ANNUAL REPORT 2013 - Oilfield Workforce

ANNUAL REPORT 2013OILFIELD WORKFORCE GROUP LIMITED(ARBN 160 966 585)

for the Oil, Gas and Hydrocarbon Processing Industries

02

CONTENTS

1 About Oilfield 01

2 Chairman’s Statement 02

3 Directors Details 03

6 Notice of AGM 35

7 CDI Voting Form 38

5

Asx Additional Information 34

4 Financial Statements 04

Directors' report

Statement by directors

Independent auditor's report

Corporate governance statement

Statements of financial position

Consolidated statement of profit or loss and other comprehensive income

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the financial statements

05

07

08

09

11

12

13

14

15

01

ABOUT OILFIELDOilfield Workforce Group Limited (ASX: OFW), headquartered in Singapore and listed on the Australia Stock Exchange, is an international turnkey manpower solutions company that specialises in the oil and gas industry. The Group’s operational reach extends to Australia, Brazil, China, Hong Kong, Indonesia,Ivory Coast, Malaysia, Singapore and Thailand.

The Group’s professional staffing service provide customers with turnkey solutions and its expertise covers all stages of the project cycle, from exploration to maintenance, across multiple disciplines, from project management, project engineering, design engineering, contract, cost, planning, construction commission, third party inspection and operations.

Oilfield Workforce Group Limited

02

CHAIRMAN’s STATEMENT

Dear Shareholder

On behalf of the Board, I have the pleasure of presenting the Annual Report of Oilfield Workforce Group Limited and its subsidiaries (‘Oilfield” or the “Group”) for the financial year ended 31 December 2013 (“FY2013”).

Year In Review

This was an operationally challenging year for our Group, we reported revenue and net loss of US$8.67 million and US$0.79 million respectively, which were lower than the corresponding period last year. The reasons contributing to the weakness in 2013 can primarily be attributed to the collective impact of client-side delays in what was expected to be key contributing project in 2013, as well as unfavourable movements in the AUD against the USD, our reporting currency.

Over the past year, the industry continued to see delays across the oil and gas complex, from final investment decisions to project awards and commencement. Commensurate with the wide industry landscape, one of the Group’s new contract wins this year was delayed by approximately 12 months, due to engineering modification and a material delivery issue.

In the year 2013, the exchange rate for AUD to USD move from 1 AUD to 1.04 USD at the beginning of the year to 1 AUD to 0.89 USD at the end of the reporting period, giving rise to a US$0.69 million negative impact to our bottom line. Although this was a translational loss resulting from our AUD-denominated IPO proceeds held as cash, the loss was material to our profit and loss statement.

Our results for FY2013 included a number of costs related to our transformation into a listed public company that affected our results. Operating cost rose to US$2.83 million in FY2013, due to the impact of additional compliance and expansion costs incurred during the year. Our Group also took a one-off charge of US$0.12 million in relation to direct IPO expenses during the year. As a result, our Group reported Net Loss after Tax of US$0.79 million in FY2013.

In addition to the project delay and adverse foreign exchange movements, we also saw the completion of several key client projects in 2012, which contributed to a drop in revenue for 2013.

The confluence of harsh industry and macroeconomic trends this year made 2013 the most challenging year for the Group since its inception. While we have not been able to report strong financial numbers, we have been mindful to making the best use of our time in 2013 to turn it into a key year for foundation-laying. To that end, we are happy to convey that we are making meaningful headway in expanding the breadth of our customer and revenue bases.

Future Outlook and Prospects

The Group continues to work on executing its roadmap for growth which covers five key areas - namely, diversifying our business model, expanding our product range, widening our geographical reach, strengthening our customer relationships and enhancing our processing capabilities.

In addition to securing GE's Julimar Development Project and Sapura Clough’s Normand Clough Project, we have also been brought on board to look after the manpower sourcing needs of Wison Offshore and Marine as well as Daya Offshore Construc-tion. These new client wins take the form of exclusive agree-ments where we will be the sole personnel placement agents for all of the respective principals’ projects.

Capturing more opportunities and building our client base are top priorities for the Group, and my team and I have embarked on expanding our geographical presence, complementing our efforts in existing geographies.

Looking ahead, the oilfield services sector is beginning to gain positive traction and we expect the Group to be able to benefit from this upward trend. We believe we are poised to benefit from a wave of demand growth that could be driven by a mix of small, medium and large projects, together with a mix of new and delayed work. Barring unforeseen circumstances, we anticipate the beginnings of a recovery in 2014.

Acknowledgement and Thanks

I would like to extend my sincerest gratitude to my fellow Board members, management team and staff for their dedication and commitment in sustaining our Group through tough times and propelling it towards successive growth - your determination and creativity form the bedrock of this organisation. I would also like to thank our business partners, clients and loyal share-holders, for their understanding, unwavering support and trust.

I look forward to your continued support in the years ahead, which will provide us with the confidence to forge ahead with our expansion plans that will take our Group to greater heights.

Clarence Choo Chairman & CEO

Annual Report 2013


DIRECTORS DETAILSMr Choo Gim Ann (Clarence)Chairman and Chief Executive OfficerFounder, Mr Clarence Choo established Oilfield Workforce Group Limited in 2009, bringing with him over 17 years experience in the manpower solutions industry. In his current capacity as Chairman and Chief Executive Officer, Mr Choo is responsible for overall strategy, growth, worldwide marketing and sales within the Group.

Mr Choo started his career in manpower solutions at Technilink Interna-tional Limited, a manpower solutions provider, in 1999. In his 10-year career at Technilink International, Mr Choo was responsible for filling skilled and specialist positions for top-tier companies within the oil and gas industry. His last position held at Technilink International was as General Manager and was responsible for overseeing business develop-ment and overall profitability of the of the business.

Mr Choo left Technilink International for a short tenure as Managing Director at OWI Group (Singapore), further broadening his network at the technical manpower solutions provider that is also focused on the oil & gas, energy and infrastructure industries. In 2009, Mr Choo’s entrepreneurial drive and extensive network in the oil and gas space birthed the formation of Oilfield Workforce Group.

Ms Lim YunFei AngelinaExecutive Director and Chief Operating OfficerMs Angelina Lim, with over a decade’s experience in manpower solutions for the oil and gas industry, holds the position of Chief Operating Officer and Operations Manager at Oilfield Workforce Group, where her duties include managing the Group’s day-to-day operations to ensure smooth and efficient running.

After acquiring her Diploma in Electronics, Computer and Communica-tion Engineering from Nanyang Polytechnic Singapore, Ms Lim embarked on her career in oil and gas manpower solutions at Technilink International Limited, a manpower provider for the oil and gas, petrochemical, power generation and marine construction industries. Ms Lim left her position as Operations Manager at Technilink Interna-tional to take up the role of Operations Manager at OWI Group (Singapore) after six years with the company.

In 2009, Ms Lim joined CEO Mr Clarence Choo at Oilfield Workforce Group and was appointed Chief Operating Officer in November 2012.

Mr Tan Kiang Yong (Vincent)Independent DirectorMr Vincent Tan has over a decade of Business Development experience in the engineering and information technology industry in Asia, having worked for a number of international and regional companies. He holds a Bachelor Degree (Honors) in Engineering (Electrical) from National University of Singapore (NUS).

Mr Wong Alan Dak LunIndependent DirectorMr Wong is a partner of Mitchell & Partners, a firm of Chartered Accountants in Sydney, Australia. He has over 35 years’ experience in providing commercial as well as professional advice to clients across a broad range of industries.

He is actively participating in the management of various property and investment groups with interests across Australia and Asia, including development of strategies to maximise investment returns, assisting in the raising of private equity and managing operations to achieve strategic goals. Mr Wong serves as a director on the boards of a number of companies in Australia and Asia. His roles include executive and non-executive directorships. He holds a Bachelor of Commerce degree from the University of NSW and is an FCA at the Institute of Chartered Accountants in Australia.

Criteria for an "independent" directorWhere this Charter or the charter of a Board Committee requires one or more "independent" directors, the following criteria are to be consid-ered by the Board to determine if the relevant person is independent.

An "independent" director is a non-executive director who is not a member of management and who is free of any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the independent exercise of their judgement. When determining the independent status of a director, the Board will consider whether the director:

(a) is a substantial shareholder of the Company (that is, holds 5% or more of the issued voting shares of the Company) or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;(b) is employed, or has previously been employed, in an executive capacity by the Company, and there has not been a period of at least three years between ceasing such employment and serving on the Board;(c) has within the last three years been a principal of a material profes-sional adviser or a material consultant to the Company, or an employee materially associated with the service provided; (d) is a material supplier or customer of the Company, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or(e) has a material contractual relationship with the Company other than as a director of the Company.

Family ties and cross-directorships may be relevant in considering interests and relationships which may compromise independence and should be disclosed by directors to the Board.

DIRECTORS MEETINGSDuring the Year [number] of meetings of Directors (including Board sub-committees were held).Attendance by each Director during the year was as follows.

Held

4

4

4

4 4

4

4

4Lim YunFei Angelina

Wong Alan Dak Lun

Tan Kiang Yong Vincent

Choo Gim Ann Clarence

Attend Held

4

4

4

4

Attend Held

4

4

4

4

Attend Held

4

4

4

4

Attend

Board of DirectorsDirectors

Nomination &Remuneration Committe Audit Commitee Risk Management

Committee

03

04

Financial statementsOilfield Workforce Group Limitedand its subsidiaries31 December 2013

(Prepared under International Financial Reporting Standards)

Company information

Company registration number

Registered office

Directors

Audit Committee

Remuneration Committee

Nomination Committee

Secretary

Bankers

Auditor

201134138G

9 Temasek Boulevard Tower 2#08-01B Singapore 038989

Choo Gim Ann (Executive Chairman)Lim Yunfei, Angelina (Executive Director) [appointed on 1 April 2013]Tan Kiang Yong (Independent Non-Executive Director) [appointed on 26 February 2013]Wong Alan Dak Lun (Independent Non-Executive Director) [appointed on 1 April 2013]

Tan Kiang Yong (Chairman)Choo Gim Ann



Lum Kit Cheng

The Hongkong and Shanghai Banking Corporation LimitedDBS Bank LtdCIMB Bank Berhad

Foo Kon Tan Grant Thornton LLPPublic Accountants andCertified Public Accountants47 Hill Street #05-01Singapore Chinese Chamber of Commerce & Industry BuildingSingapore 179365

Partner-in-charge: Mr Yeo Boon Chye(Year of appointment: Financial year ended 31 December 2012)

Annual Report 2013

DIRECTORS’ REPORTfor the financial year ended 31 December 2013

The directors submit this annual report to the members together with the audited consolidated financial statements of the Group and statement of financial position of the Company for the financial year ended 31 December 2013.

Names of directorsThe directors of the Company in office at the date of this report are:

Choo Gim Ann (Executive Chairman)Lim Yunfei, Angelina (Executive Director) [appointed on 1 April 2013]Tan Kiang Yong (Independent Non-Executive Director) [appointed on 26 February 2013]Wong Alan Dak Lun (Independent Non-Executive Director) [appointed on 1 April 2013]

Arrangements to enable directors to acquire shares or debenturesDuring and at the end of the financial year, neither the Company nor any of its subsidiaries was a party to any arrangement of which the object of was to enable the directors to acquire benefits through the acquisition of shares in or debentures of the Company or of any other corporate body.

Directors’ interest in shares or debenturesAccording to the Register of Directors' Shareholdings kept by the Company under Section 164 of the Companies Act, Cap. 50, none of the directors who held office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations, except as follows:

Mr Choo Gim Ann, by virtue of the provisions of Section 7 of the Companies Act, Cap. 50, is deemed to have an interest in the whole of the issued share capital of the wholly-owned subsidiaries of the Company.

Holdings registered in the nameof director or nominee

Holdings in which director isdeemed to have an interest

Name of director

The Company -


Choo Gim AnnLim Yunfei, AngelinaTan Kiang Yong

As at1.1.2013

1,000,000--

As at31.12.2013

1,000,000224,000

4,000

As at1.1.2013

38,750,000--

As at31.12.2013

38,750,000--

Number of ordinary shares

05

Oilfield Workforce Group Limited and its subsidiaries

Directors’ benefitsSince the end of the previous financial year, no director has received or has become entitled to receive a benefit under a contract which is required to be disclosed under Section 201(8) of the Companies Act, Cap. 50 except for salaries, bonuses and fees and those benefits that are disclosed in this report and in Note 17 to the financial statements.

Share optionsNo options were granted during the financial year to take up unissued shares of the Company.

No shares were issued during the financial year to which this report relates by virtue of the exercise of options to take up unissued shares of the Company or any subsidiaries.

There were no unissued shares of the Company or any subsidiaries under option at the end of the financial year.

Audit CommitteeThe Audit Committee at the end of the financial year comprises the following members:


The Audit Committee performs the functions in accordance with the Audit and Risk Management Committee Charter. The main responsibili-ties of the Audit Committee are to:(i) review, assess and approve the annual full and concise reports, the half-year financial report and all other financial information published by the company or released to the market;(ii) assist the board in reviewing the effectiveness of the organisation’s internal control environment covering: - effectiveness and efficiency of operations; - reliability of financial reporting; and - compliance with applicable laws and regulations(iii) determine the scope of the internal audit function and ensure that its resources are adequate and used effectively, and assess its performance, including independence; (iv) ratify the appointment and/or removal and contribute to the performance assessment of the internal auditor;(v) oversee the effective operation of the risk management framework; (vi) recommend to the board the appointment, removal and remuneration of the external auditors, and review the terms of their engagement, the scope and quality of the audit and assess performance; (vii) consider the independence and competence of the external auditor on an ongoing basis; (viii) review and approve the level of non-audit services provided by the external auditors and ensure it does not adversely impact on auditor independence; (ix) review and monitor related party transactions and assess their propriety; and(x) report to the board on matters relevant to the committee’s role and responsibilities.

In fulfilling its responsibilities, the audit committee:

(i) receives regular reports from management and the internal and the external auditors; (ii) meets with the internal and external auditors at least once a year, or more frequently if necessary; (iii) reviews the processes the CEO and CFO have in place to support their certifications to the board;(iv) reviews any significant disagreements between the auditors and management, irrespective of whether they have been resolved;(v) meets separately with the external auditors and the internal auditor at least once a year without the presence of management; and(vi) provides the internal and external auditors with a clear line of direct communication at any time to either the Chair of the Audit Committee or the Chair of the Board.

06

The Audit Committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party.

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditor and reviews the level of audit and non-audit fees.

The Audit Committee is satisfied with the independence and objectivity of the external auditor and has recommended to The Board of Directors that the auditor, Foo Kon Tan Grant Thornton LLP, be nominated for re-appointment as auditor at the forthcoming Annual General Meeting of the Company.

Independent auditorsThe auditors, Foo Kon Tan Grant Thornton LLP, Public Accountants and Chartered Accountants, have expressed their willingness to accept re-appointment.

On behalf of the Directors

……………………………………CHOO GIM ANN

……………………………………TAN KIANG YONGDated: 10 March 2014

Annual Report 2013

STATEMENT BY DIRECTORSfor the financial year ended 31 December 2013

In the opinion of the directors, the accompanying statements of financial position, consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows, together with the notes thereon, are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2013 and of the results of the business, changes in equity and cash flows of the Group for the financial year ended on that date; and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Directors

……………………………………CHOO GIM ANN

……………………………………TAN KIANG YONGDated: 10 March 2014

07


Report on the financial statementsWe have audited the accompanying financial statements of Oilfield Workforce Group Limited (“the Company”) and its subsidiaries (“the Group”) which comprise the statements of financial position of the Group and the Company as at 31 December 2013, the consolidated statement of profit or loss and other comprehensive income, consoli-dated statement of changes in equity and consolidated statement of cash flows of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statementsManagement is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and the International Financial Reporting Standards (“IFRS”), and for devising and maintaining a system of internal accounting controls sufficient to provide a reason-able assurance that assets are safeguarded against loss from unauthor-ised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss account and balance sheets and to maintain accountability of assets.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by manage-ment, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2013, and the results, changes in equity and cash flows of the Group for the financial year ended on that date.

Report on other legal and regulatory requirementsIn our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditor, have been properly kept in accordance with the provisions of the Act.

Foo Kon Tan Grant Thornton LLPPublic Accountants andChartered Accountants

Singapore, 10 March 2014

INDEPENDENT AUDITOR’S REPORTto the members of Oilfield Workforce Group Limited

08

Annual Report 2013

CORPORATE GOVERNANCE STATEMENTThe Board of Directors of Oilfields Workforce Group Limited (“Company”) is committed to maintaining high standards of Corporate Governance. This statement outlines the main Corporate Governance practices that were adopted or in place throughout the financial year, which comply with the recommendations of the ASX Corporate Governance Council, unless otherwise stated.

Roles of the Board and ManagementOilfields Workforce has established the functions reserved to the Board as detailed in the Board Charter which is published on the Company’s website. The Board has overall responsibility for the management of the affairs of the Group including:

• developing and approving corporate strategy;• evaluating, approving and monitoring the strategic and financial plans and objectives of the Group;• evaluating, approving and monitoring the annual budgets and business plans;• determining the Company's dividend policy, the amount and timing of all dividend payments and the operation of the Company's dividend re-investment plan (if any);• evaluating, approving and monitoring major capital expenditure, capital management and all major acquisitions, divestitures and other corporate transactions, including the issue of securities of the Company;• approving all accounting policies, financial reports and material reporting and external communications by the Group; and• appointing the Chairman of the Company.Delegation to senior executives is set out in Board policies and in operat-ing policies and procedures.

Board StructureThe Board is comprised of four directors, two of whom are independent, non-executive directors. Given the Company’s background, the nature and size of its business and the current stage of its development, the Board believes that this is both appropriate and acceptable at this time.

The Board reviews its composition periodically and has the intention to appoint appropriate independent directors as required.

The Chairman, Clarence Choo is not independent. However, due to his experience and expertise in the areas the Company operates in, the Board considers that Mr Choo is suitably skilled to perform the role.

Nomination CommitteeThe Board has established a Remuneration and Nomination Committee. The Charter is available on the Company’s website.

The Committee reviews the Board’s composition periodically (at least annually) to ensure that it has the appropriate mix of expertise and experience. When a vacancy exists, for whatever reasons, or where it is considered that the Board would benefit from the services of a new Director with particular skills, the Board will select appropriate candidates with relevant qualifications, skills and experience. External advisors may be used to assist in such a process. The Board will then appoint the most suitable candidate who must stand for election at the next annual general meeting of shareholders.

For Directors retiring by rotation, the Board assesses that director before recommending them for re-election.

Board PerformanceThe Company has adopted a performance evaluation process for the Board and its Committees based on feedback and review. This is consid-ered appropriate for the size and composition of the current Board.

The Company believes it is important that the Board review its own performance and those of its Committees with a view to achieving and maintaining a high level of performance. It will meet periodically for the purpose of reviewing and evaluating its performance in meeting, its key responsibilities and achieving its objectives. As part of this review, the performance of the Board as a whole, each Director and the Chairman will be assessed.

A Board review was conducted in 2013.

Access to External ResourcesThe Directors have access to external resources including independent professional advice, as required to fully discharge their obligations as Directors of the Company as detailed in the Board Charter. The use of this resource is co-ordinated through the Chairman of the Board.

Code of ConductThe Company is committed to its Directors, employees and consultants maintaining high standards of integrity, and ensuring that activities are in compliance with the letter and spirit of both the law and Company policies.

The Company has established a Code of Conduct which is available of the Company’s website.

Diversity PolicyThe Company is committed to establishing and maintaining Employee and Board Diversity, which recognises the strategic and personal advantages that arise from a workplace where decisions are based on merit and all employees are treated equally. A Diversity Policy has been adopted by the Board and a copy of the Policy is available on the Company’s website.

Given the Group’s international operations, a natural diversity practice is in place, and the Company’s payroll during the financial year included citizens of 8 different countries.

To ensure the Company's commitment to promoting diversity is ongoing, the Measure Objectives will be derived from, but not limited to, the following assessment strategies:

• Assessing the prevalence of female employees in the organisation against the prevalence of females in senior management and Board positions.• Assessing the prevalence of ethnically and culturally diverse employees in the organisation against the prevalence of ethnically and culturally diverse employees in senior management and Board positions.• Assessing the Company's human resource policies and objectives against the Diversity Policy.• Assessing the Company's education and communication policies, promotion and materials against the Diversity Policy.• Assessing the Company's performance objectives against the flexibility needs of a varied range of employees.

The table below illustrates the proportion of female employees in the whole organisation, women in senior executive positions and women on the board.

Male (%)

75%

33%

57%

58%

25%

67%

43%

42%

Non-senior management

Total Company wide

Senior management

Board of Directors

Female (%)

2013


09

Audit CommitteeThe Board has established an Audit and Risk Management Committee. This Committee does not have a majority of independent Directors. Whilst the Board acknowledges the ASX Corporate Governance Council’s recommendations, in light of the current size of the Board, it does not have a sufficient number of independent and non-executive Directors to achieve the recommended composition. However, the Committee is chaired by an independent director.

During the financial year, the Audit and Risk Management Committee consisted of Tan Kiang Yong, independent director and Committee Chairman and, Clarence Choo, Executive Chairman of the Board.

The Audit and Risk Management Committee Charter is available on the Company’s website and further information on the Audit Committee is provided in the Directors’ Report.

Continuous DisclosureThe Company has a formal Continuous Disclosure & External Commu-nications Policy which is published on the Company’s website. This policy requires all Reporting Officers to inform the Company Secretary of any potentially ‘material information’ as soon as practi-cal after they become aware of that information. The Company Secretary will communicate the information to the Chairman and the Board, if appropriate.

Information is material if it is likely that the information would influence investors who commonly acquire securities on the ASX in deciding whether to buy, sell or hold the Company's securities. Material information must be disclosed to ASX immediately, unless ASX Listing Rules provide for non-disclosure.

The Company Secretary is responsible for interpreting and monitor-ing the Company's disclosure policy and where necessary informing the Board. The Company Secretary is responsible for all communica-tions with the ASX.

Communication with ShareholdersThe Company recognises the importance of regular and proactive interaction with the market in order to ensure the Company’s investors remain fully informed about its activities.

The Company has established a formal Continuous Disclosure & External Communications Policy which is published on the Company’s website.

Risk ManagementThe Board is responsible for the oversight of the Company’s risk management and control framework. Responsibility for control and risk management is delegated to the appropriate level of management within the Company.

The Board has established an Audit and Risk Management Committee. Its Charter is available on the Company’s website. The Committee has a responsibility to the Board for the risk management and control framework. The management team of the Company is required to initiate internal audits and report finding of their reviews to the Board regularly.

Remuneration CommitteeThe Board has appointed a Remuneration and Nomination Committee. A copy of its Charter is available on the Company’s website.

The Company’s Audit and Risk Committee does not have a majority of independent Directors. The Board acknowledges the ASX Corporate Governance Council’s recommendations though in light of the current size of the Board, Oilfield does not have a sufficient number of independent Directors to achieve the recommended composition at this time. However, the Committee is chaired by its independent director.

The formal Charter of this Committee specifies that executive directors must not be present at or participate in decisions relating to their own remuneration.

The Remuneration and Nomination Committee Charter sets out different obligations on the Remuneration and Nomination Committee with respect to considering the remuneration for executive and non-executive directors of the Company.

Non-executive directors receive a fixed fee only, while Executive Directors may be eligible for performance bonuses.

10

Annual Report 2013

The annexed notes form an integral part of and should be read in conjunction with these financial statements.

STATEMENTS OF FINANCIAL POSITIONas at 31 December 2013

AssetsNon-current

Investment in a subsidiaryProperty, plant and equipment

Current

Trade and other receivables

Cash and cash equivalents

Total assets

EquityCapital and reservesShare capitalExchange translation reserve(Accumulated losses)/ retained profitsTotal equity

LiabilitiesNon-currentObligations under finance lease Deferred tax liabilities

CurrentTrade and other payablesObligations under finance leaseCurrent tax payable

Total equity and liabilities

2,051,944-

2,051,944

5,779,261

1,455,6917,234,9529,286,896

8,021,818-

(1,349,538)6,672,280

---

2,614,616--

2,614,6169,286,896

-132,581132, 581

5,358,500

2,514,0277,872,5278,005,108

8,021,818(68,486)

(1,072,220)6,881,112

20,8658,238

29,103

614,50318,374

462,0161,094,8938,005,108

56

7

8

910(a)

1112

1311

1,785,941-

1,785,941

9,631

77

9,7081,795,649

1,786,018-

(55,764)1,730,254

---

65,395--

65,3951,795,649

-435,245435,245

3,851,427

878,727

4,730,1545,165,399

1,786,018(1,085)

14,6351,799,568

180,7698,529

189,298

2,608,57364,581

503,3793,176,5335,165,399

Note

The Company The Group31 December 2013

US$31 December 2012

US$31 December 2013

US$31 December 2012

US$

11


CONSOLIDATED STATEMENT OF PROFIT OR LOSSAND OTHER COMPREHENSIVE INCOMEfor the financial year ended 31 December 2013


The GroupYear ended

31 December 2013US$

8,670,603(6,668,663)

2,001,940215,346

(2,833,775)(11,248)

(627,737)(124,132)(751,869)

(42,586)(794,455)

(67,401)

(67,401)(861,856)

Cents

(1.19)(1.19)

Year ended31 December 2012

US$

17,713,312(14,360,620)

3,352,69238,858

(1,648,805)(33,858)

1,708,887(312,259)1,396,628(660,736)

735,892

4,298

4,298740,190

Cents

7.247.24

Note

414

1516(a)16(b)

16(c)

1718

19

20

RevenueCost of salesGross profit Other incomeAdministrative expensesFinance costs(Loss)/profit from operationsIPO expenses(Loss)/profit before taxationTaxation(Loss)/profit after taxation

Other comprehensive (expense)/income after tax:Items that may be reclassified subsequentlyto profit or loss

Exchange translation differenceOther comprehensive (expense)/income for the year, net of taxTotal comprehensive (loss)/income for the year

(Loss)/earnings per share Attributable to equity holders of the Company:- Basic- Diluted

12

Annual Report 2013

The annexed notes form an integral part of and should be read in conjunction with these financial statements.13


CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the financial year ended 31 December 2013

Retained Profits/(accumulated

losses)US$

(69,751)

735,892-

735,892

168,494

(820,000)

(651,506)14,635

14,635

(794,455)-

(794,455)

-

(292,400)

(292,400)(1,072,220)

At 1 January 2012Total comprehensive income for the year Profit after taxationOther comprehensive income, net of tax

Total comprehensive income for the year

Transactions with owners, recognised directly in equityTransfer of merger reserve to accumulated lossesDeemed liability owing to the then shareholder ofOilfield Workforce International Limited during the restructuring exercise

Total transactions with ownersBalance at 31 December 2012

At 1 January 2013 Total comprehensive loss for the yearLoss after taxationOther comprehensive expense, net of tax

Total comprehensive loss for the year

Transactions with owners, recognised directlyin equityIssue of ordinary sharesFinal tax-exempt (one-tier) dividend 0.43 centsper share paid in respect of financial year ended 31 December 2012

Total transactions with ownersBalance at 31 December 2013

Share capitalUS$

1,786,018

--

-

-

-

-1,786,018

1,786,018

--

-

6,235,800

-

6,235,8008,021,818

Exchangetranslation

reserveUS$

(5,383) -

4,298

4,298

-

-

-(1,085)

(1,085)

-(67,401)

(67,401)

-

-

-(68,486)

Mergerreserve

US$

168,494 --

-

(168,494)

-

(168,494)-

-

--

-

-

-

--

TotalUS$

1,879,378

735,8924,298

740,190

-

(820,000)

(820,000)1,799,568

1,799,568

(794,455)(67,401)

(861,856)

6,235,800

(292,400)

5,943,4006,881,112

Note

10(b)

9

25

CONSOLIDATED STATEMENT OF CASH FLOWSfor the financial year ended 31 December 2013


The GroupYear ended

31 December 2013US$

(751,869)

75,154(2,819)

-(40,560)11,248

(708,846)(1,897,218)(1,111,257)(3,717,321)

(11,248)(76,081)

(3,804,650)

(40,468)40,560

314,390314,482

(261,938)

--

(620,000)64,006

-6,235,800(292,400)5,125,468

1,635,300878,727

2,514,027


US$

1,396,628

75,788(1,556)

2,383(621)

33,8581,506,480

(1,517,391)489,188478,277(33,858)

(435,429)8,990

(91,155)621

196,418105,884

(247,476)

(200,000)(155,257)

620,00025,997

(230,061)--

(186,797)

(71,923)950,650878,727

Cash Flows from Operating Activities(Loss)/profit before taxationAdjustments for:Depreciation of property, plant and equipmentGain on disposal of property, plant and equipmentProperty, plant and equipment written offInterest incomeInterest expenseOperating profit before working capital changesIncrease in trade and other receivables(Decrease)/Increase in trade and other payablesCash (used in)/generated from operating activitiesInterest paidIncome tax paidNet cash (used in)/generated from operating activities

Cash Flows from Investing ActivitiesAcquisition of property, plant and equipment (Note A) Interest receivedProceeds from disposal of property, plant and equipmentNet cash generated from investing activities

Cash Flows from Financing ActivitiesRepayment of obligations under finance leaseDeemed payment of dividend to the then shareholderduring the restructuring exerciseAmount owing to directors, netAmount owing to a director Amount owing by third parties, net Repayment to a related partyIssuance of ordinary sharesDividend paid to shareholders of the CompanyNet cash generated from/(used in) financing activities

Net increase/(decrease) in cash and cash equivalentsCash and cash equivalents at beginning of yearCash and cash equivalents at end of year (Note 8)

14

Annual Report 2013

A. Property, plant and equipment

During the financial year ended 31 December 2013, the Group acquired property, plant and equipment with an aggregate cost of US$96,295 (2012 - US$477,287) of which US$55,827 (2012 - US$386,132) was acquired by means of finance leases. Cash payments of US$40,468 (2012 - US$91,155) were made to purchase property, plant and equipment.

1 General information

The financial statements the Company and the Group for the financial year ended 31 December 2013 were authorised for issue in accordance with a resolution of the directors on the date of the Statement by Directors.

The registered office is located at 9 Temasek Boulevard Tower 2 #08-01B, Singapore 038989. The Company was incorporated and domiciled in Singapore on 25 November 2011 under the name of Oilfield Workforce Group Pte. Ltd. as a private limited company. On 8 November 2012, the Company converted from a private limited company into a public limited company and assumed the present name Oilfield Workforce Group Limited. On 25 January 2013, the Company was admitted to the Official Listing of Australian Securities Exchange (“ASX”) Limited and commenced trading on 29 January 2013.

The principal activity of the Company is that of investment holding company. The principal activities of its subsidiaries are stated in Note 5 to the financial statements.

2 Restructuring exercise

The Group was formed as a result of a restructuring exercise (“Restructuring Exercise”) undertaken with the intention of the Company’s listing on the ASX. The Restructuring Exercise involved the following:

2(a) Incorporation of the Company

The Company was incorporated in Singapore on 25 November 2011 as an investment holding company of the Group with an initial paid-up capital of S$100 comprising 1,000,000 ordinary shares issued and allotted to Choo Gim Ann.

2(b) Acquisition of Oilfield Workforce International Limited

Pursuant to a share swap agreement dated 29 October 2012 (“Share Swap Agreement”) entered into between the Company (as the purchaser) and Oilfield Workforce International Limited (BVI) (“Oilfield BVI”), the Company acquired the entire issued and fully paid-up share capital of Oilfield Workforce International Limited (“Oilfield HK”) for an aggregate purchase consideration of approximately US$1,785,941. The aggregate purchase consideration was satisfied by the allotment and issue of 55,000,000 ordinary shares credited as fully paid, by the Company to Oilfield BVI.

3(a) Basis of preparation

The financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) including related Interpretations to International Financial Reporting Interpretations Committee (“IFRIC”), as issued by the International Accounting Standards Board (“IASB”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

The financial statements is presented in United States dollar (“US$”) which is the Company’s functional currency. All financial information is presented in US$, unless otherwise stated.

Significant accounting estimates and judgements

The preparation of the financial statements in conformity with IFRS requires the use of judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management’s best knowledge of current events and actions, actual results may differ from those estimates.

The critical accounting estimates and assumptions used and areas involving a high degree of judgement are described below:

Critical judgements made and assumptions used in applying accounting policies

Impairment in investment in a subsidiary (Note 5)Determining whether investment in a subsidiary is impaired requires an estimation of the value-in-use of that investment. The value-in-use calcula-tion requires the Company to estimate the future cash flows expected from the cash-generating units and an appropriate discount rate in order to calculate the present value of the future cash flows. Management has evaluated the recoverability of the investment based on such estimates.

Depreciation of property, plant and equipment (Note 6)Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives of property, plant and equipment to be within 3 to 5 years. The carrying amounts of the Group’s property, plant and equipment as at 31 December 2013 is US$132,581. 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.

Critical assumptions used and accounting estimates in applying accounting policies

Allowance for bad and doubtful debts (Note 7)Allowances for bad and doubtful debts are based on an assessment of the recoverability of trade and other receivables. Allowances are applied to trade and other receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of bad and doubtful debts requires the use of judgement and estimates. Where the expected outcome is different from the original estimate, suchdifference will impact carrying value of trade and other receivables and doubtful debt expenses in the period in which such estimate has been changed.

15

Oilfield Workforce Group Limited and its subsidiariesNotes to the financial statements for the financial year ended 31 December 2013

NOTES TO THE FINANCIAL STATEMENTSfor the financial year ended 31 December 2013

3(a) Basis of preparation (cont’d)

Critical assumptions used and accounting estimates in applying accounting policies (cont’d)

Income taxes (Note 18)The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is required in determining the group-wide provision for income taxes. There are also certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. When 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.

3(b) Interpretations and amendments to published standards effective in 2013

On 1 January 2013, the Group adopted the amended IASs and IFRSs that are mandatory for application from that date. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective IAS and IFRS. This includes the following IASs and IFRSs which are relevant to the Group:

The adoption of these new or amended FRSs did not result in substantial changes to the accounting policies of the Group and had no material effect on the amounts reported for the current or prior financial years except for the following:

Amendments to IAS 1 Presentation of items of Other Comprehensive IncomeThe amendments to IAS 1 Presentation of Items of Other Comprehensive Income (OCI) are effective for financial periods beginning on or after 1 July 2012.

The amendments to IAS 1 changes the grouping of items presented in OCI. Items that could be classified to profit or loss at a future point in time would be presented separately from items which will never be reclassified. As the amendments only affect the presentations of items that are already recognised in OCI, there is no impact to the Group on its financial position or performance upon adoption of this standard.

IFRS 13 Fair Value MeasurementIFRS 13 clarifies the definition of fair value and provides related guidance and enhanced disclosures about fair value measurements. It does not affect which items are required to be fair-valued. The scope of IFRS 13 is broad and it applies for both financial and non-financial items for which other FRSs require or permit fair value measurements or disclosures about fair value measurements except in certain circumstances. The adoption of IFRS 13 does not have any material impact on the accounting policies of the Group.

3(c) IFRS and IFRIC issued but not yet effectiveAt the date of authorisation of these financial statements, the following IFRS and IFRIC issued but not yet effective:

The directors of the Group do not anticipate that the adoption of the above amendments to IAS and IFRS in future periods will have a material impact on the financial statements of the Group in the period of their initial adoption.

Reference

Amendments to IAS 1Amendments to IAS 19Revised IAS 27Revised IAS 28Amendments to IFRS 7IFRS 10IFRS 11IFRS 12IFRS 13Amendments to IFRS 10, IFRS 11 and IFRS 12Various

Description

Presentation of Items of Other Comprehensive Income Employee BenefitsSeparate Financial StatementsInvestments in Associates and Joint VenturesDisclosures - Offsetting Financial Assets and Financial LiabilitiesConsolidated Financial StatementsJoint ArrangementsDisclosure of Interests in Other EntitiesFair Value MeasurementTransitional GuidanceAnnual Improvements 2009-2011 Cycle

Amendments to IAS 32Amendments to IFRS 10,IFRS 12 and IAS 27Amendments to IAS 36Amendments to IAS 39IFRIC 21VariousVariousAmendments to IAS 19IFRS 9

Offsetting Financial Assets and Financial LiabilitiesInvestment Entities

Recoverable Amount Disclosures for Non-Financial AssetsNovation of Derivatives and Continuation of Hedge AccountingLeviesAnnual Improvements to IFRSs 2010-2012 cycleAnnual Improvements to IFRSs 2011-2013 cycleDefined Benefit Plans: Employee ContributionsFinancial Instruments

Effective date(Annual periods beginning on or after)

1.1.20141.1.2014

1.1.20141.1.20141.1.20141.7.20141.7.20141.7.2014

To be determined

16

Annual Report 2013

3(d) Summary of significant accounting policies

Subsidiaries

A subsidiary is an entity controlled by the Group. The Group controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.

In the Company’s separate financial statements, shares in a subsidiary are stated at cost less allowance for any impairment losses on an individual subsidiary basis.

Consolidation

The financial statements of the Group include the financial statements of the Company and its subsidiaries made up to the end of the financial year. Information on its subsidiaries is given in Note 5.

Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are consid-ered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Business combination

Common control business combination outside the scope of IFRS 3

Business combinations occur where control over another business is obtained and the results in the consolidation of its assets and liabilities. The business combination during the period of restructuring was a common control transaction, as the conditions in IFRS 3: Business Combinations apply, in that all businesses were controlled by the same party before and after the transaction, and the control was not consid-ered transitory.

Therefore, this business combination is scoped out under IFRS 3, and therefore a suitable accounting policy needs to be determined in accordance with the hierarchy in IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors. This hierarchy looks for a policy that provides users of the financial statements with relevant and reliable information about the financial position and performance of the reporting entity. Therefore, an accounting choice is available for the accounting of this business combination.

The choice is to either apply the purchase method (applying a fair value approach to the acquisition value) or to apply the pooling of interest method where the combination is recorded at historical book values. Given the continuing control of the businesses, the Directors consider that it is appropriate to use the pooling of interest method to account for the transaction using the historical book values of the acquired assets and liabilities rather than reassessing these to more subjective and uncertain fair values. The profits attributable to the minority interest, if any, in the acquired entity, prior to the combination, have been eliminated.

Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

Contingent consideration classified as an asset or a liability is remeas-ured each reporting period to fair value through the statement of profit or loss and other comprehensive income unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of profit or loss and other comprehen-sive income.

A single uniform set of accounting policies is adopted by the combined entity. Therefore, the combined entity recognised the assets, liabilities and equity of the combining entities or businesses at the carrying amounts in the consolidated financial statements of the controlling party or parties prior to the common control combination.

The carrying amounts are included as if such consolidated financial statements of the Group had been prepared by the controlling party, including adjustments required for conforming the combined entity’s accounting policies and applying those policies to all years presented. There is no recognition of any goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of the common control combination. The effects of all transactions between the combining entities or businesses, whether occurring before or after the combination, are eliminated in preparing the consolidated financial statements of the combined entity.

Where accounting policies of subsidiaries do not conform with those of the Group, adjustments are made on combination when the amounts involved are considered significant to the Group.

Subsequent acquisition

The acquisition method of accounting is used to account for business combinations by the Group apart from business combination arising from common control described above. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.

Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill.

Disposals of subsidiaries or businesses

When a change in the Company’s ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts previously recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard.

Any retained equity interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained invest-ment at the date when control is lost and its fair value is recognised in the consolidated statement of profit or loss and other comprehensive income.

17


3(d) Summary of significant accounting policies (cont’d)

GoodwillGoodwill acquired in a business combination was initially measured at cost being the excess of the cost of the business over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill was measured at cost less any accumulated impairment losses. Goodwill was reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

Property, plant and equipment and depreciationProperty, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is computed utilising the straight-line method to write off the cost of these assets after deducting the residual value over their estimated useful lives as follows:

Computers 3 years

Furniture and fittings 3 years

Office equipment 3 years

Renovation 3 years

Motor vehicles 5 years

The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent expenditure relating to property, plant and equipment that have been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the standard of performance of the asset before the expenditure was made, will flow to the Group and the cost can be reliably measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is incurred.

For acquisitions and disposals during the financial year, depreciation is provided from the month after acquisition and to the month of disposal respectively. Fully depreciated property, plant and equipment, if any, are retained in the books of accounts until they are no longer in use.

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date as a change in estimates.

An item of 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 the profit or loss in the financial period the asset is derecognised.

Financial assets

Financial assets include cash and financial instruments. Financial assets, other than hedging instruments, can be divided into the follow-ing categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the investments were acquired. The designation of financial assets is re-evaluated and classification may be changed at the reporting date with the exception that the designation of financial assets at fair value through profit or loss is not revocable.

All financial assets are recognised on their trade date - the date on which the Group and the Company commit to purchase or sell the asset. Financial assets are initially recognised at fair value, plus directly attributable transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value.

Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at each reporting date whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Non-compounding interest and other cash flows resulting from holding financial assets are recognised in the profit or loss when received, regardless of how the related carrying amount of financial assets is measured.

Other than loans and receivables, the Group does not have any invest-ments and accordingly, there is no investment to be classified as financial assets at fair value through profit or loss, assets held-to-maturity or available-for-sale.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivables. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets, if any.

Loans and receivables include trade and other receivables. They are subsequently measured at amortised cost using the effective interest method less provision for impairment. If there is objective evidence that the asset has been impaired, the financial asset is measured at the present value of the estimated future cash flows discounted at the original effective interest rate. Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date of impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. The impairment or write back is recognised in the profit or loss.

Receivables are provided against when there is objective evidence that the Group will not be able to collect all amounts due to it in accordance with the original terms of the receivables. The amount of the writedown is determined as the difference between the assets’ carrying amount and the present value of estimated future cash flows.

Loans and receivables include trade and other receivables, related company balances and deposits held in banks.

18

Annual Report 2013


Impairment of non-financial assets

The carrying amounts of the Group’s and the Company’s non-financial assets subject to impairment are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of the cash-generating unit to which the asset belongs will be identified.

For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.

All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell and value-in-use, based on an internal discounted cash flow evaluation.

An impairment loss is charged to the profit or loss unless it reverses a previous revaluation in which case it is charged to equity.

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount or when there is an indication that the impairment loss recognised for the asset no longer exists or decreases.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognised.

A reversal of an impairment loss is recognised as income in the profit or loss.

Cash and cash equivalentsCash and cash equivalents include cash on hand and deposits with financial institutions which are readily convertible to cash and which are subject to an insignificant risk of changes in value.

Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.

DividendsFinal dividends proposed by the directors are not accounted for in shareholders’ equity as an appropriation of retained profit, until they have been approved by the shareholders in a general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability.

Interim dividends are simultaneously proposed and declared, because the articles of association of the Group grant the directors the author-ity to declare interim dividends. Consequently, interim dividends are recognised directly as a liability when they are proposed and declared.

Financial liabilitiesThe Group’s financial liabilities include trade and other payables, related company balances and obligations under finance lease.

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest-related charges are recognised as an expense in “finance cost” in the profit or loss.

Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.

Gains and losses are recognised in the profit or loss when the liabilities are derecognised as well as through the amortisation process.

Finance lease liabilities are measured at initial value less the capital element of lease repayments (see policy on “Finance Leases”).

Trade and other payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest method.

ProvisionsProvisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation and a reliable estimate can be made of the amount of the obligation. Present obligations arising from onerous contracts are recognised as provisions.

The management reviews the provisions annually and where in their opinion, the provision is inadequate or excessive, due adjustment is made.

If the effect of the time value of money is material, if any, provisions are discounted using a current pre-tax rate that reflects, where appropri-ate, the risks specific to the liability. Where discounting is used, the increase in the provision is due to the passage of time is recognised as finance costs.

Related partiesParties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.

Employee benefitsPension obligationsThe Group participates in the defined contribution national pension schemes as provided by the laws of the countries in which it has operations. In particular, the Singapore incorporated companies in the Group contribute to the Central Provident Fund (“CPF”), a defined contribution plan regulated and managed by the Government of Singapore in respect of eligible employees. The contributions to national pension schemes are charged to the profit or loss to which the contributions relate.

Employee leave entitlementsEmployee entitlements to annual leave are recognised when they accrue to employees. Accrual is made for the unconsumed leave as a result of services rendered by employees up to the end of reporting period.

19



Employee benefits (cont’d)Key management personnel

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the Group. Directors are considered key management personnel.

Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substan-tively enacted by the end of the reporting period.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of an asset or liability in a transac-tion that is not a business combination and affects neither accounting or taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the date of the financial position; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the date of the financial position, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in the profit or loss, except to the extent that the tax arises from a transaction which is recognised directly in equity.

Leases

Finance leasesWhere assets are financed by lease agreements that give rights approxi-mating to ownership, the assets are capitalised as if they have been purchased outright at values equivalent to the lower of the fair values of the leased assets and the present value of the total minimum lease payments during the periods of the lease. The corresponding lease commitments are included under liabilities. The excess of the lease payments over the recorded lease obligations are treated as finance charges which are amortised over each lease term to give a constant effective rate of charge on the remaining balance of the obligation.

The leased assets are depreciated on a straight-line basis over their estimated useful lives as detailed in the accounting policy on “Property, plant and equipment and depreciation”.

Operating leasesRentals on operating leases are charged to the profit or loss on a straight-line basis over the lease term. Lease incentives, if any, are recognised as an integral part of the net consideration agreed for the use of the leased asset. Penalty payments on early termination, if any, are recognised in the profit or loss when incurred.

Revenue recognitionRevenue is recognised when the significant risks and rewards of owner-ship have been transferred to the buyer. Revenue excludes goods and services taxes and is arrived at after deduction of trade discounts. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

Revenue from rendering of services is recognised when services are rendered and accepted by customer.

Interest income is recognised on a time-apportioned basis using the effective interest rate method.

Functional currenciesFunctional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements of the Group and the Company are presented in United States dollar, which is also the functional currency of the Company.

Conversion of foreign currenciesTransactions and balancesTransactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognized in profit or loss. However, in the consolidated financial statements, currency translation differences arising from borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations, are recognised in other comprehensive income and accumulated in the currency translation reserve.

Foreign exchange gains and losses that relate to borrowings are presented in the income statement within “finance costs”. All other foreign exchange gains and losses are reported as other income and administrative expenses respectively.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

20

Annual Report 2013


Conversion of foreign currencies (cont’d)

Group entities

The results and financial position of the Group entities that have a functional currency different from the presentation currency and are therefore translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing exchange rates at the end of reporting period;

(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumula-tive effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) All resulting currency translation differences are recognised in other comprehensive income and accumulated in the exchange transla-tion reserve.

Financial instruments

Financial instruments carried on the statements of financial position include cash and cash equivalents, financial assets and financial liabilities. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. These instruments are recognised when contracted for.

Disclosures on financial risk management objectives and policies are provided in Note 24 to the financial statements.

4 Revenue

Revenue of the Group represents provision of skilled contract labour and related value added services to the Oil and Gas industry.

5 Investment in subsidiaries

The Company

Unquoted equity investments, at cost

Details of the subsidiaries are as follows:

31 December 2013US$

2,051,944

31 December 2012US$

1,785,941

Country ofincorporation/principal place

of business Cost of investments

Effectivepercentage of

equity held Principal activities

Provision of skilledcontract labour andrelated value addedservices to the Oil andGas industry


Provision of executivesearch services to theOil and Gas industry



Name

Subsidiaries held by the Company

Oilfield WorkforceInternational Limited 1

Oilfield WorkforceInternational Pte Ltd2

Oilfield WorkforceConsultancy Pte Ltd3

OFW Service Sdn Bhd4

Oilfield Workforce(Australia) Pty Ltd5

2013 - %

100

100

100

100

100

2013 - US$

1,785,941

76,340

77

157,450

11

Hong Kong

Singapore

Singapore

Malaysia

Australia

2012 - %

100

-

-

-

-

2012 - US$

1,785,941

-

-

-

-

21


Country ofincorporation/principal place

of business Cost of investments

Effectivepercentage of

equity held Principal activities




5 Investment in subsidiaries (cont’d)

Details of the subsidiaries are as follows: (cont’d)

Name


Oilfield Workforce Mão DeObra Técnica Ltda6

Oilfield Workforce MEDMCC7

Subsidiary held by Oilfield Workforce International Limited


1 Audited by Abacus CPA Limited. Audited by Foo Kon Tan Grant Thornton LLP for consolidated purposes2 Audited by Foo Kon Tan Grant Thornton LLP The ownership of Oilfield Workforce International Pte Ltd was transferred from Oilfield Workforce International Limited to Oilfield Workforce Group Limited during the year. There is no goodwill reported arising from the restructuring.3 Incorporated on 13 November 2013 and dormant during the year; Foo Kon Tan Grant Thornton LLP was appointed as auditor on 12 February 20144 Incorporated on 28 May 2013; audited by SJ Grant Thornton, Malaysia5 Incorporated on 9 April 2013 and dormant during the year; not required by laws to be audited6 Incorporated on 2 August 2013 and dormant during the year; not required by laws to be audited7 Incorporated on 25 September 2013 and dormant during the year

2013 - %

100

100

-

2013 - US$

4,896

27,229

-

Brazil

Dubai

Singapore

2012 - %

-

-

100

2012 - US$

-

-

76,340

22

Annual Report 2013

Officeequipment

US$

4,0738,783

(2,861)-

37510,37013,780

-(475)

23,675

2,9651,011

(2,861)-

1561,2714,819

-(87)

6,003

17,672

9,099

Furnitureand fittings

US$

8,18211,438(9,022)(2,772)

5208,3464,268

-(324)

12,290

7,8371,173

(8,665)(693)

348-

3,508-

(32)3,476

8,814

8,346

Computers

US$

13,64325,327(7,909)

-1,209

32,2706,469

-(1,160)37,579

7,7164,542

(5,883)-

4716,846

10,757-

(331)17,272

20,307

25,424

Renovation

US$

33,53945,607

(35,030)-

2,35946,475

--

(1,587)44,888

32,774800

(35,030)-

1,456-

16,218-

(146)16,072

28,816

46,475

Motorvehicles

US$

219,497386,132

-(229,244)

17,108393,493

71,778(383,524)

(10,618)71,129

14,26768,262

-(36,461)

1,52447,59239,852

(71,953)(1,334)14,157

56,972

345,901

Total

US$

278,934477,287(54,822)

(232,016)21,571

490,95496,295

(383,524)(14,164)189,561

65,55975,788

(52,439)(37,154)

3,95555,70975,154

(71,953)(1,930)56,980

132,581

435,245

The GroupCost

At 1 January 2012AdditionsWritten offDisposalsExchange translation differenceAt 31 December 2012AdditionsDisposalsExchange translation differenceAt 31 December 2013

Accumulated depreciationAt 1 January 2012Depreciation for the yearWritten offDisposalsExchange translation differenceAt 31 December 2012Depreciation for the yearDisposalsExchange translation differenceAt 31 December 2013

Net book valueAt 31 December 2013

At 31 December 2012

6 Property, plant and equipment

As at 31 December 2013, the net book values of motor vehicles acquired under finance lease for the Group amounted to US$56,972 (2012 - US$345,901).

23


7 Trade and other receivables

Trade and other receivables are denominated in the following currencies:

Trade receivables are usually due within 30 to 60 days and do not bear any effective interest rate. All trade are subject to credit risk exposure. However, the Group does not identify specific concentrations of credit risk with regards to trade receivables, as the amounts recognised resembles a large number of receivables from various customers. Impairment on trade receivables is made when certain debtors are identified to be irrecoverable.

Based on historical default rates, the Group believes that no impairment is necessary in respect of past due trade receivables. These receivables are mainly arising by customers that have a good credit record with the Group.

(i) Financial assets that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are customers with a good collection track record with the Company is as follows.

(ii) Financial assets that are past due but not impaired

The ageing analysis of trade receivables past due but not impaired is as follows:

The outstanding balances with subsidiaries are unsecured advances, interest-free and repayable on demand.There is no allowance for doubtful debts arising from the outstanding balances.

The amount owing by a third party as at 31 December 2012 related to advances which were unsecured and interest-free. The amount had been fully repaid during the financial year ended 31 December 2013.


US$

5,192,975

-

-

7,501

40,44488,09029,490

165,5255,358,500

31 December 2012US$

3,325,782

-

390,144

7,237

46,46877,307

4,489525,645

3,851,427

31 December 2013US$

547,477

5,192,967

-

-

-12,13526,682

5,231,7845,779,261

31 December 2012US$

-

-

-

-

-9,631

-9,6319,631

Trade receivables

Non-trade Amount owing by subsidiaries

Amount owing by a third party

Advances to contractors

DepositsPrepaymentsOther receivables

The Company The Group

31 December 2013US$

4,531,616

617,52177,61233,86082,01915,872

5,358,500

31 December 2012US$

3,230,017

618,0633,347

---

3,851,427

31 December 2013US$

323,046

97,60266,794

5,291,819--

5,779,261

31 December 2012US$

-

9,631----

9,631

United States dollarSingapore dollarIndonesian rupiahAustralian dollarMalaysian ringgitUnited Arab Emirates dirham

31 December 2013US$

667,564306,189

1,028,3412,002,094

31 December 2012US$

1,318,887

418,590311,617

2,049,094

The Group Past due 0 to 30 daysPast due 31 to 60 daysPast due over 61 days

31 December 2013US$

3,190,881

31 December 2012US$

1,276,688

The Group Current

24

Annual Report 2013


31 December 2013US$

1,786,0186,235,8008,021,818

31 December 2012US$

1,786,018

-1,786,018

The Group and The Company At beginning of yearIssue of ordinary sharesAt end of year

31 December 2013US$

56,000,00012,000,00068,000,000

31 December 2012US$

1,000,00055,000,00056,000,000

Represented by: Issued and fully paid ordinary shares,with no par valueBalance at beginning of yearIssuance of ordinary sharesBalance at end of year

8 Cash and cash equivalents

Cash and cash equivalents are denominated in the following currencies:

The fixed deposit has one month maturity after the end of the financial year with a weighted average effective interest rate at 2.42%.

9 Share capital

Pursuant to a share swap agreement dated 29 October 2012 (“Share Swap Agreement”) entered into between the Company (as the purchaser) and Oilfield Workforce International Limited (BVI) (“Oilfield BVI”), the Company acquired the entire issued and fully paid-up share capital of Oilfield Workforce International Limited (“Oilfield HK”) for an aggregate purchase consideration of approximately US$1,785,941. The aggregate purchase consideration was satisfied by the allotment and issue of 55,000,000 ordinary shares credited as fully paid, by the Company to Oilfield BVI.

During the financial year, the Company issued 12,000,000 (2012 - nil) new ordinary shares at an issue price of A$0.50 per share for a total considera-tion of A$6,000,000 (2012 - nil) in its initial public offering. The newly issued shares rank pari passu in all respects with the previously issued shares.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings of the Company. All shares rank equally with regard to the Company’s residual assets.


31 December 2013US$

901,062

10,2151,602,7502,514,027

31 December 2012US$

-

5,725873,002878,727

31 December 2013US$

901,062

-554,629

1,455,691

31 December 2012US$

-

77-

77

Fixed depositCash on handCash at bank


US$

626,579252,380

1,521,5961,093

107,0335,346

2,514,027

31 December 2012US$

775,121103,180

32799

--

878,727

31 December 2013US$

--

1,455,691---

1,455,691

31 December 2012US$

- 77

----

77

United States dollarSingapore dollarAustralian dollarHong Kong dollarMalaysian ringgitUnited Arab Emirates dirham

25

5 Investment in subsidiaries

Name


Oilfield WorkforceInternational Limited 1


Oilfield WorkforceConsultancy Pte Ltd3

OFW Service Sdn Bhd4

Oilfield Workforce(Australia) Pty Ltd5

10(a) Exchange translation reserve

The presentation currency which gives rise to translation difference relates to the effect on the exchange difference arising from share capital and accumulated losses of the foreign subsidiaries.

10(b) Merger reserve

The merger reserve arises from the difference between the purchase consideration and the carrying value of the interest in the equity acquired under the pooling-of-interests method of consolidation in the restructuring exercise undertaken with the intention of the Company’s listing on the ASX.

During the financial year ended 31 December 2012, the merger reserve was transferred to the retained profits.

11 Obligations under finance lease

Obligations under finance lease are denominated in Singapore dollar.

The amount payable within one year is included under current liabilities whilst that payable after one year is included under non-current liabilities.

The Group leases motor vehicles from non-related parties under finance leases. The lease agreements do not have renewal clauses. The finance lease obligations are secured by the underlying assets (note 6).

The weighted average effective interest rate of obligations under finance leases at the end of the financial year is 4.59% (2012 - 3.74%).

12 Deferred tax liabilities

Deferred tax liabilities are to be settled after one year.

The balance related to tax on effect of excess of tax written down value over net book value of qualifying property, plant and equipment.

31 December 2013US$

(1,085)

(67,401)(68,486)

31 December 2012US$

(5,383)

4,298(1,085)

The Group Balance at beginning of yearMovement during the yearBalance at end of year

31 December 2013US$

19,70721,334

-41,041(1,802)39,239

31 December 2012US$

72,485

191,011-

263,496(18,146)245,350

The Group

Minimum lease instalments payable: Due not later than one year Due later than one year but not later than five years Due later than five years

Finance charges allocated to future periodsPresent value of minimum lease payments

31 December 2013US$

8,529(291)8,238

31 December 2012US$

1,0067,5238,529

The Group

Balance at beginning of year(Credited) / charged to profit or loss (Note 18)Balance at end of year

31 December 2013US$

18,37420,865

-39,239

31 December 2012US$

64,581

180,769-

245,350

The Group

Present value of minimum lease payments: Due not later than one year Due later than one year but not later than five years Due later than five years

26

Annual Report 2013

13 Trade and other payables

Trade and other payables are denominated in the following currencies:

The Company and the GroupThe fair value of trade and other payables have not been disclosed as, due to their short duration, management considers the carrying amounts recognised in the statements of financial position to be reasonable approximation of their fair values.

Accruals relate mainly to provisions for salaries and related costs of employees and contractors.

The CompanyThe non-trade amounts owing to subsidiaries are unsecured, interest-free and repayable on demand.

The GroupThe amount owing to a director as at 31 December 2012 related to dividend due to him arising from the restructuring exercise. This sum has been paid in January 2013.

The amount owing to a third party as at 31 December 2012 related to advances which were unsecured and interest-free. It had no repayment terms and was repayable only when the cash flows of the Group permits. The amount had been fully paid during the financial year ended 31 December 2013.


31 December 2013US$

525,047

---

2,81411,44175,20189,456

614,503

31 December 2012US$

1,571,466

620,000

-326,138

6,47940,09344,397

1,037,1072,608,573

31 December 2013US$

85,000

-

2,496,518---

33,0982,529,6162,614,616

31 December 2012US$

16,809

-

48,586----

48,58665,395

Accruals

Non-tradeAmount owing to a directorAmount owing to subsidiariesAmount owing to a third partyTax withheld from contractorsGST payablesOther payables


31 December 2013US$

245,278342,483

--

26,742-

614,503

31 December 2012US$

1,717,228

348,131458,452

84,762--

2,608,573

31 December 2013US$

2,524,709

85,00011

--

4,8962,614,616

31 December 2012US$

-

48,58616,809

---

65,395

United States dollarSingapore dollarAustralian dollarIndonesian RupiahMalaysian ringgitBrazilian real

27


14 Cost of sales

Cost of sales consists mainly of services rendered by contractors and certain employee benefit costs.

15 Other income

16(a) Administrative expenses

16(b) Finance costs

16(c) IPO expenses


US$

165,48040,560

2,8196,487

215,346


US$ -

6211,556

36,68138,858

The Group

Exchange gainInterest incomeGain on disposal of property, plant and equipmentOther


US$ -

11,24811,248


US$

24,3049,554

33,858

The Group

Interest expense on:- loan from a related party- finance leases


US$ --

109,59514,537

124,132


US$

201,060111,199

--

312,259

The Group

Audit feesReporting Accountant feeAgent commission relating to placement of shares to investorsOthers


US$

1,059,85394,433

117,998105,485

75,15414,767

-115,451856,830

27,15514,37413,78519,73813,17511,85717,63117,13645,358

213,5952,833,775


US$

603,18732,11851,04560,22275,78825,623

2,383588,692

1,8394,7148,318

2803,9468,001

56535,99517,746

9,573118,770

1,648,805

The Group

Employee benefit costsDirectors’ feeRental of officeConsultancy feeDepreciation of property, plant and equipment (Note 6)EntertainmentProperty, plant and equipment written offProfessional feeExchange lossTravelling expensesTelecommunicationSubscription feePrinting and stationeryUpkeep of vehiclesAdvertisingInsuranceBank chargesSecretarial feeOthers

28

Annual Report 2013

17 (Loss)/profit before taxation

18 Taxation

The tax expense on the results of the financial year varies from the amount of income tax determined by applying the Singapore statutory rate of income tax on Group's results as a result of the following:


US$

75,154(2,819)

-691,350

11,248(40,560)

94,433

483,22722,713

167,99714,902

869,44543,490

1,601,774

541,9211,059,8531,601,774


US$

75,788(1,556)

2,3831,839

33,858(621)

32,188

325,19725,823

85,5916,793

2,877,84970,576

3,391,829

2,788,642603,187

3,391,829

The Group

(Loss)/profit before taxation have been arrived at after(crediting)/charging:

Depreciation of property, plant and equipmentGain on disposal of property, plant and equipmentProperty, plant and equipment written offExchange loss (net)Interest expenseInterest incomeEmployee benefit costs:Directors’ feeDirectors of the Company - salaries and related costs - CPF contributionsKey management personnel (other than directors) - salaries and related costs - CPF contributionsOther than directors and key management personnel - salaries and related costs - CPF contributions

Employee benefit costs charged to:Cost of salesAdministrative expenses

Note

615

16(a)15, 16(a)

16(b)15

16(a)

16(a)


US$

38,154(291)

37,86376,081

113,944(71,358)

42,586


US$

106,0007,523

113,523547,429660,952

(216)660,736

The Group

Current taxationDeferred taxation (Note 12)

Foreign tax

Over provision in respect of prior years


US$

(751,869)

(128,000)1,089

(7,025)240,424(35,683)(32,942)

-37,863


US$

1,396,628

237,00011,000

(74,000)104,323(20,800)

(239,000)95,000

113,523

The Group

(Loss)/profit before taxation

Tax at statutory rate of 17%Difference in tax rateTax effect on non-taxable incomeTax effect on non-deductible expensesSingapore statutory stepped income exemptionTax effect on offshore exemption of a Hong Kong subsidiaryExpenses allocated to other jurisdiction

29


19 Other comprehensive income

20 Earnings per shareThe basic earnings and diluted earnings per share are calculated by dividing the net (loss)/profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the financial year.

There are no dilutive potential ordinary shares that were outstanding during the financial year.

21 Significant related party transactions

In addition to the related party information disclosed elsewhere in the financial statements, the following are transactions at mutually agreed amounts entered into between the Group and its related party at agreed rates:

22 Operating segments

The Chief Operating Decision Maker monitors the Group’s operating results regularly for the purpose of making decisions about resource allocation and performance assessment. Consolidated results are also reviewed regularly by the Chief Operating Decision Maker.

No information by operating segments is presented as the principal operation of the Group relates entirely to one sole business segment, i.e. the provision of skilled contract labour and related value added services to the Oil and Gas industry. Neither does the Group have any vertical integrated operations in rendering its manpower supply. The only discrete financial information provided which is reviewed by the Chief Operating Decision Maker is on consolidated basis as the manner in which business segment is operated is much confined to the Chief Operating Decision Maker.

(1) Geographical SegmentFor geographical segment revenue information, the allocation which is based on the geographical location where the customers are located is as follows:

Sales Revenue by Geographical Market

Exchange translation difference

Before taxUS$

(67,401)

Tax expenseUS$

-

Year ended 31 December 2013

Net of taxUS$

(67,401)

Exchange translation difference

Before taxUS$

4,298

Tax expenseUS$

-

Year ended 31 December 2012

Net of taxUS$

4,298


US$

(794,455)

67,000,000

(1.19)

(1.19)


US$

735,892

10,166,667

7.24

7.24

The Group

Net (loss)/profit attributable to equity holders of the Group

Weighted average number of ordinary shares for purpose ofcalculating basic and diluted (loss)/earnings per share

Basic (loss)/earnings per share (cents)

Diluted (loss)/ earnings per share (cents)


US$ -


US$

24,304

The Group

Loan interest charged by a related party


US$

1,556,1721,677,604

841,594--

442,4043,496,735

656,0948,670,603


US$

8,672,4156,420,839

86,45334,16359,404

1,477,862584,326377,850

17,713,312

The Group

AustraliaSingaporeChinaBangladeshVietnamMalaysiaIndonesiaNigeria

30

Annual Report 2013

22 Operating segments (cont’d)

Information about Major Customers

Revenue from five (2012 - five) major customers arising from sales attributable to the provision of skilled contract labour and related value added services to the Oil and Gas industry amounted to US$7,190,924 (2012 - US$15,674,294), representing 82.9% (2012 - 88.5%) of revenue, breakdown as follows:

(a) US$ 1,551,265 (2012 - US$8,672,415)(b) US$ 1,499,473 (2012 - US$1,466,222)(c) US$ 1,279,442 (2012 - US$714,707)(d) US$ 2,217,289 (2012 - US$584,326)(e) US$ 643,455 (2012 - US$377,850)

(2) Non-current assets by geographical area

The following table shows the carrying amount of the non-current assets by geographical area in which the non-current assets are located:

23 Operating lease commitments (non-cancellable)

At the end of the reporting period, the Group was committed to making the following lease rental payments under non-cancellable operating leases for rental of office premises and other equipment with an original term of more than one year:

The Group

Not later than one yearLater than one year and not later than five yearsLater than five years

The leases on the Group’s office premises and photocopier on which rentals are payable will expire earliest on 9 April 2014 and latest on 30 Septem-ber 2017, and the current rent payable on the leases are between US$191 and US$8,888 per month and are subject to revision on renewal of lease agreements.

24 Financial risk management objectives and policies

The board of directors meets periodically to analyse and formulate measures to manage the Group's exposure to market risk, including principally changes in interest rates and currency exchange rates. Generally, the Group employs a conservative strategy regarding its risk management. As the Group’s exposure to market risk is kept at a minimum level, the Group has not used any derivatives or other instruments for hedging purposes. The Group does not hold or issue derivative financial instruments for trading purposes.

As at financial years ended 31 December 2012 and 2013, the Group’s financial instruments mainly consisted of cash and cash equivalents, receiva-bles and payables.

24.1 Currency riskCurrency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.

In terms of operations, the sales and purchases are denominated mainly in United States dollar and Singapore dollar.

The extent of currency risk exposure is mainly for transactions which are denominated in foreign currencies, Singapore dollar (“S$”), Australian dollar (“A$”), Indonesian rupiah (“IDR”) and Malaysian ringgit (“RM”). The Group does not use any financial derivative such as foreign currency forward contracts, foreign currency options or swaps for hedging purposes. The Group will continue to monitor its foreign exchange exposure. The risk arising from movement in foreign exchange rate is minimised as exposure to foreign currency risk is insignificant to the Group.

Sensitivity analysisWith all other variables being held constant, a 5% strengthening/weakening of the S$, A$, IDR and RM against US$ at the reporting date would have either increased or decreased the Group’s net profit after tax and equity by the amounts shown below:

The Group

S$A$INRRM


US$

132,581


US$

435,245

The Group

Singapore


US$

126,0216,259

-


US$

109,700116,059

-


US$24,40977,773

3,8818,115


US$ 6,384

(22,906)(4,071)

-

31


24.2 Cash flow and fair value interest rate riskCash flow interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Group’s exposure to cash flow interest rate risk relates to fixed deposit placed with a financial institution (Note 8) and obligations under finance lease (Note 11).

Sensitivity analysis of interest rate riskAs at financial years ended 31 December 2012 and 2013, if United States interest rate increased/decreased by 1% per annum, with all other variables held constant, the Group’s net profit net of tax would have decreased/increased by US$2,454 and increased/decreased by US$8,618 respectively.

24.3 Credit riskCredit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss.

The carrying amount of trade and other receivables represents the Group’s maximum exposure to credit risk in relation to its financial assets. No other financial assets carry a significant exposure to credit risk.

The Group’s trade receivables comprise 3 debtors (2012 - 3 debtors) that represent 86% (2012 - 76%) of trade receivables. Wison Offshore & Marine Ltd and PT Oilfield Workforce Indonesia (“Prime”) represent 53% (2012 - Nil) and 17% (2012 – 20%) of trade receivables for the financial year ended 31 December 2013 respectively.

24.4 Liquidity riskLiquidity or funding risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Group manages its liquidity risk by ensuring the availability of adequate funds to meet all its obligations in a timely and cost-effective manner.

The table below analyses the maturity profile of the Group’s financial liabilities based on contractual undiscounted cashflows:

24.5 Market price riskPrice risk is the risk that the value of a financial instrument will fluctuate due to changes in market prices.

The Group does not hold any quoted or marketable financial instrument. Hence, there is no exposure to any movement in market prices.

More than 5 years

US$ ---

TotalUS$

614,503

41,041655,544

Less than1 year

US$

614,50319,707

634,210

Between2 and 5 years

US$ -

21,33421,334

As at 31 December 2013Trade and other payablesObligations under finance lease

---

2,608,573263,496

2,872,069

2,608,57372,485

2,681,058

- 191,011191,011

As at 31 December 2012Trade and other payablesObligations under finance lease

32

Annual Report 2013

25 Dividends

26 Capital management

The Group’s and the Company’s objectives when managing capital are:

(a) To safeguard the Group’s and the Company’s ability to continue as a going concern;(b) To support the Group’s and Company’s stability and growth;(c) To provide capital for the purpose of strengthening the Group’s and the Company’s risk management capability; and(d) To provide an adequate return to shareholders.

The Group and the Company actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder returns, taking into consideration the future capital requirements of the Group and the Company and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. The Group and the Company currently does not adopt any formal dividend policy.

The Group monitors capital on the basis of its equity ratio, which is calculated as being equity as a percentage of total assets. The Group’s equity ratio is as follows:

There were no changes in the Group’s and Company’s approach to capital management during the financial year ended 31 December 2013.

The Group and the Company are not subject to externally imposed capital requirement.

27 Financial instruments

Fair values The carrying amount of the financial assets and financial liabilities with a maturity of less than one year is assumed to approximate their fair values.

The Group and the Company does not anticipate that the carrying amounts recorded at the end of the reporting period would be significantly different from the values that would eventually be received or settled.

2013US$

292,400

2012US$

-

The Company and The Group

Ordinary dividends paid- final tax-exempt (one-tier) dividend paid in respect of the previous financial year of 0.43 cents (2012 - nil) per share

2013US$

6,881,1128,005,108

86.0%

2012US$

1,799,5685,165,399

34.8%

Total equityTotal assetsEquity ratio

33


ASX ADDITIONAL INFORMATIONThe shareholder information set out below was applicable as at 28 February 2014. At this date the Company has 68,000,000 ordinary shares held by 328 shareholders.

SUBSTANTIAL SHAREHOLDERS

TWENTY LARGEST SHAREHOLDERS

DISTRIBUTION OF SHAREHOLDINGS

The number of shareholders’ holdings less than a marketable parcel is 0.

VOTING RIGHTSAll ordinary shares carry one vote per share.

NUMBER OF ORDINARY SHARES SUBJECT TO ESCROW0

OILFIELD WORKFORCE INTERNATIONAL LIMITED

DMG & PARTNERS SECURITIES PTE LTD <CLIENTSA/C>

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

LIM YUNYI SERENA

CITICORP NOMINEES PTY LIMITED

35,386,385

11,208,000

4,959,000

4,214,615

3,756,259

Holder Name Number of ordinary shares in which interest is held

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 - 99,999,999,99

TOTAL

1,000

998,312

318,000

354,200

66,328,488

68,000,000

1

249

49

13

16

328

0.001

1.468

0.468

0.521

97.542

100.000

Holdings Ranges Holders Total Units %

OILFIELD WORKFORCE INTERNATIONAL LIMITED

DMG & PARTNERS SECURITIES PTE LTD <CLIENTS A/C>

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

LIM YUNYI SERENA

CITICORP NOMINEES PTY LIMITED

NATIONAL NOMINEES LIMITED

MR CLARENCE CHOO

NICOLAS SIM HEOK HOO

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED ‐ A/C 2

UOB KAY HIAN PRIVATE LIMITED <CLIENTS A/C>

MS BEVERLEY HUNG

MOK NGAN NOOI

TAN YUELING

MRS YUN FEI ANGELINA LIM

HSU CHING FU

SECRET RECIPE MANUFACTURING SDN BHD

SOH KINN YEOW

MR JOHN CHARLES PLUMMER

MR COLIN ROBERT HARRIS & MRS RAE HARRIS

POK YUAN FOO

LAI MENG HONG

35,386,385

11,208,000

4,959,000

4,214,615

3,756,259

1,898,000

1,000,000

977,000

625,000

500,000

482,614

411,308

411,307

224,000

150,000

125,000

60,000

50,000

48,000

30,000

30,000

66,546,488

52.039

16.482

7.293

6.198

5.524

2.791

1.471

1.437

0.919

0.735

0.710

0.605

0.605

0.329

0.221

0.184

0.088

0.074

0.071

0.044

0.044

97.864

Holder Name Balance at 28-02-2014 %

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Annual Report 2013

35

NOTICE IS HEREBY GIVEN that the 2nd Annual General Meeting of the members of Oilfield Work-force Group Limited (the “Company”) will be held on Friday, 25 April 2014 at 9 Temasek Boulevard #08-01B Suntec Tower Two Singapore 038989 at 2.30 p.m. to transact the following business:-

ORDINARY BUSINESS1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the financial year ended 31 December 2013 with the Auditors’ Report thereon. (Resolution 1)

2. To re-elect Ms Lim Yunfei, Angelina as an Executive Director pursuant to Article 86 of the Articles of Association of the Company. (Resolution 2)

3. To re-appoint Messrs Foo Kon Tan Grant Thornton LLP as Auditors and to authorise the Directors to fix their remuneration. (Resolution 3)

4. To transact any other routine business which may properly be transacted at an Annual General Meeting.

SPECIAL BUSINESSTo consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modification:

5. Directors’ Fees (Resolution 4) To approve the payment of Directors’ Fees of up to S$120,000 for the current financial year ending 31 December 2014.

6. Authority to issue shares (Resolution 5) That pursuant to Section 161 of the Companies Act, Cap. 50 (the “Act”) and with regard to the Listing Rules of the Australian Securities Exchange (ASX), the Directors of the Company be authorised and empowered to:-

(i) issue shares in the capital of the Company (whether by way of rights, bonus or otherwise); and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible or exchangeable into shares; and/or

OILFIELD WORKFORCE GROUP LIMITEDUnique Entity Number (UEN): 201134138G(Incorporated in the Republic of Singapore) ARBN 160 966 585

NOTICE OF ANNUAL GENERAL MEETING

36

(iii) (notwithstanding the authority conferred by this Ordinary Resolution may have ceased to be in force) issue shares in pursuance of any Instruments made or granted by the Directors of the Company while this Ordinary Resolution was in force,

Provided that:-

(a) the aggregate number of shares to be issued pursuant to the Ordinary Resolution (including shares to be issued in pursuance of the Instruments made or granted pursuant to the Ordinary Resolution and including shares which may be issued pursuant to any adjustment effected under any relevant Instruments) shall not exceed 15% of the current issued capital, being the limit prescribed by the ASX Listing Rules; (b) in exercising the power to make or grant Instruments (including the making of any adjustment under any relevant Instrument), the Company shall comply with the Listing Rules and Regulations of the ASX for the time being in force (unless such compliance has been waived by the ASX) and the Articles of Association of the Company; and

(c) unless revoked or varied by the Company in General Meeting, such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company following passing of the Ordinary Resolution, or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

BY ORDER OF THE BOARD

……………………………………CHOO GIM ANNDirector

7 April 2014

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VOTING EXCLUSIONResolution 4The Company will disregard any votes cast on Resolution 4 by the Chair, any Director of the Company and their associates.

However, the entity need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

EXPLANATORY NOTES TO RESOLUTIONS1. Resolution 1 – Annual Report The financial statements of Oilfield Workforce Group Limited and its controlled entities for the year ended 31 December 2013 and the reports of the Directors and Auditors are set out in the Audited Accounts as released to the ASX and available on the Company’s website.

2. Resolution 2 – Re-election of Ms Lim Yunfei, Angelina as an Executive Director Ms Lim will retire pursuant to Article 86 of the Articles of Association of the Company. Ms Lim has over 10 years of experience in oil and gas recruitment industry. Ms Lim is the Chief Operating Officer for the Group and is responsible for managing the day-to-day operations of the Company.

3. Resolution 3 – Appointment of Auditors The current Auditors, Foo Kon Tan Grant Thornton LLP, Certified Public Accountants will hold office until the conclusion of this Meeting. They have expressed their willingness to accept re-appointment. Share holders are asked to consider their re-appointment as Auditors and to authorise the Directors to fix their remuneration.

4. Resolution 4 – Directors’ Fees Item 5 is to seek approval for the payment of Directors’ Fees on a current year basis.

5. Resolution 5 – Authority to issue shares The proposed ordinary resolution, if passed, will empower the Directors of the Company, from the date of this Meeting until the next Annual General Meeting, or the date by which the next Annual General Meeting is required by law to be held, whichever is earlier, to issue shares and convertible securities in the Company up to a maximum of 15% of the current issued capital in the Company. This authority will, unless revoked or varied at a General Meeting, expire at the next Annual General Meeting of the Company.

For clarity, this resolution is not seeking approval for: • The issue of securities pursuant to the requirements of ASX Listing Rule 7.1A; nor • The issue of securities to related parties, pursuant to the requirements of ASX Listing Rule 10.11.

ADDITIONAL NOTES1) A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy or proxies (not more than two proxies) to attend and vote on his/her behalf. A proxy need not be a member of the Company.2) The instrument appointing a proxy or proxies must be under the hand of the appointer or of his/her attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised.3) To be effective, the instrument appointing a proxy must be deposited at the Registered Office of the Company not less than forty-eight (48) hours before the time appointed for holding the Meeting:

9 Temasek Boulevard #08-01B Suntec Tower Two Singapore 038989

38

CDI Voting Instruction Form Annual General MeetingFor your vote to be effective it must be received by 2.30 p.m. on 21 April 2013

FOR ALL ENQUIRIES CALL:(within Australia) 1300 737 760

(outside Australia) +61 2 9290 9600

FACSIMILE +61 2 9290 9655

ALL CORRESPONDENCE TO:Oilfield Workforce Group Limited

9 Temasek Boulevard #08-01BSuntec Tower TwoSingapore 038989

STEP 1 – CHESS Depositary Nominees will vote as directed

I/We

ofbeing a holder of CHESS Depositary Interests of the above Company hereby direct CHESS Depositary Nominees Pty Ltd to vote the shares underlying my/our holding at the Annual General Meeting of Oilfield Workforce Group Limited to be held at 2.30 p.m. on 25 April 2014 and at any adjournment of that meeting.

By execution of this CDI Voting Form the undersigned hereby authorises CHESS Depositary Nominees Pty Ltd to appoint such proxies or their substitutes to vote in their discretion on such business as may properly come before the meeting. Where no direction is given and the Chairman votes as proxy, you acknowledge that the Chairman will vote in favour of the proposed resolutions.

STEP 2 - Items of Business For Against Abstain*

Resolution 1 – Adoption of the Directors’ Report and the Audited Accounts of the Company

Resolution 2 – Re-election of Ms Lim Yunfei, Angelina as an Executive Director

Resolution 3 – Re-appointment of Foo Kon Tan Grant Thorton LLP as Auditors of the Company

Resolution 4 – Approval of Directors’ Fees for the financial year ending 31 December 2014

Resolution 5 – Authority to issue Shares

*If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

STEP 3 - PLEASE SIGN HEREThis section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Contact Name ……………………………………………….…….. Contact Daytime Telephone ……………………………………………… Date / / 2014

Individual or Securityholder 1

Sole Director andSole Company Secretary

Securityholder 2

Director

Securityholder 3

Director/Company Secretary

OILFIELD WORKFORCE GROUP LIMITEDARBN 160 966 585

39

How to vote on Items of BusinessYou can vote by completing, signing and returning your CDI Voting Instruction Form. This form gives your voting instructions to CHESS Depositary Nominees Pty Ltd, which will vote the underlying shares on your behalf. You need to return the form no later than the time and date shown above to give CHESS Depositary Nominees Pty Ltd enough time to tabulate all CHESS Depositary Interest votes and to vote on the underlying shares.

Signing Instructions

Individual: Where the holding is in one name, the security holder must sign.

Joint Holding: Where the holding is in more than one name, all of the security holders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the Australian registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Only duly authorised officer/s can sign on behalf of a company. Please sign in the boxes provided, which state the office held by the signatory. i.e. Sole Director, Sole Company Secretary or Director and Company Secretary.

LODGEMENTThis form (and any Power of Attorney under which it is signed) must be received no later than 2.30 p.m. on Monday, 21 April 2014. Any form received after that time will not be valid for the scheduled meeting.

Forms may be lodged:

By Mail 9 Temasek Boulevard #08-01B Suntec Tower Two Singapore 038989

In Person 9 Temasek Boulevard #08-01B Suntec Tower Two Singapore 038989

Attending the MeetingIf you wish to attend the meeting please bring this form with you to assist registration.

CDI Voting Instruction Form Oilfield Workforce Group Limited Annual General Meeting

for the Oil, Gas and Hydrocarbon Processing Industries

Singapore Headquarters9 Temasek Boulevard #08-01B Suntec Tower 2, Singapore 038989Email: [email protected] +65 6871 8893Fax +65 6334 8510

ANNUAL REPORT 2013 - Oilfield Workforce

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Transcript of ANNUAL REPORT 2013 - Oilfield Workforce