Zicom : Full Year Statutory Accounts 2021

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ZICOM GROUP LIMITED ABN 62 009 816 871

Annual Report - 30 June 2021

Contents
Chairman's Message	1
Board of Directors	3
Joint Company Secretary	7
Directors' Report	8
Auditor's Independence Declaration	22
Corporate Governance Statement	23
Consolidated Statement of Comprehensive Income	30
Consolidated Balance Sheet	31
Consolidated Statement of Changes in Equity	32
Consolidated Statement of Cash Flows	33
Notes to the Consolidated Financial Statements	34
Directors' Declaration	99
Independent Auditor's Report	100
Information on Shareholdings	106
Corporate Directory	107

Zicom Group Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Zicom Group Limited

38 Goodman Place

Murarrie, QLD 4172

Australia

For personal use only

Zicom Group Limited

Chairman's Message

"In the midst of darkness, light persists"

Mahatma Gandhi 1869-1948

Mahatma Gandhi's famous speech in 1931 cannot be more appropriate to describe the dark periods in the last 18 months. Indeed, in the midst of darkness, humanity has focused on the light. It has embraced all necessary health control measures and expedited the discovery of vaccines to control the pandemic so normalcy can be restored to our lives. However, the Delta Variant and the Mu Variant, two of the most virulent mutations of the Covid-19 virus which are more infectious and transmissible, continue to keep the pandemic at its height. It is assuming an endemic characteristic like common flu. The virus has somewhat evolved to control our destiny. Economic growth is subject to it being under control.

Severe Impact

The impact inflicted on our businesses in 2020 right up to the end of the financial year just ended has been the most severe in the Company's history. Orders for our products and services virtually ceased for almost the better part of the year, caused by lockdowns, global downturns compounded by trade war and geopolitical conflicts between USA and China, reduced travels and people movement. We had to rely on past orders secured in 2019 pre-pandemic, for revenue and cash flow.

Outcome In Adversity

In the midst of these adversities, we devised and innovated new ways of working together to execute our projects remotely. We reinforced communications and understanding among the teams and invested in new tools to facilitate these, ramped up tight healthcare control measures across the businesses and enhanced safety measures for all employees with emphasis on those at project sites. These additional costs were incurred necessarily. The payback came in the form of successful completion of projects, without penalties and runaway costs. Customers' trust and confidence has been bolstered positioning ourselves strongly for new projects ahead.

Unrelenting Efforts Paying Off

At the same time, our push into Green Energy projects had been unrelenting in expediting technology developments and engagement with customers. Most of these efforts had to be carried out remotely. The hard work and tenacity in the midst of very tough challenges finally paid off with us securing a total of S$60m of LNG propulsion systems. These were secured from one of the world's biggest oil tanker owners. The tankers are chartered to a top European oil company which strongly champions green energy and sustainability. This strong recognition is now propelling us to foray into different medium of carbon-free gas propulsion systems to meet industry demand, such as methanol and ammonia.

Green Shoots

In the last 6 months, general enquiries covering all sectors of our businesses have increased. We believe the Group has turned the corner and should see better days ahead. The resilience, fortitude and dedication of the Group's management and work force reinforce the Group's ability to capture growing opportunities as the global economy is resetting. The pandemic is expected to ease with increased vaccinations. Humanity and businesses are adapting to live with this potential endemic as a new normal to restore economic growth.

Share Buy-back

Our ability to deliver projects successfully in the pandemic enabled the Group to pay off all project loans taken in time, and to achieve a strong positive cash flow. This has reduced the Group's gearing ratio positioning the Board to review its capital management policy. As the board is of the opinion that the Group's quoted share price does not reflect its intrinsic value, it has decided on a share buy-back from September 2021.

The Teams' Fortitude

During the year the management and all employees, in particular the site project teams displayed great valour, strong dedication and commitment in the face of adversity in executing projects. We owe them great gratitude for their efforts without which, the projects would not have been successfully completed in time. A group of senior managers volunteered suspension of their pay between 20-30%. I took a 50% suspension of my pay. This was to strengthen cash liquidity. On 30 June 2021, their salaries were restored as we emerged with a stronger cash position. I did not restore my pay suspension but instead decided to reduce my monthly pay permanently by two-thirds as a solidarity with the employees' strong dedication and commitment during a crisis.

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Zicom Group Limited

Chairman's Message

Appreciation

Our Board members gave valuable guidance and exercised patience and support during the year, for which I am grateful. I would like to take this opportunity to express my appreciation to our shareholders for their forbearance and continuing support. We look forward to deliver better returns and to enhance their share value in the near future.

G L Sim

Chairman

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Zicom Group Limited

Board of Directors

Giok Lak Sim, FCPA

Executive Chairman, Age 75

Experience and Expertise

Appointed to the Board on 5 April 1995. Chairman and Managing Director of Zicom Group Limited till 31 December 2018. From 1 January 2019, stepped down as Managing Director and remains as Executive Chairman of Zicom Group Limited and all its subsidiaries. Experienced in public accounting, corporate development, strategic management as well as international trade.

Member of Incubation Advisory Board, Singapore National Eye Centre

Member of Board of Governors, UOB-SMU Asian Enterprise Institute

Singapore Ernst & Young Entrepreneur of the Year (Industrial Products), 2008

Other current directorships and former directorships in last 3 years

Board Member of SPRING Singapore (1 April 2014 to 31 March 2018)

Special responsibilities

Member of Nomination and Remuneration Committee

Executive Chairman of all subsidiaries

Relevant interests in shares and options as at date of signing the Directors' Report 107,781,137 ordinary shares

Kok Yew Sim, BSc

Executive Director and Group Chief Executive Officer, Age 41

Experience and expertise

Made an Executive Director on 25 September 2014 and promoted to Group Chief Executive Officer on 1 January 2019. For many years as the Chief Executive Officer of Sys-Mac Automation Engineering Pte Ltd (Sys-Mac), Mr Kok Yew Sim has been instrumental in Sys-Mac Group's growth journey, focusing on providing customised automation solutions, building capabilities and market penetration. As he gradually transits into his new role as the Group CEO, he will focus on strengthening and transforming the Group's existing core businesses to align with the technological age so as to enhance shareholders value. His first task was to spearhead the Group's foray into LNG propulsion systems and is now leading the team to execute the maiden project in transforming the offshore marine sector. He is leading the team to advance development into carbon-free gas propulsion systems in addition to LNG to meet evolving mandates of the International Maritime Organisation.

Mr Sim graduated with a Bachelor's degree in Electrical and Electronics Engineering from the University of Michigan, Ann Arbor, USA (Summa Cum Laude). He is the second son of the Executive Chairman, 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

CEO of Sys-Mac Automation Engineering Pte Ltd and its subsidiaries

Deputy Chairman of iPtec Pte Ltd

Director of Emage Vision Pte Ltd

Relevant interests in shares and options as at date of signing the Directors' Report

1,350,253 ordinary shares and 400,000 options

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Zicom Group Limited

Board of Directors

Lim Bee Chun, Jenny, FCCA

Executive Director and Joint Company Secretary, Age 48

Experience and expertise

Appointed to the Board on 13 November 2019, Ms Jenny Lim has been the Group's Financial Controller since 2005. She is responsible for accounting, financial, tax and corporate secretarial matters of the Group. Ms Lim also assumed the role of Joint Company Secretary since 6 June 2008. Before joining the Group, Ms Lim was with an international public accounting firm for more than 10 years specialising in audit and tax. She is a Fellow of the Association of Chartered Certified Accountants.

Other current directorships and former directorships in last 3 years

None

Special responsibilities

Joint Company Secretary

Director of Zicom Private Limited

Director and Company Secretary of Zicom Holdings Private Limited

Relevant interests in shares and options as at date of signing the Directors' Report 944,563 ordinary shares and 250,000 options

Yian Poh Lim, BSc, MSc

Non-Executive and Independent Director, Age 75

Experience and expertise

Appointed to the Board on 24 July 2006. Mr Yian Poh Lim has more than 20 years of extensive experience in the banking and finance industry and is currently the managing director of Yian Poh Associates, a financial consultancy and investment firm. Since 2000, Mr Lim has been an Honorary Commercial Advisor to The Administrative Committee of Jiaxing Economic Development Zone, China. He is also an Expert Consultant to Suzhou Vocational University, China. Mr Lim holds a Bachelor of Science degree from Nanyang University, Singapore and a Master of Science degree from the University of Hull, England.

Other current directorships and former directorships in last 3 years Independent Director of Casa Holdings Limited (appointed 4 November 2008) Lead Independent Director of TTJ Holdings Limited (appointed on 5 July 1996) Independent Director of ECON Healthcare (Asia) Limited (appointed on 22 March 2021)

Special responsibilities

Chairman of Nomination and Remuneration Committee

Member of Audit Committee

Non-Executive Director of Zicom Holdings Private Limited

Relevant interests in shares and options as at date of signing the Directors' Report

1,038,000 ordinary shares and 250,000 options

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