Ansys Integrated Report 29 February 2012

128 Pages·2012·6.42 MB·English

ANSYS LIMITED INTEGRATED REPORT
GLOSSARY OF TERMS
“Act” The Companies Act, No. 71 of 2008, and the Corporate Law Amendment Act, No. 24 of 2006.
“Ansys” or “the company” Ansys Limited (Registration number 1987/001222/06) a public company incorporated in accordance with the
laws of South Africa, formerly Ansys Integrated Systems (Pty) Limited
“the Group” Ansys Limited (Registration number 1987/001222/06) a public company incorporated in accordance with the
laws of South Africa, and its subsidiaries
“AltX” The Alternative Exchange of the JSE
“AMD” Aerospace and Maritime Defence Industry Association
“auditors” BDO South Africa Incorporated (Practice number 905526E)
“BBBEE” as defined in the Broad-Based Black Economic Empowerment Act, (Act 53 of 2003) and which means the eco-
nomic empowerment of all black people, including women, workers, youth, people with disabilities and people
living in rural areas, through diverse but integrated socio-economic strategies
“business day” any day other than a Saturday, Sunday or official public holiday in South Africa
“certificated shareholders” Ansys shareholders who elect to receive physical Ansys share certificates
“common monetary area” South Africa, the Republic of Namibia and the Kingdoms of Swaziland and Lesotho
“dematerialised shareholder” a shareholder who holds ordinary shares which have been incorporated into the Strate system and which are
no longer evidenced by physical documents of title in terms of the Custody and Administration of Securities
Act, 1992
“Designated Advisor” Exchange Sponsors (2008) (Pty) Ltd (Registration number 1999/024433/07), a company incorporated in ac-
cordance with the laws of South Africa, a Designated Advisor as contemplated in the Listings Requirements
“directors” or
“board of directors” the directors of Ansys, further details of whom appear on page 2 and 3
“Emerging Signals (Pty) Ltd” Emerging Signals (Pty) Ltd (Registration number 1952/000247/07) a private company incorporated in accor-
dance with the laws of South Africa
“Government” The Government of South Africa
“GRI” Global Reporting Initiative
“IASYS” Integrated Advanced Systems (Pty) Ltd (Registration number 1987/002834/07) a private company incorporated
in accordance with the laws of South Africa
“IFRS” International Financial Reporting Standards, which comprise standards and interpretations approved by the
International Accounting Standards Board, International Financial Reporting Interpretations Committee and In-
ternational Accounting Standards, and Standing Interpretations Committee interpretations approved by the In-
ternational Accounting Standards Committee
“incorporation” The date of incorporation of Ansys, being 23 March 1987
“Listings Requirements” The Listings Requirements of the JSE
“Optocon” Optocon Systems (Pty) Ltd (Registration number 2005/018161/07) a private company incorporated in accor-
dance with the laws of South Africa
“QuadSoft” QuadSoft (Pty) Ltd (Registration number 2001/004368/07) a private company incorporated in accordance with
the laws of South Africa
“Rand” or “R” or “cents” The official currency of South Africa
“SENS” The Securities Exchange News Service of the JSE
“South Africa” The Republic of South Africa
“SANDF” South African National Defence Force
“SARCC” South African Rail Commuter Corporation
“shareholders” holders of ordinary shares in Ansys
“SOE” State Owned Enterprises
“the JSE” JSE Limited (Registration Number 2005/022939/06), a company duly registered and incorporated with limited
liability under the company laws of South Africa, and licensed as an Exchange under the Securities Act 36 of
2004
“the Registrar” The Registrar of Companies in South Africa
“transfer secretaries” Computershare Investor Services (Pty) Ltd (Registration number 2004/003647/07), a company incorporated
in accordance with the laws of South Africa
ANNUAL FINANCIAL STATEMENTS
Directorate and Secretariat 2
Executive Committee 4
Profile 5
Group Five Year Review 6
Group Share Information 9
Chairman and CEO Report 10
Operational Review 12
Corporate Citizenship 20
Sustainability Report 25
Corporate Governance Statement 35
Directors’ Responsibility Report 52
Company Secretary Certificate 52
Directors’ Report 53
Independent Auditor’s Report 59
Consolidated Statement of Comprehensive Income 60
Consolidated Statement of Financial Position 61
Consolidated Statement of Changes in Equity 62
Consolidated Statement of Cash Flows 63
Notes to Group Annual Financial Statements 64
Administration 106
Notice of Annual General Meeting 107
Form of Proxy 121
Election form 123
Ansys Limited (Incorporated in the Republic of South Africa) (Registration number: 1987/001222/06)
1
DIRECTORATE AND SECRETARIAT PROFILE
Teddy Daka – Non-Executive Chairman
Teddy is a foremost exponent in BBBEE issues and is His management experience includes executive level
an advisor to a number of government departments. He posts in Telkom and Phalaborwa Foundation. Teddy has
currently serves on various boards of global businesses served on various Tender Boards, such as a member of
and state owned companies. He is a director at SITA Tender Board and Chairman of SAA Tender Board.
Aurecon Pte Ltd (Singapore), Non-Executive Director at His also served on several Government and Ministerial
SAA SOC Ltd, Chairman of SAA Technical SOC Ltd, Advisory Committees, such as Chairman at the
Executive Chairman of Tedaka Technologies Pty Ltd and Department of Public Works, member at the
is a trustee of the Aurecon Africa Trust. Department of Home Affairs as well as Ministerial Task
Team member on SITA at the Department of Public
Teddy holds a MBA from South Africa’s Gordon Institute Service and Administration.
of Business Science, a Bachelor of Arts Honours degree
in Business Management from De Montfort University From July 2012, Teddy has been appointed as Acting
in the UK and a Certificate in Education from the (interim) CEO until a suitable candidate is recruited.
University of Zimbabwe. He has also completed
executive programmes at several institutions locally
and in the USA.
Fezile Dantile – Independent Non-Executive Director
Fezile who holds a B Comm, is currently the Managing again from 2009 to 2010. He is a member of the
Director of SIMS (Pty) Limited, a private company Institute of Personnel Management and the Black
involved in construction and maintenance of railway Management Forum.
infrastructure.
Fezile with his extensive experience in Human Resource
He is also a director of Plasserail (SA) (Pty) Limited and Management, is also the Chairman of the Remuneration,
SimsKhula (Pty) Limited, both of which are in the rail Social and Ethics Committee. He has been a non-
industry. Fezile was President of the RailRoad executive director of Ansys since 11 March 2011.
Association of South Africa from 2004 to 2005 and
2
DIRECTORATE AND SECRETARIAT PROFILE
David Keebine – Independent Non-Executive Director
David holds a BComm and a Management Development Turbo (Pty) Limited, a wholly owned subsidiary of Voith
Diploma from the South African Institute of Management. Germany.
He has been the managing director of Imfuyo Projects David is also appointed as the Chairman of the Audit
(Pty) Limited for the last eight years. Previously he was and Risk Committee. He has been a non-executive
the financial manager and divisional director of Voith director of Ansys since 11 March 2011.
Alan Holloway – Chief Executive Officer
Alan is a graduate engineer with a Masters of Business After Avitronics and Denel, he was COO at Spescom for
Leadership degree and is a Registered Professional two years. He gathered very useful managerial and
Engineer. He has acquired extensive experience in technical skills during his years at Grintek, Spescom
running high technology projects and companies during and Ansys and has a passion for growing businesses.
his 30 years in the Aerospace, Telecommunications and He was a director of JSE-listed companies (Grintek and
Rail Industries. Spescom) from 1992 to 2002 and has been CEO of
Ansys since 2002.
Alan was the founder of Avitronics in 1988. He grew it
into a world class company for 12 years and then sold Subsequent to year-end, Alan has resigned as CEO of
it to Celsius Tech, which became Saab. Today it is Ansys with effect from 30 June 2012.
known as Saab Avitronics (High Technology Electronic
Warfare Company). Alan also headed the Electronic
Warfare Division at Armscor as well as various divisions
in Denel.
Rachelle Grobbelaar – Chief Financial Officer
Rachelle is a qualified Chartered Accountant and a One of her clients at the firm was IST. She moved to
member of the Institute of Directors. commerce in 2006 and joined McDonalds (SA) as their
Corporate Financial Manager, where she gathered
She completed her articles at PricewaterhouseCoopers group accounting and reporting skills as well as
and remained at the firm as an assistant audit managerial skills.
manager. Rachelle gained extensive experience in the
engineering industry and the listing environment. Rachelle has been CFO of Ansys since 2008.
Rudi Barnard – Executive Director
Rudi has 28 years’ experience in electronic rail he was instrumental in the acquisitions of Emerging
systems, of which 21 were at Siemens. He has a Signals and QuadSoft.
National Diploma in Electrical Engineering and has
successfully completed a number of postgraduate Rudi is an Associate Member of the Institution of
business courses at UNISA. Railway Signal Engineers and a Member of the Institute
of Directors.
Under Rudi’s leadership, the rail business at Ansys has
diversified to now also include railway signalling and
Melinda Gous – Company Secretary
Melinda has a certificate in Advanced Business and
Securities Law from UNISA. She has over 10 years
experience in company secretarial practice.
3
EXECUTIVE COMMITTEE
Alan Holloway Rachelle Grobbelaar Rudi Barnard
Chief Executive Officer Chief Financial Officer Executive Director &
Rail Executive
Johan Kotze –Marketing Executive
Johan is a graduate Electronic and Systems engineer. Johan has been part of Ansys since 2008 and his
He started up the mining group within Ansys. Although interpersonal skills tend to get the most out of both the
he comes from an electro-optics background, the field technical teams as well as clients.
he specialised in, he is passionate about the new
opportunities brought by the company’s rope testing
technology.
Onno Sakkers –Chief Technical Officer
Onno is a professional engineer with a deep interest in involvement at various levels across all projects. He is
the workings, development and manufacturing of also responsible for Ansys’ Safety, Quality Assurance,
machines and systems, particularly those aspects Environmental Management (SHEQ) and configuration
related to optimising their usability, maintainability and management.
productibility.
He has been involved with the company since 1991 and
currently serves as chief technical officer with
Johann Fischer –Mining and Industrial Executive
Johann is responsible for the mining and industrial the development as well as marketing of the Ansys
segment of Ansys and has a strong technical Maintenance Management System.
background. Johann is a graduate Electronic and
Systems engineer and specialised in Quality Assurance. His current focus is the development and commissioning
of the rope testing equipment.
Since starting at the company in 2007, he has carried
a variety of responsibilities from quality assurance to
Elsabe van der Westhuizen – Human Resources Executive
Elsabe is a BA graduate and has more than 20 years Elsabe has been the Human Resource Executive in
experience in Human Resource practices. She has Ansys since January 2009.
gathered useful knowledge and skills in Organisational
Development (including Skills Development and
Employment Equity), Performance Management,
Change and Diversity Management over the years.
4
PROFILE
Ansys was founded in 1987 to supply the defence force with avionic computers and
other applications of harsh environment electronics and embedded software. During
the late 1980s and early 1990s, the Company became the National Centre of 1987 Ansys is founded. Main aim to
Excellence for airborne crash recorders. This established a broad capability to gather provide avionic computers and
data in extremely harsh environments, process it, and supply it as crucial management flight recorders
information. Its in-house capabilities also allowed the Company to complete complex
1998 Actively participates in rail market.
weapons system integration projects. This expertise ensured that Ansys remained
First Vehicle Identification System
responsible to Denel for a variety of weapons integration work for the SANDF.
installed
Ansys became black empowered in 2002 when Teddy Daka acquired a 40% equity 2002 Ansys achieves BEE status
stake in the Company and joined the Ansys Board. Ansys listed on the JSEs Alternative
2006 Partnership between Ansys and
Exchange in June 2007.
Invensys Rail Systems, Australia
Active participation in the rail market began in 1998 with the commissioning of an 2007 Ansys listed on the Alternative
Automatic Vehicle Identification System for Transnet Freight Rail on the Coal Link line Exchange Board of the JSE
between Ermelo and Richards Bay. This system was later expanded to allow for Train
2007 Ansys acquires Optocon, QuadSoft
Condition Monitoring. In 2003 a similar Vehicle Identification System was installed
and Emerging Signals
by Ansys on the Sishen-Saldana OREX line. The successful implementation and
support delivered to these major links resulted in the awarding of the Transnet Freight
2008 Rationalisation of the Board of
Rail contract to Ansys for the installation of a Vehicle Identification System on all its Directors and the establishment of
South African tracks in 2006. In 2006, Ansys and Invensys Rail Systems Australia the executive committee
agreed to work together to enable Invensys signalling systems to return to South
2009 Ansys achieved remarkable
Africa. This positioned both companies favourably for the upgrading of signalling
success in the development of a
infrastructure in most sub-Saharan African countries.
new Continuous Rope Monitoring
System (CRMS)
In December 2007, the Group acquired the business of Emerging Signals, an approved
railway signalling contracting company as well as 100% shareholding in QuadSoft, a 2010 Ansys sold Optocon and
company that develops and maintains locomotive in-cab communications systems. streamlined its business into three
The group also acquired 100% shareholding in Optocon, an engineering company that core divisions housed under one
manufactures precision electro optical systems. Subsequently, the Group sold its legal entity
shareholding in Optocon during the 2011 financial year. In November 2008, the Board
2011 First CRMS unit installed at Moab
of Directors was rationalised. The Board now consists of an equal number of executive
Khotsong Mine
and non executive directors. An Executive Committee was established which includes
key employees of Ansys as well as the Executive Managers of the three business 2012 Ansys achieved profitable results
divisions. During the last two financial years, the Company achieved incredible
success in the development of a new Mine Rope Tester. This innovative development
has been enthusiastically received in the mining industry as it significantly contributes
to mine safety. The first Continuous Rope Monitoring system was successfully
installed during the current financial year.
The Group was streamlined into three core divisions housed under a single legal entity
during the 2011 financial year. The business of QuadSoft (Pty) Ltd was transferred
into the rail division of Ansys Ltd and the shareholding of Optocon (Pty) Ltd, as part of
the defence segment, was sold. As part of the board’s strategic approach to reduce
trading risk and minimise overheads, Ansys is now trading from two premises rather
than four. One of these premises is a 1300m2assembly facility set up in Centurion to
produce all of the company products.
Ansys returned to profitability during the 2012 financial year, since the last two loss
making years. This result was achieved through effective strategic interventions,
namely the containment of operating cost, improvement of gross margins and effective
disposal of Optocon (Pty) Ltd to limit further losses from this subsidiary.
Today Ansys dominates the local market in Trackside Measurement encompassing
health/condition monitoring systems and automatic vehicle identification systems.
It’s Mining and Industrial division is involved in monitoring and control systems and
information systems for optimisation of industrial processes and Ansys defence
division specialises in the integration of weapon systems and low cost sights for
armoured vehicles.
5
GROUP FIVE YEAR REVIEW
FOR THE YEAR ENDED 29 FEBRUARY 2012
Group Consolidated Statement of Financial Position
2012 2011 2010 2009 2008
R’000 R’000 R’000 R’000 R’000
Assets
Non-current assets 46 447 45 078 43 699 38 354 40 935
Plant and equipment 920 1 641 7 887 6 871 5 210
Intangible assets 36 010 32 276 29 347 29 005 35 725
Deferred tax asset 9 517 11 161 6 465 2 478 –

Current assets 30 744 19 194 45 832 66 011 71 264

Inventories 9 136 5 390 10 156 5 799 6 195
Trade and other receivables 21 276 12 836 32 261 52 235 44 271
Other financial assets – – 60 1 012 190
Cash and cash equivalents 180 781 3 355 6 965 20 608
Current tax receivable 152 187 – – –

Total assets 77 191 64 272 89 531 104 365 112 199

Equity and liabilities
Equity 49 443 37 171 48 747 66 022 76 302

Capital and reserves 49 443 37 171 48 747 66 022 76 302

Non-current liabilities 5 125 4 055 2 371 2 027 6 958

Borrowings – – 388 665 1 187
Derivative financial liabilities – – – – 5 255
Deferred tax liability 5 125 4 055 1 983 1 362 516

Current liabilities 22 623 23 046 38 413 36 316 28 939

Borrowings 3 456 4 044 274 523 840
Trade and other payables 14 259 16 666 30 048 18 950 24 567
Derivative financial liabilities 291 19 – 5 871 813
Cash and cash equivalents 4 617 2 317 7 202 9 115 –
Current tax payable – – 889 1 857 2 719

Total equity and liabilities 77 191 64 272 89 531 104 365 112 199
6
GROUP FIVE YEAR REVIEW
FOR THE YEAR ENDED 29 FEBRUARY 2012
Group Consolidated Statement of Comprehensive Income
2012 2011 2010 2009 2008
R’000 R’000 R’000 R’000 R’000
Continuing operations:
Revenue 102 090) 97 877) 77 366) 120 171) 121 940)
Gross profit 46 430) 31 879) 25 003) 52 144) 44 483)
Other income 355) 342) 277) 90) 195)
Operating costs (31 338) (30 246) (32 790) (47 632) (19 080)
EBITDA 15 447) 1 975) (7 510) 4 602) 25 598)
Depreciation and amortisation (3 835) (3 772) (2 541) (1 544) (587)
Profit/(loss) before interest and taxation 11 612) (1 797) (10 051) 3 058) 25 011)
Finance income 3) 63) 184) 908) 1 410)
Finance cost (850) (694) (695) (1 550) (478)
Profit/(loss) before taxation 10 765) (2 428) (10 562) 2 416) 25 943)
Taxation (2 843) 2 624) 2 052) (887) (7 941)
Profit/(loss) for the year from
continuing operations 7 922) 196) (8 510) 1 529) 18 002)
Discontinued operations:
Loss for the year –) (13 432) (7 728) –) –)
Taxation –) –) 532) –) –)
Loss for the year from
discontinued operations –) (13 432) (7 196) –) –)

Other comprehensive income, net of tax –) –)s –) –) –)
Total comprehensive income/(loss)
for the year 7 922) (13 236) (15 706) 1 529) 18 002)
7
GROUP FIVE YEAR REVIEW
FOR THE YEAR ENDED 29 FEBRUARY 2012
Group Consolidated Statement of Cash Flows
2012 2011 2010 2009 2008
R’000 R’000 R’000 R’000 R’000
Cash flows from operating activities
before working capital 14 871) (4 723) (14 335) (5 013) 12 921)
Changes in working capital (14 686) 7 887) 26 714) (12 500) (4 284)
Cash flows from operating activities 185) 3 164) 12 379) (17 513) 8 637)
Cash flows from investing activities (6 848) (6 407) (7 599) (4 717) (39 935)
Cash flows from financing activities 3 762) 5 554) (6 477) (528) 49 535)
Cash flows for the year (2 901) 2 311) (1 697) (22 758) 18 238)
Cash and Cash equivalents at
beginning of period (1 536) (3 847) (2 150) 20 608) 2 370)
Cash and Cash equivalents at end
of the year (4 437) (1 536) (3 847) (2 150) 20 608)
Group Per Share Financial Information
2012 2011 2010 2009 2008
R’000 R’000 R’000 R’000 R’000
Number of shares in issue
– total 161 867 056 149 117 056 142 228 041 140 271 008 140 000 000
– weighted 155 994 105 143 637 146 141 517 718 140 134 390 131 945 205
– diluted 155 994 105 143 637 146 143 406 733 144 503 386 133 913 631

Basic earnings/(loss) per share (cents)
– total 5.08) (9.22) (11.10) 1.09) 13.64)
– from continuing operations 5.08) 0.14) (6.01) 1.09) 13.64)
– from discontinued operations –) (9.35) (5.08) –) –)

Diluted earnings/(loss) per share (cents)
– total 5.08) (9.22) (10.95) 1.06) 13.44)
– from continuing operations 5.08) 0.14) (5.93) 1.06) 13.44)
– from discontinued operations –) (9.35) (5.02) –) –)

Headline earnings/(loss) per share (cents)
– total 5.06) (3.86) (10.25) 1.09) 13.71)
– from continuing operations 5.06) 0.14) (5.99) 1.09) 13.71)
– from discontinued operations –) (4.00) (4.96) –) –)
8