Annual
Report 2023
Raising the
Standard.
Contents
1
2023 Highlights
2 Chairman’s Address
4 Managing Director’s Report
8
Business Overview
11 Safety
12
Board of Directors
14 Key Management Team
16 Financial Report
78 Directors’ Declaration
79
83 Shareholder Information
Independent Auditor’s Report
Photos: Cover – Sydney Gateway, NSW
Inside cover – Clayton yard, VIC
2023 Highlights
Acrow is a leading provider of smart integrated construction
systems across formwork, industrial services and commercial
scaffolding in Australia. We are proud to report 10 years of
consecutive growth and a strong outlook for the future.
Total Revenue $m
Revenue by Business Unit#
14%
Increase
to $168.5m
19
20
21
22
23
71.0
87.0
105.7
148.3
168.5
● Formwork 60.5%
● Industrial services 23.9%
● Commercial scaffold 15.5%
EBITDA* $m*
Revenue by Geography
47%
Increase
to $53.2m
14.8*
19.5
24.3
19
20
21
22
23
36.3
53.2
Earnings per Share c*
62%
Increase
to 11.64c
4.4
4.0
4.9
19
20
21
22
23
7.2
11.7*
*Underlying
#Revenue includes sale of ex hire equipment
● QLD 53.9%
● NSW 20.0%
● VIC 12.4%
● SA 4.9%
● WA 6.0%
● TAS 2.8%
$168.5m
Revenue for FY23
Acrow Annual Report 2023 | 1
Chairman’s Address
FY23 was another great year for
Acrow in which we achieved progress
across all facets of the business.
Our strategy of participating in the Australian civil infrastructure market, which includes the federal
government’s 10-year, $120 billion infrastructure pipeline1 and greenfield projects that represent
$72 billion2 worth of opportunity, delivered strong organic growth further cementing Acrow’s
position as Australia’s leading provider of smart integrated construction systems across formwork,
industrial services and commercial scaffolding.
Our core business has benefited from expanding interstate
where we have been under-represented in the past, and
winning new contracts which include some of Australia’s
marquee infrastructure projects.
Outstanding growth led to a new record statutory
net profit of $23.5 million, an increase of 49% on the
previous year.
As we build a larger and more robust platform, we
are driving better returns. Return on equity has more
than doubled in four years, improving to 32.7% in
FY23 compared to 23.0% in the previous year. Capital
expenditure for the year was $23.4 million, of which
$17.8 million was invested in growth. In addition, we
acquired $23.5 million premium screens and panels in
the last quarter of FY23. We continue to invest smartly to
exploit the market opportunities before us. The company
maintains a strong balance sheet.
Dividend
This robust result has enabled the Board to declare a
final dividend of 2.7 cents per share, fully franked. Together
with the interim dividend of 1.7 cents per share,
85% franked, this represents full year dividends of
4.4 cents per share, 94% franked, a 63% increase
on the prior year.
Underlying earnings per share were 11.7 cents per
share, up 63% on 7.2 cents per share and continuing the
company’s positive track record of growth. This has also
been recognised in the company’s market capitalisation
and share price which increased substantially during the
financial year.
Innovation driving national growth
These results validate the success of our business strategy
which is focused on the east coast infrastructure market
and on strengthening our network nationally. We maintain
an impressive forward-looking pipeline of work including
large projects with significant opportunities for Acrow,
which present an exciting trend for the future.
Importantly, we continue to be successful in converting
opportunity into contracts.
We are investing significantly in people and particularly
in engineering skills and training, which has led to Acrow’s
people being recognised in the industry as ‘best of breed’
and by our clients for their ability to deliver superior
outcomes on projects.
Acrow is differentiated by a unique approach to
engineering which has placed us in a sweet spot. We have
invested in developing our own suite of products, placing
us at the forefront of product innovation. The growth of our
product offerings has allowed us to offer attractive prices
1 Benchmark Report 2023, Australian Trade and Investment Commission
2 Australian Infrastructure Investment Report 2022
Our core business has benefitted from expanding interstate where we have
been under-represented in the past, and winning new contracts which include
some of Australia’s marquee infrastructure projects. Peter Lancken, Chairman
2 | Acrow Annual Report 2023
Preassembled Kidston Work
Box, Morrison Lane yard, QLD
Closing
A key role of the Board is to ensure that we can capitalise
on the opportunities before us, and it is pleasing to be
part of a stable and productive Board which is navigating
the company through change successfully with another
optimal year ahead.
I would like to thank my Board colleagues as well as
Steven Boland, his executive team, and all our employees
for their efforts.
In addition to our ongoing investment in hard assets,
significant investment is continuing to strengthen our
platform, including enterprise resource planning, and
ensuring that the technology supporting our business
advances at a pace to enable its growth.
While at a macroeconomic level the domestic
economy has been affected by rising interest rates,
the nation-building economy is strong, and major
infrastructure growth is continuing. We forecast that
Acrow’s performance will continue to improve. The
company maintains a record pipeline of work and is
consistently tendering for new projects in a market which is
bursting with opportunities.
Peter Lancken AM Chairman
and to package them effectively, raising our competitive
position. We also made significant yard operational
improvements, establishing new facilities in south-east
Queensland and in Melbourne to support our growing
business reducing yard congestion and improving material
handling safety.
These facilities support ongoing growth, particularly
in formwork which is the company’s powerhouse. Our
industrial services business is well positioned with a strong
platform for expansion into new states and markets. The
strategic approach we have activated in commercial
scaffolding, supported by a skilled team, has seen
utilisation rates reach an all-time high.
One Acrow
We have taken the decision to elevate the way we project
ourselves to the market through the exciting launch of
a new brand on 4 September 2023. This leverages the
opportunities from the acquisitions made since listing on
the ASX, uniting the business in a ‘one company’ approach
which allows the business we have built to demonstrate a
single purpose.
Our most recent acquisitions are already demonstrating
their value. During the year we entered the jump form
market through acquisition of a best in class jacking
system, which enables the construction of the lift shaft
core of a multi-story building. This business is off to a great
start. It also has synergy with our screen business, which
we have strengthened with the acquisition of premium
screen assets. Acrow is now the only combined jump form
and screens provider in Australia, and four of the first five
contracts secured by the jump form business include a
screen component. This provides an excellent example
of how we are packaging product innovation and
engineering expertise to drive business growth.
47%
EBITDA increase
to $53.2m
4.4c
Dividend per share
up 63% on 2022
Acrow Annual Report 2023 | 3
Managing Director’s Report
Another outstanding year for
the business.
It is pleasing to report that Acrow’s great run and momentum has continued with strong organic
growth across Australia and record financial results.
We are a leading provider of smart integrated
construction systems across formwork, industrial services
and commercial scaffolding and have built a competitive
advantage from innovative engineering solutions, a
superior product range, a high-quality team and an
unmatched network. Our market presence has now been
strengthened with the decision to unite our businesses
through the relaunch of a single, overarching Acrow brand,
which is underpinned by a ‘best of breed’ approach.
The new brand reflects that while our operations have
grown through acquisition, we work as one group of
people with a unified product offering – and our ability
to engineer bespoke solutions and cross-sell nationally
provides a platform for ongoing growth.
Acrow today is a go-to supplier on infrastructure projects,
having established a positive reputation for quality,
safety and service. Some of the marquee civil engineering
projects which we serve include the Bruce Highway
upgrade and Cross River Rail in Queensland, Melbourne
Metro and Westgate Tunnel in Victoria, Sydney Gateway,
Sydney M12 Motorway, and Snowy 2.0 in NSW.
Our people
Through my career, I have never worked with a more
talented, committed group as the 300 people that
make up the Acrow team which I am proud to
lead. We have a very diverse workforce with
an entrepreneurial and solutions-focused
culture that is committed to positive outcomes
for clients.
We place an enormous emphasis on internal
training and development. Focused initially on
engineering leadership, this has broadened
to include sales and administration staff. For example, the
Acrow graduate experience provides two years of mentoring
and regular professional development and our mental health
champion program provides staff with professional support.
Our talent and succession planning for key roles also has
an emphasis on providing internal and external training
and mentoring.
Engineering skills transform products
Acrow’s transformation into an engineering led business
has enabled us to achieve our mission in the formwork
market over the past five years, and we are now the clear
market leader in Australia.
Since listing on ASX, the balance of our business has
changed. The revenue generated by engineered systems
and services has shifted from 43% of the total to 83% in
FY23. We now employ 45 engineers including chartered
and dedicated site engineers. Our national approach to
engineering includes ISO accreditation and a dedicated
product testing facility.
Our engineering focus is now evolving to include a
dedicated product design team, whose mission is to
design products specifically for the Australian market. This
is an incredibly exciting development within our business
and will further consolidate our position as the Australian
formwork and industrial scaffold leader.
Capitalising on a gap in the market, the Powershore 150
was our first locally designed product. It has been well
received by the Australian heavy-duty shoring market,
offering 50% more capacity than similar systems. Owning
the intellectual property means we are unconstrained by
licensor restrictions and can enter untapped markets with
tight cost and supply chain control.
Through my career, I have never worked with a more talented, committed
group as the 300 people that make up the Acrow team which I am proud
to lead. Steven Boland, CEO
4 | Acrow Annual Report 2023
Metro Tunnel – Preassembled
Franklin Adit, VIC
Our product versatility and solutions focus allows us to
supply multiple added formwork packages and provide all
engineering design, supply and preassembly.
New product range stimulates strong
organic growth
We have successfully leveraged acquisitions and our
general capital program to open new channels for
revenue. Our FY23 entry into the $150 million jumpform
market has propelled us in the commercial buildings
market. Our system has a competitive advantage as it is
computer controlled and all components are reusable,
reducing the special fabrication needs and saving time
and labour cost.
We commenced with two jumpform contracts valued at
$4 million and began quoting for new business in May 2023,
rapidly developing a pipeline valued at $26 million. We
are now targeting $20 million of annualised revenue from
jumpform, within 30 months of commencing operations.
Also in the last quarter of FY23, we acquired premium
screens assets and intellectual property for $11.5 million.
These heavy-duty screens can be extended to widths
of 5.4 metres, which we have leveraged to win Tier 1
commercial multi-story high rise building work. The
premium screens complement our existing screen assets
and add flexibility. As they are only available in south-east
Queensland, we anticipate national rollout and cross
selling opportunities.
Our industrial services division has also been bolstered
with the acquisition of a ring lock modular scaffolding
system and specific furnace scaffolding equipment that
provides a significant competitive advantage.
All acquisitions are fully integrated. The growth hurdle
which we apply for all capital expenditure of 40% has
been significantly exceeded, with an actual cumulative
return of 57.9% over FY23.
Ongoing hire sales momentum
A highlight of the year was securing hire contracts of
$67.5 million, up 35% from $50.4 million in the previous year
and a threefold increase from $21.9 million in FY19. Hire
contracts are a key lead indicator of future performance
and our pipeline of work grew 70% with strong organic
growth across the country, demonstrated by the increase
in the value of our pipeline to $142.3 million compared with
$83.9 million. Formwork represented 80% of the pipeline
and the new premium screens provide a strong uplift.
Our strong success rate in tenders has continued to
exceed 50% demonstrating that we are the primary
trusted partner in our sector.
Financial overview
We delivered strong returns for shareholders in FY23.
EBITDA was $53.2 million, up 47% on $36.3 million in the
previous year as we benefited from our organic growth
initiatives. Costs were carefully controlled, a significant
achievement at a time of growth. Our focus on providing
effective bespoke solutions for customers also allowed
margin improvement, with EBITDA margin growing to 31.6%
from 24.5%. Cash flow from operations was $44.9 million,
representing an 84% conversion rate.
Total revenue was $168.5 million, an increase of 14% on
$148.3 million, driven by both volume and price growth in
hire revenue across most states of Australia. Total sales
contribution increased 29% to $104.6 million, supported
by market share gains and new product development.
While bad debts increased, these remained low compared
to peers.
Following capital investment initiatives valued at
$45 million in FY23, total assets increased by $33.6 million
to $218.5 million at 30 June 2023. Acrow’s total headroom
of debt facilities has been increased to $16.6 million, and
gearing remains at comfortable levels. While Acrow’s net
35.0%
Secured hire contracts of $67.5 million, up from
$50.4 million in the previous year
Acrow Annual Report 2023 | 5
Managing Director’s Report (continued)
debt to net debt plus equity ratio increased 2.8% to 31.1%,
net debt to EBITDA remained flat at 1.1 times. The group
held cash of $4.9 million at 30 June 2023.
Formwork
National formwork revenue increased to a record
$102.0 million, up 29% from $78.8 million with strong
equipment hire growth, and substantial gains in
Queensland and NSW while consistent incremental growth
in Victoria and Western Australia continued. Product sales
grew 55% to $22.7 million and screens revenue was a
record $13.3 million, including initial premium screen sales.
Sales contribution increased 28%. We maintained a strong
formwork pipeline nationally.
Some significant screens packages won included The
Archibald, two 30-storey towers in Gosford, the University
of NSW’s 15-storey health translation hub in Sydney and
Cirque 2, a 22-storey luxury apartment building in Perth,
which is also a jumpform project.
Industrial services
Industrial services revenue was $40.4 million, 11% lower than
$45.6 million in the previous year, reflecting a lower volume
of product sales. The industrial services business provides
recurring earnings for Acrow. Since entering the industrial
services market with a Queensland-based acquisition in
2020, we have increased revenue fourfold and expanded
into NSW, South Australia and Tasmania and built a
highly-skilled team with strong sector expertise.
In FY23 we consolidated market share gains across the
east coast, securing a five-year contract on the Snowy
2.0 renewable energy project. We participated in several
power station shutdowns including at Eraring, Mount
Piper and Stanwell. Bidding continues on a range of
product sales and labour hire contracts nationally. We are
broadening this business nationally and target growth in
north Queensland, South Australia and Western Australia.
Commercial scaffold
Commercial scaffold revenue grew 9% to $26.1 million
with improved hire revenue growth and strong volumes,
compared to $23.9 million in the previous year. As
customers have experienced increased funding costs,
hire has become more attractive than purchase and with
a shortage of supply driving increased prices, we have
locked in favourable terms for longer-term contracts.
We responded positively to the market by focusing on
dry hire growth and exiting non-performing contracts.
Sales contribution was up 82% for this strong free cash
flow business.
Outlook
Acrow is experiencing organic growth nationally at the
fastest rate in the company’s history. While our primary
focus remains the east coast civil infrastructure markets
of Queensland, NSW and Victoria, we are also growing
in South Australia, Western Australia and Tasmania as
we capitalise on the capability of our teams to secure
packages of work and take products into these markets.
Spending across the national civil transport infrastructure
sector continues to grow, providing tailwinds. Based
on actual and projected spending from 2018-2027, the
projected spend from 2023 to 2027 represents 68% of the
total, more than double actual spending from 2018-2022.
Forthcoming major transport infrastructure projects
include the $30 billion Victorian suburban rail loop,
$16 billion Victorian North East Link, $4.6 billion Queensland
component of Inland Rail, $2.2 billion Coomera Connector
Stage 1, $2.6 billion Sydney Metro West and the Sydney
M6 Stage I motorway valued at $1.6 billion. We anticipate
tendering for packages on these projects and are
optimistic that our engineering innovation, competitive
position and pricing will continue to achieve success.
The range of products that we offer is expanding with our
Acrowdeck modular slab formwork system and Universal
soldier system, a multipurpose formwork system for
infrastructure projects, to be rolled out this year. We are
also aggressively seeking to grow our national industrial
services business.
We expect continued growth in FY24 and anticipate
revenue in the range $190 million-$200 million, and
another year of record hire revenues. EBITDA is forecast in
the range $67 million-$70 million, with asset acquisitions
completed in the last quarter of FY23 to contribute an
estimated $8 million in incremental EBITDA. Net debt is
expected to decline in FY24.
Our growth is guided by a clear strategy. We are
capitalising on our leadership position in the formwork
market and offer the widest range of product across
formwork, industrial services and commercial scaffold in
the Australian market, supported by a national network,
strong engineering expertise and skilled teams. We have
a fantastic team of people in Acrow who are dedicated to
continuing our profitable business growth by providing the
highest possible service to our customers across Australia.
Steven Boland CEO
$30.5m
Underlying NPAT
increased 71%
29%
Sales contribution
increased to $104.6m
6 | Acrow Annual Report 2023
Case Study:
CYP Metro South & North stations
THE
PROJECT
Design and supply of
Adit formwork
TECHNOLOGY
USED
Partnering with the Cross Yarra Partnership (CYP),
Acrow has provided the design and supply for all Adit
formwork on the CYP Metro South & North stations. Adit
formwork provides the mould that shapes concrete
during casting.
The packages have been extremely complex, requiring significant
product versatility and engineering expertise including many
engineering firsts for the Australian construction industry. One
example was the Little La Trobe Street adit, which used 10 metres of
Acrow’s Powershore 150 shoring system and was hydraulically jacked
four times up an 11% slope. Acrow provided a full turnkey solution
including the design and supply of the hydraulic jacking system.
Full turnkey solution
including Universal Soldier
System and Powershore 150
Working in tight and confined spaces, the Acrow engineering team
worked hand in hand with CYP to develop detailed, step-by-step
staging for offsite assembly and installation.
STAFF FOR
PROJECT
Engineers and
Project Sales
The project is part of the largest package of works for the $12.5 billion
Metro Tunnel, which includes twin tunnels and five new underground
stations. When opened in 2025, it will enable around half a million
more passengers to use Melbourne’s rail network every week.
“An exercise in millimetres, this gallery arch mobilisation
was intuitive formwork design and travelling system.
Those on-site are loving it and are excited to be working
on it.” Henry Walker, CVP D&V JV
Photo: CYP Metro Victoria
Acrow Annual Report 2023 | 7
Business Overview
Formwork
$90.7m Revenue
● Leading provider of formwork systems
● Dry hires falsework and shoring systems
in Australia
● Provides a range of wall forming panel,
used to support horizontal structures and
vertical loads during construction
soffit forming and conventional systems for
large and small construction equipment
● Jacking systems (Jumpform) to construct
the lift shaft core of multi-storey buildings
● Dry hires formwork equipment and
● Products are manufactured overseas and/
provides the product that forms the
temporary mould to support concrete
structures during construction
Industrial Services
or imported
● Generates revenue through dry
hire agreements
● Bespoke engineering and design for
large projects
$40.4m Revenue
● Highly experienced team and customer
● Full turnkey solution from design to supply
service ethic
and install
● Generates revenue from wet hire
agreements including hire, transport,
labour and consumables.
● At the forefront of scaffold service
providers in Australia to the
industrial sector
● Strong focus on the energy, mining and
industrial sectors including shutdowns
Commercial Scaffold
$26.1m Revenue
● Premier provider of scaffolding systems
● Wet hire agreements are typically
in Australia
● Provides access solutions to builders
and building contractors when working
at heights
based on a contract sum encompassing
equipment hire, transport, labour
provisions and supply of consumables
● Solutions offered on both a wet and
● Generates revenue through both dry hire
dry basis
and wet hire agreements
● Dry hire agreements are typically based
on a price per tonne per week, over a
minimum of 4 weeks
● Supports commercial building including
office and high rise developments,
universities and schools, industrial
buildings, hospitals and retail
centre developments
Screens
$13.3m Revenue
● Leading designer and hirer of heavy-duty
and versatile screen systems for the
construction industry
● Dry-hire model offering highly engineered
solutions for a wide range of customers
● Engineering capabilities provide a key
● Provides screen-based formwork systems
competitive advantage
which support the construction of
commercial high-rise buildings and civil
infrastructure, including bridges, roadworks
and train stations
8 | Acrow Annual Report 2023
Acrow is a leading provider of engineered formwork
solutions and scaffold in Australia.
FY23 Commentary
● Strong organic growth
● Record revenue up 29%
● Strong increased activity in Queensland and NSW
● Incremental growth in other national markets
● Product sales up 55%
● Jumpform commences with two projects, develops
$26 million pipeline
190 Projects in the pipeline
FY24 Strategy
● Capitalise on strong national pipeline to secure
packages on major infrastructure projects
● Ongoing sale and hire of formwork equipment
in Australia
● Expand Jumpform across Acrow’s national network
● Design and deliver Acrow’s innovative products in
the Australian formwork market
FY23 Commentary
● Strong free cash flow business
● Softer product sales and labour hire market
● Increased margins with greater hire
business revenue
● Ongoing power station shutdowns
8 Projects in the pipeline
FY24 Strategy
● Expansion into new products and markets
around Australia
● Consolidate expansion in east coast states
● Active M&A pipeline to enter new territories
and markets
129 Projects in the pipeline
FY23 Commentary
● Strategic move to dry hire
FY24 Strategy
● Leverage supply shortage as customer funding
● Strong improvement on higher volumes and prices
more expensive
● Revenue up 9%
● Highly skilled workforce
● Purchased high quality ring lock business
● Favourable terms locked in for longer-term
contracts
FY23 Commentary
● Record screens revenue
● Acquired premium screen assets
229 Projects in the pipeline
FY24 Strategy
● Continue interstate market share growth
● Expand premium screens business outside
Queensland to secure Tier 1 multi-storey
building contracts
● New product development and cross-sell
Acrow Annual Report 2023 | 9
Case Study:
Jacking Systems (Jumpform)
THE
PROJECT
The Monaco, Main Beach
TECHNOLOGY
USED
Acrow Jacking Systems
Jumpform
STAFF FOR
PROJECT
● site supervisor
● engineers
● project manager
10 | Acrow Annual Report 2023
Acrow provided the design and supply of the lift shaft
and stair core jumpform system for The Monaco, a
luxury 24-storey residential tower at Main Beach.
This was Acrow’s first venture into the jumpform market. While the
project was mostly straightforward, it required a large concrete
placing boom to be mounted to the jumpform. In the absence of
available internal cells, the engineering team designed a smart,
efficient bracing system using shear blocks and the Powershore
150 heavy-duty high load shoring system to provide an internal
bracing tower.
The system’s top platform was built off-site and lifted into position
in two 15 tonne segments, minimising onsite assembly and
allowing fast installation.
The key benefit of Acrow’s system is the simplicity of its electric
jacking controls. Acrow’s client was able to learn the system
and operate the jump form without assistance after two
supervised jumps.
Main and inset photos: The Monaco, Jacking
Systems (Jumpform), Main Beach, QLD
Safety
The health and safety of our people, customers and subcontractors
is paramount.
Acrow’s safety culture is based on collaboration and a
shared sense of responsibility. We have a multi-tiered
process that ensures our employees and subcontractors
are trained and follow industry leading safe work
practices. Employees have access to health and safety
information from Acrow’s Safety team, Head of People
& Culture and through the Acrow intranet. Our lost
time injury frequency rate was lower while working an
additional 21,400 hours compared to FY22. Other safety
key performance indicators remained in line with the
previous year.
Specific initiatives and programs conducted in
FY23 included:
● Updates on recent developments in health and safety
for the CEO, and the Executive Leadership team
● Professional development and growth of the
Safety team
● Development of online information resources to help
employees understand their responsibilities
● Evaluation and updating of all health and safety
related materials including procedures, policies and
manuals, across all Acrow locations
Total recordable injury frequency rate
Lost time injury frequency rate
19
20
21
22
23
23.8
26.9
26.8
19
20
21
22
23
2.4
2.9
6.0
5.9
20.7
12.9
11.5
Total recordable injuries
Lost time injuries
19
20
21
22
23
8
11
9
14
14
19
20
21
22
23
1
2
2
6
4
Cross River Rail, Albert Street Station, Lot 3, Brisbane QLD
Acrow Annual Report 2023 | 11
Board of Directors
Mr Peter Lancken AM | NON-EXECUTIVE CHAIRMAN
Peter has a career spanning over 30 years in a range of executive and director roles in
equipment hire, industrial, and real estate companies. He was formerly the Managing Director
and Non-Executive Chairman of Kennards Hire Pty Limited.
Peter managed an era of growth spanning two decades at Kennards, with sales now exceeding
$550 million from a network of over 200 locations, and remains on the Board as a Non-Executive
Director. Peter is also a Non-Executive Director of Crimestoppers NSW and was Non-Executive
Chairman of Propertylink Group (ASX:PLG) prior to its acquisition in April 2019.
Peter holds a Bachelor of Engineering (Civil) degree from the University of New South Wales,
is a Fellow of the Institute of Engineers Australia and is a fellow of the Australian Institute of
Company Directors.
Mr Steven Boland | EXECUTIVE DIRECTOR
Steve’s 30 year executive career includes extensive experience in operational management
and leadership spanning waste, sports management and hire in both Australia and the
United Kingdom.
Steven joined Acrow in 2013 and since then has served as its Chief Executive Officer. Steven was
previously the CEO of the Melbourne Rebels Rugby Club and was responsible for the start-up
phase of a Super Rugby professional sporting team. Previously, from 2004 to 2010, Steven served
as the Global Executive Director (Recycling) of Visy Industries, and from 2002 to 2004, Steven
was the Executive Director (Commercial Waste) of Veolia Environment UK.
Mrs Melanie Allibon | NON-EXECUTIVE DIRECTOR
Chair of the Remuneration & Nomination Committee
Melanie has an extensive background in human resources and operating risk primarily in the
industrial services, mining, manufacturing and FMCG sectors.
She has held senior executive roles with Newcrest Mining, Seven Group Holdings, Amcor, Pacific
Brands and Foster’s Group with responsibility spanning Australia, USA, Asia and the UK.
Melanie has been a non-executive director for the last 10 years including Boom Logistics Pty
Limited for over three years and Chair since November 2021. Melanie is a member of Chief
Executive Women, International Women’s Forum and AICD.
12 | Acrow Annual Report 2023
Mr David Moffat | NON-EXECUTIVE DIRECTOR
David has a career spanning over 35 years in the construction industry, most recently with
Lipman for 29 years, prior to his resignation in December 2018. From 2013-2018, David was the
Managing Director of the Lipman Group of Companies.
In 2019 David founded Cornerstone (NSW) Pty Ltd, whereas Managing Director, he provides
strategic business planning and advisory services to Subcontractors, Head Contractors and
Clients within the construction industry.
David brings with him key competencies in Leadership, Construction Management, Innovation
and Safety. He holds a Bachelor of Engineering Degree (Civil) from The University of Technology,
Sydney (“UTS”).
Ms Laurie Lefcourt | NON-EXECUTIVE DIRECTOR
Chair of the Audit and Risk Committee
Laurie has an extensive background in financial, strategic and risk management, particularly in
the resources, construction, and infrastructure sectors. She has held senior management and
executive roles across Rio Tinto, Queensland Rail, Sinopec Oil and Gas, and Wiggins Island
Coal Terminal.
Laurie has been a non-executive director for the past 5 years and). and is a past member on
the boards of Tamawood Ltd (ASX: TWD), Advance NanoTek Ltd (ASX:ANO), and SenterpriSYS
Ltd (NSX: SPS). In 2013, Laurie founded Sage Strategies Pty Ltd where she provides support to
organisations in developing and executing strategy.
Laurie holds a bachelor’s degree in finance and administration, is a fellow of the Institute of
Chartered Accountants of Australia and New Zealand, as well as a graduate of the Australian
Institute of Company Directors.
Acrow Annual Report 2023 | 13
Key Management Team
Steven Boland
Chief Executive Officer
As above.
Andrew Crowther
B Ec, CA
Chief Financial Officer
Andrew joined Acrow in July 2019. He has more than 20 years’
experience having held senior financial and chief financial
officer roles at Thorn Group, SFG Ltd, BT Financial Group
and Colonial First State. He brings a breadth of industry
and property infrastructure finance expertise to Acrow,
including work in the property funds and asset management,
superannuation and financial advice, consumer finance and
leasing and business finance industries.
Matthew Caporella
B.Eng (Civil) B.Bus (Mgt) MIEAust CPEng NER RPEQ 21573
Chief Operating Officer
Matthew joined Acrow in 2012 and recently promoted
to Chief Operating Officer from National Manager –
Engineering Operations.
Jan Pienaar
BComm Hons
General Manager (QLD)
Jan joined Acrow in December 2018 as General Manager,
Queensland. He has more than 10 years’ management
experience and was previously National Sales manager
at Doka Formwork Australia, and before that as General
Manager (Formwork) at Waco Kwikform.
Jurie Roetger
National General Manager – Industrial Services
Jurie joined the Acrow Group as part of the Uni-span
acquisition in October 2019. He has more than 18 years
industry experience. His previous roles with the Uni-span
Group includes Scaffold Designer, Project Manager,
North Queensland Manager and National Industrial
Services Manager.
Peter Fehrenbach
MBA, CPIM
General Manager (NSW)
Peter joined Acrow in September 2021. He has over 15 years
management experience, previously holding positions at
Bullivants that include National Operations and Supply
Chain Manager as well as Regional Business Manager (NSW,
Vic and SA). He also held various Supply Chain leadership
roles in the Australia Pacific region at Orica.
14 | Acrow Annual Report 2023
Belma Dulic
B.ChemEng
General Manager VIC
Belma joined Acrow in 2022 as General Manager Victoria.
Belma has had an extensive career to date and has held
several senior positions, most recently as Operations
Manager at CSR Masonry & Insulation.
Belma holds a Bachelor’s Degree in Chemical
Engineering and has over 20 years of manufacturing and
operational experience.
Jason Merjane
B.Eng (Civil), MIEAust
National General Manager – Screens
Jason joined Natform in 2015 and is responsible for the
screens business across the country.
Jeffery Stewart
National Sales & Marketing Manager
Jeffery joined Acrow in 2011. His prior roles include Regional
Manager and director for Atlas Steels in New Zealand,
National Market Development Manager at Atlas Specialty
Metals, and Market Development Manager for Smorgon
Steels Metals Distribution.
Robert Parovel
B Arts (Psychology & Management), MBA, AHRI, AICD
Head of People & Culture
Robert joined Acrow in November 2021, having previously
held senior Human Resource positions with Harsco
Corporation, GCC Services, and Webuild Group. Having lived
and worked abroad, he has extensive experience in the Asia
Pacific and Middle East regions.
Colin Fisher
General Manager (TAS)
Colin previously worked at Honeywell Business Solutions as
a General Manager. Prior to Honeywell Business Solutions he
worked at Visy Industries as the General Manager, and as
the National Operations Manager at Onyx UK Limited.
Bill Goodall
General Manager (SA)
Bill joined Acrow in 2016. Bill has spent the last 16 years in
management roles in the Formwork and Scaffold industry
operating in NSW, SA, NT & WA.
Conan Godrich
B.Comm (Marketing and Finance), PGDip
General Manager (WA)
Conan brings over a decade of experience with Acrow. His
prior roles include Account Manager (Gnangara Operations)
at Rinker Australia, and Sales and Customer Service at
OneSteel Reinforcing.
Evan Field
B.Eng (Civil & Environmental Mgt), M.Adv Eng (Structural
Engineering Design), MIEAust, CPEng, RPEQ 12200,
PRE0001793, PE0007203
National Manager – Engineering
Evan joined Acrow in 2022 as the National Manager –
Engineering. He has over 15 years’ experience in the design
& construction of major infrastructure, primarily specialising
in Temporary Works, and has most recently held positions as
Senior Construction Services Engineer ADG Engineers and
Principal Engineer Infrastructural Engineers.
Carl Roetger
BComm (Marketing)
National Head of Procurement
Carl joined Acrow in October 2019 as the National
Procurement Manager previously being a Co founder and
Director of Uni span Australia since 2001. Prior to this Carl
was the Co-founder and Joint MD of Nu-form Formwork and
Scaffolding in South Africa.
Eddie McInulty
B.Arts (Town and Country Planning)
National Business Development Manager
Eddie joined Acrow in 2019 and brings 20 years of experience
from both in the UK and Australia, specialising in the Civil
Engineering & Infrastructure industry. Previous roles include
Managing Director for GHI Formwork Australia, National
Sales Manager for Uni span and prior Sales Management
roles with Peri Australia and Peri UK Ltd.
Metro Tunnel – Preassembled Collins Street Adit, VIC
Acrow Annual Report 2023 | 15
Financial Report
17 Directors’ Report
22
Auditor’s Independence
Declaration
23 Remuneration Report – Audited
44 Financial Statements
48 Notes to the Consolidated
Financial Statements
78 Directors’ Declaration
Independent Auditor’s Report
79
83 Shareholder Information
85 Corporate Directory
Photo: Cross River Rail, Albert Street Station, Lot 1,
Jacking Systems (Jumpform), Brisbane QLD
16 | Acrow Annual Report 2023
Directors’ Report
For the year ending 30 June 2023
The Directors present their report, together with the Annual Financial Report for Acrow Formwork and Construction
Services Limited (Acrow or the Company) and its controlled entities, for the year ended 30 June 2023, and the Auditor’s
Report thereon.
This report has been prepared in accordance with the requirements of the Corporations Act 2001 and the information
below forms part of this Directors’ Report:
DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
Peter Lancken (Chairman)
Steven Boland (Chief Executive Officer)
David Moffat
Melanie Allibon
Laurie Lefcourt
Information on the current directors and shareholdings are presented in the Annual Report on pages 12 to 13 and pages
35 to 39 respectively. This information includes the qualifications, experience, and special responsibilities of each director.
DIRECTORS’ MEETINGS
The number of directors’ meetings and number of meetings attended by each of the directors of the Company during
the financial year ending 30 June 2023 are:
Peter Lancken (Chairman)
Steven Boland (Chief Executive Officer)
David Moffat
Melanie Allibon
Laurie Lefcourt
Board of Directors
Remuneration
Nomination Committee
Audit and Risk
Committee
No. held
No.
attended
No. held
No.
attended
No. held
No.
attended
13
13
13
13
13
13
13
13
13
13
4
–
4
4
–
4
–
4
4
–
5
–
5
–
5
5
–
5
–
5
COMPANY SECRETARY
Mr Lee Tamplin of Automic Group is the Company
Secretary and has over 20 years’ experience in the
financial services industry in both Australia and the UK.
He is Company Secretary for several ASX listed, NSX
listed and Proprietary companies across a range of
industries. Mr Tamplin holds a BA (Hons) Financial Services
(Bournemouth University United Kingdom), a Diploma of
Financial Planning, is a Graduate of the Australian Institute
of Company Directors, a Member of the Governance
Institute of Australia, and a Member of the Australian
Institute of Company Directors.
PRINCIPAL ACTIVITIES
Acrow operates in the Australian construction services
industry, hiring formwork, falsework, scaffolding and
screen equipment and undertakes sales of formwork and
scaffolding related consumables. It also operates an
industrial services business.
The formwork operation involves the supply of the
temporary mould that supports concrete structures
in their construction, whilst falsework equipment is
used to support suspended horizontal structures
during construction.
Acrow perimeter screens support the construction of
civil infrastructure, commercial and residential projects,
providing an edge protection and perimeter access
solution for these structures.
The industrial services operation supplies an industrial
labour service to compliment the scaffolding hire to the
energy, industrial and mining sectors.
The scaffolding operation supplies scaffolding equipment
and access solutions to builders and building contractors
when working at heights.
OPERATING AND FINANCIAL REVIEW
The Acrow business performed very strongly for the
12 months to 30 June 2023.
The business strategy being re-base towards the value
added, highly engineered civil formwork solutions market
as well as an increased focus on equipment sales and
expanding its new Industrial Services division translated to
a large increase in profit during the year.
Financial performance:
The company achieved a net profit after tax of $23.5m up
49% from 2022 profit of $15.7m.
Acrow Annual Report 2023 | 17
On an underlying basis (reconciliation refer to table
below), the net profit after tax increased 71% from $17.8m
to $30.5m. The key highlights for the year included:
● Group revenue increased 14% on prior comparative
period “pcp” to $168.5m (including sales of ex-hire
gear), assisted by a strong trading performance in
the formwork division, up 29% on pcp and commercial
scaffold division, up 9%. Performance continues to be
predominantly organically generated. Hire revenue
increased $17.5m or 31%, labour and cartage reduced
by $3.8m, sales of equipment increased by $6.5m
or 12.5%.
● Sales contribution increased 29% to $104.6m. 77% of
that increase was generated from stronger equipment
hire across all divisions. Gross margin increased by
7.3% to 62.1%, benefitting from the revenue mix change
towards hire revenue as a proportion of total revenue.
● Underlying earnings before interest, depreciation
and amortisation “EBITDA” increased 47% to $53.2m,
accelerating in the second half of the year due to
scale benefits from previous capital expenditure.
EBITDA margin of increased 7.1% to 31.6% likewise by the
increased proportion of hire revenue to sales revenue.
73% of the increased sales contribution/gross margin
flowed directly to increased EBITDA, up from 60% pcp.
● Depreciation and interest expenses increased in line
with average capital expenditure and gross debt/
interest rate.
Financial performance table
● Underlying effective tax rate reduced from 9.9% pcp
to 8.3% with the year continuing to benefit from carry
forward tax losses from an underlying subsidiary. These
previously unrecognised tax balances have now been
brought on balance sheet as at balance date and
impacted statutory tax expense below.
● Underlying Net profit after tax “NPAT” increased 71%
to $30.5m.
● Underlying Earnings Per Share increased 62% to
11.64 cents per share.
● Full year dividend per share up 63% to 4.40 cents
per share.
● Net debt to EBITDA maintained flat at 1.0 times.
Includes only 2 months of earnings contributions
from asset acquisitions reported in May 2023 against
directly associated borrowings of $16.0m.
● Underlying Return on Equity up 9.7% to 32.7%.
Statutory NPAT increased 49% to $23.5m. Previously
unrecognised tax balances from the subsidiary
carrying the majority of the groups tax losses, Acrow
Formwork and Scaffolding Pty Limited, were recognised
at balance date resulting in a net tax expense of
$2.6m (recognition of previously unrecognised deferred
tax credit $4.3m and first-time recognition of current year
expense of $6.9m). This was classified as a significant item
being non-cash related.
Statutory net profit after tax
Add back share-based payments
Add back acquisition and integration costs
Recognition of previously unrecognised deferred tax and current tax not
brought to account
Underlying net profit after tax
Add back depreciation
Add back interest
Add back tax expense
Underlying EBITDA
2023
$’000
23,457
3,217
1,222
2,592
30,488
15,223
4,766
2,760
53,237
2022
$’000
15,694
1,165
954
–
17,813
13,070
3,467
1,962
36,312
18 | Acrow Annual Report 2023
Directors’ ReportFor the year ending 30 June 2023 Financial position:
There was continued improvement in net current assets of
$2.7m to $5.7m surplus.
Net debt increased from $32.8m in 2022 to $46.4m,
being cash $4.9m (2022: $3.0m) less debt of $51.3m (2022:
$35.9m). This was predominantly due to:
● significant capital expenditure during the year of
$23.4m including $17.8m growth capex for our new
jumpform system, ringlock industrial services scaffold
and other civil infrastructure formwork equipment; and
● asset acquisitions that totalled $23.5m were made in
the last quarter of the year which included $16.0m of
debt finance;
Net gearing (net debt / (net debt + equity)) increased from
28.3% to 31.1%.
Property, plant and equipment increased from $95.5m to
$131.6m due to capital expenditure and acquisitions of
$46.9m (2022: $22.4m) offset by depreciation and sales
with a written down value of $6.7m (2022: $2.6m).
Total working capital increased by $6.7m to $39.5m from
$32.8m pcp. This increase was the result of:
● an increase in trade debtors’ balance of $4.8m to
$39.2m. This increase of 14% was consistent with the
increase in revenue;
● decrease in inventory and prepayments of $4.7m; and
● decrease in trade payables of $6.6m due to the paying
down of longer dated payables after last year end.
Trade receivables debtor’s days reduced from 60 days
to 57 days during the year excluding the impact of
negotiated extended term sales. Total bad debts expense
during the year was $3.1m or 1.8% of revenue compared to
last year’s $0.65m. Total debts written off totalled $2.1m
compared to $0.4m last year. The total provision for bad
debts was increased during the year from $1.5m to $2.5m.
Further information on the operating and financial review
is contained in the Chairman’s and Managing Director’s
Review on pages 2 to 6 of this Annual Report.
Operating results:
Refer to the Managing Director’s Report on pages 4 to 6 of
this Annual Report.
DIVIDENDS
The Company paid a 1.50 cent franked dividend per
share being a total of $3.90m for the financial year ending
30 June 2022 on 30 November 2022. Shares totalling
1,269,071 were issued under the Dividend Reinvestment
Plan at 49.50 cents per share including a 5% discount.
The Company paid an interim 1.70 cents 85% franked
dividend per share being a total of $4.5m for the financial
year ending 30 June 2023 on 31 May 2023. Shares totalling
574,947 were issued under the Dividend Reinvestment Plan
at 72.42 cents per share including a 5% discount.
Subsequent to balance date, the Directors declared
a dividend of 2.70 cents per share, 100% franked on
14 August 2023 to be paid on 30 November 2023. The
dividend has not been provided for in this financial report.
ENVIRONMENTAL REGULATIONS
Acrow’s operations are not subject to significant
environmental regulations under the Commonwealth
of Australia and State/Territory legislation. The Board
believes that Acrow has adequate systems in place to
manage its environmental responsibilities and is not aware
of any breach of regulations.
The Group is also subject to environmental regulation
in respect of its exploration activities in Ghana but not
aware of any breach of those regulations.
NO OFFICERS ARE FORMER AUDITORS
No officer of the Company has been a partner in an audit
firm, or a director of an audit company, that is an auditor
of the Company during the year or was such a partner
or Director at a time when the audit firm or the audit
company undertook an audit of the Company.
NON-AUDIT SERVICES
All non-audit services were subject to the corporate
governance procedures adopted by the Group and have
been reviewed by the Audit and Risk Committee to ensure
that they do not impact the integrity and objectivity of
the auditor.
All the non-audit services provided do not undermine
the general principles relating to auditor independence
as set out in APES 110 Code of Ethics for Professional
Accountants, as they did not involve reviewing or
auditing the auditor’s own work, acting in a management
or decision-making capacity for the Group, acting
as an advocate for the Group or jointly sharing risks
and rewards.
Details of the amounts paid or payable to the auditor of
the Group, Grant Thornton and their related practices for
audit and non-audit services during the year are set in
note 27.
SIGNIFICANT CHANGES IN THE STATE
OF AFFAIRS
There were no significant changes in the Group’s state
of affairs.
REMUNERATION REPORT
The remunerations report forms part of the directors’
report and can be found on pages 23 to 43. It has
been audited in accordance with section 300A of the
Corporations Act.
SHARE RIGHTS
At the date of this report, Acrow had 300,000 share
options outstanding relating to grants of deferred equity
to employees under the previous Long-Term Incentive
Acrow Annual Report 2023 | 19
Plan. These vest through to July 2023. During the year 1,500,000 share options were cancelled after failing to meet
vesting criteria and 7,254,500 units in total were exercised.
2,893,962 Performance Rights were issued during the year with vesting periods at the end of the financial years 2023
and 2024. If the vesting conditions are met each Performance Right can be exercised into one Fully Paid Ordinary Share
at the holder’s discretion until the expiry date of 6 June 2037. The Performance Rights were issued to Steven Boland
and senior managers of the Company under the Company’s Rights Plan and form part of the new Long Term Variable
Remuneration (LTVR) of the employees. Performance Rights issued to KMP’s are included in this balance.
8,474,004 Performance Rights vested during the year after meeting vesting criteria for the measurement period to
30 June 2022 and 7,128,149 were exercised into ordinary shares. 447,614 Performance Rights relating to measurement
period to 30 June 2022 were forfeited after not achieving vesting criteria. This includes KMP Performance Rights
detailed above.
Balance of outstanding rights and options as at year end:
Options
Performance rights
Quantity outstanding
300,000
12,503,025
Weighted average
exercise price
$0.40
Expiry date
16 July 2024
Nil
31 July 2035 to 30 August 2037
For further details, refer to note 29 of this Annual Report.
LIKELY DEVELOPMENTS AND
EXPECTED RESULTS
For information about likely developments and expected
results in the operations of the Company, refer to the
Chairman’s and Managing Director’s Reports on pages 2
to 6 of this Annual Report.
INDEMNIFICATION OF DIRECTORS
AND OFFICERS
Under the terms of Article 35 of the Company’s
Constitution, and to the extent permitted by law, the
Company has indemnified the directors of the Company
named in this Directors’ report, the Company Secretaries,
and other persons concerned in or taking part in the
management of Acrow. The indemnity applies when
persons are acting in their capacity as officers of the
Company in respect of:
● Liability to third parties (other than the Company or
related bodies corporate), if the relevant officer has
acted in good faith; and
● Costs and expenses of successfully defending legal
proceedings in which relief under the Corporations Act
2001 is granted to the relevant officer.
The Group has not made any indemnity payment during
the year.
INSURANCE PREMIUMS
During the financial year, the Company paid a premium
of $240,365 excluding GST for Directors’ and Officers’
Liability Insurance policy. The insurance provides cover
for the Directors named in this Directors’ Report, the
Company Secretary, and officers and former Directors
and officers of the Company. The insurance also provides
20 | Acrow Annual Report 2023
cover for present and former Directors and officers of other
companies in the Group.
CORPORATE GOVERNANCE STATEMENT
This statement outlines the main corporate governance
practices in place throughout the financial year
and can be referred to on the Acrow Group website:
https://www.acrow.com.au/investors/
EVENTS SUBSEQUENT TO THE END OF THE
FINANCIAL YEAR
Changes on loan facilities either effected or agreed after
balance date:
● Trade finance loans of $893,334 were drawn and
repayable in full within 180 days.
● Insurance premium finance loans of $3,202,846 in total
were drawn and repayable in full by July 2024.
On 14 August 2023 the Directors declared a 100% franked
dividend of 2.7 cents per share to be paid on 30 November
2023. Dividend Reinvestment Plan is available for election.
The dividend has not been provided for in this financial
report as it was not declared until after 30 June 2023.
On 21 August 2023 a total of 4,807,117 units of performance
rights on FY2024 and FY2025 have been issued to
executives and senior managers.
Other than the above events, there has not otherwise
arisen between 30 June 2023 and the date of this report
any item, transaction or event of a material and unusual
nature likely, in the opinion of the directors of the Group, to
affect significantly the operations of the Group, the results
of those operations, or the state of the affairs of the Group
in future financial years.
Directors’ ReportFor the year ending 30 June 2023 ROUNDING OF AMOUNTS
Acrow Formwork and Construction Services Limited is a company of the kind referred to in the Australian Securities
and Investments Commission (ASIC) Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated
24 March 2016 and in accordance with that Legislative Instrument, amounts in the Consolidated Financial Statements
and this Directors’ Report have been rounded off to the nearest dollar, unless stated otherwise.
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration made under section 307C of the Corporations Act 2001 is set out on
page 22 of the Annual Report and forms part of the Directors’ Report for the financial year ended 30 June 2023.
Signed in accordance with a resolution of the Directors:
Peter Lancken
Chairman
Steven Boland
Director, Chief Executive Officer
Sydney, 22 September 2023
Sydney, 22 September 2023
Acrow Annual Report 2023 | 21
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
Auditor’s Independence Declaration
To the Directors of Acrow Formwork and Construction Services Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Acrow Formwork and Construction Services Limited for the year ended 30 June 2023, I declare that, to the
best of my knowledge and belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
N P Smietana
Partner – Audit & Assurance
Sydney, 22 September 2023
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
#9392637v2w
22 | Acrow Annual Report 2023
Auditor’s Independence DeclarationFor the year ending 30 June 2023
Remuneration Report – Audited
For the year ending 30 June 2023
Letter from the Chair of the
1.
Remuneration Committee
Dear Shareholder,
On behalf of the Board, I am delighted to present the
Remuneration Report of the Acrow Group for the year
ended 30 June 2023. The report outlines key aspects
of the remuneration policy and framework and the
remuneration awarded this year.
The information provided in this report has been prepared
based on the requirements of the Corporations Act
2001 and the applicable accounting standards and has
been audited.
Significant progress has been made in pursuing our
defined strategy of becoming the national leader in
formwork and hire and sales as well as expanding our
industrial services footprint. This included our expansion
into the Jumpform market.
The Board provides oversight to the remuneration strategy
through the Remuneration & Nomination Committee and
ensures the remuneration strategy attracts and retains
quality directors and executives, fairly and responsibly
rewards them, is equitable and aligned to shareholders’
interests, and complies with the law and high standards
of governance.
The Remuneration Committee is focused on executive
remuneration to ensure that it continues to align with
Acrow’s strategy, motivate management, reflect market
best practice and support the delivery of sustainable
long-term returns to shareholders. During the 2023 year
we engaged with specialised remuneration advisors and
major shareholders as part of this process.
As we move ahead, the group is very well positioned to
deliver on targets and strategy. The incentive targets for
the longer are aligned with the group strategy.
Melanie Allibon
Independent Non-Executive Director
Chair of the Remuneration Committee
Scope of the Remuneration Report
2.
and Individuals Classed as KMP
The Remuneration Report sets out the prescribed key
management personnel (KMP) remuneration information
and details in accordance with section 300A of the
Corporations Act and associated regulations, including
policies, procedures, governance, and factual practices
as required.
In addition, Acrow Formwork and Construction Services
Limited (Acrow, the Company) has decided to set out such
further information as shareholders may require for them
to obtain an accurate and complete understanding of the
Company’s approach to the remuneration of KMP.
KMP are the non-executive directors, the executive
directors and employees who have authority and
responsibility for planning, directing and controlling the
activities of the consolidated entity, directly or indirectly
during any part of the financial year. On that basis, the
following roles/individuals are addressed in this report:
Non-executive Directors (NEDs)
● Mr Peter Lancken, independent non-executive
Chairman since 27 March 2018.
● Mr David Moffat, independent non-executive director
since 19 September 2019.
● Ms Melanie Allibon, independent non-executive
director from 1 September 2021 and Chair of
Remuneration Committee.
● Ms Laurie Lefcourt, independent non-executive
director since 1 October 2021 and Chair of Audit &
Risk Committee.
Senior Executives Classified as KMP During the
Reporting Period
● Mr Steven Boland, Chief Executive Officer (CEO) &
Executive Director since 27 March 2018.
● Mr Andrew Crowther Chief Financial Officer (CFO) since
8 July 2019.
3. Context of KMP Remuneration for
FY2023 and into FY2024 – unaudited
3.1 Context for Remuneration Governance
during FY2023
The KMP remuneration structures that appear in this report
are largely those that prevailed over FY2023, as is required
by regulation, but also address expectations for FY2024,
to some extent.
The Board has further developed remuneration
governance, policies and practices applied to KMP of the
Company, as well as other employees as the business has
and continues to mature. The following outlines important
context for the decisions that were made in relation to
remuneration for/during FY2023, the outcomes of which
are presented in this report.
● A total of 2,893,962 performance rights were issued
in FY2023, 2,148,588 units to Steven Boland (CEO)
for 2023 plan and 2024 plan and 745,374 units to
Senior Managers for 2023 plan only. The issues have
three-year measurement periods.
● The Company is focussed on delivering value for
shareholders by executing on strategy including:
– Becoming the leading engineered formwork sales
and hire equipment solutions provider in Australia
including moving into the Jumpform market
– Become the leading engineered solutions provider
to the Australian Industrial Services market
– Concentrating on profitable organic growth
– Actively pursuing strategically sensible acquisitions
to accelerate profitable growth
Acrow Annual Report 2023 | 23
– Target high ROI organic growth opportunities
● Remuneration for senior executives should be
across all states.
composed of:
4. Overview of Acrow’s Remuneration
Governance Framework & Strategy
4.1
Transparency and Engagement
The Company seeks input regarding the governance of
KMP remuneration from a wide range of sources, including:
● Shareholders and other stakeholders,
● Remuneration Committee Members,
● External remuneration consultants (ERCs),
● Other experts and professionals such as tax advisors
and lawyers, and
● Company management to understand roles and issues
facing the Company.
The following outlines a summary of Acrow’s Remuneration
Framework, including policies and practices to the extent
developed. Shareholders can access a number of the
related documents by visiting the investors portal on the
Company website www.acrow.com.au. It is recommended
that shareholders, proxy advisors and other interested
parties consider all the available information.
4.2 Remuneration Committee Charter
The Remuneration Committee Charter (the Charter)
governs the operation of the Remuneration Committee
(the Committee). It sets out the Committee’s role and
responsibilities, composition, structure and membership
requirements. The purpose of the Committee is to assist
the Board by:
● Establishing appropriate processes regarding the
review of the performance of directors, committees
and the Board, and implementing them,
● Reviewing and making recommendations to the Board
in relation to the remuneration packages of Senior
Executives and non-executive directors, equity-based
incentive plans and other employee benefit programs,
● Developing policies, procedures and practices that
will allow the Company to attract, retain and motivate
high calibre executives, and
● Ensuring a framework for a clear relationship between
key executive performance and remuneration.
The Committee has the authority to obtain outside legal
or other professional advice or assistance on any matters
within its terms of reference.
Acrow recognises the importance of ensuring that any
recommendations given to the Committee provided by
remuneration consultants are provided independently
of those to whom the recommendations relate. Further
information about the parameters under which external
remuneration consultants are engaged is provided below.
4.3
Senior Executive Remuneration Policy
The Company’s senior executive remuneration policy may
be summarised as follows:
24 | Acrow Annual Report 2023
– Fixed Package inclusive of superannuation,
allowances, benefits and any applicable fringe
benefits tax (FBT),
– Variable remuneration which is at-risk, creating
opportunity for the Company to pay less than the
potential variable remuneration when performance
expectations have not been met, and which is
partly an incentive to reward executives for meeting
or exceeding expectations, including:
• Short-term Incentive (STI) or Bonus opportunity
which provides a reward for performance
against annual objectives, and
•
Long Term Variable Remuneration (LTVR)
which provides an equity-based reward for
performance against indicators of shareholder
benefit or value creation, over a multi-year
period, and
–
In total the sum of the elements will constitute a
total remuneration package (TRP).
● Both internal relativities and external market factors
should be considered,
● Total remuneration packages (TRPs, which include
Fixed Package and incentives) should be structured
with reference to market practices, the practices of
competitors for talent, and the circumstances of the
Company at the time,
● Remuneration will be managed within a range to allow
for the recognition of individual differences such as the
calibre of the incumbent and the competency with
which they fulfil a role (a range of +/- 20% is specified
in line with common market practices), and
● Termination benefits will generally be limited to the
default amount allowed for under the Corporations Act
(without shareholder approval).
Changes to remuneration resulting from annual reviews
are generally to be determined in relation to:
● external benchmarking, and/or market movements,
● whether current remuneration for the incumbent is
above or below the policy midpoint/benchmark
– those below the midpoint will tend to receive
higher increases,
● the competence of the incumbent in fulfilling their role
which determines their positioning within the policy
range – higher calibre incumbents are intended to be
positioned higher in the range, and
● any changes to internal relativities related to role/
organisation design that have occurred since the
previous review.
4.4 Non-executive Director Remuneration Policy
The Non-executive Director remuneration policy applies
to non-executive directors (NEDs) of the Company in their
Remuneration Report – AuditedFor the year ending 30 June 2023 capacity as directors and as members of committees, and
may be summarised as follows:
● Remuneration may be composed of:
– Board fees,
– Committee fees,
– Superannuation,
– Other benefits, and
– Equity (if appropriate at the time)
● Remuneration will be managed within the aggregate
fee limit (AFL) or fee pool approved by shareholders
of the Company, noting that equity does not count
towards the AFL unless cash remuneration is sacrificed
for a grant of equity, refer section 9,
● The Board may seek adjustment to the AFL in the
case of the appointment of additional NEDs, or should
the AFL become insufficient to attract or retain the
appropriate calibre of NEDs,
● Remuneration should be reviewed annually,
● Committee fees may be used to recognise additional
contributions to the work of the Board by members of
committees in circumstances that the workload of the
Board is not equally shared, and
● The Board Chair fee will be set as a multiple of the fees
payable to other NEDs, in recognition of the additional
workload associated with this role.
4.5
Short-Term Incentive Policy
The short-term incentive policy of the Company is
that an annual component of executive remuneration
should be at-risk and allow the Company to modulate
the cost of employment to align with individual and
Company performance while motivating value creation
for shareholders:
● The STI should be paid in cash and deferral should
not apply since there is a separate component of
remuneration (the LTVR) which is intended to address
long term outcomes,
● Non-executive directors are excluded from
participation,
● A termination of employment will trigger a forfeiture of
some or all of unearned STI entitlements depending
upon the circumstances of the termination. The Board
retains discretion to trigger or accelerate payment
or vesting of incentives provided the limitation on
termination benefits as outlined in the Corporations
Act are not breached, and
● Short-term awards are linked to the main drivers of
value creation at the group, business unit or individual
level, as may be appropriate to the role and subject to
Board decision.
4.6
Long-Term Incentive Policy
The long-term incentive policy of the Company is that a component of remuneration of executives should be at-risk and
linked to equity in the Company to ensure that the interests of executives are aligned with those of shareholders, and
share risk with shareholders:
Long Term Variable Remuneration Plan (LTVR)
Aspect
Purpose
Plan Rules, Offers and Comments
The LTVR Plan’s purpose is to provide an element of at-risk remuneration that constitutes
part of a market competitive total remuneration package and aims to ensure that Senior
Executives have commonly shared goals related to producing relatively high returns for
Shareholders. Other purposes of the LTVR Plan are to assist Senior Executives to become
Shareholders, provide a component of remuneration to enable the Company to compete
effectively for the calibre of talent required for it to be successful and to help retain
employees, thereby minimising turnover and stabilising the workforce such that in periods
of poor performance the cost is lesser (applies to non-market measures under AASB2).
As at balance date, the Company had Performance Rights and Options for the purposes
of the LTVR. All Loan Funded Shares were exercised and loans paid during the year with
no balance of these at year end.
Acrow Annual Report 2023 | 25
Long Term Variable Remuneration Plan (LTVR)
Aspect
Form of Equity
Plan Rules, Offers and Comments
The current plan in operation at balance date includes the ability to grant the following
Rights to Eligible Employees which include the Managing Director and employees as
nominated by the Board:
● Share Awards,
● Performance Rights, which are subject to performance related vesting conditions, and
which may be settled upon exercise by new issues or on market purchase of ordinary
fully paid Shares,
● Options, which are subject to an exercise price, and which typically have no intrinsic
value when granted (exercise price is around the Share price), creating an incentive
to increase Share price and grow shareholder value. The Options may be settled as
“Cashless Exercise” in which case on exercise of the Options the Company will only
allot and issue or transfer that number of Plan Shares to the Participant that are equal
in value to the difference between the Exercise Price otherwise payable in relation
to the Options and the then market value of the Plan Shares as at the time of the
exercise. Options may also be subject to performance related vesting conditions, and
No dividends accrue to unvested Rights or Options, and no voting rights are attached,
however dividends do accrue to vested Loan Funded Shares (along with voting
entitlements) which must be put towards repayment of the Loan if any amount
is outstanding.
Unless prior Shareholder Approval is obtained, the number of Awards which may be
granted under this Plan (assuming all Options and Performance Rights were exercised)
must not at any time exceed in aggregate 10% of the total Issued Capital of the
Company at the date of any proposed new Awards.
The Board retains discretion to determine the LTVR to be offered each year, subject to
shareholder approval in relation to Directors, when the Rights are to be settled in the form
of a new issue of Company shares. The Board may also seek shareholder approval for
grants to Directors in other circumstances, at its discretion.
FY2023 Invitations
Eligible senior employees were granted 745,374 performance rights over two tranches with
a total fair value of $323,266. These have potential vestings in 2023.
Steven Boland (CEO) was granted 2,148,588 performance rights over four tranches with a
total fair value of $1,170,150. These have potential vestings in 2023 and 2024.
Three-year Measurement Periods combined with annual grants will produce overlapping
cycles that will promote a focus on producing long term sustainable performance/value
improvement and mitigates the risk of manipulation and short-termism (continuous
improvement). Because of the timing of grants, the life of the Right may be less than
3 years at times, however this does not impact the Measurement Period over which
performance is measured.
Plan Limit
LTI Value
Measurement Period
Performance, Vesting and
Forfeiture Conditions
The Board has discretion to set Vesting, Performance and Forfeiture Conditions and for
each Invitation. When such conditions are not met, the entitlement lapses.
FY2023 Invitations
Except as indicated below, a participant must remain employed by the Company during
the Measurement Period and the performance conditions must be satisfied for LTVR
to vest.
Retesting
Retesting is not contemplated under the Plan Rules.
Amount Payable for
Grants
The target value of LTVR is included in assessments of remuneration benchmarking and
policy positioning. No amount is payable by participants for grants of Performance
Rights. An Acquisition Price will apply in respect of grants of Loan Funded Shares (with an
accompanying loan) and may also apply to grants of Share Awards, which may or may
not have Vesting Conditions. Any loan must be repaid prior to the end of the Loan Term,
up to the Market Value of the Loan Funded Shares (non-recourse).
26 | Acrow Annual Report 2023
Remuneration Report – AuditedFor the year ending 30 June 2023 Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan Rules, Offers and Comments
Exercise of Grants
Disposal Restrictions etc.
Cessation of Employment
Change of Control of the
Company (CoC)
Participants will be required to submit an Exercise Notice in respect of Performance Rights
and Options, in order to convert them to Shares, as well as the payment of the Exercise
Price in respect of each Option exercised. No amount is payable on the exercise of
Performance Rights.
Options and/or Performance Rights granted under this Plan may not be assigned,
transferred, encumbered with a Security Interest in or over them, or otherwise disposed of
by a Participant, unless the consent of the Board is obtained, or due to the force of law in
the case of the death of a Participant. The Board has discretion to determine the disposal
restrictions attaching to Share Awards, Loan Funded Shares or Plan Shares (resulting from
vesting and exercise of grants) as part of the Invitation terms.
In the event of cessation of employment in the circumstances of a “Bad Leaver”
(resignation or termination for cause), all unvested entitlements will be forfeited. In other
circumstances, the treatment of unvested awards will be dealt with as determined by
the Board.
If in the opinion of the Board a change of control event has occurred, or is likely to occur;
a) Performance Rights granted will vest to the extent that the performance period has
elapsed, and to the extent performance conditions have been met (may involve a
pro-rata calculation), with the remainder lapsing,
b) Options may be subject to accelerated vesting in the sole discretion of the Board, and
c) Share Awards or Loan Funded Shares which do not vest will automatically be
surrendered by the Participant, and any that do not lapse, and which are subject to
an outstanding loan will be subject to the requirement of the loan being repaid by the
date of the CoC.
Fraudulent or Dishonest
Actions
If the Board takes the view that a Participant has acted fraudulently, dishonestly, or
wilfully breaches their duties to the group, the Board has discretion to determine that
unvested or unexercised awards are forfeited.
● The LTVR should be based on Performance Rights
or Options (which may include Loan Funded Shares
arrangements) that produce a benefit for Participants
when performance objectives are met (which may
include increasing Share price),
● The measurement period for long term incentives
should be at least two years,
● A termination of employment will trigger a forfeiture
of some, or all of the long-term incentives held by an
executive in respect of which performance conditions
and hurdles have not yet been met, depending upon
the circumstances of the termination. The Board retains
discretion to trigger or accelerate payment or vesting
of incentives provided the limitation on termination
benefits as outlined in the Corporations Act are not
breached.
4.7
Securities Trading Policy
The Company’s Securities Trading Policy applies to
Directors and executives classified as KMP (including their
relatives and associates), those employees working closely
with KMP, employees nominated by the Board, or any
other employee holding inside information. It sets out the
guidelines for dealing in any type of Company Securities
by persons covered by the policy, and the requirement
for the Company to be notified within 2 business days
of any dealing. It also summarises the law relating to
insider trading which applies to everyone at all times.
Under the current policy, those covered by the policy may
not trade during a “blackout period” or when they hold
inside information (subject to exceptional circumstances
arrangements, see the policy on the Company website).
The following periods in a year are “blackout periods” as
defined in the policy:
● 2 weeks prior to the release of the Company’s half
year results,
● From the financial year balance date until 24 hours
following the release of the Company’s preliminary full
year results (Appendix 4E),
● Within 24 hours of release of price sensitive information
to the market, and
● another date as declared by the Board (“ad-hoc”).
Executive Remuneration Engagement Policy
4.8
and Procedure
The Company has adopted an executive remuneration
engagement policy and procedure to manage the
interactions between the Company and external
remuneration consultants, to ensure their independence
and that the Remuneration Committee will have clarity
regarding the extent of any interactions between
Acrow Annual Report 2023 | 27
management and the external remuneration consultants. This policy enables the Board to state with confidence whether
the advice received has been independent, and why that view is held. The Policy states that external remuneration
consultants are to be approved and engaged by the Board before any advice is received, and that such advice may
only be provided to a non-executive director. Interactions between management and the external remuneration
consultants must be approved and will be overseen by the Remuneration Committee when appropriate. Refer to
section 13.
4.9
Variable Executive Remuneration – The Short-Term Incentive Bonus Plan
Short-term Incentive Plan (STIP)
Aspect
Purpose
Measurement Period
Award Opportunities
Performance Assessments
and Award Outcomes
Award Payment
Cessation of Employment
During a Measurement
Period
Plan, Offers and Comments
The short-term incentive bonus plan’s purpose is to give effect to an element of
remuneration. This element of remuneration reinforces a performance focussed culture,
encourages teamwork and co-operation among executive team members and
maintains a stable executive team by helping retain key talent. These objectives aim to
be achieved by a simple plan that rewards participants for their performance during a
12-month period.
The Company’s financial year (12 months). For the year ended 30 June 2023, the
measurement period was from 1 July 2022 to 30 June 2023.
The CEO was offered an opportunity of up to 40% of Fixed Package which is based on
achieving a range of measurable KPI’s which are predominately based on achieving
Profit before Tax targets and strategic goals and meeting safety standards. For other
KMP Executives, their individual KPI’s are determined by the CEO in collaboration with
the Board.
Performance assessments are undertaken by the CEO in relation to other Senior
Executives who then make recommendations to the Board, and by the Board in relation
to the CEO. The Board has discretion to vary the recommendations of the CEO in
determining final award outcomes.
Assessments and award determinations are performed following the end of the
Measurement Period and the auditing of Company accounts. Awards will generally
be paid in cash in the September following the end of the Measurement Period. They
are to be paid through payroll with PAYG tax deducted as appropriate. There are
limited situations where awards may be satisfied through the issue of equity. Deferral
has not been introduced due to the mix of short-term and long-term incentives being
appropriately weighted.
In the event of cessation of employment due to dismissal for cause, all entitlements in
relation to the Measurement Period are forfeited.
In the event of cessation of employment due to resignation, all entitlements in relation to
the Measurement Period are forfeited, unless the termination is classified as “good leaver”
in the discretion of the Board, in which case the Board may make an award at the time of
the termination, or assess outcomes at the normal time, following the termination.
Change of Control
In the event of a Change of Control including a takeover, the Board has discretion
regarding the treatment of short-term incentive bonus opportunities.
Fraud, Gross Misconduct
etc.
If the Board forms the view that a Participant has committed fraud, defalcation or
gross misconduct in relation to the Company then all entitlements in relation to the
Measurement Period will be forfeited by that participant.
4.10 Variable Executive Remuneration – Long Term Variable Remuneration Plan (LTVR) –
Performance Rights
The LTVR plan is an annual performance rights plan to which selected executives and KMP are invited to participate
at the Board’s discretion. The Company currently has two LTVR plans running which share the same method but differ
slightly in their hurdles and vesting criteria detailed in the table below. All of the 2023 and 2024 plans were granted in
the form of performance rights directly linked to the performance of the Company, the returns generated, and relative
increases in shareholder wealth. This structure was used to ensure appropriate alignment to shareholder value over a
specified timeframe.
28 | Acrow Annual Report 2023
Remuneration Report – AuditedFor the year ending 30 June 2023 Long Term Variable Remuneration Plan (LTVR)
Aspect
Instrument
Purpose
Plan limit
Plan, Offers and Comments
Performance rights being a right to receive a share subject to performance and
vesting conditions.
To motivate executives to achieve the long-term performance targets.
Performance rights issued to CEO and senior executives for 2023 and 2024 rely on
Corporations Act Section 708 relief – “Senior Managers”.
Performance rights issued for certain senior managers outstanding for 2023 were issued
under Class Order exemption 14/1000.
LTVR Value
The Board retains discretion to determine the LTVR to be offered each year.
2022 plan vested
The measurement period of the 2022 plan finished on 30 June 2022. The performance
outcome resulted in an overall 97% of rights on issue vesting. 96% of the EPS rights vested
and 4% lapsed, 100% of the TSR rights vested, which amounted to a total of 8,474,004
units vested in FY2023,all but 1,635,355 being exercised into ordinary shares as at the date
of this report. The KMP vestings are below:
KMP Steven Boland vested 1,067,287 rights and subsequently exercised into shares.
34,713 rights did not meet performance hurdles and lapsed.
KMP Andrew Crowther vested 532,675 rights and subsequently exercised into shares.
17,325 rights did not meet performance hurdles and lapsed.
2023 plan Invitations
A total of 5,404,102 performance rights have been granted in the 2023 plan, of which
3,584,434 performance rights were granted in FY2022 to executives, 1,074,294 were
granted to Steven Boland and 745,374 were granted to Senior Managers in FY2023.
KMP Steven Boland has been issued 1,074,294 performance rights in this plan with a total
fair value of $602,889.
KMP Andrew Crowther has been issued 418,664 performance rights in this plan with a total
fair value of $184,322.
2024 plan Invitations
A total of 5,391,568 performance rights have been granted in the 2024 plan.
KMP Steven Boland has been issued 1,074,294 performance rights in this plan with a total
fair value of $567,261.
KMP Andrew Crowther has been issued 426,426 performance rights in this plan with a total
fair value of $172,576.
No dividends are paid or accrued on unvested awards.
2023 plan:
● 50% issue measured on Earnings per share (EPS) criteria specifically “NPAT / Weighted
average number of shares on issue”
● 50% issue measured on Total Shareholder return (TSR) criteria. This compares the
share price and dividends through the measurement period to the ASX small
industrials index.
2024 Plan:
● 50% issue measured on Earnings per share (EPS) criteria specifically “NPAT / Weighted
average number of shares on issue”
● 50% issue measured on Total Shareholder return (TSR) criteria. This compares the
share price and dividends through the measurement period to the ASX small
industrials index.
Acrow Annual Report 2023 | 29
Dividends
Tranches
Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan, Offers and Comments
Performance hurdles
The vesting of the TSR Performance Rights will be determined by reference to the
following scale, in relation to the Measurement Period:
Performance Level
Stretch and above
Between target and stretch
Target
Company’s Annulised TSR
compared to the Annulised TSR
of the ASX Small Industrials
Total Return Index
% of Tranche
Vesting
Index TSR + 160% TSR CAGR
100%
> 130% Index TSR,
< 160% TSR CAGR
130% Index TSR
Pro-rata
Executives
50%; Senior
Managers 62.5%
Between threshold and target
> Index TSR, < 130% TSR CAGR
Pro-rata
Threshold
Below threshold
Index TSR
< Index TSR
0%
0%
TSR is the sum of Share price appreciation and dividends (assumed to be reinvested in
Shares) during the Measurement Period. It is annualised for the purposes of the above
vesting scale. CAGR is Compound Annual Growth Rate. The Company’s annualised TSR
will be compared with the annualised TSR of the Index.
The vesting of EPS Performance Rights will be determined by reference to the following
scale, in relation to the Measurement Period:
Performance Level
Stretch and above
Between target and stretch
Target
Earnings Per Share (EPS) CAGR
20%
> 10%, < 20%
10%
% of Tranche
Vesting
100%
Pro-rata
Executives
50%; Senior
Managers 62.5%
Between threshold and target
> 8%, < 10%
Pro-rata
Threshold
Below threshold
8%
< 8%
0%
0%
30 | Acrow Annual Report 2023
Remuneration Report – AuditedFor the year ending 30 June 2023 Long Term Variable Remuneration Plan (LTVR)
Aspect
Plan, Offers and Comments
EPS growth will be calculated as the CAGR required for the EPS in the year immediately
prior to the commencement of the Measurement Period to equal the EPS achieved in the
final year of the Measurement Period. The EPS will be calculated as follows for each year
of the calculation:
NPAT EPS ÷ Time Weighted Average Issued Shares.
● NPAT in any period relating to the plan will be signed off by the Board. This will also
include “base” capex budgeted to achieve the budgeted NPAT.
● Any capex acquired above budget will require the target NPAT adjusted for the
relevant measurement years at a required return of 40% weighted post tax for the
time available (i.e. above budget capex 40% return time available during year).
● If any M&A activity occurs, the NPAT will be adjusted in consultation with the Board.
● The Board has discretion regarding whether or not to approve adjustments relating to
NPAT at each measurement period.
Andrew Crowther had 900,000 out of 1,200,000 units of options vested and exercised
before reporting date. Exercise price was 40 cents per unit, 436,894 units were forfeited at
market price in exchange for 463,106 units of ordinary shares. The last remaining 300,000
units of vested in July 2023.
Gateway
TSR and EPS Performance Rights are not subject to a gate, however, vesting above Target
in any years will be subject to the Boards discretionary approval.
Measurement Period and
vesting dates
2023 Plan: 1 July 2020 to 30 June 2023 (3 years)
2024 plan: 1 July 2021 to 30 June 2024 (3 years)
Each grant is tested on the grant performance hurdles criteria at the end of the
measurement period.
Vesting for each successful tranche occurs only after the signed audited financial
statements are lodged with the Australian Stock Exchange relevant to each plan.
Retesting
Retesting is not contemplated under the Plan Rules.
Amount payable for grants No amount is payable by participants for grants of Performance Rights
Exercise of Grants
Participants will be required to submit an Exercise Notice in respect of vested
performance rights in order to convert them to Shares. Each Right has a Term of 15 years
from the Grant Date and if not exercised within that Term the Rights will lapse.
Performance Assessments
and Award Outcomes
At the end of each performance period, the Remuneration and Nomination Committee
assesses the relevant performance measures and determines the extent to which the
awards should vest. Payment is made by the issuing or transfer of shares.
Award Payment
Cessation of Employment
During a Measurement
Period
Change of Control
Assessments and award determinations are performed following the end of the
Measurement Period and the auditing of Company accounts. Awards will generally
be paid in cash in the September following the end of the Measurement Period. They
are to be paid through payroll with PAYG tax deducted as appropriate. There are
limited situations where awards may be satisfied through the issue of equity. Deferral
has not been introduced due to the mix of short-term and long-term incentives being
appropriately weighted.
In the event of cessation of employment due to dismissal for cause, all entitlements in
relation to the Measurement Period are forfeited.
In the event of cessation of employment due to resignation, all entitlements in relation to
the Measurement Period are forfeited, unless the termination is classified as “good leaver”
in the discretion of the Board, in which case the Board may make an award at the time of
the termination, or assess outcomes at the normal time, following the termination.
If a change of control occurs prior to the vesting of an award, then the Board may
determine in its absolute discretion whether all or some of a participant’s unvested award
vest, lapse, is forfeited, or continues.
Acrow Annual Report 2023 | 31
Proforma Executive Remuneration for FY2023 (non-statutory disclosure) – unaudited
5.
The disclosures required under the Corporations Act (including regulations) and prepared in accordance with applicable
accounting standards, do not provide shareholders with an understanding of the intended remuneration in a given year.
For example, the LTVR disclosed is not reflective of the remuneration opportunity for the year being reported on, due
to the requirements of AASB2. Therefore, the following table is provided to ensure that shareholders have an accurate
understanding of the Board’s intention regarding the remuneration offered to executives during FY2023. The values
presented reflect the remuneration for a full year i.e. ignoring any part-year reporting impact.
Position
Executive Director and
Chief Executive Officer
Incumbent
Steven Boland
Chief Financial Officer
Andrew Crowther
Executive Director
Margaret Prokop (resigned
31 December 2021)
Fixed
Package
including
Super1
Target STI2
LTVR
Opportunity
Total Value
of Package
$555,243
$221,053
$602,889
$1,379,185
$553,519
$276,760
$247,922
$1,078,201
$337,355
$101,206
$209,104
$647,665
$327,818
$98,346
$115,007
$541,171
–
$83,345
–
–
–
–
–
$83,345
Year
2023
2022
2023
2022
2023
2022
1 Package includes car allowance and superannuation.
2 With Steven Boland (CEO), STI is capped at 40% of his package; with Andrew Crowther (CFO) STI is capped at 30% of his package subject to
achieving individual KPIs and performance targets.
32 | Acrow Annual Report 2023
Remuneration Report – AuditedFor the year ending 30 June 2023 n
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Acrow Annual Report 2023 | 33
7.
7.1
Performance Outcomes for FY2023
Company Performance
The following outlines the performance of the Company over the FY2016 and FY2023 period in accordance with the
requirements of the Corporations Act:
Corporate Performance Measures
FY End Date
Revenue
Profit/(loss)
after Tax
Share Price
Change in
Share Price
30-Jun-23
30-Jun-22
30-Jun-21
30-Jun-20
30-Jun-19
30-Jun-18
30-Jun-17
30-Jun-16
$168,494,966
$23,457,040
$148,345,521
$15,694,168
$105,743,523
$3,962,998
$81,681,600
$3,013,023
$68,858,910
$4,948,715
$15,478,995
$10,510,658
$0
$0
($613,395)
$8,468,607
$0.780
$0.505
$0.375
$0.315
$0.300
$0.290
$0.120
$0.180
$0.275
$0.130
$0.060
$0.015
$0.010
$0.170
($0.06)
n/a
Short-term change in
Shareholder Value over
1 Year
(SP increase + Dividends)
Amount
$0.307
$0.154
$0.078
$0.025
$0.025
$0.170
($0.06)
n/a
%
61%
41%
25%
8%
9%
142%
(33%)
n/a
Total
Dividends
per Share1
$0.032
$0.024
$0.018
$0.010
$0.015
Nil
Nil
Nil
1 The above 30 June 2018 represents three-months consolidated result since Acrow’s acquisition of the Acrow Holdings Group from April 2018 to
June 2018.
2 The Company was not listed between July 2013 to April 2016 and hence no further historical results provided.
3 Dividends paid are the cash amount (post franking).
7.2
Links Between Performance and Reward Including STI and LTVR Determinations
The remuneration of executive KMP is intended to be composed of three parts as outlined earlier, being:
● Fixed Package, which is not intended to vary with performance, but which tends to increase as the scale of the
business increases (i.e. following success),
● STI which is intended to vary with indicators of annual Company and individual performance, and
● LTVR which is also intended to deliver a variable reward based on long-term measures of Company performance.
If STI is achieved, it is paid after the end of the financial period it related to. This level of potential award was considered
appropriate under the STI process as it stood at the time, and strongly linked to performance.
Following the end of FY2023, reports on the Company’s activities during the year were prepared for the Board. The Board
then assessed the extent to which expectations had been met or exceeded in relation to the Company and each role, to
calculate the total award payable. This included assessed NPAT, underlying EBITDA and EPS growth.
During the reporting period, grants of equity were made in relation to the LTVR scheme as part of remuneration for
FY2023 but did not vest due to the presence of the long-term measurement period and vesting conditions that are yet
to be completed/assessed.
7.3
Links Between Company Strategy and Remuneration
The Company intends to attract the superior talent required to successfully implement the Company’s strategies at a
reasonable and appropriately variable cost by:
● positioning Fixed Packages (the fixed element) around relevant market data benchmarks when they are
undertaken, and
● supplementing the Fixed Package with at-risk remuneration and incentives that motivate executive focus on:
– short to mid-term objectives linked to the strategy via annual performance assessments, and
–
long term value creation for shareholders by linking a material component of remuneration to those factors
that shareholders have expressed should be the long-term focus of executives and the Board, such as share
price appreciation.
To the extent appropriate, the Company links strategic implementation and measures of success of the strategy, directly
to incentives in the way that performance is assessed.
34 | Acrow Annual Report 2023
Remuneration Report – AuditedFor the year ending 30 June 2023 e
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Acrow Annual Report 2023 | 39
NED Fee Policy Rates for FY2023 and FY2024, and Fee Limit
9.
The Remuneration and Nominations Committee took advice from an external remuneration consultant that was not
the auditor, and these adjustments have been implemented to ensure we continue to attract the highest talent in the
Director pool.
The total annual fee for FY2023 was $396,000 which remains under the annual fees limit (AFL or fee pool) of $500,000
which was approved by shareholders as part of the constitution of the Company since re-listing in April 2018
The following table outlines the NED fee policy rates that were applicable for the 2023 year.
Director
Chairperson
Other
Directors Fees/Executive Remuneration
$136,000
$80,000
Chair of Audit & Risk Committee
Additional $10,000
Chair of Remuneration Committee
Additional $10,000
The table below outlines the proposed total annual fee from September FY2023 which on an annualised basis is
$444,000 which remains under the annual fees limit (AFL or fee pool) of $500,000.
Director
Chairperson
Other
Directors Fees/Executive Remuneration
$150,000
$90,000
Chair of Audit & Risk Committee
Additional $12,000
Chair of Remuneration Committee
Additional $12,000
40 | Acrow Annual Report 2023
Remuneration Report – AuditedFor the year ending 30 June 2023 %
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Acrow Annual Report 2023 | 41
10.2 NED Remuneration
Remuneration received by non-executive directors in FY2023 and FY2022 are disclosed below:
FY2023
Name
Peter Lancken
David Moffat
Melanie Allibon
Laurie Lefcourt
Total NED
FY2022
Name
Peter Lancken
Gregg Taylor (resigned
22 November 2021)
David Moffat
Melanie Allibon (appointed
1 September 2021)
Laurie Lefcourt (appointed
1 October 2021)
Total NED
Role
Chairman
Independent NED
Independent NED
Independent NED
Role
Chairman
Independent NED
Independent NED
Independent NED
Short-term
Share Based
Payments
Board Fees
Rights/
Options
$135,993
$80,000
$90,000
$90,000
$395,993
–
–
–
–
–
Short-term
Share Based
Payments
Board Fees
Rights/
Options
$135,993
$37,500
$84,583
$70,317
–
–
–
–
–
–
%
performance
based
–
–
–
–
–
%
performance
based
–
–
–
–
–
–
Total
$135,993
$80,000
$90,000
$90,000
$395,993
Total
$135,993
$37,500
$84,583
$70,317
$65,833
$394,226
Independent NED
$65,833
$394,226
11.
Employment Terms for Key Management Personnel
11.1
Service Agreements
A summary of contract terms in relation to executive KMP is presented below:
Period of Notice
Name
Steven Boland
Position held at
close of FY2023
Employing
Company
Duration of
Contract
From
Company
From KMP
Executive Director
and Chief
Executive Officer
Acrow Formwork
and Construction
Limited
Open-ended
6 months
6 months
Andrew Crowther Chief Financial
Officer
Acrow Formwork
and Construction
Limited
Open-ended
6 months
6 months
Termination
Payments
Up to 6
months’ Total
Remuneration
Up to 6
months’ Total
Remuneration
* The treatment of incentives in the case of termination is addressed in separate sections of this report that give details of incentive design.
On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form
of a letter of appointment. The letter summarises the Board policies and terms, including compensation relevant to the
office of the director. No contracts apply to the appointment of non-executive KMP.
42 | Acrow Annual Report 2023
Remuneration Report – AuditedFor the year ending 30 June 2023 12. Other Remuneration Related Matters
The following outlines other remuneration related matters that may be of interest to stakeholders, in the interests of
transparency and disclosure:
● Other than in the case of grants of Loan Funded Shares, there were no loans to Directors or other KMP at any time
during the reporting period, and
● There were no other transactions with KMP.
13. External Remuneration Consultant Advice
During the reporting period, the Board engaged external remuneration consultants to provide KMP remuneration
recommendations relating to remuneration post the date of this report including the long-term variable remuneration
referred to in subsequent events in the Directors Report.
The Board reviewed the recommendations from the external remuneration advisor directly and independent of executive
management and are satisfied the recommendations were made free of undue influence of the relevant KMP’s.
The Board has adopted a policy to govern any such future engagements, the details of which will be disclosed in future
Remuneration Reports should they arise.
End of audited Remunerations Report.
Acrow Annual Report 2023 | 43
In dollars
Revenue
Other income
Personnel expenses
Sub-contract labour costs
Inventory purchased, net of changes in finished goods
Depreciation
IT and telecommunication expenses
Freight costs
Insurance expenses
Expected credit loss provision and bad debt expense
Other expenses
Profit before net finance costs and income tax
Finance costs
Profit before income tax
Income tax expense
Profit from continuing operations
Other comprehensive income
Items that may be reclassified to profit / (loss)
Foreign operations – foreign currency translation differences
Total comprehensive income for the year
Earnings per share from continuing operations
Basic EPS (cents per share)
Diluted EPS (cents per share)
Note
2023
2022
4
5
6
7
8
149,814,345
140,826,918
12,024,427
4,955,787
(55,775,184)
(51,875,934)
(15,469,758)
(18,039,520)
(28,012,325)
(31,642,371)
(15,222,956)
(13,070,352)
(1,858,760)
(1,641,245)
(1,914,389)
(1,975,256)
(1,216,688)
(1,090,449)
(3,145,000)
(650,000)
(5,932,869)
(4,628,112)
33,290,843
21,169,466
(4,481,063)
(3,513,116)
28,809,780
17,656,350
(5,352,740)
(1,962,182)
23,457,040
15,694,168
(1,939)
1,431
23,455,101
15,695,599
24
24
8.96
8.69
6.32
6.06
The above statement should be read in conjunction with the accompanying notes.
44 | Acrow Annual Report 2023
Statement of Profit or Loss and other Comprehensive IncomeFor the year ending 30 June 2023 In dollars
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Contract assets
Prepayments and other assets
Assets held for sale
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use lease assets
Intangible assets
Total non-current assets
Total assets
Current liabilities
Bank overdraft
Trade payables
Other payables
Employee benefits
Lease liabilities
Loans and borrowings
Current tax liabilities
Liabilities associated with assets held for sale
Total current liabilities
Non-current liabilities
Other payables
Employee benefits
Lease liabilities
Loans and borrowings
Provisions
Deferred income tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
Note
2023
2022
9
10
11
12
12
13
14
15
16
9
17
17
18
15
19
21
13
17
18
15
19
20
21
4,939,396
3,010,433
39,178,433
34,362,867
11,397,484
14,872,186
42,814
111,927
3,850,665
5,075,832
–
72,579
59,408,792
57,505,824
131,589,548
95,490,436
20,088,885
24,478,720
7,428,704
7,428,704
159,107,137
127,397,860
218,515,929
184,903,684
–
3,001,005
14,890,123
21,484,027
3,000,000
–
6,186,367
6,159,454
6,375,328
4,964,215
21,907,696
17,001,678
1,348,072
1,869,031
–
67,063
53,707,586
54,546,473
4,000,000
–
628,024
444,988
17,537,389
23,285,254
29,382,836
15,848,299
469,274
469,274
9,907,149
6,990,415
61,924,672
47,038,230
115,632,258
101,584,703
102,883,671
83,318,981
61,809,122
58,310,046
4,076,017
3,059,423
36,998,532
21,949,512
102,883,671
83,318,981
The above statement should be read in conjunction with the accompanying notes.
Acrow Annual Report 2023 | 45
Statement of Financial PositionAs at 30 June 2023 In dollars
Share capital
Share based
option
payments
reserve
Foreign
currency
translation
reserve
Retained
earnings
Total equity
Balance at 30 June 2021
46,703,384
2,972,126
54,311
11,757,622
61,487,443
Total comprehensive income for
the period
Profit for the year
Other comprehensive income
Total comprehensive income
Transactions with owners of
the company
–
–
–
Shares issued net of transaction costs
9,897,173
–
–
–
–
Options & Performance Rights
forfeited, written back to P&L
Options & Performance Rights failed to
meet market condition
Dividends paid to shareholders
Shares issued under dividend
reinvestment plan (DRP), net of costs
–
–
–
951,671
(409,120)
(398,910)
–
–
Equity settled share base payments
–
1,573,788
Transfer of option reserves to
share capital
Proceeds from exercise of options,
net of costs
Total transactions with owners of
the company
734,203
(734,203)
23,615
–
11,606,662
31,555
–
15,694,168
15,694,168
1,431
1,431
–
1,431
15,694,168
15,695,599
–
–
–
–
–
–
–
–
–
–
–
9,897,173
(409,120)
398,910
–
(5,901,188)
(5,901,188)
–
–
–
–
951,671
1,573,788
–
23,615
(5,502,278)
6,135,939
Balance at 30 June 2022
58,310,046
3,003,681
55,742
21,949,512
83,318,981
Total comprehensive income for
the period
Profit for the year
Other comprehensive income
Total comprehensive income
Options & Performance Rights
forfeited, written back to P&L
Options & Performance Rights failed to
meet market condition
Dividends paid to shareholders
Shares issued under dividend
reinvestment plan (DRP), net of costs
–
–
–
–
–
–
1,036,828
(261,821)
(7,426)
–
–
Equity settled share base payments
–
3,478,692
Transfer of option reserves to
share capital
Proceeds from exercise of options,
net of costs
Total transactions with owners of
the company
2,190,912
(2,190,912)
271,336
–
–
–
–
23,457,040
23,457,040
(1,939)
–
(1,939)
(1,939)
23,457,040
23,455,101
–
–
–
–
–
–
–
–
(261,821)
7,426
–
(8,415,446)
(8,415,446)
–
–
–
–
1,036,828
3,478,692
–
271,336
3,499,076
1,018,533
–
(8,408,020)
(3,890,411)
Balance at 30 June 2023
61,809,122
4,022,214
53,803
36,998,532
102,883,671
The above statement should be read in conjunction with the accompanying notes.
46 | Acrow Annual Report 2023
Statement of Changes in EquityFor the year ended 30 June 2023 In dollars
Cash flows from operating activities
Receipts from customers
Receipts on lease revenue
Payments to suppliers and employees
Cash generated from operations
Income tax paid
Net cash inflow from operating activities
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Deferred payment on acquisitions
Net cash outflow from investing activities
Cash flows from finance activities
Proceeds from issue of shares
Capital raising costs
Proceeds from exercise of options, net of costs
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Dividends paid net of DRP
Finance costs paid
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents as at 1 July
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
Note
2023
2022
21
5
70,425,037
88,716,570
80,641,924
54,374,672
(118,240,226)
(131,718,641)
32,826,735
11,372,601
(2,956,964)
(9,790)
29,869,771
11,362,811
18,680,621
7,518,603
(44,941,533)
(22,378,490)
–
(3,582,656)
(26,260,912)
(18,442,543)
–
–
10,500,000
(602,826)
263,597
16,525
49,451,920
28,528,971
(31,011,363)
(18,017,843)
15
(5,831,150)
(5,145,257)
(7,370,832)
(4,942,427)
(4,181,064)
(3,136,668)
1,321,108
7,200,475
4,929,967
120,743
9,428
1
4,939,396
(111,316)
1
9,428
The above statement should be read in conjunction with the accompanying notes.
Acrow Annual Report 2023 | 47
Statement of Cash FlowsFor the year ended 30 June 2023 Contents
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Reporting entity
Basis of preparation
Significant accounting policies
Revenue
Other income
Other expenses
Finance costs
Income tax expense
Cash and cash equivalents
Trade and other receivables
Inventories
Contract assets, prepayments and
other assets
Assets and liabilities held for sale
Property, plant and equipment
Leases
Intangible assets
Trade and other payables
Employee benefits
Loans and borrowings
Provisions
Deferred income tax liability and current
income tax liability
Issued capital
Capital management
Earnings per share
Capital commitments
Reconciliation of cash flows from
operating activities
Remuneration of auditors
Key management personnel and
related parties
Share-based payments
Financial risk management
Group entities
32 Operating segments
33
34
35
Parent entity disclosures
Deed of cross guarantee
Subsequent events
48 | Acrow Annual Report 2023
Reporting entity
1.
Acrow Formwork and Construction Services Limited (Acrow
or the Company) is a limited company incorporated in
Australia and whose shares are traded on the Australian
Securities Exchange under the issuer code “ACF”.
The consolidated financial statements of Acrow for the
year ended 30 June 2023 comprise of the Company and
its controlled entities (the Group).
The Group is a for-profit entity and is primarily involved in
the hire and sale of falsework, formwork, scaffolding and
screen equipment, and other construction services.
Acrow’s Annual Reports for prior reporting periods are
available upon request from the Company’s registered
office located at Level 5, 126 Phillip Street, Sydney NSW
2000, Australia or at www.acrow.com.au.
2.
(a)
Basis of preparation
Basis of accounting
The consolidated financial statements are general
purpose financial statements which have been prepared
in accordance with Australian Accounting Standards
(AASBs) adopted by the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001.
The consolidated financial statements comply with
International Financial Reporting Standards (IFRS)
adopted by the International Accounting Standards
Board (IASB) and were authorised for issue by the Board of
Directors on 22 September 2023.
Details of the Group’s significant accounting policies are
included in note 3.
(b)
Basis of measurement
The consolidated financial statements have been
prepared on accrual basis and are based on historical
costs, modified where applicable by the measurement at
fair value.
(c)
Functional and presentation currency
The consolidated financial statements are presented in
Australian dollars, which is the Group’s functional currency.
(d)
Use of estimates and judgements
The preparation of consolidated financial statements in
conformity with AASBs requires management to make
judgements, estimates and assumptions that affect the
application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised
and in any future periods affected.
In particular, information about significant areas of
estimations, uncertainties and critical judgements
in applying accounting policies that have the most
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 significant effect on the amounts recognised in the
consolidated financial statements include the following:
into consideration potential voting rights that currently
are exercisable.
Accounting estimates and judgements
Note
Revenue
Income tax expense
Trade and other receivables
Inventories
Property, plant and equipment
Leases
Intangible assets
Employee benefits
Provisions
Deferred income tax liability and current
income tax liability
Share-based payments
4
8
10
11
14
15
16
18
20
21
29
The accounting policies below have been applied
consistently to all periods presented in these consolidated
financial statements and have been applied consistently
by the Group.
(e) Comparative information
Where applicable, comparative information is
reclassified to comply with disclosure requirements and
improve comparability.
(f)
Rounding
Acrow is a company of the kind referred to in the
Australian Securities and Investments Commission
(ASIC) Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191, dated 24 March 2016 and
in accordance with that Legislative Instrument, amounts
in these consolidated financial statements have been
rounded off to the nearest dollar and are shown as such,
unless stated otherwise.
3.
(a)
Significant accounting policies
Basis of consolidation
The consolidated financial statements have been
prepared by aggregating the financial statements of
all the entities that comprise the Group, being Acrow
Formwork and Construction Services Limited and its
controlled entities.
All inter-entity balances and transactions are eliminated in
these consolidated financial statements.
(i)
Business combinations
Business combinations are accounted for using the
acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group.
Control is the power to govern the financial and
operating policies of an entity so as to obtain benefits
from its activities. In assessing control, the Group takes
The Group measures goodwill at the acquisition date as:
● the fair value of the consideration transferred; plus
● the recognised amount of any non-controlling interests
in the acquiree; plus, if the business combination is
achieved in stages, the fair value of the existing equity
interest in the acquiree; less
● the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in the statement of profit or loss.
The consideration transferred does not include amounts
related to the settlement of pre-existing relationships.
Such amounts are generally recognised in the statement
of profit or loss.
Costs related to the acquisition, other than those
associated with the issue of debt or equity securities
that the Group incurs in connection with a business
combination are expensed as incurred.
Any contingent consideration payable is recognised
at fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not remeasured,
and settlement is accounted for within equity, otherwise
subsequent changes to the fair value of the contingent
consideration are recognised in the statement of profit
or loss.
Where an asset only purchase is made and deferred
consideration is contingent to certain conditions being
met, the amount payable is assumed to be at the
maximum probable level, such that the capitalisation
of assets includes the full value of the purchase price.
Any reduction in final deferred consideration paid are
to be recognised in the statement of profit or loss as
when the conditions resulting in the reduction in deferred
consideration have occurred.
(ii)
Subsidiaries
Subsidiaries are entities controlled by the Group. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that
control commences until the date that control ceases.
(b)
Foreign currency
Transactions in foreign currencies are translated to the
functional currency of the Group at exchange rates at the
dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date.
The foreign currency gain or (loss) on monetary items is
the difference between amortised cost in the functional
currency at the beginning of the period, adjusted for
effective interest and payments during the period, and
Acrow Annual Report 2023 | 49
3.
Significant accounting policies (continued)
the amortised cost in foreign currency translated at the
exchange rate at the end of the year.
Foreign currency differences arising on retranslation
are recognised in the statement of profit or loss,
except for qualifying cash flow hedges to the extent
the hedge is effective, which are recognised in other
comprehensive income.
(c)
(i)
Financial instruments
Non-derivative financial assets
The Group initially recognises receivables on the date
that they are originated. All other financial assets
(including assets held at fair value through profit or loss)
are recognised initially on the trade date at which the
Group becomes a party to the contractual provisions of
the instrument.
The Group derecognises a financial asset when the
contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash
flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the
financial asset are transferred. Any interest in transferred
financial assets that is created or retained by the Group is
recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net
amount presented in the statement of financial position
when, and only when, the Group has a legal right
to offset the amounts and intends to either to settle
on a net basis or to realise the asset and settle the
liability simultaneously.
The Group has the following non-derivative financial
assets: receivables and cash and cash equivalents.
Receivables
A receivable is recognised when performance obligations
are met or as lease income is earned as this is the point in
time that the consideration is unconditional because only
the passage of time is required before the payment is due.
Receivables are financial assets with fixed or determinable
payments that are not quoted in an active market. Such
assets are recognised initially at the transaction price plus
any directly attributable transaction costs. Subsequent to
initial recognition, receivables are measured at amortised
cost using the effective interest method, less any
impairment losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, cash
on hand and cash equivalents, net of bank overdrafts.
Cash equivalents represent highly liquid investments which
are readily convertible to cash.
(ii)
Non-derivative financial liabilities
The Group initially recognises debt securities issued on the
date that they are originated. All other financial liabilities
(including liabilities held at fair value through profit or loss)
50 | Acrow Annual Report 2023
are recognized initially on the trade date at which the
Group becomes a party to the contractual provisions of
the instrument.
The Group derecognises financial liability when its
contractual obligations are discharged or cancelled
or expire.
Financial liabilities are recognized initially at fair value plus
any directly attributable transaction costs.
Subsequent to initial recognition, financial liabilities are
measured at amortized cost using the effective interest
rate method.
Financial liabilities comprise loans and borrowings, trade
and other payables.
Bank overdrafts that are repayable on demand and form
an integral part of the Group’s cash management are
included as a component of cash and cash equivalents
for the purpose of the statement of cash flows.
(iii)
Issued capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and
share options are recognised as a deduction from equity,
net of any tax effects.
(d)
(i)
Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at
cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditure that is directly attributable to
the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour,
any other costs directly attributable to bringing the assets
to a working condition for their intended use, the costs
of dismantling and removing the items and restoring the
site on which they are located, and capitalised borrowing
costs (see below).
Cost also may include transfers from other comprehensive
income of any gain or (loss) on qualifying cash flow hedges
of foreign currency purchases of property, plant and
equipment. Purchased software that is integral to the
functionality of the related equipment is capitalised as
part of that equipment.
When parts of an item of property, plant and equipment
have different useful lives, they are accounted for as
separate items (major components) of property, plant
and equipment.
The gains and (losses) on disposal of an item of property,
plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount of
property, plant and equipment and are recognised net
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 within other income or other expenses in the statement of
profit or loss.
(ii)
Subsequent costs
The cost of replacing a component of an item of property,
plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic
benefits embodied within the component will flow to
the Group, and its cost can be measured reliably. The
carrying amount of the replaced part is derecognised. The
costs of the day-to-day servicing of property, plant and
equipment are recognised in the statement of profit or loss
as incurred.
(iii)
Depreciation
Depreciation is based on the cost of an asset less its
residual value. Significant components of individual assets
are assessed and if a component has a useful life that is
different from the remainder of that asset, that component
is depreciated separately.
Depreciation is recognised in the statement of profit or
loss on a straight-line basis over the estimated useful
lives of each component of an item of property, plant
and equipment.
Right-of-use lease assets are depreciated over the shorter
of the lease term (including any contractual extensions
that are expected to be exercised) and useful life, on a
straight- line basis, unless it is reasonably certain that the
Group will obtain ownership by the end of the lease term.
The expected useful lives for depreciation purposes are
as follows:
● Hire equipment
2 – 33 years
● Leasehold improvements
over the lease term
● Plant and equipment
2 – 20 years
Depreciation methods, useful lives and residual values
are reviewed at each financial year end and adjusted
if appropriate.
acquiring the inventories, production or conversion costs
and other costs incurred in bringing them to their existing
location and condition.
Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
completion and selling expenses.
(g)
(i)
Impairment
Non-derivative financial assets
Non-derivative financial assets comprise trade and other
receivables and cash and cash equivalents.
Non-derivative financial instruments excluding financial
assets are recognised initially at fair value plus transaction
costs. Subsequent to initial recognition, non-derivative
financial assets are measured at amortised cost less
impairment losses.
A financial asset is recognised if the Group becomes a
party to the contractual provisions of the asset.
Financial assets are derecognised if the Group’s
contractual rights to the cash flows from the financial
assets expire or if the Group transfers the financial asset to
another party without retaining control or substantially all
risks and rewards of the asset.
The Group recognises its financial assets at either
amortised cost or fair value, depending on the contractual
cash flow characteristics of the financial assets.
The classification of financial assets that the Group
held at the date of initial application was based on the
facts and circumstances of the financial assets held at
that date.
Financial assets recognised at amortised cost are
measured using the effective interest method, net of
any impairment loss. Financial assets other than those
classified as financial assets recognised at amortised cost
are measured at fair value with any changes in fair value
recognised in the statement of profit or loss.
(iv)
Hire equipment loss provision
Receivables
A hire equipment loss provision is recognised to cover the
expected loss of equipment on hire. The provision is based
on historical experience of unrecoverable losses incurred
on the return of hire equipment from customers.
(e)
(i)
Intangible assets
Goodwill
All business combinations are accounted for by applying
the acquisition method. Goodwill represents the difference
between the cost of the acquisition and the fair value of
the net identifiable assets acquired. Goodwill is stated at
costs less any accumulated impairment losses.
(f)
Inventories
Inventories are measured at the lower of cost and net
realisable value.
The cost of inventories is based on the weighted average
cost principle, and includes expenditure incurred in
For trade receivables, the Group conducts an ongoing
assessment of expected credit losses (ECL) by analysing
actual loss experience of the Group, arrears, and other
inputs such as exposure or timing. The assessment is
broken down into 4 sectors including Industrial Services,
Civil Infrastructure, Commercial, and Residential. These
sectors are then analysed in a set of 5 stages ranging
from currently due receivables to above 90-days due
receivables. The Group also separately quantifies
receivables due from entities in liquidation/default.
The Group provides for a loss allowance equivalent to the
lifetime expected credit losses from initial recognition of
those receivables.
Losses are recognised in the statement of profit or loss
and other comprehensive income and reflected in an
allowance account against trade receivables.
Acrow Annual Report 2023 | 51
3.
Significant accounting policies (continued)
When a subsequent event causes the amount of
impairment loss to decrease, the decrease is reversed
through the statement of profit or loss and Other
Comprehensive Income.
Obligations for contributions to defined contribution
plans are recognised as an employee benefit expense in
the statement of profit or loss in the periods during which
services are rendered by employees.
(ii)
Non-financial assets
The carrying amounts of the Group’s non-financial assets,
other than inventories and deferred tax assets, are
reviewed at each reporting date to determine whether
there is any indication of impairment, and if any such
indication exists, then the asset’s recoverable amount
is estimated.
For intangible assets, namely goodwill that have
indefinite useful lives or that are not yet available for use,
the recoverable amount is estimated each year at the
same time.
An impairment loss is recognised if the carrying amount
of an asset or its related cash-generating unit (CGU)
exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater
of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time
value of money and the risks specific to the asset.
For the purpose of annual impairment testing applicable
to goodwill, such intangible assets that cannot be tested
individually are grouped together into the smallest group
of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other
assets or CGU.
Impairment losses are recognised in the statement of
profit or loss.
Impairment losses recognised in respect of CGUs are
allocated to reduce the carrying amounts of assets in the
CGU (or group of CGUs) on a pro rata basis.
Impairment losses recognised in prior periods are assessed
at each reporting date for any indications that the loss
has decreased or no longer exists.
An impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable
amount. 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, net
of depreciation or amortisation, if no impairment loss had
been recognised.
(h)
(i)
Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit
plan under which an entity pays fixed contributions into
a separate entity and will have no legal or constructive
obligation to pay further amounts.
52 | Acrow Annual Report 2023
Prepaid contributions are recognised as an asset to
the extent that a cash refund or a reduction in future
payments is available.
Contributions to a defined contribution plan that are due
more than 12 months after the end of the period in which
the employees render the service are discounted to their
present value.
(ii)
Other long-term employee benefits
The Group’s net obligation in respect of long-term
employee benefits other than defined benefit plans is the
amount of future benefit that employees have earned in
return for their service in the current and prior periods plus
related on-costs.
The benefit is discounted to determine its present value,
and the fair value of any related assets is deducted.
The discount rate is the yield at the reporting date on
high quality corporate bonds that have maturity dates
approximating the terms of the Group’s obligations.
The calculation is performed using the projected unit
credit method.
(iii)
Termination benefits
Termination benefits are recognised as an expense when
the Group is demonstrably committed, without realistic
possibility of withdrawal, to a formal detailed plan to
either terminate employment before the normal retirement
date, or to provide termination benefits as a result of an
offer made to encourage voluntary redundancy.
Termination benefits for voluntary redundancies are
recognised as an expense if the Group has made an offer
of voluntary redundancy, it is probable that the offer will
be accepted, and the number of acceptances can be
estimated reliably.
If termination benefits are payable more than 12 months
after the reporting period, the termination benefits are
discounted to their present value.
(iv)
Short-term benefits
Short-term employee benefit obligations are measured on
an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be
paid under short-term cash bonus or profit-sharing
plans if the Group has a present legal or constructive
obligation to pay this amount as a result of past service
provided by the employee and the obligation can be
estimated reliably.
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 (v)
Share-based payments
(ii)
Onerous contracts
The Group provides benefits to selected employees in
the form of share-based payment transactions, whereby
employees render services in exchange for options and/or
performance rights over ordinary shares.
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from a
contract are lower than the unavoidable cost of meeting
its obligations under the contract.
The cost of the share-based payments is measured by
reference to the fair value at the date at which they are
granted and amortized over the expected vesting period
with a corresponding increase in share capital reserve.
If vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on
the best available estimate of the number of share options
expected to vest.
Non-market vesting conditions are included in
assumptions about the number of options that are
expected to become exercisable. Estimates are
subsequently revised if there is any indication that
the number of share options expected to vest differs
from previous estimates. Any adjustment to cumulative
share-based compensation resulting from a revision is
recognised in the current period. The number of vested
options ultimately exercised by holders does not impact
the expense recorded in any period. Upon exercise
of share options, the proceeds received, net of any
directly attributable transaction costs, are allocated to
share capital.
The fair value of share-based payments is appraised
at grant date in accordance with AASB 2 Share-based
Payments. These are independently determined using
a pricing model that considers the exercise price, the
terms of the payment, the vesting and performance
criteria, the impact of the dilution, the non-tradeable
nature of the payment, the share price at grant date,
the expected price volatility of the underlying share, the
comparative share market indices, the expected dividend
yield and the risk-free interest rate for the term of the
share-based payment.
(i)
Provisions
A provision is recognised if, as a result of a past event,
the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that
an outflow of economic benefits will be required to settle
the obligation.
Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the
risks specific to the liability.
The unwinding of the discount is recognised as
finance cost.
(i)
Restructuring
A provision for restructuring is recognised when the Group
has approved a detailed and formal restructuring plan,
and the restructuring either has commenced or has been
announced publicly.
Future operating losses are not provided for.
The provision is measured at the present value of the lower
of the expected cost of terminating the contract and the
expected net cost of continuing with the contract.
Before a provision is established, the Group recognises
any impairment loss on the assets associated with
that contract.
(iii) Make good
A provision for make good is measured at the present
value of the cost of restoring leased properties to their
original condition, at the conclusion of the lease.
(j)
Revenue
Acrow is predominately a provider of falsework, formwork,
scaffolding and screen equipment for hire or sale with
revenue primarily generated via dry hire, project hire
or sale.
The company generates revenue via provision of
equipment hire, services and the sales of product. Revenue
generated from hire of equipment only is referred to as
“dry hire” revenue.
Project hire or “wet hire” revenue includes “dry hire” revenue
plus labour services, cartage services, consumable sales
and/or other services which are recognised over time as
services can be staged progressively as they are rendered.
These forms of contracts may vary in scope; however, all
project hire has one common performance obligation,
being the provision of scaffolding structures to the
customer which includes the scaffolding equipment, the
labour on installation and dismantling, cartage (transport
to and from the customer) and any ancillary materials that
are required to fulfill the obligation.
To determine whether to recognise revenue, the Group
follows a 5-step process:
1) Identifying the contract with a customer
2) Identifying the performance obligations
3) Determining the transaction price
4) Allocating the transaction price to the
performance obligations
5) Recognising revenue when/as performance
obligation(s) are satisfied.
(i)
Hire of equipment
Falsework, formwork, scaffolding and screen equipment
are rented to customers under operating leases with rental
periods averaging six months to less than one year.
The rental can be arranged as dry hire where only
equipment is provided to the customer and revenue is
recognised at fixed rates over the period of hire; or as part
Acrow Annual Report 2023 | 53
3.
Significant accounting policies (continued)
of a project hire where Acrow supplies labour and cartage
services between warehouse and building sites.
Revenue recognition on equipment hire commences once
falsework, formwork, scaffold or screen equipment is either
collected by the customer, delivered to the customer or
once a scaffolding structure has been certified to be safe
and access granted to customers or control otherwise
passes to a customer.
Revenue is recognised over straight-line bases over the life
of the hire agreements per AASB 16 Leases.
(ii)
Labour and cartage services
Revenue from providing scaffolding labour in installation
and dismantling, and equipment cartage, being transport
to and from the customer, are recognised at one or more
points in time as services can be staged progressively as
they are rendered.
Revenue is recognised based on the actual service
provided to the end of the reporting period because the
customer receives and uses the benefits simultaneously.
Labour and cartage services revenue are recognised
over time under AASB 15 Revenue from Contracts
with Customers.
(iii)
Consumable sales and other services
Revenue from sales is measured as the transaction price
net of returns, trade discounts and volume rebates.
Revenue is recognised when control of the goods or
services are transferred to customers which is generally
upon delivery to or collection by the customer depending
on the contract with the customer.
Discounts are recognised as a reduction in revenue until
management determine that it is highly probable that no
significant reversal of revenue will occur.
Revenue recognition of consumable sales and other
services are at a point in time when control passes which
is typically upon delivery or collection as under AASB 15
Revenue from Contracts with Customers.
(k)
Finance income and finance costs
Finance income comprises interest income on funds
deposited. Interest income is recognised as it accrues
in the statement of profit or loss, using the effective
interest method.
Finance costs comprise interest expenses on loans and
borrowings, lease liabilities and, where material, the
unwinding of the discount on provisions.
Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying
asset are recognised in the statement of profit or loss
using the effective interest method.
(l)
Tax
Tax expense comprises current and deferred tax.
Current and deferred tax are recognised in the
statement of profit or loss, except to the extent that it
relates to items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on
the taxable income or (loss) for the year, using tax rates
enacted or substantively enacted at the reporting date,
and any adjustment to tax payable in respect of previous
years. Current tax payable also includes any tax liability
arising from the declaration of dividends.
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognised
for temporary differences on the initial recognition of
assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor
taxable profit or (loss).
Deferred tax is measured at the tax rates that are
expected to be applied to temporary differences when
they reverse, based on the laws that have been enacted
or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses,
tax credits and deductible temporary differences, to the
extent that it is probable that future taxable profits will be
available against which they can be utilised.
Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
(m) Goods and services tax
Revenue, expenses and assets are recognised net of the
amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset
or as part of the expense.
Cash flows included in the statement of cash flows are
on a gross basis. The GST components of cash flows
arising from investing and financing activities which are
recoverable from or payable to the Australian Taxation
Office, are classified as operating cash flows.
54 | Acrow Annual Report 2023
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 (n)
Lease accounting
The Group as a lessee
The Group makes the use of leasing arrangements
principally for the provision of the warehouse/office space,
forklift equipment, motor vehicles and printers. The Group
does not enter into sale and leaseback arrangements.
All the leases are negotiated on an individual basis and
contain a wide variety of different terms and conditions
such as purchase options and escalation clauses. The
Group assesses whether a contract is or contains a lease
at inception of the contract. A lease conveys the right to
direct the use and obtain substantially all of the economic
benefits of an identified asset for a period of time in
exchange for consideration.
Only motor vehicle lease contracts contain both lease and
non-lease components. These non-lease components are
usually associated with servicing and repair contracts.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a
right-of-use asset and a lease liability in its consolidated
statement of financial position. The right-of-use asset
is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct
costs incurred by the Group, an estimate of any costs to
dismantle and remove the asset at the end of the lease,
and any lease payments made in advance of the lease
commencement date (net of any incentives received).
The Group depreciates the right-of-use asset on a
straight-line basis from the lease commencement date to
the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term including any lease
extensions that are likely to be exercised.
The Group also assesses the right-of-use asset
for impairment when such indicators exist. At the
commencement date, the Group measures the lease
liability at the present value of the lease payments unpaid
at that date, discounted using the Group’s incremental
borrowing rate because as the lease contracts are
negotiated with third parties it is not possible to determine
the interest rate that is implicit in the lease.
The incremental borrowing rate is the estimated rate that
the Group would have to pay to borrow the same amount
over a similar term, and with similar security to obtain an
asset of equivalent value.
Lease payments included in the measurement of the
lease liability are made up of fixed payments (including in
substance fixed), variable payments based on an index or
rate, amounts expected to be payable under a residual
value guarantee and payments arising from options
reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be
reduced by lease payments that are allocated between
repayments of principal and finance costs. The finance
cost is the amount that produces a constant periodic rate
of interest on the remaining balance of the lease liability.
The lease liability is reassessed when there is a change
in the lease payments. Changes in lease payments
arising from a change in the lease term or a change
in the assessment of an option to purchase a leased
asset. The revised lease payments are discounted using
the Group’s incremental borrowing rate at the date of
reassessment when the rate implicit in the lease cannot be
readily determined.
The amount of the remeasurement of the lease liability is
reflected as an adjustment to the carrying amount of the
right-of-use asset. The exception being when the carrying
amount of the right-of-use asset has been reduced to
zero then any excess is recognised in profit or loss.
Payments under leases can also change when there is
either a change in the amounts expected to be paid
under residual value guarantees or when future payments
change through an index or a rate used to determine
those payments, including changes in market rental rates
following a market rent review.
The remeasurement of the lease liability is dealt with by
a reduction in the carrying amount of the right-of-use
asset to reflect the full or partial termination of the lease
for lease modifications that reduce the scope of the lease.
Any gain or loss relating to the partial or full termination of
the lease is recognised in profit or loss.
The right-of-use asset is adjusted for all other lease
modifications. The Group has elected to account for
low-value assets using the practical expedients. These
leases relate to mobile IT devices such as computer
monitors, laptops and mobile telephones. Instead of
recognising a right-of-use asset and lease liability, the
payments in relation to these are recognised as an
expense in profit or loss on a straight-line basis over the
lease term.
The Group as a lessor
As a lessor the Group classifies its leases as either
operating or finance leases. A lease is classified as a
finance lease if it transfers substantially all the risks and
rewards incidental to ownership of the underlying asset
and classified as an operating lease if it does not.
Accounting standards and interpretations
(o)
issued but not yet effective
Certain new accounting standards and interpretations
have been published that are not mandatory for
30 June 2023 reporting period and have not been early
adopted by the Company.
These standards are not expected to have material
impact on the entity in the current or future reporting
periods and on foreseeable future transactions.
● AASB 2021-2 Amendments to Australian Accounting
Standards – Disclosure of Accounting Policies and
Definition of Accounting Estimates;
● AASB 2021-5 Amendments to Australian Accounting
Standards – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction;
Acrow Annual Report 2023 | 55
3.
Significant accounting policies (continued)
● AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or
Non-current; and
● AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants.
2023
2022
30,173,235
34,449,251
6,424,309
5,936,777
39,905,960
44,597,902
76,503,504
84,983,930
73,310,841
55,842,988
149,814,345
140,826,918
2023
2022
18,680,621
7,518,603
(6,656,194)
(2,562,816)
12,024,427
4,955,787
2023
2022
(1,142,196)
(748,453)
(975,831)
(931,428)
(890,752)
(473,438)
(837,125)
(419,487)
(779,347)
(217,698)
(430,646)
(402,058)
(423,731)
(339,708)
(286,300)
(378,547)
(347,101)
(537,135)
(5,932,869)
(4,628,112)
4. Revenue
In dollars
Revenue from contracts with customers
Labour services transferred over time
Cartage services transferred over time
Consumable sales and other services transferred at a point in time
Revenue from operating leases
Hire of equipment
5. Other income
In dollars
Disposal of property, plant and equipment
Proceeds
Written down value
Net gain on disposal of property, plant and equipment
6. Other expenses
In dollars
Restructuring, preparation of new yard and other significant costs
Audit, tax and legal expenses
Travelling expenses
Utilities
Property costs
Plant & equipment operating expenses
Repair & maintenance
Motor vehicle expenses
Others
56 | Acrow Annual Report 2023
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023
7.
Finance costs
In dollars
Finance costs
Unwinding interest on deferred consideration
Interest expense on financial liabilities
Interest expense on leases
Borrowing costs
Net finance costs from continuing operations
8.
Income tax expense
In dollars
Current income tax expense
Deferred income tax expense
Under provision for income tax in prior year
Recognition of previously unrecognised deferred tax not brought to account
Income tax expense attributable to profit
In dollars
Profit before income tax
Income tax (expense) using the Group’s domestic tax rate (30%)
Income tax effects of amounts which are not deductible / (taxable) in calculating
taxable income:
Non-deductible losses on overseas entities
Non-deductible share-based payment expense
Non-deductible acquisition expense
Non-deductible impairment expense
Other non-deductible expenses
(Under) provision for income tax in prior year
2023
2022
–
(33,960)
(2,937,522)
(1,833,618)
(1,327,157)
(1,509,802)
(216,384)
(135,736)
(4,481,063)
(3,513,116)
2023
2022
(7,692,833)
(1,584,228)
(1,862,236)
(360,775)
(96,140)
4,298,469
(17,179)
–
(5,352,740)
(1,962,182)
2023
2022
28,809,780
17,656,350
(8,642,934)
(5,296,905)
(46,396)
(965,061)
-
(17,782)
(26,919)
(96,140)
(288)
(349,400)
(31,644)
(17,989)
(17,209)
(17,179)
–
Recognition of previously unrecognised deferred tax not brought to account
4,298,469
Utilisation of prior year tax losses not previously recognised
Income tax expense attributable to profit
144,023
3,768,432
(5,352,740)
(1,962,182)
9. Cash and cash equivalents
In dollars
Cash at bank
Bank overdraft
2023
2022
4,939,396
3,010,433
–
(3,001,005)
4,939,396
9,428
Acrow Annual Report 2023 | 57
10. Trade and other receivables
In dollars
Trade receivables
Expected credit loss provision
Movement in the expected credit loss provision:
In dollars
At 1 July
Opening balance
Expected credit loss recognised during the year
Receivables written off during the year
Balance at 30 June
2023
2022
41,668,122
35,821,806
(2,489,689)
(1,458,939)
39,178,433
34,362,867
2023
2022
(1,458,939)
(1,178,190)
(3,145,000)
(650,000)
2,114,250
369,251
(2,489,689)
(1,458,939)
Current
More than
30 days
More than
60 days
More than
90 days
Default
Total
2023
Expected credit loss rate
0.03%
0.20%
1.26%
27.71%
100.00%
Gross carrying amount
21,286,667
9,270,500
2,163,810
8,102,604
844,541
41,668,122
Lifetime expected credit loss
6,386
18,541
27,264
1,592,957
844,541
2,489,689
2022
Expected credit loss rate
0.02%
0.30%
4.22%
15.98%
100.00%
Gross carrying amount
17,237,806
11,002,000
2,161,000
4,867,517
553,483
35,821,806
Lifetime expected credit loss
3,448
33,006
91,194
777,808
553,483
1,458,939
11.
Inventories
In dollars
Finished goods
12. Contract assets, prepayments and other assets
In dollars
Contract assets
Current
Other receivables
Prepayments
58 | Acrow Annual Report 2023
2023
2022
11,397,484
14,872,186
11,397,484
14,872,186
2023
42,814
42,814
2022
111,927
111,927
935,144
807,617
2,915,521
4,268,215
3,850,665
5,075,832
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023
13. Assets and liabilities held for sale
In dollars
Assets classified as held for sale
Liabilities associated with assets held for sale
2023
–
–
2022
72,579
67,063
Asset held for sale relates to exploration assets of Noble Mineral Resources Ghana Limited (NMRGL), this was impaired
during FY2023. The Company intends to wind up NMRGL and is assessing various options.
14. Property, plant and equipment
In dollars
Cost
Land and
buildings
Plant and
equipment
Hire
equipment
Total
Balance at 1 July 2021
475,989
13,071,560
92,750,724
106,298,273
Additions
Disposals
Balance at 30 June 2022
Cost
Balance at 1 July 2022
Additions
Disposals
Balance at 30 June 2023
Depreciation and impairment losses
Balance at 1 July 2021
Depreciation for the year
Disposals
Hire equipment loss adjustment
Balance at 30 June 2022
Balance at 1 July 2022
Depreciation for the year
Disposals
Hire equipment loss adjustment
Balance at 30 June 2023
Carrying amounts
At 1 July 2021
At 30 June 2022
At 1 July 2022
At 30 June 2023
–
–
1,020,433
21,358,057
22,378,490
(42,457)
(2,950,875)
(2,993,332)
475,989
14,049,536
111,157,906
125,683,431
475,989
14,049,536
111,157,906
125,683,431
45,025
464,888
51,431,620
51,941,533
–
(39,323)
(8,405,822)
(8,445,145)
521,014
14,475,101
154,183,704
169,179,819
373,764
10,976,005
11,939,650
23,289,419
17,467
500,611
6,869,271
7,387,349
–
–
391,231
391,231
(41,319)
–
(389,197)
(53,257)
(430,516)
(53,257)
11,435,297
18,366,467
30,192,995
11,435,297
18,366,467
30,192,995
18,171
512,133
8,655,923
9,186,227
–
–
(30,675)
(1,758,276)
(1,788,951)
–
–
–
409,402
11,916,755
25,264,114
37,590,271
102,225
2,095,555
80,811,074
83,008,854
84,758
84,758
111,612
2,614,239
92,791,439
95,490,436
2,614,239
92,791,439
95,490,436
2,558,346
128,919,590
131,589,548
Property, plant and equipment are at times sold prior to the end of its useful life either at the request of the customers
or due to loss. “Loss on Hire” revenue are charged as Other Income (see note 5) where the customers are liable. On
acquisition of property plant and equipment there is no intention to dispose through sale.
Acrow Annual Report 2023 | 59
Leases
15.
The Acrow group leases various properties, forklifts, motor vehicles and printers. Property lease terms are up to 10 years
and often include extension options, forklift lease terms are up to 7 years, motor vehicle lease terms are from 1 to 3 years,
whilst all printers are for a 5-year lease term.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the group.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of
financial performance over the lease period to produce a constant periodic rate of interest on the remaining balance of
the liability for each period.
The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Payments on IT equipment including laptops and mobile devices have been treated as low-value assets, are recognised
on a straight-line basis as an expense in the statement of financial performance.
Lease amounts recognised in the Statement of Financial Position:
In dollars
Right-of-use assets
Properties
Forklifts and office equipment
Motor vehicles
Total right-of-use assets
Lease liabilities
Current
Non-current
Total lease liabilities
2023
2022
18,215,522
22,218,881
1,521,853
1,860,910
351,510
398,929
20,088,885
24,478,720
6,375,328
4,964,215
17,537,389
23,285,254
23,912,717
28,249,469
Additions to the right-of-use assets during FY2023 were $1,820,753 (FY2022: $1,047,654).
Lease amounts recognised in the Statement of profit or loss and Other Comprehensive Income:
In dollars
Depreciation charge for right-of-use assets:
Properties
Forklifts and office equipment
Motor vehicles
Total depreciation charge for right-of-use assets
Lease payments include:
2023
2022
4,920,155
4,765,763
731,223
385,351
646,144
271,098
6,036,729
5,683,005
● Variable lease payments that are based on an index or rate;
● Amounts expected to be payable by the lessee under residual value guarantees;
● The exercise price of a purchase option if Acrow is reasonably certain to exercise that option;
● Fixed payments (including in-substance fixed payments), less any lease incentives receivable; and
● Payment of penalties for terminating the lease, if the lease term reflects Acrow exercising that option.
60 | Acrow Annual Report 2023
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 Lease payments are discounted using the interest rate implicit in the lease, if determinable or at the Group’s incremental
borrowing rate.
In dollars
Lease amounts included in the Statement of cashflows
Lease payments
Interest expense (included in finance costs)
Total amount paid
Expenses relating to low value asset leases
Lease payments not recognised as liabilities
2023
2022
5,831,150
1,327,157
5,145,257
1,509,802
7,158,307
6,655,059
135,688
138,788
The Group has elected not to recognise a lease liability for low value leases (where an asset is valued at USD5,000 or
lower per AASB 16). Payments for these are recognised on a straight-line basis as an expense in the statement of profit
or loss.
Low value assets are predominately portable IT and telecommunication equipment. The undiscounted cash flows on the
remaining lease term at the reporting date are as follow:
In dollars
Less than one year
Between one and five years
16.
Intangible assets
In dollars
Goodwill
2023
94,536
100,425
194,961
2022
114,968
194,961
309,929
2023
2022
7,428,704
7,428,704
7,428,704
7,428,704
All business combinations are accounted for by applying the acquisition method. Goodwill represents the difference
between the cost of the acquisition and the fair value of the net identifiable assets acquired.
Goodwill is stated at costs less any accumulated impairment losses.
Acrow annually tests goodwill with indefinite useful lives for impairment. An asset that does not generate independent
cash flows is tested for impairment as part of a cash generating unit (CGU).
Where there is an impairment loss, it is recognised in the statement of profit or loss when the carrying amount of an asset
exceeds its recoverable amount. The asset’s recoverable amount is estimated based on the higher of its value-in-use
and fair value less costs to sell.
The recoverable amount of a CGU is determined based on a value-in-use calculation. The calculations use cash flow
projections based on a one-year budget that has been approved by the board of directors and then a four-year
forecast approved by the management. Cash flows beyond the five-year period* are extrapolated using the cash flows
for year 5 and the estimated long-term growth rates.
The discount rate used is the Group’s weighted average cost of capital. The terminal growth rate reflects the
management’s outlook on growth. The discount rate used is the Group’s weighted average cost of capital. The terminal
growth rate reflects the management’s outlook on growth.
Average growth rate 1 – 5 years
Terminal growth rate
Post-tax discount rate
2023
14.7%*
1%
11.8%
2022
57.5%
1%
10.6%
*
Increase in EBIT from 2023 to 2024 is 65% and between 1.1% to 2.9% for the following four years. The large increase in the 2024 year is due to
strong organic growth in sales from expanding geographically and acquiring Premium Screens to the product range that has improved both
Natform’s and the Group’s capacities and capabilities.
Acrow Annual Report 2023 | 61
16.
Intangible assets (continued)
In dollars
Opening goodwill balance
Additions
Reductions
Closing balance
In dollars
Allocation to CGU Groups
Natform companies
Other
2023
2022
7,428,704
7,428,704
–
–
–
–
7,428,704
7,428,704
2023
2022
7,301,902
7,301,902
126,802
126,802
7,428,704
7,428,704
Impairment testing on Natform companies
Goodwill of $7,301,902 was recorded at 31 August 2018 with respect to the acquisition of Natform Pty Ltd and Natform
(QLD) Pty Ltd. The recoverable amount of CGU was determined based on value-in-use calculations which require the
use of assumptions. The calculations use cash flow projections based on financial budgets approved by management
covering a five-year period.
Sensitivity
Management has made judgements and estimates in respect of impairment testing of goodwill. Should these
judgements and estimates not occur, the carrying value of goodwill may vary. Any reasonable change in the key
assumptions on which the estimates and/or the discount rate are based would not cause the carrying amount of the
CGU to exceed the recoverable amount.
17. Trade and other payables
In dollars
Current trade payables
Trade payables
Accrued expenses
Current other payables
Deferred consideration on asset acquisitions
Non-current other payables
Deferred consideration on asset acquisitions
2023
2022
9,565,151
12,344,200
5,324,972
9,139,827
14,890,123
21,484,027
3,000,000
4,000,000
–
–
62 | Acrow Annual Report 2023
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 18. Employee benefits
In dollars
Current
Annual leave
Long service leave
Other employee benefits
Non-current
Long service leave
2023
2022
2,175,165
2,377,838
1,949,972
1,913,103
2,061,230
1,868,513
6,186,367
6,159,454
628,024
628,024
444,988
444,988
All employees have defined contribution plans for superannuation and the expense recognised during the year was
$3,731,993 (2022: $3,334,148).
19. Loans and borrowings
In dollars
Current
Non-current
Borrowings are represented by the following finance facilities:
Secured amortising business loan of $4,125,000 commenced in July 2022 maturing
July, 2025
Secured interest only business loan of $16,000,000 commenced in March 2023
maturing July, 2024
2023
2022
21,907,696
17,001,678
29,382,836
15,848,299
51,290,532
32,849,977
2,860,000
16,000,000
–
–
Secured amortising business loan of $18,168,000
8,543,000
11,483,000
Equipment finance facility, revolving 3-year limit of $22.0m (Jun 22: $20.0m)
14,869,132
13,450,245
Headroom
Trade finance facility, revolving 180-day limit of $9.02m (Jun 22: $8.0m)
Headroom
Working capital facility, $11.0m (Jun 22: $8.4m) including $2.0m bank guarantee (Jun 22:
$1.4m), $9.0m bank overdraft (Jun 22: $6.6m) and $0m Import Letters Credit Facility
(Jun 22: $0.4m)
Headroom
Borrowings utilised
Headroom
Total accessible borrowing amount
Borrowings utilised and committed
Less: Bank overdraft utilised excluded from loans and borrowings disclosed separately
on the Statement of Financial Position
Less: Bank guarantee utilised not drawn
Total Loans and Borrowings
7,130,868
6,549,755
9,018,400
7,916,732
–
83,268
1,976,583
4,336,853
9,023,417
3,663,147
53,267,115
37,186,830
16,154,285
10,296,170
69,421,400
47,483,000
53,267,115
37,186,830
–
(3,001,005)
(1,976,583)
(1,335,848)
51,290,532
32,849,977
All borrowings are secured by interlocking guarantees where each company within the group jointly and severally
guarantees the repayment of loans to the lending institution. All loans are secured over the assets and inventory of
the Group.
Covenants are reviewed half-yearly with the lender. The Group has complied with all the respective borrowing covenants
throughout the year ended 30 June 2023. The covenant measures include Debt Service Cover ratio, Equity ratio and
Financial Debt to EBITDA ratio.
Acrow Annual Report 2023 | 63
19. Loans and borrowings (continued)
Interest rates on secured amortised business loans are variable and dependent on prevailing market rates and
bank margins.
All borrowing costs incurred in the year have been expensed.
20. Provisions
In dollars
Make good
2023
469,274
469,274
2022
469,274
469,274
A provision for make good is measured at the present value of the cost of restoring leased properties to their original
condition, at the conclusion of the lease. No property lease had been entered into during the year that require
further addition.
21. Deferred income tax liability and current income tax liability
In dollars
2023
2022
Deferred income tax liability movement during the year:
Opening balance at 1 July
6,990,415
6,596,723
Recognition of previously unrecognised deferred tax not brought to account (v)
(4,298,469)
Changes to estimates from prior years
Provisions
Accruals
Property, plant and equipment
Revenue tax loss
Closing balance at 30 June
Income tax liabilities
Opening balance at 1 July
Changes to estimates from prior years
Tax paid
Current tax liabilities
Carried forward unpaid tax liabilities
Unrecognised deferred tax assets
Deferred tax assets not recognised for the following items:
Revenue tax losses
Capital losses
Temporary differences
374,674
(394,104)
(98,200)
2,354,539
4,978,294
–
32,919
(250,978)
74,124
537,627
–
9,907,149
6,990,415
1,869,031
(278,534)
(2,956,964)
310,332
(15,739)
(9,790)
2,714,539
1,584,228
1,348,072
1,869,031
1,351,811
11,200,229
411,923
181,384
202,441
(5,921,940)
1,945,118
5,480,730
While tax losses and temporary differences do not expire under current tax legislation, deferred tax assets have not been
recognised in respect of these items as certain subsidiaries have experienced a number of years without taxable income
and therefore recovery is not considered probable. The tax losses do not expire under current tax legislation.
The potential benefit of the deferred tax asset in respect of tax losses carried forward will only be obtained if:
(i) The subsidiaries continue to derive future assessable income of a nature and an amount sufficient to enable the
benefit to be realised;
(ii) The subsidiaries continue to comply with the conditions for deductibility imposed by the law;
(iii) No changes in tax legislation adversely affect the subsidiaries in realising the asset and;
64 | Acrow Annual Report 2023
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 (iv) The subsidiaries pass the continuity of ownership test, or the same business test as outlined by the Australian
Taxation Office.
(v) Net deferred tax asset of Acrow Formwork & Scaffolding Pty Ltd were previously unrecognised due to uncertainty of
realisation, however it has been able to derive assessable income and meet the above four conditions in recent years
that enable the benefit from the tax loss to be realised.
22.
Issued capital
In units
Number of shares
On issue of 1 July
Issue of DRP shares (i)
Issue of shares for cash
Shares issued through conversion of performance rights (ii)
Exercise of share options (iii)
Exercise of restricted rights
Issue of loan funded shares (iv)
2023
2022
252,952,199
219,377,208
1,844,018
2,138,792
–
27,631,579
7,128,149
2,220,190
–
2,194,500
3,165,120
280,500
359,000
–
266,339,056
252,952,199
(i) 1,269,071 units of ordinary shares were issued at $0.495 per share following the final dividend declaration on
30 November 2022 pursuant to the Dividend Reinvestment Plan (DRP); 574,947 units of ordinary shares were issued at
$0.7242 per share following the FY2023 interim dividend declaration on 31 May 2023 also pursuant to the DRP.
(ii) 7,128,149 units of ordinary shares were issued during the year through conversion of performance rights granted under
Long Term Variable Remuneration (LTVR) plan.
(iii) 2,020,190 units of shares were issued during the year against 4,860,000 units of options exercised without cash,
forfeiting 2,839,810 units of options at market price; and 200,000 units exercised with cash at $0.20 per unit.
(iv) 2,194,500 units of Loan Funded Shares were exercised at $0.20 per share. After applying accumulated dividend
since FY2019, balance on the proceed was $260,049. This was immediately settled by cash, thus no loan has been
drawn upon.
The holders of these shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at general meetings of the Group.
Dividends
Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been
approved prior to the reporting date.
The following dividends were declared and paid by the Group during the year:
In dollars
2023
2022
Dividends on ordinary shares declared and paid:
Final dividend in respect of the previous reporting period:
FY2022: 1.50 cents per share (FY2021: 1.15 cents per share)
– Paid in cash
– Paid via DRP
Interim dividend for the current reporting period:
FY2023: 1.70 cents per share (FY2022: 1.20 cents per share)
– Paid in cash
– Paid via DRP
3,270,403
2,239,483
628,190
635,683
4,100,428
2,702,944
416,425
323,078
8,415,446
5,901,188
Acrow Annual Report 2023 | 65
22.
Issued capital (continued)
A 60% franked dividend of $3,898,594 for the year ended 30 June 2022 was paid on 30 November 2022 at 1.50 cents per
share with 1,269,071 new shares issued as part of the DRP.
An 85% franked interim dividend of $4,516,853 for FY2022 was paid on 31 May 2023 at 1.70 cents per share with 574,947
new shares issued as part of the DRP.
Subsequent to balance date, the Directors declared a dividend of 2.70 cents per share, 100% franked on 14 August 2023.
Franking credit balance was $833,029 at 30 June 2023 (2022: $523,984).
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising on translation of the Group entities
that do not have functional currency of AUD dollars and have been translated for presentation purpose.
Share-based payments reserve
The share-based payments reserve is used to recognize the grant date fair value of shares issued to employees and
directors that have not yet vested.
23. Capital management
Management monitors the capital of the Group, in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and borrowings.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
24. Earnings per share
Basic EPS is calculated by dividing profit for the year attributable to ordinary equity holders of the Parent by the
weighted average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the net profit attributable to ordinary equity holders of the Parent by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares
that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following table reflects the income and share data used in the basic and diluted EPS computations:
In dollars
Earnings reconciliation
Profit excluding significant items
Net share-based payments and significant items*
Net profit after tax
2023
2022
30,488,289
17,812,912
(7,031,249)
(2,118,744)
23,457,040
15,694,168
* Significant items are comprised of share-based payments, restructuring costs and preparation of new yards as in note 6; and for FY2023 the
initial recognition of deferred tax of Acrow Formwork & Scaffolding Pty Ltd $2.6m.
Number of ordinary shares:
Weighted average number of ordinary shares used in the calculation of basic EPS
261,861,124
248,515,534
Weighted average number of ordinary shares used in the calculation of diluted EPS
269,961,010
258,794,953
2023
2022
Cents per share:
Basic EPS excluding significant items (cents per share)
Diluted EPS excluding significant items (cents per share)
Basic EPS (cents per share)
Diluted EPS (cents per share)
66 | Acrow Annual Report 2023
11.64
11.29
8.96
8.69
7.17
6.88
6.32
6.06
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 25. Capital commitments
In dollars
Capital commitments
2023
2022
Capital expenditure contracted for at the reporting date but not recognised as
liabilities as follows:
Plant and equipment
5,920,251
2,382,900
26. Reconciliation of cash flows from operating activities
In dollars
Cash flows from operating activities
Profit
Adjustments for:
– Depreciation and impairment
– Depreciation on right–of–use assets
– Hire equipment loss provision
– (Gain) on disposal of assets
– Share–based payment
Net changes in working capital:
– Trade and other receivables
– Inventories
– Contract assets
– Prepayments and other assets
– Assets held for sale
– Trade and other payables
– Provisions and employee benefits
– Liabilities associated with assets held for sale
– Current income tax liabilities
– Deferred income tax liabilities
– Lease termination
Cash generated from operating activities
Finance costs
Net cash from operating activities
2023
2022
23,457,040
15,694,168
9,186,227
7,387,349
6,036,729
5,683,003
–
(53,257)
(12,024,427)
(4,955,787)
3,216,871
1,164,668
(4,815,566)
(9,751,131)
3,474,702
(5,913,632)
69,113
663,241
1,225,167
(1,457,455)
72,579
(6,072)
(6,593,955)
(3,918,210)
209,949
1,353,377
(69,002)
7,041
(520,959)
1,558,700
2,916,734
(152,495)
393,692
–
25,688,707
7,849,695
4,181,064
3,513,116
29,869,771
11,362,811
27. Remuneration of auditors
During the year the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd (GT) as the
auditor of the parent entity.
In dollars
Audit and review of financial reports
Group and controlled entities
Total audit and review of financial reports
Other assurance services
Tax compliance services
Total other non-audit services
Total services provided by GT
2023
2022
463,485
463,485
21,169
211,788
211,788
696,442
335,315
335,315
12,700
111,180
111,180
459,195
Acrow Annual Report 2023 | 67
28. Key management personnel and related parties
Key management personnel are those persons having authority and responsibility of planning, directing and controlling
the activities of the Group, directly or indirectly, including any director, whether executive or otherwise, of the Group.
In dollars
Key management personnel compensation for the period:
● Short-term employment benefits
● Long term employment benefits
● Post-employment benefits
● Share-based payments
Total compensation paid to key management personnel
Other related party transactions
2023
2022
1,482,551
1,778,441
110,739
50,584
1,069,508
2,713,382
96,309
49,810
23,792
1,948,352
With the resignation of Margaret Prokop in December 2021, rental payments in FY2023 (2022: $1,057,924) and outstanding
balances at reporting date (2022: $48,612) to her companies are no longer considered as related party transactions;
similarly with the cessation of manufacturing agreement with Nat Pty Ltd in May 2022, no transactions occurred in
FY2023 (2022: $1,057,924) or are outstanding at reporting date (2022: $12,496).
All intercompany transactions between the parent entity and the subsidiaries and amongst the subsidiaries have been
eliminated on consolidation.
29. Share-based payments
Loan Funded Shares
There were 2,194,500 units of Loan Funded Shares carried forward from FY2022 with exercise price $0.20 per share. After
applying accumulated dividend since FY2019, balance on the proceed was $260,049. This was immediately settled by
cash, thus no loan has been drawn upon.
No further loan funded shares had been granted in the reporting year, total number of outstanding shares at
30 June 2023 were nil (2022: 2,194,500).
Reconciliation of outstanding loan funded share options:
The number and weighted average exercise prices of loan funded options were as follows:
2023
2022
Outstanding at 1 July
Granted during the year
Exercised during the year
Outstanding at 30 June
Weighted
average
exercise price
Weighted
average
exercise price
Number
Number
2,194,500
$0.20
2,475,000
–
–
–
(2,194,500)
$0.20
(280,500)
–
–
2,194,500
$0.20
–
$0.20
$0.20
At 30 June 2023 the Group had the following share-based payment arrangements.
Options
During the period, 200,000 units were exercised at 20 cents per share with $40,000 proceeds received.
900,000 units were exercised at 40 cents per share cashless and 3,960,000 units were exercised at 50 cents per
share cashless, by forfeiting a combined total of 2,839,810 units at market prices for the issue of 2,020,190 units of
ordinary shares.
1,500,000 units were cancelled due to termination of employment.
No further options had been granted in the reporting year, total number of outstanding units on 30 June 2023 were
300,000 (2022: 6,860,000).
Balance of all outstanding options at balanced date are as follow:
68 | Acrow Annual Report 2023
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 Grant date
Expiry date
Exercise price
options Exercise price
2023
2022
Number of
13 December 2017
13 December 2022
14 January 2019
14 January 2024
4 March 2019
16 July 2019
Balance at 30 June
4 March 2024
16 July 2024
Reconciliation of outstanding share options:
$0.20
$0.50
$0.50
$0.40
–
–
–
300,000
300,000
$0.20
$0.50
$0.50
$0.40
Number of
options
200,000
5,100,000
360,000
1,200,000
6,860,000
2023
2022
Weighted
average
exercise price
Weighted
average
exercise price
Number
$0.47
6,910,000
$0.47
–
$0.47
$0.50
$0.40
–
–
(50,000)
6,860,000
–
–
$0.20
$0.47
Number
6,860,000
–
(5,060,000)
(1,500,000)
300,000
Outstanding at 1 July
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at 30 June
Performance Rights
Carried forward from FY2022, there were a total of 17,184,826 units Performance Rights (LTVR 1-8) outstanding which
were granted based on Earnings Per Share (EPS) and Total Shareholder Return (TSR) performance hurdles over FY2021 to
FY2024 periods. There are eight tranches and their movements are summarised as follow:
Long term variable incentives
Measurement period
Hurdle
Vesting status on 30 June 2023
Outstanding as of 1 July (i)
Grants / (cancellations) of issues
Unvested or forfeiture
LTVR 1
FY2022
TSR
Vested
2,230,405
(43,000)
–
LTVR 2
FY2022
EPS
Vested
6,691,213
(129,000)
(275,614)
Vested and exercised as ordinary shares
(1,828,405)
(5,010,244)
Balance outstanding 30 June 2023
359,000
1,276,355
LTVR 3
FY2021
TSR
Lapsed
–
–
–
–
–
Long term variable incentives
Measurement period
Hurdle
Vesting status at 30 June 2023
Outstanding as of 1 July
Grants / (cancellations) of issues (ii)
Unvested or forfeiture
Vested and exercised as ordinary shares
LTVR 5
FY2023
TSR
LTVR 6
FY2023
EPS
LTVR 7
FY2024
TSR
Unvested
Unvested
Unvested
Unvested
1,792,217
537,147
–
–
1,792,217
2,158,637
2,158,637
537,147
537,147
537,147
–
–
–
–
–
–
Balance outstanding 30 June 2023
2,329,364
2,329,364
2,695,784
2,695,784
(i) 8,474,004 units of LTVR 1 & 2 vested (vesting outcome of 100% and 95.8% respectively) during the FY2023, of which
6,838,649 had been exercised, along with LTVR 4 of which 289,500 units had been exercised, leaving balance of
1,707,355 units vested and exercisable at reporting date.
Acrow Annual Report 2023 | 69
LTVR 4
FY2021
EPS
Vested
361,500
–
–
(289,500)
72,000
LTVR 8
FY2024
EPS
29. Share-based payments (continued)
(ii) 2,148,588 units of LTVR 5 to 8 were granted to
Steven Boland (CEO) pursuant to the Annual General
Meeting held on the 15 November 2022, bringing total
performance rights to 10,050,296 units, unvested at
reporting date.
A further 745,374 units of Performance Rights (LTVR 9 &
10) were granted to senior managers on 12 August 2022,
with similar performance conditions as LTVR 5 & 6, these
were granted based on Earnings Per Share (EPS) and
Total Shareholder Return (TSR) performance hurdles over
FY2023 periods.
Total number of all outstanding performance rights on
30 June 2023 were 12,503,025 units (2022: 17,184,826).
Performance rights granted in FY2022 and FY2023 (LTVR 5
to 10) have the following terms:
(i) Exercise price: nil;
The model inputs for the performance rights (LTVR 5 to 8)
granted on the 1 June 2022 included:
a) Exercise price: nil.
b) Share price at grant date of 1 June 2022 was $0.48.
c) Expected price volatility between 14% and 33%- based
on comparable companies.
d) Expected dividend yield 5.1%.
e) Risk-free interest rate between 2.25% and 3.6%.
The model inputs for the performance rights (LTVR 9
& 10) granted to senior Managers on the 12 August 2022
included:
a) Exercise price: nil.
b) Share price at grant date of 12 August 2022 was $0.51.
c) Expected price volatility between 21.3% and 38.3% –
(ii) Conversion: upon vesting, conversion to shares on a
based on comparable companies.
1 for 1 basis;
(iii) Dividends: not entitled until performance rights
are exercised;
(iv) Vesting hurdles:
a. 50% of each issue measured on Earnings per share
(EPS) criteria specifically “Net profit after tax /
Weighted average number of shares on issue”.
i.
ii.
A threshold cumulative return of 8% is required
below which no vesting will occur.
A target return of 10% will vest, either 50% for
executives or 62.5% for senior managers, of
performance rights and pro rata between 8%
and 10%.
iii. Above 10% return up to a maximum of 20%
return the balance of the performance rights will
vest on a pro rata basis.
b. 50% of each issue measured on Total Shareholder
return (TSR) criteria. This compares the share price
and dividends through the measurement period to
the ASX Small Industrials Index.
i.
ii.
A threshold cumulative return equal to the
market is required below which no vesting
will occur.
A target return of 130% of the index TSR will
vest, either 50% for executives or 62.5% for senior
managers, of performance rights and pro rata
between index return and 130% of index return.
iii. Above 130% of index return up to a maximum
of 160% index return the balance of the
performance rights will vest on a pro rata basis.
c. The performance rights will be measured between
1 July 2020 and 30 June 2023 for the 2023 issue and
1 July 2021 and 30 June 2024 for the 2024 issue.
70 | Acrow Annual Report 2023
d) Expected dividend yield 4.7%.
e) Risk-free interest rate at 3.2%.
The model inputs for the performance rights (LTVR
5 to 8) granted to Steven Boland (CEO) on the
15 November 2022 included:
a) Exercise price: nil.
b) Share price at grant date of 15 November 2022
was $0.58.
c) Expected price volatility between 17.9% and 37.4% –
based on comparable companies.
d) Expected dividend yield 5.2%.
e) Risk-free interest rate between 3.4% and 3.5%.
30. Financial risk management
Risk management objectives and policies
The Group’s activities expose it to a variety of financial
risks: market risk (including foreign exchange risk, interest
rate risk), credit risk and liquidity risk. The Group’s overall
risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group.
The Group uses derivative financial instruments such
as foreign exchange contracts to hedge certain risk
exposures. Derivatives are exclusively used for economic
hedging purpose and are not used as speculative or
trading instruments.
The Group uses different methods to measure different
types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate, foreign
exchange and other price risks, and aging analysis for
credit risk.
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 There was no open foreign exchange contract at
30 June 2023 and 30 June 2022.
Fair value hierarchy
The fair value of financial assets and financial liabilities
must be estimated for recognition and measurement or for
disclosure purposes.
Fair value inputs are summarised as follows:
Fair value hierarchy is re-assessed annually for any
change in circumstance that may suggest a revised level
be assigned to a type of balance measured at fair value.
The Group’s risk management is coordinated by
management, in close cooperation with the Board of
Directors, and focuses on actively securing the Group’s
short to medium-term cash flows by minimising the
exposure to financial markets.
Level 1: The fair value of financial instruments traded in
active markets (such as publicly traded derivatives, and
trading and available-for-sale securities) is based on
quoted market prices at the end of the reporting period.
The Group does not actively engage in the trading
of financial assets for speculative purposes. The most
significant financial risks to which the Group is exposed
are described below.
Level 2: The fair value of financial instruments that are not
traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques
which maximise the use of observable market data and
rely as little as possible on entity specific estimates. If all
significant inputs required to fair value an instrument are
observable, the instrument is included in Level 2.
Level 3: If one or more of the significant inputs is not based
on observable market data, the instrument is included in
Level 3.
The fair value hierarchy was not applicable for the year
ended 30 June 2023, as the Group held no financial assets
or liabilities that required valuation.
Market risk analysis
The Group is exposed to market risk through its use of
financial instruments and specifically to interest rate risk
and certain other price risks, which result from its operating
activities.
Exposure to currency risk
As at 30 June 2023 the Group held the below AUD
equivalent of foreign currency risks in USD, EUR and HKD:
30 June 2023
30 June 2022
In dollars
Trade payables
USD
EUR
HKD
USD
EUR
4,796,939
682,466
20,880
2,728,137
768,196
Purchase orders at 30 June
11,695,444
2,524,055
359,140
3,479,939
1,695,780
HKD
191,557
232,824
–
–
–
–
(59,369)
–
16,492,383
3,206,521
380,020
6,148,707
2,463,976
424,381
Cash at Bank
Net exposure
Foreign currency sensitivity
A possible strengthening/(weakening) of the USD, EUR or the HKD at 30 June would have affected profit or loss by the
amounts (in AUD) shown below. This analysis assumes that all other variables remain constant and ignores the impact of
forecast purchases.
In dollars
USD (10% movement)
EUR (10% movement)
HKD (10% movement)
Interest rate risk
Profit or loss
Strengthening
Weakening
1,596,215
305,289
34,969
(1,735,579)
(342,493)
(41,803)
Interest rate risk is the risk that changes in interest rates impact the Group’s financial performance or the value of its
financial instruments.
The Group’s interest rate risk arises from its overdrafts, term loans and when new equipment or trade finances are
drawn. Draw down and increase in overdraft under the current debt facility are priced using a floating interest rate plus a
fixed margin.
Acrow Annual Report 2023 | 71
30. Financial risk management (continued)
The Group does not currently use interest rate hedges. However, management regularly reviews its funding arrangements
to ensure loans are competitively priced and access are maintained to necessary liquidity levels to service the Group’s
operational activities.
At 30 June 2023 the Group has the following exposure to interest rates on borrowings:
In dollars
Fixed rate instruments
Loans and borrowings
Variable rate instruments
Loans and borrowings
Overdraft
2023
2022
23,887,532
21,366,977
27,403,000
11,483,000
–
3,001,005
Interest Rate Sensitivity
Macroeconomic Scenarios
At 30 June 2023, the Group held interest bearing loans of
$51,290,532 (2022: $32,849,977) and a bank overdraft of nil
(2022: $3,001,005).
An increase of 100 basis points in interest rates on variable
instruments at the reporting date would have a negative
impact of $186,571 (2022: $155,723) on the net profit,
whereas a decrease of 100 basis points would have a
positive impact of $189,867 (2022: $143,611) on the net profit.
Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge
an obligation to the Group. The Group is exposed to this
risk principally through receivables from customers. The
Group leases hire equipment and provides services to
consumers pursuant to policies and procedures that are
intended to ensure that there is no concentration of credit
risk with any particular individual, company or other entity.
The Group’s exposure to credit risk is influenced mainly by
the individual characteristics of each customer. However,
management also considers the factors such as market
segment, financial profile, default risk of the industry
sector and credit history of the customers. To manage
this risk, the Group has a policy for establishing credit
approvals and limits under which each new customer is
analysed individually for creditworthiness before standard
payment terms and limits are granted. Where available
at reasonable cost, external credit ratings and/or reports
on customers and other counterparties are obtained and
used. The Group’s policy is to deal only with creditworthy
counterparties. The summary of the Group’s trade
receivables is available in note 10.
The Group conducts an ongoing assessment of expected
credit losses (ECL) by analysing actual loss experience
of the Group, arrears, and other inputs such as exposure
or timing. The assessment is broken down into 4
sectors including Industrial Services, Civil Infrastructure,
Commercial, and Residential. These sectors are then
analysed in a set of 5 stages ranging from currently due
receivables to receivables due in over 90 days. The Group
also separately quantifies receivables due from entities in
liquidation/default.
72 | Acrow Annual Report 2023
Expected credit losses (“ECL”) are a probability-weighted
estimate of credit losses over the expected life of
the financial instrument. The Group has a process for
incorporating forward looking economic scenarios and
determining the probability weightings assigned to
each scenario in determining the overall ECL. The Group
prepares a base, best and worst-case scenarios based on
economic variables.
The Group has incorporated this by use of a management
overlay or economic risk reserve.
Write-off policy
The Group writes off financial assets in whole or in part,
when it has exhausted all practical recovery efforts
and has concluded there is no reasonable expectation
of recovery. Indicators that there is no reasonable
expectation of recovery include (i) ceasing enforcement
activity and (ii) where the Group’s recovery method is
foreclosing on collateral and the value of the collateral
such that there is no reasonable expectation of
full recovery.
Liquidity risk analysis
Liquidity risk is the risk that the Group might be unable to
meet its obligations.
The Group manages its liquidity needs by monitoring
scheduled debt servicing payments for long-term financial
liabilities as well as forecast cash inflows and outflows due
in day-to-day business. The data used for analysing these
cash flows is consistent with that used in the contractual
maturity analysis below.
Liquidity needs are monitored in various time bands,
on a day-to-day and week-to-week basis, as well
as on a rolling 30-day projection. Long-term liquidity
needs for a 180-day and a 360-day lookout period are
identified monthly.
Net cash requirements are compared to available
borrowing facilities to determine headroom or any
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
Refer to note 19 for undrawn borrowing facilities.
The Group’s objective is to maintain cash to meet its liquidity requirements for 30-day periods at a minimum. Funding for
long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities.
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, notably its cash
resources and trade receivables.
The following liquidity risk disclosures reflect all contractually fixed repayments and interest resulting from recognised
financial liabilities and derivatives as of 30 June 2023. The timing of cash flows for liabilities is based on the contractual
terms of the underlying contract.
Contractual cash flow
Carrying
amount
Total
1 year or less
1 to 5 years Over 5 years
2023
Non-derivative financial liabilities
Trade payables and accrued expenses
14,890,123
(14,890,123)
(14,890,123)
–
Loans and borrowings
51,290,532
(54,213,736)
(24,098,777)
(30,114,959)
–
–
Lease liabilities
23,912,717
(27,132,178)
(6,525,646)
(16,246,407)
(4,360,125)
90,093,372
(96,236,037)
(45,514,546)
(46,361,366)
(4,360,125)
2022
Non-derivative financial liabilities
Trade payables and accrued expenses
21,484,027
(21,484,027)
(21,484,027)
–
Loans and borrowings
32,849,977
(35,302,897)
(18,039,906)
(17,262,991)
–
–
Lease liabilities
28,249,469
(33,556,109)
(6,392,739)
(19,481,318)
(7,682,052)
82,583,473
(90,343,033)
(45,916,672)
(36,744,309)
(7,682,052)
31. Group entities
The consolidated financial statements include the financial statements of the following wholly-owned subsidiaries:
In dollars
Acrow Holdings Pty Limited (a), (b)
Acrow Formwork and Scaffolding Pty Ltd (a), (b)
Natform Pty Ltd (a), (b)
Natform (QLD) Pty Ltd (a), (b)
Uni-span Group Pty Ltd (a), (b)
Uni-span Height Safety Pty Ltd (a), (b)
Unispan Australia Pty Ltd (a), (b)
Uni-span Formwork Solutions Pty Ltd (a), (b)
Acrow Group Investments Pty Ltd (a), (b)
Noble Mineral Resources Ghana Limited
Place of
incorporation
% Equity
interest
NSW
NSW
NSW
QLD
QLD
QLD
QLD
QLD
NSW
Ghana
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(a) These subsidiaries have been granted relief from the necessity to prepare financial reports under the option available
to the Group under ASIC Corporations (Wholly Owned Companies) Instrument 2016/785.
(b) These subsidiaries, along with Acrow Formwork and Construction Services Limited (the parent entity of the Group),
form the Deed of Cross Guarantee Group described further from note 34.
Acrow Annual Report 2023 | 73
32. Operating segments
The Group’s operating segment is based on the internal reports that are reviewed and used by the Board of Directors
and the executive management team (being the Chief Operating Decision Makers (“CODM”)) in assessing the financial
performance and in determining the allocation of resources. The Group operates in the building construction market,
providing falsework, formwork, scaffolding, screens and related material for hire and sales. There are no operating
segments for which discrete financial information exists.
The information reported to the CODM, on at least monthly basis, is the consolidated results as shown in the statement
of profit or loss and other comprehensive income and statement of financial position.
33. Parent entity disclosures
In dollars
Results of the parent entity
Profit for the period
Total comprehensive income for the period
Financial position of the parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
2023
2022
4,257,926
4,257,926
1,139,571
1,139,571
42,940
18,455
54,889,773
54,554,925
54,932,713
54,573,380
193,003
193,003
201,184
201,184
54,739,710
54,372,196
Accounting policies of the parent company Acrow Formwork and Construction Services Limited are consistent with the
group and subsidiaries.
Investments in subsidiaries are accounted for at cost in the financial statements of the parent entity, these are reviewed
annually for recoverability at the reporting date.
74 | Acrow Annual Report 2023
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023 34. Deed of cross guarantee
Under the terms of ASIC Corporations (Wholly owned Companies) Instrument 2016/785, certain wholly owned controlled
entities have been granted relief from the requirement to prepare audited financial reports.
Acrow entered into an approved Deed of Indemnity on 26 June 2018 for the cross-guarantee of liabilities with Acrow
Formwork and Scaffolding Pty Ltd and Acrow Holdings Pty Ltd, then on 19 December 2018, an Assumption Deed was
executed to include newly formed entity Acrow Group Investments Pty Ltd and acquired companies, Natform Pty Ltd and
Natform (QLD) Pty Ltd.
A further assumption deed was executed on 3 May 2020 to include the new acquired Uni-span group of companies.
The following statement of profit or loss and statement of financial position comprises Acrow and its controlled entities
which are party to the Deed of Cross Guarantee, after eliminating all transactions between parties to the Deed.
Statement of profit or loss
For the year ended 30 June 2023
In dollars
Revenue
Other income
Personnel expenses
Sub-contract labour costs
Inventory purchased, net of changes in finished goods
Depreciation
IT and telecommunication expenses
Freight costs
Insurance expenses
Expected credit loss provision and bad debt expense
Other expenses
Profit before net finance costs and income tax
Finance costs
Profit before income tax
Income tax expense
Profit from continuing operations
2023
2022
149,814,345
140,826,918
12,024,427
4,955,787
(55,699,125)
(51,815,012)
(15,469,758)
(18,039,520)
(28,012,324)
(31,642,371)
(15,222,956)
(13,070,352)
(1,858,760)
(1,641,245)
(1,914,389)
(1,975,256)
(1,216,688)
(1,090,449)
(3,145,000)
(650,000)
(5,854,273)
(4,688,074)
33,445,499
21,170,426
(4,481,063)
(3,513,116)
28,964,436
17,657,310
(5,352,740)
(1,962,182)
23,611,696
15,695,128
Acrow Annual Report 2023 | 75
34. Deed of cross guarantee (continued)
Statement of Financial Position
As at 30 June 2023
In dollars
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Contract assets
Prepayments and other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use lease assets
Intangible assets
Total non-current assets
Total assets
Current liabilities
Bank overdraft
Trade payables
Other payables
Employee benefits
Lease liabilities
Loans and borrowings
Current tax liabilities
Total current liabilities
Non-current liabilities
Other payables
Employee benefits
Lease liabilities
Loans and borrowings
Provisions
Deferred income tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Retained earnings
Total equity
76 | Acrow Annual Report 2023
2023
2022
4,939,277
3,010,318
39,178,433
34,362,867
11,397,484
14,872,186
42,814
111,927
3,850,665
5,075,832
59,408,673
57,433,130
131,589,548
95,490,436
20,088,885
24,478,720
7,428,704
7,428,694
159,107,137
127,397,850
218,515,810
184,830,980
–
3,001,005
14,739,052
21,484,027
3,000,000
–
6,186,367
6,159,454
6,375,328
4,964,215
21,907,696
17,001,678
1,348,072
1,869,031
53,556,515
54,479,410
4,000,000
–
628,024
444,988
17,537,389
23,285,254
29,382,836
15,848,299
469,274
469,274
9,907,149
6,990,415
61,924,672
47,038,230
115,481,187
101,517,640
103,034,623
83,313,340
61,809,122
58,310,046
4,022,213
3,003,681
37,203,288
21,999,613
103,034,623
83,313,340
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2023
35. Subsequent events
Changes on loan facilities either effected or agreed after balance date:
● Trade finance loans of $893,334 were drawn and repayable in full within 180 days.
● Insurance premium finance loans of $3,202,846 in total were drawn and repayable in full by July 2024.
On 14 August 2023 the Directors declared a 100% franked dividend of 2.7 cents per share to be paid on
30 November 2023. Dividend Reinvestment Plan is available for election. The dividend has not been provided for in this
financial report as it was not declared until after 30 June 2023.
On 21 August 2023 a total of 4,807,117 units of performance rights on FY2024 and FY2025 have been issued to executives
and senior managers.
Other than the above events, there has not otherwise arisen between 30 June 2023 and the date of this report any
item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Group, to affect
significantly the operations of the Group, the results of those operations, or the state of the affairs of the Group in future
financial years.
Acrow Annual Report 2023 | 77
In the opinion of the Directors of Acrow Formwork and Construction Services Ltd (the Group):
(a) The consolidated financial statements and notes set out on pages 44 to 77 and the Remuneration Report in the
Directors’ Report, set out on pages 23 to 43 are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance, for the
financial year ended on that date; and
(ii) complying with Australian Accounting Standards, International Financial Report Standards and the Corporations
Regulations 2001;
(b) There are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
(c) There are reasonable grounds to believe that Acrow Formwork and Construction Services Limited and its controlled
entities identified in note 31 will be able to meet any obligations or liabilities to which they are or may become subject
by virtue of the Deed of Cross Guarantee between Acrow Formwork and Construction Services Limited and its
controlled entities pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
(d) The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief
Executive Officer and the Chief Financial Officer for the financial year ended 30 June 2023.
Signed in accordance with a resolution of the Directors:
Peter Lancken
Chairman
Steven Boland
Director, Chief Executive Officer
Sydney, 22 September 2023
Sydney, 22 September 2023
78 | Acrow Annual Report 2023
Directors’ DeclarationFor the year ended 30 June 2023
Independent Auditor’s Report
For the year ended 30 June 2023
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
Independent Auditor’s Report
To the Members of Acrow Formwork and Construction Services Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Acrow Formwork and Construction Services Limited (the Company)
and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2023, the consolidated statement of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes
to the consolidated financial statements, including a summary of significant accounting policies, and the
Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance
for the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
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Acrow Annual Report 2023 | 79
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the key audit matter
Carrying value of goodwill (Note 16)
As disclosed in Note 16, intangible assets comprise
goodwill relating to the acquisition of Natform Pty Ltd
and Natform (QLD) Pty Ltd which amounts to $7.4
million.
In accordance with AASB 136 Impairment of Assets,
the Group is required to test the carrying value of
goodwill annually.
Management has tested goodwill for impairment by
comparing the carrying value of the assets related to
this cash-generating unit to a valuation model based on
the value in use of these assets.
We have determined this is a key audit matter as this
assessment requires the exercise of significant
judgement about forecasting future revenues and
expenses, including discount rates applied to cash
flows.
Expected credit loss (Note 10)
As disclosed in Note 10, the Group’s expected credit
loss provision amounts to $2.5 million.
In accordance with AASB 9 Financial Instruments, the
Group is required to prepare an estimation of expected
credit losses as at 30 June 2023.
We have determined this is a key audit matter due to
the inherent subjectivity involved in the Group making
forward looking judgements in relation to the recovery
of credit risk exposures. We further note there is an
increased risk in relation to the recoverability of trade
receivables in the current year due to the unstable
environment in the construction industry resulting from
the insolvency risk that may impact the Group’s
customers.
80 | Acrow Annual Report 2023
Our procedures included, amongst others:
• Enquiring with management to obtain and document
an understanding of the processes and controls
related to the assessment of impairment, including
the calculation of the recoverable amount;
• Obtaining management’s value-in-use calculations
to:
− Test the mathematical accuracy;
− Evaluate management’s ability to perform
accurate estimates by comparing historical
forecasting to actual results;
− Test forecast cash inflows and outflows; and
− Assess the discount rates applied to forecast
future cash flows;
• Evaluating the value in use model against the
requirements of AASB 136, including consultation
with our internal valuation experts;
• Performing sensitivity analysis on the significant
inputs and assumptions made by management in
preparing the calculation; and
• Assessing the appropriateness of the disclosures
included in the financial report.
Our procedures included, amongst others:
• Assessing the Group’s expected credit loss model at
year end with respect to the requirements of the
accounting standard AASB 9;
• Reviewing management’s accounting paper and
assessing the reasonableness of key assumptions
used in their expected credit loss model;
• Testing the trade receivables ageing profile
prepared by the Group for the purpose of placing
reliance on the trade receivables ageing profile for
our analysis;
• Assessing the Group’s identification of credit
impaired trade receivables including the basis
adopted by the Group in the identification;
• Challenging the identified trade receivables by
taking into account past payment trends, industry
Grant Thornton Audit Pty Ltd
Independent Auditor’s ReportFor the year ended 30 June 2023
Key audit matter
How our audit addressed the key audit matter
data and observable data specific to the relevant
customers and to customers that are more than 90
days past due; and
• Assessing the appropriateness of the disclosures
included in the financial report.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Grant Thornton Audit Pty Ltd
Acrow Annual Report 2023 | 81
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June
2023.
In our opinion, the Remuneration Report of Acrow Formwork and Construction Services Limited for the year
ended 30 June 2023 complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
N P Smietana
Partner – Audit & Assurance
Sydney, 22 September 2023
82 | Acrow Annual Report 2023
Grant Thornton Audit Pty Ltd
Independent Auditor’s ReportFor the year ended 30 June 2023
Shareholder Information
For the year ended 30 June 2023
Additional Information for Listed Entities (Shareholder Information)
The shareholder information set out below was applicable as at 22 September 2023 (Reporting Date).
Substantial Holders
Top Holders
PERENNIAL VALUE ASSET MANAGEMENT
Holding Distribution
Analysis of numbers of equity holders by size of holding:
Ordinary Shares
Top Holders
above 0 up to and including 1,000
above 1,000 up to and including 5,000
above 5,000 up to and including 10,000
above 10,000 up to and including 100,000
above 100,000
Totals
Performance Rights
Top Holders
above 0 up to and including 1,000
above 1,000 up to and including 5,000
above 5,000 up to and including 10,000
above 10,000 up to and including 100,000
above 100,000
Totals
Securities
25,467.210
%
9.57%
Holders
Total Units
% Issued Share
Capital
1,601
680
425
1,382
335
167,353
1,837,424
3,371,136
50,306,598
211,161,741
0.06%
0.69%
1.26%
18.85%
79.13%
4,423
266,844,252
100.00%
Holders
Total Units
% Issued Share
Capital
–
–
–
2
34
36
–
–
–
121,652
16,849,365
16,971,017
–
–
–
0.72%
99.28%
100.00%
Based on the price per security, number of holders with an unmarketable holding: 1,477, with total 67,974, amounting to
0.03% of Issued Capital
Voting Rights
Fully Paid Ordinary Shares – on a show of hands every member present at a meeting in person or by proxy shall have one
vote and upon a poll each share have one vote.
Performance Rights – do not have voting rights.
Securities subject to Voluntary Escrow
There are no securities voluntarily escrowed.
Unlisted Securities
Unlisted Securities include: 6,860,000 unlisted options and 17,501,700 performance rights.
There are no holders of more than 20% in either the options or performance right classes.
On-Market Buy-Back
The Company is not currently conducting an on-market buy-back.
Acrow Annual Report 2023 | 83
Top Holders
Twenty Largest Quoted Equity Security Holders
The names of the twenty largest holders of quoted equity securities are listed below:
Position Holder Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
KENECO PROPERTY PTY LTD
CITICORP NOMINEES PTY LIMITED
MARGARET ANNA PROKOP
NETWEALTH INVESTMENTS LIMITED
BOND STREET CUSTODIANS LIMITED
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MRP PROPERTY PTY LTD
11 BELGRAVIA PTY LTD
MR ANDREW HAROLD KENNARD & MRS PRUDENCE ALICE KENNARD
JOSAMBA PTY LTD
DRACKA PTY LTD
WHOOSHKA NOMINEES PTY LTD
MARYVILLE PTY LTD
MALCOLM & JUNE ROSS INVESTMENTS PTY LTD
BOND STREET CUSTODIANS LIMITED
BNP PARIBAS NOMS PTY LTD
BRUNDEE INVESTMENTS PTY LTD
20
MR MATTHEW ROBERT CAPORELLA
Total
Total issued capital
Other Information:
Holding
35,936,618
13,086,667
12,973,816
7,126,209
6,721,703
6,716,495
6,156,141
5,559,417
4,751,043
3,152,543
3,039,474
2,500,000
2,265,625
2,184,976
2,149,306
2,091,132
1,644,672
1,552,055
1,515,368
1,503,649
% IC
13.47%
4.90%
4.86%
2.67%
2.52%
2.52%
2.31%
2.08%
1.78%
1.18%
1.14%
0.94%
0.85%
0.82%
0.81%
0.78%
0.62%
0.58%
0.57%
0.56%
122,626,909
45.95%
266,844,252
100.00%
There are no issues of securities approved for the purposes of item 7 of section 611 of the Corporations Act 2001 (Cth) that
have not yet been completed.
No securities were purchased on-market during the reporting period under or for the purposes of an employee incentive
scheme or to satisfy the entitlements of the holders of options or other rights to acquire securities granted under an
employee incentive scheme.
84 | Acrow Annual Report 2023
Shareholder InformationFor the year ended 30 June 2023 Corporate Directory
For the year ended 30 June 2023
COMPANY
Acrow Formwork and Construction Services Limited
BOARD OF DIRECTORS
Mr Peter Lancken AM | Non-Executive Chairman
Mr Steven Boland | Executive Director
Mrs Melanie Allibon | Non-Executive Director
(Chair of the Remuneration and Nomination Committee)
SHARE REGISTRY
Automic Group
Level 5, 126 Phillip Street
Sydney NSW 2000
AUDITOR
Grant Thornton Audit Pty Ltd
Level 17, 383 Kent Street
Sydney NSW Australia 2000
Ms Laurie Lefcourt | Non-Executive Director
(Chair of the Audit and Risk Committee)
Mr David Moffat | Non-Executive Director
CHIEF FINANCIAL OFFICER
Mr Andrew Crowther
ASX CODE
ACF
ACN
124 893 465
COMPANY SECRETARY
Mr Lee Tamplin
REGISTERED OFFICE
c/- Automic Group
Level 5, 126 Phillip Street
Sydney NSW 2000
Back cover: Cross River Rail, Roma
Street, Brisbane QLD
Designed and produced by FCR
www.fcr.com.au
Acrow Annual Report 2023 | 85
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