Annual Report
For the year ended 30 June 2019
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities
INFRASTRUCTURE
RENEWABLES
RESOURCES
Decmil Annual Report 2019
Australian Business Number
35 111 210 390
ASX Code
DCG
Registered address
20 Parkland Road
Osborne Park, WA 6017
Tel: +61 8 9368 8877
Annual general meeting
Shareholders are advised that the Decmil Group Limited
2019 Annual General Meeting (AGM) will be held on
6th November 2019 at 20 Parkland Road, Osborne Park,
Western Australia, commencing at 10.00am (AWST).
About this report
This Annual Report is a summary of Decmil Group Limited’s
(ASX: DCG) (“Decmil” or “Company”) operations, activities
and financial position as at 30 June 2019.
Decmil Group Limited (ABN 35 111 210 390) is the parent
Company of the Decmil Group of companies. In this report,
unless otherwise stated, references to ‘Decmil’, ‘DGL’ and
‘the Company’, and ‘we’, ‘us’ and ‘our’ refer to Decmil Group
Limited and its controlled entities.
References in the report to ‘the year’ or ‘the reporting
period’ relate to the financial year, which is 1 July 2018 to
30 June 2019, unless otherwise stated. All dollar figures
are expressed in Australian currency.
In an effort to reduce its impact on the environment, Decmil
will only post printed copies of this Annual Report to those
shareholders who elect to receive one through the share
registry. An electronic copy of this Annual Report will be
available on our website at www.decmil.com
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities Contents
1
2
3
4
Our company
About Us
Vision and Values
Our Sectors
Message from
the board
Chairman’s Letter
What matters
most to us
People & Culture
Health, Safety & Environment
Community
Financial report
Directors’ Report
Auditor’s Independence Declaration
Statement of Profit or Loss and
Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Information for
Listed Public Companies
Corporate Directory
2
4
6
19
20
23
24
28
48
49
50
51
52
53
101
102
107
109
Decmil Annual Report 2019
About us
Decmil is a public company
listed on the Australian Stock
Exchange (ASX code DCG).
We are an Australian owned construction and engineering
company offering a diversified range of services to the
infrastructure, renewable energy and natural resources sectors.
With operations throughout Australia and New Zealand,
we offer a combination of national expertise and local
knowledge, supported by a team of valued suppliers and
contractors. Our offices are located in Perth, Western
Australia; Brisbane, Queensland; Melbourne, Victoria; and
Auckland, New Zealand.
For more than 40 years, and often in remote and
challenging locations, we have collaborated with our clients
to deliver solutions for: transport, mining infrastructure,
non-process infrastructure; building; defence & detention;
oil & gas; fuel infrastructure; health & education; wind, solar
& battery; accommodation; structural, mechanical & piping;
electrical, instrumentation & controls; and maintenance.
Our clients vary from government sectors in transport, defence,
immigration and health to blue chip clients in the resources,
commercial and industrial sectors. We work closely with our
clients to achieve innovative and cost-effective solutions.
Our long standing client relationships and repeat business
are testament to the value, expertise, quality and
performance we provide.
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities
3
Waiheke School Redevelopment | Waiheke Island, NZ
1 / Our Company
Decmil Annual Report 2019
Our Vision
To be the market
leader in project
delivery, achieving
sustainable growth
through the quality
of our people and
the strength of our
relationships.
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities
Our Values
5
Integrity
We are honest in all aspects and treat
people with respect and dignity.
Excellence
We strive to deliver results that
stretch our capabilities.
Accountability
We take responsibility and accountability for
our actions and hold others to account.
Teamwork
We work together and support
each other to achieve our goals.
1 / Our Company
Decmil Annual Report 2019
Our Sectors
Infrastructure
Decmil has significant
experience in infrastructure
engineering and construction,
delivering multidisciplinary
projects in sectors such as
transport, utilities, water,
defence, corrections, health
and education.
Our capabilities include bulk earthworks, road
construction and maintenance, bridgeworks and
environmental remediation and engineering.
We hold National Roads Prequalification R5, B4, F150+
meaning we are well placed and experienced to deliver
transport infrastructure projects across Australia.
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities
7
Drysdale Bypass Upgrade | Drysdale, VIC
1 / Our Company
Decmil Annual Report 2019
Our Sectors
Infrastructure
Waiheke School Redevelopment | Waiheke Island, NZ
Rapid Deployment Prisons | Tongariro, Rolleston, Christchurch NZ
Reid Highway Upgrade | Perth, WA
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities 9
Plenty Road Upgrade | Greater Melbourne, VIC
1 / Our Company
Decmil Annual Report 2019
Our Sectors
Renewables
Decmil offers a range of
feasibility, engineering, project
management and construction
services for the Renewable
Energy sector with capabilities
in solar, wind and energy
storage projects.
From scoping studies through to design, approvals,
delivery and operations we optimise all stages of the
development process to provide our clients with a cost
effective and streamlined delivery solution.
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities
11
Sunraysia Solar Farm | Balranald, NSW
1 / Our Company
Decmil Annual Report 2019
Our Sectors
Renewables
Gullen Solar Farm | Southern Tablelands, NSW
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities 13
Sunraysia Solar Farm | Balranald, NSW
1 / Our Company
Decmil Annual Report 2019
Our Sectors
Resources
Decmil has an extensive
history of achievement in
the delivery of large-scale
resource projects.
We have the capacity and experience to deliver everything from
accommodation, non-process infrastructure, civil construction,
transport infrastructure and fuel infrastructure solutions.
We respond efficiently to our clients’ needs and add value at
all stages of the project life cycle. We have the expertise to self-
perform works and have strong relationships with specialist
sub-contractors where required.
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities
15
Amrun NPI | Weipa, QLD
1 / Our Company
Decmil Annual Report 2019
Our Sectors
Resources
Fortescue Metals Group Tug Pens | Port Hedland, WA
QGC Wellsite Installation | Surat Basin, QLD
Amrun NPI | Weipa, QLD
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities 17
Mulla Mulla Village Expansion | Pilbara, WA
1 / Our Company
Decmil Annual Report 2019
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities 19
Chairman’s Letter
It is with great pleasure that I present
the 2019 annual report of Decmil.
Much has been achieved in the
2019 financial year, culminating in
substantial top line revenue growth
in the business and a return to
profitability and the payment of
dividends to our shareholders.
Decmil has become a diverse business
and operations in the 2019 financial
year reflected that diversity.
Key highlights include:
~ Strong safety performance with a
total recordable injury frequency
rate of approximately 5.
~ Extension and expansion of a
project for BHP at its South Flank
mine in relation to the upgrade
of the Mulla Mulla village;
~ Extension of the relationship
with QGC with a new three-
year framework agreement
for operational works
across the Surat Basin;
~ Growth of the Decmil business
in New Zealand including
the construction of a multi-
site Corrections project for
rapidly deployable prisons;
~ The award to Decmil’s Victorian
business unit of over $216 million
of new transport infrastructure
construction work;
~ The award of a $277 million
EPC contract in relation to the
Sunraysia solar project; and
~ Entering the wind sector as a
balance of plant contractor with two
projects worth $151 million at the
Warradarge and Yandin wind farms
in WA and a developing partnership
with Danish wind giant Vestas.
Several key appointments were also
made to the Executive Leadership
Team team in 2019, including Dickie
Dique moving into an executive role
overseeing our Western Australia and
Queensland business, the appointment
of Michael Learmonth as Executive
General Manager for our Victorian and
New Zealand business, the appointment
of Kate Strack as Executive General
Manager for People and Damian
Kelliher as Executive General Manager
for Commercial and Risk. These
appointments substantially strengthen
the business in several key areas.
Financial Performance
& Position
In the 2019 financial year Decmil
generated a substantial top line
revenue growth, with the core
Construction & Engineering business
unit growing revenue by 96% year
on year as the Company secured
several new and larger contracts. With
strong top line revenue growth and
managed overheads, the business
generated EBITDA of $24.1 million
and profit after tax of $14.0 million.
Our financial position remained sound
and at 30 June 2019 the Group’s
balance sheet reflected an overall
net cash position of $83.5 million
and net assets of $235 million.
I am also pleased to report that following
the strong performance in FY19,
the Decmil Board has recommended
paying dividends, returning a 1 cent
interim and 2 cent final dividend to
shareholders. This is inline with the
Board long term target of a 40-60
percent dividend payout ratio.
Strategy and Outlook
The business continues to focus on
the Infrastructure, Resources and
Renewable Energy sectors in line
with the strategy set in 2017.
Positive market conditions exist
across all of our key sectors including
significant opportunity across Australia
in the transport infrastructure sector
where the Group is actively pursuing
new road and bridge construction
projects as both head contractor and
in joint ventures. Continuing sustaining
capital works and new projects in the
WA Iron Ore sector, together with
renewed upcoming activity in the
onshore LNG sector, also present
significant opportunities for Decmil.
As Chairman of the Decmil Board
I can say that we are also very
focused on risk management.
Engineering construction requires
a wide variety of physical, technical
and commercial risks to be managed
to ensure long term success in the
industry. In that regard Decmil has
also enhanced its project control
and commercial risk management
practices, with enhanced procedures,
systems and people in key areas.
Conclusion
Decmil continues to grow as a
diverse and sustainable national
engineering construction business.
We are engaged on some of the most
significant capital works projects
in Australia and New Zealand.
The Company is proud of the
contribution it makes to the Australian
and New Zealand community, both as
a preferred employer and a constructor
of many key infrastructure projects.
In closing, the Board and executive
team believe that the business is
in a strong position for the future. I
would like to take this opportunity
on behalf of the Board to thank our
loyal shareholders for their ongoing
support and our employees for their
contribution and dedication to Decmil.
David Saxelby
Chairman
2 / Message from the Board
Decmil Annual Report 2019
People & Culture
We continue to attract high-calibre and skilled talent
to drive an inclusive, high-performing culture that is
aligned to our business strategy.
Decmil has a proud history of project
delivery since 1978 and whilst our
business has seen many changes,
our foundations and vision remain
the same. Our success is driven by
our people and we aim to attract,
develop and retain a diverse high-
performing workforce. Our proven
track record, distinctive capabilities
and ability to manage risk and
volatility are underpinned by more
than 40 years of experience,
making us a partner of choice.
Our vision, ‘To be the market
leader in project delivery, achieving
sustainable growth through the
quality of our people and the strength
of our relationships’, continues to
align our people and is essential
for success across Decmil.
Decmil’s success is the result of a
diverse team who shares the values of:
~
Integrity – We are honest in
all aspects and treat people
with respect and dignity.
~ Excellence – We strive to deliver
results that stretch our capabilities.
~ Accountability – We take responsibility
and accountability for our actions
and hold others to account.
~ Teamwork – We work together
and support each other
to achieve our goals.
Our recruitment philosophy ensures
that we attract the right people
who are highly skilled in their areas
of expertise and aligned to The
Decmil Way to ensure success
at every level. We are focused
on hiring local and indigenous
employees to secure a diverse and
all-encompassing workforce.
Annual Overview
At 30 June 2019 Decmil had
554 employees: 405 salaried
employees and 149 wages employees.
Decmil maintains that our people
are critical to strong and sustainable
business growth. Our diverse portfolio
of projects aids our ability to attract
and retain quality employees with
varying backgrounds, skills & expertise.
Nationally, we have welcomed
several new senior positions as
our regions grow and our strategy
further focuses on work winning in our
three key sectors of Infrastructure,
Renewables and Resources.
Employing people across Australia
and New Zealand has allowed us to
implement several initiatives during
the year including an employee
engagement survey, excellence awards
and a refresh of our performance
review and KPI setting process.
From a resourcing perspective
we have found success from our
internal referral program and with
the implementation of a resourcing
system, PageUp, we have been able
to ensure candidate experience
is seamless and personalised.
We have an increased focus on
inclusion and diversity – next year
we will be excited to launch our first
Reconciliation Action Plan and a
Gender Diversity strategy. Decmil
recognises that an inclusive culture
that promotes diversity and respect
is critical to our success. During the
year, several of our projects focused
on Indigenous engagement within
our workforce with key achievements
on our Mulla Mulla Village Expansion
project and FMG Tug Pen project.
Outlook
Next year, we will continue to focus
on growing the capability within our
teams, driving inclusive and diverse
high-performing teams and increasing
our collaboration across regions
and projects. Our attention will also
be on increasing our learning and
development offering in order to ensure
a high-performing culture.
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities 21
3 / What Matters Most To Us
Decmil Annual Report 2019
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities Health, Safety
& Environment
23
SHIELD
Work Health & Safety
Environment & Sustainability
Keeping our people and our projects
safe is central to everything we do at
Decmil. Our award-winning program,
Safety and Health In Every Level
at Decmil (SHIELD) empowers our
people to create a safe workplace.
SHIELD is about:
~ Recognising ‘What Matters Most’
to each of us;
~ Understanding those behaviours
that will keep us safe at work;
~ Conducting safety conversations
in the workplace to promote
safe behaviours and correct
at-risk behaviours; and
~ Providing a program to recognise
and reward safe behaviours.
The purpose of our SHIELD
program is to drive the behaviours,
attitudes, decisions and actions
within the business to achieve
a working environment that is
free from injury or incident.
Since it was implemented nine years
ago, the SHIELD program has
assisted significantly in reducing Total
Recordable Injury Frequency Rates
(TRIFR) across all project sites.
During the 2019 financial year
Decmil recorded a slight deterioration
with its safety performance results
compared to the previous year as
measured by the TRIFR. The TRIFR
was approx. 5 for this period. Within
this result, an outstanding TRIFR
performance of ‘Zero’ was achieved
by the Decmil Western Region.
We have achieved platinum
certification in the IFAP Safe Way
Awards and have been successful in
transitioning Work, Health & Safety
processes (specifically field leadership
activities) from paper based to on-line
templates and workflows for real-time
reporting and action management.
Over the next 12 months we are
focused on a range of key initiatives
to support the safety and well-being
of our people. These include continued
development of our SHIELD program
and Safety Foundations with a focus
on critical risk management and
safety leadership. We also plan to
review our health promotion activities
with a focus on mental health.
Environmental management is a
key focus of Decmil with exceptional
performance reported for the 2019
financial year. There were no regulatory
breaches or significant environmental
impacts recorded with Decmil’s
operations. We have continued to
focus on carbon emission reduction
schemes, and improving environmental
training, resources and systems.
Over the coming year we will be
launching the ‘Second Nature’
program to focus on the integration
of sustainability practices across
Decmil; recognising the inextricable
link between sustainability and
our business objectives.
Our Second Nature program is about:
~ Demonstrating sustainability
leadership and engagement;
~ Driving efficiencies through
innovation and continual
improvement;
~ Protecting our natural environment
and reducing our carbon footprint;
~ Stimulating positive change
through our business and
our supply chains; and
~ Encouraging meaningful,
productive relationships with our
employees, clients and partners.
At Decmil, we believe Second Nature
will create new opportunities and
enhance long-term social and
environmental outcomes to deliver
lasting benefits for all our stakeholders.
3 / What Matters Most To Us
Decmil Annual Report 2019
Community
We develop relationships within our
communities through a broad and
inclusive process that spans from
project initiation to project completion.
At Decmil, we encourage our people to
participate in organised charity events.
Over the past year the Company has
been involved in a number of staff driven
charity initiatives that assist worthy
charities and support the communities
in which we operate. Internal assistance
with fundraising and promotion is
provided to staff who instigate initiatives
which support Decmil’s charity partners
and our local communities.
We encourage our project teams to
engage with local communities to
support education, sport and culture
as well as proactively working to help
improve social amenities.
Our Corporate Social Responsibility
program, Decmil in the Community, is
about giving back, helping people in
need and supporting local communities.
Mental Health
A key focus of our business is the
mental health of our people and the
broader community.
Decmil has continued our longstanding
association with Beyond Blue and the
Mental Health Foundation of NZ as
official Corporate Supporters. Decmil
is proud to promote these independent,
not-for-profit organisations which
aim to increase awareness of anxiety
and depression and to reduce the
associated social stigma.
We actively fundraise for these
organisations to help understanding
of mental health issues, empowering
people to seek help, and supporting
their recovery, management and
resilience. Fundraising activities include
the sale of Entertainment books and
the donation of proceeds from our
annual Christmas raffles.
Indigenous Engagement
Decmil is committed to indigenous
participation across all positions and
levels. We develop partnerships and
initiatives with local communities to
encourage indigenous participation.
In the delivery of our projects, we
engage with indigenous businesses
and suppliers to:
~ Develop procurement strategies
that provides opportunities for
Indigenous people;
~ Train and equip our people
with cultural knowledge and
understanding; and
~ Work with our subcontractors so
that they engage with Aboriginal
and Torres Strait Islander people
and communities.
Local Communities
Decmil is proud of the positive
contributions we make to the communities
in which we operate. In addition to
providing local employment and service
opportunities, we support a range of
initiatives that help create healthy,
vibrant and cohesive communities.
We maintain regular and open
communication with local officials
and community leaders to promote
friendly and proactive dialogue, and
we encourage community members to
reach out if they have any issues to
discuss. Building these partnerships
provides a foundation for positive
socioeconomic outcomes for both our
company and our communities.
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities 25
QGC Wellsite Installation | Chinchilla Melon Festival | Surat Basin
Sunraysia | Balranald Cup Day | Balranald, NSW
Drysdale Bypass | Drysdale Bowling and Croquet Club | Drysdale, VIC
3 / What Matters Most To Us
Decmil Annual Report 2019
Board of Directors
David Saxelby
Non-Executive Chairman
David was appointed as a Non-
Executive Chairman in March 2018. He
has held Managing Director and CEO
roles for the past decade, most recently
with Lendlease as CEO of Construction
and Infrastructure Australia.
Prior to Lendlease, David was with the
Leighton Group for 18 years, where
he held a number of senior positions,
most recently as Managing Director of
Thiess. In addition to these roles, David
has held a number of senior positions
on Industry Boards and was listed in
the Top 100 Engineers in Australia.
Scott Criddle
Managing Director and
Chief Executive Officer
Scott was appointed Chief Executive
Officer in July 2009, and Managing
Director of Decmil Group Limited in
April 2010 and has been a Director
of the Company since that time.
He was previously the Managing
Director of Decmil Australia.
In this role he was responsible for
the long-term growth and strategic
direction of the Company, playing
a key role in building relationships
with stakeholders and clients.
Scott joined Decmil Australia in
1993 as a construction labourer to
gain experience and learn about the
Company from the ground up. He held
a variety of roles within Decmil Australia
including Construction Manager,
Estimator, Business Development
Manager and Area Manager.
Bill Healy
Non-Executive Director
Bill Healy was appointed as Non-
Executive Director in April 2009
and appointed as Non-Executive
Chairman in July 2014.
Bill was a director and shareholder in
Sealcorp Holdings from 1985 which
then established and developed
the diversified financial services
group. He was a founding director
of ASGARD Capital Management
Ltd, Securitor Financial Group Ltd,
PACT Investment Group Pty Ltd and
ASSIRT Pty Ltd. Sealcorp was acquired
by St George Bank in 1997 and Bill
remained on the Board until 1999.
He was founding director and
Chairman of BOOM Logistics Ltd
and was involved in the development
of the Company’s business
model, early acquisitions and
preparation for listing in 2003.
Other Directorships:
Other Directorships:
Other Directorships:
~ Australian Rail Track Corporation
~ Office of Projects Victoria
~ None
~ None
Former Directorships:
Former Directorships:
Former Directorships:
~ None
~ None
~ None
Decmil Group Limited ABN 35 111 210 390 and Controlled Entities
Our people approach comprises of strategic objectives
that create an agile, leadership-driven and high
performance culture to enable us to rise to the challenge.
27
Don Argent
Non-Executive Director
Dickie Dique
Executive Director
Don was appointed as Non-Executive
Director of Decmil in March 2018.
Don was the Director Finance
and Administration for the Thiess
Group, one of the largest integrated
engineering and services providers
in Australia and South East Asia.
He joined Thiess Pty Ltd in 1985
following six years’ service with Thiess
Holdings Ltd in the late 1970’s, and
until he retired in July 2011, played
an instrumental part in the growth
of Thiess from a family-run business
to a leading Australian construction,
mining and services company.
Don holds a Bachelor of
Commerce degree, is a Certified
Practising Accountant and a
Fellow of the Australian Institute
of Company Directors.
Dickie was appointed as Non-
Executive Director of Decmil in
July 2018. In February 2019, he
joined us as Executive General
Manager – North West.
Dickie has 25 years’ experience in
senior executive and management
roles in construction businesses and
is a respected leader in the Western
Australian construction industry.
A registered builder in a number of
states in Australia, Dickie’s experience
covers the commercial, civil, residential,
mining and modular sectors. Dickie is
very familiar with the Decmil business,
having held the roles of General
Manager and Chief Operating Officer
for the Decmil Group until 2011, and
was a key driver to significant periods
of growth during his tenure with the
Group. Prior to re-joining Decmil, Dickie
was a Director at Pindan Contracting.
Alison Thompson
Company Secretary
Alison has held several senior
financial positions within the Group
since August 2007. She is currently
the Group Financial Controller for
Decmil and was appointed Company
Secretary in January 2014.
She has extensive technical
experience gained from 4 years with
PricewaterhouseCoopers and prior
to joining Decmil, gained valuable
industry experience at international
construction firm Balfour Beatty
based in the United Kingdom.
Alison holds a Bachelor of Commerce
and a Graduate Diploma of Applied
Corporate Governance, and is a
Fellow of Chartered Accountants,
Australia and New Zealand.
Other Directorships:
~ None
Former Directorships:
~ Ausdrill Limited
Other Directorships:
~ Go2 People Limited
Former Directorships:
~ None
4 / Financial Report
Directors’ Report
FOR THE YEAR ENDED 30 JUNE 2019
Principal Activities
Decmil provides engineering construction services for the Infrastructure, Resources and Renewable
Energy sectors:
Infrastructure
▪ Government infrastructure projects including accommodation, immigration facilities, corrections
facilities, office buildings, defence facilities, schools, administration buildings and storage facilities;
and
▪ Road and bridge civil engineering projects.
Resources
▪ Construction of non-process infrastructure, including industrial buildings, workshops and storage
facilities;
▪ Coal Seam Gas wellhead installation with associated pipelines and facilities; and
▪ Civil work on brown and greenfield projects including site preparation, excavation and bulk
earthworks in regional and remote areas.
Renewables
▪ EPC and balance of plant works for remote wind and solar projects.
Operating Results
The consolidated entity reported a statutory profit after providing for income tax expense of $14,018,000
(2018: loss of $6,131,000).
Dividends Paid or Recommended
The company announced a fully franked 2.0 cent per share final dividend with a record date of 6
September 2019 and payment date of 27 September 2019.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Overview of the Activities of the Group
Decmil was established in 1978 and since has grown to provide design, engineering, construction and
maintenance engineering construction services to the Infrastructure, Resources and Renewable sectors
across Australia and New Zealand.
The business has three key sector pillars that form the base of the business. These three pillars of focus
are summarised in the below table:
Resources
Iron Ore (civil, NPI)
Coal Seam Gas
LNG (civil, NPI, maintenance)
Renewables
Solar PV (EPC)
Wind (balance of plant)
Hybrid (including storage)
Infrastructure
Roads and Bridges
Education
Defence
Corrections
Immigration
Health
Operations
Operations reflected the diversity of the Group, with project activity spanning public sector infrastructure
projects in Australia and New Zealand, non-process infrastructure for the WA Iron Ore and LNG sectors,
Queensland coal seam gas maintenance; and in recent years renewable energy.
The Group’s revenue for the financial year ended 30 June 2019 by sector and geography is presented
below:
18%
37%
FY19
Revenue by
Region
$663m
8%
20%
17%
22%
39%
FY19
Revenue by
Sector
$663m
39%
WA QLD
VIC
NZ
NSW
Resources
Renewables
Infrastructure
Operational highlights include:
▪ Strong safety performance with a total recordable injury frequency rate of approximately 5, with 0 for
the Western region;
▪ Extension and expansion of a project for BHP at its South Flank mine in relation to the upgrade of
the Mulla Mulla village;
▪ Completion of projects for Fortescue in relation to its Port Hedland tug harbor and non-process
infrastructure for Rio Tinto at its Amrun mine;
▪ Extension of the relationship with QGC with a new three-year framework agreement for operational
works across the Surat Basin;
▪ Growth of the Decmil business in New Zealand including the construction of a multi-site Corrections
project for rapidly deployable prisons;
▪ The award to Decmil’s Victorian business unit of over $216 million of new transport infrastructure
construction work;
▪ Award of a $277 million EPC contract in relation to the Sunraysia solar project in New South Wales;
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Operations (Cont’d)
▪ Award of $63 million of new transport infrastructure projects in Western Australia (Reid Highway) and
Queensland (Warrego Highway); and
▪ Entering the wind sector as a balance of plant contractor with two projects worth $151 million at the
Warradarge and Yandin wind farms in WA and a developing partnership with leading Danish wind
company Vestas.
Financial Performance & Position
Revenue grew by 94% to $663 million for the twelve months ended 30 June 2019 and represents record
revenue growth for the Company. This was due to the Company securing several new and larger
contracts in the 2018 and 2019 calendar years as market conditions improved in the Infrastructure
sector.
Administrative expenses grew by 17% for the twelve months ended 30 June 2019 and at a slower rate
than growth in revenue. This resulted in the Company reporting improved profit results, with earnings
before interest, tax and depreciation increasing by 411% in the 2019 financial year to $24 million.
Cashflow was also strong, with the Company generating $22 million of operating cashflow and $67
million of net cashflow for the twelve months ended 30 June 2019.
In August 2018 the Company raised $50 million of new equity capital at an issue price of 80 cents per
share to fund growth associated with new and larger infrastructure projects. The capital raising and
positive operating cashflow resulted in the Group’s balance sheet reflecting an overall net cash position
of $83.5 million at 30 June 2019, with no drawn senior secured debt and net tangible assets of $160
million.
Significant Changes in State of Affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial
year.
After Balance Date Events
On 28 August 2019, the Company proposed a fully franked 2.0 cent per share final dividend with a
record date of 6 September 2019 and payment date of 27 September 2019. The total amount of this
dividend payment will be $4.766 million. After this dividend payment, the Australian franking account
balance will be $54.783 million.
Except for the matters disclosed above, no matters or circumstances have arisen since the end of the
financial year which significantly affected or may significantly affect the operations of the consolidated
entity, the results of those operations, or the state of affairs of the consolidated entity in future financial
years.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Likely Developments and Outlook
Several of Decmil’s key sectors are experiencing strong market conditions.
These sectors and their drivers are summarised below:
▪
Iron Ore (WA): replacement tonnage projects being developed by BHP, Rio Tinto and Fortescue
continuing and ramping up and expected to continue until at least 2021/2022. The Fortescue high
grade magnetite concentrate project (Iron Bridge) is also expected to commence in 2020;
▪ LNG (WA): several new LNG projects are at the FEED and FID stages and should present
opportunities to the WA contractor market from 2020. These include Woodside projects such as
Pluto LNG Train 2, the development of Browse with onshore processing, the development of
Scarborough with onshore processing and other projects such as new power projects (dual gas/solar
project for the purposes of carbon offsets);
▪ Coal Seam Gas (QLD): renewed investment in upstream CSG which is likely to create new
opportunities for Decmil given its established position in that market;
▪ Transport Infrastructure (VIC): a significant spend in transport infrastructure over the coming 3-4
years has been announced by the Victorian State in their recent budget. In addition to Decmil’s
existing capability in road and bridge construction, there are also opportunities to expand into rail
construction;
▪ New Zealand: on the back of successful projects in Education and Corrections, Decmil is
establishing itself as a reputable constructor of modular buildings and this market continues to offer
opportunities in existing sectors but also new sectors such as social housing and commercial
accommodation. There is also the opportunity to enter the horizontal civil market in NZ; and
▪ Renewables (National): high levels of capital spend in connection with renewable energy projects
with the shift towards a decarbonised economy. Decmil has now established a presence in both
solar (Gullen and Sunraysia) and wind (Warradarge and Yandin).
Infrastructure investment by sector ($ billion)
Source: Deloitte Access Economics Investment Monitor
As at the date of this report the Company has approximately $900 million of work in hand (contracted
and preferred extending to FY22). Accordingly, the Company expects revenue to continue to grow in the
financial year ended 30 June 2020 and is either shortlisted or a preferred contractor on several large
contracts across all its core sectors.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Material Business Risks
The key challenges for the Group going into the 2020 financial year are:
▪ To recruit quality staff that can sustain projected growth;
▪ Retain robust project controls to ensure project returns are predictable; and
▪ To select projects that can deliver acceptable returns.
Material risks that could adversely affect the Group include the following:
▪ The Company is exposed to a number of macro-economic cycles, in particular capital expenditure by
State and Federal Government and in natural resources. These cycles are in turn impacted by a variety
of factors inclusive of fiscal conditions in the economy, Government policy on capital expenditure and
commodity prices. Any weakness in the broader construction and engineering sector and a reduction in
growth capital expenditure across major new natural resource projects will impact the Company.
▪ A portion of the Group's contracts are 'lump sum' in nature and to the extent costs exceed the
contracted price, there is a risk these amounts may not be recovered. From time to time variations to
the planned scope occurs or issues arise during the construction phase of a project, not anticipated at
the time of bid. This may give rise to claims under the contract with the principal in the ordinary course
of business. Where such claims are not resolved in the ordinary course of business they may enter
formal dispute and the outcome upon resolution of these claims may be materially different to the
position taken by Company.
▪
In order for the Group to continue working on engineering construction projects, a robust safety
methodology needs to be in place. A serious safety incident or fatality has the ability to create a
substantial risk to Decmil's social licence to operate. Decmil mitigates this safety risk via its 'SHIELD'
safety methodology, ensuring that all employees (including senior management) and sub-contractors
are aligned and engaged with the approach to safety.
▪ The Company is dependent on various technical and financial accreditations to operate the business.
These include safety accreditations, quality assurance standards, building licences, technical
accreditations by State Main Roads agencies and various financial accreditations. Many of these
accreditations are assessed and monitored by State and Federal Government Agencies. Any failure to
maintain or comply with an accreditation can impact the eligibility of the Company to participate in
certain projects and sectors.
▪ The Company operates as a ‘Design and Construct’ or ‘Engineer, Procure and Construct’ contractor in
the engineering sector. Such projects and contracts place an obligation on the Company to design ‘Fit
for Purpose’ infrastructure and to give warranties to such effect. Any failure in design may see the
Company exposed to contractual claims for breach of ‘Fit for Purpose’ or design obligations and, from
time to time, to performance and liquidated damages. The Company manages this risk by maintaining
Professional Indemnity insurance and also engaging appropriate third party design consultants for
complex or specialist design expertise.
▪ Any abatement in economic activity in the Gladstone region will result in a short term diminution in the
occupancy levels at the Homeground Village and significantly lower levels or revenue and profit than
historically generated. Management expects that in the medium term new opportunities will arise for
Homeground Gladstone as the LNG sector in Gladstone moves from the construction to the operational
and maintenance stages; however, the risk of volatility in the short term remains present.
▪ Decmil's ability to remain productive, profitable and competitive and to affect its planned growth
initiatives, depends on its ability to attract and retain skilled labour. Tightening of the labour market in
key regions due to a shortage of skilled labour, combined with a high industry turnover rate and
growing number of competing employers for skilled labour, may inhibit Decmil's ability to hire and retain
employees. Decmil is exposed to increased labour costs in markets where the demand for labour is
strong. A shortage of skilled labour could limit Decmil's ability to grow its business or lead to a decline
in productivity and an increase in training costs and adversely affect its safety record. Each of these
factors could materially adversely impact its revenue and, if costs increase or productivity declines, its
operating margins.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Material Business Risks (Cont’d)
During the 2015 financial year the Company implemented an enterprise risk review process to identify
the most material risks facing the Company enterprise wide, together with an action plan to mitigate the
occurrence or effect of each identified risk (Enterprise Risk Register). Each of the risks on the Enterprise
Risk Register have been allocated to an owner who is responsible for monitoring, reporting and
implementing action plans for each of the risks.
The Enterprise Risk Register brings together the most critical risks (both corporate and operational)
identified by the Group Risk Management System and creates a structured process for regular reporting
to the Board.
The Enterprise Risk Register is reviewed and presented to the Audit and Risk Committee on a quarterly
basis.
In late 2018 a new Commercial & Risk function was also added to the Group to cover critical areas such
as legal, commercial, procurement, project controls and quality to aid in the management of risk and
business governance required at project level.
Capital Management
Management is continually assessing the optimal capital structure to ensure the Group is working
towards providing shareholders with adequate returns based on assessment of market risks and
opportunities. This includes the management of debt levels, distributions to shareholders and the
requirement for further equity funding.
Whilst the Group has access to substantial senior debt and bonding facilities, it ended the year with no
drawn senior debt.
Management also periodically reviews the level of capital invested in the Homeground Gladstone Village
and where appropriate opportunity exists, will consider options to monetise the asset.
Environmental Regulation
The Company is subject to environmental regulation in accordance with applicable state, territory or
federal legislation and statutory requirements for the jurisdictions in which it operates.
There were no incident events that required reporting to relevant statutory bodies during the financial
year.
The Company aims to continually improve its environmental performance and has established carbon
emission reduction targets for the next financial year.
Directors’ Meetings
During the financial year, 10 directors’ meetings were held. Attendances by each director during the year
were:
Directors’ Meetings
Audit & Risk
Remuneration
Number of
meetings
eligible to
attend
10
3
10
10
10
10
Number
attended
9
3
10
9
10
10
Number of
meetings
eligible to
attend
4
1
-
2
4
1
Number
attended
4
1
-
2
4
1
Number of
meetings
eligible to
attend
2
-
-
-
2
2
Number
attended
2
-
-
-
2
2
Don Argent
Denis Criddle
Scott Criddle
Dickie Dique
Bill Healy
David Saxelby
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report – Audited
This Remuneration Report for the year ended 30 June 2019 details the nature and amount of
remuneration for directors and specified executives of Decmil Group Limited in accordance with the
requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been
audited as required by section 308(3C) of the Act.
The Remuneration Report is presented under the following sections:
1. Remuneration governance
1.1. Remuneration committee
1.2. Use of remuneration consultants
2. Executive remuneration approach and structure
2.1. Remuneration philosophy
2.2. Executive remuneration structure
2.3. Remuneration practices
2.4. Short term incentive plan
2.5. Long term incentive plan
3. Link between Company performance and executive remuneration
4. Employment contracts of directors and senior executives
5. Non-Executive Director fee arrangements
6. Details of remuneration
This Remuneration Report sets out remuneration information for Decmil’s Key Management Personnel
(KMP) (as defined in AASB 124 Related Party Disclosures) including Non-Executive Directors, Executive
Directors and other senior executives who have authority for planning, directing and controlling the
activities of the Company.
The following persons acted as Directors or Executives during or since the end of the financial year:
Role
Non-Executive Directors (NEDs)
Mr David Saxelby – Chairman of the Board
Mr Bill Healy – Chairman of the Audit & Risk and
Remuneration Committees
Mr Don Argent
Mr Denis Criddle
Mr Dickie Dique
Executive Directors
Appointed May 2016 and as Chairman in March 2018
Appointed 23 April 2009
Appointed 1 March 2018
Retired 31 October 2018
Appointed 1 July 2018 (transferred to Executive
Director in February 2019)
Mr Scott Criddle – Managing Director and CEO
Mr Dickie Dique – Director and Executive General
Manager – Western and Northern
Appointed as CEO in July 2009 and Managing
Director in April 2010
Appointed as Director in July 2018 and Executive
General Manager – Western and Northern in February
2019
Executives (Other KMP)
Mr Tony Radalj – Chief Operating Officer
Resigned 18 December 2018
Mr Craig Amos – Chief Financial Officer
Appointed CFO in March 2014
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
1.
Remuneration governance
1.1 Remuneration committee
The Remuneration Committee is responsible for reviewing and recommending to the Board of Directors
compensation arrangements for the directors and Executive Leadership Team (ELT).
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration
of directors and the ELT on a periodic basis. The assessment is made with reference to the Group’s
performance, executive performance and comparable information from industry sectors and other listed
companies in similar industries.
1.2 Use of remuneration consultants
To ensure the Company and Remuneration Committee is fully informed when making remuneration
decisions, it from time to time seeks external remuneration advice and uses industry salary survey data.
During the financial year, the fixed remuneration of executives was benchmarked against peers based
on industry salary surveys sourced from AON Hewitt and Mercer.
In the past, Ernst & Young has also been engaged to provide advice on the structure of the long term
incentive plans and provide a comparison of the Company’s plan to market trends.
For the purposes of the Corporations Amendment (Improving Accountability on Director and Executive
Remuneration) Act 2001 (the Act), any guidance provided by remuneration consultants throughout the
financial year was not considered a remuneration recommendation in relation to KMP as defined by
Division 1 of Part 1.2 of Chapter 1 of the Act.
2.
2.1
Executive remuneration approach and structure
Remuneration philosophy
The performance of the Company ultimately depends upon the quality of its directors and ELT. In order
to maintain performance and create shareholder value, the Company must attract, motivate and retain
highly skilled and experienced directors and executives.
Decmil aims to provide competitive at market remuneration and rewards in order to:
▪ attract the right people who are aligned to Decmil’s values and behaviours;
▪ motivate employees so they understand their contribution to Decmil;
▪
▪
recognise employees’ effort and commitment to Decmil; and
retain the highest quality employees within Decmil.
Decmil ensures:
▪ appropriate compensation is given to executives for the services they provide;
▪ attraction and retention of executives with the required skills to effectively manage the operations
and growth of the business;
▪ executives are motivated to perform in the best interest of Decmil; and
▪ gender pay equality.
2.2
Executive remuneration structure
The remuneration structure for executive officers, including executive directors, is based on a number of
factors, including experience, qualifications, job level and overall performance of the Company. The
service agreements between the Company and specified directors and executives are on a continuing
basis which are not expected to change in the immediate future.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
The following table illustrates the executive remuneration elements, including how each element aligns
to the Company’s remuneration strategy and links remuneration outcomes to performance.
Vehicle
Purpose
Link to Performance
Remuneration
Component
Fixed
remuneration
Comprises base salary,
superannuation contributions and
other benefits such as motor vehicles
and life insurance.
STI
The STI component of the KMP
remuneration is paid in cash.
To provide competitive
fixed remuneration for
senior executives as
determined by the scope
of their position and the
knowledge, skill and
experience required to
perform the role.
Rewards executives for
short term achievement
of:
▪
financial and
operational key
performance
indicators;
▪
▪
progress with the
delivery of the
Company’s business
plan and strategic
objectives; and
specific goals in
relation to the
development of
people within the
Company and its
profile within the
business community.
Company and individual
performance are
considered during the
annual remuneration
review.
Examples of key
performance indicators
include:
▪ Achievement of
financial targets such
as Group revenue
and EBITDA or
NPAT;
▪ Achievement of target
work in hand levels at
30 June of each year
to ensure the
sustainability of
revenue in
subsequent years;
▪ Overhead and cost
control targets;
▪ Targets set in relation
to the achievement of
the Group’s business
plan such as the
diversification of the
business and entry
into new markets; and
▪ Targets set for safety
performance based
on Total Recordable
Injury Frequency
Rates.
Vesting of awards is
dependent on absolute
TSR, achieving EPS
growth targets and
continuous employment.
LTI
Executives are entitled to participate
in the performance rights scheme
approved by shareholders.
Performance rights do not attract
dividends or voting rights.
To better align executives
to the interests of
shareholders and provide
a reward based on long
term growth in share price
and earnings.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
2.3 Remuneration practices
The Company aims to reward executives with a level and mix of remuneration appropriate to their
position, responsibilities and performance within the business and aligned with market practice.
The Company’s policy is to position fixed remuneration between the 50th and 75th percentile of salary
bands based on major industry surveys produced by AON Hewitt and Mercer. This ensures Decmil
remains competitive with its peers.
The performance of executives is measured against criteria agreed with each executive and is based
predominantly on the Company’s performance and shareholder value. Incentives are linked to
predetermined performance criteria. The Board may, however, exercise its discretion in relation to
approving incentives, bonuses, rights and shares. The policy is designed to attract high calibre
executives and reward them for performance that results in long-term growth in shareholder wealth.
Where applicable, executive directors and executives receive a superannuation guarantee contribution
required by the Government, which during the year was 9.5% (subject to the statutory cap), and do not
receive any other retirement benefits. Some individuals, however, have chosen to sacrifice all or part of
their remuneration to increase payments towards superannuation.
Upon retirement, specified directors and executives are paid employee entitlements and incentives
accrued to the date of their retirement.
All remuneration paid to directors and executives is valued at cost to the Company and expensed.
Where performance rights and shares are given to directors and executives, they are valued according
to the accounting standards.
2.4
Short term incentive plan
General Terms of the STI Plan
How is it paid
Generally, in cash. The CEO STI award can be satisfied by the issue of
restricted rights.
How much can executives earn? Executives can earn up to a maximum of 50% of their total fixed
How is performance measured?
When is it paid?
What happens if an executive
leaves or there is a change of
control?
remuneration as an STI incentive.
Through a balance scorecard of financial, operational and organisation
development KPI’s set prior to the commencement of each financial year.
Financial measures are assessed based on the Group’s audited financial
results.
In September or October of the financial year after the target year.
The payment of any accrued or part STI benefit in these circumstances is at
the discretion of the Board.
The STI award opportunity is based on a percentage of an individual’s base salary. For the CEO, a
maximum award opportunity of 50% of total fixed remuneration is available. The STI is based on the
previous financial year’s base salary earnings to 30 June before performance based remuneration
reviews.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
2.5
Long term incentive plan
The LTI offered to key executives forms a key part of their remuneration and assists to align their
interests with the long term interests of shareholders.
The purpose of the LTI Scheme is to reward key executives for attaining results over a long measurable
period and for staying with the organisation. The LTI Scheme is a share based plan consisting of
performance rights and shares which have pre-determined vesting conditions.
The LTI Scheme is designed to:
▪
create a strong link between the eligible participants’ performance and Decmil’s performance;
▪ assist in retention of employees; and
▪
contribute to eligible participants feeling they own part of Decmil and have an influence in the
direction of Decmil.
General Terms of the LTI Plan
How is it paid?
How much can be earned (i.e. maximum
opportunity)?
How is performance measured?
When is performance measured?
What happens if an executive leaves or
there is a change of control?
Are executives eligible for dividends?
The Company uses performance rights and restricted shares in its
long term incentive plan.
The CEO can earn up to 150% and other executives up to 50% of
total fixed remuneration converted into performance rights at the
60 day VWAP to 30 June.
Vesting hurdles for performance rights for executives are based on
absolute TSR (40%), EPS (40%) and continuous employment
(20%).
The achievement of vesting conditions for performance rights are
assessed between July and September after the target financial
year-end. Measurement periods are from the date of award of the
rights to the first tranche being eligible for vesting.
If an employee resigns, or his or her employment is terminated
due to misconduct or performance related reasons, all
performance rights and restricted shares are immediately forfeited.
If an employee retires or an employee’s employment terminates
for redundancy prior to performance rights or restricted shares
vesting, the Board may use its discretion to vest the performance
rights or restricted shares.
Where a change of control event occurs in respect to the
Company, the Board, in its absolute discretion, may determine the
treatment of any unvested performance rights or restricted shares
and the timing of such treatment.
Only where the Board does not exercise its discretion to determine
a particular treatment, will all unvested performance rights and
restricted shares vest on change of control.
Performance rights do not accrue dividends.
The retention grant of restricted shares to the CEO accrues
dividends which become payable upon vesting.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
For executives, performance rights will vest (that is, shares will be issued or become transferable to the
executives upon satisfaction of the performance rights vesting conditions) to the extent that the
applicable performance hurdles set by the Board are satisfied. Subject to achievement of the hurdle, the
performance rights may be converted (on a one-for-one basis) to fully paid ordinary shares in the
Company.
Any performance rights which do not vest at any due vesting date rollover for re-assessment to the next
vesting date. The vesting conditions will be subsequently reassessed in that year and performance rights
may vest as applicable. Unvested performance rights will rollover for the length of the performance
period and will be forfeited at the end of the grant period if not vested. If an executive resigns from his or
her employment, any unvested performance rights will lapse, unless the Board determines otherwise.
Performance hurdles
Each year the Board reviews and considers the appropriateness of the performance hurdles and, where
necessary, makes adjustments and amendments to reflect market conditions.
Below is a summary of the performance hurdles that relate to unvested performance rights as at 30 June
2019:
Issued financial year ended 30 June 2013 and prior
Performance rights issued during the financial year ended 30 June 2013 and prior years are eligible for
vesting three, five and seven years after the initial grant date depending upon Total Shareholder Return
(TSR) performance relative to a comparator group identified at the time of grant (S&P/ASX 300 Index).
Performance rights granted during this period remain under these terms and conditions.
The performance rights vest according to the schedule below:
Company TSR Rank in S&P/ASX 300 Index
Below the 50th Percentile
At or below the 50th Percentile and below the 75th
Percentile
At or above the 75th Percentile
% of Performance Rights that Vest
0%
50%, plus 2% for every one Percentile increase above
50th Percentile
100%
Issued financial year ended 30 June 2015 and later
These performance rights are subject to the following vesting conditions:
a. 20% of performance rights are subject to continuous service of employment. This portion will
vest at 100% three years after the financial year of which the grant of the performance rights are
made;
b. 40% of performance rights are subject to EPS CAGR performance; and
c. 40% of performance rights are subject to absolute TSR performance.
In relation to the performance rights subject to the EPS CAGR and TSR, the following vesting tranches
will apply:
Years after the financial year in respect of which the
grant of Performance Rights is made
2
3
4
% of Performance Rights Eligible for Vesting
25%
25%
50%
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
For performance rights subject to EPS CAGR performance, vesting will occur as follows:
EPS CAGR – Measured from the year in respect of
which grant of Performance Rights is made
<6%
6%
>6% <8%
>8%
% Performance Rights that Vest
0%
25%
Pro-rata vesting between 25%-100%
100%
For performance rights subject to TSR performance, vesting will occur as follows:
Absolute TSR – Measured from the year in respect of
which grant of Performance Rights is made
< 7%
7%
>7% <11%
>11%
% Performance Rights that Vest
0%
50%
Pro-rata vesting between 50%-100%
100%
Note, the Company obtained shareholder approval at the 2015 AGM to implement a number of changes
to the hurdles attaching to performance rights. These changes included the replacement of the Relative
Total Shareholder Return (TSR) performance hurdle with an Absolute TSR performance hurdle, and
adjustment of the Earnings Per Share (EPS) hurdles in line with market expectations and inclusion of a
retention hurdle relating to continuous employment with the Group.
3.
Link between Company performance and executive remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, directors
and executives. There have been two methods applied in achieving this aim, the first being a
performance based short term incentive based on key performance indicators, and the second being the
issue of performance rights to executive directors and executives to encourage the alignment of
personal and shareholder interests.
4.
Employment contracts of directors and senior executives
The Company has entered into a service agreement with Mr Scott Criddle who commenced in the role of
CEO on 1 July 2009.
The key terms of Mr Scott Criddle’s service agreement are:
Notice Period
Term
Restraint Period
Total Fixed Remuneration
Long Term Incentive Scheme
Short Term Incentive Scheme
Termination Benefits
Three month written notice unless in relation to certain circumstances such as
serious misconduct or gross neglect of duty
Ongoing until terminated
Three months after termination of employment
Reviewed and established annually by the Remuneration Committee
The Decmil Group Limited LTI scheme applies
The Decmil Group Limited STI scheme applies
No contractual termination benefits apply
The Company may terminate the contract without cause by providing written notice of the required
termination period or by making payment in lieu of notice based on the individual’s annual salary
component together with a discretionary payment. Termination payments are generally not payable on
resignation or dismissal for serious misconduct. In the instance of serious misconduct, the Company can
terminate employment at any time.
Other executives in the Company have similar executive service agreements which include terms and
conditions relating to confidentiality, restraint on employment and intellectual property. The executive
service agreements are typically not fixed term agreements and continue on an ongoing basis until
terminated.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
These agreements may be terminated by notice of either party or earlier in the event of certain breaches.
In the event of termination for any reason, the Company will pay accrued and untaken annual leave, and
subject to legislation, any accrued and untaken long service leave owing to the executive. Termination
payments are generally not payable on resignation or dismissal for serious misconduct. In the instance
of serious misconduct, the Company can terminate employment at any time.
Non-Executive Directors are appointed under appointment letters that deal with, amongst other matters,
the following:
▪
terms of appointment and tenure;
▪ entitlements;
▪ duties and responsibilities; and
▪
indemnities, insurances and access.
5.
Non-Executive Director fee arrangements
The Board’s policy is to remunerate Non-Executive Directors at market rates for comparable companies
for time, commitment and responsibilities. The Board approves payments to the Non-Executive Directors
and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required. The maximum aggregate amount of fees that can
be paid to Non-Executive Directors is subject to approval by shareholders during a general meeting.
Fees for Non-Executive Directors are not linked to the performance of the consolidated entity however to
align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the
Company.
Non-Executive Director (NED) fees consist of base fees and committee chair fees. The payment of
committee chair fees recognises the additional time commitment required by NEDs who chair Board
committees. The chair of the Board attends all committee meetings but does not receive any additional
committee fees in addition to base fees.
The table below summaries Board and committee chair fees payable to NEDs at 30 June 2019 (inclusive
of superannuation):
Board fees
Chairman
Non-Executive Director
Committee fees
Audit & Risk and Remuneration
Chair
Member
Maximum aggregate NED fee pool
$000
130
73
$000
8
-
The maximum aggregate amount of fees that can be paid to NEDs is subject to approval by
shareholders during a general meeting. The maximum aggregate amount that may be paid to NEDs for
their services is $650,000 during any financial year.
6.
Details of remuneration
Details of the remuneration of KMP of the consolidated entity are set out in the following tables:
NEDs ($)
Year
Salary and Fees
Superannuation
STI
Paid in Relation to
Prior Year
David Saxelby
Don Argent1
Denis Criddle2
Dickie Dique3
Bill Healy
Lee Verios4
Total
Executive
Directors ($)
Scott Criddle
Dickie Dique5
Total
Other Executives
($)
Tony Radalj6
Craig Amos
Total
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
129,600
91,799
66,575
22,192
22,192
66,575
42,525
-
81,370
106,027
-
24,658
342,262
311,251
-
-
6,325
2,108
2,108
6,325
-
-
7,730
10,073
-
2,342
16,163
20,848
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fair Value of
Incentive
Securities
Awarded
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
Total
Total Performance
Related
%
Total Fixed
Remuneration
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
129,600
91,799
72,900
24,300
24,300
72,900
42,525
-
89,100
116,100
-
27,000
358,425
332,099
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
100.0
100.0
-
100.0
100.0
100.0
Year
Salary and Fees
Superannuation
STI
Paid in Relation to
Prior Year
2019
2018
2019
2018
2019
2018
604,734
500,000
189,718
-
794,452
500,000
20,531
20,049
10,266
-
30,797
20,049
-
-
-
-
-
-
Year
Salary and Fees
Superannuation
STI
Paid in relation to
Prior Year
2019
2018
2019
2018
2019
2018
364,519
421,186
429,738
350,000
794,257
771,186
10,266
16,605
20,531
20,049
30,797
36,654
-
-
-
-
-
-
Fair Value of
Incentive
Securities
Awarded
192,727
227,976
-
-
192,727
227,976
Fair Value of
Incentive
Securities
Awarded
-
187,500
70,830
83,784
70,830
271,284
Other
Total
Total Performance
Related
%
Total Fixed
Remuneration
%
-
-
-
-
-
-
817,992
748,025
199,984
-
1,017,976
748,025
23.6
30.5
-
-
18.9
30.5
76.4
69.5
100.0
-
81.1
69.5
Other
Total
Total Performance
Related
%
Total Fixed
Remuneration
%
-
-
-
-
-
-
374,785
625,291
521,099
453,833
895,884
1,079,124
-
30.0
13.6
18.5
7.9
25.1
100.0
70.0
86.4
81.5
92.1
74.9
1 Don Argent was appointed to the board of directors on 1 March 2018
2 Denis Criddle retired from the board of directors on 31 October 2018
3 Dickie Dique was appointed to the board of directors on 1 July 2018
4 Lee Verios resigned from the board of directors on 1 November 2017
5 Dickie Dique joined the Executive Leadership Team on 1 February 2019
6 Tony Radalj left the Executive Leadership Team on 18 December 2018
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
Options issued as part of remuneration for the year ended 30 June 2019
There were no options granted to directors or executives as part of their remuneration during the
financial year.
Performance Rights
During the year ended 30 June 2019, the following performance rights were granted.
Grant Date
1 July 2018
Number of Rights Granted
Fair Value of Rights Granted
1,387,139
$263,556
During the year ended 30 June 2019, 633,616 performance rights were vested.
During the year ended 30 June 2019, 805,574 of performance rights lapsed due to their vesting criteria
not being met.
The following rights have been granted but remain unvested at 30 June 2019:
Grant Date
1 July 2012
1 July 2015
1 July 2016
1 July 2017
1 July 2018
Total
Number of Unvested Rights
282,536
823,073
2,006,769
1,676,126
1,387,139
6,175,643
Fair Value of Unvested Rights
$28,819
$115,230
$306,032
$311,759
$263,556
$1,025,396
Additional Information
The earnings of the consolidated entity for the five years to 30 June 2019 are summarised below:
Revenue
EBITDA
EBIT
Profit/(loss) after income tax
2019
$000
663,276
24,100
21,439
14,018
2018
$000
349,255
(1,722)
(4,736)
(6,131)
2017
$000
305,124
2016
$000
301,644
(31,240)
(75,926)
(36,867)
(82,902)
(28,347)
(58,236)
2015
$000
666,915
62,696
55,894
40,280
The factors that are considered to affect total shareholders return (TSR) are summarised below:
Share price at financial year end ($)
Total dividends paid (cents per share)
Basic earnings per share (cents per share)
2019
0.91
1.0
6.27
2018
0.97
-
2017
0.93
4.0
(0.10)1
(2.65)2
2016
0.72
10.5
6.102
2015
1.16
13.0
23.91
1 Based on continuing operations
2 Based on adjusted earnings
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
Shareholdings, Option holdings and Performance Rights holdings
Shareholdings
The number of shares in the Company held during the financial year by each director and KMP of the
consolidated entity, including their personally related parties, is set out below:
30 June 2019
Balance
1.07.2018
Received as Part
of Remuneration
Additions
Disposals/
Other1
Balance
30.06.2019
Directors:
Don Argent
Denis Criddle2
Scott Criddle
Dickie Dique
Bill Healy
David Saxelby
Key management
personnel:
Craig Amos
Tony Radalj3
Total
Option holdings
-
22,379,145
5,641,268
-
600,190
50,000
109,521
325,000
29,105,124
-
-
-
-
4,875,000
(27,254,145)
-
-
441,592
-
(1,136,878)
4,945,982
-
-
-
85,076
168,966
695,634
150,000
25,000
37,500
-
-
8,721
-
-
-
(493,966)
158,721
625,190
87,500
194,597
-
5,087,500
(28,876,268)
6,011,990
There were no options held by directors or KMP at 30 June 2019.
Performance Rights holdings
The number of performance rights in the Company held during the financial year by each director and
KMP of the consolidated entity, including their personally related parties, is set out below:
30 June 2019
Balance
1.07.2018
Granted as
Remuneration
Vested During
the Period
Expired/
Other1
Balance
30.06.2019
Directors:
Scott Criddle
Key management
personnel:
Craig Amos
Tony Radalj3
4,930,524
1,014,352
(441,592)
(749,571)
4,753,713
1,079,806
172,414
6,182,744
372,787
-
1,387,139
(85,076)
(68,966)
(595,634)
-
1,367,517
(103,448)
(853,019)
-
6,121,230
1 Other includes shares included upon appointment or excluded upon retirement/resignation
2 Denis Criddle retired on 31 October 2018
3 Tony Radalj resigned on 18 December 2018
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Remuneration Report (Cont’d)
Other transactions with directors, KMP and their related parties:
(a) Director Related Transactions1
Rent of various properties used by Decmil Australia Pty Ltd paid to Broadway Pty Ltd, an entity in
which Mr Denis Criddle has a beneficial interest
Consulting fees for Saxelby Associates Pty Ltd, an entity in which Mr David Saxelby has a beneficial
interest
Consulting fees for Cald Investments Pty Ltd, an entity in which Mr Dickie Dique has a beneficial
interest
(b) Director Related Balances
Amounts owing to Saxelby Associates Pty Ltd, an entity in which Mr David Saxelby has a beneficial
interest, for directors’ fees and consulting fees
[End of Remuneration Report]
Shares Under Option
2019
$000
196
200
8
27
There were no unissued ordinary shares of the Company under option outstanding at the date of this
report.
Shares Issued on the Exercise of Options
There were no ordinary shares of the Company issued on the exercise of options during the year ended
30 June 2019 and up to the date of this report.
Employee Share Program
At the 2014 Annual General Meeting, shareholders approved the adoption by the Company of a broad
based employee share plan and the issue of securities pursuant to that plan. During the financial year,
259,036 shares were issued under this plan as part of the Decmil Employee Share Purchase Plan.
Under this plan, employees who purchased up to $1,000 of shares had those shares matched by the
Company. The matched shares are subject to a trade restriction until the earlier of 3 years or cessation
of employment with the Company.
Indemnifying Officers or Auditor
The Company has indemnified the Directors of the Company for costs incurred, in their capacity as a
director, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the Directors of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the Company or any related entity against a liability incurred by the auditor.
Proceedings on Behalf of Company
In or around August 2012, Steel Building Systems (SBS) was engaged as a subcontractor by Decmil
Australia Pty Ltd (“Decmil”) to construct the Gladstone Village in Queensland. SBS’ scope of work was
the design, manufacture and supply of modular buildings, as well as miscellaneous on-site works
associated with the modular buildings. On 17 November 2017, the liquidators of SBS commenced
proceedings against Decmil Australia Pty Ltd in the NSW Supreme Court for alleged unpaid contract
1 Transactions relating to directors’ fees are included in the Directors’ Report details of remuneration
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Proceedings on Behalf of Company (Cont’d)
sums of $3.3 million and alleged lost profit on works removed from SBS’ scope of works. Decmil rejects
the claims brought by the liquidators of SBS and denies it is indebted to SBS as claimed. Decmil’s
current position is that SBS is in fact indebted to Decmil for a similar sum due to defective works and
associated rectification costs, incomplete works, overheads incurred by Decmil in connection with the
defects and rectification works, expert costs and fees. Decmil has filed a defence in relation to the
liquidator’s claims and will file a cross claim for the sum Decmil alleges it is owed by SBS.
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a
party for the purpose of taking responsibility on behalf of the Company for all or part of those
proceedings.
Non-Audit Services
The Board of Directors, in accordance with advice from the audit committee, is satisfied that the
provision of non-audit services during the year is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services
disclosed below did not compromise the external auditor’s independence for the following reasons:
▪ all non-audit services are reviewed and approved by the audit committee prior to commencement to
ensure they do not adversely affect the integrity and objectivity of the auditor; and
▪
the nature of the services provided does not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
The following fees were paid or payable to RSM Australia Partners for non-audit services provided
during the year ended 30 June 2019:
Taxation compliance services
Accounting assistance
Total
Auditor’s Independence Declaration
$
22,400
14,500
36,900
A copy of the auditor’s independence declaration as required under section 307C of the Corporations
Act 2001 can be found within this financial report.
Directors’ Report Cont’d
FOR THE YEAR ENDED 30 JUNE 2019
Rounding of Amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to ‘rounding-off’. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the directors
of Decmil Group Limited support and have adhered to the ASX Corporate Governance Principles and
Recommendations as detailed in Decmil Corporate Governance Statement which can be found at
http://www.decmil.com.au/investor-relations/corporate-governance/
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
David Saxelby
Chairman
28 August 2019
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Decmil Group Limited for the year ended 30 June 2019, 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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 28 August 2019
TUTU PHONG
Partner
Statement of Profit or Loss and
Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Entity
2019
$000
663,276
(603,960)
59,316
(33,677)
(1,539)
24,100
428
(2,338)
(2,661)
19,529
(5,511)
14,018
-
14,018
-
14,018
6.27
6.27
6.27
6.27
-
-
2018
$000
341,608
(305,927)
35,681
(28,719)
(2,248)
4,714
32
(1,493)
(2,903)
350
(521)
(171)
(5,960)
(6,131)
-
(6,131)
(3.54)
(3.54)
(0.10)
(0.10)
(3.44)
(3.44)
Note
4
4(a)
5
5, 17
6
7
10a
10a
10b
10b
10c
10c
Revenue from continuing operations
Cost of sales
Gross profit
Administration expenses
Equity based payments
Earnings from continuing operations before interest, tax,
depreciation and amortisation & impairments
Interest received
Borrowing costs
Depreciation and amortisation expense
Profit before income tax expense
Income tax expense
Net profit/(loss) from continuing operations
Loss after tax from discontinued operations
Net profit/(loss) for the year
Other comprehensive income
Other comprehensive income
Total comprehensive income for the year
Overall Operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Continuing Operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Discontinuing Operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
The accompanying notes form part of these financial statements
Statement of Financial Position
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Entity
Note
2019
$000
2018
$000
12
13
14
20
18
17
24
19
21
22
23
25
24
23
25
26
83,481
74,272
65,102
6,648
229,503
92,449
9,994
30,771
75,482
208,696
438,199
190,194
1,698
1,611
6,150
199,653
191
2,845
380
3,416
203,069
235,130
216,858
18,272
235,130
16,755
43,672
28,882
8,561
97,870
92,410
7,565
30,329
75,482
205,786
303,656
88,223
1,596
387
5,623
95,829
544
472
498
1,514
97,343
206,313
165,832
40,481
206,313
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Work in progress
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Investment property
Property, plant and equipment
Deferred tax assets
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Current tax payable
Borrowings
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities
Borrowings
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Retained earnings
TOTAL EQUITY
The accompanying notes form part of these financial statements
Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Entity
Note
Balance at 1 July 2017
Net loss for the year
Total comprehensive income for the year
Shares issued for the period
Transaction costs net of tax benefit
Equity based payments
Balance at 30 June 2018
Issued
Capital
$000
163,384
-
-
118
82
2,248
165,832
Retained
Earnings
$000
46,612
(6,131)
(6,131)
-
-
-
40,481
Balance at 30 June 2018
165,832
40,481
Opening balance adjustment on application of AASB15
-
(33,846)
Total
$000
209,996
(6,131)
(6,131)
118
82
2,248
206,313
206,313
(33,846)
172,467
14,018
186,485
51,465
(1,512)
1,539
(2,381)
(466)
165,832
-
165,832
51,465
(1,512)
1,539
-
(466)
6,635
14,018
20,653
-
-
-
(2,381)
-
11
216,858
18,272
235,130
Balance at 1 July 2018
Net profit for the year
Total comprehensive income for the year
Shares issued for the period
Transaction costs net of tax benefit
Equity based payments
Dividends paid
Performance rights converted to shares
Balance at 30 June 2019
The accompanying notes form part of these financial statements
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Entity
Note
2019
$000
2018
$000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs paid
Income taxes paid
Net cash provided by operating activities
29(a)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Proceeds from sale of subsidiary
29(b)
Proceeds from sale of non-current assets
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayment of borrowings
Net proceeds from share issue
Dividends paid
Net cash provided by/(used in) in financing activities
Net increase/(decrease) in cash held
Cash at beginning of the financial year
Cash at end of the financial year
11
12
564,656
(535,556)
315,662
(313,573)
29,100
428
(2,338)
(5,521)
21,669
2,089
34
(1,496)
-
627
(1,283)
(1,775)
-
257
(1,026)
(339)
48,803
(2,381)
46,083
66,726
16,755
83,481
919
259
(597)
(380)
200
-
(180)
(150)
16,905
16,755
The accompanying notes form part of these financial statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
The financial statements of Decmil Group Limited (‘the Company’) for the year ended 30 June 2019
comprise of the Company and its controlled entities (collectively referred to as ‘the consolidated entity’)
and the consolidated entity’s interests in joint operations. The separate financial statements of the parent
entity, Decmil Group Limited, have not been presented within this financial report as permitted by the
Corporations Act 2001.
Decmil Group Limited is a company limited by shares incorporated in Australia whose shares are
publicly traded on the Australian Securities Exchange.
The financial statements were authorised for issue in accordance with a resolution of the directors dated
27 August 2019.
NOTE 1: Summary of Significant Accounting Policies
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations
Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards
Board, and International Financial Reporting Standards as issued by the International Accounting
Standards Board. The consolidated entity is a for-profit entity for financial reporting purposes under
Australian Accounting Standards.
Material accounting policies adopted in the preparation of these financial statements are presented
below and have been consistently applied unless otherwise stated.
Except for cash flow information, the financial statements have been prepared on an accruals basis and
are based on historical costs, modified where applicable, by the measurement at fair value of selected
non-current assets, financial assets and financial liabilities.
(a) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled
by Decmil Group Limited at the end of the reporting period. The Company controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. The assets, liabilities and results of all controlled
entities are fully consolidated into the financial statements of the consolidated entity from the date on
which control is obtained by the consolidated entity. The consolidation of a controlled entity is
discontinued from the date that control ceases.
Intercompany balances and transactions between entities in the consolidated entity are eliminated on
consolidation. Accounting policies of controlled entities have been changed where necessary to ensure
consistency with those adopted by the consolidated entity.
Non-controlling interests in the results and equity of controlled entities are shown separately within the
equity section of the consolidated statement of financial position and statement of profit or loss and other
comprehensive income. The non-controlling interests in the net assets of the controlled entity comprise
their interests at the date of the original business combination and their share of changes in equity since
that date.
Where the consolidated entity loses control over a controlled entity, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the controlled entity together with any cumulative
translation differences recognised in equity. The consolidated entity recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in
profit or loss.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
(b) Income Tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income
based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax
assets and liabilities attributable to temporary differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to
be applied when the assets are recovered or liabilities are settled, based on those tax rates that are
enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in controlled entities, associates or
joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Tax consolidation
Decmil Group Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred
tax assets and liabilities of the entities are set off in the consolidated financial statements.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts receivable from or payable to other entities in the tax consolidated group. The
tax funding arrangement ensures that the intercompany charge equals the current tax liability or benefit
of each tax consolidated group member, resulting in neither a contribution by the head entity to the
controlled entities nor a distribution by the controlled entities to the head entity.
(c) Construction Contracts and Work in Progress
Construction work in progress is valued at cost, plus profit recognised to date less any provision for
anticipated future losses. Cost includes both variable and fixed costs relating to specific contracts, and
those costs that are attributable to the contract activity in general and that can be allocated on a
reasonable basis.
Construction profits are recognised on the stage of completion basis and measured using the proportion
of costs incurred to date compared to expected actual costs. Where losses are anticipated they are
provided for in full. Construction revenue has been recognised on the basis of the terms of the contract
adjusted for any variations or claims allowable under the contract.
(d) Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture
where unanimous decisions about relevant activities are required.
Joint venture operations represent arrangements whereby joint operators maintain direct interests in
each asset and exposure to each liability of the arrangement. The consolidated entity’s interests in the
assets, liabilities, revenue and expenses of joint operations are included in the respective line items of
the consolidated financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other
parties’ interests. When the consolidated entity makes purchases from a joint operation, it does not
recognise its share of the gains and losses from the joint operations until it resells those goods/assets to
a third party.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
(e) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated
depreciation and impairment losses.
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is
not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the assets employment and subsequent
disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.
Depreciation
The depreciable amount of all property, plant and equipment but excluding freehold land is depreciated
on a straight-line basis over their useful lives to the consolidated entity commencing from the time the
asset is held ready for use. The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Owned plant and equipment
Leased plant and equipment
5% to 33%
12.5% to 20%
The assets' residual values and useful lives are reviewed and adjusted if appropriate, at the end of each
reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the statement of profit or loss and other comprehensive income in the
period in which they arise.
(f) Investment Property
Investment property, comprising investment interests in land and buildings, is held to generate long-term
returns. Investment property is initially measured at cost and subsequently measured at fair value.
Investment property is carried at fair value which is based on discounted cash flow projections.
Investment property is valued at least every 3 years by independent external valuers. Any resultant
changes in fair value are shown separately in the statement of profit or loss and other comprehensive
income as net gains/(losses) from fair value adjustments on investment property.
(g) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the
asset, but not the legal ownership that are transferred to entities in the consolidated entity are classified
as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to
the fair value of the leased property or the present value of the minimum lease payments, including any
guaranteed residual values. Lease payments are allocated between the reduction of the lease liability
and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis
over their estimated useful lives. Lease payments for operating leases, where substantially all the risks
and benefits remain with the lessor, are recognised as expenses in the periods in which they are
incurred.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
(h) Impairment of Assets
At each reporting date, the consolidated entity reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less
costs to sell and value-in-use, is compared to the asset's carrying value. Any excess of the asset's
carrying value over its recoverable amount is expensed immediately to the statement of profit or loss and
other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated
entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.
(i) Goodwill
Goodwill acquired in a business combination is initially measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling interests in the acquiree, and the acquisition
date fair value of any previously held equity interest over the acquisition-date fair value of the identifiable
assets acquired and the liabilities assumed.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is not amortised. Goodwill is reviewed for impairment, annually or more frequently if events or
changes in circumstances indicate that the carrying value may be impaired. It is allocated to the
consolidated entity’s cash-generating units or groups of cash-generating units, representing the lowest
level at which goodwill is monitored not being larger than an operating segment. Gains and losses on the
disposal of an entity include the carrying amount of goodwill related to the entity disposed of.
Impairment losses recognised for goodwill are not subsequently reversed.
For the purpose of impairment testing and since the acquisition date of the business combination,
goodwill is allocated to each cash-generating unit, or groups of cash-generating units that are expected
to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the
acquiree were assigned to those units or groups of units. Each unit or group of units to which the
goodwill is so allocated represents the lowest level within the entity at which the goodwill is monitored for
internal management purposes and is not larger than a segment.
(j) Intangibles other than Goodwill
Intangible assets acquired separately are capitalised at cost. Following initial recognition, the cost model
is applied to each class of intangible assets. Where amortisation is charged on assets with finite lives,
this expense is taken to the statement of profit or loss and other comprehensive income, through the
‘amortisation expenses’ line item.
Intangible assets are tested for impairment where an indicator of impairment exists and in the case of
intangible assets with indefinite useful lives, either individually or at the cash-generating unit level.
(k) Employee Benefits
Provision is made for the consolidated entity’s obligation for short-term employee benefits. Short-term
employee benefits are benefits that are expected to be settled wholly before 12 months after the end of
the annual reporting period in which the employees render the related service, including wages, salaries
and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to
be paid when the obligation is settled.
The consolidated entity’s obligations for short-term employee benefits such as wages, salaries and sick
leave are recognised as a part of current trade and other payables in the statement of financial position.
The consolidated entity’s obligations for employees’ annual leave and long service leave entitlements
are recognised as provisions in the statement of financial position.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
Other long term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected to be
settled wholly within 12 months after the end of the annual reporting period in which the employees
render the related service. Other long-term employee benefits are measured at the present value of the
expected future payments to be made to employees. Expected future payments incorporate anticipated
future wage and salary levels, durations of service and employee departures and are discounted at rates
determined by reference to market yields at the end of the reporting period on government bonds that
have maturity dates that approximate the terms of the obligations. Any remeasurements for changes in
assumptions of obligations for other long-term employee benefits are recognised in statement of profit or
loss and other comprehensive income in the periods in which the changes occur.
The consolidated entity’s obligations for long-term employee benefits are presented as non-current
provisions in its statement of financial position, except where the consolidated entity does not have an
unconditional right to defer settlement for at least 12 months after the end of the reporting period, in
which case the obligations are presented as current provisions.
Equity-based payments
The consolidated entity provides equity-settled equity-based compensation benefits to employees. The
equity-based compensation benefits include the award of shares, and performance rights over shares, in
exchange for the rendering of services. The fair value of the equity to which employees become entitled
is measured at grant date and recognised as an expense over the vesting period, with a corresponding
increase to an equity account. The fair value of shares is measured as the share price at the date of
grant and the fair value of performance rights is ascertained using various option pricing models which
incorporate, where required, market vesting conditions. The number of shares and performance rights
expected to vest is reviewed and adjusted at the end of each reporting date such that the amount
recognised for services received as consideration for the equity instruments granted shall be based on
the number of equity instruments that eventually vest.
(l) Provisions
Provisions are recognised when the consolidated entity has a legal or constructive obligation, as a result
of past events, for which it is probable that an outflow of economic benefits will result and that outflow
can be reliably measured. Provisions are measured using the best estimate of the amounts required to
settle the obligation at the end of the reporting period, taking into account the risks and uncertainties
surrounding the obligation.
(m) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the
end of the financial year and which are unpaid. Due to their short-term nature they are measured at
amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days
of recognition.
(n) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term
highly liquid investments with original maturities of 6 months or less.
(o) Revenue and Other Income
The financial reporting standard on revenue from contracts with customers establishes a five-step model
to account for revenue arising from contracts with customers. Revenue is recognised at an amount that
reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or
services to a customer. An asset (goods or services) is transferred when or as the customer obtains
control of that asset.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
Revenue from Construction Activities:
For long-term service contracts and projects for constructing, manufacturing or developing an asset the
customer value is created over time during the contract period and it is accounted for as a single
performance obligation that is satisfied over time. This is because the customer simultaneously receives
and consumes the benefits of the entity’s performance in processing each transaction as and when each
transaction is processed; the performance creates or enhances an asset (for example, work in progress)
that the customer controls as the asset is created or enhanced; or the performance does not create an
asset with an alternative use to the entity and the entity has an enforceable right to payment for
performance completed to date. The revenue is recognised over time by using the input method.
For the input method the revenue is recognised on the basis of the efforts or inputs to the satisfaction of
a performance obligation such as resources consumed, labour hours expended and costs incurred,
relative to the total expected inputs to the satisfaction of that performance obligation.
Services:
Revenue from service orders and term projects is recognised when the entity satisfies the performance
obligation at a point in time generally when the significant acts have been completed and when transfer
of control occurs or for services that are not significant transactions revenue is recognised as the
services are provided.
Interest income:
Interest income is recognised using the effective interest method.
All revenue is stated net of the amount of goods and services tax (GST).
(p) Financing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the statement of profit or loss and other comprehensive
income in the period in which they are incurred.
(q) Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Decmil Group
Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
(r) Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
(s) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of
the reporting period.
(t) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the relevant revenue authority. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
(u) Financial Instruments
Recognition and derecognition of financial instruments:
A financial asset or a financial liability is recognised in the statement of financial position when, and only
when, the entity becomes party to the contractual provisions of the instrument. All other financial
instruments are recognised and derecognised, as applicable, using trade date accounting or settlement
date accounting. A financial asset is derecognised when the contractual rights to the cash flows from the
financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of the financial asset are transferred or in
which the entity neither transfers nor retains substantially all of the risks and rewards of ownership and it
does not retain control of the financial asset. A financial liability is removed from the statement of
financial position when, and only when, it is extinguished, that is, when the obligation specified in the
contract is discharged or cancelled or expires. At initial recognition the financial asset or financial liability
is measured at its fair value plus or minus, in the case of a financial asset or financial liability not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of
the financial asset or financial liability.
Classification and measurement of financial assets:
Financial assets classified as measured at amortised cost: A financial asset is measured at amortised
cost if it meets both of the following conditions and is not designated as at fair value through profit or
loss, that is (a) the asset is held within a business model whose objective is to hold assets to collect
contractual cash flows; and (b) the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.
Typically trade and other receivables, bank and cash balances are classified in this category.
Financial assets that are a debt asset instrument classified as measured at fair value through other
comprehensive income: There were no financial assets classified in this category at reporting year end
date.
Financial assets that are an equity investment classified as measured at fair value through other
comprehensive income: There were no financial assets classified in this category at reporting year end
date.
Financial assets classified as measured at fair value through profit or loss: There were no financial
assets classified in this category at reporting year end date.
Classification and measurement of financial liabilities:
Financial liabilities are classified as at fair value through profit or loss in either of the following
circumstances: the liabilities are managed, evaluated and reported internally on a fair value basis; or the
designation eliminates or significantly reduces an accounting mismatch that would otherwise arise. All
other financial liabilities are carried at amortised cost using the effective interest method. Reclassification
of any financial liability is not permitted.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
(v) Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services
performed in the ordinary course of business. Receivables expected to be collected within 12 months of
the end of the reporting period are classified as current assets. All other receivables are classified as
non-current assets. Trade and other receivables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest rate method, less any provision for impairment.
The trade receivables and contract assets are subject to the expected credit loss model under the
financial reporting standard on financial instruments. The methodology applied for impairment loss is the
simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables and contract assets. The expected lifetime losses are recognised from initial
recognition of these assets. These assets are grouped based on shared credit risk characteristics and
the days past due for measuring the expected credit losses. The allowance matrix is based on its
historical observed default rates over a period of 36 months over the expected life of the trade
receivables and is adjusted for forward-looking estimates. At every reporting date the historical observed
default rates are updated and changes in the forward-looking estimates are analysed. The loss
allowance was determined as nil for both trade receivables and contract assets.
(w) Current and Non-current Classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be
realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to settle a liability for at least 12 months after the reporting
period. All other assets are classified as non-current.
(x) Foreign Currency Transactions and Balances
Foreign currency translation
The financial statements are presented in Australian dollars, which is the Company’s functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit or loss.
(y) Fair Value of Assets and Liabilities
The consolidated entity measures some of its assets and liabilities at fair value on either a recurring or
non-recurring basis, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the consolidated entity would receive to sell an asset or would have to pay to
transfer a liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and
willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is
used to determine fair value. Adjustments to market values may be made having regard to the
characteristics of the specific asset or liability.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
The fair values of assets and liabilities that are not traded in an active market are determined using one
or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or
liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the
absence of such a market, the most advantageous market available to the consolidated entity at the end
of the reporting period (i.e. the market that maximises the receipts from the sale of the asset or
minimises the payments made to transfer the liability, after taking into account transaction costs and
transport costs).
The fair value of liabilities and the consolidated entity’s own equity instruments (excluding those related
to equity-based payment arrangements) may be valued, where there is no observable market price in
relation to the transfer of such financial instrument, by reference to observable market information where
such instruments are held as assets. Where this information is not available, other valuation techniques
are adopted and, where significant, are detailed in the respective note to the financial statements.
(z) Rounding of Amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to ‘rounding-off’. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
(aa) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
(ab) Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on
historical knowledge and best available current information. Estimates assume a reasonable expectation
of future events and are based on current trends and economic data, obtained both externally and within
the consolidated entity.
Impairment of goodwill and intangibles
The amount of goodwill is tested annually for impairment. This annual impairment test is based on
assumptions that are affected by expected future market or economic conditions. As a result, judgement
is required in evaluating the assumptions and methodologies used by management, in particular those
relating to the forecasted revenue growth and profit margins. The disclosures about goodwill are
included in note 19, which explains that small changes in the key assumptions used could give rise to an
impairment of the goodwill balance in the future. Actual outcomes could vary from these estimates.
Equity-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to
the fair value of the equity instrument at the date at which they are granted.
The fair value of performance rights are determined using various option pricing models. The accounting
estimates and assumptions relating to equity-settled equity-based payments would have no impact on
the carrying amount of assets and liabilities within the next annual reporting period but may impact
expenses and equity.
Revenue recognised over time:
The entity has revenue where the performance obligation is satisfied over time. Revenue is recognised
over time by measuring the progress toward complete satisfaction of that performance obligation. A
single method is applied consistently for measuring progress for each performance obligation satisfied
over time. Judgment is required when selecting a method (output or input methods) for measuring
progress toward complete satisfaction of a performance obligation.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1: Summary of Significant Accounting Policies (Cont’d)
Assessing the satisfaction of performance obligations over time requires judgment and the consideration
of many criteria that should be met to qualify such as whether the customer presently is obligated to pay
for an asset, whether the customer has legal title, whether the entity has transferred physical possession
of the asset, whether the customer has assumed the significant risks and rewards of ownership of the
asset, and whether the customer has accepted the asset. Events and circumstances frequently do not
occur as expected. Even if the events anticipated under the assumptions occur, actual results are still
likely to be different from the estimates since other anticipated events frequently do not occur as
expected and the variation may be material. The related account balances at the end of the reporting
year are disclosed in the notes 4 and 14 on revenues and contract assets and contract liabilities.
Contract modifications:
A contract with a customer is accounted for as a separate contract if (1) the scope of the contract
increases because of the addition of promised goods or services that are distinct and (2) the price of the
contract increases by an amount of consideration that reflects the entity's stand-alone selling prices of
the additional promised goods or services. In order to faithfully depict the entity's rights and obligations
arising from a modified contract, the modifications may be accounted for some prospectively and others
on a cumulative catch-up basis. The accounting for the modification depends on whether the additional
promised goods or services are distinct. The accounting for contract modification requires judgement. In
addition, if the entity has not yet determined the price, management has to estimate the change to the
transaction price arising from the contract modification using the variable consideration guidance in the
financial reporting standard. Contract modifications may have a significant impact on the entity's ability to
record revenue. The related account balances at the end of the reporting year are disclosed in the notes
4 and 14 on revenues and contract assets and liabilities.
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a
three level hierarchy, based on the lowest level of input that is significant to the entire fair value
measurement, being: level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities that the consolidated entity can access at the measurement date; level 2: Inputs other than
quoted prices included within level 1 that are observable for the asset or liability, either directly or
indirectly; and level 3: Unobservable inputs for the asset or liability. Considerable judgement is required
to determine what is significant to fair value and therefore which category the asset or liability is placed
in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models.
These include discounted cash flow analysis or the use of observable inputs that require significant
adjustments based on unobservable inputs.
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant
judgement is required in determining the provision for income tax. There are many transactions and
calculations undertaken during the ordinary course of business for which the ultimate tax determination
is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the
consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters
is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Recovery of deferred tax assets
The deferred tax relating to an asset is recognised when the entity expects to recover the carrying
amount of the asset through use or sale. Judgement is required for assessment of whether recovery will
be through use or through sale when the asset is measured using the fair value model for investment
property or when the revaluation model is required or permitted by a financial reporting standard for a
non-financial asset. Management has taken the view that as there is clear evidence that the entity will
consume the relevant asset economic benefits throughout its economic life. The amount is detailed in
note 24.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: New Accounting Standards for Application in Future Periods
New, revised or amending Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current
reporting period.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The
standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial
Instruments: Recognition and Measurement'. AASB 9 introduces new classification and measurement
models for financial assets.
A financial asset shall be measured at amortised cost, if it is held within a business model whose
objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and
solely principal and interest. All other financial instrument assets are to be classified and measured at
fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to
present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive
income (OCI). For financial liabilities, the standard requires the portion of the change in fair value that
relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting
mismatch). New simpler hedge accounting requirements are intended to more closely align the
accounting treatment with the risk management activities of the entity. New impairment requirements will
use an 'expected credit loss' (ECL) model to recognise an allowance. Impairment will be measured
under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL method is adopted.
The standard introduces additional new disclosures. The consolidated entity has adopted this standard
from 1 July 2018 but with no impact to the consolidated entity.
AASB 15 Revenue from Contracts with Customers
In the current year, the consolidated entity has applied AASB 15 Revenue from Contracts with
Customers which has come into effect 1 January 2018. Details of the new requirements of AASB 15 as
well as their impact on the Group’s consolidated financial statements are described below.
AASB 15 establishes a comprehensive framework for determining the timing and quantum of revenue
recognised. It replaces existing guidance, including AASB 118 Revenue and AASB 111 Construction
Contracts. The core principle of AASB 15 is that an entity shall recognise revenue when control of a
good or service transfers to a customer.
Significant judgments and estimates are used in determining the impact, such as the assessment of the
probability of customer acceptance of claims, estimation of project completion date and assumed levels
of project execution productivity.
The contractual terms and the way in which the Group operates its construction contracts is
predominantly derived from projects containing one performance obligation. Contracted revenue will
continue to be recognised over time, however the new standard provides new requirements for variable
consideration, as well as accounting for claims and variations as contract modifications which all impart
a higher threshold of probability for recognition.
Revenue was previously recognised when it is probable that work performed will result in revenue
whereas under the new standard, revenue is recognised when it is highly probable that a significant
reversal of revenue will not occur for these modifications.
Under AASB 111 Construction Contracts, costs incurred during the tender process were able to be
capitalised within other current assets when it was deemed probable the contract would be won. Under
the new standard, costs can only be capitalised if they are both expected to be recovered and either
would not have been incurred if the contract had not been won or if they are intrinsic to the delivery of a
project.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2: New Accounting Standards for Application in Future Periods (Cont’d)
The consolidated entity has applied AASB 15 retrospectively with the cumulative effect of initially
applying the standards as an adjustment to the opening balance of equity and comparative figures are
therefore not restated.
Adoption of AASB 15
Shareholder equity of $206.3 million at 1 July 2018 reduced by $33.8 million upon adoption of all
requirements of the new standard.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have
not been early adopted.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting
period ended 30 June 2019. The consolidated entity's assessment of the impact of these new or
amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out
below.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The
standard replaces AASB 117 Leases and for lessees will eliminate the classifications of operating leases
and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of
financial position, measured as the present value of the unavoidable future lease payments to be made
over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-
value assets (such as personal computers and small office furniture) where an accounting policy choice
exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or
loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for
lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future
restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be
replaced with a depreciation charge for the leased asset (included in operating costs) and an interest
expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease,
the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117.
For classification within the statement of cash flows, the lease payments will be separated into both a
principal (financing activities) and interest (either operating or financing activities) component. For lessor
accounting, the standard does not substantially change how a lessor accounts for leases. The
consolidated entity will adopt this standard from 1 July 2019 and its impact on adoption is expected to
result in total assets increasing by $12,183,000, total liabilities increasing by $13,086,000 and net assets
decreasing by $558,000.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3: Parent Entity Information
Statement of profit or loss and other comprehensive income
Loss for the year
Total comprehensive income for the year
Statement of financial position
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Retained earnings
TOTAL EQUITY
a) Guarantees
Parent Entity
2019
$000
2018
$000
(24,111)
(24,111)
(27,725)
(27,725)
100,682
86,099
186,781
148,096
271
148,367
86,543
87,175
173,718
158,083
652
158,735
218,552
(180,138)
38,414
168,628
(153,645)
14,983
Cross guarantees have been provided by Decmil Group Limited and its controlled entities as listed in
note 15(b).
b) Other Commitments and Contingencies
Decmil Group Limited has no commitments to acquire property, plant and equipment, and has no
contingent liabilities apart from that disclosed in note 34.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 4: Revenue
From continuing operations
Construction and engineering revenue
Accommodation revenue
Other revenue
- rentals
Total revenue from continuing operations
(a) Interest revenue
Interest revenue from:
- other persons
Total interest revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Sectors
Infrastructure
Resources
Renewables
Accommodation
Other
Geographical regions
Australia
New Zealand
Consolidated Entity
2019
$000
659,118
4,158
-
663,276
2018
$000
335,901
5,952
(245)
341,608
428
428
32
32
Consolidated Entity
2019
$000
252,564
154,271
252,080
4,158
203
2018
$000
119,688
215,322
630
5,952
16
663,276
341,608
551,534
111,742
663,276
293,236
48,372
341,608
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 5: Expenses
From continuing operations
Profit/(loss) before income tax includes the following specific
expenses:
Employee benefits costs
Finance costs
Depreciation and amortisation of non-current assets:
- plant and equipment owned
- plant and equipment leased
- building
Total depreciation
Rental expense on operating leases
NOTE 6: Income Tax Expense
Consolidated Entity
2019
$000
2018
$000
92,404
2,338
2,181
480
-
2,661
2,675
73,323
1,493
2,792
109
2
2,903
2,847
Consolidated Entity
Income tax (expense)/benefit is attributable to:
Profit from continuing operations
Loss from discontinued operations
The components of income tax (expense)/benefit comprise:
Current tax
Deferred tax
Under provision for tax in prior year
The prima facie tax benefit on profit/loss before income tax is
reconciled to the income tax benefit as follows:
Prima facie tax (expense)/benefit on profit/loss before income tax at
29% (2018: 30%)
Adjusted by the tax effect of:
- equity based payments
- deductible capital raising costs
- non-deductible items
- research and development tax offset (non-refundable)
- under provision for tax in prior year
Income tax (expense)/benefit attributable to profit/loss before
income tax
The applicable weighted average effective tax rates are as follows:
Note
7
24
2019
$000
(5,511)
-
(5,511)
(5,622)
234
(123)
(5,511)
2018
$000
(521)
589
68
(1,564)
2,183
(551)
68
(5,744)
1,992
(160)
659
3,459
(3,602)
(123)
(5,511)
28%
(93)
3
(855)
(428)
(551)
68
1%
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 7: Discontinued Operations
As part of the Group’s refocus on its core construction and engineering business units, on 1 November
2017 the Group’s telecommunications division consisting of SC Holdings Pty Ltd and its subsidiaries SC
Services Pty Ltd and SC Equipment Holdings Pty Ltd and the Group’s design consulting business,
Scope Australia Pty Ltd, were discontinued.
(a) Financial performance information
Consolidated Entity
Other services revenue
Interest received
Total revenue
Cost of sales
Administration expenses
Borrowing costs
Depreciation and amortisation expense
Loss on disposal of subsidiaries
Total expenses
Loss before income tax expense
Income tax benefit
Loss after income tax expense from discontinued operations
Note
2019
$000
-
-
-
-
-
-
-
-
-
-
-
-
29(b)
6
2018
$000
7,647
1
7,648
(8,644)
(2,002)
(2)
(111)
(3,438)
(14,197)
(6,549)
589
(5,960)
(b) Financial position information
Consolidated Entity
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
Total Assets
Current Liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
Net Assets
2019
$000
-
-
-
-
-
-
-
-
-
2018
$000
10
20
752
782
782
32
32
32
750
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 7: Discontinued Operations (Cont’d)
(c) Cash flow information
Consolidated Entity
Net cash used in operating activities
Net cash provided by investing activities
Net cash used in financing activities
Net decrease in cash and cash equivalents from discontinued
operations
2019
$000
-
-
-
-
2018
$000
(991)
962
(1)
(30)
NOTE 8: Key Management Personnel Disclosures
a. Names and positions held of directors and other members of Key Management Personnel in office
at any time during the financial year are:
Parent Entity Directors
Don Argent
Denis Criddle (retired 31 October 2018)
Scott Criddle
Dickie Dique (appointed 1 July 2018)
Bill Healy
David Saxelby
Key Management Personnel
Tony Radalj: Chief Operating Officer (resigned 18 December 2018)
Craig Amos: Chief Financial Officer
b. Compensation for Key Management Personnel
The totals of remuneration paid to directors and KMP of the Company and the consolidated entity during
the year are as follows:
Short-term employee benefits
Equity-based payments
2019
$000
2,009
264
2,273
2018
$000
1,660
499
2,159
c. Loans to Key Management Personnel
No directors or KMP had any loans during the reporting period.
d. Other transactions and balances with Key Management Personnel
There were no other transactions and balances with KMP other than that disclosed in note 31.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 9: Auditors’ Remuneration
Remuneration of the auditor of the parent entity for:
- auditing or reviewing the financial report
- taxation services
- accounting assistance
NOTE 10: Earnings Per Share
(a)
(b)
(c)
(d)
Reconciliation of earnings to profit or loss from overall
operations
Profit/(loss) after income tax
Earnings used to calculate basic and dilutive EPS
Reconciliation of earnings to profit or loss from
continuing operations
Profit/(loss) after income tax
Earnings used to calculate basic and dilutive EPS
Reconciliation of earnings to profit or loss from
discontinuing operations
Loss after income tax
Earnings used to calculate basic and dilutive EPS
Weighted average number of ordinary shares
outstanding during the year used in calculating
basic EPS
Weighted average number of dilutive options outstanding
Weighted average number of ordinary shares outstanding
during the year used in calculating dilutive EPS
Consolidated Entity
2019
$000
275
22
15
312
2018
$000
228
29
10
267
Consolidated Entity
2019
$000
14,018
14,018
2018
$000
(6,131)
(6,131)
14,018
14,018
(171)
(171)
-
-
(5,960)
(5,960)
No.
No.
223,473,242
173,223,027
-
-
223,473,242
173,223,027
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 11: Dividends
Distributions Paid
Final dividend for the year ended 30 June 2018 of nil cents (2017:
nil cents)
Interim dividend for the year ended 30 June 2019 of 1 cent (2018: nil
cents) per share fully franked at the tax rate of 30%
Balance of Australian franking account at year end
Balance of New Zealand imputation account at year end
NOTE 12: Cash and Cash Equivalents
Cash at bank and in hand
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of
cash flows is reconciled to items in the statement of financial
position as follows:
Cash and cash equivalents
NOTE 13: Trade and Other Receivables
CURRENT
Trade receivables
Less: Provision for impairment of receivables
Movement in the provision for impairment of receivables are as
follows:
Opening balance
Additional provisions recognised
Written off during the year as uncollectable
Closing balance
Consolidated Entity
2019
$000
-
2,381
2,381
56,825
1,482
2018
$000
-
-
-
54,244
-
Consolidated Entity
2019
$000
83,481
83,481
2018
$000
16,755
16,755
83,481
16,755
Consolidated Entity
2019
$000
74,272
-
74,272
-
-
-
-
2018
$000
43,672
-
43,672
-
399
(399)
-
The following table details the consolidated entity’s trade receivables exposed to credit risk with ageing
analysis and impairment provided for thereon. Amounts are considered as ‘past due’ when the debt has
not been settled, with the terms and conditions agreed between the consolidated entity and the customer
or counterparty to the transaction. Receivables that are past due are assessed for impairment by
ascertaining solvency of the debtors and are provided for where there are specific circumstances
indicating that the debt may not be fully repaid to the consolidated entity.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 13: Trade and Other Receivables (Cont’d)
The balances of receivables that remain within initial trade terms (as detailed in the table) are considered
to be of high credit quality.
Past due but not impaired (days overdue)
Within
initial
trade
terms
$000
Gross
amount
$000
74,272
74,272
65,491
65,491
31-60
$000
6,621
6,621
2019
Trade receivables
Total
2018
Trade receivables
Total
43,672
43,672
42,472
42,472
547
547
61-90
$000
91-120
$000
>1201
$000
Past due
and
impaired
$000
16
16
13
13
633
633
1,511
1,511
2
2
638
638
-
-
-
-
Allowance for expected credit loss:
There is no allowance for expected credit losses recognised as at 30 June 2019.
NOTE 14: Work in Progress
CURRENT
Construction and engineering contracts
Cost incurred to date plus profit recognised
Consideration received and receivables as progress billings
Advanced billings to customers
Unbilled amounts due from customers
Consolidated Entity
Note
2019
$000
2018
$000
998,642
(969,002)
29,640
(35,462)
65,102
29,640
566,798
(545,732)
21,066
(7,816)
28,882
21,066
21
1 Includes contractor’s retention withheld by customers of $612,000 (2018: nil)
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 15: Controlled Entities
(a) Controlled Entities
Country of
Incorporation
Percentage Owned (%)
2019
2018
Parent Entity:
Decmil Group Limited
Controlled entities of Decmil Group Limited:
Decmil Australia Pty Ltd
Decmil Properties Pty Ltd
Eastcoast Development Engineering Pty Ltd
Homeground Villages Pty Ltd
Decmil Infrastructure Pty Ltd
Decmil Services Pty Ltd
Decmil Group Limited Employee Share Plan Trust
Controlled entities of Homeground Villages Pty Ltd:
Homeground Gladstone Pty Ltd ATF Homeground
Gladstone Unit Trust
Homeground Gladstone Unit Trust
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Controlled entities of Decmil Australia Pty Ltd:
Decmil PNG Limited
Decmil Construction NZ Limited
Decmil Engineering Pty Ltd
Decmil Southern Pty Ltd (formerly Cut and Fill Pty Ltd)
Papua New
Guinea
New Zealand
Australia
Australia
100%
-
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Controlled entities of Decmil Services Pty Ltd:
Decmil Telecom Pty Ltd
Australia
-
100%
(b) A deed of cross guarantee between Decmil Group Limited and the following wholly-owned controlled
entities existed during the financial year and relief was obtained from preparing a financial report for
Decmil Group Limited’s wholly-owned controlled entities under ASIC Class Order 98/1418: Decmil
Australia Pty Ltd, Eastcoast Development Engineering Pty Ltd, Homeground Villages Pty Ltd and Decmil
Properties Pty Ltd.
Under the deed, Decmil Group Limited and the above named wholly-owned controlled entities guarantee
to support each other’s liabilities and obligations. Decmil Group Limited and its above named wholly-
owned controlled entities are the only parties to the deed of cross guarantee and are members of the
Closed Group.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 15: Controlled Entities (Cont’d)
The following are the aggregate totals, for each category, relieved under the deed.
Financial information in relation to:
(i)
Statement of profit or loss and other comprehensive
income:
Profit/(loss) before income tax
Income tax benefit
Profit/(loss) after income tax
(ii)
Retained Earnings:
Retained earnings at the beginning of the year
Opening balance adjustment on application of AASB15
Profit/(loss) after income tax
Dividends recognised for the period
Retained earnings at the end of the year
2019
$000
2018
$000
2,528
(2,094)
434
(956)
(33,321)
434
(2,381)
(36,224)
(19,151)
1,210
(17,941)
16,985
-
(17,941)
-
(956)
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 15: Controlled Entities (Cont’d)
(iii)
Statement of Financial Position:
Current Assets
Cash and cash equivalents
Trade and other receivables
Work in progress
Current tax receivable
Other assets
Total Current Assets
Non-current Assets
Investment property
Property, plant and equipment
Deferred tax assets
Intangible assets
Other financial assets
Total Non-current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Non-current Liabilities
Deferred tax liabilities
Borrowings
Provisions
Total Non-current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Retained earnings
Net Equity
2019
$000
2018
$000
50,606
51,154
53,921
2,290
1,344
159,315
92,449
5,536
29,803
71,061
6,218
205,067
364,382
176,200
1,208
3,885
3,662
24,176
27,821
820
6,829
63,308
92,410
3,658
29,375
71,061
6,218
202,722
266,030
96,512
173
3,427
181,293
100,112
182
1,912
361
2,455
183,748
180,634
216,858
(36,224)
180,634
544
-
498
1,042
101,154
164,876
165,832
(956)
164,876
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16: Joint Arrangements
Interest in Joint Operations
Mordialloc JV
Decmil BESIX JV
TCDC JV
Decmil Balance JV
Decmil Balance JV
DASSH JV
Country of
Incorporation
Australia
Australia
New Zealand
Australia
Australia
Australia
2019
40%
50%
50%
25%
67%
45%
2018
-
50%
50%
25%
67%
45%
The following material Joint Operations are disclosed as follows:
Mordialloc JV
In March 2019, Major Roads Projects Victoria, a Victorian state government department, awarded
Decmil Southern Pty Ltd, in joint venture with McConnell Dowell Constructors (Aust) Pty Ltd (Mordialloc
JV), a $25m contract for an early works package for the Mordialloc Freeway project. The early works
package involves detailed design work of the freeway link with the main works expected to be awarded
by the end of 2019 upon Environmental Planning Approval. The principal place of business of the joint
operation is Australia.
Under the joint venture agreement Decmil Southern Pty Ltd has a 40% participation interest in all the
assets used, revenues generated and the expenses incurred by the joint arrangement. Decmil Southern
Pty Ltd is also liable for 40% of any liabilities incurred by the joint arrangement. In addition, Decmil
Southern Pty Ltd has voting rights in the joint arrangement, which generally require unanimity on most
decisions save for certain urgent matters which may initially be determined by the Project Manager (and
can be subsequently disputed by either party).
Mordialloc JV is an unincorporated entity and is classified as a joint operation. Accordingly, Decmil
Southern Pty Ltd’s interests in the assets, liabilities, revenues and expenses attributable to the joint
arrangement have been included in the appropriate line items in the consolidated financial statements.
The consolidated entity’s share of assets employed, liabilities owing and net results of the Mordialloc JV
that are included in the consolidated financial statements are as follows:
CURRENT ASSETS
Cash and cash equivalents
Other assets
TOTAL CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITES
Revenue
Expenses
Profit for the year
2019
$000
2,842
1,572
4,414
4,414
2,862
2,862
2,862
3,925
(2,373)
1,552
2018
$000
-
-
-
-
-
-
-
-
-
-
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16: Joint Arrangements (Cont’d)
Decmil BESIX JV
In June 2017, Pilbara Marine Pty Ltd, a wholly owned subsidiary of Fortescue Metals Group, awarded
Decmil Australia Pty Ltd, in joint venture with BESIX Australia Pty Ltd (Decmil BESIX JV), a ~$21.0m
contract for the provision of tug infrastructure and service facilities including fuel, lighting, electrical and
water services at Anderson Point, Port Hedland in Western Australia. The principal place of business of
the joint operation is Australia.
Under the joint venture agreement Decmil Australia Pty Ltd has a 50% participation interest in all the
assets used, revenues generated and the expenses incurred by the joint arrangement. Decmil Australia
Pty Ltd is also liable for 50% of any liabilities incurred by the joint arrangement. In addition, Decmil
Australia Pty Ltd has voting rights in the joint arrangement, which generally require unanimity on most
decisions save for certain urgent matters which may initially be determined by the Project Manager (and
can be subsequently disputed by either party).
Decmil BESIX JV is an unincorporated entity and is classified as a joint operation. Accordingly, Decmil
Australia Pty Ltd’s interests in the assets, liabilities, revenues and expenses attributable to the joint
arrangement have been included in the appropriate line items in the consolidated financial statements.
The consolidated entity’s share of assets employed, liabilities owing and net results of the Decmil BESIX
JV that are included in the consolidated financial statements are as follows:
CURRENT ASSETS
Cash and cash equivalents
Other assets
TOTAL CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITES
Revenue
Expenses
Profit/(loss) for the year
2019
$000
359
2
361
361
1,530
1,530
1,530
4,229
(6,258)
(2,029)
2018
$000
520
3,671
4,191
4,191
3,939
3,939
3,939
12,014
(11,718)
296
Contingent Liabilities in Respect of Joint Arrangements
The consolidated entity is liable for the following contingent liabilities owing from its participation interests
in the joint arrangements if and when they arise:
Guarantees given for satisfactory contract performance
2019
$000
2,005
2018
$000
4,677
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17: Property, Plant and Equipment
LAND AND BUILDING (Secured)
Freehold land, at cost
PLANT AND EQUIPMENT
Plant and Equipment:
At cost
Accumulated depreciation
Leased Plant and Equipment (Secured)
Accumulated depreciation
Total Property, Plant and Equipment
Movements in Carrying Amounts
Consolidated Entity
2019
$000
554
554
41,060
(35,605)
5,455
5,164
(1,179)
3,985
9,994
2018
$000
554
554
40,352
(33,944)
6,408
1,427
(824)
603
7,565
Movement in the carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current financial year:
Balance at 1 July 2018
Additions
Transfer between categories
Disposals
Depreciation expense
Balance at 30 June 2019
Balance at 1 July 2017
Additions
Transfer between categories
Disposals
Disposals on divestment of subsidiary
Depreciation expense
Balance at 30 June 2018
Land and
Building
$000
554
Owned Plant
and Equipment
$000
6,408
Leased Plant
and Equipment
$000
603
-
-
-
-
554
1,243
75
(90)
(2,181)
5,455
3,937
(75)
-
(480)
3,985
Land and
Building
$000
748
Owned Plant
and Equipment
$000
9,172
Leased Plant
and Equipment
$000
505
-
(192)
-
-
(2)
554
1,768
192
(388)
(1,433)
(2,903)
6,408
207
-
-
-
(109)
603
Total
$000
7,565
5,180
-
(90)
(2,661)
9,994
Total
$000
10,425
1,975
-
(388)
(1,433)
(3,014)
7,565
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 18: Investment Property
Balance at beginning of year
Additions
Balance at the end of the year
Consolidated Entity
2019
$000
92,410
39
92,449
2018
$000
92,400
10
92,410
The investment property comprises the Homeground Gladstone Accommodation Village located in
Gladstone, Queensland. The investment property is carried at fair value, with fair value being determined
using a discounted cash flow valuation model based on assumptions made by the consolidated entity as
detailed in note 33.
NOTE 19: Intangible Assets
Goodwill at cost
Total intangible assets
Movements in Carrying Amounts
Goodwill
Consolidated Entity
2019
$000
75,482
75,482
2018
$000
75,482
75,482
Balance at the beginning and end of the year
75,482
75,482
Allocation of Goodwill to CGU’s
Construction & Engineering
Balance at the end of the year
75,482
75,482
75,482
75,482
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 19: Intangible Assets (Cont’d)
The recoverable amount of the consolidated entity's goodwill has been determined by value-in-use
calculations using discounted cash flow models, based on a 1-year budget approved by the Board and
extrapolated for a further 4 years using a steady rate, together with a terminal value.
Key assumptions are those to which the recoverable amount of an asset or cash-generating unit (CGU)
is most sensitive.
The following key assumptions were used in the discounted cash flow model for each CGU:
a. 12.9% (2018: 12.9%) pre-tax discount rate;
b. 5% (2018: 5%) per annum projected revenue growth rate;
c. 2.5% (2018: 2.5%) per annum increase in operating costs and overheads; and
d. 2.5% (2018: 2.5%) per annum increase in terminal value.
The discount rate of 12.9% pre-tax reflects management’s estimate of the time value of money and the
consolidated entity’s weighted average cost of capital, the risk free rate and the volatility of the share
price relative to market movements.
Management believes the projected 5% revenue growth rate and 2.5% increase in operating costs and
overheads is justified based on past experience and current market outlook. Management also believes
that a 2.5% increase in the terminal value of each CGU is prudent and appropriate based on current
market conditions.
At the date of this report there has been no reason to adjust these assumptions.
Sensitivity
As disclosed above, the directors have made judgements and estimates in respect of impairment testing
of goodwill. Should these judgements and estimates not occur the resulting goodwill carrying amount
may decrease. The sensitivities are as follows:
a. Revenue for the CGU would need to decrease by more than 4.5% before goodwill would need to
be impaired, with all other assumptions remaining constant.
b. Overheads for the CGU would need to increase by more than 16.0% before goodwill would need
to be impaired, with all other assumptions remaining constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable
amount of each CGU’s goodwill is based would not cause the carrying amount to exceed its recoverable
amount.
NOTE 20: Other Current Assets
CURRENT
Prepayments
Others
Consolidated Entity
2019
$000
870
5,778
6,648
2018
$000
1,170
7,391
8,561
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 21: Trade and Other Payables
CURRENT
Unsecured Liabilities
Trade payables
Advance billings to customers
Sundry payables and accrued expenses
NOTE 22: Current Income Tax
Current tax payable
- provision for income tax
NOTE 23: Borrowings
CURRENT
Secured liabilities
Hire purchase liability
Insurance premium funding
Software subscription funding
Total current borrowings
NON-CURRENT
Secured liabilities
Hire purchase liability
Total non-current borrowings
Total borrowings
Consolidated Entity
Note
2019
$000
14
62,038
35,462
92,694
190,194
2018
$000
33,620
7,816
46,787
88,223
Consolidated Entity
2019
$000
1,698
1,698
2018
$000
1,596
1,596
Consolidated Entity
2019
$000
1,399
212
-
1,611
2,845
2,845
4,456
2018
$000
214
161
12
387
472
472
859
Hire purchase agreements have an average term of 3.6 years. The average interest rate implicit in the
hire purchase is 4.46% (2018: 4.51%). The hire purchase liability is secured by a charge over the
underlying hire purchase assets.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24: Other Deferred Tax
Consolidated Entity
2019
Deferred tax assets on:
Transaction costs on equity
issue
Provisions – employee benefits
Investment due diligence costs
Other provisions and accruals
Tax losses and carry forward tax
credits
Property, plant and equipment
Research and development tax
offset (non-refundable)
Total deferred tax assets
Deferred tax liabilities on:
Foreign currency translation
Prepayments
Equity based payments
Accrued income
Total deferred tax liabilities
Consolidated Entity
2018
Deferred tax assets on:
Transaction costs on equity
issue
Provisions – employee benefits
Investment due diligence costs
Other provisions and accruals
Tax losses and carry forward tax
credits
Property, plant and equipment
Research and development tax
offset (non-refundable)
Total deferred tax assets
Deferred tax liabilities on:
Prepayments
Equity based payments
Accrued income
Total deferred tax liabilities
1 July
2018
Opening
Balance
$000
Under-
provision
in Prior
Year
$000
Disposed
on Disposal
of
Subsidiary
$000
Charged
to Income
$000
Charged
Directly to
Equity
$000
30 June
2019
Closing
Balance
$000
8
2,136
5
464
16,246
10,303
1,167
30,329
-
17
452
75
544
-
(16)
-
(133)
110
(9)
(150)
(198)
-
-
-
(75)
(75)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
520
16
355
750
(1,525)
-
116
9
4
(215)
84
(118)
524
-
-
-
-
-
-
532
2,640
21
686
17,106
8,769
1,017
524
30,771
-
-
(160)
-
(160)
9
21
77
84
191
1 July
2017
Opening
Balance
$000
Under-
provision
in Prior
Year
$000
Disposed
on Disposal
of
Subsidiary
$000
Charged
to Income
$000
Charged
Directly to
Equity
$000
30 June
2018
Closing
Balance
$000
7
1,578
12
843
12,630
12,028
1,595
-
315
-
(490)
139
(417)
-
-
(312)
-
-
-
(1)
-
28,693
(453)
(313)
(17)
333
-
316
98
-
-
98
-
-
-
-
4
555
(7)
111
3,477
(1,307)
(428)
2,405
(64)
212
75
223
(3)
-
-
-
-
-
-
8
2,136
5
464
16,246
10,303
1,167
(3)
30,329
-
(93)
-
(93)
17
452
75
544
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 25: Provisions
CURRENT
Employee entitlements
Total current provisions
NON CURRENT
Employee entitlements
Total non-current provisions
Total provisions
Consolidated Entity
Note
25a
25a
2019
$000
6,150
6,150
380
380
6,530
2018
$000
5,623
5,623
498
498
6,121
(a) Provision for Employee Entitlements
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion for this provision includes the total amount accrued for annual leave entitlements and
the amounts accrued for long service leave entitlements that have vested due to employees having
completed the required period of service. Based on past experience, the consolidated entity does not
expect the full amount of annual leave or long service leave balances classified as current liabilities to be
settled within the next 12 months. However, these amounts must be classified as current liabilities since
the consolidated entity does not have an unconditional right to defer the settlement of these amounts in
the event employees wish to use their leave entitlement.
The non-current portion for this provision includes amounts accrued for long service leave entitlements
that have not yet vested in relation to those employees who have not yet completed the required period
of service.
Movement in provision
Balance at beginning of year
Additional provision
Disposals through disposal of controlled entity
Amounts used
Balance at the end of the year
Consolidated Entity
2019
$000
6,121
7,444
-
(7,035)
6,530
2018
$000
5,056
6,169
(740)
(4,364)
6,121
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 26: Issued Capital
Consolidated Entity
2019
$000
2018
$000
238,310,204 (2018: 173,811,927) fully paid ordinary shares
216,858
165,832
(a) Ordinary Shares
2019
No.
At the beginning of reporting period
173,811,927
Shares issued during the year
Issue of retention shares
Performance rights converted to
shares
Issue of shares for capital raising
Equity based payments
Transaction costs of issue
259,036
-
633,616
63,605,625
-
-
$000
165,832
115
-
-
50,884
1,539
(1,512)
2018
No.
171,736,697
213,490
1,577,500
284,240
-
-
-
$000
163,384
118
-
-
-
2,248
82
At the end of the reporting date
238,310,204
216,858
173,811,927
165,832
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in
proportion to the number of shares held. At the shareholders meetings each ordinary share is entitled to
one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
During the year ended 30 June 2017, the Decmil Group Limited Employee Share Plan Trust was
established. Shares allocated to employees stay in the trust and vest to employees after two years of
continuous employment from the date of grant. In October 2017, 1,577,500 ordinary shares were issued
into the trust and allocated to employees. The allocation made to employees during the year ended 30
June 2019 was made from unallocated shares already held within the trust.
Also, during the year ended 30 June 2019, 259,036 shares were issued under the Decmil Employee
Share Purchase Plan. Under this plan, employees who purchased up to $1,000 of shares had those
shares matched by the Company. The matched shares are subject to a trade restriction until the earlier
of three years or cessation of employment with the Company.
In addition to the above share issues, 633,616 shares were issued to executives upon vesting of
performance rights during the year ended 30 June 2019.
(b) Capital Management
Management controls the capital of the consolidated entity in order to maintain an optimal debt to equity
ratio, provide shareholders with adequate returns and ensure that the consolidated entity can fund its
operations and continue as a going concern. The consolidated entity’s debt and capital includes ordinary
share capital and financial liabilities (including bank guarantee and surety bonding facilities), supported
by financial assets.
Management manages the consolidated entity’s capital by assessing the consolidated entity’s financial
risks and adjusting its capital structure in response to changes in these risks and in the market. This
includes the management of debt levels, distributions to shareholders and the requirement for further
equity funding in the consolidated entity. The deployment of capital to the consolidated entity’s assets
and business units is also reviewed regularly and managed to ensure rates of return continue to be at an
acceptable level. Where necessary, management may consider redeploying capital within the
consolidated entity or alternatively returning capital to shareholders.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 27: Commitments
Consolidated Entity
(a) Hire Purchase Commitments1
Payable – minimum HP payments
Not later than 1 year
Between 1 and 5 years
Minimum HP payments
Less future finance charges
Present value of minimum HP payments
(b) Insurance Premium Funding Commitments
Payable – minimum payments
Not later than 1 year
Minimum payments
Less future finance charges
Present value of minimum payments
(c) Software Subscription Funding Commitments
Payable – minimum payments
Not later than 1 year
Minimum payments
Less future finance charges
Present value of minimum payments
(d) Operating Leases Payable
Non-cancellable operating leases contracted for but not recognised
as liabilities
Payable – minimum lease payments
Not later than 1 year
Between 1 and 5 years
More than 5 years
(e) Operating Leases Receivable
Future minimum rentals receivable for operating leases at the end of
the reporting period but not recognised as assets
Receivable – minimum lease receipts
Not later than 1 year
Between 1 and 5 years
2019
$000
1,560
2,983
4,543
(299)
4,244
216
216
(4)
212
-
-
-
-
2,807
6,660
-
9,467
132
-
132
2018
$000
242
512
754
(68)
686
161
161
(2)
159
12
12
-
12
2,683
8,028
1,176
11,887
128
132
260
1 Hire purchase commitments include contracted amounts for various plant and equipment with a written down value of $3,983,986 (2018: $603,252)
secured under hire purchase contracts expiring within one to five years. Under the terms of the hire purchase contracts, the consolidated entity has
the option to acquire the assets under finance for predetermined residual values on the expiry of the contracts.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 28: Segment Reporting
The consolidated entity has identified its operating segments based on the internal reports that are
reviewed and used by the Board of Directors (chief operating decision makers) in assessing
performance and determining the allocation of resources.
The consolidated entity operates as three segments.
Construction and Engineering
▪ Decmil Australia Pty Ltd – multi-discipline design, civil engineering and construction services;
▪ Decmil Construction NZ Limited – construction arm of Decmil located in New Zealand;
▪ Decmil Southern Pty Ltd – civil engineering and infrastructure construction services;
▪ Decmil Infrastructure Pty Ltd – an entity used for tendering large infrastructure projects and Public
Private Partnerships (PPPs);
▪ Eastcoast Development Engineering Pty Ltd – acquired business now integrated into the Decmil
Australia Pty Ltd entity;
▪ Decmil Engineering Pty Ltd – acquired business now integrated into Decmil Australia Pty Ltd entity;
▪ Decmil PNG Limited – dormant construction arm of Decmil located in Papua New Guinea; and
▪ Scope Australia Pty Ltd – discontinued business specialising in the delivery of study, project
management, engineering and design consultancy services to the mining, resources, government
and construction sectors.
Accommodation
▪ Homeground Villages Pty Ltd – Homeground Gladstone Accommodation Village located in
Gladstone, Queensland.
Other
▪ Decmil Properties Pty Ltd – former owner and manager of a commercial office building located at 20
Parkland Road, Osborne Park, Western Australia which derived internal and external revenue;
▪ SC Services Pty Ltd – discontinued business specialising in the design, installation, commissioning
and maintenance services to telecommunications network owners, manufacturers and NBN service
providers; and
▪ Decmil Telecom Pty Ltd trading as SAS Telecom – discontinued mining communications and
managed services business.
The consolidated entity is domiciled in Australia. 83% of revenue from external customers is generated
from Australia.
The consolidated entity derives 36%, 18% and 15% (2018: 26%, 20% and 14%) of its revenues from the
top three external customers. All of the consolidated entity’s assets are located in Australia.
Basis of accounting for purposes of reporting by operating segments
a. Accounting policies adopted
Unless stated otherwise, all amounts reported to the chief operating decision makers with
respect to operating segments, are determined in accordance with accounting policies that are
consistent with those adopted in the annual financial statements of the consolidated entity
b.
Intersegment transactions
Corporate charges are allocated to reporting segments based on the segments’ overall
proportion of revenue generation within the consolidated entity. Management believes this is
representative of likely consumption of head office expenditure that should be used in assessing
segment performance and cost recoveries.
c. Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that
receives the majority of the economic value from the asset. In most instances, segment assets
are clearly identifiable on the basis of their nature and physical location.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 28: Segment Reporting (Cont’d)
d. Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the
liability and the operations of the segment. Tax liabilities are generally considered to relate to the
consolidated entity as a whole and are not allocated. Segment liabilities include trade and other
payables and certain direct borrowings.
e. Unallocated items
The following items of revenue, expenses, assets and liabilities are not allocated to operating
segments as they are not considered part of the core operations of any segment:
▪
income tax expense;
▪ deferred tax assets and liabilities; and
▪
current tax liabilities.
(a) Segment Performance
2019
External sales
Total segment revenue
Segment earnings before interest,
tax, depreciation and amortisation &
impairments
Net interest
Depreciation & amortisation expense
Segment result
Other unallocated expenses
Income tax expense
Profit for the period
Construction &
Engineering
$000
659,118
Accommodation
$000
4,158
659,118
4,158
Other
$000
-
-
Total
$000
663,276
663,276
26,504
(1,611)
(257)
24,636
(1,915)
(2,514)
22,075
1
(147)
(1,757)
4
-
(253)
Segment Performance
2018
External sales
Construction &
Engineering
$000
336,622
Accommodation
$000
5,952
Total segment revenue
Segment earnings before interest,
tax, depreciation and amortisation &
impairments
Net interest
Depreciation & amortisation expense
Segment result
Other unallocated expenses
Income tax benefit
Loss for the period
336,622
5,463
(1,418)
(2,396)
1,649
5,952
(693)
(20)
(504)
(1,217)
(1,910)
(2,661)
20,065
(536)
(5,511)
14,018
Total
$000
349,255
349,255
Other
$000
6,681
6,681
(6,109)
(1,339)
(24)
(114)
(6,247)
(1,462)
(3,014)
(5,815)
(384)
68
(6,131)
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 28: Segment Reporting (Cont’d)
(b) Segment Assets
2019
Current assets
Non-current assets
Other unallocated assets
Total segment assets
Total assets includes:
Construction &
Engineering
$000
208,949
83,907
-
292,856
Accommodation
$000
789
Other
$000
6
92,710
-
93,499
Acquisition of non-current assets
5,156
62
Segment Assets
2018
Current assets
Non-current assets
Other unallocated assets
Total segment assets
Total assets includes:
Construction &
Engineering
$000
94,973
Accommodation
$000
1,162
81,284
-
176,257
92,795
-
93,957
Acquisition of non-current assets
1,841
198
(c) Segment Liabilities
2019
Current liabilities
Non-current liabilities
Other unallocated liabilities
Total segment liabilities
Segment Liabilities
2018
Current liabilities
Non-current liabilities
Other unallocated liabilities
Total segment liabilities
Construction &
Engineering
$000
194,669
Accommodation
$000
600
3,084
-
197,753
53
-
653
Construction &
Engineering
$000
90,545
Accommodation
$000
1,132
863
-
91,408
-
-
1,132
Total
$000
209,744
176,617
51,838
438,199
5,218
Total
$000
96,521
174,079
33,056
303,656
2,105
Total
$000
195,269
3,137
4,663
203,069
Total
$000
91,677
863
4,803
97,343
-
-
6
-
Other
$000
386
-
-
386
66
Other
$000
-
-
-
-
Other
$000
-
-
-
-
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29: Cash Flow Information
(a) Reconciliation of Cash Flow from Operations with (Loss)/Profit after Income Tax
Profit/(loss) after income tax
Adjustments for:
Depreciation and amortisation
Equity based payments
(Profit)/loss on sale of non-current assets
Loss on disposal of subsidiaries
Bad debts written off
Cash generated from operations before working capital changes
Changes in assets and liabilities
Trade receivables
Other assets
Work in progress
Trade payables and accruals
Current tax liabilities
Deferred tax assets
Deferred tax liabilities
Provisions
Change in working capital balances
Net cash generated from operating activities
Consolidated Entity
2019
$000
14,018
2,661
1,539
(167)
-
-
18,051
(30,598)
1,913
(70,066)
102,653
102
(442)
(353)
409
3,618
21,669
2018
$000
(6,131)
3,014
2,248
126
3,438
399
3,094
(9,969)
(2,802)
(20,860)
29,468
1,547
(1,948)
228
1,869
(2,467)
627
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29: Cash Flow Information (Cont’d)
(b) Disposal of Entities
(i) On 1 November 2017, SC Holdings Pty Ltd and its subsidiaries SC Services Pty Ltd and SC
Equipment Holdings Pty Ltd were divested.
Goodwill associated with the SC Holdings entities amounting to $10,687,000 was previously
impaired at 30 June 2017.
The divestment excluded pre-completion cash and accounts receivable balances, which accrued to
the benefit of Decmil.
Residual net assets (excluding pre-completion cash and accounts receivable) were divested for a
consideration of $919,055.
Sale consideration
Less: deferred consideration
Cash inflow on disposal
Assets and liabilities held at disposal date:
Work in progress
Plant and equipment
Deferred tax assets
Payables & accruals
Provisions
Loss on disposal
Sale consideration
(ii) On 1 November 2017, residual components of Scope Australia Pty Ltd were divested.
Assets and liabilities held at disposal date:
Receivables
Plant and equipment
Deferred tax assets
Payables & accruals
Provisions
Loss on disposal
Sale consideration
Fair Value
$000
919
-
919
3,892
1,361
221
(1,133)
(653)
3,688
(2,769)
919
Fair Value
$000
848
72
92
(106)
(237)
669
(669)
-
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29: Cash Flow Information (Cont’d)
(c) Non-cash Financing and Investing Activities
Finance leases to acquire plant and equipment
(d) Credit Standby Facilities with Banks
Credit facilities
Amount utilised
Bank overdraft
Limited recourse receivables funding
Loan facility
Equipment finance
Guarantees and surety bond facilities
The credit facilities are summarised as follows:
Bank overdraft and/or limited recourse receivables funding facility
Loan facility
Equipment finance
Guarantee and surety bond facilities
Consolidated Entity
2019
$000
3,936
2018
$000
206
Consolidated Entity
2019
$000
2018
$000
346,296
272,000
-
(7,959)
-
(4,244)
(209,893)
124,200
35,000
25,000
8,000
286,296
354,296
-
(16,688)
-
(686)
(68,949)
185,677
25,000
25,000
3,000
219,000
272,000
The majority of credit facilities are provided by National Australia Bank Limited and comprise a $65
million multi-option facility and a $0.5 million corporate credit card facility. The $65 million multi-option
facility encompasses a bank guarantee facility, letter of credit facility, overdraft facility of $25 million, a
limited recourse receivables funding facility of $35 million and a market loan facility of $25 million.
The bank market loan facility expires in January 2020. The interest charged is calculated at Bank Bill
Rate plus a margin of 1.55% (2018: 1.55%) which equates to 2.84% as at 30 June 2019 (2018: 3.73%).
Security for the National Australia Bank facilities comprises the following:
▪ General Security granted by Decmil Group Limited and its controlled entities (other than Decmil PNG
Ltd and Homeground Karratha Pty Ltd);
▪ Negative pledge in relation to Homeground Gladstone Pty Ltd; and
▪ First registered mortgage over property situated at 101 Calliope River Road, Calliope, Queensland.
In addition to the National Australia Bank facilities, the consolidated entity also has the following
facilities:
▪ Equipment finance of $8 million with Toyota Finance; and
▪ Surety bond facilities of $100 million with Asset Insure, $35 million with Vero, $50 million with BCC
Surety, $25 million with Liberty and $71.3 million (USD$50 million) with AIG Australia.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 30: Equity Based Payments
Performance Rights Plan
The Board believes that the long term incentive offered to key executives forms a key part of their
remuneration and assists to align their interests with the long term interests of Shareholders. For details
of the Long Term Incentive Plan, refer to the Directors’ Report.
A summary of the movements of all performance rights issued is as follows:
Performance rights outstanding as at 30 June 2017
Granted
Vested
Lapsed
Performance rights outstanding as at 30 June 2018
Granted
Forfeited
Vested
Lapsed
Performance rights outstanding as at 30 June 2019
Number
5,790,762
1,676,126
(284,240)
(851,506)
6,331,142
1,387,139
(103,448)
(633,616)
(805,574)
6,175,643
The fair value of the performance rights granted during the financial year was $263,556. Performance
rights are valued using various valuation methodologies, including Black-Scholes option pricing models
and Monte Carlo simulations where performance rights have market based vesting conditions. Expected
life is based on management’s best estimate at the time of valuation of vesting criteria being achieved.
The fair value has been discounted to reflect the probability of not meeting the vesting conditions. The
discount factors were determined through an analysis of relative share price to the date of grant,
dividends paid and likelihood of rights being forfeited prior to vesting.
The weighted average fair value of performance rights granted during the year was $0.190 (2018:
$0.186). These values were calculated using a Black-Scholes option pricing model applying the following
inputs:
Expected vesting period for the performance rights to vest:
2, 3 and 4 years
Expected share price volatility:
Risk-free interest rate:
Dividend yield
30%
2.25%
0.0%
Historical volatility has been the basis for determining expected share price volatility as it is assumed
that this is indicative of future movements. Expenses arising from equity-based payment transactions
recognised during the year were as follows:
Performance Rights
Expenses
Written back due to forfeiting
Written back due to lapsing
Written back on reassessment of probabilities
Consolidated Entity
2019
$000
891
(12)
(59)
-
820
2018
$000
1,403
-
(152)
(270)
981
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 30: Equity Based Payments (Cont’d)
Incentive Shares Plan
During the year the Board approved an Incentive Shares Plan whereby ordinary shares are issued into
the Decmil Group Limited Employee Share Plan Trust on an allocated basis for employees. These
ordinary shares will vest to employees after two years of continuous employment from the date of grant.
In the event an employee resigns or Decmil terminates their employment due to misconduct or
performance related reasons prior to vesting, the shares are forfeited.
A summary of the movements of all incentive shares issued is as follows:
Unvested incentive shares as at 30 June 2017
Granted
Vested
Forfeited
Unvested incentive shares as at 30 June 2018
Granted
Vested
Forfeited
Unvested incentive shares as at 30 June 2019
Number
1,370,000
1,762,500
(165,000)
(412,500)
2,555,000
660,000
(1,027,000)
(663,000)
1,525,000
The fair value of the incentive shares granted during the financial year was $359,040. Incentive shares
are valued using the share price at the date of grant. The fair value has been discounted by 20% to
reflect the probability of not meeting the continuous employment vesting condition.
Expenses arising from the incentive shares plan transactions recognised during the year were as
follows:
Incentive Shares
Expenses
Written back due to forfeiting
Consolidated Entity
2019
$000
1,155
(436)
719
2018
$000
1,441
(174)
1,267
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 31: Related Party Transactions and Balances
Parent entity
Decmil Group Limited is the parent entity.
Controlled entities
Interests in controlled entities are set out in note 15.
Key management personnel
Disclosures relating to KMP are set out in note 8 and the Remuneration Report in the Directors' Report.
Transactions with related parties
The following transactions occurred with related parties:
(a) Director Related Transactions1
Rent of various properties used by Decmil Australia Pty Ltd paid to
Broadway Pty Ltd, an entity in which Mr Denis Criddle has a
beneficial interest
Consulting fees for Saxelby Associates Pty Ltd, an entity in which
Mr David Saxelby has a beneficial interest
Consulting fees for Cald Investments Pty Ltd, an entity in which Mr
Dickie Dique has a beneficial interest
(b) Director Related Balances
Amounts owing to Saxelby Associates Pty Ltd, an entity in which Mr
David Saxelby has a beneficial interest, for directors’ fees and
consulting fees
Consolidated Entity
2019
$000
196
200
8
2018
$000
190
200
-
27
27
1 Transactions relating to directors’ fees are included in the Directors’ Report details of remuneration
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32: Financial Instruments
The consolidated entity’s financial instruments consist mainly of deposits with banks, accounts
receivable and payable and borrowings.
The only derivatives used by the consolidated entity relate to forward foreign exchange contracts in
relation to offshore procurement. The consolidated entity does not speculate in the trading of derivative
instruments.
(i) Financial Risk Management Policies
The Chief Financial Officer and other senior finance executives regularly analyse financial risk exposure
and evaluate treasury management strategies in the context of the most recent economic conditions and
forecasts.
The overall risk management strategy seeks to assist the consolidated entity in meeting its financial
targets, whilst minimising potential adverse effects on financial performance.
Treasury functions are performed in accordance with policies approved by the Board of Directors. Risk
management policies are approved and reviewed by the Board on a regular basis.
(ii) Specific Financial Risk Exposures and Management
The main risks the consolidated entity is exposed to through its financial instruments are interest rate
risk, liquidity risk, credit risk, price risk and foreign exchange risk.
Interest rate risk
Exposure to interest rate risk arises on financial assets and liabilities recognised at the end of the
reporting period whereby a future change in interest rates will affect future cash flows.
Liquidity risk
The consolidated entity manages liquidity risk by monitoring forecast cash flows and ensuring that
adequate unutilised borrowing facilities are maintained.
Credit risk
Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties
to discharge their obligations in full or in a timely manner are subject to credit risk. These arise principally
from cash balances with banks, cash equivalents, receivables and other financial assets. The maximum
exposure to credit risk is the total of the fair value of the financial assets at the end of the reporting year.
Credit risk on cash balances with banks and any other financial instruments is limited because the
counter-parties are entities with acceptable credit ratings. For expected credit losses (ECL) on financial
assets, a simplified approach is permitted by the financial reporting standards on financial instruments
for financial assets that do not have a significant financing component, such as trade receivables. On
initial recognition, a day-1 loss is recorded equal to the 12 month ECL (or lifetime ECL for trade
receivables), unless the assets are considered credit impaired.
For credit risk on trade receivables an ongoing credit evaluation is performed on the financial condition
of the debtors and an impairment loss is recognised in profit or loss. Reviews and assessments of credit
exposures in excess of designated limits are made. Renewals and reviews of credits limits are subject to
the same review process.
Note 12 discloses the maturity of the cash and cash equivalents balances. Cash and cash equivalents
are also subject to the impairment requirements of the standard on financial instruments.
There are no material amounts of collateral held as security at 30 June 2019.
In respect of the parent entity, credit risk also incorporates the exposure of Decmil Group Limited to the
liabilities of all the parties to the deed of cross guarantee. Credit risk is managed on a consolidated basis
and reviewed regularly by finance executives and the Board. It arises from exposures to customers as
well as through deposits with financial institutions.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32: Financial Instruments (Cont’d)
The consolidated entity does not have any material credit risk exposure to any single receivable or group
of receivables under financial instruments entered into by the consolidated entity.
Price risk
The consolidated entity is exposed to price risks associated with labour costs and to a lesser extent, fuel
and steel prices. Wherever possible, the consolidated entity contracts out such exposures or allows for
the rise and fall for changes in prices or provides sufficient contingencies to cover for such price risks.
Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to movement in foreign exchange rates of currencies in which the
consolidated entity holds financial instruments which are other than the Australian Dollar (AUD)
functional currency of the consolidated entity. This risk is managed predominantly through forward
foreign exchange contracts.
(iii) Financial instrument composition and maturity analysis:
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a
fixed period of maturity, as well as management’s expectations of the settlement period for all other
financial instruments. As such, the amounts may not reconcile to the statement of financial position.
Weighted
Average
Effective
Interest
Rate
%
1.5
-
-
4.3
1.5
-
-
3.9
Non-
Interest
Bearing
$000
-
74,272
74,272
(190,194)
-
(190,194)
-
43,672
43,672
(88,223)
-
(88,223)
Within
1 year
$000
83,481
-
83,481
-
(1,611)
(1,611)
16,755
-
16,755
-
(387)
(387)
1 to 5
Years
$000
Carrying
Amount
$000
-
-
-
-
(2,845)
(2,845)
-
-
-
-
(472)
(472)
83,481
74,272
157,753
(190,194)
(4,456)
(194,650)
16,755
43,672
60,427
(88,223)
(859)
(89,082)
2019
Financial Assets
Cash and cash equivalents
Receivables
Financial Liabilities
Payables
Borrowings
2018
Financial Assets
Cash and cash equivalents
Receivables
Financial Liabilities
Payables
Borrowings
The cash flows in the maturity analysis above are not expected to occur significantly earlier than
contractually disclosed above.
(iv) Net Fair Values of financial instruments
Unless otherwise stated, the carrying amount of financial instruments reflect their fair value.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32: Financial Instruments (Cont’d)
(v) Sensitivity Analysis
Interest Rate Risk and Price Risk
The consolidated entity has performed sensitivity analysis relating to its exposure to interest rate risk,
price risk and foreign exchange risk at balance date. This sensitivity analysis demonstrates the effect on
the current year results and equity which could result from a change in these risks.
Interest Rate Sensitivity Analysis
The consolidated entity’s cash and cash equivalents and borrowings are subject to interest rate
sensitivities. At 30 June 2019, the effect on profit and equity as a result of changes in the interest rate,
with all other variables remaining constant is immaterial.
Price Risk Sensitivity Analysis
At 30 June 2019, the effect on profit and equity as a result of changes in the price risk, with all other
variables remaining constant would be as follows:
Consolidated Entity
2019
$000
2018
$000
Change in profit
Increase in labour costs by 5% (CPI assumption)
(4,620)
(3,666)
Change in equity
Increase in labour costs by 5% (CPI assumption)
(4,620)
(3,666)
In the opinion of the consolidated entity’s management, the majority of the above increase in labour cost,
had it been incurred, would have been negated by an increase in the price of services offered by the
consolidated entity.
The above sensitivity analysis has been performed on the assumption that all other variables remain
unchanged.
Foreign Exchange Sensitivity Analysis
The effect on profit and equity as a result of changes in foreign exchange rates, with all other variables
remaining constant, is immaterial.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33: Fair Value Measurement
Fair value hierarchy
The following tables detail the consolidated entity's assets measured or disclosed at fair value, using a
three level hierarchy, based on the lowest level of input that is significant to the entire fair value
measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets that the consolidated entity can
access at the measurement date
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset, either
directly or indirectly
Level 3: Unobservable inputs for the asset
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
Consolidated 2019
Assets
Investment property
Total assets
Consolidated 2018
Assets
Investment property
Total assets
-
-
-
-
-
-
-
-
92,449
92,449
92,449
92,449
92,410
92,410
92,410
92,410
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to
approximate their fair values due to their short-term nature.
Investment property has been valued using a discounted cash flow model.
Movements in level 3 assets during the current and previous financial year are set out below:
Consolidated
Balance at 30 June 2017
Additions
Balance at 30 June 2018
Additions
Balance at 30 June 2019
Investment Properties
$000
92,400
10
92,410
39
92,449
Total
$000
92,400
10
92,410
39
92,449
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33: Fair Value Measurement (Cont’d)
In July 2017, the Group’s investment property, being the Homeground Gladstone Accommodation
Village located near Gladstone, Queensland, was revalued by an independent valuer (Ernst & Young).
The primary valuation method utilised by the valuer was a discounted cash flow model.
Key assumptions utilised by the valuer in the preparation of its valuation included:
▪ Useful life of the asset in the range of 20 to 30 years with no terminal value;
▪ Various occupancy assumptions over the estimated useful life based on expected accommodation
demand (low of 15% to high of 98%);
▪ Room rate growth in the range of 0% to 2.0%; and
▪ A nominal post-tax discount rate range of 11.0% to 12.0%.
As a result of the independent valuation, the Homeground Gladstone investment property was revalued
to $92,400,000.
The fair value is sensitive to long term changes to key assumptions disclosed above. Any material
change within the range for any individual assumption or any combination of assumptions will likely have
a material impact on the fair value as follows:
Assumption
Useful life
Occupancy
Room rate growth
Discount rate
NOTE 34: Contingent Liabilities
Increase in Assumption
Decrease in
Assumption
Positive impact
Negative impact
Positive impact
Negative impact
Positive impact
Negative impact
Negative impact
Positive impact
Guarantees given to external parties for satisfactory contract
performance for the consolidated entity
Consolidated Entity
2019
$000
2018
$000
209,893
68,949
In or around August 2012, Steel Building Systems (SBS) was engaged as a subcontractor by Decmil
Australia Pty Ltd (“Decmil”) to construct the Gladstone Village in Queensland. SBS’ scope of work was
the design, manufacture and supply of modular buildings, as well as miscellaneous on-site works
associated with the modular buildings. On 17 November 2017, the liquidators of SBS commenced
proceedings against Decmil Australia Pty Ltd in the NSW Supreme Court for alleged unpaid contract
sums of $3.3 million and alleged lost profit on works removed from SBS’ scope of works. Decmil rejects
the claims brought by the liquidators of SBS and denies it is indebted to SBS as claimed. Decmil’s
current position is that SBS is in fact indebted to Decmil for a similar sum due to defective works and
associated rectification costs, incomplete works, overheads incurred by Decmil in connection with the
defects and rectification works, expert costs and fees. Decmil has filed a defence in relation to the
liquidator’s claims and will file a cross claim for the sum Decmil alleges it is owed by SBS.
Apart from the above there are no further contingent liabilities relating to the consolidated entity.
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 35: Subsequent Events
On 28 August 2019, the Company proposed a fully franked 2.0 cent per share final dividend with a
record date of 6 September 2019 and payment date of 27 September 2019. The total amount of this
dividend payment will be $4.766 million. After this dividend payment, the Australian franking account
balance will be $54.783 million.
Except for the matters disclosed above, no matters or circumstances have arisen since the end of the
financial year which significantly affected or may significantly affect the operations of the consolidated
entity, the results of those operations, or the state of affairs of the consolidated entity in future financial
years.
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2019
In the directors' opinion:
▪
▪
▪
▪
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
the attached financial statements and notes comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board as described in note 1 to the financial
statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's
financial position as at 30 June 2019 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable; and
▪ at the date of this declaration, there are reasonable grounds to believe that the members of the
Extended Closed Group identified in note 15(b) 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 described.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the directors
David Saxelby
Chairman
28 August 2019
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF DECMIL GROUP LIMITED
Opinion
We have audited the financial report of Decmil Group Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2019, 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 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 2019 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 and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (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.
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 this matter
Impairment of Intangible Assets
Refer to Note 19 in the financial statements
The carrying amount of goodwill as at 30 June 2019
is $75,482,000.
Our audit procedures included:
Management performs an annual impairment test
on the recoverability of the goodwill as required by
Australian Accounting Standards.
the cash generating unit (CGU)
We determined this area to be a key audit matter
as management’s assessment of the value-in-use
involves
of
judgement about the future cash flow projections,
expected revenue growth rates and the discount
rate.
Recognition of Deferred Tax Assets
Refer to Note 24 in the financial statements
The Group has recognised on the statement of
financial position deferred tax assets of $30,771,000
as at 30 June 2019.
Management has performed an assessment on the
recoverability of the deferred tax assets by using the
Group’s forecast for the year ended 30 June 2020
and beyond to satisfy the probability criteria that
future taxable profits will be available to utilise these
tax assets.
We determined this area to be a key audit matter as
judgement
management’s assessment
about the future profitability of the Group.
involves
• Assessing management’s determination that the
goodwill should be allocated to one CGU based on
the nature of the Group’s business;
• Engaging our Corporate Finance specialists to
conduct a review of the appropriateness of the
model and the discount rate used;
the
including
key
assumptions,
flow
projections, expected revenue growth rates and the
discount rate;
of
future cash
• Challenging
reasonableness
the
• Reviewing management’s sensitivity analysis over
the key assumptions used in the model; and
• Checking the mathematical accuracy of the model
and reconciling input data to supporting evidence,
such as approved budgets and considering the
reasonableness of the budget.
Our audit procedures included:
• Reviewing of the Group’s forecast for 5 years from
1 July 2019 and assessing management’s
assumptions and inputs for reasonableness;
• Engaging our Taxation specialists to conduct a
review of the tax effect calculations; and
• Checking the mathematical accuracy of the forecast
and reconciling input data to supporting evidence,
such as approved budgets and considering the
reasonableness of the budget.
Recognition of Revenue and Profits on Long Term Contracts
Refer to Note 4 in the financial statements
The Group’s largest source of revenue is from
construction and engineering, which amounted to
$659,118,000 for the year ended 30 June 2019. As
revenues are
disclosed
recognised over time as performance obligations are
fulfilled.
in Note 1(o),
these
Our audit procedures included:
• Reviewed contractual terms with customers and
substantiated project revenues and costs incurred
against underlying supporting documents;
Construction and engineering revenue is recognised
by management after assessing all factors relevant
to each contract, including specifically assessing the
following as applicable:
• Determination of stage of completion and
measurement of progress towards performance
obligations;
• Estimation of total contract revenue and costs
including the estimation of cost contingencies;
• Determination of contractual entitlement and
assessment of the probability of customer
approval of variations and acceptance of claims;
and
• Estimation of project completion date.
We focused on this area as a key audit matter due to
the number and type of estimation events over the
course of the contract life, the unique nature of
individual contract conditions, leading to complex
and judgmental revenue recognition from contracts.
Fair Valuation of Investment Property
Refer to Note 18 in the financial statements
The Group owns an investment property in the
Homeground Accommodation Village in Gladstone,
Queensland.
At 30 June 2017, the fair value of the investment
property was independently valued by an external
valuer. The primary valuation method used by the
external valuer was a discounted cash flow (DCF)
model.
We determined this area to be a key audit matter as
there are judgements involved in the preparation of
the DCF model such as the useful life of the asset,
estimated occupancy rates over the useful life,
estimated growth rates and an appropriate post-tax
discount rate.
• Assessed management’s
assumptions
the stage of completion,
in
determining
total
transaction price and total budgeted cost estimated;
• Checked mathematical accuracy of revenue and
profit recognised during the year based on the stage
of completion;
• Reviewed
and
customers
subcontractor
correspondences and discussed the progress of the
projects with project managers for any potential
disputes, variation order claims, known technical
issues or significant events that could impact the
estimated contract costs;
• Reviewed management’s
• Discussed with project personnel and management
on the rationale for revisions made to budgeted
costs and checked supporting documentation;
• Checked the mathematical accuracy of the revenue
recognised based on the input method calculations;
and
assessed the reasonableness of the provision for
onerous contracts provided by management; and
• Evaluated management’s assessment of the impact
to revenue recognition from the adoption of AASB
15 Revenue from Contracts with Customers and
reviewed
transitional
adjustments made to the financial statements.
the quantification of
assessment
the
Our audit procedures included:
• Assessing management’s determination of whether
there are any impairment indicators;
• Assessing the valuation methodology used by the
external valuer;
• Assessing the competency of the external valuer;
• Assessing the appropriateness of relying on the
independent valuation undertaken in July 2017 and
whether the assumptions utilised in the valuation
were still appropriate as at 30 June 2019; and
• Reviewing
the
valuation and
independent
assessing the assumptions and inputs used for
reasonableness.
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 2019 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly 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 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 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/ar2.pdf.
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2019.
In our opinion, the Remuneration Report of Decmil Group Limited, for the year ended 30 June 2019, 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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 28 August 2019
TUTU PHONG
Partner
Additional Information for Listed
Public Companies
FOR THE YEAR ENDED 30 JUNE 2019
Additional information required by the Australian Securities Exchange and not shown elsewhere in this
report is as follows.
Substantial shareholders
The names of substantial beneficial shareholders listed on the Company’s register as at 30 June 2019 are:
Denis Criddle
Thorney Investments Group
Commonwealth Bank Group
BlackRock, Inc.
Paradice Investment Management Pty Ltd
The following information is made up as at 31 July 2019:
Distribution of shareholdings
Shares
27,679,145
26,024,227
20,466,031
16,520,645
15,358,597
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
No. of
shareholders
No. of ordinary
shares
1,409
1,673
647
713
87
4,529
708,946
4,794,293
5,001,560
19,199,529
208,605,876
238,310,204
%
11.61
10.92
8.59
6.93
6.44
%
0.30
2.01
2.10
8.06
87.53
100.00
There are 797 shareholders with an unmarketable parcel totalling 183,883 shares.
Voting rights
All ordinary shares issued by Decmil Group Limited carry one vote per share without restriction.
Additional Information for Listed
Public Companies (Cont’d)
FOR THE YEAR ENDED 30 JUNE 2019
Twenty largest shareholders
The names of the twenty largest registered shareholders of fully paid ordinary shares in the Company as
at 31 July 2019 are:
HSBC Custody Nominees (Australia) Ltd
J P Morgan Nominees Australia Ltd
Citicorp Nominees Pty Ltd
Broadway Pty Ltd – Decmil Australia Fund A/C
Bond Street Custodians Limited – Salter D64848 A/C
UBS Nominees Pty Ltd
Broadway Pty Ltd – Decmil Australia A/C
BNP Paribas Nominees Pty Ltd – Agency Lending DRP A/C
National Nominees Ltd
Scadden Pty Ltd
L, M & R Franco – The LMR Franco Unit A/C
Sandhurst Trustees Ltd – Endeavor Asset Mgmt A/C
Zero Nominees Pty Ltd
AMP Life Ltd
BNP Paribas Noms Pty Ltd – DRP
Delauney Pty Ltd – The Franco Family A/C
Farview Pty Ltd – Ernesto Franco Family A/C
Mrs Nola Criddle – Criddle Investment Fund A/C
CPU Share Plans Pty Limited – DCG IPS Control A/C
Neweconomy Com Au Nominees Pty Ltd – 900 Account
No. of Ordinary
Fully Paid Shares
Held
40,382,743
32,180,903
29,458,843
10,475,000
8,326,365
7,929,133
7,824,666
7,252,267
5,928,374
5,200,000
5,000,000
4,855,054
3,245,382
3,145,513
2,506,527
2,300,000
2,300,000
2,247,827
1,925,000
1,507,788
%
16.95
13.50
12.36
4.40
3.49
3.33
3.28
3.04
2.49
2.18
2.10
2.04
1.36
1.32
1.05
0.97
0.97
0.94
0.81
0.63
Total
183,991,385
77.21
Corporate Directory
FOR THE YEAR ENDED 30 JUNE 2019
Directors
David Saxelby, Non-Executive Chairman
Scott Criddle, Managing Director & Chief
Executive Officer
Dickie Dique, Executive Director
Don Argent, Non-Executive Director
Bill Healy, Non-Executive Director
Company Secretary
Alison Thompson
Australian Business Number
35 111 210 390
Principal Registered Address
20 Parkland Road
Osborne Park WA 6017
Telephone: 08 9368 8877
Facsimile: 08 9368 8878
Postal Address
PO Box 1233
Osborne Park WA 6916
Operational Offices
Perth
Level 6, 20 Parkland Road
Osborne Park WA 6017
Telephone: 08 9368 8877
Brisbane
Level 5, 60 Edward Street
Brisbane QLD 4000
Telephone: 07 3640 4600
Auckland
Level 12, 16 Kingston Street
Auckland 1010
Telephone: +64 9 443 4443
Melbourne
Level 3, 850 Collins Street
Docklands VIC 3008
Telephone: 1300 332 645
Auditor
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
Telephone: 08 9261 9100
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Telephone: 08 9323 2000
Email: www-
au.computershare.com/Investor/Contact
Website: www.computershare.com
Bankers
National Australia Bank Ltd
100 St Georges Terrace
Perth WA 6000
Telephone: 13 10 12
Controlled Entities
Decmil Australia Pty Ltd
Decmil Engineering Pty Ltd
Decmil PNG Limited
Decmil Construction NZ Limited
Decmil Southern Pty Ltd
Eastcoast Development Engineering Pty Ltd
Homeground Villages Pty Ltd
Homeground Gladstone Pty Ltd ATF
Homeground Gladstone Unit Trust
Decmil Infrastructure Pty Ltd
Decmil Group Limited Employee Share Plan
Trust
ASX Code
DCG
Operating across Australia & New Zealand
Perth | Melbourne | Brisbane | Auckland
decmil.com
Decmil Annual Report 2019