Fair values
The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial
statements approximates their fair values.
The following table details the fair value of financial assets and liabilities of the Consolidated Entity:
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables
Borrowings
Total financial liabilities
31 December 2013
31 December 2012
Carrying
amount
$
4,426,994
3,639,758
8,066,752
1,509,999
5,522,005
7,032,004
Fair
Value
$
4,426,994
3,639,758
8,066,752
1,509,999
5,522,005
7,032,004
Carrying
amount
$
1,834,894
1,802,176
3,637,070
2,083,334
4,158,486
6,241,820
Fair
Value
$
1,834,894
1,802,176
3,637,070
2,083,334
4,158,486
6,241,820
Net financial assets / (liabilities)
1,034,748
1,034,748
(2,604,750)
(2,604,750)
The main risks arising from the Consolidated Entity’s financial instruments are interest rate risk, liquidity risk,
foreign currency risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they
are summarised below.
Sensitivity analysis
In managing interest rate and currency risks, the Company endeavours to reduce the impact of short-term
fluctuations on the Company’s earnings. Over the longer term, however, permanent changes in foreign exchange
and interest rates will have an impact on consolidated earnings, although the extent of that impact will depend on
the level of cash resources held by the Consolidated Entity. A general increase of one percentage point in interest
rates would not be expected to materially impact earnings.
55
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont’d)
Interest rate risk
The Consolidated Entity’s exposure to market risk for changes in interest rates relates primarily to the Consolidated
Entity’s short term debt obligations.
Cash includes funds held in term deposits and cheque accounts during the year, which earned interest at rates
ranging between 0% and 2.35%, depending on account balances.
The following annual interest rates apply to the Consolidated Entity’s credit facilities:
Bank operating facility
7.8% variable
All other financial assets and liabilities are non-interest bearing.
At balance date, the Consolidated Entity had the following mix of financial assets and liabilities exposed to variable
interest rate risk that are not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
Financial liabilities
Bank operating facility
Net exposure
31 December 2013
$
31 December 2012
$
4,426,994
1,834,894
(5,522,005)
(1,095,011)
(4,158,486)
(2,323,592)
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date.
At 31 December, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
pre-tax profit and equity would have been affected as follows:
Judgements of reasonable possible movements:
31 December 2013
$
31 December 2012
$
+1% (100 basis points)
Pre-tax profit increase/(decrease)
Equity increase/(decrease)
-1% (100 basis points)
Pre-tax profit increase/(decrease)
Equity increase/(decrease)
Foreign currency risk
(10,950)
(10,950)
10,950
10,950
(23,236)
(23,236)
23,236
23,236
The Consolidated Entity is exposed to foreign currency on sales, purchases and borrowings that are denominated in
a currency other than Australian Dollars. The currency giving rise to this risk is primarily Euro dollars, US dollars
and Chinese RMB.
56
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont’d)
At balance date, the Consolidated Entity had the following exposure to Euro dollars, US dollars and Chinese RMB
foreign currency that is not designated in cash flow hedges:
31 December 2013
$
31 December 2012
$
Financial assets
Cash and cash equivalents (EUR)
Cash and cash equivalents (USD)
Cash and cash equivalents (GBP)
Cash and cash equivalents (RMB)
Trade and other receivables (EUR)
Trade and other receivables (USD)
Trade and other receivables (RMB)
Financial liabilities
Trade and other payables (EUR)
Trade and other payables (USD)
Trade and other payables (GBP)
Trade and other payables (RMB)
Borrowings (RMB)
Net exposure
34,781
567,188
18,754
1,621,449
2,242,172
272,055
30,168
2,932,528
3,234,751
(109,091)
(403,079)
(9,417)
(912,364)
(1,433,951)
(5,522,005)
(1,479,033)
21,095
43,395
-
1,727,335
1,791,825
203,687
43,753
1,149,003
1,396,443
(452,113)
(390,528)
-
(864,367)
(1,707,008)
(4,158,486)
(2,677,226)
The following sensitivity is based on the foreign currency risk exposures in existence at the reporting date.
At 31 December, had the Australian Dollar moved, as illustrated in the table below, with all other variables held
constant, equity would have been affected as follows:
Judgements of reasonable possible movements:
AUD/USD, AUD/EUR and AUD/RMB +20%
Equity increase/(decrease)
AUD/USD, AUD/EUR and AUD/RMB -20%
Equity increase/(decrease)
31 December 2013
$
31 December 2012
$
246,505
446,204
(295,806)
(535,445)
At this stage, the Consolidated Entity does not seek to hedge this exposure.
Credit risk
The credit risk on financial assets of the Consolidated Entity which have been recognised on the statement of
financial position is generally the carrying amount, net of any provision for impairment losses.
The Consolidated Entity continuously monitors credit risks arising from its trade receivables which are principally
with significant and reputable companies. It is the Consolidated Entity’s policy that credit verification procedures,
including assessment of credit ratings, financial position, past experience and industry reputation, are performed on
new customers that request credit terms. Risk limits are set for each customer and regularly monitored. Receivable
balances are monitored on an ongoing basis with the result that the Consolidated Entity’s exposure to bad debts is
not significant.
57
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (cont’d)
The total credit risk exposure of the Consolidated Entity could be considered to include the difference between the
carrying amount of the receivable and the realisable amount. At balance sheet date there were no significant
concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each
financial asset in the balance sheet. Details with respect to credit risk of trade and other receivables are provided in
Note 6.
Liquidity risk
Liquidity risk arises from the possibility that the Consolidated Entity might encounter difficulty in settling its debts
or otherwise meeting its obligations related to financial liabilities. The Consolidated Entity manages this risk through
the following mechanisms:
1.
2.
3.
4.
5.
preparing forward-looking cash flow analyses in relation to its operational, investing and financing activities;
monitoring undrawn credit facilities;
obtaining funding from a variety of sources;
maintaining a reputable credit profile; and
managing credit risk related to financial assets.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Financial liability and financial asset maturity analysis
Within 1 Year
1 to 5 Years
Over 5 Years
Total
31/12/2013 31/12/2012 31/12/2013 31/12/2012 31/12/2013 31/12/2012 31/12/2013 31/12/2012
Consolidated Group
$000
$000
$000
$000
$000
$000
$000
$000
Financial liabilities due for
payment
Bank operating facility and
loans
Trade and other payables
Total contractual outflows
Total expected outflows
5,522
4,158
1,510
7,032
7,032
2,083
6,241
6,241
Financial assets – cash flows
realisable
Cash and cash equivalents
Trade and other receivables
Total anticipated inflows
4,427
3,640
8,067
1,835
1,802
3,637
Net (outflow)/ inflow on
financial instruments
1,035
(2,604)
Financial assets pledged as collateral
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,522
4,158
1,510
7,032
7,032
2,083
6,241
6,241
4,427
3,640
8,067
1,835
1,802
3,637
1,035
(2,604)
There are no financial assets that have been pledged as security for debt and their realisation into cash is not
restricted.
58
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
18. COMMITMENTS AND CONTINGENT LIABILITES
Operating lease commitments
Future operating lease rentals not provided for in the financial
statements and payable:
Not later than one year
Later than one year but not later than five years
31 December 2013
$
31 December 2012
$
48,017
24,009
72,026
5,000
-
5,000
Contingent liabilities
The Company is currently a defendant in a proceeding brought against the Company by a former employee in
relation to the employee’s past employment. Having considered legal advice, the Directors believe that the claim can
be successfully defended, without any losses (including for costs) being incurred by the Company.
19. EARNINGS PER SHARE
The calculation of basic earnings per share at 31 December 2013 was based on the profit attributable to ordinary
shareholders at $404,460 (six months ended 31 December 2012: $1,275,581 loss) and a weighted average number of
ordinary shares outstanding during the year ended 31 December 2013 of 959,249,953 (31 December 2012: 751,746,826)
calculated as follows:
Issued ordinary shares at beginning of period
Effect of shares issued on 9 August 2012
Effect of shares issued on 27 September 2012
Effect of shares issued on 12 November 2012
Effect of shares issued on 30 August 2013
Effect of shares issued on 30 August 2013
Effect of shares issued on 11 October 2013
Effect of shares issued on 15 November 2013
Effect of shares issued on 15 November 2013
Effect of shares issued on 17 December 2013
Weighted average number of ordinary shares at 31 December
Year ended
31 Dec 2013
Number
6 months ended
31 Dec 2012
Number
896,087,712
-
-
-
25,479,452
679,452
12,254,047
23,997,509
669,589
82,192
959,249,953
720,938,456
1,430
14,221,323
16,585,617
-
-
-
-
-
-
751,746,826
The Company’s potential ordinary shares are not considered dilutive and accordingly the basic loss per share is the
same as the diluted loss per share.
59
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
20. CONTROLLED ENTITIES
Parent entity
Vmoto Limited
Controlled entities
Vmoto Australia Pty Ltd (formerly Capital Pacific Pty Ltd)
Vmoto International Limited
Vmoto E-Max International Limited
Nanjing Vmoto Co, Ltd
Nanjing Vmoto Manufacturing Co, Ltd
Nanjing Vmoto E-Max Electric Vehicles Development Co, Ltd
Vmoto Europe Operations S.L.
21. KEY MANAGEMENT PERSONNEL DISCLOSURES
Details of key management personnel
Country of
Incorporation
Entity
interest
31
December
2013
Entity
interest
31
December
2012
Australia
Australia
Hong Kong
Hong Kong
China
China
China
Spain
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(i) Directors
Mr Simon Farrell
Chairman (Non-Executive) – appointed 29 January 2013
Mr Charles Chen
Mr Ivan Teo
Managing Director (Executive) – appointed Executive Director 5 January 2007
and Managing Director 1 September 2011
Finance Director (Executive) – appointed Chief Financial Officer 17 June 2009
and Finance Director 29 January 2013
Mr Oliver Cairns
Director (Non-Executive) – appointed 1 September 2011
Mr Kaijian Chen
Director (Non-Executive) – appointed 1 September 2011
(ii) Executives
Mr Patrick Davin
President of Strategic Business Development – appointed 1 July 2012
Mr Michael Fulton
International Sales Manager – appointed 1 July 2010
Mr George Hou
General Manager – appointed 6 July 2012
Mr Zhengjie Wu
Vice General Manager - appointed 5 October 2009
60
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
21. KEY MANAGEMENT PERSONNEL DISCLOSURES (cont’d)
Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or payable to
each member of the Consolidated Entity’s key management personnel for the year ended 31 December 2013.
The totals of remuneration paid to key management personnel of the Company and the Consolidated Entity during
the period ended 31 December 2013 are as follows:
Year
ended
31 Dec 2013
$
6 months
ended
31 Dec 2012
$
Short-term employee benefits
Share-based payments
Total KMP compensation
692,181
56,188
748,369
348,569
77,307
425,876
Share holdings and transactions of key management personnel
The movement during the year ended 31 December 2013 in the number of ordinary shares held, directly, indirectly or
beneficially by each key management person, including their personally-related entities, is as follows:
Held at
1 Jan 2013
Held at
date of
appointment
Net change1
Granted as
remuneration
Received on
vest of
performance
rights
Held at
date of
resignation
Held at
31 Dec 2013
Directors
Mr S Farrell
Mr C Chen
Mr I Teo
Mr O Cairns
Mr K Chen
Executives
Mr P Davin
Mr M Fulton
Mr G Hou
Mr Z Wu
N/A
39,664,578
N/A
9,488,888
2,777,777
-
N/A
3,511,000
N/A
N/A
2,272,728
2,272,728
2,272,728
2,727,274
2,727,273
-
-
-
-
-
-
1,000,000
-
1,000,000
-
N/A
N/A
N/A
N/A
N/A
2,272,728
42,937,306
5,783,728
13,216,162
5,505,050
24,548,165
-
-
-
N/A
N/A
N/A
N/A
(9,227,272)
-
-
-
-
-
1,000,000
-
-
-
-
-
N/A 15,320,893
N/A
-
N/A
1,000,000
N/A
-
1.
*Net change represents the acquisition and disposal of shares on market and/or participation in the placement
undertaken by the Company.
61
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
21. KEY MANAGEMENT PERSONNEL DISCLOSURES (cont’d)
Option holdings of key management personnel
The movement during the year ended 31 December 2013 in the number of options over ordinary shares held,
directly, indirectly or beneficially by each key management person, including their personally-related entities, is as
follows:
Held at
1 Jan 2013
Held at
date of
appointment
Additions
Granted as
remuneration
Expired
Held at
date of
resignation
Held at
31 Dec 2013
Directors
Mr S Farrell
Mr C Chen
Mr I Teo
Mr O Cairns
Mr K Chen
Executives
Mr P Davin
Mr M Fulton
Mr G Hou
Mr Z Wu
N/A
13,221,526
N/A
8,141,527
2,777,777
-
N/A
2,425,000
N/A
N/A
-
2,100,000
1,500,000
800,000
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
-
-
10,000,000
-
-
-
-
-
-
-
3,141,527
-
N/A
N/A
N/A
N/A
N/A
10,000,000
13,221,526
2,425,000
5,000,000
2,777,777
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
-
2,100,000
1,500,000
800,000
The options held by Mr Simon Farrell will vest on 23 May 2014. The options held by other specified directors are
vested and exercisable.
Performance right holdings of key management personnel
The movement during the year ended 31 December 2013 in the number of performance rights held, directly,
indirectly or beneficially by each key management person, including their personally-related entities, is as follows:
Held at
1 Jan 2013
Held at
date of
appointment
Granted as
remuneration
Vested as
Shares
Forfeited
Held at
date of
resignation
Held at
31 Dec 2013
Directors
Mr S Farrell
Mr C Chen
Mr I Teo
Mr O Cairns
Mr K Chen
Executives
Mr P Davin
Mr M Fulton
Mr G Hou
Mr Z Wu
N/A
10,000,000
N/A
10,000,000
-
-
-
-
-
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
-
-
-
1,000,000
-
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
-
9,000,000
-
9,000,000
-
N/A
N/A
N/A
N/A
-
-
-
-
62
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
21. KEY MANAGEMENT PERSONNEL DISCLOSURES (cont’d)
Other Key Management Personnel Transactions
There have been no related party transactions involving any of the Key Management Personnel identified in the table
above during the year or the previous year.
22. RECONCILIATION OF CASH FLOWS FROM/ (USED IN)
OPERATING ACTIVITIES
Cash flows from operating activities
Profit/(Loss) for the year
Adjustments for:
- Depreciation and impairment
- Share based payment expenses
Operating loss before changes in working capital and provisions
1,048,168
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in other assets
(Decrease)/ increase in payables
Net cash (used in) operating activities
23. NON-DIRECTOR RELATED PARTIES
(1,837,582)
(2,030,159)
(1,855,979)
850,155
(3,825,397)
Year ended
31 December 2013
$
6 months ended
31 December 2012
$
404,460
(1,275,581)
484,112
159,596
254,360
27,724
(993,497)
(85,858)
(666,090)
34,554
(390,048)
(2,100,939)
Non-director related parties are the Company’s controlled entities. Details of the Company’s interest in controlled
entities are set out in Note 20. Details of dealings with these entities are set out below.
Transactions
The loans to controlled entities are unsecured, interest-free and of no fixed term. The loans are provided primarily
for capital purchases and working capital purposes.
Receivables
Aggregate amounts receivable from non-director related parties:
Non-current
Unsecured loans to controlled entities
Provision for non recovery
24. SUBSEQUENT EVENTS
Vesting of Performance Rights
Company
Year ended
31 Dec 2013
$
6 months
ended
31 Dec 2012
$
19,408,358
(19,408,358)
16,097,939
(16,097,939)
-
-
On 21 January 2014, the Company issued 1,000,000 fully paid ordinary shares to Mr Yiting Chen and 1,000,000 fully paid
ordinary shares to Mr Oliver Cairns as a result of vesting of Class D incentive performance rights as approved by
shareholders on 31 July 2012.
63
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( c o n t ’ d )
Exercise of Options
On 13 February 2014, the Company issued 40,400 fully paid ordinary shares following the exercise of 40,400 listed
options exercisable at $0.04 on or before 31 December 2014.
Apart from the above, there were no other significant events subsequent to year ended 31 December 2013 and prior to
the date of this report that have not been dealt with elsewhere in this report.
25. PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Accumulated losses
Reserves
Share based payment premium reserve
Total equity
Financial performance
Loss for the period
Other comprehensive income
Total comprehensive income
31 Dec 2013
31 Dec 2012
$
2,678,947
9,192,186
11,871,133
85,466
-
85,466
$
453,934
6,101,189
6,555,123
320,325
-
320,325
57,725,955
(46,007,404)
51,060,622
(45,126,871)
238,048
11,956,599
Year
ended
31 Dec 2013
$
880,533
-
880,533
301,047
6,234,798
6 months
ended
31 Dec 2012
$
383,066
-
383,066
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity has not entered into any guarantees in relation to the debts of its subsidiaries during the year ended
31 December 2013.
Commitments for the acquisition of property, plant and equipment by the parent entity
The parent entity has no commitments for any acquisition of property, plant and equipment.
26. Fair Value Measurement
In accordance with AASB 13, Fair Value Measurement, the group is required to disclose for each class of assets and
liabilities measured at fair value, the level of the fair value hierarchy within which the fair value method is
categorised. The group view that no assets or liabilities are measured at fair value, other than cash, trade and other
receivables, trade and other payables and borrowings with carrying amounts assumed to approximate their fair value.
64
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
D I R E C T O R S ’ D E C L A R A T I O N
In the opinion of the Directors of Vmoto Limited:
(a) the financial statements and notes, set out on pages 30 to 64, are in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the financial position of the Consolidated Entity as at 31 December 2013
and their performance, as represented by the results of their operations and their cash flows, for the
year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) the attached financial statements also comply with International Financial Reporting Standards, as stated in Note 1
to the financial statements; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Managing Director and the Finance Director for the year ended 31 December 2013.
Signed in accordance with a resolution of the Directors:
Yiting (Charles) Chen
Managing Director
Dated at China, Western Australia this 28th day of March 2014.
65
To The Board of Directors
As lead audit director for the audit of the financial statements of Vmoto Ltd for the
financial year ended 31 December 2013, I declare that to the best of my knowledge and
belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
DATED at PERTH this 28th day of March 2014
We have audited the accompanying financial report of Vmoto Ltd (“the Company”) and
Controlled Entities (“the Consolidated Entity”), which comprises the consolidated
statement of financial position as at 31 December 2013, and the consolidated statement
of profit or loss and other comprehensive income, consolidated statement of changes in
equity and consolidated statement of cash flows for the year then ended, notes
comprising a summary of significant accounting policies and other explanatory
information, and the directors’ declaration of the Consolidated Entity, comprising the
Company and the entities it controlled at the year’s end or from time to time during the
financial year.
The directors of the Company are responsible for the preparation and fair presentation of
the financial report 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 is free from material
misstatement, whether due to fraud or error. In Note 1, the directors also state, in
accordance with Accounting Standards AASB 101: Presentation of Financial Statements,
that the financial statements comply with International Financial Reporting Standards.
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. These Auditing
Standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance whether
the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial report 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 entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
In conducting our audit, we followed applicable independence requirements of Australian professional ethical
pronouncements and the Corporations Act 2001.
In our opinion:
a. The financial report of Vmoto Ltd and Controlled Entities is in accordance with the Corporations Act 2001,
including:
i.
giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2013 and
of its performance for the year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001;
b. The financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
We have audited the Remuneration Report included in directors’ report of the year ended 31 December 2013.
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.
In our opinion, the Remuneration Report of Vmoto Ltd for the year ended 31 December 2013, complies with
section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
DATED at PERTH this 28th day of March 2014
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
A D D I T I O N A L S H A R E H O L D E R I N F O R M A T I O N
The following information is current as at 14 March 2014:
Voting Rights
The voting rights attaching to ordinary shares are:
On a show of hands every member present in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
Options and Performance Rights do not carry any voting rights.
Substantial Shareholders
The number of shares held by substantial shareholders and their associates who have provided the Company with
substantial shareholder notices are set out below:
Name of Substantial Shareholder
Mr Bing Wu
Mr Yiting (Charles) Chen
Huimin Zhou
Date Notice provided to the Company
20 August 2012
20 August 2012
28 August 2012
Number of Shares
37,664,114
35,873,052
38,582,316
Number of Options
12,554,705
2,000,000
12,860,771
On-Market Buy Back
There is no current on-market buy back.
Distribution Schedules
Distribution schedules for each class of security as at 14 March 2014 are set out below. Where a person holds 20% or
more of the securities in an unquoted class, the name of that holder and number of securities is also provided.
Fully paid ordinary shares
Range
1
1,001
5,001
10,001
100,001
Total
Holders
Units
%
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
11,936
44
410,350
102
2,076,063
238
1,762
83,226,095
1,197 1,137,512,760
0.00
0.03
0.17
6.81
92.99
3,343 1,223,237,204 100.00
Listed options exercisable at $0.04 each expiring 31 December 2014
\
Range
1
1,001
5,001
10,001
100,001
Total
Holders
Units
%
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
0
0
230,227
66
314,694
39
132
5,180,417
102 140,126,492
0
0.16
0.22
3.55
96.07
339 145,851,830 100.00
69
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
Class E unlisted options exercisable at $0.04 each, expiring 23 May 2018
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
11
-
-
-
-
-
-
-
-
5,000,000 100.00
1
5,000,000 100.00
¹ Newcove International Inc holds 5,000,000 options comprising 100.0% of this class.
Class F unlisted options exercisable at $0.08 each, expiring 23 May 2018
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
11
-
-
-
-
-
-
-
-
5,000,000 100.00
1
5,000,000 100.00
¹ Newcove International Inc holds 5,000,000 options comprising 100.0% of this class.
ESOP options exercisable at $0.025 each, expiring 1 September 2014
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
11
-
-
-
-
-
-
-
-
8,500,000 100.00
11
8,500,000 100.00
ESOP options exercisable at $0.03 each, expiring 23 November 2015
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
-
-
-
-
17 11,500,000 100.00
-
-
-
-
17 11,500,000 100.00
Class B Incentive Performance Rights, subject to vesting criteria, expiring 17 December 2014
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
2
2
-
-
-
-
-
-
-
-
2,000,000 100.00
2,000,000 100.00
70
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
¹ 1,000,000 Performance Rights held by each of Silverlight Holdings Pty Ltd and Mr Yiting
(Charles) Chen, comprising 50.00% each.
Class C Incentive Performance Rights, subject to vesting criteria, expiring 17 December 2015
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
2
2
-
-
-
-
-
-
-
-
2,000,000 100.00
2,000,000 100.00
¹ 1,000,000 Performance Rights held by each of Silverlight Holdings Pty Ltd and Mr Yiting
(Charles) Chen, comprising 50.00% each.
Class E Incentive Performance Rights, subject to vesting criteria, expiring 21 January 2015
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
2
2
-
-
-
-
-
-
-
-
2,000,000 100.00
2,000,000 100.00
¹ 1,000,000 Performance Rights held by each of Silverlight Holdings Pty Ltd and Mr Yiting
(Charles) Chen, comprising 50.00% each.
Class F Incentive Performance Rights, subject to vesting criteria, expiring 21 January 2016
Range
1
1,001
5,001
10,001
100,001
Total
-
1,000
-
5,000
10,000
-
- 100,000
Over
-
Holders Units
%
-
-
-
-
2
2
-
-
-
-
-
-
-
-
2,000,000 100.00
2,000,000 100.00
¹ 1,000,000 Performance Rights held by each of Silverlight Holdings Pty Ltd and Mr Yiting
(Charles) Chen, comprising 50.00% each.
Class G Incentive Performance Rights, subject to vesting criteria, expiring 31 December 2015
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
2
2
-
-
-
-
-
-
-
-
2,666,666 100.00
2,666,666 100.00
¹ 1,333,333 Performance Rights held by each of Silverlight Holdings Pty Ltd and Mr Yiting
(Charles) Chen, comprising 50.00% each.
71
Class G Incentive Performance Rights, subject to vesting criteria, expiring 31 December 2015
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
2
2
-
-
-
-
-
-
-
-
2,666,666 100.00
2,666,666 100.00
¹ 1,333,333 Performance Rights held by each of Silverlight Holdings Pty Ltd and Mr Yiting
(Charles) Chen, comprising 50.00% each.
Class I Incentive Performance Rights, subject to vesting criteria, expiring 31 December 2015
Range
1
1,001
5,001
10,001
100,001
Total
1,000
-
5,000
-
-
10,000
- 100,000
Over
-
Holders Units
%
-
-
-
-
2
2
-
-
-
-
-
-
-
-
2,666,668 100.00
2,666,668 100.00
¹ 1,333,334 Performance Rights held by each of Silverlight Holdings Pty Ltd and Mr Yiting
(Charles) Chen, comprising 50.00% each.
Unmarketable Parcels
Holdings of less than a marketable parcel of ordinary shares (being 38,462 shares as at 14 March 2014):
Holders
Units
180
2,217,269
72
V M O T O L I M I T E D
A B N 3 6 0 9 8 4 5 5 4 6 0
Top Holders
The 20 largest registered holders of quoted securities as at 14 March 2014 were:
Fully paid ordinary shares
Name
No. Shares %
1
2
COMPUTERSHARE CLEARING PTY LTD
PERSHING AUSTRALIA NOMINEES PTY LTD
MR BING WU
PALIR PTY LTD
MR BRENDAN DAVID GORE
MR THOMAS JOSEPH FALVEY
MR YI CHEN
MR ER CHUAN ZHOU
MR PATRICK DENNIS DAVIN
3
4
5
6
7
8
9
10 MR YAO TIEMING
11
12
13
14
15
16
17 MR IAN KENNETH EDLIN & MRS NILA LEA EDLIN
18
NATIONAL NOMINEES LIMITED
SILVERLIGHT HOLDINGS PTY LTD
YANG PTY LTD
CAMBRIAN HOLDINGS PTY LTD
UBS NOMINEES PTY LTD
FITEL NOMINEES LIMITED
CRISEREN INVESTMENTS LIMITED
EDLINS PROSPERITY PLUS PTY LTD
COVERDOVE PTY LTD
19
20
144,093,625
11.78
82,519,622
43,200,478
31,000,000
26,200,000
24,375,391
23,369,911
15,274,150
13,320,893
13,143,200
12,581,471
11,363,637
11,000,000
10,306,110
10,000,000
9,044,536
8,000,000
7,874,016
7,650,000
6.75
3.53
2.53
2.14
1.99
1.91
1.25
1.09
1.07
1.03
0.93
0.90
0.84
0.82
0.74
0.65
0.64
0.63
7,409,009
511,726,049
0.61
41.83
Listed options exercisable at $0.04 each, expiring 31 December 2014
Name
No. Options
%
FISKE NOMINEES LTD
1 PERSHING AUSTRALIA NOMINEES PTY LTD
2
3 PALIR PTY LTD
4 MR YI CHEN
5 MR BING WU
6 MR BRENDAN DAVID GORE
SILVERLIGHT HOLDINGS PTY LTD
7
8
FINNCAP LTD
9 KAIJIAN CHEN
10 MR BENN ALEXANDER SPIERS
11 FIRST AVENUE ENTERPRISES PTY LTD
12 MAGALLANES CAPITAL LIMITED
13 MR GREGORY NEVILLE ARNOLD
14
MRS BARBARA SCHRODER & MR
JASON WILLIAM SCHRODER
15 SHANDORA ONE PTY LTD
16 MR GREGORY NEVILLE ARNOLD
17 MR IAN KENNETH EDLIN & MRS NILA LEA EDLIN
18 SHIELA INVESTMENTS PTY LTD
19 ACTION RENTALS PTY LTD
20 SENTABOOL PTY LTD
26,082,297
16,666,667
14,500,000
13,994,911
12,554,705
6,000,000
5,000,000
3,725,385
2,777,777
2,500,000
2,132,915
1,700,000
1,488,000
1,470,000
1,055,000
1,012,000
1,000,000
1,000,000
850,000
825,000
116,334,657
17.88
11.43
9.94
9.60
8.61
4.11
3.43
2.55
1.90
1.71
1.46
1.17
1.02
1.01
0.72
0.69
0.69
0.69
0.58
0.57
79.76
73