Zicom Group Limited
ABN 62 009 816 871 • ASX Code : ZGL
Transiting An
InflectIon Point
A N N U A L R E P O R T 2 0 1 3
chaIrman’s message
Transiting An
InflectIon Point
Dear Shareholders,
The global economic climate continues to be uncertain
although the USA economy has been showing signs of
sustained recovery. Confidence in the Asia Pacific region
has been dampened by the restructuring in the Chinese
economy, continuing Euro-Zone’s inertia, India’s burgeoning
account deficit compounded by political uncertainties and
Australia’s resource slump. These have invariably impacted
against the Group’s businesses. Thanks to our diversified
revenue base and the Group’s ventures that have been
judiciously and prudently carried out, your directors are
confident that notwithstanding temporary pull backs, the
Group is confident of a sustainable growth momentum in
the years to come.
ReSultS
The Group’s consolidated revenue for the financial year just
ended on 30 June 2013 dropped by 8.3% from S$130.65m
in the previous year to S$119.85m. The Group’s consolidated
profits after tax for the full year dropped by 11.6% from
S$7.84m in the previous year to S$6.93m.
Notwithstanding the results, the Group’s total cash balances
remain strong at S$21.36m and its on-going prospects
remain robust. For this reason the Group has decided to
maintain its rate of dividends payable to shareholders.
an inFleCtion Point
Your directors have continuously reviewed the Group’s
performance since its reverse-takeover in 2006. The Group
has consistently maintained a healthy profit level giving a
return on equity that ranges from 8.1% to 19.5 % from 2009
to 2013 successfully traversing the global financial crisis in
2007-2009.
RetuRn on equity
19.3%
19.5%
16.4%
9.7%
8.1%
20%
15%
10%
5%
0%
FY09
FY10
FY11
FY12
FY13
However, your directors recognize that the Group is at an
inflection point.
Group’s total revenue for the 5 years to 2013 show an
average negative compound annual growth rate (CAGR) of
3%. The precision engineering segment however shows a
positive CAGR of 46%.
Segmental Revenue
Industrial and Mobile Equipment
Construction
Total Revenue
Precision Engineering and Automation
Offshore Marine, Oil and Gas
StRengtHening CoRe BuSineSSeS
• Focused Innovation
• Product Development
• Productivity Improvements
• Leadership Developments
• New Market Penetration
FoRay into teCHnologieS
• Establishing an Innovative Culture
• Building Total Technical Capability
• Strategic Alliances
•
Integrated Platform
• Early Stage Funding Opportunities
The Group first initiated steps to transit this inflection point
3 years ago. It invested in technologies as a new driver for
sustainable growth while at the same time maintained its
focus on innovation and product development, productivity
improvements and new market penetration for its on-going
core businesses. Existing core businesses are the back-
bone of the Group with their recurrent revenue and cash
flow. As such the Group continuously focuses on innovative
improvements to maintain their growth. However challenges
in such businesses are well entrenched and innovation
space limited. Innovation and technologies will be the main
drivers of growth globally. The Group embarked on limited
investments in disruptive technologies 3 years ago, utilizing
its strong cash position, without external borrowing.
CommeRCialiSation oF teCHnology
inveStmentS
The three technology investments which the Group has
embarked on have now reached a stage of commercialisation
into the global market. Collectively these technology
investments are expected to be able to make a positive
contribution to the Group’s profits in the coming financial
year.
CReating an integRateD PlatFoRm
In recognition of our success in bringing these disruptive
technologies to a commercial stage, our wholly owned
precision engineering subsidiary Sys-Mac Engineering &
Automation Pte Ltd (Sys-Mac) was awarded the status of a
medical technology “private sector translator” by a Singapore
government agency responsible for developing enterprises
with a cash grant of S$4.5m. The grant enables the Group
to set up a first of its kind commercial entity in Singapore,
focused on translating medical technology intellectual
properties into tangible medical devices for various research
institutions, universities, hospitals and technology spin-off
companies. A Research Cooperation Agreement with one of
Singapore largest health clusters to undertake joint research
and development of clinically-driven inventions using our
platform is being finalized. This cooperation also facilitates
the Group’s customers access to clinical trials to bridge an
existing gap in the local medtech eco-system.
This has resulted in an integrated platform for the growth
of medtech being established, generating new capabilities
which the Group can market to the medtech sector.
The Group is also positioned upfront to identify early
stage new technologies possessing good potentials for
seed investments. The integrated activities of precision
engineering and
technologies will be designated as
“Precision Engineering & Technologies” segment.
Growth momentum for the Group’s new technologies will
accelerate as the Group’s integrated technology platform
strengthens.
confident that growth rate in this cluster can be maintained.
Notwithstanding that the Group’s existing core businesses
suffered an average negative CAGR of 3% in the last 5 years,
we are confident that the coming years will see positive
growth rates. Business prospects remain robust while the
Group continues to focus on development and productivity
enhancements.
innovative CultuRe
Skills in research and development in disruptive technologies
help to enhance the culture of innovation that is permeating
the Group’s entire spectrum. Cross fertilization of skills in
the Group will be facilitated to strengthen the entire Group’s
capability.
enHanCing SHaReHolDeRS’ value
The Group has shown great resilience and has been
consistently profitable in the last 5 years giving a respectable
return on equity from 8.1% to 19.5%. However its share
value has performed below its NTA of S$0.35 (A$0.30)
per share in the last 12 months. With its various growth
strategies gaining traction, your directors are confident that
shareholders’ value will be accordingly enhanced.
yeaR CHaRt
(ZGL)
0.280
0.260
0.240
0.220
0.200
0.180
2012
2013
www.netquote.com.au
aPPReCiation
I take this opportunity to thank the Board for their guidance
and support in setting the growth directions for the Group
and to convey my appreciation to the management and all
employees for their entrepreneurship, diligence and strong
commitment, without which the Group would not have
achieved its continuous success. I would also like to thank
our shareholders for their continuous support.
Continuing gRowtH SeCtoRS
The precision engineering segment has achieved an average
CAGR of 46% in the last 5 years. With the commercialisation
of the new medtech start-ups gaining momentum, we are
g l Sim
Chairman
1
2013 ANNUAL REPORT DIrectors anD company secretarIes
Executive Directors
Alternate Director
giok lak Sim, FCPA
Chairman and Group Managing Director,
Age 67
kok Hwee Sim, BSc, MSc
Executive Director, Age 35
kok yew Sim, BSc
Alternate Director to Mr Kok Hwee Sim,
Age 33
Experience and Expertise
Appointed to the Board on 5 April 1995.
Chairman and Managing Director of
Zicom Group Limited and Executive
Chairman of all its subsidiaries.
Experienced in public accounting,
corporate development, financial and
industrial management as well as
international trade.
Singapore Ernst & Young Entrepreneur
of the Year (Industrial Products), 2008.
Member of the Human Capital
Advisory Committee of SPRING,
Singapore.
Member of the Entrepreneurship
Review Committee 2013
Other current directorships and
former directorships in last 3 years
None
Special responsibilities
Member of Nomination and
Remuneration Committee
Experience and expertise
Appointed to the Board on 21
November 2007. As Executive Director
of the Group, his responsibilities
include human resource development,
business process improvements,
restructuring and acquisitions and
treasury management. On 1 September
2013, Mr Sim was appointed Managing
Director of iPtec Pte Ltd, a wholly
owned subsidiary, principally engaged in
medical technology translation services.
Mr Sim graduated with a Bachelors
degree in Industrial Engineering and
Operations Research from the University
of Michigan with Honours (Magna
Cum Laude) and a Masters degree in
Financial Engineering from Columbia
University, New York. Mr Kok Hwee
Sim is the eldest son of the Chairman
and Managing Director, Mr G L Sim and
director of substantial shareholder, SNS
Holdings Pte Ltd.
Other current directorships and
former directorships in last 3 years
Executive Chairman of all subsidiaries
Chairman of Curiox Biosystems Pte Ltd
None
Special responsibilities
Executive Director of Zicom Holdings
Pte Ltd and Director of its subsidiaries
Director of Curiox Biosystems Pte Ltd
Managing Director of iPtec Pte Ltd
Experience and expertise
Appointed as Alternate Director to
Mr Kok Hwee Sim on 5 July 2010.
Mr Sim is the Chief Executive Officer
of Sys-Mac Automation Engineering
Pte Ltd (Sys-Mac) and is responsible for
Sys-Mac’s growth strategies, overall
administration and management of
its business and operations. Mr Sim
graduated with a Bachelors degree in
Electrical and Electronics Engineering
from the University of Michigan with
Honours (Summa Cum Laude). He is
the second son of the Chairman and
Managing Director, Mr G L Sim and
director of substantial shareholder, SNS
Holdings Pte Ltd.
Other current directorships and former
directorships in last 3 years
None
Special responsibilities
Alternate Director to Mr Kok Hwee Sim
in Zicom Holdings Pte Ltd
Director of Sys-Mac Automation
Engineering Pte Ltd and its subsidiaries
Director of Biobot Surgical Pte Ltd
Relevant interests in shares and
options as at date of signing the
Directors’ Report
77,474,368 ordinary shares
Relevant interests in shares and
options as at date of signing the
Directors’ Report
Relevant interests in shares and
options as at date of signing the
Directors’ Report
1,258,180 ordinary shares and 280,000
options
1,070,253 ordinary shares and 280,000
options
2
Zicom Group Limited Independent Directors
From left to right: Frank Leong Yee Yew, Yian Poh Lim, Shaw Pao Sze, Ian Robert Millard
FRank leong yee yew,
MBA, FCA (ENGLAND &
WALES), FCA (SINGAPORE)
Independent Director, Age 70
Experience and expertise
Appointed to the Board on
24 July 2006. Extensive
experience in auditing,
financial management and
corporate secretarial work,
having practised as a partner
in an audit firm and worked
as a company secretary,
finance manager and financial
controller in a leading property
development company and
involved in acquisitions and
major developments.
Other current directorships
and former directorships in
last 3 years
Independent Director of TTJ
Holdings Limited (appointed
11 January 2010)
Special responsibilities
Member of Nomination and
Remuneration Committee
Member of Audit Committee
Non-executive Director of
Zicom Holdings Pte Ltd
Relevant interests in shares
and options as at date
of signing the Directors’
Report
524,364 ordinary shares
yian PoH lim, BSc, MSc
Independent Director, Age 67
SHaw Pao Sze
Independent Director, Age 69
Experience and expertise
Experience and expertise
Appointed to the Board on
19 February 2010. Mr Shaw
Pao Sze holds a Master
Foreign-Going Certificate
of Competency and has
extensive experiences in
maritime industry from
managing liner and ship
chartering services, corporate
planning in one of the world’s
largest shipping lines and
consultancy services for
transport engineering, maritime
and logistics planning for
infrastructure projects.
Other current directorships
and former directorships in
last 3 years
Synergy Metals Ltd (Australia)
(appointed 15 October 2010)
Special responsibilities
None
Relevant interests in shares
and options as at date
of signing the Directors’
Report
30,000 options
Appointed to the Board on 24
July 2006. Yian Poh Lim has
more than 20 years of extensive
experience in the banking and
finance industry. In 1993, he
set up Yian Poh Associates,
a financial consultancy and
investment firm. He has been an
Honorary Commercial Advisor to
The Administrative Committee of
Jiaxing Economic Development
Zone, China since 2000. He is
also a member of the advisory
panel of the Singapore Food
Manufacturer’s Association.
Other current directorships
and former directorships in
last 3 years
Independent Director of Casa
Holdings Limited (appointed
4 November 2008)
Independent Director of TTJ
Holdings Limited (appointed
5 July 1996)
Special responsibilities
Chairman of Nomination and
Remuneration Committee
Member of Audit Committee
Non-executive Director of
Zicom Holdings Pte Ltd
Relevant interests in shares
and options as at date
of signing the Directors’
Report
488,000 ordinary shares
ian RoBeRt millaRD,
FCA, FAICD
Independent Director, Age 74
Experience and expertise
Appointed to the Board
on 23 November 2006.
Extensive experience in public
accounting and corporate
secretarial work. Fellow of
the Institute of Chartered
Accountants with 30 years as
a partner in major accounting
firms in Queensland and
a Fellow of the Australian
Institute of Company Directors.
Other current directorships
and former directorships in
last 3 years
None
Special responsibilities
Chairman of Audit Committee
Relevant interests in shares
and options as at date
of signing the Directors’
Report
592,250 ordinary shares
3
2013 ANNUAL REPORT Company Secretaries
From left to right: Surendra Kumar, Lim Bee Chun, Jenny
SuRenDRa kumaR, CPA
Joint Company Secretary, Age 53
lim Bee CHun, Jenny, FCCA
Joint Company Secretary, Age 40
Experience and expertise
Mr Kumar is the Finance Manager of
Cesco Australia Limited and holds a
Bachelors degree in Commerce from
Auckland University and is a Certified
Practicing Accountant. He has had 30
years of experiences in auditing, industrial
and management accounting prior to
joining the Group in 2008.
Other current directorships and
former directorships in last 3 years
None
Special responsibilities
Director of Cesco Equipment Pty Limited
Company Secretary of Cesco Australia
Limited and Cesco Equipment Pty Limited
Relevant interests in shares and
options as at date of signing the
Directors’ Report
15,000 ordinary shares and 120,000
options
Experience and expertise
Ms Jenny Lim has been the Group’s
Financial Controller since 2005. She is
a qualified accountant and a Fellow of
the Association of Chartered Certified
Accountants from the United Kingdom
since 1998. Ms Lim has over 10 years of
audit and tax experience in an international
public accounting firm prior to joining the
Group.
Other current directorships and
former directorships in last 3 years
None
Special responsibilities
Director of Zicom Pte Ltd
Joint Company Secretary of all subsidiaries
in Singapore except for MTA-Sysmac
Automation Pte Ltd
Joint Company Secretary of Curiox
Biosystems Pte Ltd
Relevant interests in shares and
options as at date of signing the
Directors’ Report
664,563 ordinary shares and 280,000
options
4
Zicom Group Limited corporate chart
ziCom gRouP
limiteD
ZIcom holdIngs pte ltd
Singapore 100%
Investment Holding
cesco australIa ltd
Australia 100%
Concrete Mixers
hangZhou cesco machInery
co ltd
China 100%
Concrete Mixers
ZIcom cesco engIneerIng
co ltd
Thailand 100%
Concrete Mixers
cesco equIpment pty ltd
Australia 100%
Engineered Products
ZIcom cesco thaI co ltd
Thailand 100%
Dormant
Investment holdIng
company
constructIon equIpment
offshore marIne,
oIl & gas machInery
precIsIon engIneerIng &
automatIon
ZIcom thaI hydraulIcs
co ltd
Thailand 100%
Hydraulics Systems
fa geotech equIpment
sdn Bhd
Malaysia 100%
Foundation Equipment
foundatIon assocIates
engIneerIng pte ltd
Singapore 100%
Foundation Equipment
ZIcom pte ltd
Singapore 100%
Marine Deck Machinery
ZIcom equIpment pte ltd
Singapore 100%
Oils & Gas Equipment
pt sys-mac IndonesIa
Indonesia 100%
Precision Engineering
sys-mac automatIon
engIneerIng pte ltd
Singapore 100%
Precision Engineering & Automation
mta-sysmac automatIon
pte ltd
Singapore 61%
Automation
orIon systems IntegratIon
pte ltd
Singapore 84%
Semi-Conductor Equipment
Integrated automatIon
systems pte ltd
Singapore 100%
Automation
BIoBot surgIcal pte ltd
Singapore 92%
Medical Device
assocIated company
Curiox Biosystems Pte Ltd
saedge vIsIon solutIons
pte ltd
Singapore 100%
Optic & Vision System Engineering
Iptec pte ltd
Singapore 100%
Medical Technology Translation
Services
5
2013 ANNUAL REPORT Malaysia
Fa geoteCH equiPment SDn BHD
managing DiReCtoR
Peck Hua Ng
exeCutive DiReCtoR
Teck Meng Liew
Australia
CeSCo auStRalia limiteD
managing DiReCtoR
Gary Webster
CeSCo equiPment Pty ltD
managing DiReCtoR
Gary Webster
exeCutive DiReCtoRS
Surendra Kumar
Rick Pearce
Kenny Teh
Thailand
ziCom CeSCo engineeRing Co ltD
managing DiReCtoR
Sammy Ng Siong Teck
exeCutive DiReCtoR
Saowaluke Phongchok
ziCom tHai HyDRauliCS Co ltD
managing DiReCtoR
Sammy Ng Siong Teck
exeCutive DiReCtoR
Saowaluke Phongchok
Indonesia
Pt SyS-maC inDoneSia
managing DiReCtoR
Juat Koon Sim
exeCutive DiReCtoRS
Kok Yew Sim
David Loh Chin Woon
Boon Chye Seah
China
HangzHou CeSCo maCHineRy Co ltD
managing DiReCtoR
Chin Ming Tan
Key management
Singapore
ziCom PRivate limiteD
Joint managing DiReCtoRS
Juat Lim Sim
Hung Seah Tang
exeCutive DiReCtoRS
Kok Hwee Sim
Juat Khiang Sim
Hong Jun Zhang
Jenny Lim Bee Chun
ziCom equiPment Pte ltD
managing DiReCtoR
Rashed Choudhury
exeCutive DiReCtoR
Khwaza Md Rezwanul
FounDation aSSoCiateS engineeRing Pte ltD
managing DiReCtoR
Jimmy Teoh Guan Hooi
exeCutive DiReCtoR
Peck Hua Ng
SyS-maC automation engineeRing Pte ltD
managing DiReCtoR
Juat Koon Sim
exeCutive DiReCtoRS
Kok Yew Sim - CEO
David Loh Chin Woon
Tony Low Boon Koon
mta-SySmaC automation Pte ltD
managing DiReCtoR
Juat Koon Sim
exeCutive DiReCtoRS
Kok Yew Sim - CEO
Tony Low Boon Koon
Bobby Owen Archer
Bryan Raymond Root
SaeDge viSion SolutionS Pte ltD
exeCutive DiReCtoRS
Kok Yew Sim - CEO
Bing Chiang Wong
oRion SyStemS integRation Pte ltD
exeCutive DiReCtoRS
Amlan Sen
Chin Guan Khaw
Siew Sarn Lau
iPteC Pte ltD
managing DiReCtoR
Kok Hwee Sim
exeCutive DiReCtoRS
Kok Yew Sim
Gary Lee Kim Hin
BioBot SuRgiCal Pte ltD
exeCutive DiReCtoR
Chew Loong Yap
6
Zicom Group Limited DIrectors’ report 2013
Your directors present their report on the consolidated accounts of Zicom Group Limited for the year ended 30 June 2013.
Directors
The following persons were directors of Zicom Group Limited during the financial year and up to the date of this report. Directors
were in office for this entire period.
Mr. G L Sim
Mr. K H Sim
Mr. Y P Lim
Mr. F Leong
Mr. I R Millard
Mr. S P Sze
Mr. K Y Sim
(Chairman and Managing Director)
(Executive Director)
(Independent)
(Independent)
(Independent)
(Independent)
(Alternate director to K H Sim)
Principal Activities
The Group’s principal activities comprise the manufacturing of deck machinery, offshore structures, fluid metering stations, process
plants, foundation equipment and concrete mixers, precision engineered machinery and services to the offshore marine, oil and gas,
construction, electronics, biomedical and agriculture industries.
Consolidated Results
The Group recorded the following consolidated results during the year as compared with those of previous year:-
key Financials
Revenue
Net profits after tax (NPAT)
Change (%)
year ended 30 June 13
(S$ million)
year ended 30 June 12
(S$ million)
- 8.3
- 11.6
119.85
6.93
130.65
7.84
The Group’s cash balances remain strong. As at 30 June 2013, the group’s total cash and bank balances were S$21.36m as
compared with S$24.45m as at 30 June 2012.
Dividends
The Group has decided to pay a final dividend of Australian cents 0.55 per share (2012: Australian cents 0.55) making the full year
dividends to 1 Australian cent per share. The final dividend will be fully paid out of Conduit Foreign Income under the provisions of
the Australian Income Tax Act. Accordingly, withholding tax will not apply to non-Australian residents.
The record date for the final dividend will be 15 November 2013 and the payment date is 29 November 2013.
Review of Operations
The Group’s consolidated revenue for the full year is S$119.85m as compared with S$130.65m in the previous year, a decrease of
8.3%. The Group’s full year net consolidated profits after tax attributable to members to 30 June 2013 are S$6.93m as compared
with S$7.84m in the previous year, a decrease of 11.6%.
The net profit margin achieved for the full year is 5.8% as compared with 6.1% in the previous year. The 0.3% decrease is mainly
attributable to unrealised mark-to-market exchange losses and the extended gestation costs of the start-up investments.
Earnings per share dropped from Singapore 3.69 cents to 3.24 cents per share, a decrease of Singapore 0.45 cents.
Net tangible assets per share increased from Singapore 34.22 cents to 35.05 cents per share.
Return on equity, based on average of the opening and closing equity, for the year was 8.1% as compared to 9.7% in the previous year.
The average rates for currency translation for revenue and expenses are A$1 to S$1.2664 (2012: S$1.3031) and for balance sheet
items A$1 to S$1.1699 (2012: S$1.2917).
7
2013 ANNUAL REPORT
DIrectors’ report 2013
The results for the full year have been impacted by unrealised mark-to-market exchange losses on hedging instruments, delayed
shipments in 2 significant orders of construction equipment at the end of the financial year, delay in order confirmation in our oil and
gas projects and losses from extended gestation of our various technology investments.
The Group’s businesses are expected to continue to be resilient in the midst of structural changes in the global economies. China,
under a new leadership, has been focusing to improve the efficiency of its economy starting with restructuring its banking systems.
This has resulted in tightening of money supply and highly geared inefficient enterprises are expected to fall or be merged and
development is expected to slow down. The Indian economy likewise has been slowing down. The impact against resource-based
economies such as Australia is being felt. The European Union’s economy is expected to remain flat and possibly weaken further.
The USA and Japanese economies appear to show recovery and recent economic data show that the Chinese economy appears
to be on the mend. However, the general global recovery remains fragile.
At an Inflection Point
Although the Group’s core businesses are built on strong foundation, your Board has recognized that the Group has reached an
inflection point. Group’s annual revenue in the last 5 years from 2009 to 2013 show an average negative compound annual growth
rate (CAGR) of 3%. The precision engineering segment, however, shows a positive CAGR of 46%.
To transit this inflection point, 3 years ago, the Group commenced to invest in new disruptive technologies focused on medical and
semi-conductor technologies that the Group can contribute synergistic support in engineering and manufacturing in our precision
engineering segment. The start-ups which the Group has invested have commenced commercialisation and are expected to
generate revenue in 2014.
The Group will strategise its revenue into 2 main streams viz. heavy equipment and precision engineering and technologies. The
heavy equipment stream will comprise the marine offshore and oil and gas, construction equipment and hydraulic services. The
precision engineering and technologies stream will comprise precision engineering, automation and investments in new technologies.
The main drivers to strengthen and grow the heavy equipment stream will be focused innovation and product development,
productivity improvements, leadership development and market expansion. The main drivers to grow the precision engineering and
technologies stream are the expansion and strengthening of the existing infrastructure with a strong pool of specialist engineers and
managers. This will strengthen our expertise in supporting the growth of our existing investments in technologies and to embrace
new technologies that are synergistic and possessing strong potentials that may or may not necessarily integrate into our core
activities. Towards this direction, the Group has been fortuitous in being awarded “private sector translator” status by a government
agency in charge of enterprise development in Singapore with a cash grant of up to S$4.5m. The grant is to assist the Group to set
up a business, the first of its kind in Singapore, to be run as a commercial entity for profit, to translate medical technology intellectual
properties from research institutions in Singapore. A wholly owned subsidiary, iPtec Pte Ltd has been formed for this purpose.
Adding impetus to the drive, the Group will consider seed-funding of start-ups which possess strong potentials and will consider
exiting these investments for profits when they have realized their potentials.
Judicious Risk Management
Investments in new technologies carry high risks and rewards. The market for new technologies is generally green field providing
opportunities for exponential growth as compared with established products. As such it has been the Group’s policy to invest in
new technologies from its internal cash reserves without external borrowings. The Group will consider gearing for a new technology
business only after it has achieved commercialisation and is generating revenue.
The Group will fund the paid up capital of S$2m of iPtec Pte Ltd, our new intellectual property translation engineering subsidiary
from its internal cash reserves.
Revenue by Business Segments
The following is an analysis of the segmental revenue :-
Revenue by Business Segments
Change (%)
Offshore Marine, Oil & Gas Machinery
Construction Equipment
Precision Engineering & Automation
Industrial & Mobile Hydraulics
8
+ 22.6
- 30.8
+ 0.9
+ 7.5
year ended 30 June 13
(S$ million)
42.11
year ended 30 June 12
(S$ million)
34.35
39.72
35.21
3.43
57.39
34.90
3.19
Zicom Group Limited Offshore Winches
Gas Processing Plant
Offshore Fabrication
Offshore Marine, Oil & Gas Machinery
Following the huge oil rig orders placed in the last few years and being delivered, demand for offshore vessels to support their
operations has resurged. Orders for our deck machinery had been strong offsetting delays in orders from oil and gas. Orders for
our oil and gas projects had been delayed as a result of our earlier problems in two previous projects which have now been rectified
and the projects successfully handed over. Our timely and successful delivery of our first deep sea deck machinery for water depth
exceeding 500m has strengthened our reputation in the industry. We are confident of strengthening our positioning in the industry
to gain more orders. Prospects for securing orders for oil and gas projects are strong.
Offshore structures for operations of remote operated vehicles in sub-seas operations, in parallel with deck machinery, experienced
increased demand. Such demand remains robust.
As at the end of the financial year just ended, we have secured confirmed orders of S$37.0m in the marine offshore, oil and gas and
offshore structure segment to be delivered in the financial year 2014.
Construction Equipment
Revenue for construction equipment decreased by 30.8% in the
current year as compared with the previous year primarily due to orders
amounting to S$10.8m being held back at the end of the financial year
caused by customers’ delay. These were shipped after the financial year.
The orders for concrete mixer in Thailand have, otherwise, been very strong
and these are expected to continue into the next financial year. China’s
mixer business has been quite flat due to a slow-down in infrastructure
developments in China and Hong Kong. The China operation, however,
has become profitable. The Australian market slowed down considerably
during the year and we do not expect any significant recovery in the
coming year. We expect marginal losses in the Australian market.
Foundation equipment demand in South East Asia has been taking
a breather. Several customers have equipped themselves in recent
years. Demand for construction works requiring foundation equipment
continue to be strong, in particular Singapore, due to the huge backlog
in infrastructure projects that are expected to last several years. Hence,
rental of equipment has been on the rise and the rate of increase is
expected to be higher than new equipment sales. The Group has
penetrated into Malaysia whose infrastructural developments are also
growing. We expect to grow the Malaysian market. Demand in Australia
remains subdued.
Super-Kong Vibro Hammer
Concrete Mixers
Precision Engineering & Automation
The precision engineering sector has shown a marginal 0.9% increase in revenue over the previous year. This is in spite of the slow-
down in the global economy leading to a contraction of 2.2% in the global semi-conductor industry and the extended gestation of
our start-up investments.
9
2013 ANNUAL REPORT
DIrectors’ report 2013
This segment achieves an average of 46% compound annual
growth in the last 5 years. With forecast of compound growth in
the global semi-conductor industry exceeding 4% in the next 5
years driven by growth in demand in hand-held devices such as
smart phones and tablet computers, signs of recovery are evident.
Medical devices are forecast to equally enjoy good compound
growth in the coming years. Riding on the growth of these sectors
and the commercialisation of our start-up investments, whose
products are manufactured by our precision engineering sector,
we are confident of achieving sustainable growth in our precision
engineering sector.
Engineered to Precision
Industrial & Mobile Hydraulics
This sector is made up of supply of hydraulic system drives and hydraulic services in support of our general core business activities
in hydraulic engineering. Variation in this sector is not significant.
Foreign Exchange Exposure
The Group generally prices its sales in foreign currencies on forward rates. During the full year, we hedged our rates accordingly to
ensure our margins were maintained. The net loss attributable to foreign exchange during the current year is S$2.69m as compared
with an exchange gain of S$0.16m in the previous year.
Accounting Standards AASB 139 obliges us to fair value our outstanding foreign currency derivatives at the rates ruling on 30
June 2013. The net loss of S$2.69m included the imputed unrealised loss in the valuation of these derivatives as at 30 June 2013
amounting to S$2.41m (2012: S$0.50m).
Financial Position
The group’s financial position has generally improved:-
Classification
increase (+) / Decrease (-)
S$ million
as at 30 June 13
S$ million
as at 30 June 12
S$ million
Net Assets
Net Working Capital
Cash in Hand and at Bank
+ 3.87
+ 2.46
- 3.09
88.49
44.95
21.36
84.62
42.49
24.45
Gearing Ratios
The Group gearing ratio is 0% at the same ratio for the year ended 30 June 2012. Gearing ratio has been arrived at by dividing our
net interest bearing debts over total capital.
Return Per Share
The Group’s earnings and net tangible assets per share are as follows: -
Classification
Earnings per share
Decrease
Singapore Cents
- 0.45
2013
Singapore Cents
3.24
2012
Singapore Cents
3.69
The weighted average shares used to compute basic earnings per share are 213,798,000 for this year and 212,376,000 shares for
the previous year.
Classification
increase
Singapore Cents
Net tangible assets per share
+ 0.83
as at 30 June 13
Singapore Cents
35.05
as at 30 June 12
Singapore Cents
34.22
Capital Expenditure
For the year ending 30 June 2014, the Group plans to invest up to S$2.5m for prototyping, precision and testing equipment and the
setting up of our new wholly owned subsidiary iPtec Pte Ltd. Part of the costs is covered by a grant.
10
Zicom Group Limited
DIrectors’ report 2013
Confirmed Orders
We have a total of S$56.0m (30 June 2012: S$51.5m) outstanding
confirmed orders in hand as at 30 June 2013. A breakdown of these
outstanding confirmed orders is as follows:-
These outstanding orders are scheduled for delivery in the financial
year 2014. Prospects for on-going orders continue to be robust.
Offshore Marine, Oil & Gas Machinery
Construction Equipment
Precision Engineering & Automation
Industrial & Mobile Hydraulics
total
S$ m
37.0
12.3
6.5
0.2
56.0
The Precision Engineering Technology Cluster
Going forward into 2014, we aim to group the technology cluster comprising our start-up investments and the precision engineering
and automation sector together under “Precision Engineering & Technologies”.
A Strategic Catalyst
The Group’s success in translating its start-ups’ technologies into products that have now progressed to commercialisation globally
has earned it the award of a “private sector translator” that comes with a cash grant of up to S$4.5m for the first 3 years. This
amount is to be disbursed based on the Group’s achieving key performance milestones. A wholly owned subsidiary iPtec Pte Ltd
(“iPtec”) has been formed to carry out this activity and will be run as a commercial entity for profit. It is the intention of the Group and
the grantor for iPtec to achieve a global outreach.
iPtec is an acronym for intellectual property (“IP”) translation engineering centre. iPtec will focus on medical technology translation
for local research institutes in Singapore in both the government and private sector and may extend to include overseas IPs. iPtec
will be the first company of its kind in Singapore to bridge an eco-system in the medical technology landscape in Singapore.
The company will invest in the latest state-of-the-art advanced prototyping equipment and testing facilities and employ specialist
engineers in equipment design, clinical trials, regulatory approvals and industrial design to render a comprehensive suite of services
to customers from the IP’s proof of concept stage to commercialisation.
Seed Funding Potentials
Translated IPs are owned by customers who pay for the translation services. However the Group will consider investing in and co-
own IPs that possess strong potentials and to provide seed-funding to start-ups with strong promises. Seed-funded investments
may be disposed of for profit if their potentials have been realized and they do not form a strategic fit with the Group’s core business.
Technologies translated by iPtec may be seamlessly supported by Sys-Mac Automation Engineering Pte Ltd’s manufacturing
expertise as it has done so for the Group’s various start-up investments.
Progress on Start-Up Investments
The Group’s various start-ups possess disruptive technologies. The nature of the technologies invariably takes a longer phased
gestation period. The most encouraging signs are that each of the technologies invested has been accepted by the relevant end
users as disruptive. As the technologies are validated at various phases for proof of value to the customers, gradual adoption is
gaining pace. Once customers have fully adopted the technologies, exponential sales are expected to break-out.
Orion Systems Integration Pte Ltd (Orion)
Orion’s commercial Thermal Bonder for fine pitch flip chips has been accepted by industry. We are finalising the sale of significant
batch orders with the first batch of 6 units aimed to be shipped within the
first half of 2014 subject to no delay in customer’s expansion plans. The
expanding global demand for hand-held devices and tablet computers
will use fine pitch flip chips as opposed to conventional chips. This is
expected to accelerate the process for chip manufacturers to retool into
manufacturing and packaging fine pitch flip chips. Fine pitch flip chips
are high power computing chips that meet present days’ requirement for
small but powerful chips for increased multi-functional computing needs
in the industry.
Orion is emerging from its gestation to be revenue generating.
Phoenix Thermal Bonder
11
2013 ANNUAL REPORT DIrectors’ report 2013
Biobot Surgical Pte Ltd (Biobot)
The commercial version of the Mona Lisa iSR’obot surgical robot for prostate biopsy was
launched in the AUA 2013, a conference of the American Urology Association in San Diego
in May 2013. The surgical robot was well received and we are finalising partnerships with two
university hospitals to set up centers of excellence in Europe and USA. One of these will be based
in Germany and the other one in New York City. We aim to have these centers set up before
December 2013. The centers of excellence will facilitate training of customers in the region on
the use of our surgical robot and facilitate further development on the applications of our robot,
including therapy.
The commercial unit has undergone various technical improvements in accuracy, enhanced
safety and ergonomic features facilitating one-man operation and local anaesthesia. Approval
from the Food and Drug Administration (FDA) in USA for the updated unit has been received. We
expect to receive CE Mark (Eurozone) in the next 2 months. Updates to regulatory approval in
Australia and Taiwan have been filed. We plan to file for regulatory approval in China in the first
half of calendar year 2014.
Biobot aims to realise its first sales of the robot in the first half of the next financial year.
Mona Lisa iSR’bot
Curiox Biosystems Pte Ltd (Curiox)
Curiox’s DropArray technology has achieved break-through acceptance by 10 of the top 25 pharmaceutical companies in the USA
and Europe. The DropArray technology, whose application research findings were published in “Blood” a prestigious journal of the
American Society of Hematology in December 2012, is now well accepted as the leading unique technology for high throughput
screening in drug discovery processes that use both suspension and adherent cells in the preparation of complex assays.
The DropArray technology which employs wall-less microplates has proven to achieve a higher retention of suspension cells during
washing and uses less disease markers and reagents which are expensive compounds. The technology is now at a critical stage
of validation by various pharmaceutical companies applying it in their respective proprietary assays in developing new drugs.
Significant progress has been achieved in us adapting our features to suit their needs. We are confident that our progress towards
full adoption is gaining pace. Although their standards are stringent, making the level of entry high, we are hopeful of industry’s
adoption within the next 12 months. A full adoption of our technology will potentially escalate from its current validation with high
end complex assays to simpler assays widening the scope of applications across the industry.
In the interim, revenue from applications in simpler assays is being generated. This is expected to pick up.
Curiox LT DropArray Machine
Curiox DropArray Assay
Curiox HT DropArray Machine
Prospects
The year just ended has been volatile. Our full year’s results have been impacted by such volatility.
The global recovery is expected to remain fragile with uncertainties continuing to prevail. The Group charts its course on the basis
that these global uncertainties whether arising from economic imbalances or political changes will always underscore the global
economic landscape. As such, the Group has been positioning itself to transit the inflection point in its growth path, in order to create
a platform for sustainable growth.
Prospects for the Group in 2014 remain strong. The Group is confident of sustainable growth into the future.
12
Zicom Group Limited DIRECTORS’ REPORT 2013
Subsequent Events after the Balance Sheet Date
Redemption of redeemable loans stocks
On 1 July 2013, 3,016,772 redeemable loan stocks in Biobot Surgical Pte Ltd (“Biobot”) held by Zicom Holdings Pte Ltd
has been fully redeemed by Biobot via the issue of 1 ordinary share fully paid for every loan stock held. As a result, the
Group equity interest in Biobot was adjusted to 91.8%.
Incorporation of iPtec Pte Ltd
On 2 July 2013, Sys-Mac Automation Engineering Pte Ltd incorporated a wholly owned subsidiary, iPtec Pte Ltd, which
will be principally engaged in medical technology translation services.
Environmental Regulations
The group is subject to environmental regulations under State and Federal legislations. The group holds environmental
licences for its manufacturing site in Brisbane. No significant material environmental incidents occurred during the year.
Meetings of directors
The number of meetings of the company’s board of directors and of each board committee held since the last Annual
General Meeting, and the numbers of meetings attended by each director were:
Giok Lak Sim
Kok Hwee Sim
Yian Poh Lim
Frank Leong Yee Yew
Ian R Millard
Shaw Pao Sze
Kok Yew Sim
Meetings of Committees
Full meetings of
directors
Audit
A
4
4
4
4
4
4
3
B
4
4
4
4
4
4
4
A
2
2
2
2
2
2
2
B
2
2
2
2
2
2
2
Nomination &
Remuneration
B
A
1
1
-
-
1
1
1
1
-
-
-
-
-
-
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
Insurance or indemnification of officers
During the financial year, Zicom Group Limited paid a premium of A$8,527 to insure against liabilities of the directors and
officers of the reporting entity.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against directors or officers in their capacities as officers of the reporting entity.
The policy also provides for certain statutory fines incurred by the reporting entity or officers, and protection for claims
made alleging a breach of professional duty arising out of an act, error or omission of the officers of the reporting entity.
Retirement, election and continuation in office of directors
Mr Y P Lim retires by rotation and being eligible, offers himself for re-election.
13
2013 ANNUAL REPORT DIRECTORS’ REPORT 2013
Directors’ relevant interests in Zicom Group Limited
In accordance with S300(11) of the Corporations Act 2001, the relevant interests of the Messrs G L Sim and S P Sze in
the shares and options of Zicom Group Limited as at the date of this report are unchanged to those disclosed within the
financial statements as at 30 June 2013.
Due to the expiry of certain share options subsequent to the financial year just ended, the share options held by the
following directors at the date of this report are:
Mr K H Sim
Mr Y P Lim
Mr F Leong
Mr I R Millard
Mr K Y Sim
280,000
-
-
-
280,000
There has been no change to the relevant interests in shares of Zicom Group Limited held by these directors between the
reporting date and the date of this report.
Remuneration report (Audited)
This remuneration report outlines the director and executive remuneration arrangements of the Company and the Group in
accordance with the requirements of the Corporations Act 2001 and its Regulations. This information has been audited as
required by section 308(3C) of the Act.
Key management personnel (KMP) of the Group are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Group, directly or indirectly, including any director (whether
executive or otherwise) of the Group.
The remuneration report is set out under the following main headings:
A
B
C
A
Principles used to determine the nature and amount of remuneration
Service Agreements
Details of remuneration
Principles used to determine the nature and amount of remuneration
A combined Nomination and Remuneration Committee has been formed. The members of the Nomination
and Remuneration Committee comprise of Mr Y P Lim as Chairman with Mr Frank Leong and Mr G L Sim as
members. The Nomination and Remuneration Committee had approved the Service Agreement of the group
managing director, Mr G L Sim and this was subsequently ratified by the full board.
The key principle of Zicom Group Limited’s remuneration policy is to ensure remuneration is set at levels that will
attract, motivate, reward and retain personnel to improve business results, having regard to the company’s financial
performance and financial position.
Non-executive directors
Remuneration of non-executive directors is determined by the directors within the maximum amount approved by
the shareholders. Each non-executive director receives a base fee of A$25,000 for being a director of the Group.
An additional fee of A$2,000 is also paid for each Board Committee of which a non-executive director sits and
A$5,000 if the director is a Chair of a Board Committee. The payment of additional fees for serving on committees
recognises the additional time commitment and responsibilities of the non-executive directors who serve on one or
more sub committees. There is also an attendance fee of A$1,000 for each meeting attended by the non-executive
director.
14
ZICOM GROUP LIMITED DIRECTORS’ REPORT 2013
Non-executive directors are eligible to participate in the Zicom Employee Share and Option Plan (“ZESOP”). The
Board considers that there should be an appropriate mix of remuneration comprising cash and securities for all
Directors to link the remuneration of the Directors to the financial performance of the Company and to align the
interests of shareholders and all Directors.
The board recommends that total directors’ fees for non-executive directors for the financial year ending 30 June
2014 be fixed at a maximum sum of A$150,000 (S$180,000) at the same level as the previous year.
Key management personnel – executive directors and senior executives
All remuneration paid to executive directors and senior executives comprises of the following components:
•
•
•
•
Base pay and benefits;
Short term incentives;
Other remuneration such as superannuation,
Participation in the Zicom Employee Share and Option Plan.
The company’s policy does not allow transactions which limit the economic risk in participating in unvested
entitlements under equity-based remuneration schemes.
Base pay
The level of base pay is set so as to provide a level of remuneration which is appropriate to the position and is
competitive in the market. The remuneration of the executive directors is reviewed annually by the board and the
remuneration of senior executives is reviewed annually or on promotion by the managing director(s).
Benefits
Senior executives receive benefits including health insurance, disability insurance and car allowances.
Short term incentives
The objective of short term incentives is to reward the senior executives of the group with performance bonus tied
to a minimum profit threshold of the group companies. Such bonuses are paid within 90 days after the year end
and completion of audit. The minimum profit threshold is the lower of $500,000 or 15% of total shareholder funds
as at the reporting date.
B
Service Agreements
Group Managing Director
The group managing director, Mr G L Sim is directly employed by Zicom Holdings Private Limited (“ZHPL”) and
has renewed his service agreement with ZHPL for another 5 years with effect from 1 July 2011. The group and Mr
Sim are required to give each other at least 6 months’ notice in the termination of the service agreement. Under
the terms of his service agreement, Mr Sim continues to be appointed as the Zicom Group Limited (“ZGL”) Group
Managing Director and Chairman as well as the Executive Chairman of all the operating subsidiaries.
Mr Sim is entitled to an annual review of his monthly salary if the company’s results exceed 15% return on
shareholders’ funds. Mr Sim has frozen his monthly salary since 2007. Mr Sim will continue to draw the monthly
salary at the 2007 level for the next 5 years from 1 July 2011 and waive all salary increments. Apart from this, all
other benefits, terms and conditions in his service agreement remain unchanged.
15
2013 ANNUAL REPORT DIRECTORS’ REPORT 2013
Mr Sim is paid a monthly salary and a car allowance. Mr Sim is entitled to a performance bonus not exceeding 5%
of the pre-tax consolidated profits of ZHPL upon achieving agreed minimum profit targets, being the only criterion
for his entitlement. ZHPL’s profits exceeded the target for the financial year just ended and will be paid a bonus
accordingly. Mr Sim has decided with the Nomination & Remuneration Committee that he shall only receive 3.5%
of pre-tax consolidated profits of ZHPL as his performance bonus instead of his full entitlement at 5% so as to
allocate the balance of his entitlement to reward other outstanding senior executives who are otherwise not entitled
to profit sharing contractually. Accordingly, this 3.5% of pre-tax consolidated profits will be deemed to be 100% of
his entitlement for the current financial year. Mr Sim has likewise, in previous years, forgone part of his bonus.
Mr Sim is entitled to convert part of this performance bonus up to no more than 50% of the amount payable, into
shares of ZGL at the average of the closing prices of the last 5 trading days before the end of the relevant financial
year. However, such entitlement must be exercised within 7 working days after the financial year end. For the
current financial year, Mr Sim did not elect to convert any part of his performance bonus into ZGL shares.
Mr Sim is not paid any salary or fees by ZGL, Cesco Australia Limited (“CAL”) or any other group companies.
In the event CAL achieves the minimum pre-tax profits, Mr Sim will be paid a bonus not exceeding 5% of CAL’s
profits. During the year just ended, Mr Sim was not paid any bonus by CAL as the profit target was not achieved.
Senior Executives (directors of group companies)
Senior executives in key decision making are employed under rolling contracts. The company and these senior
executives are required to give each other 6 months’ notice to terminate the service contracts. The senior
executives are entitled to a monthly salary and a car allowance. Each year, each of the subsidiary companies,
allocates 10% of their pre-tax profits upon achieving agreed minimum profit targets, being the only criterion for
allocation of bonus to its eligible executives, as a “bonus pool”. The maximum entitlement capped for eligible
executives ranges from 2.5% to 5% of the pre-tax profits. Each year, the Nomination and Remuneration Committee
will decide the proportion payable to each of these eligible executives based on the number of eligible executives
entitled to the pool and any recommendation of management to reward any outstanding senior executives who are
otherwise not eligible contractually, to be specially rewarded. The decisions made by the Committee are deemed to
be 100% of their entitlement for the respective eligible executive for the financial year.
These senior executives are also entitled to convert part of their performance bonus, up to no more than 50% of
the amount payable, into shares in ZGL at the average of the closing prices of the last 5 trading days before the
end of the relevant financial year. However, such entitlement must be exercised within 7 working days after the
financial year end. For the year just ended, none of the executives exercised the option to convert part of their
performance bonus into ZGL shares.
Zicom Employee Share and Option Plan
Options are granted under the Zicom Employee Share and Option Plan (“ZESOP”) which was approved by
shareholders on 23 November 2006.
A person is eligible to participate in ZESOP if he or she is a director or an employee of a group company.
Approved share options are allocated to each group company based on its profit contribution to the Group for
the past 3 years. These options are then granted to employees based on individual performance and those with
potentials in that group company. This initiative strengthens the Group’s position to retain and attract talent so as to
expand and grow to improve the Group’s performance and enhance shareholders’ value.
The board may at any time make invitations to eligible employees to participate in the ZESOP. The invitation will
specify the total number of options each eligible employee may acquire, the exercise price, period and exercise
conditions. All options shall lapse upon the expiry of the exercise period as determined by the board or 10 years
after grant of the option whichever is earlier.
16
ZICOM GROUP LIMITED DIRECTORS’ REPORT 2013
If an eligible participant ceases to be employed by any member of the group his or her options shall lapse. In the
event an eligible participant, who, by reason of death, or physical or mental incapacity or such other reasons as
the Board may approve, ceases to be an eligible participant before the participant has exercised all vested options
under ZESOP, then those options shall continue to be capable of being exercised in accordance with the rules.
Options granted under ZESOP carry no voting rights or entitlement to dividends.
During the current financial year, 2,610,000 share options were granted to deserving employees and directors
to acquire the ZGL shares at A$0.17 per share. These options are valid for 3 years, 50% of these options are
exercisable 12 months from the date of grant and the remaining are exercisable 24 months from the date of grant.
Options are granted at no cost to employees. When exercised, each option is convertible into one ordinary share
which shall be credited as fully paid up and rank equally with all other fully paid ordinary share capital.
During the financial year, employees have exercised options to acquire 517,500 fully paid ordinary shares in Zicom
Group Limited at a weighted average exercise price of A$0.18 per share. 1,277,500 options expired during the
financial year.
At the date of this report, there were 6,760,000 unissued ordinary shares under options (7,035,000 at the reporting
date).
Company Performance
The table below shows the performance of the Group for the past 5 financial years:
Earnings per share (Australian cents)
Dividend per share (Australian cents)
Closing share price (Australian cents)
Net tangible assets per share (Australian cents)
2013
2.56
1.00
23.00
29.96
2012
2.83
1.00
15.00
26.49
2011
5.15
1.00
50.00
24.73
2010
4.02
0.85
12.50
23.53
2009
4.47
0.60
10.00
20.84
17
2013 ANNUAL REPORT DIRECTORS’ REPORT 2013
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DIRECTORS’ REPORT 2013
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19
2013 ANNUAL REPORT
DIRECTORS’ REPORT 2013
Details of share options to key management personnel
The following options were granted to the following key management personnel during the year ended 30 June 2013.
2013
Directors
K H Sim
K Y Sim
Executives
G H Teoh
J L Sim
H S Tang
No of
options
granted
Grant
date
Fair value
per option
at grant
date
Exercise
price per
option
Expiry date
First
exercise
date
Last
exercise
date
40,000 15 Nov 12
40,000 15 Nov 12
40,000 15 Nov 12
40,000 15 Nov 12
40,000
40,000
40,000
40,000
40,000
40,000
1 Sep 12
1 Sep 12
1 Sep 12
1 Sep 12
1 Sep 12
1 Sep 12
A$0.09
A$0.10
A$0.09
A$0.10
A$0.09
A$0.10
A$0.09
A$0.10
A$0.09
A$0.10
A$0.17
A$0.17
A$0.17
A$0.17
A$0.17
A$0.17
A$0.17
A$0.17
A$0.17
A$0.17
14/11/2015
14/11/2015
14/11/2015
14/11/2015
15/11/2013
15/11/2014
15/11/2013
15/11/2014
14/11/2015
14/11/2015
14/11/2015
14/11/2015
31/08/2015
31/08/2015
31/08/2015
31/08/2015
31/08/2015
31/08/2015
01/09/2013
01/09/2014
01/09/2013
01/09/2014
01/09/2013
01/09/2014
31/08/2015
31/08/2015
31/08/2015
31/08/2015
31/08/2015
31/08/2015
Options granted to, vested and exercised by key management personnel during the year are as follows:
No of Options
Value of Options
S$
Granted Exercised
Expired
Granted
Exercised
Expired
Remuneration
consisting of
options for the
year
(%)
Independent Directors
Y P Lim
F Leong
I R Millard
S P Sze
Executive Directors
G L Sim
K H Sim
K Y Sim
Executives
G H Teoh
J Koon Sim
J L Sim
H S Tang
–
–
–
–
50,000
50,000
50,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
150,000
–
–
200,000
100,000
300,000
–
80,000
80,000
80,000
–
80,000
80,000
400,000
–
–
–
–
–
8,696
8,696
8,757
–
8,757
8,757
43,663
7,223
7,223
7,223
–
–
–
–
–
–
–
–
21,669
–
–
–
–
–
–
–
–
–
20,694
10,347
31,041
1.0
1.1
1.1
0.1
–
1.3
1.1
0.7
–
0.8
1.0
For details on the valuation of options, including models and assumptions used, please refer to note 25.
There were no alterations to the terms and conditions of options granted as remuneration since their grant date.
20
ZICOM GROUP LIMITED Directors’ Declaration
DIRECTORS’ REPORT 2013
In accordance with a resolution of the directors of Zicom Group Limited, I state that:
In the opinion of the directors:
Legal Proceedings
the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
(a)
No person has applied for leave of Court to bring proceedings on behalf of the consolidated entity or to intervene in
any proceedings to which the consolidated entity is a party for the purpose of taking responsibility on behalf of the
giving a true and fair view of the consolidated entity’s balance sheet as at 30 June 2012 and of its performance for
consolidated entity for all or any part of those proceedings.
the year ended on that date; and
(i)
Non-Audit Services
(ii)
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001;
There were no non-audit services provided by the entity’s auditor and related practices of the entity auditor, Ernst &
(b)
Young, during the year.
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 2.2.
(c)
Auditor’s Independence Declaration
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
A copy of the auditor’s signed independence declaration as required under Section 307C of the Corporations Act 2001 is
(d)
attached to this report.
this declaration has been made after receiving the declarations required to be made to the Directors in accordance with
section 295A of the Corporations Act 2001 for the financial year ended 30 June 2012.
Rounding of Amounts
(e)
as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified
in Note 10 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed
of Cross Guarantee.
The company is an entity to which the Class Order 98/100 applies and accordingly, amounts in the financial statements
and directors’ report have been rounded to the nearest S$1,000 unless otherwise stated.
This report was made in accordance with a resolution of the board of directors.
On behalf of the Board
G L Sim
GL Sim
Chairman/Managing Director
Chairman/Managing Director
Brisbane
23 September 2013
28 September 2012
88
ZICOM GROUP LIMITED
21
2013 ANNUAL REPORT
AUDITOR’S INDEPENDENCE DECLARATION
to the Directors of Zicom Group Limited
In relation to our audit of the financial report of Zicom Group Limited for the financial year ended 30 June 2013, to the
best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the
Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
Ric Roach
Partner
23 September 2013
22
ZICOM GROUP LIMITED CORPORATE GOVERNANCE STATEMENT
Introduction
The Board of Directors is responsible for the Corporate Governance of Zicom Group Limited and its controlled entities
(referred to in this document as “the Company”). The Directors are focused on fulfilling their responsibilities individually
and as a Board to all of the Company’s stakeholders. This involves recognition of and a need to adopt principles of good
corporate governance having regard to the ASX Corporate Governance Council (CGC) published guidelines as well as its
corporate governance principles and recommendations.
The Company has reviewed its Corporate Governance procedures over the past year to ensure compliance with the
principles of good corporate governance.
At the end of this Corporate Governance Statement there is a table detailing the recommendations with which the
Company does not strictly comply.
A description of the Company’s practices in complying with the principles is set out below.
Principle 1: Laying Solid Foundations for Management and Oversight
The role of the Board is to lead and oversee the management and direction of the Company and its controlled entities.
After appropriate consultation with executive management the Board:
-
-
-
-
-
defines and sets the business objectives. It subsequently monitors performance and achievement of the
Company’s objectives;
oversees the reporting on matters of compliance with corporate policies and laws, takes responsibility for
risk management processes and reviews executive management of the Company;
monitors and approves business plans, financial performance and budgets, and available resources and
major capital expenditure initiatives of the Company;
maintains liaison with the Company’s auditor; and
reports to Shareholders.
Senior Executives and Executive Directors have letters of appointments or service contracts describing their terms of
office, duties, rights and responsibilities.
The performance of the board and key executives is reviewed regularly against both measureable and qualitative
indicators. The performance criteria against which directors and executives are assessed are aligned with the financial
and non-financial objectives of Zicom Group Limited. Directors whose performance is consistently unsatisfactory may be
asked to retire.
Principle 2: Structure the Board to Add Value
The recommendations of the Corporate Governance Council are that the composition of the Board be determined so
as to provide the Company with a broad base of industry, business, technical, administrative and corporate skill and
experience considered necessary to represent Shareholders and fulfil the business objectives of the Company.
The recommendations of best practice are that the majority of the directors and in particular the chairperson should be
independent. An independent director is one who:
-
-
does not hold an executive position;
is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a
substantial shareholder of the Company;
23
2013 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT
-
-
-
-
-
has not within the last three years been employed in an executive capacity by the Company or other group
member, or been a director after ceasing to hold any such employment;
is not a principal of a significant professional adviser or a significant consultant of the Company or other
group member, or an employee materially associated with the service provided;
is not a significant supplier or customer of the Company or other group member, or an officer of, or
otherwise associated directly or indirectly with a significant supplier or customer;
has no significant contractual relationship with the Company or other group member other than as a
Director of the Company; and
is free from any interest and any business or other relationship which could, or could reasonably be
perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.
Individual board members do not fulfil all of these criteria but the overall profile of the Board is considered the most
appropriate for the activities of the Company.
Details of the members of the Board, their experience, expertise, qualifications, term of office and independent status are
included in the “Board of Directors” section within the annual report.
Materiality thresholds in determining the independence of non-executive directors are:
-
-
A relationship that accounts for more than 10% of the Director’s gross income (other than director’s fees
paid by the company).
Where the relationship is with a firm, company or entity, in respect of which the Director (or any associate)
has more than a 20% shareholding if a private company or 2% if a listed company.
Mr G L Sim was appointed Managing Director of Zicom Group Limited commencing 1 July 2006, and Chairman of Zicom
Group Limited with effect from 23 November 2006. He is a major shareholder in Zicom Group Limited through his interest
in his family company, SNS Holdings Pte Ltd. Previously Mr Sim had been the major shareholder (through SNS Holdings
Pte Ltd) of Zicom Holdings Pte Ltd (“ZHPL”). Mr Sim has been the Managing Director of ZHPL since founding the
company and was appointed the Chairman of ZHPL on 17 August 2007, in line with his position as the Group chairman.
The Board has determined that Mr Sim is, and was not independent.
Mr Frank Leong has no relationships or interests that would affect his role as an independent director.
Mr Y P Lim has no relationships or interests that would affect his role as an independent director.
Mr Ian R Millard has no relationships or interests that would affect his role as an independent director.
Mr S P Sze has no relationships or interests that would affect his role as an independent director.
Mr K H Sim is an Executive Director and therefore is considered by the Board to be not independent.
Mr K Y Sim is an alternate director of Mr K H Sim and therefore is considered by the Board to be not independent.
Term of Office
The Company’s Constitution specifies that at the annual general meeting in every year, one third of the Directors for the
time being but not exceeding one-third (with the exception of the Managing Director) must retire from office by rotation.
24
ZICOM GROUP LIMITED CORPORATE GOVERNANCE STATEMENT
Independent Professional Advice
Directors and Board Committees have the right, in connection with their duties and responsibilities as Directors, to seek
independent professional advice at the Company’s expense. Prior written approval of the Chairman is required, and this
will not be unreasonably withheld.
Board Committees
The Company has a Nomination and Remuneration Committee and an Audit Committee, the details of which are set out
below:
Nomination and Remuneration Committee
The Nomination and Remuneration Committee is a combined committee, comprising of the following members:
•
•
•
Mr Y P Lim (Chairman)
Mr G L Sim
Mr Frank Leong
The Committee has the responsibility for recruitment and evaluation of Board Members. In addition the committee
formulates the remuneration policies for the Board Members and Managing Director of the Group.
Audit Committee
The Audit Committee comprises of the following members:
•
•
•
Mr Ian Millard (Chairman)
Mr Frank Leong
Mr Y P Lim
The Audit Committee operates in accordance with a charter. The main responsibilities of the Audit Committee are to:
•
•
•
•
•
•
•
Review, assess and approve the annual report, the half year financial report and all other financial information
published by the Company or released to the market.
Review the effectiveness of the Group’s internal control environment, including effectiveness and efficiency of
operations, reliability of financial reporting and compliance with applicable laws and regulations.
Oversee the effective operation of the risk management framework.
Recommend the appointment, removal and remuneration of the external Auditor, and review the terms of their
engagement, the scope and quality of their audit and assess their performance.
Consider the independence and competence of the external Auditor on an ongoing basis.
Review and monitor related party transactions and assess their propriety.
Report on matters relevant to the committee’s role and responsibilities.
The Board and the Company Secretaries
The Company Secretaries are accountable to the Board and the appointment or removal of the Company Secretary is a
matter of the Board as a whole.
Each Director is entitled to access the advice and services of the Company Secretary.
25
2013 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT
Principle 3: Promote Ethical and Responsible Decision-Making
Code of Conduct
Directors, officers, employees and consultants to the Company are required to observe high standards of behaviour and
business ethics on behalf of the Company and they are required to maintain a reputation of integrity on the part of both
the Company and themselves. The Company does not contract with or otherwise engage any person or party where it
considers integrity may be compromised.
Directors are required to disclose to the Board actual or potential conflicts of interest that may or might reasonably be
thought to exist between the interests of the director or the interests of any other party in so far as it affects the activities
of the Company. When applicable, directors are to act in accordance with the Corporations Act if a conflict cannot be
removed or it persists. Directors would be restricted from taking part in the decision making process or discussions where
that conflict does arise.
Directors are required to make disclosure of any share trading. The key principles of the Share Trading Policy are that
Directors and officers are prohibited to trade while in possession of unpublished price sensitive information and during the
following closed periods:
•
•
•
•
The period between 1 January and the release of the Company’s Half Year results to the Stock Exchange
The period between 1 July and the release of the Company’s Full Year results to the Stock Exchange
The twenty-four hours following an announcement of price sensitive information on the Stock Exchange
Other periods as may be imposed by the Company when price sensitive, non-public information may exist
in relation to a matter
Price sensitive information is information that a reasonable person would expect to have a material effect on the price or
value of the company shares. The undertaking of any trading in shares must be notified to the Company Secretary who
makes disclosure to the ASX.
Diversity Policy
The Company does not have a written diversity policy, however, the Company recognises the importance of benefitting
from all available talent regardless of gender, age, ethnicity and cultural background. The Company promotes an
environment conducive to the appointment of well qualified employees, senior management and board candidates so that
there is appropriate diversity to maximise the achievement of corporate goals.
The Company has employees including executives from diversified cultural background and nationalities such as
Australians, Bangladeshis, Chinese, Indians, Indonesians, Filipinos, Malaysians, Myanmar, New Zealanders, Singaporeans
and Thais. In addition, approximately 20% of the Company’s workforce is made up of female employees.
Principal 4: Safeguard Integrity in Financial Reporting
As stated above the Company’s Audit Committee is made up of independent directors.
To ensure the integrity of the Company’s financial reports, the managing director and the Group Financial Controller are
required to declare annually, in writing to the board, that the financial records of the Company for the respective financial
year have been properly maintained, the Company’s financial reports comply with accounting standards and present a
true and fair view of the Company’s financial condition and operational results.
Each member of the Board has access to the external Auditor and the Auditor has access to each Board member.
26
ZICOM GROUP LIMITED CORPORATE GOVERNANCE STATEMENT
Principal 5: Make Timely and Balanced Disclosure
The Joint Company Secretaries are persons responsible for overseeing and co-ordinating disclosure of information to the
ASX as well as communication with the ASX. This involves compliance with the continuous disclosure requirements of the
Listing Rules.
Principal 6: Respect the Rights of Shareholders
Pursuant to Principle 6, the Board’s objective is to promote effective communication with its shareholders at all times.
Zicom Group Limited is committed to:
-
-
-
Ensuring that shareholders and financial markets are provided with full and timely information about the
Company’s activities in a balanced and understandable way
Complying with continuous disclosure obligations contained in the ASX listing rules and the Corporations
Act in Australia
Communicate effectively with its shareholders and making it easier for shareholders to communicate with
the Company
To promote effective communication with shareholders and encourage effective participation at general meetings,
information is communicated to shareholders:
-
-
-
-
-
Through the release of information to the market via the ASX
Through the distribution of annual report and Notice of Annual General Meeting
Through shareholder meetings and investor relations presentations
Through letters and other forms of communications directly with shareholders when deemed necessary
Hosting all of the above on the Company website at www.zicomgroup.com
The external auditors are required to attend the Annual General Meeting and are available to answer any shareholder
questions about the conduct of the audit preparation of the audit report.
Principle 7: Recognise and Manage Risk
The Board is conscious of the need to continually maintain systems of risk management and controls in order to create
long-term shareholders value. In recognition of this, the board determines the Company’s risk profile and is responsible
for overseeing and approving risk management strategy and policies and internal controls. The Company has in place
policies and procedures for risk management which cover areas including workplace health and safety, control of key
resources, manufacturing, financial and other critical business processes. The operational risks are managed by senior
management level and escalated to the board for direction where the issue is exceptional, non-recurring or may have a
material financial or operational impact on the Company.
In accordance with Section 295A of the Corporations Act, the Group Managing Director (Chief Executive Officer
equivalent) and the Group Financial Controller (Chief Financial Officer equivalent) have provided a written statement to the
board that:
-
-
The view provided on the Company’s financial report is founded on a sound system of risk management
and internal compliance and control which implements the Board’s policies; and
The Company’s risk management and internal compliance and control system is operating efficiently and
effectively in all material respects.
The board notes that due to its nature, such internal control assurance can only be reasonable rather than absolute as the
inherent limitations in internal controls cannot be designed to detect all weaknesses in control procedures.
27
2013 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT
Principle 8: Remunerate Fairly and Responsibly
As stated above, a Nomination and Remuneration Committee has been established by the board.
Details of the remuneration for Directors and Key Management Personnel can be found in the Directors Report within the
Annual Report.
The Group Managing Director and Group Executive Director receive performance based remuneration. In addition, the
Group Managing Director has renewed his service agreement with the Group for a term of another 5 years from 1 July
2011. The other Directors do not receive any performance based remuneration and do not have contracts with the
Company that give them any form of certain tenure. One third of the Directors retire annually and are free to seek re-
election by Shareholders.
Each member of the Board has committed to spending sufficient time to enable them to carry out their duties as a
Director of the Company.
A maximum amount of remuneration for non-executive Directors is fixed by Shareholders in general meeting and can be
varied in the same manner. In determining the allocation (if any) the Board must take account of the time demands on the
Directors together with such factors as fees paid to other corporate directors and to the responsibilities undertaken by
them.
The Directors with the exception of Mr G L Sim were granted options after it was approved by the shareholders in an
Extraordinary General Meeting on 28 August 2008. The Board considers that there should be an appropriate mix of
remuneration comprising cash and securities for all Directors to link the remuneration of the Directors to the financial
performance of the Company. The Directors consider this remuneration policy to be a sensible and balanced policy which
aligns the interests of shareholders and all Directors. The hedging policy regarding unvested options is detailed within the
Directors’ Report.
28
ZICOM GROUP LIMITED CORPORATE GOVERNANCE STATEMENT
Departures from the Recommendations of the ASX Corporate Governance Council.
Recommendation
Number
1.1
1.2 and 2.5
Departure from Recommendation
Explanation for Departure
is no
formalisation of
There
the
separation of functions between the
Board and Management.
Throughout the reporting period the Board consisted
of a majority of non-executive Directors. Practices
followed are consistent with the Principle.
is no written process
There
for
performance evaluation of the Board,
committees, individual Directors and key
executives.
The Nomination and Remuneration Committee
monitors, reviews and discusses the performance
of the Board and key executives and implements
changes where necessary.
2.2
The Chair is not an independent director.
The Chairperson and Managing Director positions
are held by the same non-independent director. The
Board has chosen a director who has significant
experience in the business who will lead the
Company in the best interests of the shareholders.
The Board has agreed on the responsibilities and
division between Chairman and Managing Director.
The Chair and Managing Director
positions are held by the same non-
independent director.
There is no written Diversity Policy and
there are no established measureable
objectives for achieving gender diversity.
Although there are no written policies and
measureable objectives in place, practices followed
are consistent with the Principle.
There are no written policies and
procedures designed
to ensure
compliance with ASX Listing Rule
disclosure requirements.
Although there are no written policies in place, the
responsibility for compliance with the ASX Listing
Rules is handled by the Board, in conjunction with
the Company Secretaries.
The Company has no formally designed
or disclosed communication strategy
with Shareholders.
2.3
3.3
5.1
6.1
7.1 and 7.2
There has been no written policies on
risk oversight and management or for
senior management to make statements
to the Board concerning those matters.
The Board is conscious of the need to keep
Shareholders and markets advised. The procedures
adopted within the Company, although not written,
are weighted towards informing Shareholders and
markets.
Given the nature and size of the Company, its
business interests and the involvement of all
Directors, all of whom have business management
skills, it was not considered necessary to establish
a written policy. The Company adheres to the
Recommendations under
for
this Principle
statements by senior management to the Board.
29
2013 ANNUAL REPORT CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2013
(In Singapore dollars)
Revenue from continuing operations
Other operating income
Cost of materials
Employee, contract labour and related costs
Depreciation and amortisation
Property related expenses
Other operating expenses
Finance costs
Share of results of associates
Profit before taxation
Tax benefit / (expense)
Note
2013
S$’000
2012
S$’000
4
4
4
5
118,733
128,959
1,116
1,689
(61,265)
(29,374)
(5,256)
(2,595)
(13,367)
(474)
(613)
6,905
303
(73,776)
(27,318)
(4,931)
(2,528)
(12,081)
(878)
(1,357)
7,779
(553)
Profit for the year from continuing operations after taxation
7,208
7,226
Other comprehensive income:
Items that may be subsequently reclassified to profit and loss
Foreign currency translation on consolidation
Effect of tax on other comprehensive income
(326)
-
(326)
(135)
–
(135)
Total comprehensive income
6,882
7,091
Profit/ (loss) attributable to:
Owners of parent
Non-controlling interest
Profit for the year
Total comprehensive income / (loss) attributable to:
Owners of parent
Non-controlling interest
Earnings per share (cents)
Basic earnings per share
Diluted earnings per share
6
6
6,929
279
7,208
6,603
279
6,882
3.24
3.23
7,836
(610)
7,226
7,701
(610)
7,091
3.69
3.67
30
ZICOM GROUP LIMITED CONSOLIDATED BALANCE SHEET
as at 30 June 2013
(In Singapore dollars)
Note
2013
S$’000
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Loan receivable from an associate
Investment in an associate
Others
Current assets
Cash and bank balances
Inventories
Trade and other receivables
Prepayments
Tax recoverable
Assets held for sale
Financial asset recorded at fair value through profit or loss
TOTAL ASSETS
Current liabilities
Payables
Interest-bearing liabilities
Provisions
Provision for taxation
Unearned income
Unrealised loss on derivatives
NET CURRENT ASSETS
Non-current liabilities
Interest-bearing liabilities
Deferred tax liabilities
Provisions
Unearned income
TOTAL LIABILITIES
NET ASSETS
Equity attributable to equity holders of the Company
Contributed equity
Reserves
Retained earnings
Non-controlling interest
TOTAL EQUITY
8
9
5
11
11
20
12
13
15
16
17
18
17
5
18
19
2012
S$’000
35,833
11,918
754
-
2,768
1
51,274
24,446
28,255
33,169
908
205
-
300
87,283
33,101
13,212
1,943
919
2,578
1
51,754
21,355
21,829
34,832
546
109
524
-
79,195
130,949
138,557
20,747
9,459
1,138
431
64
2,411
34,250
44,945
5,147
2,622
443
-
8,212
42,462
88,487
37,623
(251)
50,099
87,471
1,016
88,487
31,547
10,425
1,248
1,015
64
497
44,796
42,487
6,535
2,161
384
63
9,143
53,939
84,618
37,083
110
45,955
83,148
1,470
84,618
TOTAL EQUITY AND LIABILITIES
130,949
138,557
31
2013 ANNUAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2013
(In Singapore dollars)
6
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32
ZICOM GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2013
(In Singapore dollars)
Note
2013
S$’000
2012
S$’000
Cash flows from operating activities:
Operating profit before taxation
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Bad debts written off
Allowance for doubtful debts, net
Allowance for inventory obsolescence
Inventories written off
Interest expenses
Interest income
Property, plant and equipment written off
Patented technology costs written off
Gain on disposal of property, plant and equipment
Loss on disposal of property, plant and equipment
Loss on disposal of equity interest in subsidiary
Loss on remeasurement of investment in associate to fair value
Provisions made, net
Cost of share-based payments
Fair value adjustment for financial asset through profit or loss
Share of results of associates
Unrealised loss on derivatives
Unrealised exchange difference
Operating profit before reinvestment in working capital
Decrease in stocks and work-in-progress
(Increase)/ decrease in projects-in-progress
Decrease/ (increase) in debtors
Decrease in creditors
Cash generated from operations
Interest received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in computer software
Increase in development expenditure
Increase in patented technology
Investment in associate
Decrease/ (increase) in amount due from associate
Subscription of convertible loan stocks
Acquisition of subsidiary
Disposal of subsidiary
Acquisition of non-controlling interest
Net cash used in investing activities
8
9
4
4
4
4
4
4
4
4
4
4
4
18
4
8(b)
8(c)
9
9
11(b)
11(b)
10(a)
6,905
4,406
850
–
–
19
3
474
(152)
133
5
(59)
5
–
–
152
157
–
613
2,411
(8)
15,914
7,591
(5,024)
2,790
(12,167)
9,104
152
(477)
(1,032)
7,747
(2,320)
83
(530)
(1,390)
(34)
(453)
193
(919)
–
–
(595)
(5,965)
7,779
4,225
706
2
297
45
3
878
(220)
4
–
(100)
13
87
874
214
238
(800)
1,357
497
(75)
16,024
4,727
2,421
(778)
(1,284)
21,110
220
(885)
(2,274)
18,171
(5,740)
131
(83)
(37)
(31)
(1,451)
(924)
–
157
(77)
(385)
(8,440)
33
2013 ANNUAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2013
(In Singapore dollars)
Note
2013
S$’000
2012
S$’000
Cash flows from financing activities:
Net increase in amount due to directors
Repayments of bank borrowings
Dividends paid on ordinary shares
Dividends paid to non-controlling shareholders
Proceeds from exercise of employee share options
Proceeds from issue of shares
- by the Company to shareholders
- by subsidiary company to non-controlling interest
Proceeds from disposal of equity interest to non-controlling interest
Repayment of hire purchase creditors
Net cash used in financing activities
Net (decrease)/ increase in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
7
19
20
20
22
(1,188)
(2,742)
(97)
117
351
37
43
(1,263)
(4,720)
(2,938)
(101)
24,241
21,202
30
(3,289)
(2,706)
(98)
66
–
–
–
(2,684)
(8,681)
1,050
11
23,180
24,241
34
ZICOM GROUP LIMITED 1.
Corporate information
This financial report of Zicom Group Limited (the “Company” or “Parent Entity”) and its subsidiaries for the year
ended 30 June 2013 was authorised for issue in accordance with a resolution of the directors on 23 September
2013.
Zicom Group Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on
the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’ report.
2.
Summary of significant accounting policies
2.1 Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared
on a historical cost basis except for derivative financial instruments which have been measured at their fair
values.
The financial report is presented in Singapore dollars and all values are rounded to the nearest thousand
dollars (S$’000) unless otherwise stated.
2.2
Statement of compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board.
(i)
Changes in accounting policies and disclosures
The Group has adopted the following new and amended Australian Accounting Standards and AASB
Interpretations as of 1 July 2012.
AASB 2010 – 8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of
Underlying Assets [AASB 112] effective 1 Jan 2012
AASB 2011 – 9 Amendments to Australian Accounting Standards – Presentation of Other
Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049]
effective 1 July 2012
The adoption of these standards and interpretations did not have any effect on the financial
performance or position of the Group.
(ii)
Accounting Standards and Interpretations issued but not effective
Certain Australian Accounting Standards and Interpretations have been recently issued or amended
but are not yet effective have not been adopted by the Group for the annual reporting period ended
30 June 2013. The directors expect the adoption of these new and amended standards and
interpretations below will have no material impact on the financial statements in the period of initial
application.
AASB 10 Consolidated Financial Statements
AASB 11 Joint Arrangements
35
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.2
Statement of compliance (cont’d)
(ii)
Accounting Standards and Interpretations issued but not effective (cont’d)
AASB 12 Disclosure of Interests in Other Entities
AASB 13 Fair Value Measurement
AASB 119 Employee Benefits
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
AASB 2012-9 Amendment to AASB 1048 arising from the withdrawal of Australian
Interpretation 1039
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key
Management Personnel Disclosure Requirements [AASB 124]
AASB 1053 Application of Tiers of Australian Accounting Standards
AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets
and Financial Liabilities
AASB 9 Financial Instruments
Annual Improvements 2009 – 2011 Cycle Annual Improvements to IFRSs 2009 – 2011 Cycle
[IFRS 1, IAS 1, IAS 16, IAS 32, IAS 34]
2.3
Principles of consolidation
Basis of consolidation from 1 July 2009
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries
as at the balance sheet date.
Subsidiaries are all those entities over which the Group has the power to govern the financial and operating
policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether the Group controls another
entity.
The financial statements of the subsidiaries used in the preparation of the consolidated financial statements
are prepared for the same reporting date as the Company using consistent accounting policies. All intra-
group balances, transactions, unrealised gain and losses resulting from intra-group transactions and
dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
36
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.3 Principles of consolidation (cont’d)
Investments in subsidiaries held by Zicom Group Limited are accounted for at cost in the separate financial
statements of the Parent Entity less any impairment charges. Dividends received from subsidiaries are
recorded as a component of other revenues in the separate statement of comprehensive income of the
Parent Entity, and do not impact the recorded cost of investment. Upon receipt of dividend payments
from subsidiaries, the Parent will assess whether any indicators of impairment of the carrying value of the
investment in the subsidiary exist. Where such indicators exist, to the extent that the carrying value of the
investment exceeds its recoverable amount, an impairment loss is recognised.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition
method of accounting involves recognising at the acquisition date, separately from goodwill, the identifiable
assets required, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable
assets acquired and the liabilities assumed are measured at their acquisition date fair values.
The difference between the above items and the fair value of consideration (including the fair value of any
pre-existing investment in the acquiree) is goodwill or discount on acquisition.
Non-controlling interests are allocated their share of net profit after tax in the statement of comprehensive
income and are presented within equity in the consolidated balance sheet, separately from the equity of the
owners of the Parent.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit
balance.
A change in the ownership interest of a subsidiary that does not result in a loss of control, is accounted for
as an equity transaction.
If the group loses control over a subsidiary, it
•
•
•
•
•
•
•
derecognises the assets (including goodwill) and liabilities of the subsidiary.
derecognises the carrying amount of any non-controlling interest.
derecognises the cumulative translation differences recorded in equity.
recognises the fair value of the consideration received.
recognises the fair value of any investment retained.
recognises any surplus or deficit in profit or loss.
reclassifies the Group’s share of components previously recognised in other comprehensive income
to profit or loss or retained earnings, as appropriate.
37
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.3 Principles of consolidation (cont’d)
Basis of consolidation prior to 1 July 2009
Certain of the above mentioned requirements were applied on a prospective basis. The following
differences, however, are carried forward in certain instances from the previous basis of consolidation:
Acquisitions of non-controlling interest, prior to 1 July 2009, were accounted for using the parent
entity extension method, whereby, the difference between the consideration and the book value of
the share of the net assets acquired was recognised in goodwill.
Losses incurred by the Group were attributed to the non-controlling interest until the balance was
reduced to nil. Any further excess losses were attributed to the Group, unless the non-controlling
interest had a binding obligation to cover these. Losses prior to 1 July 2009 were not reallocated
between non-controlling interest and the owners of the Parent.
Upon loss of control, the Group accounted for the investment retained at its proportionate share of
net asset value at the date control was lost. The carrying value of such investments at 1 July 2009
have not been restated.
2.4 Business combinations
Subsequent to 1 July 2009
Business combinations are accounted for using the acquisition method. Identifiable assets acquired and
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the
services are received.
When the Group acquires a business, it assess the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and other
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host
contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed
to be an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or as a
change to other comprehensive income. If the contingent consideration is classified as equity, it should not
be remeasured until it is finally settled within equity.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its
acquisition date fair value and any resulting gain or loss is recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in acquiree (if
any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate
share of the acquiree’s identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the
amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held
equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities
is recorded as goodwill. The accounting policy for goodwill is set out in Note 2.8 (a). In instances where the
latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on
the acquisition date.
38
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.4 Business combinations (cont’d)
Prior to 1 July 2009
In comparison to the above-mentioned requirements, the following differences applied:
Business combinations were accounted for using the purchase method. Transaction costs directly
attributable to the acquisition formed part of the acquisition cost. The non-controlling interest (formerly
known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net
assets.
Business combinations achieved in stages were accounted for in separate steps. Any additional acquired
share of interest did not affect previously recognised goodwill. The goodwill amounts calculated at each step
acquisition were accumulated.
When the Group acquired a business, embedded derivatives separated from the host contract by the
acquiree were not reassessed on acquisition unless the business combination resulted in a change in the
terms of the contract that significantly modified the cash flows that otherwise would have been required
under the contract.
Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic
outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the
contingent consideration were adjusted against goodwill.
2.5 Operating segments
An operating segment is a component of an entity that engages in business activities from which it may
earn revenues and incur expenses (including revenues and expenses relating to transactions with other
components of the same entity), whose operating results are regularly reviewed by the entity’s chief
operating decision makers to make decisions about resources to be allocated to the segment and assess
its performance and for which discrete financial information is available.
Operating segments have been identified based on the information provided to the chief operating decision
makers – being the executive management team.
The group aggregates two or more operating segments when they have similar economic characteristics,
and the segments are similar in each of the following respects.
Nature of the products and services
Type or class of customer for the products and services
Methods used to distribute the products or provide the services, and if applicable
Nature of the regulatory environment
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately.
However, an operating segment that does not meet the quantitative criteria is still reported separately where
information about the segment would be useful to users of the financial statements.
Segment results include items directly attributable to a segment as well as those that can be allocated on
a reasonable basis. Unallocated items mainly comprise corporate assets, head office expenses, start-up
operations which are yet to earn revenue and income tax assets and liabilities. Segment capital expenditure
is the total costs incurred during the year to acquire segment assets by geographical area that are expected
to be used for more than one year.
39
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.6
Foreign currency translation
(a)
Functional and presentation currency
The presentation currency of Zicom Group Limited is Singapore dollars (S$). Each subsidiary in the
Group determines its own functional currency and items included in the financial statements of each
subsidiary company are measured using that functional currency.
(b)
Foreign currency transactions and balances
Transactions in foreign currencies are initially recorded in the functional currencies of the Company
and its subsidiaries at exchange rates ruling at the transaction dates. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet
date. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates as at the dates 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.
Differences arising on the settlement or translation of monetary items are recognised in profit or
loss except for exchange differences arising on monetary items that form part of the Group’s net
investment in foreign operations, which are recognised initially in other comprehensive income and
accumulated under foreign currency translation reserve in equity.
(c) Consolidated financial statements
On consolidation, the results and balance sheet of foreign operations are translated into Singapore
dollars using the following procedures:
•
•
Assets and liabilities are translated at the closing rate prevailing at reporting date; and
Income and expenses are translated at average exchange rates for the year, which
approximates the exchange rates at the dates of the transactions.
The exchange differences arising on the translation are recognised in other comprehensive income.
On disposal of a foreign operation, the component of other comprehensive income relating to that
particular foreign operation is recognised in profit or loss.
2.7 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property,
plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment losses.
Freehold land has an unlimited useful life and is therefore not depreciated. Depreciation of an asset begins
when it is available for use and is computed on the straight-line basis over the estimated useful lives of the
assets as follows:
40
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.7 Property, plant and equipment (cont’d)
Leasehold properties
Machinery
Office furniture and equipment
Leasehold improvements
Motor vehicles
Computers
over remaining period of the lease
expiring years 2039 to 2043
10 years
5 years
5 years
5 years
1 year
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year end and adjusted
prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in
profit or loss in the year the asset is derecognised.
2.8
Intangible assets
(a) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the
consideration transferred over the fair value of the Group’s net identifiable assets acquired and
liabilities assumed. If this consideration transferred is lower than the fair value of the net identifiable
assets of the subsidiary acquired, the difference is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from
the acquisition date, allocated to each of the Group’s cash-generating units that are expected to
benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and
whenever there is an indication that the cash-generating unit may be impaired, by comparing the
carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable
amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is
less than the carrying amount, an impairment loss is recognised in profit or loss. Impairment losses
recognised for goodwill are not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is
disposed of, the goodwill associated with the disposed operation is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of
in this circumstance is measured based on the relative fair values of the disposed operation and the
portion of the cash-generating unit retained.
41
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.8
Intangible assets (cont’d)
(b) Other intangible assets
Intangible assets acquired separately or in a business combination are measured initially at cost.
The cost of an intangible asset acquired in a business combination is its fair value as at the date of
acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed to be either finite or indefinite.
Intangible assets with finite useful lives are amortised over their estimated useful lives and assessed
for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method are reviewed at least at each financial year end.
Intangible assets with indefinite useful lives or not yet available for use are tested for impairment
annually or more frequently if the events and circumstances indicate that the carrying value may
be impaired either individually or at the cash-generating unit level. Such intangible assets are not
amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to
determine whether the useful life assessment continues to be supportable. If not, the change in
useful life from indefinite to finite is made on a prospective basis.
Amortisation is calculated on a straight-line basis over the estimated useful lives of intangible assets
as follows:-
Computer software costs
Customer list
Patented technology
Developed/ Unpatented technology
Research and development costs
5 years
8 years
10 – 20 years
7 – 14 years
Research costs are expensed as incurred. An intangible asset arising from development expenditure
on an individual project is recognised only when the Group can demonstrate the technical feasibility
of completing the intangible asset so that it will be available for use or sale, its intention to complete
and its ability to use or sell the asset, how the asset will generate future economic benefits, the
availability of resources to complete and the ability to measure reliably the expenditure during the
development. Amortisation begins when the development is complete and the asset is available for
use or sale. Any expenditure so capitalised is amortised over the period of expected benefit from the
related project.
Club membership
Club membership was acquired separately and is not amortised as it has an indefinite life.
Gains or losses from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss.
42
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.9
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired.
If any such indication exists, or when annual impairment testing for an asset (i.e. goodwill acquired in a
business combination) is required, the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to
sell and its value in use and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. 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.
In determining fair value less cost to sell, recent market transactions are taken into account, if available.
If no such transaction can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded companies or other available
fair value indicators. Where the carrying amount of an asset exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. Impairment losses are recognised in
profit or loss.
An assessment is made at each reporting date as to whether there is any indication that previously
recognised impairment losses recognised for an asset other than goodwill may no longer exist or may
have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised
impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount
of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognised for
the asset in prior years. Reversal of an impairment loss is recognised in profit or loss.
2.10
Investment in an associate
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant
influence. An associate is equity accounted for from the date the Group obtains significant influence until the
date the Group ceases to have significant influence over the associate.
The Group generally deems they have significant influence if they have over 20% of the voting rights.
Under the equity method, investment in the associate is carried on the balance sheet at cost plus post-
acquisition changes in the Group’s share of net assets of the associate. Goodwill relating to an associate is
included in the carrying amount of the investment and is neither amortised nor tested for impairment.
The profit or loss reflects the Group’s share of the results of operations of the associate. Where there has
been a change recognised in other comprehensive income by the associate, the Group recognises its share
of such changes in other comprehensive income. Unrealised gains and losses resulting from transactions
between the Group and the associate are eliminated to the extent of the interest in the associate.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment
loss on the Group’s investment in its associate. The Group determines at each reporting date whether there is
any objective evidence that the investment in the associate is impaired. If this is the case the Group calculates
the amount of impairment as the difference between the recoverable amount of the associate and its carrying
value and recognises the loss as “share of results of associates” in the profit or loss.
43
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.10
Investment in an associate (cont’d)
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
The reporting dates of the associate and the Group are identical and the associate’s accounting policies
conform to those used by the Group for like transactions and events in similar circumstances.
Upon loss of significant influence over the associate, the Group measures and recognises any retained
investment at its fair value. Any difference between the carrying amount of the associate upon loss
of significant influence and the fair value of the aggregate of the retained investment and proceeds from
disposal is recognised in the profit or loss.
2.11 Financial assets
Initial recognition and measurement
Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to
the contractual provisions of the financial instrument. The Group determines the classification of its financial
assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial
assets not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:-
(a)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and
financial assets designated upon initial recognition at fair value through profit and loss. This category
includes derivative financial instruments entered by the Group that are not designated as hedging
instruments in hedge relationships as defined in AASB 139.
The Group has not designated any financial assets upon initial recognition at fair value through profit
or loss.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at
fair value. Any gains or losses arising from changes in fair value of the financial assets are recognised
in profit or loss and the related assets are classified as current assets in the balance sheet.
(b)
Loans and receivables
Non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market are classified as loans and receivables. Subsequent to initial recognition, loans and
receivables are carried at amortised cost using the effective interest method, less impairment losses.
Gains and losses are recognised in profit or loss when the loans and receivables are derecognised
or impaired, and through the amortisation process. These are included in current assets, except for
those with maturities greater than 12 months after the balance sheet date, which are classified as
non-current.
44
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.11 Financial assets (cont’d)
(c)
Available-for-sale financial assets
Available-for-sale financial assets include equity and debt securities. Equity investments classified as
available for sale are those that are neither classified as held for trading nor designated at fair value
through profit and loss. Debt securities in this category are those that are intended to be held for an
indefinite period of time and they may be sold in response to needs of liquidity or changes in market
conditions.
After initial recognition, available-for-sale financial assets are measured at fair value with gains or
losses from changes in fair value recognised in other comprehensive income, except for impairment
losses, foreign exchange gains and losses on monetary instruments and interest calculated using
the effective interest method are recognised in profit or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss as a
reclassification adjustment when the financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost
less impairment loss.
Derecognition
A financial asset is derecognised where the contractual right to receive cash flows from the asset has
expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and
the sum of the consideration received and any cumulative gain or loss that has been recognised in other
comprehensive income is now recognised in profit or loss.
2.12
Impairment of financial assets
The Group assesses at each balance sheet date whether there is any objective evidence that a financial
asset or group of financial assets is impaired.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the financial asset’s original effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss
is recognised in profit or loss.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly
or if an amount was charged to the allowance account, the amounts charged to the allowance account are
written off against the carrying value of the financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets has incurred,
the Group considers factors such as the probability of insolvency or significant financial difficulties of the
debtor and default or significant delay in payments.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the previously recognised impairment
loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at
the reversal date. The amount of reversal is recognised in profit or loss.
45
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.13 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits, and short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value. For the purposes of the statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts which forms an
integral part of the Group’s cash management. Bank overdrafts are included within interest-bearing liabilities
under current liabilities on the balance sheet.
2.14 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories
to their present location and condition are accounted for as follows:
-
-
Raw material: purchase costs on a first-in first-out basis.
Finished goods and work-in-progress: costs of direct materials and labour and a proportion
of manufacturing overheads based on normal operating capacity. These costs are assigned on a
first-in first-out basis.
When necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying
value of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of
completion and the estimated costs necessary to make the sale.
2.15 Construction contracts
The Group principally operates fixed price contracts. Contract revenue and contract costs are recognised as
revenue and expenses, respectively, by reference to the stage of completion of the contract activity at the
balance sheet date, when the outcome of a construction contract can be estimated reliably.
The outcome of a construction contract can be estimated reliably when i) total contract revenue can be
measured reliably; (ii) it is probable that the economic benefits associated with the contract will flow to the
entity; (iii) the costs to complete the contract and the stage of completion can be measured reliably; and
(iv) the contract costs attributable to the contract can be clearly identified and measured reliably so that the
actual costs incurred can be compared with prior estimates.
Where the contract outcome cannot be measured reliably (principally during the early stages of a contract),
both contract revenue and expenses are not recognised until the contract outcome can be estimated
reliably.
The stage of completion is measured by the proportion that contract costs incurred to date bear to the
estimated total contract cost. Only costs that reflect services performed are included in the estimated total
costs of the contract. An expected loss on the construction contract is recognised as an expense immediately
when it is probable that total contract costs will exceed total contract revenue.
46
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.16 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it
is no longer probable that an outflow of economic resources will be required to settle the obligation, the
provision is reversed. If the effect of the time value of money is material, provisions are discounted using a
current pre- tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognised as a finance cost.
Provisions for warranty-related costs are recognised when the product is sold or service provided. Initial
recognition is based on historical experience. The initial estimate of warranty-related costs is reviewed
annually and revised, if necessary.
2.17 Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant
will be received and all attaching conditions will be complied with. When the grant relates to an expense
item, it is recognised as income on a systematic basis over the period that the costs, which it is intended
to compensate, are expensed. Where the grant relates to an asset, the fair value is recognised as deferred
capital grant on the balance sheet and is amortised to profit or loss over the expected useful life of the
relevant asset by equal annual instalments. Alternatively, it may be presented on the balance sheet by
deducting the grant in arriving at the carrying amount of asset.
2.18 Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual
provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial
recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value
through profit or loss, directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:-
(a)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and
financial liabilities designated upon initial recognition at fair value through profit or loss. Financial
liabilities are classified as held for trading if they are acquired for the purpose of selling in the near
term. This category includes derivative financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships. Separated embedded derivatives are also
classified as held for trading unless they are designated as effective hedging instruments.
47
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.18 Financial liabilities (cont’d)
(a)
Financial liabilities at fair value through profit or loss (cont’d)
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured
at fair value. Any gains or losses arising from changes in fair value of the financial liabilities are
recognised in profit or loss.
The Group has not designated any financial liabilities upon initial recognition at fair value through
profit or loss.
(b)
Other financial liabilities
After initial recognition, other financial liabilities are subsequently measured at amortised cost using
the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities
are derecognised, and through the amortisation process.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged, cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original liability and the recognition of a
new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
2.19 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the
acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when
the activities to prepare the asset for its intended use or sale are in progress and the expenditures and
borrowing costs are incurred.
Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All
other borrowing costs are expensed in the period they occur. Borrowing costs consists of interest and other
costs that an entity incurs in connection with the borrowing of funds.
2.20 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the
arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific
asset or assets and the arrangement conveys a right to use the asset, even if that right is not explicitly
specified in the arrangement.
Group as a lessee
Finance leases that transfer substantially all the risks and benefits incidental to ownership of the leased item
to the Group, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at
the present value of the minimum lease payments. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged to profit or loss.
48
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.20 Leases (cont’d)
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the
lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease
term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the
lease term.
Group as a lessor
Leases where the Group transfers substantially all the risks and benefits of ownership of the leased item
is accounted for in accordance with the Group’s policy for sales of goods as set out in note 2.23. Cost
incurred in connection with negotiating and arranging the finance lease is recognised as an expense when
the selling profit is recognised.
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are
classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to
the carrying amount of the leased asset and recognised over the lease term on the same bases as rental
income. The accounting policy for rental income is set out in note 2.23.
2.21 Employee benefits
(a) Wages and salaries, annual leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave expected to be
settled within 12 months of the balance sheet date are recognised in respect of employees’ services
up to the reporting date and measured at the amounts expected to be paid when liabilities are
settled.
(b)
Long service leave / retirement benefits
The liabilities for long service leave and retirement benefits, applicable to Australian and Thailand
subsidiaries respectively, are recognised in the provision for employee benefits and measured at the
present value of expected future payments to be made in respect of services provided by employees
up to the balance sheet date. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the reporting date on national government bonds with terms to maturity and
currencies that match, as closely as possible, the estimated future cash outflows.
(c)
Superannuation
The Group participates in the national pension scheme as defined by the laws of the countries in
which it has operations.
Contributions are made by the Group, for its Australian subsidiaries, to employee accumulation
superannuation funds.
The Group’s companies in Singapore make contributions to the Central Provident Fund scheme, a
defined contribution pension scheme.
49
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.21 Employee benefits (cont’d)
(c)
Superannuation (cont’d)
The subsidiary company incorporated and operating in the People’s Republic of China (“PRC”) is
required to provide certain staff pension benefits to its employees under existing PRC regulations.
Pension contributions are provided at rates stipulated by PRC regulators and are contributed to
a pension fund managed by government agencies, which are responsible for administering these
amounts for the subsidiary’s employees.
Contributions to defined contribution pension schemes are recognised as an expenses in the period
in which the related services is performed.
(d)
Employee share option plan
Employees (including key management personnel) of the Group receive remuneration in the form of
share options as consideration for service rendered. The cost of these equity-settled share based
payment transactions with employees is measured by reference to the fair value of the options at the
date on which the options are granted. This cost is recognised in profit or loss, with a corresponding
increase in the employee share option reserve, over the vesting period. The cumulative expenses
are recognised at each reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Group’s best estimate of the number of options that will ultimately vest.
The charge or credit to profit or loss for a period represents the movement in cumulative expense
recognised as at beginning and end of that period and is recognised in employee costs.
No expense is recognised for options that do not ultimately vest. The employee share option reserve
is transferred to retained earnings upon expiry or forfeiture of the share options after its vesting date.
When the options are exercised, the employee share option reserve is transferred to share capital as
new shares are issued.
2.22 Derivative financial instruments
The Group uses derivative financial instruments to hedge its risks associated with foreign currency. Such
derivative financial instruments are classified as financial assets or liabilities at fair value through profit or loss
and are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value at each balance sheet date.
Any gains or losses arising from changes in fair value on derivative financial instruments are taken to profit or
loss.
2.23 Revenue recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the
extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably
measured. The following specific recognition criteria must also be met before revenue is recognised:-
Sale of goods
Revenue on sale of goods is recognised when the significant risks and rewards of ownership of the goods
have been passed to the buyer, which generally coincides with delivery and acceptance of the goods sold.
50
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.23 Revenue recognition (cont’d)
Services rendered
Revenue from services rendered are recognised upon performance of services and the delivery to
customers.
Revenue recognised on projects
Revenue on contract jobs are recognised using the percentage of completion method. The stage of
completion is measured using the proportion of costs incurred to the estimated total costs to complete the
project. Losses, if any, are immediately recognised when their existence is foreseen.
Interest income
Interest income is recognised using the effective interest method.
Dividends
Dividend income is recognised when the Group’s right to receive payment is established.
Rental income
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate cost of
incentives provided to lessees is recognised as a reduction of rental income over the lease term on a
straight-line basis.
Commission income
Commission income is recognised on an accrual basis.
2.24 Taxation
(a)
Current tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted at the balance sheet date,
in the countries where the Group operates and generates taxable income.
Current income taxes are recognised in profit or loss except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive or directly in equity. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate.
(b)
Deferred tax
Deferred income tax is provided using the liability method on temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
51
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.24 Taxation (cont’d)
(b)
Deferred tax (cont’d)
Deferred tax liabilities are recognised for all temporary differences, except:
-
-
When the deferred tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, when the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of
unused tax credits and unused tax losses. Deferred tax assets are recognised to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences, and
the carry forward of unused tax credits and unused tax losses can be utilised except:
-
-
When the deferred tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and,
at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
and
In respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognised only to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each
balance sheet date and are recognised to the extent that it has become probable that future taxable
profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the balance sheet date.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current income tax assets against current income tax liabilities and the deferred taxes relate to the
same taxable entity and the same taxation authority.
52
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.24 Taxation (cont’d)
(c)
Goods and service tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax except:
-
Where the goods and services tax incurred on a purchase of assets or services is not
recoverable from the taxation authority, in which case the goods and services tax is
recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
-
Receivables and payables that are stated with the amount of goods and services tax included.
The net amount of goods and services tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables on the balance sheet.
2.25 Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
2.26 Earnings per share
(a)
Basic earnings per share
Basic earnings per share is determined by dividing net profit attributable to members of the Company
by the weighted average number of ordinary shares outstanding during the year.
(b) Diluted earnings per share
Diluted earnings per share is determined by dividing the net profit attributable to members of the
Company by the adjusted weighted average number of ordinary shares which takes into account the
effects of all dilutive potential ordinary shares comprising of share options granted to employees.
2.27 Related parties
A related party is defined as follows:
(a)
a person or a close member of that person’s family is related to the Group and Company if that
person:
(i)
has control or joint control over the Company;
(ii)
has significant influence over the Company; or
(iii)
is a member of the key management personnel of the Group or Company or of a parent of the
Company.
53
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.27 Related parties (cont’d)
(b)
An entity is related to the Group and the Company if any of the following conditions applies:
(i)
(ii)
the entity and the Company are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
one entity is an associate or joint venture of the other entity (or an associate or joint venture of
a member of a group of which the other entity is a member).
(iii)
both entities are joint ventures of the same third party.
(iv)
(v)
one entity is a joint venture of a third entity and the other entity is an associate of the third
entity.
the entity is a post-employment benefit plan for the benefit of employees of either the
Company or entity related to the Company. If the Company is itself such a plan, the
sponsoring employers are also related to the Company.
(vi)
the entity is controlled or jointly controlled by a person identified in (a).
(vii)
a person identified in (a) (i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
2.28 Critical accounting estimates and judgments
The preparation of the Group’s financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent liabilities at the balance sheet date. Uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amount of the
asset or liability affected in the future periods.
(a)
Key sources of estimation uncertainty
Management has identified the following critical accounting policies for which significant judgements,
estimates and assumptions are made. Actual results may differ from these estimates under different
assumptions and conditions and may materially affect financial results or the balance sheet reported
in future periods.
(i)
Useful lives of property, plant and equipment
The cost of property, plant and equipment is depreciated on a straight-line basis over the
property, plant and equipment’s estimated economic useful lives. Management estimates the
useful lives of these property, plant and equipment to be within 1 to 30 years. Changes in the
expected level of usage and technological developments could impact the economic useful
lives and the residual values of these assets, therefore, future depreciation charges could be
revised. The carrying amount of the Group’s property, plant and equipment at the balance
sheet date is disclosed in Note 8 to the financial statements.
54
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.28 Critical accounting estimates and judgments (cont’d)
(a)
Key sources of estimation uncertainty (cont’d)
(ii)
Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-financial assets
at each balance sheet date. Goodwill and other intangibles with indefinite lives are tested for
impairment annually and at other times when such indicators exist. Other non-financial assets
are tested for impairment when there are indicators that the carrying amounts may not be
recoverable.
When value in use calculations are undertaken, management must estimate the expected
future cash flows from the asset or cash-generating unit and choose a suitable discount
rate in order to calculate the present value of those cash flows. Further details of the key
assumptions applied in the impairment assessment of goodwill are given in Note 9 to the
financial statements.
(iii)
Impairment of loans and receivables
The Group assesses at each balance sheet date whether there is any objective evidence that
a financial asset is impaired. To determine whether there is objective evidence of impairment,
the Group considers factors such as the probability of insolvency or significant financial
difficulties of the debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash
flows are estimated based on historical loss experience for assets with similar credit risk
characteristics. The carrying amount of the Group’s loans and receivable at the balance sheet
date is disclosed in note 21 to the financial statements.
(iv) Construction contracts
The Group recognises contract revenue by reference to the stage of completion of the
contract activity at the balance sheet date, when the outcome of a construction contract can
be estimated reliably. The stage of completion is measured by reference to the proportion that
contract costs incurred for work performed to date bear to the estimated total contract costs.
Significant assumptions are required to estimate the total contract costs that will affect the
stage of completion. The estimates are made based on past experience and knowledge of
the project engineers. The carrying amounts of assets and liabilities arising from construction
contracts at the balance sheet date are disclosed in Note 14 to the financial statements.
(b)
Judgements made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the following
judgements, apart from those involving estimations, which has the most significant effect on the
amounts recognised in the financial statements:
Income taxes
The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is
involved in determining the group-wide provision for income taxes. There are certain transactions
and computations for which the ultimate tax determination is uncertain during the ordinary course of
business.
55
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 2.
Summary of significant accounting policies (cont’d)
2.28 Critical accounting estimates and judgments (cont’d)
(b)
Judgements made in applying accounting policies (cont’d)
The Group recognises liabilities for expected tax issues based on estimates of whether additional
taxes will be due. Where the final tax outcome of these matters is different from the amounts that
were initially recognised, such differences will impact the income tax and deferred tax provisions in
the period in which such determination is made. The carrying amount of the Group’s tax payables
and deferred tax liabilities at 30 June 2013 was S$431,000 (2012: S$1,015,000) and S$2,622,000
(2012: S$2,161,000) respectively. The Group also has deferred tax assets of S$1,943,000
(2012: S$754,000) as at 30 June 2013.
3.
Segment information
Business segments
Identification of reportable segments
The group has identified its operating segments based on internal reports that are reviewed and used by the
executive management team (the chief operating decision makers) in assessing performance and in determining
the allocation of resources. The operating segments identified are as follows:
•
•
•
Offshore Marine, Oil and Gas Machinery – manufacture and supply of deck machinery, gas metering
stations, offshore structures for underwater robots and related equipment, parts and services.
Construction Equipment – manufacture and supply of concrete mixers and foundation equipment, including
equipment rental, parts and related services.
Precision Engineering and Automation – manufacture of precision and automation equipment, thermal
bonders, including equipment related parts and engineering services.
•
Industrial and Mobile Hydraulics – supply of hydraulic drive systems, parts and services.
Inter-segment sales
Inter-segment sales are recognised based on internally set transfer price at arm’s length basis.
Unallocated revenue and expenses
Unallocated revenue comprises mainly non-segmental revenue including grants received by start-up operations
which are yet to earn revenue and fair value gain on derivative asset. Unallocated expenses comprise mainly of
non-segmental expenses such as head office expenses, loss on remeasurement or expenses relating to start-up
operations which are yet to earn revenue.
56
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 3.
Segment information (cont’d)
Business segments (cont’d)
The following tables present revenue and profit information regarding operating segments for the years ended
30 June 2013 and 2012.
Offshore
marine, oil
and gas
machinery
S$’000
Precision
engineering
and
automation
S$’000
Construction
equipment
S$’000
Industrial
and mobile
hydraulics Consolidated
S$’000
S$’000
Year ended 30 June 2013
Revenue
Sales to external customers
Other revenue
Inter-segment sales
Total segment revenue
Inter-segment elimination
Unallocated revenue
Interest income
Total consolidated revenue
Results
Segment results
Unallocated revenue
Unallocated expenses
Share of results of associate
Profit before tax and finance cost
Finance costs
Interest income
Profit before taxation
Income tax benefit/ (expense)
Net profit after taxation
Other segment information
Capital expenditure
- property, plant and equipment
- intangible assets
Depreciation and amortisation
Other non-cash expenses
41,963
9
137
42,109
39,461
252
7
39,720
34,725
455
31
35,211
2,584
5
839
3,428
4,540
2,759
2,187
859
261
154
606
2,073
3,596
198
3,219
600
175
876
1,085
342
42
31
18
5
118,733
721
1,014
120,468
(1,014)
243
152
119,849
10,345
243
(2,748)
(613)
7,227
(474)
152
6,905
303
7,208
4,074
1,259
5,333
4,928
3,020
57
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 3.
Segment information (cont’d)
Business segments (cont’d)
Year ended 30 June 2012
Revenue
Sales to external customers
Other revenue
Inter-segment sales
Total segment revenue
Inter-segment elimination
Unallocated revenue
Interest income
Total consolidated revenue
Results
Segment results
Unallocated revenue
Unallocated expenses
Share of results of associates
Profit before tax and finance cost
Finance costs
Interest income
Profit before taxation
Income tax benefit/ (expense)
Net profit after taxation
Other segment information
Capital expenditure
- property, plant and equipment
- intangible assets
Depreciation and amortisation
Other non-cash expenses
Offshore
marine, oil
and gas
machinery
S$’000
Precision
engineering
and
automation
S$’000
Construction
equipment
S$’000
Industrial
and mobile
hydraulics Consolidated
S$’000
S$’000
34,302
52
–
34,354
57,167
207
15
57,389
34,721
171
4
34,896
2,769
5
414
3,188
1,916
6,394
2,722
668
328
4
552
541
7,016
–
1,317
99
3,122
663
931
172
–
–
15
139
128,959
435
433
129,827
(433)
1,034
220
130,648
11,700
1,034
(2,940)
(1,357)
8,437
(878)
220
7,779
(553)
7,226
8,661
103
8,764
4,620
1,515
58
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 3.
Segment information (cont’d)
Geographical segments
The Group’s geographical segments for revenue and non-current assets are determined based on location of
customers and assets respectively.
The following table presents revenue and certain assets information regarding geographical segments for the years
ended 30 June 2013 and 2012.
Year ended 30 June 2013
Revenue
S$’000
S$’000
S$’000
S$’000 S$’000
S$’000
S$’000
S$’000
S$’000
Australia Malaysia Singapore China
States Bangladesh Thailand Others
Total
United
Sales to external
customers
16,450
11,723
34,239
17,077
25,948
2,227
6,910
4,159
118,733
Other revenue from
external customers
47
7
945
10
Other segment
information
Segment non-current
assets
3,882
4,379
29,962
243
Investment in associates
Unallocated assets
Capital expenditure
- property, plant and
equipment
111
262
3,697
- intangible assets
–
–
1,847
3
–
–
–
–
–
–
34
73
1,116
119,849
–
7,304
543
46,313
2,578
2,863
51,754
–
–
98
63
4,234
167
–
2,014
6,248
59
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 3.
Segment information (cont’d)
Geographical segments (cont’d)
Year ended 30 June 2012
Revenue
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000 S$’000
Australia Malaysia Singapore China
States Bangladesh Thailand Others
Total
United
Sales to external
customers
23,281
12,721
35,938
6,947
29,099
8,067
6,833
6,073 128,959
Other revenue from
external customers
41
32
1,390
41
2
21
16
146
1,689
130,648
Other segment
information
Segment non-current
assets
4,997
1,269
32,547
284
–
–
7,954
700 47,751
Investment in associates
Unallocated assets
Capital expenditure
- property, plant and
2,768
755
51,274
equipment
772
1,121
6,481
- intangible assets
–
–
2,110
37
–
–
–
–
–
134
207
8,752
–
29
2,139
10,891
4.
Revenue, income and expenses
(i)
Revenue
Sales of goods
Rendering of services
Rental revenue
Revenue recognised on projects
60
Consolidated
2013
S$’000
76,094
6,860
6,335
29,444
118,733
2012
S$’000
93,764
7,684
6,326
21,185
128,959
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 4.
Revenue, income and expenses (cont’d)
(ii)
Other operating income
Interest income
Commission income
Gain on disposal of property, plant and equipment
Service rendered
Government grants
Gain on financial asset recorded at fair value through profit or loss
Bad debts recovered
Trade discount received
Other revenue
(iii)
Other operating expenses
Included in other operating expenses are the following:
Consolidated
2013
S$’000
2012
S$’000
152
26
59
398
230
–
4
108
139
1,116
220
66
100
193
140
800
2
40
128
1,689
Consolidated
2013
S$’000
2012
S$’000
Allowance for inventory obsolescence, net
Allowance for doubtful debts, net
Bad debts written off
Foreign exchange loss /(gain)
Provision for product warranties, net
Loss on disposal of property, plant and equipment
Property, plant and equipment written off
Warranty expense charged directly to profit or loss
Inventories written off
Patented technology cost written off
Loss on remeasurement of investment in associate to fair value
Loss on disposal of equity interest in subsidiary
19
–
–
2,687
47
5
133
55
3
5
–
–
45
297
2
(161)
109
13
4
–
3
–
874
87
61
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 5.
Tax expense
Current income tax
- Current income tax charge
- Adjustments in respect of previous years
Deferred income tax
- Relating to the origination and reversal of temporary differences
- Adjustment in respect of previous years
Income tax (benefit)/ expense
Consolidated
2013
S$’000
2012
S$’000
544
(96)
(1,258)
507
(303)
1,073
(30)
(186)
(304)
553
A reconciliation between the tax expense and the product of accounting profit of the Group multiplied by the
applicable tax rate for the year ended 30 June was as follows:
Profit before taxation
Tax expense:
Tax at the domestic rates applicable to profits in the countries where the
group operates
Release of deferred tax liability on intangible assets
Non-deductible expenses
Non-taxable income
Partial tax exemption
Deferred tax asset not recognised
Recognition of deferred tax assets not previously recognised
Utilisation of deferred tax asset previously not recognised
Under / (over) provision in prior years
Enhanced tax credits
Others
Tax (benefit) / expense
Consolidated
2013
S$’000
2012
S$’000
6,905
7,779
1,402
(111)
530
(397)
(113)
265
(1,001)
–
411
(1,267)
(22)
(303)
2,352
(106)
248
(992)
(155)
73
–
(62)
(334)
(417)
(54)
553
The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.
62
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 5.
Tax expense (cont’d)
Deferred taxation as at 30 June relates to the following:
Consolidated
balance sheet
2013
S$’000
2012
S$’000
Consolidated statement of
comprehensive income
2012
2013
S$’000
S$’000
Deferred tax liabilities
Differences in depreciation
Intangible assets
Acquisition of subsidiary
Accrual for unconsumed leave
Provisions
Unutilised capital allowances
Unutilised tax losses
Deferred tax assets
Unutilised tax losses
Unutilised capital allowances
Provisions
Accrual for unconsumed leave
Differences in depreciation
Intangible assets
(2,386)
(636)
–
58
147
7
188
(2,622)
1,857
86
197
11
(21)
(187)
1,943
(1,510)
(573)
(114)
36
–
–
–
(2,161)
533
8
405
40
(197)
(35)
754
876
(48)
–
(22)
(147)
(7)
(188)
(1,350)
(78)
208
29
(176)
152
(751)
(502)
(111)
–
3
–
31
10
20
(3)
124
(5)
(44)
(13)
(490)
Consolidated
2013
S$’000
2012
S$’000
The directors estimate that the potential future income tax benefit at 30
June in respect of revenue tax losses not brought to account is
3,293
3,663
The benefit will only be obtained if –
(a)
(b)
the consolidated entity derives future assessable income of a nature and of an amount sufficient to enable
the benefit to be realised;
the consolidated entity continues to comply with the conditions for deductibility imposed by tax legislation;
and
(c)
no changes in tax legislation adversely affect the consolidated entity’s ability to realise the benefit.
Tax Consolidation Legislation
Zicom Group Limited and its wholly owned Australian subsidiaries have not elected to form a tax consolidated
group.
63
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 6.
Earnings per share
Earnings per share are calculated by dividing the Group’s profit attributable to members of the Company by the
weighted average number of shares in issue during the year.
Earnings used in calculating basic and diluted earnings per share
(a)
Net profit attributable to equity holders of the Parent
Consolidated
2013
S$’000
2012
S$’000
6,929
7,836
No. of shares (Thousands)
(b) Weighted average number of shares for basic earnings per share
213,798
212,376
Effect of dilution:
Share options (d)
Adjusted weighted average number of shares
(c)
Earnings per share
Basic
Diluted
849
214,647
1,406
213,782
Singapore cents
3.24
3.23
3.69
3.67
There were no transactions involving ordinary or potential ordinary shares that would significantly change the
number of the ordinary shares or potential ordinary shares outstanding between the reporting date and the date of
completion of these financial statements.
(d)
Options
Options granted to employees (including KMP) as described in note 25 are considered to be potential
ordinary shares and have been included in the determination of diluted earnings per share to the extent they
are dilutive. These options have not been included in the determination of basic earnings per share.
7.
Dividends
Declared and paid during the financial year:
- Final unfranked dividend for 2011: 0.55 Australian cents per share
- Interim unfranked dividend for 2012: 0.45 Australian cents per share
- Final unfranked dividend for 2012: 0.55 Australian cents per share
- Interim unfranked dividend for 2013: 0.45 Australian cents per share
Consolidated
2013
S$’000
2012
S$’000
–
–
1,488
1,254
2,742
1,471
1,235
–
–
2,706
Proposed but not recognised as a liability as at 30 June:
- Final unfranked dividend for 2013: 0.55 Australian cents per share
(2012: 0.55 Australian cents per share)
1,358
1,519
After the reporting date, the final dividend for 2013 was approved by the board of directors.
64
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) l
a
t
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65
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars)
8.
Property, plant and equipment (cont’d)
(a)
The net book value of property, plant and equipment held under hire purchase are as follows:-
Motor vehicles
Plant and equipment
Consolidated
2013
S$’000
240
5,008
5,248
2012
S$’000
32
4,315
4,347
Leased assets are pledged as security for the related finance lease liabilities.
(b)
During the year, the Group acquired property, plant and equipment with an aggregate cost of S$4,234,000
(2012: S$8,752,000) of which S$1,580,000 (2012: S$1,711,000) were acquired by means of hire purchase
financing. Cash payments of S$2,320,000 (2012: S$5,740,000) were made to purchase property, plant and
equipment. Additions also included an amount of S$314,000 (2012: S$1,266,000) which was previously
included in stock but was converted and capitalised as fixed assets during the current financial year. The
balance of S$20,000 (2012: S$35,000) relates to provision for reinstatement made in the current financial
year.
(c)
During the financial year, the Group disposed of property, plant and equipment with an aggregate net book
value of S$29,000 (2012: S$44,000). Sales proceeds amounting to S$83,000 (2012: S$131,000) were
received in cash.
(d)
During the financial year, the Group wrote off property, plant and equipment with an aggregate net book
value of approximately S$133,000 (2012: S$4,000).
(e)
The net book value of property, plant and equipment pledged as security are as follows:
Mortgage of leasehold properties
Mortgage of freehold land and buildings
Consolidated
2013
S$’000
3,125
5,527
8,652
2012
S$’000
3,250
6,166
9,416
66
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) l
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a
c
t
e
N
3
1
0
2
e
n
u
J
0
3
t
A
2
1
0
2
e
n
u
J
0
3
t
A
67
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars)
9.
Intangible assets (cont’d)
Average remaining Amortisation period
(years) – 2013
Average remaining Amortisation period
(years) - 2012
Impairment tests for goodwill
Customer
list
Developed
technology
Computer
software
Unpatented
technology
Patented
technology
1
2
–
1
5
2
11.4
12.4
10
10
In accordance with AASB 3, the carrying value of the Group’s goodwill on acquisition as at 30 June 2013 was
assessed for impairment.
Basis on
which
recoverable
values are
determined
As at
30.6.2013
As at
30.6.2012
S$’000
S$’000
Growth rate
per annum
2013
%
2012
%
Discount
rate per
annum
2013 2012
%
%
Group
Carrying value of capitalised goodwill
based on cash generating units
Sys-Mac Automation Engineering Pte Ltd
2,974
2,974
Value-in-use 8% - 20% 5% - 8% 16% 13%
Zicom Group Limited
2,291
2,530
Value-in-use 5% - 10% 5% - 10% 18% 17%
Orion Systems Integration Pte Ltd
Biobot Surgical Pte Ltd
664
1,316
7,245
664
Value-in-use 10% - 20% 10% - 30% 16% 14%
1,316
Value-in-use 15% - 30% 15% - 30% 19% 17%
7,484
Goodwill is allocated for impairment testing purposes to the individual entity which is also the cash generating unit
(“CGU”).
The recoverable amount of each CGU is determined based on value-in-use calculations using cashflow projections
based on financial budgets approved by management covering a one to five years period. Management
determined budgeted gross margin in the financial budgets based on past performance and its expectation of
market development. Terminal growth rate of 1% were used for the above cash generating units with the exception
of Orion Systems Integration Pte Ltd for which 0% was used.
The calculations of value-in-use for the CGUs are most sensitive to the following assumptions:-
Budgeted gross margins – Gross margins are based on average values achieved in the three years preceding
the start of the budget period or if unavailable, based on management assessment of the markets. These are
increased over the budget period for anticipated efficiency improvements.
Growth rates – The forecasted growth rates are based on management’s assessment of the markets and do not
exceed the long-term average growth rate for the industries relevant to the CGUs.
68
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 9.
Intangible assets (cont’d)
Pre-tax discount rates – Discount rate reflect the current market assessment of the risk specific to the CGUs. In
determining appropriate discount rates for each unit, regard has been given to the weighted average cost of capital
of the entity as a whole and the yield on a 15 year government bond at the beginning of the budgeted year.
Sensitivity to changes in assumption
Management believe that no reasonably possible change in any of the above key assumptions would cause the
carrying values of these CGUs to materially exceed their recoverable amounts.
No impairment loss was required for the financial years ended 30 June 2013 and 2012 for goodwill as their
recoverable values were in excess of their carrying values.
10.
Investment in subsidiaries
Investment in controlled entities, at cost
Less: Impairment loss
Parent Entity
2013
S$’000
54,544
(5,921)
48,623
2012
S$’000
54,544
(5,263)
49,281
The consolidated financial statements include the financial statements of Zicom Group Limited and the subsidiaries
listed in the following table.
The interest in each controlled entity has been adjusted to assessed recoverable amounts on the basis of their
underlying assets.
Name of Company
Held by the Company:
Cesco Australia Limited
Zicom Holdings Pte Ltd
Controlled entities held by subsidiary
companies:
Country of
incorporation/
formation
Carrying value
of Parent Entity
investment
Percentage
of equity held by the
Group
2013
S$’000
2012
S$’000
2013
%
2012
%
Australia
Singapore
4,448
44,175
5,106
44,175
100
100
Cesco Equipment Pty Ltd
Zicom Pte Ltd
Zicom Equipment Pte Ltd
Foundation Associates Engineering Pte Ltd
Sys-Mac Automation Engineering Pte Ltd
MTA-Sysmac Automation Pte Ltd
SAEdge Vision Solutions Pte Ltd
Australia
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100
100
100
100
100
61
100
100
100
100
100
100
100
100
61
100
69
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 10.
Investment in subsidiaries (cont’d)
Name of Company
Controlled entities held by subsidiary
companies: (cont’d)
Integrated Automation Systems Pte Ltd
Orion Systems Integration Pte Ltd
Biobot Surgical Pte Ltd
PT Sys-Mac Indonesia
Zicom Cesco Engineering Co. Ltd
Zicom Cesco Thai Co. Ltd
Zicom Thai Hydraulics Co. Ltd
FA Geotech Equipment Sdn Bhd
Cesco Kemajuan Sdn Bhd
Hangzhou Cesco Machinery Co Ltd
Country of
incorporation/
formation
Carrying value
of Parent Entity
Investment
Percentage
of equity held by the
Group
2013
S$’000
2012
S$’000
2013
%
2012
%
Singapore
Singapore
Singapore
Indonesia
Thailand
Thailand
Thailand
Malaysia
Malaysia
China
–
–
–
–
–
–
–
–
–
–
48,623
–
–
–
–
–
–
–
–
–
–
49,281
100
84
92
100
100
100
100
100
100
100
100
54
80
100
100
100
100
100
100
100
(a)
Orion Systems Integration Pte Ltd (“Orion”)
On 3 July 2012, Zicom Holdings Pte Ltd acquired an additional 29.74% equity interest in Orion from its
non-controlling interest for a cash consideration of S$595,000 thereby increasing the Group’s interest in
Orion to 84%. The difference between the carrying value of the additional interest acquired of S$624,000
and the cash consideration amounting to S$29,000 has been recognized within equity.
(b)
Biobot Surgical Pte Ltd (“BBS”)
On 31 December 2012, the shareholders of the BBS approved the transfer of 1,200,000 Profit Guarantee
Shares to Zicom Holdings Pte Ltd as the minimum agreed profits could not be achieved by BBS under the
Shareholders’ Agreement. This resulted in an increase in the Group’s interest in BBS to 92%. The difference
between the carrying amount of the additional interest acquired of S$104,000 and the value of Profit
Guarantee Shares transferred of S$300,000 amounting to S$196,000 has been recognized as premium
paid on acquisition within equity.
Entity subject to class order relief
Pursuant to the Class Order 98/1418, relief has been granted to Cesco Australia Limited (“CAL”) and
Cesco Equipment Pty Ltd (“CEPL”) from the Corporations Act 2001 requirements for preparation, audit and
lodgement of their financial reports.
As a condition for the Class Order, a deed of Cross Guarantee was executed between Zicom Group Limited
(“ZGL”) and CAL on 15 May 2008. The effect of the deed is that ZGL has guaranteed to pay any deficiency
in the event of winding up of CAL or if CAL does not meet its obligations under the terms of overdraft,
loans, leases or other liabilities subject to the guarantee.
CAL also has given a similar guarantee in the event that ZGL is wound up or if it does not meet its
obligations under the terms of overdraft, loans and leases or other liabilities subject to the guarantee.
70
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 10.
Investment in subsidiaries (cont’d)
On 9 May 2013, CEPL executed a Deed of Assumption with ZGL so that CEPL is joined to the Deed of Cross
Guarantee and assumes liability under and be bound by the Deed of Cross Guarantee as if CEPL was a Group
Entity when the deed of Cross Guarantee was executed.
The consolidated Income Statement and Balance Sheet of the entities that are members of the Closed Group are
as follows:
Consolidated Income Statement
Closed Group
Profit from continuing activities before taxation
Income tax expense
Net profit for the year
Accumulated losses at the beginning
Expiry of employee share options
Dividends paid
Accumulated losses at the end
2013
S$’000
2,707
–
2,707
(24,537)
136
(2,742)
(24,436)
2012
S$’000
3,250
–
3,250
(25,081)
–
(2,706)
(24,537)
Consolidated Balance Sheet
Closed Group
Non-current assets
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Current assets
Cash and bank balances
Inventories
Trade and other receivables
Current liabilities
Payables
Interest-bearing liabilities
Provisions
NET CURRENT ASSETS
Non-current liabilities
Interest-bearing liabilities
Provisions
2013
S$’000
1,644
593
44,175
46,412
1,776
3,239
5,662
10,677
6,969
1,434
240
8,643
2,034
10
220
230
2012
S$’000
2,251
742
44,175
47,168
1,605
3,692
7,717
13,014
8,977
2,812
229
12,018
996
91
194
285
NET ASSETS
48,216
47,879
Equity attributable to equity holders of the Company
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
71,631
1,021
(24,436)
48,216
71,091
1,325
(24,537)
47,879
71
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 11.
Investment in an associate
(a)
Investment details
Curiox Biosystems Pte Ltd
2,578
2,768
(b) Movements in the carrying amount of the Group’s investment in an associate
Consolidated
2013
S$’000
2012
S$’000
At beginning of year
Additional investment
Share of losses after income tax
Unrealised profits
At end of year
2013
S$’000
2,768
453
(613)
(30)
2,578
2012
S$’000
2,007
1,451
(674)
(16)
2,768
In the last financial year, Zicom Holdings Pte Ltd (“ZHPL”) subscribed for 171,586 Rights Shares pursuant
to the renounceable Rights Issue of Curiox, at an issue price of S$5.28 per Right Share payable in 2 equal
tranches. Consideration for the two tranches amounting to S$453,000 each had been paid in April 2012
and September 2012 respectively.
With the additional investment, ZHPL’s equity interest in Curiox Biosystems Pte Ltd has increased to
46.49% as at 30 June 2013 (2012: 44.06%).
On 18 January 2013, Curiox issued 919,000 convertible loan stocks with cumulative interest at 5%
per annum to ZHPL for a cash consideration of S$919,000. These will be either repaid or redeemed by
Curiox equally on 2 maturity dates, 31 December 2014 and 31 December 2015. ZHPL holds the right to
convert these into preference shares in Curiox on these maturity dates.
(c)
Summarised financial information
The following table illustrates summarised financial information relating to the Group’s associate:
Extract from the associate’s balance sheet:
Current assets
Non-current assets
Current liabilities
Net assets
72
2013
S$’000
2012
S$’000
1,257
537
1,794
(1,666)
128
1,137
560
1,697
(772)
925
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars)
11.
Investment in an associate (cont’d)
(c)
Summarised financial information (cont’d)
Extract from the associate’s statement of comprehensive income:
Results:
Revenue
Net losses
12.
Inventories
Raw materials, at net realisable value
Raw materials, at cost
Work-in-progress, at cost
Trading stocks, at cost
Trading stocks, at net realisable value
Stocks-in-transit, at cost
Total inventories at lower of cost and net realisable value
2013
S$’000
2012
S$’000
500
133
(1,263)
(1,600)
Consolidated
2013
S$’000
2,002
2,392
6,722
9,902
296
515
21,829
2012
S$’000
2,844
2,020
9,925
12,735
296
435
28,255
Inventories recognised as cost of sales for the year ended 30 June 2013 totalled S$83,289,000
(2012: S$99,144,000) for the Group.
13. Current Assets - Receivables
Consolidated
Trade receivables (a)
Allowance for impairment loss (b)
Advance payments to suppliers
Amount due from customers for contract work (note 14)
Deposits
Related party receivables (c):
- Associate
- trade
- non-trade
- Other related parties (trade)
Other receivables
2013
S$’000
23,827
(317)
23,510
1,006
8,743
158
155
109
125
1,026
34,832
2012
S$’000
26,150
(374)
25,776
677
4,554
207
–
457
13
1,485
33,169
(a)
Please refer to note 21 for the ageing analysis of trade receivables past due but not impaired.
73
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars)
13. Current Assets - Receivables (cont’d)
(b)
Allowance for impairment loss
Trade and other receivables are non-interest bearing and are generally due when invoiced or on 30 to
60 days term. An allowance for impairment loss is recognised when there is objective evidence that an
individual receivable is impaired.
The group has trade and other receivables that are impaired at the balance sheet date and the movements
of the allowance accounts used to record the impairment are as follows:
Consolidated
individually impaired
Trade receivables
2012
2013
S$’000
S$’000
Non-trade receivables
2013
S$’000
2012
S$’000
317
(317)
–
374
1
(55)
(1)
(2)
317
374
(374)
–
141
281
(40)
(10)
2
374
26
(26)
–
26
–
–
–
–
26
26
(26)
–
–
26
–
–
–
26
Nominal amounts
Less: allowance for impairment
Movements in allowance accounts:
As at 1 July
Charge for the year
Written off
Write back
Currency realignment
As at 30 June
(c)
For related party receivables, please refer to note 23 for terms and conditions.
(d)
Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair
value.
14. Gross amount due from/(to) customers for contract work
Contract costs incurred to date
Recognised profits to date
Progress billings and advances
Amount due from customers for contract work, net
Gross amount due from customers for contract work (note 13)
Gross amount due to customers for contract work (note 16)
Consolidated
2013
S$’000
14,994
4,712
19,706
(13,410)
6,296
8,743
(2,447)
6,296
2012
S$’000
17,889
2,198
20,087
(18,815)
1,272
4,554
(3,282)
1,272
Advances received included in gross amount due to customers
for contract work
–
1,330
Revenue recognised on projects is disclosed in note 4.
74
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 15.
Financial asset recorded at fair value through profit or loss
This arose from a contractual right held by Zicom Holdings Pte Ltd (“ZHPL”) to receive Profit Guarantee Shares
from the non-controlling shareholders of Biobot Surgical Pte Ltd (“BBS”) if BBS do not achieve the minimum
agreed profits by 30 June 2013.
A gain from fair value adjustment of these Profit Guarantee Shares amounting to S$800,000 was recognised in the
last financial year.
On 31 December 2012, the shareholders of the BBS approved the transfer of 1,200,000 Profit Guarantee Shares
to ZHPL as the minimum agreed profits could not be achieved. Please see note 10 for details.
16. Current Liabilities - Payables
Trade, other payables and accruals (a)
Amount due to customers for contract work (note 14)
Owing to related parties (b)
- trade
- non-trade
Consolidated
2013
S$’000
18,221
2,447
26
53
20,747
2012
S$’000
28,209
3,282
25
31
31,547
(a)
All amounts are non-interest bearing and are normally settled on 30 to 90-day terms.
(b)
Related parties
For related parties’ payable, please refer to note 23 for terms and conditions.
(c)
Due to the short-term nature of these payables, the carrying value is assumed to approximate its fair value.
17.
Interest-Bearing Liabilities
Consolidated
Current
Bank overdraft (a)
Bills payable (b)
Factory loan (c)
Machinery loan (d)
Invoice finance facility (e)
Term loan (f)
Lease liabilities (note 27)
Non-Current
Factory loan (c)
Machinery loan (d)
Term loan (f)
Lease liabilities (note 27)
2013
S$’000
153
2,817
611
239
1,311
2,380
1,948
9,459
1,236
–
2,504
1,407
5,147
2012
S$’000
205
2,342
585
366
3,217
2,332
1,378
10,425
1,847
244
2,784
1,660
6,535
75
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 17.
Interest-Bearing Liabilities (cont’d)
Details of the secured borrowings are as follows:
(a)
(b)
(c)
Overdraft of S$153,000 (2012: S$205,000) which bears interest at 7.50% (2012: 7.50%) per annum is
secured by a mortgage of the subsidiary company’s freehold land and buildings at Chonburi, Thailand.
Bills payable amounting to S$2,817,000 (2012: S$2,342,000) with an average maturity of 2.5 – 4 months
(2012: 3 - 4 months) bears interest at 2.17% to 2.34% (2012: 2.15% to 7.50%) per annum. All bill payables
were secured by a corporate guarantee given by ZHPL.
Factory loans amounting to S$1,031,000 (2012: S$1,266,000) which is made up of current and long-term
portions of S$240,000 (2012: S$220,000) and S$791,000 (2012: S$1,046,000) respectively is repayable
over the remaining 50 monthly instalments at fixed interest rate of 1.75% (2012: 1.45%) per annum. It is
secured by a legal mortgage on ZHPL’s leasehold property at No. 9 Tuas Avenue 9 Singapore 639198 and
a corporate guarantee from the Company.
The remaining factory loan amounting to S$816,000 (2012: S$1,166,000) which is made up of current and
non-current portions of S$371,000 (2012: S$365,000) and S$445,000 (2012: S$801,000) respectively is
repayable over the remaining 26 monthly instalments at an interest rate of 4.13% (2012: 5.25%) per annum.
It is secured by a legal mortgage of the subsidiary company’s freehold land and buildings at 700/895 Moo
2, Amata Nakorn Industrial Estate, Chonburi, Thailand and a corporate guarantee from ZHPL.
(d) Machinery loan due within the next 12 months amounting to S$156,000 (2012: S$374,000 made up of
current portion: S$221,000; non-current portion: S$153,000) bears interest at 4.13% (2012: 5.25%) per
annum and is secured by a legal mortgage on the subsidiary company’s freehold land and buildings at
700/895 Moo 2, Amata Nakorn Industrial Estate, Chonburi, Thailand and a corporate guarantee from ZHPL.
The remaining machinery loan also due within the next 12 months amounting to S$83,000 (2012:
S$236,000 made up of current portion: S$145,000; non-current portion: S$91,000) bears interest at a fixed
rate of 8.62% (2012: 8.62%) per annum and is secured by a fixed and floating charge over all the assets of
Cesco Australia Limited (“CAL”).
(e)
Invoice finance facility amounting to S$1,311,000 (2012: S$2,667,000) which bears floating interest rate at
5.88% to 6.64% (2012: 6.80% to 7.90%) is secured by a fixed and floating charge over all the assets of
CAL.
As at 30 June 2012, invoice finance facility amounting to S$550,000 which bore interest at 2.46% per
annum was secured by a corporate guarantee given by ZHPL.
(f)
Term loans amounting to S$4,402,000 (2012: S$5,056,000) comprising current and long-term portions of
S$1,898,000 (2012: S$2,272,000) and S$2,504,000 (2012: S$2,784,000) respectively bears floating interest
at 1.45% to 2.38% (2012: 2.45% to 2.70%) per annum is repayable over 3 to 5 years and secured by a
corporate guarantee given by ZHPL.
The remaining term loan payable within 12 months amounting to S$482,000 (2012: S$60,000) bears
interest at 5.50% (2012: 4.25%) per annum and is secured by a legal mortgage on the subsidiary
company’s freehold land and buildings at 700/895 Moo 2, Amata Nakorn Industrial Estate, Chonburi,
Thailand and a corporate guarantee from ZHPL.
(g)
Financing facilities available
As at 30 June 2013, the Group had available S$138,200,000 (2012: S$108,785,000) of undrawn
committed borrowing facilities and all bank covenants were complied with.
76
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 18. Provisions
Current
Product warranties
Employee benefits
Non-Current
Employee benefits
Reinstatement costs
Movements in provision for warranties
At beginning of year
Allowance for the year
Write back of allowance
Utilisation
Acquisition of subsidiary
Currency realignment
At end of year
Warranty expense written-off directly to profit or loss (note 4)
Movements in provision for employee benefits
At beginning of year
Allowance for the year
Currency realignment
At end of year
Movements in provision for reinstatement costs:
At beginning of year
Allowance for the year
Currency realignment
At end of year
Consolidated
2013
S$’000
2012
S$’000
927
211
1,138
246
197
443
1,061
187
1,248
201
183
384
Consolidated
2013
S$’000
2012
S$’000
1,061
862
(815)
(183)
–
2
927
55
388
105
(36)
457
183
20
(6)
197
1,243
418
(309)
(314)
23
–
1,061
–
293
105
(10)
388
148
35
–
183
In accordance with the lease agreement, the Group must reinstate certain subsidiaries’ leased premises in
Singapore and Australia to its original condition at the end of the lease term.
An additional provision of S$20,000 (2012: S$35,000) was raised during the year ended 30 June 2013 in respect
of the Group’s obligation to remove leasehold improvements from the leased premises in Singapore and is included
in the carrying amount of leasehold improvements.
Because of the long-term nature of liability, the greatest uncertainty in estimating the provision is the costs that will
ultimately be incurred. The provision has been calculated using a pre-tax discount rate of 6%.
77
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 19. Contributed equity
(a)
Share Capital
Parent Entity
Consolidated
2013
2012
No. of shares (Thousands)
2013
S$’000
2012
S$’000
Ordinary fully paid shares
214,752
212,452
37,623
37,083
The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All
ordinary shares carry one vote per share without restriction.
(b) Movements in ordinary share capital
At 1 July 2011
Issue of shares under Zicom Employee Share and Option Plan (i)
At 30 June 2012
Issue of shares under Zicom Employee Share and Option Plan (i)
Issue of shares in lieu of cash performance bonus (ii)
Company
Number of
ordinary shares
(Thousands)
212,159
293
212,452
517
1,783
Group
S$’000
36,983
100
37,083
189
351
At 30 June 2013
214,752
37,623
(i)
Issue of shares under Zicom Employee Share and Option Plan (“ZESOP”)
On 4 October 2011, the Company issued and allotted 293,000 ordinary shares, fully paid at A$0.18
per share, under the ZESOP. Such shares ranked pari passu with the existing ordinary shares of the
Company.
On 8 October 2012, 24 October 2012 and 4 March 2013, the Company issued and allotted a total
of 517,000 ordinary shares, fully paid at A$0.18 per share, under the ZESOP. Such shares ranked
pari passu with the existing ordinary shares of the Company.
(ii)
Issue of shares in lieu of cash performance bonus
On 21 November 2012, the board approved the issue and allotment of 430,000 shares to
executives, fully paid at A$0.155 per share, as part payment of their performance bonus for the
year ended 30 June 2012. Such shares ranked pari passu with the existing ordinary shares of the
Company.
Pursuant to the shareholders’ meeting on 13 November 2012, 888,000, 195,000 and 270,000
shares were allotted to Messrs Giok Lak Sim, Kok Hwee Sim and Kok Yew Sim respectively, fully
paid at A$0.155 per share as part payment of their performance bonus for the year ended 30 June
2012. Such shares ranked pari passu with the existing ordinary shares of the Company.
78
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 20. Cash and cash equivalents
Cash at bank and in hand
Short-term fixed deposits
Consolidated
2013
S$’000
19,956
1,399
21,355
2012
S$’000
21,455
2,991
24,446
For the purpose of cash flow statements, cash and cash equivalents comprise the following as at 30 June:
Cash and short-term deposits
Bank overdrafts
21,355
(153)
21,202
24,446
(205)
24,241
Cash at bank balance amounting to S$2,312,000 (2012: S$3,123,000) as at 30 June 2013 earned interest at
floating rate based on daily bank deposit rates ranging of 1.29% to 2.73% (2012: 1.01% to 3.80%) per annum.
The remaining cash at bank balances are non-interest bearing.
Short-term deposits are made for varying periods of one day to 3 months depending on the immediate cash
requirements of the Group, and earn interests at the respective short-term rates.
21.
Financial instruments
(a)
Financial risk management objectives and policies
The Group and the Company is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency
risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks.
The Group enters into derivative transactions, principally foreign currency forward contracts and foreign
currency options, purpose is to manage currency risk arising from the Group’s operations and sources of
finance. The Group does not apply hedge accounting for such derivatives.
The following sections provide details regarding the Group’s exposure to the above-mentioned financial risks
and the objectives, policies and processes for the management of these risks.
(b)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will
fluctuate because of changes in market interest rates.
The Group’s exposure to interest rate risk arises primarily from loans and borrowings which have floating
interest rates. The Group’s policy with respect to controlling this risk is linked to a regular review of the total
debt position and assessment of the impact of adverse changes in interest rates applicable to new and
existing debt facilities. Consideration is given to potential renewal of existing positions, alternative financing,
alternative hedging positions and mix of fixed and variable interest rates.
79
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 21.
Financial instruments (cont’d)
(b)
Interest rate risk (cont’d)
At the balance sheet date, the Group had the following mix of financial assets and liabilities exposed to
variable interest rate risk:
Financial assets
Cash and bank balances
Financial liabilities
Bank overdraft
Invoice finance facility
Factory loans
Machinery loans
Term loan
Consolidated
2013
S$’000
2012
S$’000
2,312
3,123
153
1,311
816
156
4,402
6,838
205
2,667
1,166
374
5,056
9,468
Sensitivity analysis of interest rate risk
As at 30 June 2013, if interest rates had increased/decreased by 25 basis point with all other variables held
constant, post-tax profits for the consolidated entity for the financial year would be (S$10,000)/S$9,000
(2012: (S$12,000)/S$12,000) lower/higher, as a result of the higher/lower interest rates. Accordingly, the
Group’s equity as at year-end will be (S$10,000)/S$9,000 (2012: (S$12,000)/S$12,000) lower/higher. Term
loans amounting to S$482,000 (2012: S$60,000) have fixed interest rates until expiry, at which point interest
rates resets.
(c)
Foreign currency risk
Foreign currency risk occurs as a result of the Group’s transactions that are not denominated in their
respective functional currencies. These transactions arise from the Group’s ordinary course of business.
The Group transacts business in various currencies and as a result, is largely exposed to movements in
exchange rates of United States dollars, Sterling pounds, Euros and Australian dollars.
The Group manages its foreign exchange exposure by a policy of matching, as far as possible, receipts
and payments in each individual currency. The Group also uses foreign currency forward contracts and
foreign currency options to hedge a portion of its future foreign exchange exposure. The Group uses these
currency contracts purely as a hedging tool and does not take positions in currencies with a view to make
speculative gains from currency movements.
The following sensitivity analysis is based on the foreign exchange risk exposure in existence at the balance
sheet date. As at 30 June, if exchange rates had moved, as illustrated in the table below, with all other
variables held constant, post tax profit and equity would have been affected as follows:
80
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 21.
Financial instruments (cont’d)
(c)
Foreign currency risk (cont’d)
Consolidated
USD
- strengthened 3% (2012: 3%)
- weakened 2% (2012: 3%)
EUROS
- strengthened 4% (2012: 3%)
- weakened 3% (2012: 3%)
AUD
- strengthened 3% (2012: 1%)
- weakened 7% (2012: 1%)
GBP
- strengthened 5% (2012: 3%)
- weakened 3% (2012: 3%)
(d)
Credit risk
Post tax profit
Higher/(lower)
2013
S$’000
2012
S$’000
300
(200)
(5)
4
67
(157)
(4)
3
255
(255)
(1)
1
34
(34)
(11)
11
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty
default on its obligations. The Group’s exposure to credit risk arises primarily from trade and other
receivables.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. The Group trades only with recognised and creditworthy third parties. Credit risk is
monitored through careful selection of customers and their balances are monitored on an ongoing basis
with the result that the Group’s exposure of bad debts has not been significant.
Credit risk concentration profile
The Group determines concentration of credit risk by monitoring the country profile of its trade receivables
on an on-going basis. The credit risk concentration profile of the Group’s trade receivables at the balance
sheet date is shown on the next page.
81
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 21.
Financial instruments (cont’d)
(d)
Credit risk (cont’d)
Credit risk concentration profile (cont’d)
Austria
Australia
Bangladesh
Hong Kong
India
Indonesia
Malaysia
People’s Republic of China
Singapore
Thailand
United States of America
Vietnam
Others
2013
2012
S$’000
% of total
S$’000
% of total
201
3,290
1,381
160
–
134
5,593
3,159
5,954
2,250
1,290
58
40
23,510
0.8%
14.0%
5.9%
0.7%
–
0.6%
23.8%
13.4%
25.3%
9.6%
5.5%
0.2%
0.2%
100%
–
5,288
3,459
279
3
61
2,301
494
8,910
1,519
3,363
–
99
25,776
–
20.5%
13.4%
1.1%
–
0.2%
8.9%
1.9%
34.6%
5.9%
13.1%
–
0.4%
100%
At the balance sheet date, approximately 63.3% (2012: 59.8%) of the Group’s trade receivables were due
from 18 (2012: 15) major customers.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good
payment record with the Group. Cash and short term deposits are placed with reputable banks.
Included in trade receivables as at 30 June 2013, S$103,000 (2012: S$2,506,000) are arranged to be
settled via letters of credit issued by reputable banks in countries where the customers are based.
Financial assets that are past due but not impaired
As at 30 June 2013, the ageing analysis of trade receivables is as follows:
Consolidated
2013
S$’000
6,723
4,258
992
260
2,711
14,944
2012
S$’000
4,192
1,752
1,326
1,162
3,756
12,188
Less than 30 days
30 to 60 days
61 to 90 days
91 to 120 days
More than 120 days
Financial assets that are impaired
Please refer to note 13 for details.
82
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 21.
Financial instruments (cont’d)
(e)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to
shortage of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities
of financial assets and liabilities.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use
of stand-by credit facilities.
The following table summarises the maturity profile of the Group’s financial assets and liabilities at the
balance sheet date based on contractual undiscounted payments. The expected timing of actual cash flows
from these financial instruments may differ.
Consolidated
2013
Financial assets:
Trade receivables
Other receivables
Investment securities
Loan receivable
Cash and bank balances
Total undiscounted financial assets
Financial liabilities:
Trade payables
Other payables
Unrealised loss on derivatives
Loans and borrowings
Total undiscounted financial liabilities
6 months or
less
S$’000
7 to 12
months
S$’000
After 1 year
but not more
than 5 years
S$’000
5 to 10
years
S$’000
Total
S$’000
23,790
471
–
–
21,355
45,616
8,138
6,216
2,411
7,821
24,586
–
295
–
–
–
295
–
1,283
–
1,883
3,166
–
–
1
1,031
–
1,032
–
443
–
5,370
5,813
–
–
–
–
–
–
–
–
–
–
–
23,790
766
1
1,031
21,355
46,943
8,138
7,942
2,411
15,074
33,565
Total net undiscounted financial assets/
(liabilities)
21,030
(2,871)
(4,781)
–
13,378
Consolidated
2012
Financial assets:
Trade receivables
Other receivables
Investment securities
Cash and bank balances
Total undiscounted financial assets
Financial liabilities:
Trade payables
Other payables
Unrealised loss on derivatives
Loans and borrowings
Total undiscounted financial liabilities
25,776
545
–
24,446
50,767
12,409
7,092
497
8,373
28,371
–
139
–
–
139
–
986
–
2,397
3,383
–
–
1
–
1
–
134
–
6,754
6,888
–
–
–
–
–
–
183
–
29
212
25,776
684
1
24,446
50,907
12,409
8,395
497
17,553
38,854
Total net undiscounted financial assets/
(liabilities)
22,396
(3,244)
(6,887)
(212)
12,053
83
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 21.
Financial instruments (cont’d)
(f)
Derivative financial instruments
(i)
Fair value of financial instruments that are carried at fair value
Quoted
prices
in active
markets for
identical
instruments
(Level 1)
S$’000
Significant
other
observable
inputs
(Level 2)
S$’000
Significant
unobservable
inputs
(Level 3)
S$’000
Total
S$’000
1
1
–
–
1
–
1
–
–
–
–
2,411
2,411
–
–
–
497
497
–
–
–
–
–
300
300
–
–
1
1
2,411
2,411
1
300
301
497
497
Group
2013
Financial assets:
Available-for-sale
At 30 June 2013
Financial liabilities:
Derivatives – foreign currency options
At 30 June 2013
2012
Financial assets:
Available-for-sale
Derivatives (unquoted)
At 30 June 2012
Financial liabilities:
Derivatives – foreign currency options
At 30 June 2012
Fair value hierarchy
The Group classify fair value measurement using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy have the following levels:
Level 1– Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices), and
Level 3 – Inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Quoted market price represents the fair value determined based on quoted prices on active markets
as at the reporting date without any deduction for transaction costs. The fair value of the listed equity
investments are based on quoted market prices.
84
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 21.
Financial instruments (cont’d)
(f)
Derivative financial instruments (cont’d)
(i)
Fair value of financial instruments that are carried at fair value (cont’d)
For financial instruments not quoted in active markets, the Group uses valuation techniques such
as present value techniques, comparison to similar instruments for which market observable prices
exist and other relevant models used by market participants. These valuation techniques use both
observable and unobservable market inputs.
Financial instruments that use valuation techniques with only observable market inputs or
unobservable inputs that are not significant to the overall valuation include foreign exchange
contracts not on a recognised exchange.
There were no transfers between level 1 and level 2 during the financial years 2013 and 2012.
Reconciliation of Level 3 fair value movements
Opening balance
Total gains or losses
in other comprehensive income
in profit or loss
Reclassified to investment in subsidiary
Ending balance
2013
S$’000
2012
S$’000
300
–
–
(300)
–
–
–
300
–
300
The Group uses the discounted cashflow method in determining the fair value of unquoted derivative.
(ii)
Fair value of financial instruments by classes that are not carried at fair value and whose carrying
amounts are reasonable approximation of fair value
Management has determined that the carrying amounts of cash and short-term deposits, current
trade and other receivables, current trade and other payables, current interest-bearing liabilities
reasonably approximate their fair values because they are mostly short-term in nature and repriced
frequently.
(iii)
Fair value of financial instruments by classes that are not carried at fair value and whose carrying
amounts are not reasonable approximation of fair value
The fair values of non-current finance lease liability and bank loans, which are not carried at fair value
in the balance sheet, is presented in the following table. The fair value is estimated using discounted
cash flow analysis, based on current incremental lending rates for similar types of lending and
borrowing arrangements.
85
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 21.
Financial instruments (cont’d)
(f)
Derivative financial instruments (cont’d)
(iii)
Fair value of financial instruments by classes that are not carried at fair value and whose carrying
amounts are not reasonable approximation of fair value (cont’d)
Carrying Amount
2012
2013
S$’000
S$’000
Fair Value
2013
S$’000
2012
S$’000
Financial liabilities:
Obligations under finance leases
Bank loans
1,407
3,740
1,660
4,875
1,356
3,405
1,581
4,456
22. Capital Management
The Group’s primary objective when managing capital is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and maximise shareholders’ value. Management also aims to
maintain a capital structure that ensures the lowest cost of capital available to the entity.
Management is constantly adjusting the capital structure to take advantage of favourable costs of capital or higher
returns on assets. As the market is constantly changing and after taking into account the Group’s expansion
requirements, management may adjust the dividend payments to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debts.
Management monitors capital through the gearing ratio (net debt / total capital). The Group defines net debts as
interest-bearing liabilities less cash and cash equivalents. Capital includes equity attributable to the equity holders
of the Company and reserves. The Group’s policy is to keep its gearing ratio at less than 50%.
The gearing ratios as at 30 June 2013 and 30 June 2012 were 0% as cash and cash equivalents exceeded
interest-bearing liabilities.
23. Related party disclosures
Parties are considered to be related if one party has the ability to control the other party or exercise significant
influence over the other party in making financial and operating decisions.
In addition to the related party information disclosed elsewhere in the financial statements, the following are
transactions with related parties at mutually agreed terms and amounts:
(a)
Sale and purchase of goods and services
Minority shareholder of a subsidiary company
- Sales
- Purchases
Consolidated
2013
S$’000
261
241
2012
S$’000
284
46
86
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 23. Related party disclosures (cont’d)
(a)
Sale and purchase of goods and services (cont’d)
Associates
- Sales
- Interest income
- Rental & utilities income
- Secretarial fees
Other related parties
- Sales
- Purchases
- Commission paid
Consolidated
2013
S$’000
2012
S$’000
161
34
145
24
27
-
35
137
32
33
18
12
22
28
(b)
Terms and conditions of transactions with related parties
Sales to and purchases from related parties are made at arm’s length basis at normal market prices and on
normal commercial terms.
Loan receivable from Curiox Biosystems Pte Ltd (“Curiox”) amounting to S$919,000 (2012: S$nil) earns
cumulative interest at 5% per annum. These will be either repaid or redeemed by Curiox equally on 2
maturity dates, 31 December 2014 and 31 December 2015. Zicom Holdings Pte Ltd holds the right to
convert these into preference shares in Curiox on these maturity dates.
As at 30 June 2012, advances amounting to S$453,000 were given to Curiox which bears interest at 5.0%
per annum. This advance has been applied against payment for the Right Shares due in September 2012.
Outstanding non-trade balances as at year-end with other related parties are unsecured, interest-free
and have no fixed terms of repayment. For information regarding outstanding balance on related party
receivables and payables at year-end, please refer to notes 13 and 16.
(c)
Directors and key management personnel
Disclosures are set out in note 24.
24. Key Management Personnel
(a)
Details of Key Management Personnel
(i)
Directors
G L Sim
K H Sim
K Y Sim
Y P Lim
F Leong
I R Millard
S P Sze
(Chairman and Managing Director)
(Executive Director)
(Alternate director to K H Sim)
(Independent)
(Independent)
(Independent)
(Independent)
87
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 24. Key Management Personnel (cont’d)
(a)
Details of Key Management Personnel (cont’d)
(ii)
Executives
G H Teoh
J Koon Sim
J L Sim
H S Tang
(Managing Director of Foundation Associates Engineering Pte Ltd)
(President of Sys-Mac Automation Engineering Pte Ltd)
(Joint Managing Director of Zicom Pte Ltd)
(Joint Managing Director of Zicom Pte Ltd)
(b) Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
Total compensation
(c)
Shareholdings of key management personnel
Consolidated
2013
S$
3,057,806
67,875
18,904
3,144,585
2012
S$
2,898,179
54,129
332,468
3,284,776
30 June 2013
Directors
G L Sim
K H Sim
K Y Sim
Y P Lim
F Leong
I R Millard
S P Sze
Executives
G H Teoh
J Koon Sim
J L Sim
H S Tang
Balance as at
1 July 2012
Granted as
remuneration
Options
exercised
Net change
other
Balance as at
30 June 2013
76,085,212
1,062,846
800,717
438,000
426,344
542,250
–
887,883
195,334
269,536
–
–
–
–
50,000
20,091,937
6,407,767
2,470,699
108,375,772
–
–
–
–
1,352,753
–
–
–
50,000
50,000
50,000
–
–
–
–
–
150,000
501,273
–
–
–
48,020
–
–
–
–
–
–
549,293
77,474,368
1,258,180
1,070,253
488,000
524,364
592,250
–
50,000
20,091,937
6,407,767
2,470,699
110,427,818
88
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 24. Key Management Personnel (cont’d)
(c)
Shareholdings of key management personnel (cont’d)
30 June 2012
Directors
G L Sim
K H Sim
K Y Sim
Y P Lim
F Leong
I R Millard
S P Sze
Executives
G H Teoh
J Koon Sim
J L Sim
H S Tang
Balance as at
1 July 2011
Granted as
remuneration
Options
exercised
Net change
other
Balance as at
30 June 2012
73,785,212
1,062,846
800,717
438,000
258,750
542,250
–
50,000
20,091,937
6,407,767
2,636,464
106,073,943
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,300,000
–
–
–
167,594
–
–
76,085,212
1,062,846
800,717
438,000
426,344
542,250
–
–
–
–
(165,765)
2,301,829
50,000
20,091,937
6,407,767
2,470,699
108,375,772
(d)
Option holdings of key management personnel
30 June 2013
Directors
G L Sim
K H Sim
K Y Sim
Y P Lim
F Leong
I R Millard
S P Sze
Executives
G H Teoh
J Koon Sim
J L Sim
H S Tang
Balance at
1 July 2012 Granted
Options
exercised Expired
Balance at
30 June
2013
Value of
options
granted Exercisable
Not
Exercisable
–
300,000
300,000
75,000
75,000
75,000
30,000
–
80,000
80,000
–
–
–
–
–
–
–
(50,000)
(50,000)
(50,000)
–
–
–
–
–
–
–
–
–
380,000
380,000
25,000
25,000
25,000
30,000
–
8,696
8,696
–
–
–
–
–
300,000
300,000
25,000
25,000
25,000
30,000
–
80,000
80,000
–
–
–
–
200,000
–
400,000
300,000
280,000
–
280,000
280,000
1,755,000 400,000 (150,000) (300,000) 1,705,000
–
–
–
–
– (200,000)
– (100,000)
80,000
–
80,000
80,000
8,757
–
8,757
8,757
43,663
200,000
–
200,000
200,000
1,305,000
80,000
–
80,000
80,000
400,000
89
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 24. Key Management Personnel (cont’d)
(d)
Option holdings of key management personnel (cont’d)
30 June 2012
Balance at
1 July 2011 Granted
Options
exercised Expired
Balance at
30 June
2012
Value of
options
granted Exercisable
Not
Exercisable
Directors
G L Sim
K H Sim
K Y Sim
Y P Lim
F Leong
I R Millard
S P Sze
Executives
G H Teoh
J Koon Sim
J L Sim
H S Tang
–
300,000
300,000
75,000
75,000
75,000
30,000
200,000
–
400,000
300,000
1,755,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
300,000
300,000
75,000
75,000
75,000
30,000
200,000
–
400,000
300,000
1,755,000
–
–
–
–
–
–
–
–
–
–
–
–
–
200,000
200,000
50,000
50,000
50,000
15,000
100,000
–
300,000
200,000
1,165,000
–
100,000
100,000
25,000
25,000
25,000
15,000
100,000
–
100,000
100,000
590,000
The above options were granted under the Zicom Employee Share and Option Plan which was approved by
shareholders on 23 November 2006. Please refer to note 25 for more information.
(e)
There were no loans made to key management personnel by the Group during the year.
25.
Share-based payment plans
(a)
Recognised share-based payment expenses
The expense recognised for employee services received during the year for equity-settled share-based
payment transactions amounted to S$173,000 (2012: S$238,000). There have been no cancellations or
modifications to the plan during the years 2013 and 2012.
(b)
Description of the share-based payment plan.
Zicom Employee Share and Option Plan (“ZESOP”)
Share options are granted to employees as an incentive to retain experience and attract talent. Under the
ZESOP, the exercise price of the options approximates the market price of the shares on the grant dates.
Employees must remain in service for a period of 1 to 3 years.
Should an employee leave the company or resign from his office, any vested options not exercised prior to
that date will be lost except for exceptional circumstances such as death or physical or mental incapacity.
The contractual life of each option granted is 3-5 years. There are no cash-settlement alternatives.
90
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 25.
Share-based payment plans (cont’d)
(c)
Outstanding number of options granted under ZESOP
Outstanding at beginning of the year
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
Outstanding at end of year
2013
(Thousands)
2012
(Thousands)
6,375
2,610
(155)
(1,278)
(517)
7,035
6,888
–
(220)
–
(293)
6,375
The outstanding balance as at 30 June 2013 is represented by:
No. of options (Thousands)
2013
–
–
100
175
163
162
1,685
1,710
215
215
1,225
1,225
80
80
7,035
2012
495
828
100
175
163
162
1,790
2,082
290
290
–
–
–
–
6,375
Exercise price
(Australian Cents)
Exercisable
on or after
Expiry Date
28
28
28
28
28
28
18
18
18
18
17
17
17
17
1/6/2010
1/6/2011
28/8/2010
28/8/2011
1/5/2012
1/5/2013
1/10/2011
1/10/2012
15/11/2011
15/11/2012
1/9/2013
1/9/2014
15/11/2013
15/11/2014
31/5/2013
31/5/2013
27/8/2013
27/8/2013
30/4/2015
30/4/2015
30/9/2015
30/9/2015
14/11/2015
14/11/2015
31/8/2015
31/8/2015
14/11/2015
14/11/2015
(d) Weighted average fair value
The weighted average fair value of options granted in the current financial year was A$0.09 (2012: A$nil)
(e)
The weighted average share price during the period of exercise is A$0.22 (2012: A$0.26).
(f)
Option pricing model
The fair value of the equity-settled share options granted under the ZESOP is estimated as at the date of
grant using a Trinomial model taking into account the terms and conditions upon which the options were
granted. The following table lists the inputs to the model used for the share options granted in the current
financial year:
Inputs
Exercise price (A$):
Stock price at grant date (A$):
Maximum option life in years:
Volatility:
Risk free interest rate:
2013
0.17
0.21
3
65.5%
3.5%
91
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 25.
Share-based payment plans (cont’d)
(f)
Option pricing model (cont’d)
The effects of early exercise have been incorporated into the calculations by defining the conditions under
which employees are expected to exercise their options after vesting in terms of the stock price reaching a
specified multiple of the exercise price, which is not necessary indicative of exercise patterns that may occur
in the future.
26. Commitments
(a)
Commitments
As at year-end, the Group has the following commitments:
(i)
Issued letters of credit amounting to S$6,435,000 (2012: S$196,000).
(ii)
Issued letters of guarantee amounting to S$6,350,000 (2012: S$7,133,000).
(iii)
(iv)
The Group has entered into foreign exchange buy contracts amounting to S$30,939,000
(2012: S$315,000).
The Group has entered into foreign exchange sell contracts amounting to S$20,269,000
(2012: S$24,652,000).
(b)
Operating lease commitments
The Group has entered into commercial leases for the use of leasehold properties and office equipment as
lessee. These leases have an average of 3 to 30 years. There are no restrictions placed upon the Group by
entering into these leases.
Future minimum lease payments for the leases are as follows:
Within 1 year
Within 2 - 5 years
More than 5 years
Consolidated
2013
S$’000
2,299
3,430
5,426
11,155
2012
S$’000
2,406
5,064
5,212
12,682
The amount of operating lease payments recognised as an expense in the year ended 30 June 2013 is
S$2,470,000 (2012: S$2,448,000).
92
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 26. Commitments (cont’d)
(c)
Finance lease commitments
The Group has finance leases for certain items of plant and equipment and motor vehicles. Future minimum
lease payment under finance leases together with present value of the net minimum lease payments are as
follows:
Consolidated
Minimum
payments
2013
S$’000
Present
value of
payments
2013
S$’000
Minimum
payments
2012
S$’000
Present
value of
payments
2012
S$’000
Due within one year
After one year but not more than five years
Total minimum lease payments
Less: amounts representing finance charges
2,047
1,482
3,529
(174)
3,355
1,948
1,407
3,355
–
3,355
1,460
1,762
3,222
(184)
3,038
1,378
1,660
3,038
–
3,038
(d)
Capital commitments
The Group has no capital commitment as at 30 June 2013 and 30 June 2012.
27. Auditors’ remuneration
During the year, the following fees were paid/ payable for services provided by auditors:
Amounts received or due and receivable by Ernst & Young (Australia)
- Audit or review of financial statements
Consolidated
2013
S$
2012
S$
145,953
155,720
Amounts received or due and receivable by Ernst & Young (Singapore)
- Audit or review of financial statements
208,000
198,938
Amounts received or due and receivable by other audit firms
- Audit or review of financial statements
- Taxation services
24,487
13,614
392,054
26,157
12,746
393,561
93
2013 ANNUAL REPORTNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) 28. Parent entity disclosures
(a)
The individual financial statements of the parent entity shows the following aggregate amounts:
Balance sheet of the parent entity at year end
Non-current assets
Current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Total equity of the parent entity comprising of:
Share capital
Share capital-exercise of share options
Capital reserve
Foreign currency translation reserve
Share based payments reserve
Accumulated losses
Results of parent entity
Profit for the year
Other comprehensive income
Total comprehensive income
(b)
Guarantees
2013
S$’000
48,623
2,869
51,492
50
50
2012
S$’000
49,281
1,841
51,122
118
118
51,442
51,004
71,405
225
689
(199)
681
(21,359)
51,442
2,669
–
2,669
70,937
153
689
(89)
736
(21,422)
51,004
2,834
–
2,834
(i)
(ii)
The parent entity has issued letters of guarantee amounting to S$9,600,000 (2012: S$9,152,000) to
secure trade facilities and factory loans to controlled entities.
The parent entity has entered into a Deed of Cross Guarantee and the subsidiaries subject to the
deed is disclosed in note 10.
(c)
Contingent liabilities
The parent entity has no contingent liabilities and commitments as at 30 June 2013 and 30 June 2012.
29.
Subsequent events
(a)
Redemption of redeemable loans stocks
On 1 July 2013, 3,016,772 redeemable loan stocks in Biobot Surgical Pte Ltd (“Biobot”) held by Zicom
Holdings Pte Ltd has been fully redeemed by Biobot via the issue of 1 ordinary share fully paid for every
loan stock held. As a result, the Group equity interest in Biobot was adjusted to 91.8%.
(b)
Incorporation of iPtec Pte Ltd
On 2 July 2013, Sys-Mac Automation Engineering Pte Ltd incorporated a wholly owned subsidiary, iPtec
Pte Ltd, which will be principally engaged in medical technology translation services.
94
ZICOM GROUP LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Singapore dollars) DIRECTORS’ DECLARATION
Directors’ Declaration
In accordance with a resolution of the directors of Zicom Group Limited, I state that:
In the opinion of the directors:
In accordance with a resolution of the directors of Zicom Group Limited, I state that:
(a)
In the opinion of the directors:
the financial statements and notes of the consolidated entity are in accordance with the Corporations Act
2001, including:
(a)
(i)
giving a true and fair view of the consolidated entity’s balance sheet as at 30 June 2013 and of its
the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
performance for the year ended on that date; and
(i)
(ii)
(b)
giving a true and fair view of the consolidated entity’s balance sheet as at 30 June 2012 and of its performance for
the year ended on that date; and
(ii)
complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and Corporations Regulations 2001;
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001;
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 2.2.
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 2.2.
(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.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
this declaration has been made after receiving the declarations required to be made to the Directors in
(d)
this declaration has been made after receiving the declarations required to be made to the Directors in accordance with
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2013.
section 295A of the Corporations Act 2001 for the financial year ended 30 June 2012.
(e)
as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified
in Note 10 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed
of Cross Guarantee.
as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed
Group identified in Note 10 will be able to meet any obligations or liabilities to which they are or may
become subject, by virtue of the Deed of Cross Guarantee.
(b)
(c)
(d)
(e)
On behalf of the Board
On behalf of the Board
GL Sim
G L Sim
Chairman/Managing Director
Chairman/Managing Director
23 September 2013
Brisbane
28 September 2012
88
ZICOM GROUP LIMITED
95
2013 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
to the members of Zicom Group Limited
Report on the financial report
We have audited the accompanying financial report of Zicom Group Limited, which comprises the consolidated balance
sheet as at 30 June 2013, the consolidated statement of comprehensive income, the consolidated statement of
changes in equity and the 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.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the
directors determine are necessary to enable the preparation of the financial report that is free from material misstatement,
whether due to fraud or error. In Note 2.2, the directors also state, in accordance with Accounting Standard AASB
101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting
Standards.
Auditor’s responsibility
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. Those standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about
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 controls 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 controls. 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.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have
given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the
directors’ report.
96
ZICOM GROUP LIMITED INDEPENDENT AUDITOR’S REPORT
to the members of Zicom Group Limited
Opinion
In our opinion:
a.
the financial report of Zicom Group Limited 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 30 June 2013 and of its
performance for the year ended on that date; and
ii
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.2.
Report on the remuneration report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 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.
Opinion
In our opinion, the Remuneration Report of Zicom Group Limited for the year ended 30 June 2013, complies with section
300A of the Corporations Act 2001.
Ernst & Young
Ric Roach
Partner
Brisbane
23 September 2013
97
2013 ANNUAL REPORT INFORMATION ON SHAREHOLDINGS
As at 30 September 2013
Distribution of Equity Securities
a)
Analysis of numbers of equity security holders by size of holding:-
1
1,001
5,001
10,001
100,001
–
–
–
–
1,000
5,000
10,000
100,000
and over
b)
There were 459 holders of less than a marketable parcel of ordinary shares.
Twenty Largest Equity Security Holders
The names of the twenty largest equity security holders are listed below:
Ordinary Shares
Number of Holders
97,499
1,444,307
3,388,828
27,512,401
182,308,795
214,751,830
251
499
383
762
182
2,077
Name
SNS HOLDINGS PTE LTD
JUAT KOON SIM
GIOK LAK SIM
VENTRADE (ASIA) PTE LTD
JUAT LIM SIM
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
EE GEK GOH
HUNG SEAH TANG
SIONG TECK NG
MANDEL PTY LTD
ALAN BLACKBURN & ASSOCIATES PTY LTD
FIRST CHARNOCK SUPERANNUATION PTY LTD
JUAT KHIANG SIM
MAKRAM HANNA & RITA HANNA
DEBUSCEY PTY LTD
CLAPSY PTY LTD
KOK HWEE SIM
KOY YEW SIM
ANTHONY SARACENI & CARMEL SARACENI
Substantial Shareholders
Number of
Ordinary Shares Held
Percentage of
Issued Shares
66,548,603
17,300,920
10,925,765
8,478,344
6,207,767
6,008,414
3,859,443
2,791,017
2,460,199
2,410,665
2,065,000
2,000,000
1,890,000
1,789,525
1,629,448
1,355,615
1,220,000
1,208,180
1,070,253
1,015,000
30.98%
8.06%
5.09%
3.95%
2.89%
2.80%
1.80%
1.30%
1.15%
1.12%
0.96%
0.93%
0.88%
0.83%
0.76%
0.63%
0.57%
0.56%
0.50%
0.47%
Substantial shareholders in the company (holding not less than 5% of the issued capital), as disclosed in substantial shareholder
notices given to the company, are set out below:
Name
MR GL SIM & HIS ASSOCIATES
JUAT KOON SIM & HIS ASSOCIATES
Voting Rights
Number of
Ordinary Shares Held
Percentage of
Issued Shares
77,474,368
20,091,937
36.07%
9.36%
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.
98
ZICOM GROUP LIMITED
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99
2013 ANNUAL REPORT This page has been intentionally left blank.
100
ZICOM GROUP LIMITED corporate DIrectory
BoaRD oF DiReCtoRS
Giok Lak Sim
(Chairman and Managing Director)
Kok Hwee Sim
(Executive Director)
Yian Poh Lim
Frank Leong Yee Yew
Ian Robert Millard
Shaw Pao Sze
Kok Yew Sim
(Alternate Director to Kok Hwee Sim)
Joint ComPany SeCRetaRieS
Jenny Lim Bee Chun
Surendra Kumar
RegiSteReD oFFiCe
38 Goodman Place
Murarrie QLD 4172
Australia
Telephone : +61 7 3908 6088
Facsimile
: +61 7 3390 6898
Website
: www.zicomgroup.com
SHaRe RegiStRy
Link Market Services Limited
Level 15
324 Queen Street
Brisbane, QLD 4000
Australia
Facsimile
: +61 2 9287 0309
contents
auDitoRS
Ernst & Young
111 Eagle Street
Brisbane QLD 4000
Australia
SoliCitoRS
Thomsons Lawyers
Level 16, Waterfront Place
1 Eagle Street
Brisbane QLD 4000
Australia
BankeRS
australia
Westpac Banking Corporation
Singapore
United Overseas Bank Limited
Malayan Banking Berhad
Oversea-Chinese Banking Corporation Limited
DBS Bank Limited
Westpac Banking Corporation
Australia & New Zealand Banking Group Limited
thailand
United Overseas Bank (Thai) Public Company Limited
Siam Commercial Bank
China
Industrial and Commercial Bank of China Limited
China Merchants Bank
Inside front cover
Chairman’s Message
32 Consolidated Statement of Changes in Equity
02 Directors and Company Secretaries
33 Consolidated Statement of Cash Flows
05 Corporate Chart
06 Key Management
07 Directors’ Report
22 Auditor’s Independence Declaration
35 Notes to the Consolidated Financial Statements
95 Directors’ Declaration
96
Independent Auditor’s Report
98
Information on Shareholdings
23 Corporate Governance Statement
Inside back cover
Corporate Directory
30 Consolidated Statement of Comprehensive Income
back cover
Notice of General Meeting
31 Consolidated Balance Sheet
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notice of general meeting
The General Meeting of Zicom Group Limited will be held at the
Colmslie Hotel
Corner of Wynnum and Junction Roads
Morningside 4170, Queensland
Australia
Time: 11.30am (Brisbane time)
Date: Thursday, 7 November 2013
A formal Notice of Meeting is enclosed.
Zicom Group Limited
www.zicomgroup.com
38 Goodman Place, Murarrie QLD 4172 Australia • Telephone: +61 7 3908 6088 • Facsimile: +61 7 3390 6898