Austal Limited Annual Report 2021
Contents
Index to the notes to the financial statements
Contents.........................................................................................................................................................................................................................2
Basis of preparation .....................................................................................................................................................................................80
Index to the notes to the financial statements ...............................................................................................................................................3
Chairman’s report .................................................................................................................................................................................................. 24
Note 1
Corporate information ..............................................................................................................................................................80
Note 2 Basis of preparation ..................................................................................................................................................................80
Current year performance .........................................................................................................................................................................85
Chief Executive Officer’s report ........................................................................................................................................................................ 26
Note 3 Operating segments ..................................................................................................................................................................85
Review of operations .............................................................................................................................................................................................. 31
Directors’ report ...................................................................................................................................................................................................... 34
Nomination & Remuneration Committee Chair’s message ..................................................................................................................... 40
Remuneration report .............................................................................................................................................................................................. 41
Auditor independence ........................................................................................................................................................................................... 75
Consolidated statement of profit and loss and other comprehensive income for the year ended 30 June 2021 ...............76
Consolidated statement of financial position as at 30 June 2021 ........................................................................................................77
Consolidated statement of changes in equity for the year ended 30 June 2021 ............................................................................78
Consolidated statement of cash flows for the year ended 30 June 2021 ..........................................................................................79
Notes to the consolidated financial statements .......................................................................................................................................... 80
Directors’ declaration ...........................................................................................................................................................................................155
Independent audit report to the members of Austal Limited ................................................................................................................156
Note 4 Revenue .........................................................................................................................................................................................89
Note 5 Other profit and loss .................................................................................................................................................................95
Note 6 Earnings per share ....................................................................................................................................................................98
Note 7 Reconciliation of net profit after tax to net cash flows from operations ...............................................................99
Note 8 Dividends paid and proposed ..............................................................................................................................................100
Note 9
Income and other taxes .......................................................................................................................................................... 101
Capital Structure ..........................................................................................................................................................................................109
Note 10 Cash and cash equivalents ...................................................................................................................................................109
Note 11
Interest bearing loans and borrowing ................................................................................................................................ 110
Note 12 Reconciliation of financing cash flow to interest bearing debt ................................................................................ 112
Note 13 Contributed equity and reserves ......................................................................................................................................... 113
Note 14 Government grants relating to assets ............................................................................................................................... 115
Working Capital ............................................................................................................................................................................................. 116
Note 15 Trade and other receivables .................................................................................................................................................. 116
Note 16 Vessel construction and support contracts in progress ............................................................................................. 117
Note 17
Inventories and work in progress ........................................................................................................................................ 117
Note 18 Trade and other payables ....................................................................................................................................................... 118
Shareholder information .....................................................................................................................................................................................162
Note 19 Provisions .................................................................................................................................................................................... 119
Corporate governance statement and ESG Report ...................................................................................................................................163
Corporate directory ...............................................................................................................................................................................................163
Infrastructure & other assets .................................................................................................................................................................. 122
Note 20 Property, plant and equipment ............................................................................................................................................ 122
Note 21 Leases .......................................................................................................................................................................................... 125
Note 22
Intangible assets and goodwill ............................................................................................................................................ 128
Note 23 Impairment testing of non-current assets ...................................................................................................................... 130
Note 24
Investments and other financial assets ........................................................................................................................... 133
Note 25 Assets held for sale ................................................................................................................................................................. 134
Note 26 Other non-current assets ...................................................................................................................................................... 134
Financial Risk Management .................................................................................................................................................................... 135
Note 27 Financial risk management .................................................................................................................................................. 135
Note 28 Derivatives and hedging ........................................................................................................................................................ 143
Note 29 Fair value measurements ...................................................................................................................................................... 144
Unrecognised items .................................................................................................................................................................................... 145
Note 30 Commitments and contingencies ...................................................................................................................................... 145
Note 31 Corporate investigations ....................................................................................................................................................... 146
Note 32 Events after the balance date .............................................................................................................................................. 147
The Group, management and related parties .................................................................................................................................... 148
Note 33 Business combinations .......................................................................................................................................................... 148
Note 34 Parent interests in subsidiaries .......................................................................................................................................... 150
Note 35 Related party disclosures ....................................................................................................................................................... 151
Note 36 Key management personnel (KMP) compensation ...................................................................................................... 151
Note 37 Share based payments ........................................................................................................................................................... 152
Note 38 Parent entity information....................................................................................................................................................... 154
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Company Overview
s
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In what has been a challenging year for the
shipbuilding industry, let alone the world’s
population, Austal has successfully kept our
teams safe, maintained business operations and
delivered on our commitments to employees,
customers, suppliers, stakeholders and
shareholders.
FY2021 will go down as a milestone year for
Austal, not only for rising to meet the challenges
of the COVID-19 pandemic, but for a number
of significant achievements across the business
and around the world, that position the company
for further growth.
The Austal Group safely and efficiently
delivered a record 19 vessels worldwide
in FY2021.
This included 7 naval vessels and 2 commercial
ferries from Australia, 3 naval vessels from
Austal USA, 2 commercial ferries from Vietnam,
the largest-ever commercial ferry (by volume)
constructed by the Austal Group from the
Philippines and 4 commercial ferries from
Aulong in China.
The company continued to expand both steel
shipbuilding capability and sustainment services
in the United States and Australia which
further strengthens Austal’s capacity to design,
construct and support steel naval vessels for
home and export markets.
New steel shipbuilding facilities are under
construction in Mobile, Alabama which enable
steel vessel construction to commence from
April 2022.
New sustainment facilities acquired in both
Mobile and Cairns in Queensland, Australia
will allow Austal to offer an enhanced vessel
sustainment service to key customers including
the United States Navy, Royal Australian Navy
and Australian Border Force.
New and emerging maritime technologies
continue to be a focus for our Austal teams and
supply chain partners around the world.
In FY2021, a number of exciting new product
developments were announced, including
the VOLTA series of electric ferries that offer
commercial operators an attractive, cost-
effective zero-emission transportation solution;
and new autonomous vessel technology that is
being applied to the latest Expeditionary Fast
Transport ship (EPF-13), under construction for
the United States Navy.
Based on the company’s ongoing success in
shipbuilding, technology and sustainment,
and in response to converging trends that are
impacting the global shipbuilding industry, in
2021 Austal developed and has implemented
Growth Strategy 2050.
The strategy confidently states Austal’s intent
to become the Indo-Pacific region’s leading
naval defence prime contractor and outlines the
priorities for the business over the coming three
decades; expand shipbuilding, enhance systems
and extend support.
With communities, cities, states and nations
around the world moving quickly to establish
a “new normal” way of life under COVID-19,
Austal is ready to deliver innovative, cost
effective solutions that will help defence and
commercial vessel operators continue to help
protect and transport people, every day.
i
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1
2
0
2
$1.57B
Revenue
$2.5B
Order Book
29
Ships scheduled or
under construction
19
Ships
delivered
35
Vessels under
sustainment
8 Service Centres
5,500
Employees
4
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Heading
Austal Australia delivering
Sovereign Capability
In FY2021, Austal Australia continued to develop
Australia’s sovereign naval shipbuilding capability
through the delivery of two Cape-class Patrol Boats
for the Trinidad and Tobago Coast Guard and
ongoing construction of six Cape-class Patrol Boats
for the Royal Australian Navy.
TTS Port of Spain (CG41) and TTS Scarborough
(CG42) – Austal Hulls 398 and 399 – departed
Australia in June 2021, just over 2 years since
the start of construction in Henderson, Western
Australia in April 2019.
The successful, A$126 million defence export
contract highlights the successful collaboration
between Austal, local defence industry and the
Australian Government, including the Department
of Defence, Department of Foreign Affairs and
Trade and Export Finance Australia.
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Heading
Guardians – Pride of the Pacific
The Australian Government’s Pacific Patrol Boat
Replacement Project (SEA3036-1) continues
on schedule, with five Guardian-class Patrol
Boats delivered in FY2021 bringing the total
vessels delivered in the project since 2018 to
eleven.
The success of the project to date and the
ongoing collaboration between Austal Australia
and the Department of Defence’s Capability
Acquisition and Sustainment Group (CASG)
Project Team, have earned industry-wide
accolades, including recognition as a finalist
in the Essington Lewis Awards 2021 (Defence
Acquisition Projects > A$50 million).
The project is achieving Australian Industry
Capability (AIC) content of over 68% and with
a new Guardian being launched approximately
every 3 months, is on track for completion in
CY2023.
VOEA Ngahau Siliva for Tongan Maritime Force
Papua New Guinea
Tuvalu
Tonga
Samoa
Solomon Islands
Fiji
Palau
Kiribati
Tonga
Papua New Guinea
Solomon Islands
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Heading
Sustainment reaching
new heights
In December 2020 Austal Australia
completed the acquisition of BSE Maritime
Solutions, including additional shipbuilding,
sustainment and service facilities, infrastructure
and capabilities in Cairns and Brisbane,
Queensland.
The new Austal Queensland shipyards now
offer the Pacific region’s largest mobile boat
hoist, capable of lifting vessels up to 1,120
tonnes.
The growing team of more than 100 personnel
provide support to both the Australian Border
Force’s and Royal Australian Navy’s Cape-class
Patrol Boats, as well as the Guardian-class
Patrol Boats being delivered to 12 Pacific Island
nations and Timor Leste through to CY2023.
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Austal Cairns team with Mobile Boat Hoist
Heading
Austal USA
In another milestone year for Austal USA, the
shipyard delivered two Independence-class Littoral
Combat Ships – the USS Mobile (LCS 26) and
USS Savannah (LCS 28) - and one Spearhead-
class Expeditionary Fast Transport, USNS Newport
(EPF 12) to the United State Navy; while also
taking significant first steps towards constructing
steel naval vessels and offering enhanced vessel
support services in Mobile, Alabama.
Construction of new steel shipbuilding facilities
(from a combined US$100 million investment by
Austal USA and the US Government) commenced
in March 2021 and is expected to be completed
by April 2022.
In addition to a new undefinitised contract for
the detailed design of the 15th Expeditionary
Fast Transport vessel in February 2021, Austal
USA has been awarded a swathe of design
contracts that further strengthens the shipyard’s
position to pursue autonomous and steel vessel
contracts with the US Navy, including; a Contract
Modification to Develop Autonomous Capability
in EPF-13, a Functional Design Contract for
the steel hull Navajo-class Towing, Salvage and
Rescue Ship (T-ATS) and a Concept Studies and
Preliminary Design Contract for the Development
of the US Navy’s new Light Amphibious Warship
(LAW) Program.
Start of construction of new steel
shipbuilding facility in Mobile
USNS Newport (EPF 12)
USS Mobile (LCS 26)
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Austal Philippines
Bañaderos Express for
Fred. Olsen Express
Austal Philippines has had a momentous year, constructing the shipyard’s largest
commercial ferries, three times. Firstly through the delivery of the 109 metre catamaran
FSTR for Fjord Line; followed by the launch of the 118 metre trimaran Bañaderos
Express for Fred. Olsen Express - the largest trimaran ferry ever constructed in the
Philippines, and now the 115 metre catamaran Express 5 for Molslinjen, the largest
ferry (by volume) constructed by any Austal shipyard. Three record-breaking ships
constructed under a challenging but still very safe and supportive environment that is
developing the Philippines sovereign shipbuilding capability.
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FSTR for Fjord Line
Austal Vietnam
Building upon the successful establishment of a brand
new shipyard, Austal Vietnam delivered 2 high speed
commercial ferries to the market within the FY2021
financial year. Firstly, the sleek APT James, a 94 metre
catamaran for the Government of Trinidad and Tobago
and then the 41 metre Maria Galanta Express, to Oceanoi
Limited of Mauritius.
Maria Galanta Express for Oceanoi Limited of Mauritius
A.P.T. James for the Government of Trinidad and Tobago
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Beyond Electric
Support
Austal’s support business, comprising vessel
sustainment, in-service support (ISS), integrated
logistics support, repairs and maintenance for both
commercial and defence markets continues to
grow, with additional facilities, infrastructure and
people joining the company’s established network
in FY2021.
Austal USA continued to win new service contracts
with the US Navy to support both the Littoral
Combat Ship and Expeditionary Fast Transport
fleets in the US and internationally.
In August 2020, Austal USA purchased an
additional 15 acres of waterfront land and
shipbuilding and maintenance facilities, including
a dry dock capable of launching and servicing large
steel vessels opposite and adjacent to the existing
shipyard.
Austal Australia released the new VOLTA series of
electric-powered ferries in FY2021, heralding an
environmentally friendly and efficient alternative to
traditional maritime public transport.
Austal’s VOLTA series goes beyond electric power
plant options to provide a complete turnkey solution
that includes new optimised hull designs and
superstructure configurations, fully integrated shored-
based charging infrastructure and vessel monitoring
and control systems such as MARINELINK-Smart
that offer a cost effective operation and a unique
customer experience.
U
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$164m
Revenue support
contracts FY2021
Austal USA Shipyard
$94m
Revenue support
contracts FY2021
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GROWTH
STRATEGY
2050
Our Strategic intent is to be
the Indo-Pacific Region’s
Leading Naval Defence
Prime Contractor
Strategic Context
A number of converging macro trends are impacting the shipbuilding industry:
Strategic Priorities
REGIONAL
TECHNOLOGY
ENVIRONMENTAL
LOCALISATION
Increasing importance
of the Indo-Pacific
region as a nexus
of naval operations
and demand for
commercial maritime
transport.
Arrival of autonomous
vessels and
increasing automation
of manufacturing
process to build
vessels.
International
regulatory, economic
and societal pressure
to decarbonise all
maritime transport by
2050.
Worldwide trend
towards building and
sustaining vessels
locally to foster
employment and
supply chain resilience.
EXPANDING
EXPAND
SHIPBUILDING
SHIPBUILDING
ENHANCING
ENHANCE
SYSTEMS
SYSTEMS
EXTENDING
EXTEND
SUPPORT
SUPPORT
EXPAND our shipbuilding
capabilities to be a world
leading designer and builder,
in both steel and aluminium,
of large, complex naval and
commercial vessels, including
autonomous naval ships and
zero emission fast ferries.
ENHANCE our systems and
digital products to become
Australia’s sovereign supplier
of naval vessel systems, the
global leader in fleet life cycle
management solutions for
complex assets and a regional
champion of Industry 4.0 in
shipbuilding.
EXTEND our support and
sustainment services to
become the leading Indo-
Pacific regional supplier to
the US Navy, the Australian
Commonwealth across all
Defence domains and regional
navies wherever Austal has a
shipyard presence.
20
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Our people, our values
Excellence
Customer Focus
Integrity
Teamwork
Austal has relaunched our company’s values that reaffirm our focus on
Excellence, our Customers, working with Integrity and as a Team.
The updated values have been promoted throughout the business, at all
locations and provide guidance for all of our decisions and actions.
We believe that putting our values into practice creates the greatest
benefits for our people, our customers, our suppliers, stakeholders and
shareholders - and the communities in which we live and work.
22
Austal Limited | Annual Report 2021
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.
|
21.7 14.1 14.2 10.7 10.4 10.1 6.8 7.1 FY14FY15FY16FY17FY18FY19FY20FY21Medical Treatment Injury Frequency Rate(Injuries per million hours worked)3.90 2.10 1.75 3.11 3.62 2.07 1.68 1.70 FY14FY15FY16FY17FY18FY19FY20FY21Lost Time Injury Frequency Rate(Injuries per million hours worked)
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
The Board of Directors
Austal Limited
100 Clarence Beach Rd
Henderson, WA
6166, Australia
23 August 2021
Dear Board Members,
Austal Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of
independence to the Directors of Austal Limited.
As lead audit partner for the audit of the financial statements of Austal Limited for the year ended 30 June 2021,
I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely,
DELOITTE TOUCHE TOHMATSU
A T Richards
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network
Deloitte Touche
Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield
Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Independent Auditor’s Report to the members of Austal
Fax: +61 8 9365 7001
www.deloitte.com.au
Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Austal Limited (the “Company”) and its subsidiaries (the “Group”) which
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies and other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is 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 2021 and of its financial
performance for the year then ended; and
(ii)
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 & 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
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 for 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 the scope of our audit responded to the Key Audit
Matter
Revenue recognition
As disclosed in Note 4, Shipbuilding revenue for
the year ended 30 June 2021 was $1,315 million
(USA Shipbuilding $1,013 million, Australasia
Shipbuilding $302 million – refer Note 3).
Vessel construction revenues are recognised over
time as performance obligations are fulfilled after
assessing all factors relevant to each contract,
including specifically assessing the following as
Applicable the:
Our audit procedures performed included but were not
limited to:
Evaluating the design and implementation of
processes and controls in respect of the underlying
project costs and the recognition of revenue and,
where selected, the operating effectiveness of
controls;
Discussions with selected project managers on the
risks and opportunities in relation to certain
individual contracts;
Determination of stage of completion and
measurement of progress towards
satisfaction of performance obligations;
Estimation of total contract revenue
and costs including the estimation of
contingencies which incorporate risk
contingencies for which the most significant
elements are in relation to:
o the cost contingencies on the LCS
program in USA Shipbuilding; and
o future overhead rates used in the
estimation of forecast costs for the
LCS and EPF programs in USA
Shipbuilding.
Determination of contractual entitlement
and assessment of the probability of
customer approval of contract modifications,
variations and acceptance of claims; and
Estimation of project completion dates.
We focused on recognition of vessel construction
revenue as a key audit matter due to the number
and type of estimation events over the course of
a contract life, the unique nature of individual
contract terms and the high level of judgement
required in estimating and accounting for cost
contingencies.
Selecting a sample of contracts for testing based on
a number of quantitative and qualitative factors
which may indicate that a greater level of
judgement is required in recognising revenue,
including consideration of historical issues
identified, variations and claims, delay risk, high
potential impact and high likelihood of risk events
and potential loss making contracts;
o Utilising engineering specialists in the
USA to assist in the assessment of the
stage of completion of selected vessels
in USA Shipbuilding given the
significance of the revenue
contribution to the Group;
o Obtaining an understanding of the
contract terms and conditions of
relevant contracts to evaluate whether
these were reflected in the Group’s
estimate of forecast costs and
revenue;
o Testing a sample of costs incurred to
date and agreeing these to supporting
documentation;
o Testing contractual entitlement
relating to contract modifications,
variations and claims recognised
within contract revenue to supporting
documentation and by reference to
the underlying contracts;
o Evaluating the probability of recovery
of contract assets by reference to the
status of contract negotiations,
historical recoveries and other
supporting documentation;
o Challenging the level of cost
contingencies on the LCS program in
USA Shipbuilding;
o Evaluating the reasonableness of the
future overhead rates used in the
estimation of costs for the LCS and EPF
programs in USA Shipbuilding;
o Evaluating significant exposures to
liquidated damages for potential late
delivery of vessels where relevant; and
o Evaluating historical accuracy of
forecast costs to complete.
We also assessed the adequacy of the relevant
disclosures in the financial statements.
Our procedures included, but were not limited to:
Understanding the process that the Group
undertakes to develop the value in use model;
Assessing historical forecasting accuracy by
comparing actual performance to budgets;
In conjunction with our valuation specialists:
o Challenging the forecast revenue with
consideration of contracted work,
uncontracted work (including the
probability assigned to securing the
forecast uncontracted work) and
external industry data where available;
o Assessing the discount rate against
that of comparable companies; and
o Evaluating operating margins with
reference to past performance and
knowledge of the business.
Sample testing the models for mathematical
accuracy; and
Performing sensitivity analysis on the forecast
revenue, operating margins and terminal growth
assumptions.
We also assessed the appropriateness of the disclosures
in Note 20 and 22.
Carrying amount of non-current assets –
Australasia Shipbuilding
As at 30 June 2021 the carrying value of goodwill,
other intangible assets and property, plant and
equipment was $681.8 million as disclosed in
Notes 20 and 22.
Property, plant and equipment in relation to the
Australasia Shipbuilding CGU was $120.7 million.
The Group prepared a value in use model to
assess the recoverable value of the CGU.
This requires the Group to exercise significant
judgement, with key assumptions including the
level of uncontracted revenue included in the
forecast and the operating margins.
Provisions
As disclosed in Note 19, the Group recognised a
provision of $11.48 million as at 30 June 2021 for
the probable incremental professional services
costs (“costs”) relating to the regulatory
investigations.
The Group had to apply significant judgement
when considering whether and how much to
provide for costs. As a result of the high level of
estimation uncertainty the provision could
change substantially over time as new facts
emerge and the investigations progress.
Our procedures included, but were not limited to the
following:
Discussing the potential costs with in-house legal
counsel, other management and the directors;
Challenging the assumptions and the basis for the
provision; and
Where possible, corroborating the assumptions to
external sources and input from the Group’s
professional advisors.
We also assessed the appropriateness of the disclosures
in Note 19.
Other Information
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 2021 but does not include the financial report and our auditor’s report
thereon. The annual report is expected to be made available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and we will 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 ability of the Group 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 has 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in on pages 41 to 74 of the Directors’ Report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of Austal Limited, for the year ended 30 June 2021, 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.
DELOITTE TOUCHE TOHMATSU
A T Richards
Partner
Chartered Accountants
Perth, 23 August 2021
Email: info@austal.com
Tel: +61 8 9410 1111
AUSTAL.COM