ANNUAL REPORT
For the year ended 31 December
draglobal.com
2020
DRA Global Annual Report 2020 / ACN 622581935
CONTENTS
Who is DRA Global? ...................... 2
Director’s Report ....................... 58
Services ................................................................. 5
Markets ................................................................. 5
Year at a glance ..................................................... 6
Chairman’s report .................................................. 8
Managing Director and CEO’s report .................. 10
Market trends ............................................... 13
DRA’s operating business ................................... 14
Areas of operation ............................................... 16
Strategy and outlook............................................ 18
Sustainability report ............................................. 20
Leadership .................................. 28
Board of Directors* .............................................. 28
DRA’s Group Executives ..................................... 30
Operational Overview ................. 32
Remuneration Report ................ 70
Financial Statements ................. 84
Consolidated statement of profit or loss .............. 85
Consolidated statement of other comprehensive
income ................................................................. 86
Consolidated statement of financial position ....... 87
Consolidated statement of changes in equity ...... 88
Consolidated statement of cash flows ................. 89
Notes to the consolidated financial statements ... 91
Directors’ declaration ......................................... 143
Auditor’s independence declaration .................. 144
Independent auditor’s report to the members of
DRA Global Limited ........................................... 145
EMEA region........................................................ 33
APAC/AMER region ............................................ 39
Corporate Directory .................. 151
Financial Overview ...................... 44
Financial Performance......................................... 45
Business and risks............................................... 52
Key risks ....................................................... 55
Please note: All references to $ are in AUD unless otherwise specified
DRA Global Annual Report 2020 / ACN 622581935
DRA Global
A diversified global engineering, project delivery and operations management group.
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PROJECT
DEVELOPMENT
PROJECT DELIVERY
AND EXECUTION
OPERATIONS AND
MAINTENANCE
Minerals and metals processing
OFFICES
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Mining
Infrastructure
Industrial
Energy
Water
DRA Global Annual Report 2020 / ACN 622581935
DRA Global
A diversified global engineering, project delivery and operations management group.
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4500+
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OF EXPERIENCE
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7500 PROJECTS, STUDIES
& O P E R AT I O N S
COMPLETEd sUCCEssFULLY
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aROUNd
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Safety
Integrity
Excellence
Trust
Courage
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PEOPLE C
DRA Global Annual Report 2020 / ACN 622581935
WHO IS
DRA GLOBAL?
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DRA Global Annual Report 2020 / ACN 622581935
// Who is DRA Global /
A diversified global engineering, project delivery and operations
management group headquartered in Perth, Australia, with an
impressive track record spanning more than three decades
With a focus on excellence and forward thinking, DRA consistently
seeks to develop new, smarter and safer ways of implementation
in an ever-changing environment. DRA is forward thinking in its
approach to the market, its service offerings to customers, its
innovation and its people.
The Group is passionate about safety and its goal that everyone
returns home safely every day. All practical and reasonable
measures are taken to eliminate workplace injuries and health
risks. DRA’s Code of Conduct ensures compliance with legal
and ethical expectations and strict policies and practices are
maintained to reinforce the Group’s commitment to good
governance.
DRA supports the United Nations Universal Declaration
of Human Rights and is committed to protecting the
environment.
DRA also protects employees and operations in times of
natural disaster, major catastrophes, pandemics and
unforeseen events.
DRA Global Limited (DRA or the Group) is committed to creating
tangible value for customers, shareholders and employees
through the origination, delivery and optimisation of capital
assets around the world. DRA is progressing its vision to be
the preferred global mining and minerals technical partner for
diversified service offerings.
During 2020 DRA achieved the following targets set in 2016 as
part of the strategy for the Group:
/ Develop a truly international business;
/ Achieve a diverse and balanced spread of revenue from
multiple geographical regions. In 2020 DRA generated >65%
revenue outside South Africa;
/ Position DRA as a public company headquartered in Australia;
/ Generate circa $1 billion in annual revenue; and
/ Positioned to unlock long-term shareholder value through a
liquidity event.
DRA is committed to delivering operational excellence through
all stages of a project life cycle, from concept through delivery,
commissioning and ongoing operations and maintenance as well
as optimisation and expansion.
To date DRA has successfully delivered more than 7,500 projects
and studies to customers globally and has worked on some of the
largest and most complex projects across the resources sector.
The Group is committed to achieving its business goals, as
well as achieving or exceeding the goals of its customers and
employees. For more than three decades, DRA has created a
culture that supports and motivates employees to bring their
best to work and to deliver their best for customers. This culture
has played a key role in establishing the Group as a partner of
first choice across the industry. DRA’s corporate values define
this culture and foster an environment of safety, empowerment,
innovation and collaboration across markets, sectors and
geographies.
DRA Global Annual Report 2020 / ACN 622581935
/ 3
// Who is DRA Global / Core values
PURPOSE
DRA Global creates real value by fulfilling
the aspirations of our people, customers,
shareholders and communities.
CORE VALUES
SAFETY We care for each other. Safety and
well-being is our first consideration.
INTEGRITY Do what is right for the right reasons.
EXCELLENCE We continuously strive to be better.
TRUST We build relationships by delivering
on what we promise.
COURAGE We have the conviction to step outside
our comfort zone and make a difference.
PEOPLE The cornerstone of the business
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DRA Global Annual Report 2020 / ACN 622581935
// Who is DRA Global / Services
Services
Markets
Originate - Project Development
Specialists in engineering and consulting to advance conceptual,
pre-feasibility and bankable
to
successful project
implementation. DRA’s experienced
consultants act as an extension of the customer team, providing
insights, guidance and expertise that has a tangible impact on
successful project development.
feasibility studies
through
Deliver - Project Delivery and Execution
World-class engineering solutions that add real value through
fit-for-purpose engineering solutions, unrivalled expertise,
design capabilities and project management skills. Customers
recognise the value of DRA’s comprehensive knowledge and
broad experience in EPCM, EPC and hybrid project execution
solutions. This extensive expertise consistently delivers for our
customers.
Optimise - Operations and Maintenance
Insight, analysis, strategy and advanced technology to reduce
operating and maintenance costs while enhancing productivity
and yield. Potential areas of improvement exist within any facility –
DRA helps customers make the best operational decisions within
specific time and capital constraints. Additionally, DRA provides
expert outsourced operations and maintenance solutions.
CORE VALUES
SAFETY We care for each other. Safety and
well-being is our first consideration.
INTEGRITY Do what is right for the right reasons.
EXCELLENCE We continuously strive to be better.
TRUST We build relationships by delivering
on what we promise.
COURAGE We have the conviction to step outside
our comfort zone and make a difference.
PEOPLE The cornerstone of the business
Minerals and
Metals Processing
Mining
Infrastructure
Industrial
Energy
Water
DRA Global Annual Report 2020 / ACN 622581935
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// Who is DRA Global / Year at a glance
Year at a glance
$938M
Revenue
FY19: $1,033M
$188M
Gross Profit
FY19: $203M
$77M
Underlying EBITDA1
$44M
Underlying NPAT 1
FY19: $91M
FY19: $48M
8%
Underlying EBITDA margin1
5%
Underlying NPAT margin1
FY19: 9%
FY19: 5%
$204M
Cash at Bank
FY19: $127M
$309M
Net Assets
FY19: $332M
27.49 cents
Basic earning per share
27.39 cents
Diluted earning per share
FY19: 43.78 cents
FY19: 43.78 cents
1. This is a non-IFRS measure. For an explanation of how DRA uses non-IFRS measures, please see page 46.
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DRA Global Annual Report 2020 / ACN 622581935
Year at a glance
// Who is DRA Global / Year at a glance
Operational highlights: 2020
Establish office in
Santiago, Chile
DRA awarded CHP contract for
projects
Bravus Mining and Resources in Australia
COVID-19 pandemic forces
the closure of borders,
restricted travel, limited
new investment and deferred
DRA secured two contracts at
Olympic Dam.
DRA awarded Kalium Lakes Potash
contract in Western Australia
Kamoa-Kakula flagship project continues to
reach milestones and continued delivery
despite COVID-19
Tri-K EPC project in Guinea continue
progress despite COVID-19
August 2020, DRA Operations in South Africa
back to full operation after COVID-19
shut-down
Secured nearly $1 billion
of new work in 2020
despite impacts of
COVID-19
DRA Global Annual Report 2020 / ACN 622581935
/ 7
Chairman’s report
Dear Shareholders,
The extraordinary events of 2020 are already well documented
and, as I write this Report, the COVID-19 pandemic continues to
impact us all. It is through the lens of the pandemic that I would
like to reflect on the year and report on the incredible progress
DRA Global has made over the past 12 months, in spite of the
challenges we faced.
The pandemic brought into sharp focus the importance and high
priority for the health, safety and wellbeing of our people, who
are at the core of everything we do. I congratulate the Executive
Team for a job well done during 2020 in managing the continuity
of our business and appreciate their ongoing efforts in remaining
vigilant as we continue to grapple with the effects of COVID-19.
With a global workforce of more than 4,500, across 20 locations,
it is not surprising that the pandemic has had a direct and very
real impact on our people and their families, and on behalf of the
Board I send our thoughts and support to all of those affected.
A positive outcome of the pandemic has been the ability to test
the resilience of our business and while we have come though
this challenge well, we will continue to make a concerted effort to
improve the operational safety performance of DRA.
You will be aware that in 2015-2016 we undertook a strategic
process to develop a five-year plan for the Group. This plan set
out a number of commitments, including to become a $1 billion
revenue company, growing our non-South African revenues and
taking the necessary steps to redomicile DRA from South Africa
in order to create a platform for further international growth,
including being listed on the ASX and JSE.
While these commitments were made prior to my time, I am
delighted to report that the Board and Executive Team have
met these commitments to shareholders and, all going well, we
expect DRA to become publicly listed in 2021.
A key supporter of developing and delivering that five-year
plan has been Leon Uys, DRA’s former CEO and a long-term
servant of the Group at an Executive level, as well as serving as
a Non-executive Director since 2013. It is therefore somewhat
appropriate that, having seen the culmination of his plan, Leon
has chosen to call time on his career with DRA and resigned
in early May. I know I am joined by the extended DRA family in
thanking Leon for his enduring service and wishing he and his
family every future success.
// Who is DRA Global / Chairman’s report
Peter Mansell
While the pandemic stymied our ability to run a typical in person
strategic planning process, this is a Board and Executive priority
for 2021.
An IPO is multi-faceted, with the alignment of all existing
shareholders being a fundamental component. Back in 2016,
Stockdale Street’s investment in DRA was ‘fit for purpose’,
providing a partial exit for former employee shareholders and the
support for DRA Global’s growth strategy.
However, with its primary investment focus being on private
opportunities, the run-up to DRA’s public listing was a natural exit
point for Stockdale and in January 2021, a process to buy-back
Stockdale’s shares commenced.
Throughout my tenure as Chairman, the Board has been
unwavering in tackling issues head on and smoothing the path
ahead in the interests of all shareholders. With change on the
horizon and following Stockdale’s exit, we have refreshed the
Board, including the resignation of Ken Thomas and Stockdale’s
representatives stepping down, paving the way for further
independent directors to join the Board.
To this end, we recently welcomed Paul Lombard to the Board as
an independent Non-executive Director. Paul will make a valuable
contribution to the Board with his significant experience working
throughout EMEA, and as a South African based Director.
Looking ahead, I am extremely
optimistic about the opportunities for
DRA, our people and our customers.
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DRA Global Annual Report 2020 / ACN 622581935
Chairman’s report
// Who is DRA Global / Chairman’s report
While we are sure to encounter more unexpected challenges in
the coming 12 months, we can all draw from the experiences of
2020 and the knowledge that DRA has the resilience and the
Team to prosper.
Finally, I would like to acknowledge and thank Andrew Naude,
his Executive Team and the hard-working people of DRA for
their focus on customer delivery through difficult circumstances.
The Board salutes you and, when circumstances permit, looks
forward to thanking you in person.
Thank you again. Stay safe and well.
Sincerely,
Peter Mansell
Chairman
Peter Mansell
DRA Global Annual Report 2020 / ACN 622581935
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// Who is DRA Global / Managing Director and CEO’s report
Managing Director and CEO’s report
Dear Shareholders,
It is with great pleasure that I provide this Managing Director’s
Report for DRA for the 2020 year, one for which I am extremely
proud of our team and its performance.
DRA is generally known as “…a diversified global engineering,
project delivery and operations management group…”, but
fundamentally we are a people business that delivers innovative,
timely and fit-for-purpose solutions to our valued customers.
Most importantly, DRA remained steadfast on its safety focus.
Working towards Zero Harm is a job that is never complete – there
will always be room for improvement, and we remain committed
to the goal of becoming a 0.0 LTIFR business. DRA employs
over 4,500 staff across the globe and their safety is a core focus
for the management team. I would like to acknowledge the hard
work of our people across the Group for their commitment to
creating a safe workplace and ensuring everybody is part of the
DRA safety program.
Navigating COVID-19
Amid the emergence of the COVID-19 pandemic in 2020, which
disrupted global markets and has shaped a “new normal” for
business, DRA continued to perform well. In 2020 DRA delivered
another healthy profit and ended the year in a strong cash
position, which demonstrates the robustness of the Group. As
the pandemic continues to disrupt activities across many regions,
the mining and resources industry has shown resilience, and
DRA’s people have and are continuing to demonstrate lateral
thinking, adaptability and a “can do” attitude to get the job done,
in spite of the uncertainty. Clearly, the impact of the pandemic will
continue well into 2021 and beyond, so we will remain focused
on maintaining the health, safety and wellbeing of our people and
their families, our customers and our business partners.
DRA’s people-first culture
At DRA we are committed to building an entrepreneurial culture,
providing our people with the autonomy and a sense of ownership.
To achieve this, we are creating a company with bench-strength
of leadership at all levels, and an operating model that facilitates
empowerment, autonomy and effective delivery.
In 2020 we successfully increased collaboration and integration
in our Europe, Middle East and Africa (EMEA) region through
the sharing of resources, expertise, talent and ideas-generation,
across the DRA Projects, SENET and Minopex capabilities.
Andrew Naude
In 2021 we plan to extend this to our growth region of Asia-
Pacific (APAC) and the Americas (AMER).
Over the 12 months to 31 December 2020, we also invested
significantly in resourcing key corporate functions and believe
these investments will support our long-term strategic growth
journey, including strengthened governance, business continuity
and resilience across all our operations. To create a thriving,
future-fit organisation, and to pivot our employees to the new
world of work, we have rapidly shifted our workforce to remote
and flexible working arrangements, whilst also investing in
technology and practices to support this. We also initiated a
comprehensive employee wellness program during the year, to
support our teams, work, financial, physical and mental health.
Building long-term customer engagement
DRA’s commitment to being a leader amongst industry peers,
through an unwavering customer focus, came to the forefront in
2020 against a challenging and unpredictable macroenvironment.
This was evidenced by winning repeat work from our loyal
customer base, including some multi-year contracts .
DRA works across the full spectrum of customer needs in
the resources sector, offering a true end-to-end service. We
embarked on a Group-wide initiative during the year to bolster
engagement with our customer-base, yielding great results for
both them and DRA. While the future always has elements of
uncertainty, what is clear to DRA is that demand for skills and
expertise will increase, customers will continue to seek out new
and more efficient technologies, and further innovations and
safety performance will be paramount.
Helping drive a sustainable, low-carbon economy while giving
back to the communities in which DRA operates, is increasingly
becoming a must, rather than a choice. It’s our view that
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DRA Global Annual Report 2020 / ACN 622581935
// Who is DRA Global / Managing Director and CEO’s report
customers will come back again and again, to an engineering,
project delivery and operations management company that is
forward-thinking. For DRA this means creating an atmosphere
that is conducive to creativity, growth and shared success.
Over the past year DRA has continued to grow its orderbook.
The longer-term forward opportunity pipeline has also increased,
with qualified opportunities of around $8 billion, across projects,
operations, maintenance and shut-down services, which is a
record for DRA.
Operational excellence
In 2020, DRA also embarked on an ambitious operational
excellence program across the group. The program focused on
creating synergies between the various functional groups and
operating businesses. Through our investment in the operational
excellence program, we have been able to generate savings
through efficiencies, as well as better integration of systems and
processes. The program has also been instrumental in enabling
DRA to be IPO ready in 2021.
Delivering shareholder value
Over the past year and amidst very challenging conditions
across the world DRA continued to deliver on, and was involved
in, some iconic projects. I would like to acknowledge the hard
work of our teams on their dedication and diligence in delivering
these projects. DRA’s involvement in the Kamoa-Kakula project,
which upon completion will be one of the largest copper mines
in the world, was a particular highlight. DRA continues to provide
services across the underground mine development, process
plant and associated infrastructure. DRA’s man-hours across the
project are in excess of five million and with zero LTI’s which is a
remarkable accomplishment.
Another significant project in execution for DRA is the Tri-K gold
project. Here again, the team worked throughout the COVID-19
pandemic with zero LTI’s and is on track to achieve first gold
in 2021. From operating and maintaining the highest diamond
mine in the world in Lesotho, to providing owners support to
new customers in Peru and Russia and from performing shut-
down services in the Australian outback to delivering world-class
projects across the African continent, the entire DRA team can
be proud of their achievements.
Health, safety and wellbeing
Over the year, DRA employees and contractors delivered more
than 12.3 million man hours across customer projects, and over
7.7 million additional man hours across operations, maintenance
and shut-downs, achieving LTIFR of 0.24 per 200,000 man hours
and TRIFR 0.72 per 200,000 man-hours. Our Projects business
achieved a LTIFR of under 0.1 in 2020, a fantastic achievement
which reflects our unwavering focus on safety. Zero Harm
remains at the forefront of all DRA operations and our focus on
safety is unwavering, transcending our diverse workforce across
various demographics and geographies. Our safety culture is
centred around six key pillars, being:
/ Leadership
/ Environment
/ Employee engagement
/ Behaviour
/ People
/ Systems
We will continue to adopt a progressive mindset in our approach
to safety and work closely with our customers and our industry to
eliminate safety incidents from the workplace.
Looking ahead
The next 12 months are pivotal for DRA and I am excited about
what lies ahead. We remain on track to deliver against our goals
culminating, we hope, in DRA being recognised as a leading
global engineering, project delivery and operations management
service provider to the mining, minerals and metals market.
From a corporate point of view, 2021 will bring a heightened
profile and new demands from our stakeholders. Preparing to
list is a major step for the Group and will provide the necessary
platform to support DRA’s longer-term strategic aspirations.
Having worked through the challenges of 2020 successfully and
with a strong pipeline of work in front of us, the outlook for our
operational performance is also healthy.
To conclude, I would like to acknowledge and thank our Chairman,
Peter Mansell, and the Board as well as my Executive Team for
their commitment and support over the past 12 months. Learning
from and being part of such an inspirational team is humbling
and I am grateful for the guidance and backing I receive from
my colleagues.
Stay safe and best wishes for 2021.
Sincerely,
Andrew Naude
Managing Director and CEO
DRA Global Annual Report 2020 / ACN 622581935
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// Who is DRA Global / How DRA creates value
How DRA creates value
Corporate social responsibility
A key component of any company of integrity, is an investment in
its licence to operate or, more typically articulated, its Corporate
Social Responsibility (CSR). As part of this, DRA works with its
customers and suppliers to deliver sustainable economic, social
and environmental outcomes at every opportunity.
In the broader context of CSR, DRA’s strategic pillars are centred
around:
/ Empowering talent both now and in the future, through setting
people up for success and excellence through the provision
of a safe, healthy and inclusive working environment, that
promotes diversity and wellbeing.
/
/
Inspiring people with their career development, encouraging
ownership and innovation and investing in the future
of engineering to attract the best talent to serve DRA’s
customers.
Investing in communities and supply chains in which DRA
operates. DRA will continue to develop this by creating
a positive and enduring impact on the local communities
where we do business through strategic partnerships and
meaningful engagement.
/ Focusing on building a resource efficient, low carbon
future, by helping customers succeed
decarbonisation commitments through the delivery of
innovative, resource efficient and climate resilient
engineering solutions and capital assets.
in
their
/ Supporting production of the minerals and
metals necessary in a low carbon future and
acting responsibly to minimise our impacts
on the environment.
In every operating jurisdiction, DRA is committed to constantly
deliver excellent service in the most efficient way possible, for
the shared benefit of customers, shareholders, employees,
stakeholders and communities in which we are operating.
DRA designs and delivers complex engineering solutions for
customers who value certainty and long-term value creation
through efficient design. This approach allows DRA to build
long-term partnerships, from the very earliest engagement, with
customers and strategic partners who value and share DRA’s
commitment to forward-thinking and intelligent engineering,
delivered smartly.
DRA’s approach to the origination, delivery and optimisation of
capital projects is trusted by customers.
/ Originate: Customers rely on DRA’s extensive knowledge
in engineering consulting to advance their conceptual,
pre-feasibility and bankable feasibility studies through to
successful project implementation.
/ Deliver: Comprehensive knowledge and broad experience
in EPCM, EPC, construct-only and hybrid solutions deliver
world-class, fit-for-purpose engineering solutions that add
real value. DRA’s design capabilities and strong project
management skills ensure the successful implementation of
projects across multiple geographies and sectors, often under
challenging conditions.
/ Optimise: Insight, analysis, strategy and advanced technology
are employed to reduce operating and maintenance costs
while enhancing productivity. Potential areas of improvement
exist within any facility; DRA’s operations and maintenance
business provides insight, analysis, strategy and advanced
technology to help customers make the best operational
decisions to achieve the right outcomes within specific time
and capital constraints.
/ 12
DRA Global Annual Report 2020 / ACN 622581935
Market trends
Regional
The COVID-19 pandemic delivered
challenges but also opportunities
to commodity markets across APAC,
target
business regions. The outlook remains
uncertain and depends on the duration and
AMER, and EMEA, DRA’s
severity of the pandemic.
On a positive note, the global level of mining
activity has picked up significantly from March
2020. The number of projects reporting drill results
increased 32% from December 2020 to January 2021,
demonstrating the uptick in exploration budgets in the
second half of 2020.
Exploration activity appears to be gathering momentum,
alongside commodity prices, which is positive for DRA’s
business and key regions.
Platinum
Over recent years, platinum – widely used as an auto catalyst for
chemical reactions – has benefited from a slower than expected
uptake of electric vehicles (EVs) globally. EV battery unit prices
remain too high to entice customers to swap from cheaper,
conventionally powered vehicles.
Nevertheless, given palladium’s higher price (preferred in petrol
engines), it is expected that petrol vehicle manufacturers will
substitute platinum for palladium in their catalytic converters in
the future.
We expect DRA’s strong reputation in platinum will continue to
provide a platform to build a full value chain offering, including
project delivery and ongoing operations and maintenance.
Gold
The trend in gold remains driven by uncertainty and fear of the
economic future. With the weaker global economic outlook today,
uncertainty continues to build and is increasing gold prices and
demand.
In response to the COVID-19-related economic downturn, global
governments and central banks increased fiscal and monetary
spending. This has directly benefited the gold sector with growing
demand, rising prices, and increasing capital investment from
miners looking to take advantage of higher gold prices.
DRA elevated the gold sector to one of its strategic focus areas
and we expect it to remain a key area of investment in the
coming years.
Copper
Global macro trends such as an increasing global population, the
clean energy movement and economic growth in underdeveloped
(i.e. African countries) and developing nations (i.e. China),
continue to drive copper demand.
Copper has widespread applications across the economy,
including in construction, infrastructure, electronics and power
generation. This demand is reflected in the copper price, which
has been in an uptrend and reached an eight-year high in 2020.
DRA has a well-established global business, servicing the front-
end and delivery phases of copper projects around the globe.
From a regional perspective, DRA remain focused on the regions
where it sees the most projected growth and are pursuing the
significant copper needs of these projects.
Metallurgical Coal
Historically, metallurgical coal has been an essential product in
the steel-making process. The trend is unlikely to change over
the medium term. Despite the research into finding a substitute
product it could be years before an economically viable
replacement heat source is developed.
China’s growing steel industry is facing rising costs which is a
promising positive indicator for metallurgical coal prices and
demand in the future.
DRA
remains
environmentally
metallurgical coal projects.
focused on delivering sustainable and
friendly practices across our customers’
Iron Ore
Global megatrends such as urbanisation, population growth and
infrastructure continue to drive long-term demand in the iron ore
market.
While the overall trend is positive, a constant balancing equation
between feedstock and market dynamics continues, with nations
having differing iron ore appetites. For this reason, China, Africa,
and North America appear to be the leading hotspots for iron ore
demand and capital expenditure in the coming years.
DRA’s focus is being driven by our iron ore customers in
Australia. Given DRA’s reputation across the iron ore sector,
servicing the world’s largest iron ore miners, the focus will remain
on expanding extensive delivery capabilities to meet customer
demands.
DRA’s operating business
DRA is committed to providing
engineering excellence through
all stages of the project life cycle,
from concept through delivery,
commissioning, operations and
rehabilitation.
// Who is DRA Global / DRA’s operating business
Over the past three
decades DRA has operated
and maintained 46 mineral
processing plants and
commissioned 62 processing
plants.
DRA operates two distinct but interconnected operating divisions, namely Projects and Operations.
DRA’s core business focuses on delivering these services to a diverse customer base from junior miners
to global tier-1 multi commodity customers exclusively in the minerals, metals and mining resources
sectors.
Projects Division
Operations Division
The DRA Projects’ provide mine-to-port operational services
across the Asia-Pacific region, Europe, the Middle East, Africa
and the Americas.
DRA’s team of talented professionals draw on comprehensive
knowledge and extensive experience to deliver world-class,
fit-for-purpose engineering solutions that add significant value.
From scoping and pre-feasibility, to final hand-over, in addition
to interim or ongoing operations and management, the DRA
team of professionals adds value across the entire lifecycle of
a project.
Project delivery is provided in various contracting solutions
including Engineering, Procurement
and Construction
Management (EPCM), Engineering, Procure and Construct
(EPC), Cost reimbursable, Lump Sum Turnkey (LSTK), Agreed
Target Cost (ATC) and Build, Own, Operate, Transfer (BOOT).
DRA‘s
leading design capabilities and excellent project
management skills ensure the successful implementation of
projects across multiple countries, commodities and sectors.
Contract operations and maintenance is a unique business model
for mineral processing throughout the world, as companies look
for innovative ways to reduce operating and maintenance costs
and improve productivity. DRA is a leader in contract operations
and plant maintenance. The organisation adds value to mining
operations across the world by meeting the unique needs of its
customers. From coal, chromite and ferrous metals, to diamonds,
gold and platinum, DRA offers a wide range of services designed
to make mineral processing requirements more cost effective
while maintaining product quality, plant integrity and worker
safety. DRA delivers Operations and Projects across two main
regions.
Europe, Middle East and Africa (EMEA)
This region includes the DRA Africa Projects business, and
wholly owned subsidiaries Minopex and SENET. DRA Projects
focuses on medium to large EPCM, EPC, engineering, studies
and mining solutions across the region. SENET has a focus on
hydrometallurgy, gold EPC projects in West Africa, selected
long-term key customers and junior mining customers. Minopex
provides operations and maintenance, and associated services
of mineral processing plants, through multi-year contracts, as
well as optimisation and advisory services.
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DRA Global Annual Report 2020 / ACN 622581935
DRA’s expansion into the Andean region in South America
during 2020 continued its steady growth and is showing
impressive results. In this market, the focus has been on
securing and delivering successful outcomes to the Las Bambas
and Antamina mines in Peru.
Across the AMER market, DRA has continued to provide services
to a range of customers from tier-1 multinationals, such as Anglo
American and Kinross, to junior exploration companies.
// Who is DRA Global / DRA’s operating business
DRA’s portfolio in EMEA occupies a leading competitive position
in this market. The Group’s position in the EMEA region is
fundamental to the strategy of the Group.
DRA’s suite of services in the EMEA region in 2020 comprised
fully reimbursable and fixed-price work, providing customers with
a best-for-project solution.
The EMEA region is also DRA’s global centre of excellence in
mining, hydrometallurgy (including proprietary heap leaching
equipment), operations and maintenance, operational readiness
and information modelling.
Australia and Americas (APAC/AMER)
Also divided into Projects and Operations divisions, APAC is a
growth region within DRA and offers services to the Australian
resources industry. Throughout 2020, DRA has grown its
customer base across the APAC region.
Within Australia, DRA provides maintenance and shut-down
services, mainly on the Australian east coast, to tier-1 coal
miners, through its wholly owned subsidiary, G&S Engineering
Services (G&S). G&S is regionally based in central Queensland,
enabling the ability to service a niche market in the Australian
mining industry.
In 2020, DRA established an Operations and Maintenance
(O&M) division aimed at providing O&M services to the Australian
market, leveraging the skills of Minopex and resources of G&S.
DRA secured some small, initial O&M assignments and delivered
these successfully. Transferring knowledge from Minopex has
been a key component of the set-up of the O&M business in
Australia in 2020. DRA’s EPCM, EPC and studies work in APAC
is delivered through the Projects division.
DRA has a diverse portfolio of service offerings in the APAC
region and has in a very short time become recognised in the
region. DRA’s presence in this market increased substantially in
2020 and the Group delivered projects at various stages for key
customers including Newmont, Northern Star, BHP, Rio Tinto,
Bravus Mining and Glencore.
In 2020, the Americas region had a similar business model to the
rest of DRA.
In 2020, the Operations division, DRA Energy Operations,
operated and maintained 18 refined coal processing facilities
across several states in the USA. The Projects division delivered
mostly studies, engineering and owners support across the
AMER region.
DRA Global Annual Report 2020 / ACN 622581935
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// Who is DRA Global / Areas of operation
Areas of operation
In 2020, DRA continued to expand its geographic
footprint. The Group established offices in
Peru and Chile and expanded its Australian
operations by opening a new office in Adelaide.
DRA provides services to customers from 20 strategically
positioned offices across the globe, offering a unique set
of global and local market perspectives.
/ 16
DRA Global Annual Report 2020 / ACN 622581935
Areas of operation
// Who is DRA Global / Areas of operation
OFFICES
AMER
APAC
EMEA
DRA Global Annual Report 2020 / ACN 622581935
/ 17
// Who is DRA Global / Strategy and outlook
Strategy and outlook
DRA will target controlled, long-term value appreciation by focusing
relentlessly on delivering visible, value-add solutions that reinforce our
reputation and demonstrate our values to our customers in markets,
sectors or commodities where we have (or can build) a clear competitive
advantage.
Where we come from
Between 2017 and 2020 DRA implemented a global expansion and diversification strategy, which significantly expanded
global reach and capabilities. DRA achieved its strategic objective for this period by increasing scale, establishing an
international platform for growth, maintaining a strong annuity earnings base and achieving revenue growth targets.
Where are we now
Over 4,500 employees across 20 offices, with a significant orderbook and pipeline of opportunities.
Enhanced scale, capabilities and global diversity. Focus on a group-wide operating model.
Where are we going
Combine DRA’s extensive experience and world class expertise with a mature
operating model to deliver operational excellence across the Group and position
as a preferred partner to high value customers. Continue geographic and
service offering expansion.
/ 18
DRA Global Annual Report 2020 / ACN 622581935
Strategy and outlook
Acquire complementary businesses
/ Undertake selective M&A to expand capabilities and establish
presence in new markets. Medium-term focus on building
capacity and capability in the AMER region.
/ Other bolt-on type acquisitions will be pursued to acquire
specific capability or expertise for the global business.
Maintain and develop customer relationships
/ Focussed customer relationship management practices, with
a focus on partnering with top and mid-tier miners (multi-
asset owners) and select junior mining customers where
deep expertise, delivery credibility and contracting flexibility
are valued.
/ Focus on involvement throughout the project lifecycle,
enhanced customer lifetime value.
// Who is DRA Global / Strategy and outlook
Key strategic growth areas:
DRA’s market position and reputation in relevant markets will
enable the Group to continue to grow through the award of new
work and extension of existing contracts. In addition to growth
through securing new work from existing markets and customers
further growth as follows:
Market positioning
/ Aspire to be the natural choice in the project delivery mid-
market, targeting multi asset miners and emerging resource
developers which value
true expertise, credibility and
flexibility.
/ An attractive alternative to owner-operation specifically
for emerging resource developers, joint operations and
developers reliant on external funding.
/ Maintain strong market position in EMEA. Position as an
alternative provider to top and mid-tier mining groups in
APAC/AMER with local presence, global expertise.
Geographic expansion
/ Continued growth and execution in APAC:
– The Australian metals and mining market represents a
significant growth opportunity. DRA is still relatively new
and low profile in the region with a significant and growing
pipeline of opportunities.
/ Short-term focus on execution of current opportunities.
/ Build presence and profile in AMER:
– The Andean region of South America is an attractive
market for DRA’s services due to the commodity profile of
copper and gold and scale of mines.
– Medium-term focus on gold and copper.
Service offering expansion/diversification
/ Develop advisory capacity in capital projects and operations
by leveraging existing expertise, capabilities and IP.
/ Expand DRA’s underground mining service offering within
EMEA and later into APAC/AMER. These are long-term capital
projects which routinely present follow-on opportunities,
resulting in annuity style earnings over long periods of three
to five years (up to 15 years).
/ Develop a portfolio of sustaining capital management
customer relationships.
DRA Global Annual Report 2020 / ACN 622581935
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// Who is DRA Global / Sustainability report
Sustainability report
Forward thinking, engineering a more sustainable future, together.
DRA has delivered thousands of projects and studies across
six continents with varying climates, cultures, legal systems
and social conditions. DRA is aware of social, environmental
and economic disparities across the world and it is uniquely
positioned to deliver solutions that create tangible and lasting
value for all its stakeholders.
DRA‘s long-term success depends on operating in economically
and socially sound environments and the Group strives to build a
more sustainable, equitable and inclusive future.
DRA is committed to acting in an ethical and responsible way that
is in the interest of all its stakeholders, including its employees,
customers, shareholders and the communities where it operates.
The Group’s leading engineering design offering spans the
full value chain, from mine-to-port. This allows DRA to help
its customers meet their sustainability objectives and identify
opportunities to widen their positive impact in the delivery of their
projects.
Against
Environmental, Social and Governance (ESG) objectives.
this backdrop DRA
is disclosing
its
inaugural
Climate change action
Recognition in the understanding of the effects of climate change along with the physical and transition risks and opportunities present to tackle the challenges.
Engineering services have an opportunity to play an important role in the transition to a lower carbon economy and climate change mitigation through solutions, service offerings
and technical advice.
Climate change will have significant implications for engineering services firms, directly through impacts to people and assets, and indirectly through implications for the
industries serviced.
Environmental impacts
Managing, protecting and rehabilitating the environment across the life cycle of a project is critical to maintaining social licence to operate, and is a regulatory
requirement in the majority of regions DRA operates across.
DRA has an opportunity to contribute to sustainable development by planning, advising on and delivering projects that preserve natural resources, reduce GHG
emissions, reduce waste, reduce the life cycle impacts of a project and more efficiently extract and process resources.
Community investment
Corporate responsibility in this industry includes investing in communities to improve livelihoods, contribute to economic and sustainable development
and maintain social licence to operate.
Supporting local suppliers, contractors and workers builds local capabilities and provides economic opportunities to local communities.
Talent attraction and retention
Diversity and inclusiveness is key to building a resilient organisation and enabling growth. Increasingly, diversity and inclusion is also
necessary to attract talent, while equity, the fair treatment and elimination of systematic barriers, is vital for retaining talent and remaining
competitive in the eyes of stakeholders.
Health, safety and wellbeing
Maintaining workforce health and safety is of paramount importance in the mining, engineering and infrastructure industry,
and is key to maintaining an operational and social licence to operate.
Increasingly, the definition of health and safety is being extended to include physical, emotional, financial and mental
wellbeing.
With regard to safety reporting, DRA has embraced the trend and moved away from lag indicators such as safety
incidents (outputs), towards leading indicators that focus on pro-active, preventative measures (inputs).
Sustainable supply chains
Supply chain traceability is rising in importance, driven by new laws and the growing concerns of
consumers. Customers,investors and employees are increasingly conscious of the foreign supply chain
footprint of their organisation.
Ethical business conduct
Social licence to operate refers to the
ongoing community and stakeholder
acceptance of a company’s activities; an
“informal licence”.
Social licence to operate is often at the top
of key business risks for many companies
regardless of where they are operating.
/ 20
DRA Global Annual Report 2020 / ACN 622581935
Sustainability report
// Who is DRA Global / Sustainability report
DRA’s approach to ESG
Governance and risk management
Human rights
Respect for human rights is fundamental to the sustainability of
DRA and the communities where it operates. In accordance with
its Code of Conduct and company values, DRA is committed to
ensuring that people are treated with dignity and respect, always.
This policy is guided by international human rights principles
encompassed in the Constitution of the Republic of South Africa,
the Universal Declaration of Human Rights, the International
Labour Organization’s Declaration on Fundamental Principles
and Rights at Work, the United Nations Global Compact and
the United Nations Guiding Principles on Business and Human
Rights.
Charters
Committee charters define the role and responsibility of the
committee within the governance framework of DRA. Each
member of the Audit and Risk Committee, the People, Culture
and Remuneration Committee, and the Sustainability and
HSEC Committee meet the independence requirements
of Australian regulations. DRA‘s high standards are
reflected in its Code of Conduct:
/ Board Charter;
/ Audit and Risk Committee Charter;
/ Sustainability and HSEC Charter;
/ People, Culture and Remuneration
Charter; and
/ Nomination and Governance
Committee Charter.
to support
the Group’s commitment
DRA is committed to a code of conduct that meets good legal
and ethical standards, and a commitment to doing business
with integrity and honesty. Strict policies and practices are
maintained
to good
corporate governance. DRA strives to create tangible value for
its customers, employees, shareholders and the communities
where it operates and the Group’s Board of Directors provide
the necessary guidance to ensure these activities are in the best
interests of these stakeholders. DRA prioritises transparency,
accountability and responsibility in achieving its objectives,
managing risks and ensuring compliance.
Charters and policies
DRA acknowledges that good corporate governance requires
an ongoing commitment to structures and processes. The
following charters and policies have been developed to assist all
employees in the performance of their daily duties.
Speak Up
DRA strives to prevent any form of dishonest, irregular and
unethical behaviour in business affairs. In order to live up to this
commitment, DRA encourages employees and stakeholders to
convey any serious business-related concerns they may have
through the established reporting channels.
Anti-bribery and anti-corruption
DRA’s policies clearly state that the Group takes a zero-
tolerance approach to bribery and corruption in both private and
public sector transactions. This position extends to facilitation
payments.
DRA Global Annual Report 2020 / ACN 622581935
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// Who is DRA Global / Sustainability report
Strategy
In 2020, DRA completed an ESG materiality assessment and
strategy development process to ensure the Group is operating
at the highest level, both now and in the future. The materiality
assessment process combined the methodologies from the
Global Reporting Initiative and the Sustainability Accounting
Standards Board and enabled the Group to develop both
outward and inward-looking perspectives of the most significant
ESG risks and opportunities. The process involved the following
key steps:
/
Identification: Value adding issues were identified by reviewing
ESG trends in DRA’s operating context, including global
megatrends, sector issues and the views of stakeholders,
competitors and customers.
/ Prioritisation: A strategic workshop was hosted with senior
leaders to prioritise DRA‘s material ESG issues. Workshop
participants prioritised the issues in terms of the direct impact
they have on the business performance and the significance
of this impact, the scale of the societal challenge, and
related stakeholder awareness and needs. This resulted
in the identification of seven strategic focus areas and six
responsible business items which are deemed material to
DRA’s sustainability and that of its stakeholders.
/ Consolidation: Focus areas were grouped thematically, which
led to the identification of three distinct, yet interconnected,
pillars. Commitments were then developed based on DRA’s
business model, value proposition and capabilities to ensure
that the Group’s ESG activities leverage and serve the core
of the business.
DRA’s Strategic Pillars:
Creating value for the business and society
Empowering engineering talent,
now and in the future
Investing in our communities
and local supply chains
Building a resource-efficient,
low-carbon future
Setting people up for success and excellence
by providing a safe, healthy and inclusive
working environment promoting diversity and
wellbeing
Empowering people with their career
development and encouraging ownership and
innovation
Investing in the future of engineering
professionals to attract the best talent to
serve customers
Creating a positive and enduring impact on
the local communities where DRA operates
through visible and meaningful community
engagement and investment
Building capacity and capability in the
community for supply chain resilience and
lasting local economic self-sufficiency, in
partnership with industry and governments
Helping customers succeed in their
decarbonisation commitments by delivering
innovative, resource efficient and climate
resilient engineering solutions and capital
assets
Assisting to produce the minerals and metals
necessary in a low carbon future
Acting responsibly to minimise impacts on the
environment
Prioritisation:
What matters to DRA’s business and stakeholders
Strategic
focus areas
Talent
pipeline
Mental
health and
wellbeing
Community
engagement
Supply
chain
resilience
Transition
to a lower
carbon
economy
Natural
resource
management
Physical
impacts
of climate
change
Responsible
business
issues
Employee value proposition
Diversity and inclusion
Zero harm and safety culture
Local/regional economic
development
Responsible/ethical
supply chain
Environmental compliance
(incl. pollution, and biodiversity)
/ 22
DRA Global Annual Report 2020 / ACN 622581935
// Who is DRA Global / Sustainability report
Approach to Pillar 1:
Empowering talent, now and in the
future
Zero harm and total safety culture
/ DRA pushes the boundaries of convention to develop new,
smarter and safer ways of working in an ever-changing
environment. The Group is committed to ensuring that every
employee remains healthy and returns home safely every
day. DRA takes every reasonable practical measure to
eliminate workplace injuries and health risks.
/ DRA have also developed a health, safety and
environmental (HSE) management system that is
custom- made for its operations and aligned with
the international standards of OHSAS 18001. This
enables the Group to develop new initiatives
and mindsets and to share its experiences and
findings in this area.
/ Every employee at DRA forms part of the
Group’s safety team ensuring there is
a continued focus on driving the right
behaviours across all levels resulting
in exceptional safety records being
achieved on projects of all sizes
and complexities.
Total Safety Culture
Leadership
Senior leaders are committed
to cultivating a HSE culture and
actively live DRA’s core values.
Environment
The physical environment
(facilities, procedures and people)
allow safe performance.
Employee
Engagement
Employees are actively engaged
with their work thereby gaining a full
understanding of their workforce.
Behaviour
People perform
“Safe” behaviours.
People
When people have positive perceptions of
themselves, their co-workers and the organisation,
they are willing to go beyond the call of duty.
Systems
Our HSE organisational systems support the “pin-pointed”
behaviours required of our workforce.
Mental health and wellbeing
Talent pipeline
/ Employees are the cornerstone of DRA’s business. The
mental health and wellbeing of employees was a priority for
the Group before the outbreak of COVID-19 and the global
pandemic has led to an even greater emphasis being placed
on the holistic wellbeing of employees.
/
In 2020, DRA launched a Group-wide program that focuses
on the five pillars of employee wellbeing, namely occupational
health, mental and emotional wellbeing, financial wellness,
physical health and social and community support.
/ The Group also repeated its successful mental health
programs and events including Movember, World Suicide
Prevention Month, R U OK? Day, CANSA Shavathon,
Mandela Day and the MSWA Ocean Ride.
/ DRA values the expertise and capabilities of its employees and
develops these capabilities to boost the Group’s performance
and innovation. Employees are equipped with the necessary
tools and knowledge and given the opportunities to develop
into industry leaders. The Group has created a strong culture
of encouraging employees to focus on performance, value
their customers and their goals, and respect each other. The
Group has a collaborative environment where people share
their ideas and knowledge across departments and country
offices to deliver innovative, world-class solutions.
DRA Global Annual Report 2020 / ACN 622581935
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// Who is DRA Global / Sustainability report
DRA’s response to COVID-19
COVID-19
taskforce
Wellness and
safety
The DRA COVID-19 taskforce
meets regularly to review the
latest data and take the necessary
action to ensure that the Group
follows international best practices in
its response to the pandemic.
Ongoing
communication
DRA is monitoring the situation daily to share
insights and updates with employees and customers
across the world.
COVID-19 created a new wave of challenges to
navigate, but none as dire as maintaining the wellness
and safety of DRA people. Along with implementing
remote work for our employees, DRA rolled out
new ways of working on sites for employees who
continued to provide critical services to customers.
This
included additional sanitation measures,
physical distancing and additional PPE as well as
temperature check and working with customers to
create COVID-19 safe work bubbles
The Group also increased communication with team
members for regular check-ins, directed employees
to the Employee Assistance Program and held
Zoom fitness sessions to keep spirits up.
Action in case
of infection
Resilience of the business
to support customers
DRA has procedures in place to swiftly isolate
employees who may require medical treatment
or testing. The Group implemented plans and
procedures to help its workforce operate safely
during the pandemic.
Remote
working
To meet government requirements and protect the
safety of its staff, DRA has implemented a remote
working policy across all its offices and those of its
subsidiaries, SENET, Minopex and G&S. DRA has
implemented a work-from-home strategy in these
locations to help ‘flatten the curve’ of the COVID-19
pandemic.
DRA has implemented the use of technologies
across its offices to conduct internal and external
meetings. The Group is committed to a flexible work
environment and has the technology, infrastructure
and systems to support uninterrupted service to its
customers.
DRA continues to work toward completing current
projects and studies on schedule. The Group
actively identify risks that may disrupt the project and
collaborate with its customers to achieve the best
possible outcome.
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DRA Global Annual Report 2020 / ACN 622581935
// Who is DRA Global / Sustainability report
Approach to Pillar 2:
Investing in communities and
local supply chains
Approach to Pillar 3:
Building a resource-efficient, low-
carbon future
Community engagement
Transition to a lower carbon economy
/ DRA has developed strong and lasting relationships with
host communities during its years in business. The Group
continues to emphasise the importance of these relationships
in its business strategy.
/ To have a long-term impact on economies and contribute to
sustainable beneficial development, DRA engages with the
community around the project tender process and includes
them in various project phases through discussions and
workshops.
/ DRA has a focus on utilising local talent so the community
become an integral part of the Group’s projects and contribute
to their success.
/
In 2020, DRA implemented a number of community upliftment
initiatives through its integrated approach to project delivery.
The Group continues to invest in people through socio-
economic development.
Supply chain resilience
/ DRA is committed to building capacity and capability in
the community for supply chain resilience and lasting local
economic self-sufficiency, in partnership with industry and
governments.
/ DRA has a history of working with upstream suppliers to
develop reliable and resilient supply chains. Furthermore,
DRA recognises that sustainable supply chain processes and
management is extremely beneficial to the communities in
which we operate.
/ The metals and minerals required for the transition to a lower
carbon future will require significant design, engineering,
construction and operational expertise.
/ Building on DRA’s existing credentials both from a commodity
perspective and presence in geographical locations where
these commodities will be increasingly mined, the Group is
well placed to support customers as part of this transition.
/ The Group recognises the importance of keeping pace with
market and customer needs in the transition phase and
ensuring it has the right expertise and solutions to meet the
customer’s evolving needs.
Natural resource management
/ DRA is well-positioned to help businesses understand the
implications of their choices by offering a perspective on the
end-to-end value chain. The Group is involved in the early
design and development of projects through to operating and
maintenance.
/ The Group’s businesses, DRA Nexus and SENERGY,
have resource efficiency and innovation at their core. Their
recent projects highlight the synergies between resource
stewardship, community investment and responsible business
practices. The carbon intensity of operations is also becoming
a key area of focus, reflected by customer’s voluntary
commitments to net zero targets and new tax incentives (e.g.
the 12L energy efficiency incentive in South Africa).
/ DRA also contributes to environmental sustainability through
its core service offering services in solar PV energy, wind
energy, bio energy, hydro energy, conventional energy,
transmission and distribution. An example of this during 2020
was the development of a Thermal, Solar PV and Battery
storage hybrid system for the Kobada mine (African Gold
Group/SENERGY (DRA)), which has led to annual savings
and reductions of over five million litres of HFO and over
14 million kilograms of carbon dioxide emissions and other
harmful emissions.
DRA Global Annual Report 2020 / ACN 622581935
/ 25
// Who is DRA Global / Sustainability report
/ DRA assisted Sycamore Mining to develop a power solution that leveraged the
economic and environmental advantages of a Hybrid Power Plant at the Kiniero
Gold project in the Kouroussa. The hybrid solution offers a 34% reduction in fuel
consumption and emissions compared to a conventional diesel-only powered
plant. The hybrid plant consists of five 1,500kW diesel generators, a 6.6MW Solar
Photovoltaic Plant and a 2.5MW battery energy storage system.
/
The selection of a hybrid system over a pure thermal system will see the annual
savings and reduction of five million litres of diesel and 13 million kilograms of
carbon dioxide emissions, as well as other harmful emissions. The hybrid system
will result in US$1.8 million of fuel cost savings annually, with no upfront capital
costs and more than 30% of the power consumed will be generated through green
energy.
Physical impact of climate change
DRA understands the importance of acting responsibly to protect the natural environment. DRA is committed
to monitoring its environmental risk profile and developing innovative and sustainable solutions to minimise the
impacts on the environments in which we operate.
2020 ESG achievements snapshot
Health and Safety
Total Recordable Injury Frequency Rate per million hours worked
s
c
i
t
s
i
t
a
t
S
s
t
n
e
d
c
n
I
i
Man-hours Worked
FFR*
LTIFR*
TRIFR*
Minor Injuries
Recordable Injuries
Lost Time Injuries
Fatal
Total Injuries
* Frequency rates based on 200 000 man-hours
DRA Group
2019
21,349,094
0.000
0.244
0.693
144
74
26
0
218
2020
15,444,807
0.000
0.324
0.881
118
68
25
0
186
/ 26
DRA Global Annual Report 2020 / ACN 622581935
Females
Headcount
173
32
576
Environment
1,127
258
3,026
DRA contributes to environmental sustainability through its
core service offering by providing services in solar PV energy,
wind energy, bio energy, hydro energy, conventional energy,
transmission and distribution.
/ DRA designed the hybrid power solution for the Kobada gold
mine which will yield over five million litres of HFO and over
14 million kilograms of carbon dioxide emissions and other
harmful emissions.
/ DRA designed a hybrid power system which will ensure that
30% of power consumed on the Kiniero Gold project will be
generated through green energy. This hybrid power system
will result in US$1.8 million in fuel cost savings annually
and will lead to reduction of five million litres of diesel and
13 million kilograms of carbon dioxide emissions.
/ DRA completed an ISO50002 energy audit for Royal
Bafokeng at all their operations in which over $11.9m
in potential energy savings were identified. DRA
is currently implementing the first phase of the
24 initiatives identified.
// Who is DRA Global / Sustainability report
People and community
Employees by region
Region
APAC
AMER
EMEA
Males
954
226
2,450
/ Launched a group-wide employee wellbeing program.
/ Supported several mental and physical health programs
and events including Movember, World Suicide Prevention
Month, R U OK? Day, CANSA Shavathon, Mandela Day and
the MSWA Ocean Ride.
/ Donated to the community funded RACQ CQ rescue
helicopter.
/ Supported the new Ronald McDonald family room at Mackay
Base hospital to aid local sick children and their families.
/ Launched ‘Speak Up’ - an online platform to train and enable
individuals to safely report information about misconduct
without fear of retaliation or negative treatment.
/ Made donations, loans and investments to Black owned and
Black female owned suppliers in South Africa.
/ During the COVID-19 lockdown, DRA paid the rent of the
Compass Community Provision and Social Service, an
organisation that takes care of abused and abandoned
babies, children and woman.
/ DRA was officially recognised as a leading fundraiser by
MSWA, a charity for people with neurological conditions.
/ DRA, in collaboration with Ivanplats, are building a new
multi-discipline sports field for the Tshamahans Community
in South Africa.
/ Financially supported the Chaeli Campaign, focused on
growing access to a quality education for marginalised
children.
/ Provided a total of 39 bursaries to the African Academy, one of
Africa’s leading draughting education and training institutions,
for students to study the Multi-Disciplinary Drawing Office
Practice (MDDOP) course.
/ Provided 20 laptops, to support African Academy students
learning remotely during the COVID-19 lockdown.
/ Partnered with the Gift of the Givers Foundation and
distributed 450 food parcels to various communities.
/ Provided coronavirus
ready” preventative
“COVID-19
provisions to St Giles, an association for the physically
disabled in South Africa.
DRA Global Annual Report 2020 / ACN 622581935
/ 27
// Leadership / Board of Directors*
LEADERSHIP
Board of Directors*
Peter was previously a senior partner of the Australian law firm Freehills (the predecessor to Herbert
Smith Freehills, which is currently engaged by the Group for corporate advisory matters), and
served as the National Chairman of Freehills. Peter has significant experience in managing large
organisations and over 20 years of experience as a Director of ASX and EuroNext listed companies,
including ASX 100 companies. Peter’s international experience covers a broad range of industries
and sectors including mining, media, agribusiness, energy, engineering services, oil and gas,
technology, retail and property across Europe, Africa and Canada. In the engineering, resources and
infrastructure sectors he is chairperson of Energy Resources of Australia Ltd and Ora Banda Mining
Ltd, and was chairperson of the WA Electricity Networks Corporation (known as Western Power)
and Zinifex Ltd. He has also been a Director of Aurecon Group Ltd, Nyrstar NV, OZ Minerals Ltd,
Hardman Resources Ltd and Tap Oil Ltd. Peter is also currently a Director of Cancer Research Fund
Pty Ltd (trustee of the Cancer Research Trust) and Foodbank of WA Inc.
Peter Mansell
Non-executive Director and Chairman
Andrew was appointed as the CEO of DRA Global Limited in July 2019. Andrew is a Chartered
Accountant who worked in financial services and corporate finance for 20 years, with a decade of his
experience earned at executive and director level, as well as holding Non-executive Directorships.
Andrew joined the Group in 2013 with responsibility for development and oversight of DRA’s strategic
expansion, including mergers and acquisitions. Andrew has been extensively involved in growth
initiatives within the Group’s international business, and served as interim CEO during 2016 and as
CFO from 2016 to 2019. Andrew is an alumnus of Harvard Business School, where he completed the
Advanced Management Program, as well as a graduate member of the Australian Institute of Company
Directors.
Andrew Naude
Managing Director and Group Chief Executive Officer
Greg is the Executive Vice President of the Asia Pacific region. Greg has over 35 years of experience
in the design and construction of mineral processing facilities and associated infrastructure across
a broad range of commodities. He has held positions including design engineering roles with
Lycopodium, Minproc and GHD, and senior project management roles for Roche Mining (previously
JR Engineering Services). Greg was also previously Managing Director of Abesque Engineering and
Construction Ltd and Managing Director of Minnovo Pty Ltd.
Greg McRostie † Executive Director
* As at 31 December 2020
† Resigned on 4 May 2021
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DRA Global Annual Report 2020 / ACN 622581935
// Leadership / Board of Directors*
Kathleen has over 25 years of experience as a finance professional, including as Chief
Financial Officer or General Manager of listed and private mining and contracting companies,
including BGC Contracting, Atlas Iron Ltd and Mt Gibson Iron Ltd. Kathleen was a partner of
professional services firm, Deloitte, and is currently Non-executive Director of IGO Ltd, Great
Southern Mining Ltd, Rugby WA, Future Force Foundation and the WA Health Department’s
Child and Adolescent Health Service.
Kathleen holds a Bachelor of Commerce from the University of Western Australia, is a member
of the Institute of Chartered Accountants and a graduate and member of the Institute of
Company Directors.
Kathleen Bozanic
Non-executive Director
Les has over 45 years of experience in the project delivery space having held corporate executive
and project management roles across the UK, Australia, North America and Asia for Rio Tinto,
BHP, Fluor and Aker Kvaerner. Les is currently a Non-executive Director of Neometals Ltd
and Australian Mines Limited. He is also Principal and Managing Director of Bedford Road
Associates, where he has provided advice and delivery support to customers such as Rio
Tinto in Mongolia, Hyundai Engineering and Samsung Engineering in S.Korea, Otakaro
and CERA in New Zealand, and to Melbourne Water, the State government of Victoria
and NBN Co in Australia. Les was also one of the founding contributors to the John
Grill Centre for Project Leadership at The University of Sydney. Les holds a Bachelor
of Science in Engineering and Marketing from the University of West of Scotland,
Paisley.
Les Guthrie
Non-executive Director
Leon joined the Group in 1987 after first gaining ten years of
industry experience, and during his service was instrumental in
the Group’s growth. After 27 years working for the Group he
retired from his position as CEO in 2013. For the past seven
years, Leon has acted in a Non-executive role and has been
instrumental in guiding the organisation at Board level by
setting the strategic direction for the global business.
Leon registers as a Professional Engineer with ECSA
(Engineering Council of South Africa) and holds a
MDP Project Management from the University of
Pretoria.
Leon Uys †
Non-executive Director
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// Leadership / DRA’s Group Executives
DRA’s Group Executives
Andrew Naude is the Managing Director and Chief Executive
Officer, based in Perth, Australia. Andrew joined DRA in 2013,
bringing more than 20 years of strategic leadership, financial and
commercial expertise and executive management experience to
his role within the organisation.
From April 2016 to July 2019, Andrew served as DRA’s Chief
Financial Officer and Strategy Director responsible for Group-
wide strategic expansion, including mergers and acquisitions and
strategic investments, as well as the corporate function. In his
role as CEO and MD, Andrew is accountable for the operational
management of the Group’s business activities.
Andrew is a Chartered Accountant who holds a Bachelor of
Commerce Honours degree and is also an alumnus of the
Harvard Business School, and a graduate member of the
Australian Institute of Company Directors.
Andrew Naude Managing Director and Chief Executive Officer
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DRA Global Annual Report 2020 / ACN 622581935
// Leadership / DRA’s Group Executives
Adam Buckler Chief Financial Officer
Adam joined DRA in 2020 as Chief Financial Officer. Adam is a
highly regarded finance executive with extensive mining services,
petroleum and engineering (EPCM) industry experience in
multinational companies. Adam has successfully managed
regional finance teams across multiple jurisdictions including
Australia, New Zealand, PNG, Asia/China, and India. Adam
is responsible for all finance, treasury, IT, risk and compliance
functions at a group level.
Greg is the Executive Vice President and Managing Director
of the Asia Pacific region. Greg has over 30 years’ experience
in the design and construction of mineral processing facilities
and associated
infrastructure across a broad range of
commodities. He previously held positions including design
engineering roles with Lycopodium, Minproc and GHD and
senior project management roles for Roche Mining (previously
JR Engineering Services). Greg was also previously Managing
Director of Abesque Engineering and Construction Ltd, an
Executive Director of Forge Group Ltd and Managing Director
of Minnovo Pty Ltd.
Greg McRostie Executive Vice President: Asia Pacific, Americas (APAC/AMER) Region
Alistair has been involved in large scale mining and minerals
implementing various
processing projects across EMEA,
greenfields and brownfields resources projects
for more
than two decades. Alistair holds a Bachelor of Science (Eng)
(Mechanical) from the University of the Witwatersrand, an MBA
from the University of Cape Town and is a registered professional
engineer.
Alistair Hodgkinson Executive Vice President: Europe, Middle East and Africa (EMEA) Region
DRA Global Annual Report 2020 / ACN 622581935
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OPERATIONAL
OVERVIEW
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DRA Global Annual Report 2020 / ACN 622581935
// Operational Overview / EMEA region
EMEA region
Projects
In the EMEA region, DRA delivers projects to customers under
the DRA Projects and SENET brands. Organisational alignment
has seen the integration of certain support functions to drive
efficiencies, while the technical and project delivery capabilities
of each remains unique. The SENET business is positioned to
continue delivering projects and studies within Africa and across
other jurisdictions, servicing select customers. DRA Project’s
long track record in Mineral Processing is supported by its
growing competency in the underground engineering and project
delivery space.
DRA employs a workforce of over 1,300 project staff within
the EMEA region. The business invests heavily in a regional
graduate program, ensuring availability of qualified and trained
candidates for its future workforce.
Top projects for the EMEA region in 2020 include Kamoa-Kakula,
Northam Platinum Booysendal, Assmang Gloria and Black
Rock, Managem Tri-K, Barrick Gold Pueblo Viejo, Hummingbird
Resources Kouroussa Gold FEED project as well as various
projects for Anglo Platinum in South Africa and Newmont Mining
in Ghana.
There were numerous innovations and notable achievements on
these projects, such as:
/ The Booysendal conveyor system (RopeCon) – the longest
in Africa – which facilitates material handling in mountainous
terrain; and
/ Kamoa-Kakula with both the largest decline in Africa and the
largest Paste backfill plant in the world. Kamoa will ultimately
be one of the largest copper producers in the world.
The region is advancing a number of key initiatives in the
technological and innovation arenas by way of advisory services
to global customers. Advisory support will be offered within key
areas, namely:
Mining:
/ Battery minerals and associated technologies;
/ Modernised extraction; and
/ Autonomous vehicles.
Process:
/ Coarse and fine flotation;
/ Fine particle recovery;
/ Alternative crushing and dry milling;
/ Fine grinding;
/ Dry-stack disposal and backfill; and
/ KELL Process (PGM, Gold and Base-metal refining).
DRA teams also offer the following capabilities:
/ Backfill Capability, Dry-stacked Tailings;
/ Process Control Offerings;
/ Remote support, real
time remote consulting, remote
operations; and
/ Digital/Virtual commissioning.
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// Operational Overview / EMEA region
Operations
In EMEA, DRA is a leading specialist in the field of outsourced
operations and maintenance (O&M) of minerals processing
plants. DRA’s operations offering, Minopex, employs over 2,000
staff across seven countries in the EMEA region.
All sites performed well operationally, despite
the many
disruptions of the year including a lengthy shut-down of most
mine sites which affected revenues. Letšeng recorded a strong
performance despite COVID-19 disruptions and a weak diamond
market. Significant maintenance and engineering work was
won in the Vale Moatize refurbishment program and Minopex
continued to meet customer expectations in the DRC and
Tanzania and exceeded expectations at the Ad Duwayhi site in
Saudi Arabia.
Strategically, 2020 was a year of re-positioning for future growth.
While the business consolidated its core O&M offering, it also
launched a number of new growth platforms:
/ Added underground mining capabilities to position the
business in the mechanised mining space.
/ Develop an advisory service offering and completed a
number of projects in both the Operational Readiness and the
Operational Excellence arenas.
/ Launched a Supply Chain Services platform
to offer
procurement and supply chain services.
Advisory services are centred around three distinct pillars,
namely:
/ Operational Readiness
Bridging the gap between construction and operations.
/ Optimisation
Focus on excellence metrics within business, operations and
processes.
/ Expert Advisory
Access to industry technical experts to provide insights and
solve complex problems within operations.
There are clear synergies between the Operations division and
the Projects division in DRA. These elements help to further
advance this advisory space by leveraging off the distinct skill
set, experience and technical prowess of both areas within the
business.
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DRA Global Annual Report 2020 / ACN 622581935
// Operational Overview / EMEA region
Gloria project
Customer:
Assmang
Commodity:
Manganese
Contract Type:
EPCM
Value of Contract: $35M
Location:
South Africa
In 2018, DRA secured the engineering, procurement and
construction management contract with Assmang (Pty)
Limited’s Black Rock Mine Operations for the replacement
of the Gloria Manganese Mine’s underground rock handling
infrastructure and surface plant in South Africa’s Northern
Cape.
DRA also implemented optimisation and modernisation strategies on the mine, which provided further flexibility to sustain the Life of
Mine production expectations through the replacement of underground rock handling infrastructure as well as a new surface plant and its
associated infrastructure.
Letšeng project
Customer:
Gem Diamonds
Commodity:
Gold
Contract Type:
Fixed and Variable
Value of Contract: $91M
Location:
Lesotho
Since 2004, DRA has been responsible for the management,
operation and maintenance of the processing facility at
Letšeng diamond mine in Lesotho. DRA designed and built the
350t/h DMS (dense medium separation) plant and has since
exclusively operated the plant. Letšeng diamond mine is fully
enclosed to accommodate the extreme weather conditions prevalent on the Maluti mountain range.
The plant complex includes primary crushing and scrubbing, secondary crushing and re-crushing, 800mm cyclones, wet x-ray recovery
and integrated workshops and stores.
Letšeng diamond mine consists of two diamond processing plants that are designed to have a throughput of 400tph and 450tph for plant
one and two respectively. Annually, both plants combined are able to produce 5.8 million tonnes of ore, supported by a Primary Crusher
Area plant (PCA), which consists of a feed-bin, vibrating grizzly feeder, a jaw crusher and three conveyors. The Letšeng project has been
in operation since 2004 with the commissioning of plant one; production was ramped up in 2008 with the commissioning of plant two.
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// Operational Overview / EMEA region
Tri K Gold project
Customer:
Managem Group
Commodity:
Contract Type:
Gold
EPC
Value of Contract: $110M
Location:
Guinea
Managem Group awarded DRA its Guinean Tri-K Gold project
following the successful completion of the Definitive Feasibility
Study. Tri-K was a greenfields project that aimed to establish a
new mine plant, including mining and site infrastructure, and a
Carbon-in-Leach (CIL) Gold Plant.
The Tri-K project, targeted a production of 120,000 ounces of gold per year. To achieve this, DRA undertook the construction of the CIL
and onsite infrastructure.
The Tri-K gold processing plant was designed to process 2.80 Mt/a of oxide ore and 2.30 Mt/a of sulphide ore and to recover gold through
both gravity and CIL processes. An intensive leach reactor was included in the design to process the concentrate produced from the
gravity circuit.
Kroondal 1 and 2 project
Customer:
Sibanye Stillwater
Commodity:
PGMs
Contract Type:
Fixed and Variable
Value of Contract: $40M
Location:
South Africa
is a shallow underground PGM mining and
Kroondal
concentrators located in the North West Province of South
Africa. In 1998/9 DRA built the original plant and was also
responsible for the plant upgrade in 2001.
DRA was the overall engineering, procurement and construction management contractor responsible for $200+ million expenditure,
entailing the Group’s involvement in every aspect of the mine’s construction. The upgrade involved the installation of a regrind mill, a
secondary flotation section and improvements to the dense medium separation plant.
Kroondal was the first fully integrated platinum plant to operate a dense medium separation plant ahead of the milling circuit to remove waste
rock. In 2002, DRA was awarded the ongoing operations and maintenance contract and has since provided procurement and inventory
management, on site laboratory services, MF2 including chrome recovery and management of capital and continuous improvements
projects.
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DRA Global Annual Report 2020 / ACN 622581935
// Operational Overview / EMEA region
Kamoa-Kakula Copper Mine project
Customer:
Kamoa Copper Company S.A.
Commodity:
Copper
Contract Type:
EPCM
Value of Contract: $89M
Location:
Democratic Republic of Congo
The Kamoa-Kakula deposit is the world’s largest high grade,
copper-only deposit, located in the Democratic Republic of
Congo.
Kamoa Copper SA, a joint venture between Ivanhoe Mines,
Zijin Mining Group Co, Ltd. and the Government of the Democratic Republic of Congo, aimed to develop a new Copper Mine that could
yield an estimated 6 Mtpa in its first phase alone. The Kakula deposit was independently ranked as the world’s largest, undeveloped, high
yield, high-grade copper discovery. Kakula resource is estimated at 174 million tons at a grade of 5.62% copper.
DRA’s project delivery relationship with Ivanhoe Mines started on the high-grade platinum-group metals, nickel and copper Platreef
project in South Africa. It was on this project that DRA demonstrated its advanced capability in project delivery which proved to be a key
differentiator for the organisation on Kakula.
DRA was contracted to complete the Pre-Feasibility Study, for Kamoa Copper SA, in 2017. In October 2018, DRA was further awarded
the contract to deliver a complete Basic Engineering package.
DRA provided the Kamoa-Kakula project with a complete integrated solution for the mine, process and infrastructure scopes ensuring
full value chain alignment, seamless design continuity and the financial benefit of shared project services. The engineering and
design was developed to a level suitable to support early execution works and for the PFS in parallel. The contract scope
included the Basic Engineering and design associated with all underground mining infrastructure, the concentrator plant and all
supporting surface infrastructure.
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// Operational Overview / EMEA region
This growth was supported by contracts from key customers
such as Minera Antamina and Minera Las Bambas. In October
2020, DRA opened a second South American office in Santiago,
Chile.
Copper and gold projects represent the majority of work being
undertaken in the Andean region with awards from Anglo
American, Barrick, Dundee Precious Metals and Waterton
Global.
Projects and studies were delivered by integrated teams across
multiple DRA offices to Anglo American Quellaveco, Managem
Tizert, Barrick Pueblo Viejo, Adventus Mining Curipamba and
Aya Silver and Gold Zgounder.
Across the APAC/AMER region, a number of key project wins
were achieved throughout the year. The forward opportunity
pipeline now exceeds $3 billion and there is a strong backlog of
secured work.
DRA’s APAC/AMER business continues to grow and increase its
market share in line with its strategic objectives. 2021 will see the
region focus on successful project delivery and the conversion of
opportunities currently underway.
APAC/AMER region
Projects
With over 300 personnel in the APAC/AMER region,
safety remains one of the biggest challenges and
highest priorities. In 2020, ongoing initiatives in safety
and wellness, such as employee assistance programs and
mental wellness campaigns, were implemented to achieve
the goal of constant improvement in safety performance across
the region.
Despite COVID-19 disruptions and restrictions, the following
projects were successfully completed:
/ EPC contract for processing facilities on the Dargues Gold
Mine in New South Wales for Big Island Mining;
/
Jundee Expansion EPCM for Northern Star in Western
Australia; and
/ Marawai coal EP for Adaro in Indonesia.
In 2020, DRA maintained its market presence in Australia
through its main regional offices in Perth, Western Australia and
Brisbane, Queensland. A new office in Adelaide, South Australia
was opened in July 2020 and acts as the support office for works
being carried out at BHP’s Olympic Dam operation.
The region demonstrated extraordinary resilience and delivered
a growth year, despite pandemic conditions and restrictions.
Opportunities were split almost evenly across projects and
operations respectively, predominantly in the coal, precious
metals and iron ore sectors, with the latter demonstrating the
largest revenue growth area, for tier-1 customers such as BHP
and Rio Tinto.
Key projects currently in execution include the Coal Handling
Proecssing Plant at Bravus’ Carmichael project, Kalium Lake’s
Beyondie Potash project, projects at BHP’s Olympic Dam, BMA’s
Hay Point, key sustaining capital projects for Rio Tinto’s iron ore
operations, Glencore Coal operations, Newcrest mines’ Lihir
Island in PNG and the FMG Iron Bridge Fabrication Management.
DRA also successfully delivered services in Russia from the
APAC region including for Polyus Gold, Russia’s largest gold
miner. DRA’s Beijing office supported FMG’s Magnetite project.
2020 marked the first year of DRA’s presence in South America.
The Lima office was established to support the future growth in
this region and grew to over 100 employees and contractors in
a very short time, despite COVID-19 lockdowns and constraints.
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// Operational Overview / APAC/AMER region
Operations
division
The APAC/AMER Operations
over
1,000 people. 2020 prioritised skills retention and recruitment in
a competitive environment. With the outbreak of COVID-19, a
heightened focus was placed on wellbeing and safety and new
protocols and measures were implemented across the region
with great success.
employs
Operations, similar to projects focused 2020 on ongoing
initiatives in safety and wellness. This include aspects such as
employee assistance programs and mental wellness campaigns
which were implemented to greatly contributed towards achieving
the goal of constant improvement in safety performance across
the region.
Through G&S Engineering, DRA continued to offer major
maintenance of draglines, minerals and metals sustaining capital,
shut-down works for processing facilities and underground
longwall overhauls across Australia.
Key maintenance contracts for 2020 included work for Newmont,
BHP, Rio Tinto and Anglo American among others. G&S
continues to contribute strongly in the operations, maintenance
and sustaining capital space and importantly provides the
construction capability for DRA’s full in-house EPC delivery
model which is gaining recognition in the market.
DRA Energy Operations successfully operated and maintained
18 refined coal production facilities, across seven American
states, providing daily plant operations and maintenance
services. Health and safety measures within the business were
outstanding with only one recorded LTI across the USA facilities
in 11 years.
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DRA Global Annual Report 2020 / ACN 622581935
// Operational Overview / APAC/AMER region
Carmichael project
Customer:
Bravus Mining and Resources
Commodity:
Contract Type:
Coal
EPC
Value of Contract:
$205M
Location:
Queensland, Australia
In 2020 DRA was awarded the engineering, procurement and
construction of the Coal Handling and Preparation Plant at
the Carmichael project for Bravus Mining and Resources in
Central Queensland, Australia.
The $205 million project included the delivery of a ROM bin, crushing circuit, dry tailing and stackers, stockpile, train load-out facility and
all associated plant infrastructure to process coal from the mine. DRA will provide all project management, engineering, procurement and
construction of the project.
Las Truchas project
Customer:
Commodity:
Contract Type:
Value of Contract: $8M
Arcelor Mittal
Iron Ore
Definitive Feasibility
Location:
Mexico
DRA worked with ArcelorMittal Mexico in 2020 in updating
a definitive feasibility study on the improvement of an
optimisation project at the Las Truchas Mine in Michoacán,
Mexico. The study set out to increase iron ore concentrate
production capacity and extend the life of the existing
concentrator facility.
The updated study improved the optimisation project by reducing its capital costs and making the best possible use of existing equipment.
DRA designed a solution that allows the operation to continue production by processing ores with different mineralogical characteristics
from new mining operations. DRA completed the project in July 2020 and is well placed for the detailed engineering in the execution phase.
DRA Global Annual Report 2020 / ACN 622581935
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// Operational Overview / APAC/AMER region
Maruwai CHPP (EP) project
Customer:
Commodity:
Contract Type:
Adaro
Coal
Reimbursable
(EP and Commissioning Support)
Value of Contract:
$51M
Location:
Indonesia
DRA provided the engineering and procurement for PT
Maruwai Coal’s coking coal handling and preparation plant
in Lampunut, Central Kalimantan, Indonesia. The $51 million
project enhanced capacity to handle 600 tonnes of coal per
hour and process 525 tonnes per hour.
DRA’s scope included all engineering disciplines, logistics and delivery to site and the construction surveillance and commissioning of the
plant in the next phase. The Group’s delivery of the plant included a run of mine (ROM) sizing circuit, a run of mine bin, and three stage
crushing (coal preparation plant) feed surge bin.
Quellaveco project
Customer:
Commodity:
Contract Type:
Value of Contract: $7M
Peru
Location:
Anglo American
Copper
Feasibility Study
DRA completed the feasibility study for the Coarse Particle
Recovery plant on the Quellaveco project between August
2019 and March 2020. Quellaveco was Anglo American’s first
mine operation in southern Peru, located in Moquegua – an
established copper-producing region.
The project involved building a 60-million-cubic-metre dam in the high mountain region and a 95km overland gravity-fed pipeline to deliver
water to the Quellaveco mine area, where an opencast mine is being developed along with a primary crusher, overland conveyors and
truck maintenance workshops.
Quellaveco is set to produce its first copper concentrate in 2022 and is expected to produce an average of 300 000 tonnes of copper per
year over its first ten years of operation. The project has a mine life of 30 years.
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// Operational Overview / APAC/AMER region
Pueblo Viejo project
Customer:
Commodity:
Barrick
Gold
EPCM
Contract Type:
Value of Contract: $20M
Location:
Dominican Republic
Pueblo Viejo Gold Mine is located 100km from the capital city
of Santo Domingo in the Dominican Republic. With proven
and probable reserves of 25.3 million ounces, it is the second
largest high sulphidation gold deposit in the world. A joint
venture named Pueblo Viejo Dominicana Corporation (PVDC)
was formed by Barrick Gold and Goldcorp in 2009 to develop
the mine.
The PVDC Expansion Program sought to expand processing operations from 8.5 Mt/a to 14 Mt/a in order to treat future lower grade
feeds. This aimed to facilitate lower cut-off grades, an increased resource base, and extended mine life. In March 2020, DRA completed
a feasibility study focusing on comminution, flotation, pressure oxidation circuits, thickening and associated reagents and services for the
plant expansion.
Dargues Reef project
Customer:
Diversified Minerals
Commodity:
Contract Type:
Gold
EPC
Value of Contract:
$47M
Location:
South Australia
DRA completed the engineering, procurement and construction
of the 355,000 tonnes per year gold processing facility and
mine backfill plant at Dargues gold mine in New South Wales,
Australia in 2020. DRA delivered the gold concentrate plant for
Diversified Minerals following its detailed design of the facility
in previous years. The plant comprised crushing, milling, flotation and filtration circuits. It produced the first
sulphide concentrate for export in early 2020.
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FINANCIAL
OVERVIEW
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DRA Global Annual Report 2020 / ACN 622581935
// Financial Overview / Financial Performance
Financial Performance
Revenue and Gross Profit
DRA’s headquarters re-domiciled from South Africa to Australia in FY18. Since then, revenue has been maintained above $900M.
Revenue for FY20 was $938.2M, a decrease of 9% compared to FY19. The decrease in revenue was mainly due to the unprecedented
challenges brought from COVID-19 which had a material negative impact on DRA’s Operations division in the early part of FY20.
Additionally, projects were deferred by customers and site operations were shut-down. DRA reacted swiftly to these challenges and
established an internal CEO and CFO led taskforce to mitigate risks to people and customers as well as to focus on business continuity
and resilience. These measures allowed DRA to recover from the initial negative impact brought on by COVID-19. Strategic diversification
enabled DRA to absorb the under-performance by parts of its businesses affected by COVID-19. The COVID-19 taskforce together with
the capabilities of our people also enabled DRA to capture new opportunities that arose during this challenging period.
Revenue
($M)
1,033.2
Breakdown of FY20 Revenue
by services and geography
956.6
938.2
28%
30%
FY18
FY19
FY20
15%
27%
EMEA
(Projects)
EMEA
(Operations)
APAC & AMER
(Projects)
APAC & AMER
(Operations)
In the past two years, DRA has focused on improving its project management oversight and contract execution and this has resulted in
improvements in its gross profit margin.
Gross Profit
($M)
Gross Margin
(%)
203.4
188.0
19.7%
20.0%
73.2
7.7%
FY18
FY19
FY20
FY18
FY19
FY20
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Overview / Financial Performance
FY20 gross profit was $188.0M, a decrease of 7.6% compared to FY19. However, gross profit margin as a percentage increased in FY20
to 20.0% from 19.7% in FY19. The improvement in gross profit margin was a result of a continued focus on oversight, productivity and
cost management. Going forward, DRA continues to focus on cost saving initiatives where possible, whilst delivering the highest quality
service to customers in a safe environment.
FY20 reconciliation of statutory to underlying results
Profit after income tax for the year (NPAT)
Adjusting for:
Income tax expense
Net finance income
Earnings before interest and tax (EBIT)
Adjusting for:
Depreciation of right-of-use assets
Depreciation of property, plant and equipment
Amortisation of intangible assets
Earnings before interests, taxes, depreciation, and amortisation (EBITDA)
Statutory results
Adjustments:
IPO readiness and operational excellence programs
Impairment of goodwill
Impairment of loans
Non-cash amortisation of customers relationship and
brand name
Restructuring costs
Government grant
Legal costs and onerous provisions
Underlying results
Statutory margin as a % of total revenue
Underlying margin as a % of total revenue
EBITDA
FY19
$M
85.4
-
-
0.9
-
-
-
4.5
90.8
8.3%
8.8%
FY20
$M
64.9
3.3
5.7
0.4
-
0.7
(2.8)
4.7
76.9
6.9%
8.2%
FY20
$M
39.0
3.3
5.7
0.4
6.6
0.7
(2.8)
4.7
57.6
4.2%
6.1%
EBIT
FY19
$M
59.0
-
-
0.9
7.1
-
-
4.5
71.5
5.7%
6.9%
FY20
$M
25.6
16.5
(3.1)
39.0
9.0
7.9
9.0
64.9
FY20
$M
25.6
3.3
5.7
-
6.6
0.7
(2.8)
4.7
43.8
2.7%
4.7%
FY19
$M
36.0
25.2
(2.2)
59.0
7.8
10.1
8.5
85.4
NPAT
FY19
$M
36.0
-
-
-
7.1
-
-
4.5
47.6
3.5%
4.6%
Underlying EBITDA ($76.9M in FY20 vs $90.8M in FY19) and EBIT ($57.6M in FY20 vs $71.5M in FY19) was lower in FY20 compared to
FY19. Lower revenue in FY20 had a direct impact on underlying EBITDA and EBIT.
Underlying EBITDA and EBIT margins for DRA were 8.2% and 6.1% in FY20, respectively. These margins were slightly lower than FY19
due to the impact of COVID-19. DRA experienced site shut-downs in its Minopex operations and delay or deferral of projects by customers
due to material uncertainty. Nevertheless, DRA achieved healthy results in this challenging year.
Underlying NPAT margin as a percentage year on year is comparable (FY20:4.7% vs FY19: 4.6%) and has slightly improved from the
prior year.
/ 46
DRA Global Annual Report 2020 / ACN 622581935
// Financial Overview / Financial Performance
In arriving at the underlying EBITDA, EBIT and NPAT, several adjustments were made to the statutory results so as to reflect the underlying
performance of DRA:
/
/
/
IPO Readiness and Operational Excellence Programs – DRA incurred approximately $3.3M of consulting and professional fees to
review, improve and standardise the current existing processes in different parts of its businesses to prepare DRA for an IPO. These
expenses are not expected to be recurring once the IPO is completed.
Impairment of goodwill – an impairment loss of $5.7M was recorded in FY20 in relation to DRA’s Americas Cash Generating Unit
(CGU). The impairment loss will not have a cash flow impact in the current and future period and is not representative of the DRA’s
underlying financial performance in the current year as the impairment is based on future performance of the CGU.
Impairment of loans – relates to capitalised interest income on existing loans which have been impaired. An adjustment was made to
EBIT and EBITDA as the impairment losses distorted the underlying financial performance of DRA’s core operations.
/ Non-cash amortisation of customers relationship and brand name (intangible assets) – the adjustment was in relation to intangible
assets acquired through business combinations which have no impact on the underlying financial performance of DRA.
/ Restructuring costs – DRA incurred restructuring costs in one of its partially owned subsidiaries to improve its profitability and operational
effectiveness. These restructuring costs are not recurring and not reflective of underlying financial performance.
/ Government grant – DRA’s operations in Australia received Job Keeper payments in FY20 as part of the COVID-19 relief package
introduced by the Australian Government. These payments were used to subsidise wages of employees during the period where the
affected entities were facing project deferral and reduced work as a result of COVID-19.
/ Legal costs – DRA incurred or provided for legal expenses on claims relating to prior years on onerous contracts. These expenses have
been adjusted to provide a better representation of the financial performance and operation of DRA in FY20 and FY19.
Breakdown of underlying results by segments
Revenue
Statutory EBIT
IPO readiness and
operational excellence
programs
Impairment of goodwill
Impairment of loans
Non-cash amortisation of
customers relationship and
brand name
Restructuring costs
Government grant
Legal costs and onerous
provision
EMEA
537.7
43.8
1.9
-
0.4
-
0.7
-
-
Underlying EBIT
46.8
FY20
APAC/
AMER
400.5
Other
Total
EMEA
-
938.2
681.3
FY19
APAC/
AMER
351.9
Other
Total
-
1033.2
5.1
1.4
-
-
-
-
(2.8)
4.7
8.4
(9.9)
39.0
50.2
16.9
(8.1)
59.0
3.3
5.7
0.4
6.6
0.7
(2.8)
4.7
57.6
-
-
0.9
-
-
-
-
51.1
-
-
-
-
-
-
4.5
21.4
-
-
-
7.1
-
-
-
(1.0)
-
-
0.9
7.1
-
-
4.5
71.5
6.1%
7.5%
6.1%
N/A
6.9%
5.7
-
6.6
-
-
2.4
N/A
Underlying EBIT margin
8.7%
2.1%
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Overview / Financial Performance
EMEA
Revenue decreased by 21% to $537.7M in FY20 compared to FY19. This was mainly due to the impact of COVID-19 as well as contract
mix.
Some project opportunities were deferred by customers due to global uncertainty and financing constraints. During the first half of 2020,
site shut-downs by governments and customers severely impacted the outsourced operations services. These services have since
recovered to business as usual. The results in the region were underpinned by major projects won in FY19 such as Kamoa-Kakula Copper
project, Tri-K Gold project and Gloria Manganese project. Cost saving initiatives were introduced in all parts of the businesses which had
a positive impact to the underlying EBIT margin. Underlying EBIT margin improved to 8.7% in FY20 as compared to 7.5% in FY19 which
has minimised the impact of the decrease in revenue.
Significant earnings in the EMEA region are from entities with South African Rand as the functional currency. In FY20, the South African
Rand depreciated 13% against the Australian Dollar which also contributed to a decline in earnings in FY20 as compared to FY19.
APAC/AMER
In the APAC/AMER region, DRA is focusing on expanding its customer base and brand in order to drive the next phase of growth in the
Group. Revenue increased by 14% in FY20 to $400.5M compared to FY19. However, EBIT decreased approximately 61% year on year
to $8.4M as a result of an investment in overheads to support DRA’s growth strategy.
The key highlights of this region are as follows:
/ The APAC region which forms more than 70% of the revenue in the APAC/AMER segment continued to experience revenue growth
despite a challenging environment in FY20. Revenue grew approximately 9.1% to $316.9M in FY20 compared to FY19. The growth
in revenue did not translate into a higher EBIT due to higher overheads invested to build capacity to secure and bid for new additional
work. At the end of FY20, DRA has secured work of approximately $367M to be executed in APAC over the next two years;
/ A new presence in Latin America was established during the year and is expected to drive new opportunities for DRA in the next few
years; and
/ The contribution from the Energy Operations services in North America declined due to a combination of factors including a mild winter
and a reduction of industrial demand. The projects offering was affected by the deferral of projects due to COVID-19.
FY20 - Work in hand by type of services and geography
41%
$1,084M
41%
$1,084M
59%
59%
EMEA
APAC/AMER
Projects O&M
DRA increased its work in hand (which represents secured work not yet performed ) by more than 80% compared to the prior year. More
than 70% of this work in hand is expected to be executed in the coming FY21.
Work in hand continues to reflect increased diversification across different services and geography. DRA’s work in hand was split 59%
and 41% across EMEA and APAC/AMER respectively and 41% and 59% across Projects and Operations. Diversification of revenues has
helped DRA to weather the challenges in FY20 and will remain a focus for future periods.
/ 48
DRA Global Annual Report 2020 / ACN 622581935
// Financial Overview / Financial Performance
Financial position
Cash
Net working capital
Intangible assets
Fixed assets and investments
Other financial assets
Other financial liabilities
Interest-bearing borrowings
Provision
Net lease liabilities
Net tax assets
Net assets
(a) Cash
FY20
$M
204.8
(31.3)
117.8
20.1
19.6
(19.9)
(1.2)
(49.6)
(3.3)
51.6
FY19
$M
Variance
$M
%
Note
126.7
21.7
138.8
23.1
23.3
-
(0.3)
(56.4)
(3.1)
58.3
78.1
(53.0)
(21.0)
(3.0)
(3.7)
(19.9)
(0.9)
6.8
(0.2)
(6.7)
62%
(244%)
(15%)
(13%)
(16%)
NA
274%
(12%)
6%
(11%)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
308.6
332.1
(23.5)
Cash increased by 62% to $204.8M during the year. DRA has put significant effort on improving cashflows generation from its underlying
operations. The cash balance increased predominately through the increase in cash flows from operations, and better working capital
management including advanced payment from customers.
(b) Net working capital
Net working capital comprises trade and other receivables, contract assets and inventories. This is offset by trade and other payables,
contract liabilities and employee benefits. Net working capital invested in FY20 reduced by $53M to $31.3M compared to FY19. The
decrease in net working capital was substantially due to the focus on improving recovery of trade receivables and receiving higher
advance payments from customers’ major projects.
(c) Intangible assets
Intangible assets comprise goodwill, brand, customer relationship, software and patents. The majority of intangible assets were acquired
through business consolidations. In FY20, a non-cash impairment of $5.7M was made to DRA’s Energy Operation unit. Energy Operations
still expect to be profitable in FY21, but is expected to reduce its activities significantly from FY22 onwards unless the tax incentive
scheme in relation to its operation is renewed beyond FY21. The remaining movement in intangible assets was due to annual amortisation
expenses of $9M translation losses of $8.7M on DRA’s intangible assets, net addition of software of $1.4M and addition of goodwill of $1M
from a small acquisition made in FY20.
(d) Fixed assets and investments
Fixed assets and investments were approximately 3% of total assets in FY20 (FY19: 4%). Most of DRA’s activities are not capital intensive
and do not require high capital expenditure.
(e) Other financial assets
Other financial assets comprise of investments in listed shares and non-listed shares, loans due from employees and legacy loans to
customers. The decrease of $3.7M in FY20 to $19.6M in FY19 was mainly due to a share buyback which offset some of these loans due
from employees.
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Overview / Financial Performance
(f) Other financial liabilities
The increase in other financial liabilities in FY20 of $19.9M compared to FY19 was due to the recognition of a put option liability during the
year. The liability arose from a put option agreement entered into with the former Minnovo Shareholders to purchase their shares in the
Group should the Group not be listed by 30 June 2021. DRA is not expecting any cash outflows from this transaction as it is in the process
of preparing for listing in the first half of FY21. The put option liability was required to be recorded under AASB 132 Financial instruments –
Presentation as the Group cannot be considered to fully control the outcome of the listing process. DRA also recorded $1.0M of contingent
consideration in relation to a small business consolidation in FY20.
(g) Interest-bearing borrowings
DRA has minimal borrowings in FY20 and FY19 and has sufficient liquidity. The interest-bearing borrowings amount was $1.2M in FY20
(FY19: $0.3M). These borrowings relate to funding provided by minority shareholders of partially owned subsidiaries controlled by DRA
and insurance premium funding arrangements entered into by some of DRA’s subsidiaries for their annual insurance premiums.
(h) Provisions
DRA continues to hold provisions for loss making contracts identified in prior years and new warranty obligations that arose from its
current contracts. The amount of provision decreased by $6.8M to $49.6M in FY20 compared to FY19. The decrease was mainly due to
the utilisation of provisions during the year. There were no new loss-making contracts identified in FY20.
(i) Net lease liabilities
Net lease liabilities comprise right-to-use assets offset by lease liabilities which mainly consist of the lease of buildings, premises and
motor vehicles. Net lease liabilities were $3.3M in FY20 comparable to FY19 of $3.1M. Right-to-use assets depreciated slightly faster than
the reduction of the lease liabilities through lease payments at the early stage of the lease periods resulting in net lease liabilities. The
addition of right-to-use assets during the year was $27.2M as a result of signing a long-term new office lease space in South Africa which
is offset by the recognition of the same amount in lease liabilities.
(j) Net tax assets
Net tax assets comprise deferred tax assets and current tax receivables offset by deferred tax liabilities and current tax payable. Net tax
assets decreased by $6.7M in FY20 to $51.6M as compared to FY19. The decrease in net tax assets was mainly due to higher current
tax payable as DRA continued to be profitable.
Cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents
Opening cash position
Closing cash position
FY20
$M
101.8
(8.5)
(4.1)
(11.1)
126.7
204.8
FY19
$M
25.0
(79.1)
56.0
(0.8)
125.6
126.7
/ 50
DRA Global Annual Report 2020 / ACN 622581935
// Financial Overview / Financial Performance
FY2020 Cash movements ($M)
Total
Increase
Decrease
101.8
(8.5)
(4.1)
(11.1)
126.7
FY19
Operating
activities
Investing
activities
Financing
activities
Effect of
exchange rate
204.8
FY20
Cash flows from operating activities
Operating cash flows improved significantly by more than 340% from $25.0 in FY19 to $101.8M in FY20. This was achieved through a
strict focus on cash conversion from EBITDA, negotiation of advance payments for large projects and collection of receivables at the
start of FY20. The improvement in cash inflows from operating activities demonstrated strong underlying cash flow capabilities across the
businesses in DRA in an uncertain and challenging economic environment.
Cash flows from investing activities
Net cash outflows from investing activities were $8.5M in FY20, a significant reduction from $79.1M in FY19. Net cash outflows from
investing activities have reduced significantly as DRA did not make any material acquisitions in FY20. A large portion of the cash in
FY19 was used to acquire New Senet Pty Ltd (SENET).
Cash flows from financing activities
Net cash outflows from financing activities were $4.1M in FY20 compared to net cash inflows of $56.0M in FY19. The net
cash inflows from FY19 arose from the proceeds of the issue of shares used to finance the acquisition of SENET. The net
cash outflows in FY20 were due to lease payments of $8.4M partially offset by proceeds from share issues. In FY20,
there was additional cash inflows of $3.9M through shares issued to management of SENET. The additional buy-in
from management of SENET was designed to retain and motivate management of SENET beyond the earn-out
periods after the acquisition made in FY19.
Foreign exchange effect on cash and cash equivalents
As of 31 December 2020, 73% of cash was denominated in United States Dollars (USD) and South African
Rand (ZAR). The Australian Dollar (AUD), which is the Group’s presentation currency, has strengthened
against these two currencies by approximately 9% and 12.2% respectively in FY20 when compared
to FY19. The appreciation of AUD against USD and ZAR have resulted in an exchange loss when
translating cash to AUD for cash flow presentation purposes.
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Overview / Business and risks
Business and risks
Risk management
Overview of the Framework
Overview of DRA’s risk approach
DRA views risks from both a positive and negative perspective.
A negative risk is one where if the risk is realised, it will adversely
affect the business. A positive risk is seen as an opportunity
where, if realised, will improve DRA business outcomes.
DRA has a systematic approach to managing both of these
types of risks, consistently applied across its business. A strong,
conscious and robust risk management process maximises
DRA’s ability to achieve and outperform on its business objectives
and to realise sustainable and predictable outcomes. DRA’s risk
management practices are a critical business function and value-
adding activity.
In order to manage risk, a number of enablers have been put in
place to reduce the uncertainty of DRA in achieving its strategic
objectives. This is achieved through a Group-wide framework
(the “Framework”) that defines how DRA both manages and
embraces risk, through seven linked pillars.
Risk governance and management structures
Risk management is the responsibility of the Board, providing
oversight of management’s focus on risk. The Board adopts
various standards and structures through which it fulfils its
responsibility and instils a desired risk culture within DRA,
including the Audit and Risk Committee.
Management are tasked to put in place processes and
procedures to manage risks within the limits set out by DRA’s risk
appetite statement, including risk considerations in key decision
making forums as well as via formal risk management structures.
Risk appetite
The Board sets DRA’s appetite for risk that it is willing to
accept, having regard to, inter alia, DRA’s risk capacity, strategy,
capabilities and the expectations of DRA’s stakeholders.
DRA’s risk appetite statement sets out a qualitative measure
per each of DRA’s six risk areas that DRA is willing to accept
to pursue its strategic objectives, providing a framework within
which management must operate at all levels.
Risk governance and management structures
DRA’s six key risk areas:
Risk appetite
Embedding of risk into governance
Supervision, monitoring and reporting of risk
Risk culture
Crisis management capability
Continuous review of unknown/emerging risks
/ Strategy Risk: The risk that DRA does not achieve its
strategic objectives through strategic and tactical decisions
taken.
/ Cash Flow and Financial Risk: The risk that DRA is not
able to meet its financial targets/covenants and cash flow
obligations.
/ Regulatory and Compliance Risk: The risk that DRA is
unable to meet its financial reporting, tax, legal and statutory
commitments.
/ Operational Risk: The risk of loss arising from failed or
inadequate internal processes, people, systems or external
events arising in respect of the day-to-day business.
/ People Risk: The risk that DRA does not adequately protect
its staff and related parties (their safety and wellbeing) as well
as attract and retain its staff or treat them fairly.
/ ESG Risk: The risk that DRA fails to achieve its expected
sustainability and ethical impact arising from failure to meet
best practices associated with environmental and social
issues, failed or inadequate governance processes and any
political positions adopted.
/ 52
DRA Global Annual Report 2020 / ACN 622581935
Business and risks
// Financial Overview / Business and risks
Embedding of risk into governance
Management’s decision-making processes and procedures throughout DRA includes risk, and the management thereof, as a key
consideration.
DRA’s governance documentation follows a risk-based approach to decision-making, seeking to leverage multi-disciplinary skills set to
improve business decisions. Governance documentation includes not only DRA’s Board and committee charters, Code of Conduct and
policies but also the various operating frameworks and standards that exist at both a Group-wide and business level. Key decisions are
underpinned by DRA’s Delegation of Authority framework that sets out the basis for taking certain key decisions across the business,
including the necessary involvement of relevant SMEs.
DRA’s risk management process is aligned to ISO 31000 standards and is as follows:
n
o
i
t
a
t
l
u
s
n
o
c
d
n
a
n
o
i
t
a
c
i
n
u
m
m
o
C
2. Identity risk
Identify risks and opportunities
(known or emerging), then
underlying causes and the relevant
risk category.
4. Evaluate risk
Determine whether the risk can be
accepted or if new treatment plans
are required to reduce the residual
risk rating.
6. Recording and reporting
Communicate risk management
activities and outcomes to inform
decision making.
Establish the context
Risk assessment
Identify risk
Assess risk
Evaluate risk
Treat risk
Recording and reporting
M
o
n
i
t
o
r
i
n
g
a
n
d
r
e
v
i
e
w
1. Establish the context
Clarify business objectives
and understand the operating
environment and stakeholder
needs and perspectives.
3. Assess risk
Identify existing controls and
owners. Assess the likelihood
and consequence of the risk
to determine the residual risk
rating. Identify the risk velocity
and risk confidence.
5. Treat risk
If the risk cannot be accepted,
develop treatment plans and
assign control owners.
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Overview / Business and risks
Supervision, monitoring and reporting of risk
Management continually focuses on ensuring that effective
processes are in place to manage all risks. This includes the
pro-active identification, management and reporting of risks,
maximising the ability of DRA to timeously respond to risks and
suitably protect DRA, should a risk materialize. This includes
escalation protocols to ensure that key risks receive the correct
level of timeous attention and input from management and the
Board.
Risks are reported to the Board and management through
various risk forums by a variety of stakeholders. DRA establishing
an internal audit function that will provide further reporting
and recommendations to both the Board and management to
improve DRA’s system of internal controls.
Board of Directors
Senior management
First line
Second line
Third line
Risk management and
management control
Risk control and compliance
Independent assurance
Management functions with a
focus on specific risks
Management functions with a
focus on risk and compliance
oversight
Independent function with a
focus on the effectiveness of
governance, risk management
and controls
Ownership, responsibility and
accountability for identifying,
assessing, managing, mitigating
risk inherent in the business
processes
Monitors, challenges and advises
on the implementation of risk
management practices to ensure
first line is adequately designed.
Monitors and reports risk profiles
with appropriate consequence
management
Providing independent assurance
to senior management and the
Board over the effectiveness of
achieving risk management and
control objectives within the first
and second line
R
e
g
u
l
a
t
o
r
s
E
x
t
e
r
n
a
l
a
u
d
i
t
s
Risk culture
Management needs to ensure that DRA’s organisational culture
is aligned to its risk appetite and the desired risk culture set by
the Board. A conscious risk culture and a commitment to risk
management within DRA seeks to promote accountability,
amongst not only management but all employees, to manage
risk via the various processes and procedures outlined in the
Framework, including various risk forums, risk and opportunity
assessments as well as various risk documentation and
templates.
A key component of DRA’s risk culture is the effectiveness
and independence of its speak-up standard, put in place by
management. All eligible parties are encouraged to report on, or
escalate, matters that constitute misconduct or an improper state
of affairs within DRA.
/ 54
DRA Global Annual Report 2020 / ACN 622581935
// Financial Overview / Business and risks
Crisis management capability
Management has developed organisational resilience within
DRA, including a robust crisis management capability. To pro-
actively address a potential crisis event, crisis event management
plans have been put in place across the businesses to address
potential crisis events identified. All crisis event management
plans are aimed at ensuring that critical services are continued
during a crisis event, minimising the potential downtime and
impact on the Group.
Continuous review of unknown/emerging risks
Management need to continually assess and report on new and
emerging sources of risk and the mitigating actions in place
to manage those risks. Whilst it is difficult to predict unknown
risks, management continuously reviews emerging risks that
may materialise in future from a source outside of the Group.
In response, relevant SMEs within the Group develop business
and DRA strategies to pro-actively assess, monitor and manage
such risks.
Key risks
DRA operates across multiple geographical locations and as
a result is exposed to both global and local risks factors which
may have an adverse effect on DRAs medium and long term
objectives.
Set out below is a number of key risks that have been identified
by DRA.
Safety risks relate to DRA meeting its adopted safety standards
and protecting the health of its workforce. Safety remains DRA’s
core value, our people are our single most important asset and
are critical to DRA’s ongoing success.
DRA has a number of safety initiatives to reduce the risk of
accidents in the workplace. Whilst this resulted in improved
safety statistics, DRA continues to focus on enhancing its safety
protocols, including the rollout of improved group-wide safety
standards. In addition, DRA is currently finalizing its ISO 45001
safety accreditation across its business as a means to implement
best practice safety measures across the group.
Project management risks involve the execution of DRA’s work
to ensure that it meets with the customers satisfaction as well as
DRA’s internal performance criteria set for each project. Failure
to achieve this may result in financial losses being incurred and/
or reputational impacts if customer expectations are not met.
DRA performs ongoing monitoring and oversight to ensure that
DRA’s project-related risks are understood and are appropriately
managed. This includes monthly contract assessments and
reviews that are stress tested, independently of the project
teams.
Business continuity risks are associated with disruptions to
DRA’s business and/or projects in such a manner that could
potentially cause significant loss to DRA. DRA relies on its ability
to continue uninterrupted or with the potential of significant threats
that may impact its ability to continue to operate sustainably.
DRA’s contracts are actively managed to ensure that non-
performance by either DRA, its customers or subcontractors
are managed and issues addressed pro-actively. To the extent
that disputes may result, formal dispute resolution processes
are in place and appropriately documented in DRA’s contracts to
ensure that the impact on the overall contract is minimised and
managed and disputes are amicably resolved with customers.
Should DRA’s services be suspended or terminated, or should
legal action be taken, DRA engages the necessary in-house
or external legal and commercial support to ensure that such
matters are managed optimally and in a fair and transparent
manner.
Foreign exchange risks relate to changes in exchange rates of
DRA’s key contracting and reporting currencies that may have
a financial or cash flow impact on DRA’s results and financial
position.
The Treasury Framework was implemented by DRA’s treasury
and establishes clear processes to minimise DRA’s exposure
to foreign exchange rate fluctuations. Controls in place include
avoidance of
limiting
contracting outside of DRA’s key functional currencies, the use
of natural hedges and the use of hedging products on a selected
basis.
foreign exchange
risks altogether,
Liquidity risks are associated with DRA having sufficient cash
flows to meet its return, capital and cash flow obligations.
During the financial year, a Business Resilience Plan was
defined in conjunction with the set-up of a COVID-19 Task
Force to support business critical activities, anticipate macro-
outcomes, overcome short-term uncertainties and position DRA
for future growth. The Business Resilience Plan successfully
achieved its objectives and impact on DRA’s customers, staff
and commercial interests. DRA continues to closely monitor the
impact of COVID-19 across the business and we will continue to
stay vigilant to protect our people and financial viability.
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Overview / Business and risks
DRA understands and seeks to comply with all relevant legislation,
engaging relevant external regulatory experts as required for
assistance. To the extent that legislation changes and presents
a risk to DRA, DRA will engage relevant stakeholders to fully
understand the impact thereof. This may lead to a restructuring
of DRA’s presence in such country or jurisdiction.
Governance risks involve the ethical management of DRA’s
business, both at a Board and an operating level.
DRA has an established governance framework in place and
clear parameters between the Board and DRA management
as to key decisions that can be undertaken. DRA has also
implemented a number of frameworks and standards across the
group that establish the boundaries within such decisions can be
undertaken, requiring the input from key internal stakeholders
to ensure that fully-informed, multi-disciplinary decisions can be
taken.
Staff attraction and retention risks relate to risks associated
with attracting and retaining suitable staff and the levels of staffing
required to achieve DRA’s strategy. DRA’s ability to continue to
attract and retain high calibre staff is key for DRA to deliver on its
growth aspirations.
DRA regularly undertakes staff and other surveys to understand
its position in the marketplace, with a view to improving its
attractiveness as an employer. DRA also has a number of
wellbeing initiatives aimed at improving DRA’s attractiveness as a
place to work and that our people receive the necessary support,
including work-life balance improvements, flexible working
arrangements, graduate recruitment/learnership programs, free
counselling and manager support sessions.
Industry risks associated with changes to DRA’s operating
environment impact the ability of DRA and its competitors to
compete. DRA operates in various markets linked to its industry
(notably the mining services market) that are subject to a variety
of external factors not fully within DRA’s direct control. These
risks would directly impact DRA’s ability to secure new work and/
or execute on its strategy.
DRA regularly assesses the markets in which it operates,
including the countries in which it has a temporary or permanent
presence, the services it offers to customers and the commodities/
capabilities it chooses to provide.
Competition risks relate to the ability of existing or new
competitors to disrupt DRA’s core markets and thus DRA’s ability
to compete on an equal basis. DRA operates across a number of
highly competitive markets and our ability to continue to secure
new work is the lifeblood of DRA.
DRA’s business development activities continuously focuses on
replenishing our pipeline through targeted customer engagement
and marketing initiatives, demonstrating DRA’s long-term value-
add as a partner to its customers.
Regulatory risks that may affect DRA include changes in rules,
legislation, regulations and other requirements that may directly
impact on DRA’s existing or prospective business.
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DRA Global Annual Report 2020 / ACN 622581935
DIRECTOR’S
REPORT
/ 58
DRA Global Annual Report 2020 / ACN 622581935
// Director's Report
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as ‘the Group’)
consisting of DRA Global Limited (referred to hereafter as ‘DRA’, ‘the Company’ or ‘parent entity’) and the entities it controlled at the end
of, or during, the year ended 31 December 2020 (FY2020).
Directors
The following persons were Directors of DRA Global Limited during the whole of the financial year and up to the date of this report, unless
otherwise stated:
Peter Mansell
Andrew Naude
Greg McRostie
Kathleen Bozanic
Kenneth Thomas
Leon Uys
Les Guthrie
Paul Salomon
Rafael Eliasov
Jean Nel
Information on Directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
(Chairman)
(Managing Director and Chief Executive Officer)
(appointed 2 January 2020)
(appointed 1 February 2020, resigned 11 January 2021)
(appointed 2 January 2020)
(resigned 11 March 2020)
(appointed 6 April 2020, resigned 28 January 2021)
(resigned 29 January 2021)
Peter Mansell
Chairman
Independent Non-executive Director
Bachelor of Commerce, Bachelor of Laws, Higher Diploma in Tax Law
Peter was previously a senior partner of the Australian law firm Freehills (the predecessor to Herbert
Smith Freehills, which is currently engaged by the Group for corporate advisory matters), and served
as the National Chairman of Freehills. Peter has significant experience in managing large organisations
and over 20 years of experience as a Director of ASX and EuroNext listed companies, including ASX
100 companies. Peter’s international experience covers a broad range of industries and sectors
including mining, media, agribusiness, energy, engineering services, oil and gas, technology, retail and
property across Europe, Africa and Canada. In the engineering, resources and infrastructure sectors he
is chairperson of Energy Resources of Australia Ltd and Ora Banda Mining Ltd, and was chairperson of
the WA Electricity Networks Corporation (known as Western Power) and Zinifex Ltd. He has also been
a Director of Aurecon Group Ltd, Nyrstar NV, OZ Minerals Ltd, Hardman Resources Ltd and Tap Oil
Ltd. Peter is also currently a Director of Cancer Research Fund Pty Ltd (trustee of the Cancer Research
Trust) and Foodbank of WA Inc.
Chairman of Ora Banda Mining Ltd
Chairman of Energy Resources of Australia Ltd
None
Chairman
Member of Audit and Risk Committee
Member of People, Culture and Remuneration Committee
Chairman of Nomination and Governance Committee
No shares in DRA Global Limited
No options in DRA Global Limited
Other: Entitled to be issued options under the DRA Global Limited Employee Share Scheme to the
value of 25% of his cash remuneration if the Group is listed on the ASX by 30 June 2021, otherwise
will receive a lump sum cash payment unless a later date is agreed.
DRA Global Annual Report 2020 / ACN 622581935
DRA Global Annual Report 2020 / ACN 622581935
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/ 59
// Director's Report
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Andrew Naude
Managing Director and Chief Executive Officer
Bachelor of Commerce (Finance, Honours), Chartered Accountant (ANZ&SA), Graduate AICD
Andrew was appointed as the CEO of DRA Global Limited on 15 July 2019. Andrew is a Chartered
Accountant who worked in financial services and corporate finance for 20 years, with a decade of his
experience earned at executive and director level, as well as holding several Non-executive Directorships.
Andrew joined the Group in 2013 with responsibility for development and oversight of the Group’s strategic
expansion, including mergers and acquisitions. Andrew has been extensively involved in growth initiatives
within the Group’s international business, and served as interim CEO during 2016 and as CFO from 2016 to
2019. Andrew is an alumnus of Harvard Business School, where he completed the Advanced Management
Program, as well as a graduate member of the Australian Institute of Company Directors.
None
None
Chief Executive Officer
Member of Major Project Approvals Committee
Ordinary shares in DRA Global Limited: 1,358,267
Other: Potential future participation in shares via the VMF Investment Trust *
Other: Granted options under the DRA Global Limited Employee Share Scheme to the maximum value of
$862,500 where the number of options to be issued will be determined based on the Group’s share price
after listing.
Greg McRostie
Executive Director
Bachelor of Engineering (Mechanical), Member Institute of Engineers Australia
Greg is the Executive Vice President of the Asia Pacific region. Greg has over thirty five years of experience
in the design and construction of mineral processing facilities and associated infrastructure across a broad
range of commodities. He has held positions including design engineering roles with Lycopodium, Minproc
and GHD, and senior project management roles for Roche Mining (previously JR Engineering Services).
Greg was also previously Managing Director of Abesque Engineering and Construction Ltd and Managing
Director of Minnovo Pty Ltd.
None
None
Member of Sustainability, Health, Safety, Environment and Community Committee
Ordinary shares in DRA Global Limited: 461,640
Other: Granted options under the DRA Global Limited Employee Share Scheme to the maximum value of
$338,062 where the number of options to be issued will be determined based on the Group's share price
after listing.
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DRA Global Annual Report 2020 / ACN 622581935
// Director's Report
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Kathleen Bozanic
Independent Non-executive Director (Appointed 2 January 2020)
Bachelor of Commerce, Chartered Accountant (ANZ), Graduate AICD
Kathleen has over 25 years of experience as a finance professional, including as Chief Financial Officer
or General Manager of listed and private mining and contracting companies, including BGC Contracting,
Atlas Iron Ltd and Mt Gibson Iron Ltd. Kathleen was a partner of professional services firm, Deloitte, and
is currently Non-executive Director of IGO Ltd, Great Southern Mining Ltd, Rugby WA, Future Force
Foundation and the WA Health Department’s Child and Adolescent Health Service.
Kathleen holds a Bachelor of Commerce from the University of Western Australia, is a member of the
Institute of Chartered Accountants and a graduate and member of the Institute of Company Directors.
Non-executive Director IGO Limited
Non-executive Director Great Southern Mining Limited
None
Chair of Audit and Risk Committee
Member of Nomination and Governance Committee
Member of Major Project Approvals Committee
No shares in DRA Global Limited
No options in DRA Global Limited
Other: Entitled to be issued options under the DRA Global Limited Employee Share Scheme to the value
of 25% of her cash remuneration if the Group is listed on the ASX by 30 June 2021, otherwise will receive
a lump sum cash payment unless a later date is agreed.
Dr Kenneth Thomas
Independent Non-executive Director (Appointed 1 February 2020, Resigned 11 January 2021)
Doctorate in Technical Sciences, Bachelor of Science (Honours), Master of Science (Business)
Dr. Thomas has over 45 years of experience in the mining industry across project development, construction
and operations. Until July 2012 he was Senior Vice President of Projects for Kinross Gold Corporation and
before that a Global Managing Director and Board Director at Hatch Ltd, a leading international engineering
and construction firm. Ken also held progressively senior roles at Barrick Gold Corporation through to Senior
Vice President of Technical Services, and served as Chief Operating Officer for Crystallex International
Corporation with operations and projects in Venezuela and Uruguay. Ken has extensive knowledge of the
Americas, gained from operations management and mine building for Barrick, Crystallex and Hatch.
In addition to a Doctorate in Technical Sciences (Project Implementation) from Delft University of Technology
(Netherlands,1994), Ken holds several industry awards including, Mill Man of the Year 1991, Airey Award
1999 and the Selwyn G. Blaylock Medal 2001, awarded by the Canadian Institute of Mining, Metallurgy
and Petroleum (CIM) for advances internationally in the mining and metallurgical industry. Ken also holds
a Bachelor of Science (Honours) in Metallurgy from the University College Cardiff and a Master of Science
(Business) from Imperial College, both in the United Kingdom. In addition, he is the Past President, CIM.
Non-executive Director of Cardinal Resources Limited (unlisted public company)
None
Chair of Sustainability, Health, Safety, Environment and Community Committee (until 11 January 2021)
Member of Audit and Risk Committee (until 11 January 2021)
Member of Major Project Approvals Committee (until 11 January 2021)
No shares in DRA Global Limited
No options in DRA Global Limited
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// Director's Report
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Leon Uys
Non-executive Director
Professional Engineer (Engineering Council of South Africa, HNTD, MDP Project Management
Leon joined the Group in 1987 after first gaining ten years of industry experience, and during his service
was instrumental in the Group’s growth. After 27 years working for the Group he retired from his position
as CEO in 2013. For the past 7 years, Leon has acted in a Non-executive role and has been instrumental
in guiding the organisation at Board level by setting the strategic direction for the global business. Leon
registers as a Professional Engineer with ECSA (Engineering Council of South Africa) and holds a MDP
Project Management from the University of Pretoria.
None
None
Chair of Major Project Approvals Committee
Member of People, Culture and Remuneration Committee (until 31 December 2020)
Member of Nomination and Governance Committee (until 31 December 2020)
Ordinary shares in DRA Global Limited: 4,123,340
No options in DRA Global Limited
Lee (Les) Guthrie
Independent Non-executive Director (Appointed 2 January 2020)
Bachelor of Science (Engineering and Marketing)
Les has over 45 years of experience in the project delivery space having held corporate executive and
project management roles across the UK, Australia, North America and Asia for Rio Tinto, BHP, Fluor and
Aker Kvaerner. Les is currently a Non-executive Director of Neometals Ltd and Australian Mines Limited.
He is also Principal and Managing Director of Bedford Road Associates, where he has provided advice
and delivery support to customers such as Rio Tinto in Mongolia, Hyundai Engineering and Samsung
Engineering in S.Korea, Otakaro and CERA in New Zealand, and to Melbourne Water, the State government
of Victoria and NBN Co in Australia. Les was also one of the founding contributors to the John Grill Centre
for Project Leadership at The University of Sydney. Les holds a Bachelor of Science in Engineering and
Marketing from the University of West of Scotland, Paisley.
Non-executive Director of Neometals Ltd
Non-executive Director of Australian Mines Limited
None
Chair of People, Culture and Remuneration Committee
Chair of Sustainability, Health, Safety, Environment and Community Committee
Member of Major Project Approvals Committee
No shares in DRA Global Limited
No options in DRA Global Limited
Other: Entitled to be issued options under the DRA Global Limited Employee Share Scheme to the value
of 25% of his cash remuneration if the Group is listed on the ASX by 30 June 2021, otherwise will receive
a lump sum cash payment unless a later date is agreed.
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DRA Global Annual Report 2020 / ACN 622581935
// Director's Report
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships
(last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Paul Salomon
Non-executive Director (Resigned 11 March 2020)
Chartered Accountant (ANZ), Chartered Financial Analyst, Bachelor of Business Science (Honours)
Paul joined Stockdale Street South Africa (formerly Southern Cross Capital) in 2011. Prior to joining
Stockdale Street, Paul was the co-founder of Altirah Capital, a South African private equity and venture
capital house and before that the Chief Financial Officer of Everest Capital Pty Ltd, an Australian hedge
fund business. Prior to his involvement in the hedge fund industry, Paul worked at ABN AMRO in Australia
and Investec Bank Ltd in South Africa in their corporate finance divisions. Paul qualified as a Chartered
Accountant in Australia, is a Chartered Financial Analyst and charter holder, and earned a Bachelor of
Business Science (Honours) from the University of Cape Town.
None
None
None
No shares in DRA Global Limited**
No options in DRA Global Limited
Rafael Eliasov
Non-executive Director (Appointed 6 April 2020, Resigned 28 January 2021)
Bachelor of Commerce (Finance), Bachlor of Law, Higher Diploma in Tax
Rafael has Bachelor degrees in Commerce and Law from Witwatersrand University and a Higher Diploma
in Tax from the University of Johannesburg. He worked at Investec Equity Partners for nearly 6 years and
was recently a Director of Cliff Dekker Hofmeyer. Rafael joined Stockdale Street in 2018.
None
None
Member of Audit and Risk Committee (until 28 January 2021)
Member of Nomination and Governance Committee (until 28 January 2021)
No shares in DRA Global Limited**
No options in DRA Global Limited
Jean Nel
Non-executive Director (Resigned 29 January 2021)
Bachelor of Accountancy (Honours), Chartered Accountant (SA), Chartered Financial Analyst (AIMR)
Jean held numerous executive level positions for major companies in the South African mining industry. He
currently co-owns and manages a number of investments in South Africa, Namibia and the United Kingdom,
and also serves as Non-executive Director of public companies.
Jean is a qualified Chartered Accountant and holds a Bachelor of Accountancy (Honours) from the
University of Stellenbosch. Jean obtained the Chartered Financial Analyst (CFA) qualification administered
by the AIMR (Association for Investment Management and Research) in the United States and became
a CFA charter holder. Jean also completed the Advanced Management Program (AMP) at Insead in
Fontainebleau, France.
Non-executive Director Northam Platinum Ltd
Non-executive Director of DRD Gold Limited
Non-executive Director of Tongaat Hulett
None
Member of Sustainability, Health, Safety, Environment and Community Committee (until 29 January 2021)
Member of People, Culture and Remuneration Committee (until 29 January 2021)
No shares in DRA Global Limited**
No options in DRA Global Limited
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// Director's Report
‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships of all other types of
entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and excludes directorships
of all other types of entities, unless otherwise stated.
* VMF Investments Ltd holds 7,286,011 shares in DRA Global Limited. This entity is owned and controlled by the VMF Investment Trust,
a trust established for the benefit of international management of the Group. VMF Investments Ltd is managed by the VMF Investment
Trust. At the date of these financial statements, the beneficiaries of the VMF Investment Trust include members of DRA management.
The shares in VMF Investments Ltd were acquired with capital contributed by the beneficiaries and a loan from the Group, on the
same terms as extended to other employee shareholders at the time. Family entities associated with Andrew Naude, Chief Executive
Officer of the Group is one of the beneficiaries of the VMF Investment Trust. Andrew Naude is not a trustee of the VMF Investment
Trust nor does he exercise control over VMF Investments Ltd or the VMF Investment Trust. Distributions are at the discretion of the
trustee and contingent on factors determined by the trustee. Final attributable interests in DRA shares by beneficiaries of the VMF
Trust cannot be quantified as long as these shares are owned by VMF Investments Ltd. The shareholdings disclosed for Andrew
Naude thus excludes any shares held by VMF Investments Ltd.
** Paul Salomon, Rafael Eliasov and Jean Nel were Directors appointed by BPESAM IV M Ltd and BPESAM IV N Ltd, in which they
have a contingent indirect interest. BPESAM IV M Ltd and BPESAM IV N Ltd own 15,000,000 shares each in DRA Global Limited.
BPESAM IV M Ltd and BPESAM IV N Ltd are registered in Mauritius.
Company secretary
Ben Secrett (Appointed 1 January 2021)
Ben has over 10 years of practice as a legal, corporate advisory and governance professional for Australian and foreign listed and unlisted
entities. Ben has experience as a corporate lawyer at Ashurst and Gilbert+Tobin law firms, compliance adviser at ASX, and as company
secretary for a number of ASX listed entities in the resources and technology sectors. Ben holds a Bachelor of Economics from the
University of Western Australia, a Juris Doctor law degree from the University of Notre Dame Australia, and a Graduate Diploma of Applied
Corporate Governance from the Governance Institute of Australia.
Carol Marinkovich (Resigned 31 December 2020)
Carol has over 25 years experience in the mining industry. She has extensive experience in company secretary and corporate governance
practice both within Australia and internationally, including with Gold Road Resources Ltd and Sundance Resources Ltd in Western
Australia and has worked for other junior mining companies, both listed and unlisted. Carol is a Member of the Governance Institute of
Australia and the Institute of Chartered Secretaries and Administrators.
Andrew Naude (Resigned 13 March 2020)
Andrew acted as joint secretary from 9 April 2019.
Principal activities
The Group is a multi-disciplinary engineering group that delivers consulting, project execution and operations management services in
mining, minerals processing and related infrastructure.
Operating and financial review
Information on the operations and financial position of the Group and its business strategies and prospects is set out in the review of
operations and activities on pages 32-56 of this annual report.
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DRA Global Annual Report 2020 / ACN 622581935
// Director's Report
Significant changes in the state of affairs
Minnovo put option
In 2017, the Group entered into a share purchase agreement with Minnovo Pty Ltd (Minnovo) to acquire 100% of the issued share capital
in Minnovo. The acquisition of Minnovo was completed in July 2018 and the former shareholders of Minnovo accepted cash and shares of
DRA Global Limited as full consideration. The share-based consideration was accepted only on the basis that the shares of DRA Global
Limited would be liquid within 18 months. The original period of 18 months has since lapsed. Whilst the Group has no obligation under the
share purchase agreement to buy-back the shares, the Group has entered into a formal put option agreement with the former shareholders
of Minnovo. The put option agreement grants these former shareholders the right to sell their shares obtained from the acquisition back
to the Group at the same price that the shares were issued in terms of the share purchase agreement only in the event that the listing
process has not completed by 30 June 2021. The put option agreement was approved by the shareholders at the Annual General Meeting
on 29 July 2020. A put option liability of $18.9M was recorded based on 2,539,015 number of shares at $7.44 per share. Refer to note 21.
Shares issued and Share Buy-back during the period
On 5 May 2020, DRA Global Limited issued an additional 646,464 fully paid ordinary shares to management of New Senet Pty Ltd
(SENET) with a subscription price of $6.12 per share. The additional subscription by management of SENET will seek to motivate and
retain key employees of SENET beyond the earn-out period.
On 6 April 2020, the Group bought back 570,051 fully paid ordinary shares with a total value of $4,196,818 as settlement of employee
loans owing to the Group. Refer to note 22.
Impairment of intangible assets
The Group impaired $5.7M of goodwill relating to the Americas region’s cash generating unit (CGU). The Americas region was profitable in
the past and is expected to be profitable in the next 12 months. However, the operation in the Clean Energy sector is expected to reduce
significantly from FY2022 onwards due to expiration of tax incentives in the United States. At the date of this report, the tax incentive has
not been renewed and therefore has not been taken into account in the value-in-use calculations to determine the recoverable amount of
the CGU beyond FY2022. Refer to note 16.
There were no other significant changes in the state of affairs of the Group during the financial year.
Likely developments and expected results of operations
The Group plans to continue to provide diversified engineering and operation and maintenance services globally.
Distributions
There were no dividends paid, recommended or declared during the current or previous financial year.
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// Director's Report
Meetings of Directors
The number of meetings of the Group’s Board of Directors (‘the Board’) and of each Board Committee held during the year ended
31 December 2020, and the number of meetings attended by each Director were:
Board
Audit and Risk Committee
People, Culture and Remuneration
Committee
Eligible*
Attended**
Eligible*
Attended**
Eligible*
Attended**
9
9
9
9
9
9
9
1
7
9
9
9
9
9
9
9
9
1
7
7
4
-
-
4
4
-
1
-
3
1
4
4
4
4
3
4
4
-
4
4
6
-
-
-
-
6
6
-
-
6
6
6
6
6
3
6
6
-
6
6
Sustainability, Health, Safety,
Environment and Community
Committee
Nomination and Governance
Committee
Major Project Approvals Committee
Eligible*
Attended**
Eligible*
Attended**
Eligible*
Attended**
-
-
3
-
3
-
3
-
-
3
3
3
2
3
3
3
3
-
1
2
3
-
-
3
-
3
-
-
3
-
3
3
2
3
1
3
3
-
3
3
-
8
-
8
8
8
8
-
-
-
1
8
8
8
7
8
8
-
2
-
Peter Mansell
Andrew Naude
Greg McRostie
Kathleen Bozanic
Kenneth Thomas
Leon Uys
Les Guthrie
Paul Salomon
Rafael Eliasov
Jean Nel
Peter Mansell
Andrew Naude
Greg McRostie
Kathleen Bozanic
Kenneth Thomas
Leon Uys
Les Guthrie
Paul Salomon
Rafael Eliasov
Jean Nel
Member
Chair
*
The number of meetings held during the period the Director was a member of the Board and/or Committee.
**
The number of meetings attended by the Director during the period the Director was a member of the Board and/or Committee.
Environmental regulation
The Group is subject to environmental regulation in respect of its projects and operations business activities in different regions. The
Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so that it is aware of, and is in compliance
with, relevant environmental legislation. There were no breaches of environmental legislation for the year.
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Matters subsequent to the end of the financial year
BEE restructure
DRA South Africa Proprietary Limited (“DRA South Africa”) and its subsidiaries which are controlled by the Group are implementing a
restructure of DRA’s South African operations to facilitate the conclusion of a broad-based black economic empowerment (“B-BBEE”)
ownership transaction in terms of which private equity funds managed by Ascension Capital Partners Proprietary Limited (“Ascension
Funds”) will acquire the following interest in the relevant South African group entities:
/ 35% ordinary share interest in DRA South African Group Holdings Proprietary Limited (“DRA SA Group”);
/ 25% ordinary share interest in Minerals Operations Executive Proprietary Limited (“Minopex SA”) and DRA Plant Operations Holdings
Proprietary Limited (“DRA Plant Operations”); and
/ 25% ordinary share interest in DRA Projects Group Holdings Proprietary Limited (“DRA Projects Group”).
Main Street 798 Proprietary Limited (RF) (“Main Street”), DRA SA Group’s previous B-BBEE shareholder, will remain indirectly invested in
DRA South Africa as an investor in Ascension.
In terms of the aforementioned restructure, DRA South Africa Group Holdings will replace DRA South Africa as the holding company of the
Group’s South African interests and DRA Projects Group will become the holding vehicle for the Group’s South African projects business.
The result of the restructure of the B-BBEE shareholding and introduction of Ascension as a B-BBEE partner in South Africa is that DRA’s
major operating businesses in South Africa will be certified 51% B-BBEE-owned and address the main procurement criteria set out in the
South African Mining Charter (Mining Charter 3). By addressing these criteria DRA will be able to continue to effectively compete within
the South African market, ensuring a platform for sustained growth.
At the date of this report the restructure had not been completed.
Stockdale Street’s Selective Share Buy-back
On 28 January 2021, the Group entered into a Share Buy-back Agreement with BPESAM IV M Ltd (IVM) and BPESAM IV N Ltd (IVN)
(together known as Limited Partners of Stockdale Street Investment Partnership IV) to purchase 30,000,000 of the shares in the Group.
The Buy-back consideration includes an initial cash consideration of ZAR 550,000,000 ($47,720,000) payable at completion date, a further
cash consideration of $30,280,000 payable prior to 31 December 2021, totalling approximately $78,000,000 and 25,000,000 Upside
Participants Rights (UPR). The UPRs have an exercise price of $3.10 per share with a price ceiling of $6.5 per share. Consequently, the
maximum gain of the UPRs is limited to $3.40 per UPR. In total, the transaction has a maximum value of approximately $163M which
equates to a maximum value of $5.43 per share receivable by BPESAM IV M Ltd and BPESAM IV N Ltd.
A report was obtained from an independent expert that the selective Buy-back was fair and reasonable to the shareholders of the Group
(excluding IVM, IVN and their Associates) and approval of the transaction was obtained at a meeting of the shareholders on 1 April 2021.
Impact of COVID-19
Refer to Operating and Financial Review for the impact of COVID-19 on the Group’s result in the current year.
The Group will continue to assess the impact of COVID-19 on existing Projects and Operations businesses. The duration and spread of
the pandemic and regulations imposed by governments continue to be closely monitored to determine any future impact on the Group.
The Group has a stable cash balance and did not require the use of additional credit facilities.
Other
Kenneth Thomas, Rafael Eliasov and Jean Nel resigned from the position of Non-executive Directors on 11 January 2021, 28 January
2021 and 29 January 2021 respectively. Ben Secrett was appointed as Company Secretary on 1 January 2021.
No other matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly affect the Group’s
operations, the results of those operations, or the Group’s state of affairs in future financial years.
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Shares under option
The number of unissued ordinary shares of DRA Global Limited under option at the date of this report are as follows:
Grant date
14 May 2020
Expiry date
30 June 2024
Exercise
Price
Number of
options
$0.00
495,000
The above disclosure on the number of unissued ordinary shares under option does not include options to be issued to Non-executive
Directors and employees where the number of options to be issued have not yet been determined.
The Non-executive Directors are entitled to options based on 25% of cash remuneration if the Group is listed on the ASX by 30 June 2021,
otherwise they will receive a lump sum cash payment unless a later date is agreed. The total accumulated value of options that may be
issued as at 31 December 2020 was $132,000.
Certain employees including key management personnel have been granted options on 31 December 2020 under the DRA Global
Limited Employee Share Scheme. Options to a maximum value of $7,240,585 were granted. The number of options to be issued will be
determined based on 10-day volume weighted average share price of the Group from the date of listing. The options expire on 31 March
2025.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Group or of
any other entities.
Included in these options were options granted as remuneration to the Directors and the five most highly remunerated officers during the
year. Details of options granted to Directors and key management personnel are disclosed on the remuneration report. In addition, the
following options were granted to officers who are among the five highest remunerated officers of the Group, but are not key management
personnel and hence not disclosed in the remuneration report:
Name of officer
Pierre Julien
Date
Issue price of shares
Number of options
granted
Fair value of options
granted
11 May 2020
$0.00
25,000
31 December 2020
To be determined
To be determined
$100,000
$224,473(i)
(i) Options to a maximum value of $338,062 were granted to Pierre Julien on 31 December 2020 under the DRA Global Limited Employee Share Scheme
with a fair value of $224,473. The number of options to be issued will be determined based on 10-day volume weighted average share price of the Group
from the date of listing.
Shares issued on the exercise of options
There were no ordinary shares of DRA Global Limited issued on the exercise of options during the year ended 31 December 2020 and
up to the date of this report.
Indemnity and insurance of officers
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every officer of the Group shall be
indemnified out of the property of the Group against any liability incurred by him or her in his or her capacity as officer of the Group or any
related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil
or criminal. The contracts of insurance contain confidentiality provisions that preclude disclosure of the premiums paid, the nature of the
liability covered by the policies, the limit of liability and the name of the insurer.
Indemnity and insurance of auditor
To the extent permitted by law, the Group has agreed to indemnify its auditors BDO Audit (WA) Pty Ltd, as part of the terms of its audit
engagement agreement against claims by third parties arising from the DRA Global Limited’s breach of their agreement. No payment has
been made to indemnify BDO Audit (WA) Pty Ltd during or since the end of the financial year.
/ 68
DRA Global Annual Report 2020 / ACN 622581935
// Director's Report
Proceedings on behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Group,
or to intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or
part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined
in note 37 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm
on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 37 to the financial statements do not compromise the external
auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
/ all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor;
and
/ none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the
auditor’s own work, acting in a management or decision-making capacity for the Group, acting as advocate for the Group or jointly
sharing economic risks and rewards.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page 144.
Remuneration report (audited)
The audited remuneration report is set out on pages 70 - 83 and forms part of this Directors’ report.
This report is made in accordance with a resolution of Directors, pursuant to Section 298(2)(a) of the Corporations Act 2001.
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.
On behalf of the Directors
___________________________
___________________________
Peter Mansell
Chairman
15 April 2021
Andrew Naude
Chief Executive Officer
DRA Global Annual Report 2020 / ACN 622581935
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REMUNERATION
REPORT
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DRA Global Annual Report 2020 / ACN 622581935
// Remuneration report
The remuneration report is set out under the following main headings:
/ Principles used to determine the nature and amount of remuneration;
/ Details of remuneration;
/ Service agreements;
/ Share-based payments;
/ Additional information; and
/ Additional disclosures relating to key management personnel.
Principles used to determine the nature and amount of
remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results
delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders,
and it is considered to conform to the market best practice for the delivery of reward. The Board ensures that executive reward satisfies
the following key criteria for good reward governance practices:
/
/ acceptability to shareholders;
/ performance linkage/alignment of executive compensation; and
/
competitiveness and reasonableness;
transparency.
The People, Culture and Remuneration Committee is responsible for determining and reviewing remuneration arrangements for the
Directors and Executives.
The performance of the Group depends on the quality of its Directors and Executives. The remuneration philosophy is to attract, motivate
and retain high performance and high quality personnel.
In consultation with external remuneration consultants (refer to the section ‘Use of remuneration consultants’ below), the People, Culture
and Remuneration Committee has commenced and completed a review of the Group Executive remuneration framework to ensure that it
is market competitive and complementary to the reward strategy of the Group.
The reward framework is designed to align executive reward to shareholders’ interests. The Board have considered that it should seek to
enhance shareholders’ interests by:
/
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant or
increasing return on assets as well as focusing the Executive on key non-financial drivers of value;
/ attracting and retaining high calibre Executives; and
/
reflecting good corporate governance which is aligned to the Group’s values and risk appetite aligning Executive and other key
employee interests with that of shareholders through fair and substantial incentives for delivery against agreed and measurable long
and short term objectives.
Additionally, the reward framework should seek to enhance Executives’ interests by:
rewarding capability and experience;
/
/
/ providing a clear structure for earning rewards.
reflecting competitive reward for contribution to growth in shareholder wealth; and
In accordance with best practice corporate governance, the structure of Non-executive Director and Executive Director remuneration is
separate.
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// Remuneration report
Non-executive Directors remuneration
Fees and payments to Non-executive Directors reflect the demands and responsibilities of their role. Non-executive Directors’ fees
and payments are reviewed annually by the People, Culture and Remuneration Committee. The People, Culture and Remuneration
Committee may, from time to time, receive advice from independent remuneration consultants to ensure Non-executive Directors’ fees
and payments are appropriate and in line with the market. The Chairman’s fees are determined independently to the fees of other Non-
executive Directors based on comparative roles in the external market. The Chairman is not present at any discussions relating to the
determination of his own remuneration.
The aggregate Non-executive Directors’ remuneration is determined periodically by a general meeting. The most recent determination
was at the Annual General Meeting held on 31 May 2019, where the shareholders approved a maximum annual aggregate remuneration
of $700,000.
The independent Non-executive Directors are entitled to a deferred lump sum payment equivalent to 25% of their cash remuneration from
appointment to 30 June 2021, which will be payable on 30 June 2021, by the issue of options under the DRA Global Limited Employee
Share Scheme if the Group is listed on the ASX by 30 June 2021 (unless a later date is agreed), or otherwise in cash.
Executive remuneration
The Group aims to reward Executives based on their position and responsibility, with a level and mix of remuneration which has both fixed
and variable components.
The executive remuneration and reward framework has five components:
/ Base pay and non-monetary benefits;
/ Cash and non-cash allowances;
/ Short-term performance incentives;
/ Long-term performance incentives; and
/ Other remuneration such as superannuation and long service leave.
The combination of these comprises the Executive’s total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the People, Culture
and Remuneration Committee based on comparable market remuneration and cost of living indicators with the Executive’s level of
proficiency in the role as well as the sustained performance of the individual and the Group.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits where it does not create any additional costs
to the Group and provides additional value to the Executive.
The new short-term incentives (‘STI’) program is designed to align the targets of the business units with the performance hurdles of
Executives. STI payments shall be granted to Executives based on specific annual targets and key performance indicators (‘KPI’s’) being
achieved. KPI’s have been developed on the pillars of safety and operational delivery, people and growth, financial and fiscal discipline
and customer reputation. The program is designed to drive financial performance without encouraging undue risk-taking.
The new long-term incentives (‘LTI’) program is designed to include equity instruments such as performance share options. Share options
are awarded to Executives if performance targets over a period of three years are achieved. These include achieving a targeted increase
in shareholders’ value and earning per share over a period of three years. The program is designed to promote long-term stability in
shareholder returns.
Consolidated entity performance and link to remuneration
Variable component for certain individuals is directly linked to the performance of the Group. A portion of cash bonus and incentive
payments are dependent on defined targets being met. The remaining portion of the cash bonus and incentive payments are at the
recommendation of the People, Culture and Remuneration Committee. Refer to the section ‘Additional information’ below for details of the
earnings and total shareholders return for the past three years. Due to the capital reorganisation, only three years are disclosed.
The People, Culture and Remuneration Committee is of the opinion that the continued high financial performance can be attributed in part
to the adoption of performance based compensation and is satisfied that this improvement will continue to increase shareholder wealth if
maintained over the coming years. For more information on FY2020 results, refer to operating and financial review section.
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DRA Global Annual Report 2020 / ACN 622581935
// Remuneration report
Use of remuneration consultants
During the financial year ended 31 December 2020, the Group, through the People, Culture and Remuneration Committee, engaged BDO
Reward Pty Ltd, remuneration consultants, to review its existing executive pay structures and remuneration policies in comparison to a
relevant peer and competitor group, and provide recommendations on how to improve both the STI and LTI programs. BDO Reward Pty
Ltd was paid $153,900 (2019: $108,399) for these services.
An agreed set of protocols were put in place to ensure that the remuneration recommendations would be free from undue influence
from key management personnel. These protocols include requiring that the consultant not communicate with affected key management
personnel without a member of the People, Culture and Remuneration Committee being present, and that the consultant not provide any
information relating to the outcome of the engagement with the affected key management personnel. The Board is also required to make
inquiries of the consultant’s processes at the conclusion of the engagement to ensure that they are satisfied that any recommendations
made have been free from undue influence. The Board is satisfied that these protocols were followed and as such there was no undue
influence.
Voting and comments made at the last year’s Annual General Meeting (‘AGM’)
The Group is currently not a listed entity. There is no requirement under the Corporations Act 2001 to put the remuneration report to vote
at the Group’s most recent AGM.
Details of remuneration
(from 16 September 2019)
(from 19 July 2019)
- Executive Director
(from 1 August 2019)
- Non-executive Director
- Non-executive Director
- Non-executive Chairman
- Managing Director and Chief Executive Officer
The key management personnel of the Group consisted of the following Directors of DRA Global Limited:
/ Peter Mansell
/ Andrew Naude
/ Greg McRostie
/ Kathleen Bozanic
/ Kenneth Thomas
/ Leon Uys
/ Les Guthrie
/ Paul Salomon
/ Rafael Eliasov
/
Jean Nel
And the following persons:
/ Adam Buckler
/ Alistair Hodgkinson
- Executive Vice President
- Non-executive Director
- Non-executive Director
- Non-executive Director
- Non-executive Director
- Chief Financial Officer
- Non-executive Director
(until 11 March 2020)
(from 6 April 2020)
(from 2 January 2020)
(from 2 January 2020)
(from 2 January 2020)
(from 1 February 2020)
(from 18 December 2019)
Darren Naylor, James Smith and Pierre Julien have been assessed as no longer being key management personnel following an
organisational restructure.
Kenneth Thomas, Rafael Eliasov and Jean Nel resigned from the position of Non-executive Directors on 11 January 2021,
28 January 2021 and 29 January 2021 respectively. Other than that, there is no further changes to Directors and key management
personnel during the period from the end of the reporting period, 31 December 2020 up to the date of financial statements being signed.
DRA Global Annual Report 2020 / ACN 622581935
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// Remuneration report
Amounts of remuneration
Details of the remuneration of Directors and key management personnel of the Group are set out in the following tables:
2020
Cash salary
and fees
$
Cash
bonus
$
Cash
allowance
$
Non-cash
allowance
$
Super-
annuation
$
Termination
benefits
$
Short-term benefits
Post-employment benefits
Non-executive Directors:
Peter Mansell
Kathleen Bozanic
Kenneth Thomas
Leon Uys
Les Guthrie
Paul Salomon
Rafael Eliasov
Jean Nel
192,000
96,000
88,000
-
96,000
-
-
-
-
-
-
-
-
-
-
-
Executive Directors:
Andrew Naude*
Greg McRostie*
728,997
378,997
805,650
320,000
Other key management personnel:
Adam Buckler*
Alistair Hodgkinson*
415,000
315,255
218,002
384,168
2,310,249
1,727,820
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,460
-
-
2,177
19,637
18,240
9,120
-
-
9,120
-
-
-
21,348
21,348
21,348
-
100,524
-
-
-
-
-
-
-
-
-
-
-
-
-
Share-
based
payments
Equity-
settled
$
48,000
24,000
22,000
-
Total
$
258,240
129,120
110,000
-
24,000
129,120
-
-
-
-
-
-
149,924
1,723,379
56,118
776,463
65,139
142,561
719,489
844,161
531,742
4,689,972
*
In FY2020, the People, Culture and Remuneration Committee made a change in the presentation of STI cash bonus to include the
approved accrued bonus for key management personnel in relation to their performance for FY2020. Going forward, this change
is expected to align the presentation of cash bonus in the remuneration report with the current year performance of the Group and
provide more relevant information for shareholders. As a result of this transition, the cash bonus included in FY2020 included the
accrued bonus for FY2020 and the bonus paid for FY2019 which previously were not accrued specifically for these key management
personnel. Refer to page 76 for table showing the breakdown of each bonus award.
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DRA Global Annual Report 2020 / ACN 622581935
// Remuneration report
Short-term benefits
Post-employment benefits
2019
Cash salary
and fees
$
Cash
bonus
$
Cash
allowance
$
Non-cash
allowance
$
Super-
annuation
$
Termination
benefits
$
Non-executive Directors:
14,000
5,251
Peter Mansell
Kathleen Bozanic
Kenneth Thomas
Leon Uys
Les Guthrie
Paul Salomon
Rafael Eliasov
Jean Nel
Tim Netscher
Clive Hart
Peter Maw
Sharon Warburton
Cliff Lawrenson
56,000
-
-
15,165
-
-
-
-
40,333
15,165
-
25,000
33,000
-
-
-
-
-
-
-
-
-
-
-
-
-
Executive Directors:
Andrew Naude**
Greg McRostie
Wray Carvelas**
654,388
382,249
570,527
209,510
49,093
114,542
Other key management personnel:
Adam Buckler
Alistair Hodgkinson**
Darren Naylor*
James Smith
Pierre Julien**
-
328,502
345,829
321,094
406,531
-
-
28,819
80,399
81,325
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,129
-
-
-
-
-
-
-
-
-
-
-
-
-
-
123,942
-
2,175
-
5,089
7,583
-
2,175
3,193,783
563,688
16,129
154,964
-
-
-
-
-
-
-
-
-
-
2,375
-
52,227
23,538
-
-
-
-
-
10,098
93,489
Share-
based
payments
Equity-
settled
$
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
75,251
-
-
15,165
-
-
-
-
40,333
15,165
-
27,375
33,000
24,670
1,064,737
-
454,880
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
884,863
24,670
1,596,777
-
-
-
-
-
884,863
-
7,754
-
-
20,321
77,415
-
341,345
398,360
401,493
520,450
4,984,331
* Remuneration reflected from 1 April 2019, the date of acquisition of New Senet Pty Ltd.
** Share-based payments recorded were related to Legacy Long-term Incentive Plan (Legacy LTIP) issued on 1 July 2016. The amounts
disclosed in FY2019 Annual Report were the cash-settled amounts recorded at the employing entity (subsidiary) level. The Legacy
LTIP constituted a group share-based payment transaction and was deemed as equity-settled at the consolidated entity in accordance
with AASB 2. Accordingly, the amounts disclosed previously have been restated to reflect the equity-settled share-based payment
expenses recorded at the consolidated entity.
DRA Global Annual Report 2020 / ACN 622581935
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// Remuneration report
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-executive Directors:
Peter Mansell
Kathleen Bozanic
Kenneth Thomas
Leon Uys
Les Guthrie
Paul Salomon
Rafael Eliasov
Jean Nel
Tim Netscher
Clive Hart
Peter Maw
Sharon Warburton
Cliff Lawrenson
Executive Directors:
Andrew Naude
Greg McRostie
Other key management personnel:
Adam Buckler
Alistair Hodgkinson
Pierre Julien
James Smith
Darren Naylor
Fixed remuneration
At risk - STI
At risk - LTI
2020
2019
2020
2019
2020
2019
100%
100%
100%
-
100%
-
-
-
-
-
-
-
-
44%
52%
61%
37%
-
-
-
100%
-
-
100%
-
-
-
-
100%
100%
-
100%
100%
78%
89%
-
97%
80%
80%
93%
-
-
-
-
-
-
-
-
-
-
-
-
-
47%
41%
30%
46%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20%
11%
-
-
16%
20%
7%
-
-
-
-
-
-
-
-
-
-
-
-
-
9%
7%
9%
17%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2%
-
-
3%
4%
-
-
The table below shows of each key management personnel how much of their STI cash bonus was awarded and how much was forfeited:
FY2020 award accrued in FY2020
Andrew Naude
Adam Buckler
Greg McRostie
Alistair Hodgkinson
FY2019 award paid in FY2020
Andrew Naude
Adam Buckler
Greg McRostie
Alistair Hodgkinson
Total
opportunity*
$
626,400
305,202
280,000
224,098
Total
opportunity*
$
600,000
-
280,000
224,098
Awarded*
%
Awarded
$
Forfeited
%
Forfeited
$
68.8%
71.4%
50.0%
71.4%
430,650
218,002
140,000
160,070
31.3%
28.6%
50.0%
28.6%
195,750
87,201
140,000
64,028
Awarded*
%
Awarded
$
Forfeited
%
Forfeited
$
62.5%
-
64.3%
100.0%
375,000
-
180,000
224,098
37.5%
-
35.7%
-
225,000
-
100,000
-
* The dollar value of total opportunity is determined based on maximum STI opportunity calculated as a percentage of total fixed
remuneration and the Awarded percentage reflects percentage of total opportunity, and not the actual STI opportunity. Refer to
‘Service agreements’ section for an understanding of the maximum STI opportunities for these key management personnel.
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DRA Global Annual Report 2020 / ACN 622581935
// Remuneration report
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in employment contracts. The following
outlines the details of contracts with Executives:
CEO
The CEO is employed under a contract which can be terminated with notice by either the Group or the CEO.
Under the terms of the present contract:
/ The CEO receives fixed remuneration of $750,000 per annum.
/ The CEO’s target STI opportunity is 50% of fixed remuneration and maximum STI opportunity is 80% of total fixed remuneration.
/ The CEO is eligible to participate in the LTI plan on terms determined by the Board, subject to receiving any required or appropriate
shareholder approval.
Other Executives
The other Executives are employed under a contract which can be terminated with notice by either the Group or themselves.
Under the terms of their present contracts:
/ The other Executives receive fixed remuneration which range from $320,000 to $440,000 per annum.
/ The other Executives’ target STI opportunity is 45% of fixed remuneration and maximum STI opportunity is 70% of total fixed
remuneration.
/ The other Executives are eligible to participate in the LTI plan on terms determined by the Board, subject to receiving any required or
appropriate shareholder approval.
Termination provisions
The CEO and Executives’ termination provisions are as follows:
CEO
Resignation
6 months’ notice
Executive Director (Greg McRostie)
3 months’ notice
Other Executives notice period
3 months’ notice
Termination with cause
Termination without cause
No notice
No notice
No notice
16 months
6 - 12 months depending on certain conditions
3 months’ notice
Should Executives not provide sufficient notice, they will forfeit the monetary equivalent (calculated based on Total Fixed Remuneration)
of any shortfall in the notice period. Key management personnel have no entitlement to termination payments in the event of removal for
misconduct.
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// Remuneration report
Share-based compensation
(i) Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation during the year ended
31 December 2020.
(ii) Legacy LTIP
Certain key management personnel were granted share appreciation rights (SARs) under the Legacy Long-Term Incentive Plan (Legacy
LTIP) on 1 July 2016. In July 2018, the Legacy LTIP was restructured when DRA Group Holdings Pty Ltd (DRAGH) was acquired by DRA
Global Limited through a Scheme of Arrangement. The Group restructured the SARs arrangement and replaced the remaining SARs
with an issue of 5,076,620 ordinary DRAGH shares at a ratio of approximately 0.6 shares per SAR. The modification has not resulted
in an incremental fair value adjustment under AASB 2 Share-Based Payments (AASB 2) and consequently the expense for the original
grant will continue to be recognised as if the terms had not been modified. These ordinary DRAGH shares participated in the Scheme of
Arrangement as ordinary shareholders in DRAGH and were replaced by ordinary shares in DRA Global Limited. The Participants agreed
to restrictions on the sale of the shares received pursuant to this restructure, specifically restrictions on the sale of these shares prior to
specific dates replicating the original vesting profile of the SARs - i.e. sale of 1/3rd restricted until after each of 30 June 2018, 2019, 2020,
and further agreed to sell these shares back to the Group at nominal value if they leave the employment of the Group before these dates.
The fair value per SAR for each tranche, determined at grant date (1 July 2016), using the Black-Scholes model are as follows:
Grant date
Date of vesting
Fair value per SAR
Tranche 1
1 July 2016
30 June 2018
$0.21
Tranche 2
1 July 2016
30 June 2019
$0.22
Tranche 3
1 July 2016
30 June 2020
$0.22
All the shares issued to replace the SARs were either fully vested or forfeited as at 31 December 2020.
(iii) Options
The table below shows for each key management personnel the fair value of options was granted and exercised during FY2020:
Peter Mansell
Kathleen Bozanic
Kenneth Thomas
Les Guthrie
Andrew Naude
Greg McRostie
Adam Buckler
Alistair Hodgkinson
Fair value granted*
$
Value exercised**
$
48,000
24,000
22,000
24,000
572,700
224,473
260,555
224,473
-
-
-
-
-
-
-
-
* These options were granted from various plans during the year as part of remuneration. The fair value of these options at grant date
is calculated in accordance with AASB 2. The fair value of these options are is allocated as share-based payment expenses over the
vesting period.
** The value at the exercise date of options that were granted as part of remuneration and were exercised during the year has been
determined as the intrinsic value of the options at that date.
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DRA Global Annual Report 2020 / ACN 622581935
// Remuneration report
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period are as follows:
Plan
Grant date
Vesting and
exercise date
Expiry date
Exercise
price
Value per
option at
grant date
Performance
achieved
%
vested
One-off Share Option Plan(a)
14 May 2020
30 June 2022
30 June 2024
NED Share Option Plan(b)
TBD
TBD
TBD
FY2020 Share Option Plan(c)
31 December 2020
31 March 2023
31 March 2025
$0
$0
$0
$4
TBD
TBD
N/A
N/A
TBD
Nil
100%
Nil
TBD- To be determined, N/A - Not applicable.
(a) The Company granted a one-off share option offer to certain key management personnel and employees on 14 May 2020. The
options will vest at the end of 30 June 2022 subject to the employees remaining in the Group. The fair value per option at grant date
is determined using an internal valuation based on earnings multiples method and market conditions at the grant date.
(b) Certain Non-executive Directors (NED) are entitled to be issued options under the DRA Global Limited Employee Share Scheme to
the value of 25% of their cash remuneration if the Group is listed on the ASX by 30 June 2021, otherwise they will receive a lump sum
cash payment unless a later date is agreed. This arrangement is accounted as equity-settled at the reporting date as the likelihood of
achieving the listing on the ASX is considered probable. There is no vesting condition attached to this plan.
(c) FY2020 Share Option Plan was granted to certain employees including key management personnel for a certain value where
the number of options to be issued will be determined based on the Group’s share price after listing. The options are subject to
performance hurdles in relation to Absolute Total Shareholders’ Return (ATSR) (50% of the grant value) and Earning Per Share(EPS)
(50% of the grant value) over a period of three years in order to vest. These performance hurdles are mutually exclusive so that if
only one of the hurdles is satisfied, vesting occurs for that performance hurdle. EPS performance will be assessed against compound
annual growth rate targets set by the Board. The target set for FY2020 Employee Share Plan is currently 8% compound average
growth rate. If the compound average growth rate over FY2020 to FY2022 is 8% or greater, the grant will become 100% performance
qualified. A minimum of 25% or 50% will vest if at least 2% or 4% compound growth over FY2020 to FY2022 performance period is
achieved respectively. ATSR performance is measured based on 10-day volume weighted average share price (VWAP) of the Group
from date of listing and compare to the 30-day VWAP till 31 March 2023 (inclusive) assuming dividends are reinvested. If the ATSR
from the date of listing to 31 March 2023 is 8% or greater, the grant will become 100% performance qualified. A minimum of 25% or
50% will vest if at least 2% or 4% of ATSR is achieved from the date of listing to 31 March 2023 respectively.
DRA Global Annual Report 2020 / ACN 622581935
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// Remuneration report
Additional information
The earnings of the Group for the three years to 31 December 2020 are summarised below:
Sales revenue
EBIT
Profit/(loss) after income tax
The factors that are considered to affect total shareholders return are summarised below:
Total dividends declared (cents per share)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
2020
$’000
2019
$’000
938,249
1,033,219
39,014
25,619
59,004
36,009
2018
$’000
956,655
(39,168)
(42,129)
2020
-
27.49
27.39
2019
-
43.78
43.78
2018
2.88
(57.22)
(57.22)
/ 80
DRA Global Annual Report 2020 / ACN 622581935
// Remuneration report
Additional disclosures relating to key management
personnel
Shareholding
The number of shares in the Group held during the financial year by each Director and other members of key management personnel of
the Group, including their personally related parties, is set out below:
Ordinary shares
Peter Mansell
Kathleen Bozanic
Kenneth Thomas
Leon Uys
Les Guthrie
Paul Salomon
Rafael Eliasov
Jean Nel
Andrew Naude*
Greg McRostie
Adam Buckler
Alistair Hodgkinson
Balance at the
start of the year
Granted as part
of remuneration
Additions
Share Buy-back
Balance at the
end of the year
-
-
-
4,123,340
-
-
-
-
1,421,241
461,650
-
1,015,760
7,021,991
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(62,974)
(10)
-
(19,802)
(82,786)
-
-
-
4,123,340
-
-
-
-
1,358,267
461,640
-
995,958
6,939,205
* VMF Investments Ltd owns 7,286,011 shares in DRA Global Limited. This entity is owned and controlled by the VMF Investment Trust.
Family entities associated with Andrew Naude, Chief Executive Officer of the Group is one of the beneficiaries of the VMF Investment
Trust. Andrew Naude is not a trustee of the VMF Investment Trust nor does he exercise control over VMF Investments or the VMF
Investment Trust. Final attributable interests in DRA shares by beneficiaries of the VMF Investment Trust cannot be quantified as long
as these shares are owned by VMF Investments Ltd. The shareholdings disclosed for Andrew Naude excludes any shares held by VMF
Investments Ltd.
DRA Global Annual Report 2020 / ACN 622581935
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// Remuneration report
Options
The number of options over ordinary shares in the Group held during the financial year by each Director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at the
start of the year
Granted as part
of remuneration
Exercised
Expired/
forfeited/
other
Balance at the
end of the year
Vested and
exercisable
Unvested
Options over ordinary
shares
Peter Mansell#
Kathleen Bozanic#
Kenneth Thomas#
Les Guthrie#
Andrew Naude*
Greg McRostie*
Adam Buckler*
Alistair Hodgkinson* ^
-
-
-
-
-
-
-
70,000
70,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70,000
70,000
# These independent Non-executive Directors are entitled to be issued options under the DRA Global Limited Employee Share Scheme
to the value of 25% of their cash remuneration from appointment to 30 June 2021 if the Group is listed on the ASX by 30 June 2021,
otherwise they will receive a lump sum cash payment unless a later date is agreed. No options have been issued to the Non-executive
Directors as at 31 December 2020.
* These individuals have been granted options over ordinary shares under the FY2020 Share Option Plan to a certain value where the
number of options to be issued will be determined based on the Group’s share price after listing and therefore not included in the above
table. Refer to “share-based payments” section of the remuneration report for more details.
^ Alistair Hodgkinson was granted 70,000 options under the One-Off Share Option Plan.
Loans to key management personnel and their related parties
Loans were advanced to certain employees including key management personnel to enable the purchase of shares in the Group, or to
settle tax liabilities incurred by these employees as a result of the Group electing to settle Legacy LTIP by issuing shares in DRA Global
Limited to these employees in prior years.
In May 2019, DRA Global Limited’s shareholders approved a Buy-back of sufficient shares from these employees to settle the loans owing
to the Group arising from payment of tax liabilities on behalf of these employees. The share Buy-back was completed during the year.
The remaining loans were loans to purchase shares. These loans accrue interest at the South African official prime interest rate less 2.5%,
currently 4.5% (2019: 7.25%) and do not have fixed terms of repayment. Dividends declared (if any) that accrue to the underlying shares
are applied to service these loans.
/ 82
DRA Global Annual Report 2020 / ACN 622581935
// Remuneration report
These loans owing from key management personnel are as follow:
Balance at the
start of the
year
$
Interest paid
and payable
for the year
$
526,456
2,552,571
3,079,027
8,487
119,814
128,301
Settlement
of loan with
share Buy-
back
$
(461,599)
(145,075)
(606,674)
Interest not
charged
$
-
-
-
Exchange
difference
$
(73,344)
(314,154)
(387,498)
Balance at
the end of the
year
$
-
2,213,155
2,213,155
Highest
indebtedness
during the
year
$
526,456
2,552,571
3,079,027
Andrew Naude*
Alistair Hodgkinson
* The above does not include a loan owed by VMF Investments Ltd of $23,839,389 in relation to purchase of shares in the Company
where family entities associated with Andrew Naude is one of the named beneficiaries. This entity is owned and controlled by the VMF
Investment Trust. Andrew Naude is not a trustee of the VMF Investment Trust nor does he exercise control over VMF Investments Ltd
or the VMF Investment Trust.
Other transactions with key management personnel and their related parties
Greg McRostie, an Executive Director of the Group, is one of the former shareholders of Minnovo Pty Ltd (Minnovo) entered into a
transaction with the Group during the year. Refer to the details below.
In 2017, the Group entered into a Share Purchase Agreement with Minnovo to acquire 100% of the issued share capital in Minnovo. The
acquisition of Minnovo was completed in July 2018 and the former shareholders of Minnovo accepted cash and shares of DRA Global
Limited as full consideration. The share-based consideration was accepted only on the basis that the shares of DRA Global Limited
would be liquid within 18 months. The original period of 18 months has since lapsed. Whilst the Group has no obligation under the share
purchase agreement to buy-back the shares, the Group has executed a formal put option agreement with the former shareholders of
Minnovo. The put option agreement grants these former shareholders the right to sell their shares obtained from the acquisition back to
the Group at the same price that the shares were issued in terms of the Share Purchase Agreement only in the event that the Group is
not being listed on the ASX by 30 June 2021. The value of this put option is $18,890,271. The put option agreement was approved at the
Annual General Meeting on 29 July 2020.
This concludes the remuneration report, which has been audited.
DRA Global Annual Report 2020 / ACN 622581935
/ 83
FINANCIAL
STATEMENTS
/ 84
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Consolidated statement of profit or loss
Consolidated statement of profit or loss
For the year ended 31 December 2020
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Other gains/(losses) – net
Advertising and marketing expenses
General and administrative expenses
Note
2020
$’000
2019
$’000
3
4
5
938,249
(750,211)
188,038
1,033,219
(829,785)
203,434
5,080
7,546
2,849
(221)
(851)
(1,122)
(161,166)
(146,516)
Share of net profit of associates accounted for using the equity method
33
367
580
Earnings before interest and tax
Net finance income
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year
Profit for the year is attributable to:
Non-controlling interest
Owners of DRA Global Limited
Earnings per share for profit attributable to the owners of DRA Global Limited
Basic earnings per share
Diluted earnings per share
39,014
59,004
3,111
2,194
42,125
61,198
(16,506)
(25,189)
25,619
36,009
2,474
23,145
160
35,849
25,619
36,009
Cents
Cents
27.49
27.39
43.78
43.78
7
6
8
9
9
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes
DRA Global Annual Report 2020 / ACN 622581935
/ 85
Consolidated statement of other comprehensive income
For the year ended 31 December 2020
Profit after income tax expense for the year
Other comprehensive (loss)/income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive (loss)/income for the year, net of tax
Total comprehensive (loss)/income for the year
Total comprehensive (loss)/income for the year is attributable to:
Non-controlling interest
Owners of DRA Global Limited
// Financial Statements / Business and risks
2020
$’000
25,619
2019
$’000
36,009
(32,406)
3,219
(32,406)
3,219
(6,787)
39,228
2,511
(9,298)
161
39,067
(6,787)
39,228
The above consolidated statement of other comprehensive income should be read in conjunction with the accompanying notes
/ 86
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Business and risks
Consolidated statement of financial position
As at 31 December 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Financial assets at fair value through profit or loss
Other financial assets at amortised cost
Current income tax assets
Assets of disposal groups classified as held for sale
Total current assets
Non-current assets
Trade and other receivables
Investments accounted for using the equity method
Other financial assets at amortised cost
Property, plant and equipment
Right-of-use assets
Intangibles and goodwill
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Interest-bearing borrowings
Leases liabilities
Current income tax liabilities
Employee benefits
Provisions
Other financial liabilities
Total current liabilities
Non-current liabilities
Interest-bearing borrowings
Leases liabilities
Deferred tax liabilities
Employee benefits
Other financial liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Equity attributable to the owners of DRA Global Limited
Non-controlling interests
Total equity
Note
2020
$’000
2019
$’000
10
11
3
12
13
11
33
13
14
15
16
8
17
3
18
15
19
20
21
18
15
8
19
21
22
23
204,809
125,210
38,587
4,099
3,160
3,822
5,505
385,192
59
385,251
-
2,154
12,642
17,889
37,338
117,891
57,031
244,945
126,735
145,503
21,982
4,916
3,454
7,914
10,912
321,416
302
321,718
8,234
2,318
11,919
20,414
20,022
138,822
62,912
264,641
630,196
586,359
108,515
53,718
932
9,013
7,212
35,887
49,600
18,890
283,767
250
31,659
3,615
1,269
1,004
37,797
77,394
45,289
321
7,699
3,343
34,741
56,395
-
225,182
-
15,409
12,200
1,495
-
29,104
321,564
254,286
308,632
332,073
162,547
6,000
133,935
302,482
6,150
162,788
55,322
110,790
328,900
3,173
308,632
332,073
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
DRA Global Annual Report 2020 / ACN 622581935
/ 87
// Financial Statements / Business and risks
Consolidated statement of changes in equity
For the year ended 31 December 2020
Balance at 1 January 2019
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 36)
Business combinations
Reallocation from retained earnings to non-distributable reserve
Earnings to non-distributable reserve
Issue of ordinary shares (note 22)
Buy-back shares (note 22)
Balance at 31 December 2019
Issued
capital
$’000
99,548
Reserves
$’000
Retained
profits
$’000
Non-
controlling
interests
$’000
Total equity
$’000
51,637
74,942
3,012
229,139
-
-
-
-
64,548
-
-
250
(1,558)
-
3,218
35,849
-
3,218
35,849
301
-
1
165
-
-
-
-
(1)
-
-
-
160
1
161
-
-
-
-
-
-
162,788
55,322
110,790
3,173
36,009
3,219
39,228
301
64,548
-
165
250
(1,558)
332,073
Issued
capital
$’000
Reserves
$’000
Retained
profits
$’000
Non-
controlling
interests
$’000
Total equity
$’000
Balance at 1 January 2020
162,788
55,322
110,790
3,173
332,073
Profit after income tax expense for the year
Other comprehensive (loss)/income for the year, net of tax
Total comprehensive (loss)/income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 36)
Business combinations
Put option (note 21)
Issue of ordinary shares (note 22)
Buy back shares (note 22)
Balance at 31 December 2020
-
-
-
-
-
-
3,956
(4,197)
162,547
-
23,145
(32,443)
-
2,474
37
25,619
(32,406)
(32,443)
23,145
2,511
(6,787)
2,011
-
(18,890)
-
-
-
-
-
-
-
-
466
-
-
-
6,000
133,935
6,150
2,011
466
(18,890)
3,956
(4,197)
308,632
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
/ 88
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Business and risks
Consolidated statement of cash flows
For the year ended 31 December 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Finance income received
Finance cost paid
Income tax paid
Net cash from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payment received from finance lease
Payment for intellectual property and software development costs
Net sale of software
Business combinations, net of cash acquired
Repayment of loans by third party
Proceeds from sale of other financial assets
Loans to shareholders (employees)
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Principal elements of borrowings
Principal elements of lease payments
Proceeds from issues of shares
Net cash (used in)/from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Note
2020
$’000
2019
$’000
960,955
1,064,130
(853,626)
(1,009,160)
107,329
3,333
(2,391)
(6,397)
35
101,874
(8,373)
2,330
-
(1,868)
441
(140)
559
451
(1,946)
(8,546)
2,579
(2,157)
(8,456)
3,956
(4,078)
89,250
126,735
(11,176)
54,970
2,749
(3,361)
(29,312)
25,046
(5,137)
2,681
1,668
(3,074)
763
(81,394)
1,540
3,843
-
(79,110)
12,242
(14,701)
(6,097)
64,548
55,992
1,928
125,626
(819)
Cash and cash equivalents at the end of the financial year
10
204,809
126,735
Refer to note 35 for information on non-cash financing and investing activities.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
DRA Global Annual Report 2020 / ACN 622581935
/ 89
// Financial Statements / Business and risks
Notes to the consolidated financial statements
Note 1. Basis of preparation ....................................................................................................... 92
Results
Note 2. Operating segments ............................................................................................................. 93
Note 3. Revenue .................................................................................................................................. 96
Note 4. Other income ............................................................................................................................. 99
Note 5. Other gains/(losses) – net ............................................................................................................ 99
Note 6. Expenses ........................................................................................................................................ 99
Note 7. Net finance income ......................................................................................................................... 100
Note 8. Income tax ........................................................................................................................................ 100
Note 9. Earnings per share (EPS) ................................................................................................................. 103
Financial position
Note 10. Cash and cash equivalents ............................................................................................................. 104
Note 11. Trade and other receivables ............................................................................................................ 104
Note 12. Financial assets at fair value through profit or loss ......................................................................... 105
Note 13. Other financial assets at amortised cost ......................................................................................... 105
Note 14. Property, plant and equipment ........................................................................................................ 106
Note 15. Leases ............................................................................................................................................108
Note 16. Intangibles and goodwill ................................................................................................................. 110
Note 17. Trade and other payables ............................................................................................................... 113
Note 18. Interest-bearing borrowings ............................................................................................................ 114
Note 19. Employee benefits .......................................................................................................................... 115
Note 20. Provisions ....................................................................................................................................... 116
Note 21. Other financial liabilities .................................................................................................................. 117
Capital and risk management
Note 22. Issued capital .................................................................................................................................. 118
Note 23. Reserves ......................................................................................................................................... 120
Note 24. Dividends ........................................................................................................................................121
Note 25. Financial instruments ...................................................................................................................... 121
Note 26. Contingencies ................................................................................................................................. 124
Note 27. Commitments .................................................................................................................................. 125
Note 28. Events after the reporting period..................................................................................................... 125
Group structure and other information
Note 29. Related party transactions .............................................................................................................. 126
Note 30. Parent entity information ................................................................................................................. 127
Note 31. Business combinations ................................................................................................................... 128
Note 32. Interests in subsidiaries .................................................................................................................. 128
Note 33. Interests in associates .................................................................................................................... 130
Note 34. Interests in joint operations ............................................................................................................. 131
Note 35. Cash flow information ..................................................................................................................... 132
Note 36. Share-based payments ................................................................................................................... 133
Note 37. Remuneration of auditors................................................................................................................ 137
Note 38. New standards and interpretations ................................................................................................. 138
Note 39. Other significant accounting policies............................................................................................... 139
DRA Global Annual Report 2020 / ACN 622581935
/ 91
// Financial Statements / Notes to the consolidated financial statements
Note 1. Basis of preparation
Introduction
DRA Global Limited (the Company) is a company domiciled in Australia. The consolidated financial statements of the Company comprise
the Company and its controlled entities (the Group) and the Group’s interest in associates and joint arrangements.
DRA Global Limited is a for-profit entity for the purpose of preparing the financial statements. These general purpose financial statements
have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001. The consolidated financial statements of the Group also complies with International
Financial Reporting Standards (IFRS) as adopted by the International Accounting Standards Board (IASB).
The financial statements have been prepared under the historical cost convention, except for financial instruments, property, plant and
equipment that have been measured at fair value in initial accounting of a business combination.
The Group 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 these financial statements have been rounded off in accordance with that Corporations Instrument to
the nearest thousand Dollars, or in certain cases, the nearest Dollar.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group. A list of significant controlled entities (subsidiaries)
at year end is contained in note 32 Interest in subsidiaries.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting
policies.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
Foreign currency translation
The financial statements are presented in Australian Dollars, which is DRA Global Limited’s functional and presentation currency.
Transactions denominated in foreign currencies are initially recorded in the functional currency using the exchange rate ruling at the date
of the underlying transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange
at year end. Exchange gains or losses on retranslation are included in profit or loss, with the exception of foreign exchange gains or losses
on foreign currency provisions for closure and rehabilitation which are capitalised in property, plant and equipment for operating sites.
The results and financial position of foreign operations that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
/ assets and liabilities for each reporting period presented are translated at the closing rate at the reporting date,
/
income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of the transactions), and
/ all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and
other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign
operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to
profit or loss, as part of the gain or loss on sale.
/ 92
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 1. Basis of preparation (continued)
Accounting judgements and estimates
In preparing the Group annual financial statements, management is required to make estimates and assumptions that affect the amounts
represented in the Group annual financial statements and related disclosures. Use of available information and the application of judgement
is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the Group
annual financial statements. Significant estimates and judgements include:
- Revenue recognition
- Taxation
- Useful lives of assets
- Impairment of non-financial assets
- Intangibles and goodwill
- Provision for loss making contracts
- Estimation of contingent consideration and option liabilities
- Impairment of financial assets
- Contingent liabilities
- Share-based payments
(note 3)
(note 8)
(note 14)
(note 14)
(note 16)
(note 20)
(note 21)
(note 25)
(note 26)
(note 36)
Comparative figures
Where required by the Australian Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
Significant accounting policies
Significant accounting policies are included in the respective notes or note 39.
Results
Note 2. Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker
(CODM) in DRA.
The CODM assesses the financial performance and position of the Group and makes strategic decisions. The CODM consists of the Chief
Executive Officer, the Chief Financial Officer and the Executive Vice President of each operating segment.
Identification of reportable operating segments
The CODM has identified its operating segments based on the internal reports that are used in assessing performance and in determining
the allocation of resources. Operating segments are identified based on the geographical regions of operation.
The Group aggregates two or more operating segments into a single reportable operating segment when the Group has assessed and
determined the aggregates operating segments share similar economic and geographical characteristics, such as the type of customers
for the Group’s services and similar expected growth rates and regulatory environment.
The Group has the following reportable segments:
/ Europe, Middle East and Africa (EMEA) - this part of the business provides project and/or operation services in the mining industries
throughout the EMEA region.
/ Asia Pacific and Americas (APAC/AMER) - this part of the business provides project and/or operation services in the mining and energy
industries in the Asia Pacific, North and South Americas regions.
DRA Global Annual Report 2020 / ACN 622581935
/ 93
// Financial Statements / Notes to the consolidated financial statements
Note 2. Operating segments (continued)
Information technology;
The following items are not allocated to operating segments as they are not considered part of the core trading operations of any segment:
/ Corporate overheads;
/ Group finance;
/
/ Origination;
/ Treasury;
/ Corporate secretarial; and
/ Certain strategic investments.
These amounts are presented in the ‘Others (unallocated)’ column in the operating segment information below.
The performance of each segment forms the basis of all reporting to the CODM and the Board. The CODM and the Board primarily uses
Earnings Before Interest and Tax (EBIT) to assess the performance of a segment. It will also review the assets and working capital of
each segment on a regular basis. The accounting policies adopted for internal reporting to the CODM and the Board are consistent with
those adopted in the financial statements.
In reporting the EBIT to the CODM and the Board, results for the normal operations of the segment separately show reporting of the effect
of significant items of income and expenditure which may have an impact on the quality of earnings such as depreciation and amortisation,
impairment losses, share-based payments and others.
Operating segment information
2020
Revenue
Segment revenue
Inter-segment revenue
Total revenue
EBIT
Finance income
Finance expense
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Material items include:
Share of profits of associates
Share-based payment expenses
Net impairment losses on trade receivables and contract assets
Impairment of goodwill
Depreciation of property, plant and equipment
Amortisation of intangible assets
Assets
Segment assets
Total assets
Total assets include:
Investments in associates
Acquisition of non-current assets
Liabilities
Segment liabilities
Total liabilities
EMEA
$’000
549,323
(11,561)
537,762
43,834
3,309
(1,309)
45,834
367
-
(2,774)
-
(6,772)
(806)
APAC/
AMER
$’000
Others
(unallocated)
$’000
404,361
(3,874)
400,487
5,101
1,311
(2,615)
3,797
-
-
(419)
-
(8,472)
(7)
21,910
(21,910)
-
(9,921)
881
1,534
(7,506)
-
(2,011)
819
(5,713)
(1,635)
(8,177)
347,034
146,424
136,738
2,318
26,966
-
9,528
-
2,167
195,506
122,168
3,890
Total
$’000
975,594
(37,345)
938,249
39,014
5,501
(2,390)
42,125
(16,506)
25,619
367
(2,011)
(2,374)
(5,713)
(16,879)
(8,990)
630,196
630,196
2,318
38,661
321,564
321,564
/ 94
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 2. Operating segments (continued)
2019
Revenue
Segment revenue
Inter-segment revenue
Total revenue
EBIT
Finance income
Finance expense
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Material items include:
Share of profits of associates
Share-based payment expenses
Net impairment losses on trade receivables and contract assets
Depreciation of property, plant and equipment
Amortisation of intangible assets
Assets
Segment assets
Total assets
Total assets include:
Investments in associates
Acquisition of non-current assets
Liabilities
Segment liabilities
Total liabilities
APAC/
AMER*
$’000
Others
(unallocated)
$’000
Total
$’000
13,263
(13,263)
1,053,333
(20,114)
-
1,033,219
EMEA*
$’000
685,847
(4,541)
681,306
50,175
3,652
(1,874)
51,953
580
-
(6,283)
(8,854)
(1,732)
354,223
(2,310)
351,913
16,891
1,313
(1,858)
16,346
-
-
(835)
(7,442)
(6)
(8,062)
590
371
(7,101)
-
(301)
1,694
(1,515)
(6,807)
305,896
137,405
143,058
2,318
11,310
-
6,417
-
79,403
176,566
118,014
(40,294)
59,004
5,555
(3,361)
61,198
(25,189)
36,009
580
(301)
(5,424)
(17,811)
(8,545)
586,359
586,359
2,318
97,130
254,286
254,286
* FY2019 reportable segment information is restated to conform with the current period presentation as required by AASB 8 Operating Segments.
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Statements / Notes to the consolidated financial statements
Note 3. Revenue
Disaggregation of revenue by major service lines and geographical regions:
2020
Revenue recognised over time:
Projects
Operations
Other
2019
Revenue recognised over time:
Projects
Operations
Other
EMEA
$’000
APAC/
AMER
$’000
Others
(unallocated)
$’000
286,201
249,128
2,433
537,762
380,833
297,125
3,348
681,306
141,598
258,889
-
400,487
150,823
201,090
-
351,913
-
-
-
-
-
-
-
-
Total
$’000
427,799
508,017
2,433
938,249
531,656
498,215
3,348
1,033,219
Recognition and measurement
The Group provides project and operation services to its customers. Revenue is recognised when control of the goods or services are
transferred to the customer at an amount that reflects the consideration to which the Group is expected to be entitled in exchange of those
goods or service. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the
goods and services before transferring them to the customer.
Project revenue
The Group is principally involved in the projects through provision of consulting services that includes the assessment of mineral projects
through the completion of feasibility studies and design and construction of mineral process plants. These activities involve extensive
engineering expertise in the engineering disciplines of process, electrical and instrumentation, mechanical, civil and structural and
infrastructure as well as the associated disciplines of project management, materials handling and procurement.
These projects generally contain one performance obligation due to the highly integrated activities, that in combination, forms the
deliverable for the contract with the customer. The activities cannot easily be distinguished one from the other. In rare circumstances,
some projects will have multiple performance obligations. For these contracts, the total value of the contract will be allocated to the
individual performance obligations based on standalone selling price.
Work is typically performed on assets that are controlled by the customers or on assets that have no alternative use to the Group, with the
Group having right to payment for performance to date. As performance obligations are satisfied over time, project revenue is recognised
over time using input methods such as labour hours expended or costs incurred.
Operation revenue
The Group also derives operation revenue from fixed term contracts involving the operation and maintenance of mineral process plants,
which includes associated services relating to metallurgical quality management, control and analysis as well as process optimisation.
Under these contracts, the services are delivered through the provision of labour and specialist capabilities in systems integration,
recruitment and human resource management, skills development and training, purchasing and cost control, stores and asset management,
health and safety and environmental management. These services provided are the performance obligation in respect of each contract.
The contracts are typically structured at a fixed price per month over the contract period. Additional costs incurred on behalf of a customer
on an ad hoc basis are recoverable from the customer on a reimbursable basis. These additional costs are a separate distinct performance
obligation per the contract.
/ 96
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 3. Revenue (continued)
Performance obligations are fulfilled over time as the Group largely enhances assets which the customer controls. Operation revenue
is recognised when the services are rendered based on the amount of the expected transaction price allocated to each performance
obligation noted above typically based a schedule of rates or a cost-plus basis.
Customers are generally invoiced monthly as per the structure of the contract, which are aligned with the stand-alone selling prices for
each performance obligation. Payment is received following invoice on normal commercial terms.
Costs to fulfil a contract
Costs incurred prior to the commencement of a contract may arise due to mobilisation or site setup costs. Where these costs are expected
to be recovered, they are capitalised and amortised over the course of the contract consistent with the transfer of service to the customer.
Variable consideration
It is common for contracts to include performance bonuses or penalties assessed against the timeliness or cost effectiveness of work
completed or other performance related indicators. Where consideration in respect of a contract is variable, the expected value of revenue
is only recognised when any uncertainty associated with the variable consideration is subsequently resolved.
Variable consideration is typically billed based on the achievability of agreed metrics in terms of clearly defined parameters. Once achieved,
the Group will bill the customer for the agreed amount.
In relation to variable consideration, the expected value of revenue is only recognised when it is highly probable that a significant reversal
will not occur. Expected revenue is recognised consistently in a contract based on the expected value method or the most likely amount
method whichever is more appropriate.
Certain contracts are subject to claims which are enforceable under the contract. If the claim does not result in any additional goods or
services, the transaction price is updated and the claim accounted for as variable consideration.
Warranty and defect liability
Generally, contracts include defect and warranty periods following completion of the project. These obligations are not deemed to be
separate performance obligations and are therefore estimated and included in the total costs of the contracts. Where required, amounts
are recognised accordingly in line with AASB 137 Provisions, Contingent Liabilities and Contingent Assets.
A provision is made for the difference between the expected cost of fulfilling a contract and the expected unearned portion of the Group’s
transaction price where the forecast costs are greater than the forecast revenue.
Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer
and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time
value of money.
Significant judgements and estimates
Expected costs to complete
For project revenue recognised using an input method based on costs incurred, management is required to estimate the expected forecast
costs to complete. Fundamental to this calculation, is a reliable estimate of the total forecast costs to complete the project. The Group
estimates its forecast costs to complete based on its budget derived from the tender process and reassessed at each reporting period by
its project manager based on the best available information and the current progress of the project.
Transaction price
In determining transaction price (total contract revenue), variable consideration including bonuses, penalties, claims and contract variations
are only included to the extent it is highly probable that a significant reversal in revenue will not occur in the future. The estimate of variable
consideration is determined using the expected value method or the most likely amount depending on which method better predicts the
amount of consideration to which it will be entitled.
DRA Global Annual Report 2020 / ACN 622581935
/ 97
// Financial Statements / Notes to the consolidated financial statements
Assets and liabilities related to contracts with customers
The Group has recognised the following assets and liabilities related to contracts with customers:
Current assets
Contract assets - Projects
Contract assets - Operations
Current liabilities
Contract liabilities - Projects
Contract liabilities - Operations
Contract assets and liabilities
Note 3. Revenue (continued)
2020
$’000
2019
$’000
25,179
13,408
38,587
48,507
5,211
53,718
15,789
6,193
21,982
44,533
756
45,289
Contract assets and contract liabilities refer to what is commonly known as ‘unbilled or accrued revenue’ and ‘deferred revenue’
respectively. Contract assets represent the Group’s right to consideration which is conditional on something other than the passage of
time (for example, the Group’s future performance). If the Group’s right to an amount of consideration is unconditional (other than the
passage of time), the contract asset is reclassified as a receivable.
Contract liabilities arise where payment received from the customer ahead of scheduled transfer of goods and services transferred to the
customers.
Contract assets have increased as the Group has provided services ahead of the agreed payment schedules on some EPC projects.
Contract liabilities have increased as the Group has received advance payments for some of its EPC and EPCM projects.
Revenue recognised in relation to contract liabilities
Revenue recognised that was included in the contract liability balance at the beginning of the year
Revenue recognised from performance obligation satisfied in previous periods
Remaining performance obligations (work in hand)
Contracts which have remaining performance obligations as at 31 December 2020 are set out below:
Project revenue
Operations revenue
2020
$’000
45,289
-
2019
$’000
50,404
-
2020
$’000
443,511
640,415
2019
$’000
233,298
365,342
1,083,926
598,640
Contracts in different segments have different lengths. Revenue is typically earned over these varying time frames. The average duration
of contracts is given below. Some contracts will vary from these typical lengths.
Projects revenue
1 - 4 years
Operations revenue
1 - 5 years
/ 98
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 4. Other income
Fair value adjustments to other financial assets at fair value through profit or loss (FVTPL)
Government grants
Other
Other income
Note 5. Other gains/(losses) – net
Profit on sale of property, plant and equipment
Foreign exchange gain/(loss)
(Loss)/profit on foreign currency contracts
Profit on disposals - other financial assets
Note 6. Expenses
2020
$’000
634
3,786
660
5,080
2020
$’000
1,053
7,421
(1,227)
299
7,546
2019
$’000
1,031
797
1,021
2,849
2019
$’000
378
(2,498)
967
932
(221)
Included in cost of sales and general and administrative expenses are expenses of the following nature:
Employee benefit expense
Net impairment losses on trade receivables and contract assets
Impairment - other financial assets
Impairment of goodwill
Share-based payment expenses
Depreciation of right-of-use assets
Depreciation of property, plant and equipment
Amortisation of intangible assets
Notes
2020
$’000
2019
$’000
(509,290)
(524,898)
11
16
36
15
14
16
(2,374)
(366)
(5,713)
(2,011)
(8,978)
(7,901)
(8,990)
(5,424)
(866)
-
(301)
(7,709)
(10,102)
(8,545)
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Statements / Notes to the consolidated financial statements
Note 7. Net finance income
Finance income
Bank
Other
Finance costs
Bank
Other
2020
$’000
3,030
2,471
5,501
(1,067)
(1,323)
(2,390)
2019
$’000
2,413
3,142
5,555
(1,739)
(1,622)
(3,361)
Net finance income
3,111
2,194
Note 8. Income tax
a) Income tax expense
Income tax expense/(benefit)
Current tax on profits for the year
Adjustments for current tax of prior periods
Foreign withholding tax written off
Deferred tax - Originating and reversing temporary differences
Adjustments for deferred tax of prior periods
Aggregate income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Difference in overseas tax rates
Assessable tax loss not recognised
Non-deductible expenses
Income not subjected to tax
Adjustments for current and deferred taxes of prior periods
Foreign withholding tax written off
Branch tax paid
Tax credits/incentives (including foreign income tax credits)
Others
Income tax expense
2020
$’000
19,029
352
4,430
(2,927)
(4,378)
16,506
2019
$’000
25,571
(1,657)
4,628
(4,671)
1,318
25,189
42,125
61,198
12,638
18,359
835
1,199
3,272
(319)
(4,026)
4,430
(515)
(1,308)
300
44
(405)
2,993
722
(29)
4,628
(892)
(969)
738
16,506
25,189
/ 100
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 8. Income tax (continued)
b) Deferred tax balances
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
Type of temporary difference:
Assessable tax losses
Employee benefits liabilities
Allowance for expected credit losses
Contracts in progress
Lease liabilities
Property, plant and equipment and right-of-use assets
Provision
Other
Movements:
Opening balance
Credited to profit or loss
Additions through business combinations
Foreign currency exchange adjustment
Closing balance
c) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit at statutory tax rate
2020
$’000
57,031
(3,615)
53,416
2019
$’000
62,912
(12,200)
50,712
Net deferred
tax
2020
$’000
Net deferred
tax
2019
$’000
(Charged)/
credited to
profit
or loss
2020
$’000
(Charged)/
credited to
profit
or loss
2019
$’000
22,764
13,314
5,838
437
651
(5,263)
14,971
704
53,416
21,131
12,727
3,899
6,043
2,612
(9,762)
15,582
(1,520)
50,712
1,900
2,072
(776)
(1,538)
572
3,160
1,094
821
7,305
2020
$’000
50,712
7,305
(54)
(4,547)
53,416
3,523
5,018
2,023
848
90
3,150
(11,060)
(239)
3,353
2019
$’000
53,636
3,353
(5,047)
(1,230)
50,712
2020
$’000
16,355
4,437
2019
$’000
9,634
2,616
The unused tax losses were incurred by subsidiaries that are not likely to generate taxable income in the foreseeable future. They can be
carried forward indefinitely.
Recognition and measurement
The income tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that
it relates to items recognised in other comprehensive income, directly in equity or a business combination. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Statements / Notes to the consolidated financial statements
Note 8. Income tax (continued)
Current tax assets and liabilities
Current tax comprises normal income tax on companies. Current tax for current and prior periods is, to the extent unpaid, recognised
as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is
recognised as an asset.
Current tax liabilities/(assets) for the current and prior periods are measured at the amount expected to be paid to/(recovered from) the
tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax assets and liabilities
A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the
initial recognition of an asset or liability in a transaction which, at the time of the transaction, affects neither accounting profit nor taxable
profit/(tax loss).
A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available
against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial
recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss).
A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will
be available against which the unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the
liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that
the tax arises from:
/ a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or
/ a business combination.
Current and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged,
in the same or a different period, to other comprehensive income.
Current and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same
or a different period, directly in equity.
Tax consolidation legislation
DRA Global Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
The parent entity, DRA Global Limited, and the controlled entities in the tax consolidated group account for their own current and deferred
tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in
its own right.
In addition to its own current and deferred tax amounts, the entity also recognises the current tax liabilities (or assets) and the deferred tax
assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.
Significant judgments and estimates
Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions
and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises
liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due, when the Group concludes it is not
probable that the taxation authority will accept an uncertain tax treatment. Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which
such determination is made.
/ 102
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 8. Income tax (continued)
The Group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible
temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the Group
to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast
cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable
income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the reporting date
could be impacted.
Deferred tax assets that relate to carried-forward tax losses of the Group are recognised on the basis that the Group will satisfy applicable
tax legislation requirements at the time of proposed recoupment of those tax losses. An assessment will be performed at the time when
those tax losses are utilised.
Note 9. Earnings per share (EPS)
Profit after income tax
Non-controlling interest
Profit after income tax attributable to the owners of DRA Global Limited
Basic earnings per share
Diluted earnings per share
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
Weighted average number of ordinary shares used in calculating diluted earnings per share
2020
$’000
25,619
(2,474)
23,145
Cents
27.49
27.39
2019
$’000
36,009
(160)
35,849
Cents
43.78
43.78
Number
Number
84,191,873
81,882,380
313,770
-
84,505,643
81,882,380
Basic EPS
Basic EPS is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares
outstanding during the financial year.
Diluted EPS
Diluted EPS adjusts the figures used in the determination of basic EPS to take into account the weighted average number of additional
ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
The adjustment for the calculation of diluted EPS in the table above does not take into account any options issued under the Non-
executive Directors Share Option Plan and the FY2020 Employee Share Option plan. The potential number of ordinary shares that could
be issued under these arrangements were excluded from the adjustment for the calculation of diluted EPS in the table above given the
number of options over ordinary shares to be issued will only be determined at a future date based on future valuations which are unable
to be reliably estimated at the date of this report. Refer to note 36.
DRA Global Annual Report 2020 / ACN 622581935
/ 103
// Financial Statements / Notes to the consolidated financial statements
Financial position
Note 10. Cash and cash equivalents
Current assets
Cash at bank and in hand
Restricted cash
2020
$’000
2019
$’000
204,809
126,735
The cash balance above includes issued cash-backed bank guarantees to the value of $8,568,136 (2019: $9,320,205). These cash
balances are restricted and not available for general use by the Group.
Recognition and measurement
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently
recorded at fair value.
Note 11. Trade and other receivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
Net trade receivables
Prepayments
Deposits
Withholding taxes
Other receivables
Retention debtors
Non-current assets
Retention debtors
Income tax expense
2020
$’000
2019
$’000
144,742
(35,095)
109,647
177,400
(41,947)
135,453
5,824
992
1,404
2,984
4,359
3,656
1,134
4,976
284
-
125,210
145,503
-
125,210
8,234
153,737
Recognition and measurement
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of the business. If
collection of the amounts is expected in one year or less they are classified as current assets, otherwise they are classified as non-current.
/ 104
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 11. Trade and other receivables (continued)
Allowance for expected credit losses
Movements in the allowance for expected credit losses are as follows:
Opening balance
Increase through business combinations
Net increase in loss allowance recognised in profit or loss during the year
Receivables written off during the year as uncollectible
Foreign exchange differences
Closing balance
Note 12. Financial assets at fair value through profit or loss
Current assets
Derivative financial instruments - foreign exchange currency (FEC) contracts
Listed shares
Shares in non-listed entities
Note 13. Other financial assets at amortised cost
Current assets
Loan receivable - at amortised cost (i)
Loans to shareholders (employees) - at amortised cost (ii)
Other loans
Non-current assets
Loan receivable - at amortised cost (iii)
Loans receivable
2020
$’000
41,947
50
2,374
(2,182)
(7,094)
35,095
2019
$’000
32,974
344
5,424
(1,229)
4,434
41,947
2020
$’000
876
1,750
534
3,160
2020
$’000
772
2,081
969
3,822
2019
$’000
1,518
1,327
609
3,454
2019
$’000
1,517
5,083
1,314
7,914
12,642
16,464
11,919
19,833
(i) The loan accrues interest at a rate of 15% per annum secured by assets of the counterparty. The loan is currently in default and has
been impaired to the value recoverable from the security.
(ii) These loans accrue interest at the prime lending rate in South Africa, currently 7% per annum and are repayable 60 days after the
Group is listed on the ASX. The majority of the loans have been paid through share buy-back during the year. Refer to note 22.
(iii) The loan is subject to interest at a rate ranging from 15% - 27.78% secured by assets of the counterparty. The loan is repayable no
later than 6 years after the anniversary of the loan, being June 2023.
DRA Global Annual Report 2020 / ACN 622581935
/ 105
// Financial Statements / Notes to the consolidated financial statements
Note 14. Property, plant and equipment
Buildings
$’000
Leasehold
improve-
ments
$’000
Plant and
equipment
$’000
Furniture
and fixtures
$’000
Motor
vehicles
$’000
3,918
(557)
3,361
2,963
(462)
2,501
2,704
(1,227)
1,477
2,762
(1,474)
1,288
22,250
(17,632)
4,618
23,266
(18,195)
5,071
7,249
(4,205)
3,044
6,915
(5,373)
1,542
16,393
(13,126)
3,267
13,446
(11,248)
2,198
Site
establish-
ment
$’000
31,947
(27,300)
4,647
33,601
(28,312)
5,289
Balance at
31 December 2019
Cost
Accumulated depreciation
Balance at
31 December 2020
Cost
Accumulated depreciation
Reconciliations
Reconciliations of the net book values at the beginning and end of the current and previous financial year are set out below:
Buildings
$’000
3,467
93
-
(42)
(13)
-
-
-
Leasehold
improve-
ments
$’000
668
1,004
35
-
1
-
-
-
Plant and
equipment
$’000
Furniture
and fixtures
$’000
Motor
vehicles
$’000
Site
establish-
ment
$’000
3,868
3,405
114
(37)
85
-
(5)
(43)
4,252
436
63
(48)
5
-
-
-
6,687
2,705
-
(1,928)
106
(1,432)
-
-
(144)
(231)
(2,769)
(1,664)
(2,871)
3,361
1,477
18
-
(39)
(787)
-
(52)
192
-
(6)
(53)
-
(322)
2,501
1,288
4,618
3,160
72
(36)
(492)
(52)
(2,199)
5,071
3,044
3,267
89
-
(6)
(55)
52
(1,582)
1,542
608
-
(492)
(568)
-
(617)
2,198
7,180
924
-
(213)
73
-
(937)
43
(2,423)
4,647
4,304
-
(331)
(202)
-
(3,129)
5,289
Balance at 1 January 2019
Additions
Additions through business
combinations
Disposals
Exchange differences
Transfer to Right-of-use
assets
Transfer to intangible assets
Transfers in/(out)
Depreciation expense
Balance at
31 December 2019
Additions
Additions through business
combinations
Disposals
Exchange differences
Transfers in/(out)
Depreciation expense
Balance at
31 December 2020
Total
$’000
84,461
(64,047)
20,414
82,953
(65,064)
17,889
Total
$’000
26,122
8,567
212
(2,268)
257
(1,432)
(942)
-
(10,102)
20,414
8,371
72
(910)
(2,157)
-
(7,901)
17,889
/ 106
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 14. Property, plant and equipment (continued)
Recognition and measurement
The cost of an item of property, plant and equipment is recognised as an asset when:
/
/
it is probable that future economic benefits associated with the item will flow to the Group; and
the cost of the item can be measured reliably.
Property, plant and equipment is initially measured at cost.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to
add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment,
the carrying amount of the replaced part is derecognised.
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the
cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result
of acquiring the asset or using it for purposes other than the production of inventories.
Major spare parts and stand-by equipment which are expected to be used for more than one period are included in property, plant and
equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of property, plant and
equipment are accounted for as property, plant and equipment.
Major inspection costs which are a condition of the continuing use of an item of property, plant and equipment and which meet the
recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection
costs from the previous inspection are derecognised.
Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. Refer to note 39 for impairment
policy of non-financial assets.
Land is not depreciated. All other property, plant and equipment are depreciated on the straight line basis over their expected useful lives
to their estimated residual value.
The useful lives of items of property, plant and equipment have been assessed as follows:
Buildings
Furniture and fixtures
Motor vehicles
Plant and equipment
Leasehold improvements
20 - 40 years
4 - 10 years
4 - 5 years
3 - 6 years
4 - 10 years
Site establishment
Varies depending on life of mine or contract
The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations
differ from previous estimates, the change is accounted for as a change in accounting estimate.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated
separately.
The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is
derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference
between the net disposal proceeds, if any, and the carrying amount of the item.
Significant judgment and estimates
The Group depreciates or amortises its assets over their estimated useful lives, as described in the accounting policies for property, plant
and equipment and intangible assets. The estimation of the useful lives of assets is based on historic performance as well as expectations
about future use and therefore requires a significant degree of judgement to be applied by management. The actual lives of these assets
can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programs.
DRA Global Annual Report 2020 / ACN 622581935
/ 107
// Financial Statements / Notes to the consolidated financial statements
Note 14. Property, plant and equipment (continued)
Significant judgement is applied by management when determining the residual values for property, plant and equipment. When
determining the residual value for property, plant and equipment, the following factors are taken into account:
/ External residual value information (if applicable)
/
Internal technical assessments for complex plant and machinery.
Impairment
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. No impairment loss was
recorded in property, plant and equipment during the year (2019: nil).
Note 15. Leases
Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
Right-of-use assets
Buildings
Vehicles
Lease liabilities
Current
Non-current
Additions to the right-of-use assets during the 2020 financial year were $27,221,575 (2019: $6,420,016).
Amounts recognised in the statement of profit or loss
Depreciation charge of right-of-use assets
Buildings
Vehicles
Interest expense (included in finance cost and cost of sales)
Expense relating to short-term, low-value and variable lease rentals (included in cost of sales, general and
administrative expenses)
2020
$’000
34,812
2,526
37,338
2019
$’000
18,590
1,432
20,022
2020
2019
9,013
31,659
40,672
7,699
15,409
23,108
2020
$’000
(8,219)
(759)
(8,978)
2020
$’000
(2,173)
(1,610)
2019
$’000
(7,709)
-
(7,709)
2019
$’000
(1,884)
(2,035)
The total cash outflow for leases in 2020 was $12,239,523 (2019: $10,015,158). The total cash outflow includes principal elements of
lease payments, interest expense and expense relating to short-term, low-value and variable lease rentals.
/ 108
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 15. Leases (continued)
Recognition and measurement
The Group leases buildings and vehicles. Rental agreements are typically for fixed periods but may have extension options. The lease
agreements do not impose any covenants.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the
Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of use asset
is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of
the following lease payments:
variable lease payment that are based on an index or a rate;
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
/
/
/ amounts expected to be payable by the lessee under residual value guarantees;
/
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
/ payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the Group’s incremental
borrowing rate.
Right-of-use assets are measured at cost comprising the following:
the amount of the initial measurement of lease liability;
/
/ any lease payments made at or before the commencement date less any lease incentives received;
/ any initial direct costs; and
/
restoration costs.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers
ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the
related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date
of the lease.
The Group applies AASB 136 Impairment of Assets to determine whether a right-of-use asset is impaired. At each reporting date, the
Group assesses whether there is any indication that an asset may be impaired. No impairment loss of right-to-use assets was recorded
during the year (2019: nil).
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit
or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise office equipment.
DRA Global Annual Report 2020 / ACN 622581935
/ 109
// Financial Statements / Notes to the consolidated financial statements
Note 16. Intangibles and goodwill
Goodwill
$’000
127,019
(16,738)
110,281
120,549
(22,452)
98,097
Brand
names
$’000
Computer
software
$’000
Customer
relationship
$’000
Intellectual
property
$’000
7,567
(2,032)
5,535
7,248
(3,824)
3,424
9,869
(6,091)
3,778
9,844
(7,389)
2,455
40,538
(21,310)
19,228
39,893
(26,082)
13,811
-
-
-
134
(30)
104
Balance at 31 December 2019
Cost
Accumulated amortisation and impairment
Balance at 31 December 2020
Cost
Accumulated amortisation and impairment
Reconciliations
Reconciliations of the net book values at the beginning and end of the current and previous financial year are set out below:
Balance at 1 January 2019
Additions
Additions through business combinations
Disposals
Exchange differences
Transfers in/(out)
Amortisation expense
Goodwill
$’000
47,677
-
60,535
-
2,069
-
-
Computer
software
$’000
Customer
relationship
$’000
Intellectual
property
$’000
Brand
names
$’000
1,935
-
5,145
-
-
-
1,917
3,074
-
(763)
38
942
11,845
-
12,953
-
-
-
(1,545)
(1,430)
(5,570)
Balance at 31 December 2019
110,281
5,535
Additions
Additions through business combinations
Disposals
Exchange differences
Impairment loss
Amortisation expense
Balance at 31 December 2020
-
1,081
-
(7,552)
(5,713)
-
98,097
-
-
-
(307)
-
(1,804)
3,424
3,778
1,734
-
(441)
(230)
-
(2,386)
2,455
19,228
-
-
-
(647)
-
(4,770)
13,811
-
-
-
-
-
-
-
-
134
-
-
-
-
(30)
104
Total
$’000
184,993
(46,171)
138,822
177,668
(59,777)
117,891
Total
$’000
63,374
3,074
78,633
(763)
2,107
942
(8,545)
138,822
1,868
1,081
(441)
(8,736)
(5,713)
(8,990)
117,891
Recognition and measurement
Goodwill
Business combination principles apply to entities over which the Group obtains control. The Group obtains control of a subsidiary when it
becomes exposed to, or gains rights to, variable returns from its involvement with the subsidiary and has the ability to affect those returns
through its power over the subsidiary.
The Group accounts for business combinations using the acquisition method of accounting. The cost of the business combination is
measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued. Costs directly
attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the
effective interest and costs to issue equity which are included in equity.
/ 110
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 16. Intangibles and goodwill (continued)
Contingent consideration is included in the cost of the combination at fair value as at the date of acquisition. Subsequent changes to the
assets, liabilities or equity which arise as a result of the contingent consideration are not affected against goodwill, unless they are valid
measurement period adjustments.
The acquiree’s identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of AASB 3 Business
Combinations are recognised at their fair values at acquisition date, except for non-current assets (or disposal group) that are classified
as held-for-sale in accordance with AASB 5 Non-current Assets Held-For-Sale and Discontinued Operations, which are recognised at fair
value less costs to sell.
Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present obligation at
acquisition date.
On acquisition, the Group assesses the classification of the acquiree’s assets and liabilities and reclassifies them where the classification
is inappropriate for Group purposes. This excludes lease agreements and insurance contracts, whose classification remains as per their
inception date.
Non-controlling interest arising from a business combination is measured either at their share of the fair value of the assets and liabilities
of the acquiree or at fair value. The treatment is not an accounting policy choice but is selected for each individual business combination,
and disclosed in the note for business combinations.
In cases where the Group held a non-controlling shareholding in the acquiree prior to obtaining control, that interest is measured to fair
value as at the acquisition date. The measurement to fair value is included in profit or loss for the year. Where the existing shareholding
was classified as an available-for-sale financial asset, the cumulative fair value adjustments previously recognised to other comprehensive
income and accumulated in equity are recognised in profit or loss as a reclassification adjustment.
Goodwill is determined as the consideration paid plus the fair value of any shareholding held prior to obtaining control; plus non-controlling
interest and less the fair value of the identifiable assets and liabilities of the acquiree.
Goodwill is not amortised but is tested on an annual basis for impairment. If goodwill is assessed to be impaired, that impairment is not
subsequently reversed.
Goodwill is allocated to cash-generating units (CGU) for the purpose of impairment testing. The allocation is made to those CGU or groups
of CGU that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified
at the lowest level at which goodwill is monitored for internal management purposes, being the different regions.
Brand names and customer relationship
Separately acquired brand names and customer relationship are shown at historical cost. Brand names and customer relationship acquired
in a business combination are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried
at cost less accumulated amortisation and impairment losses.
Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset is
ready for use. The useful lives are as follows:
Brand names
1 - 5 years
Customer relationship
2 - 10 years
Computer software
Computer software is initially measured at cost and amortised on a straight-line basis over the estimated useful life of each asset.
Impairment testing is conducted annually. Computer software is amortised on a straight-line basis over 1 to 3 years.
DRA Global Annual Report 2020 / ACN 622581935
/ 111
// Financial Statements / Notes to the consolidated financial statements
Note 16. Intangibles and goodwill (continued)
Significant judgements and estimates
Amortisation rates and residual values
Significant judgement is applied by management when determining the residual values for intangible assets. In the event of contractual
obligations in terms of which a termination consideration is payable to the Group, management will apply a residual value to the intangible
asset.
Key assumptions used for value-in-use calculations
Significant judgements and estimates on key assumptions used for value-in-use calculations are presented in impairment testing below.
Impairment testing
The Group monitors goodwill on a CGU level.
During the year, as part of the Group’s listing readiness process, the CODM undertook an organisational restructure by eliminating
the business units for management reporting and allocation of resources purposes. The businesses of the Group are simplified and
reorganised into different regions which represent separate CGU to deliver optimal solutions and services that are tailored to meet the
Group’s customers’ needs.
Goodwill is attributed to:
CGU
AMER region
APAC region
EMEA region*
2020
$’000
2019
$’000
-
41,962
56,135
98,097
5,713
41,962
62,606
110,281
* In FY2019, goodwill in relation to the EMEA region is allocated to three separate former business units (BU) of the following amounts:
Senet Business Unit
EMEA Business Unit
Minopex Business Unit
2019
$’000
30,289
13,894
18,423
62,606
The recoverable amount of all CGUs is based on value in use calculations, using cash flow projections covering up to five-year period
based on forecast operating results. The recoverable amount of each cash-generating unit exceeds its carrying amount.
The Group determines the recoverable amount, being the higher of the fair value less cost to sell and the value in use, of individual cash-
generating units by discounting the expected future cash flows of each of the identified cash-generating units. The recoverable amount is
then compared to the carrying value of the respective cash-generating unit and an impairment loss is raised if required.
Based on the impairment testing performed by management in the current year, an impairment charge of $5.7M arose in the Americas
region CGU. The Americas region was profitable in the past and is expected to be profitable in the next 12 months. However, the operation
in the Energy Sector is expected to reduce significantly from FY2022 onwards due to expiration of tax incentives in the United States.
At the date of this report, the tax incentive has not been renewed and therefore has not been taken into account in the value-in-use
calculations to determine the recoverable amount of the CGU beyond FY2022. There was no impairment loss recorded in FY2019.
/ 112
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 16. Intangibles and goodwill (continued)
The key assumptions used in the value in use calculations and the approach to determining the recoverable amount of all CGUs in the
current and previous period are:
Assumptions
Approach used to determining values
Revenue growth rate:
Relevant to the market conditions and business plan
Budgeted gross profit rate:
Based on past performance and management’s expectations for the future
Long term growth rate:
Typically consistent with the long term growth rate of the economic environment or country within
which the CGU operates
Discount rate (Pre-tax):
Risk in the industry and country in which each CGU operates
2020
Revenue growth rate (% annual growth rate) from FY2023-FY2025 (i)
Budgeted gross margin (%)
Long-term growth rate (%)
Pre-tax discount rate (%)
AMER
region
APAC
region
EMEA
region
(ii)
25%
N.A
15%
4%
14%
4%
18%
5%-8%
growth
19% -21%
4%
22%
(i) Revenue forecast for FY2021 to FY2022 is based on actual forecast derived from work in hand and tender opportunities.
(ii) Cash flow projection of Americas region covering a two year period is used for impairment testing.
2019
AMER BU
APAC BU
Senet BU
EMEA BU
Minopex BU
Revenue growth rate (% annual growth rate)
Budgeted gross margin (%)
Long-term growth rate (%)
Pre-tax discount rate (%)
3% - 5%
42%
N.A
22%
5%
17%
3%
16%
5% - 63%
7% - 8%
4%
21.1%
5%
25%
4%
26%
5% - 7%
14% - 15%
4%
19%
Note 17. Trade and other payables
Current liabilities
Trade payables
Accrued expenses and contract costs
Other payroll accruals
VAT/GST payable
Other payables
2020
$’000
54,960
23,280
16,849
3,407
10,019
108,515
2019
$’000
40,756
13,149
12,824
548
10,117
77,394
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective
interest rate method.
DRA Global Annual Report 2020 / ACN 622581935
/ 113
// Financial Statements / Notes to the consolidated financial statements
Note 18. Interest-bearing borrowings
Current liabilities
Loan from non-controlling interests (i)
Other borrowings
Non-current liabilities
Other borrowings
Refer to note 25 for further information on financial instruments.
Opening balance 1 January
Additional loans raised
Business combinations
Repayment of borrowings
Interest capitalised
Exchange differences
2020
$’000
689
243
932
250
1,182
2020
$’000
321
2,579
478
2019
$’000
321
-
321
-
321
2019
$’000
-
15,022
-
(2,185)
(14,725)
29
(40)
1,182
24
-
321
(i) The loan carries interests at the prime lending rate in South Africa of 7% per annum and is repayable on demand.
Financing arrangements
Significant borrowing facilities at the reporting date:
Total facilities
Derivative Products Trading Facility
Vehicle and Asset Finance
Revolving Credit Facility
Global Banking Facility
Used at the reporting date
Derivative Products Trading Facility
Vehicle and Asset Finance
Revolving Credit Facility
Global Banking Facility
Unused at the reporting date
Derivative Products Trading Facility
Vehicle and Asset Finance
Revolving Credit Facility
Global Banking Facility
2020
$’000
23,908
6,669
39,943
13,314
83,834
1,470
2,908
-
-
2019
$’000
16,325
7,318
45,495
-
69,138
2,763
1,650
-
-
4,378
4,413
22,438
3,761
39,943
13,314
79,456
13,562
5,668
45,495
-
64,725
/ 114
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 18. Interest-bearing borrowings (continued)
Recognition and measurement
Borrowings are initially measured at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost,
using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption
value is recognised over the term of the borrowings in terms of the effective interest rate method. Borrowing costs are recognised as an
expense in the period in which they are incurred unless required to be capitalised in terms of AASB 123 Borrowing Costs.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that
it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised
over the period of the facility to which it relates.
Note 19. Employee benefits
Current liabilities
Employee benefits liabilities
Non-current liabilities
Employee benefits liabilities
Recognition and measurement
Short-term employee benefits
2020
$’000
2019
$’000
35,887
34,741
1,269
37,156
1,495
36,236
The employee benefits liabilities for wages and salaries including non-monetary benefits, incentives, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The employee benefits liabilities for long service leave not expected to be settled within 12 months of the reporting date are measured at
the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
DRA Global Annual Report 2020 / ACN 622581935
/ 115
// Financial Statements / Notes to the consolidated financial statements
Note 20. Provisions
Current liabilities
Loss making contracts
Claims
Warranty provision
Others
2020
$’000
46,870
160
1,964
606
49,600
Movements in provisions
Movements in each class of provision during the current financial year are set out below:
2020
Carrying amount at the start of the year
Additional provisions recognised
Amounts released
Amounts utilised
Exchange differences
Carrying amount at the end of the year
Claims
Loss making
contracts
$'000
Claims
$’000
Warranty
provision
$’000
51,181
2,657
-
(3,186)
(3,782)
46,870
193
-
-
(18)
(15)
160
4,307
491
(2,459)
(260)
(115)
1,964
2019
$’000
51,181
193
4,307
714
56,395
Others
$’000
714
454
(173)
(375)
(14)
606
The provision for claims relates to a claim against a subsidiary in the United States.
Loss making contracts
The provision for loss making contracts relates to expected unavoidable losses on projects. The calculation of the provision is based on
the additional losses expected to be incurred to complete the contracts per the agreed scope or the compensation or penalties arising
from failure to fulfil the contracts whichever is lower.
Some of these contracts are subject to disputes and claims by the customers and counter-claims by the Group. Should the Group be
successful in recovering amounts, this may result in a reduction in the loss previously recorded. The status of these contracts and the
adequacy of provisions are assessed at each reporting date. Refer to note 26 for information on contingencies.
Warranty provision
The provision for warranty relates to the estimated liabilities on certain contracts still under warranty or defect liability period at the
reporting date.
Recognition and measurement
Provisions are recognised when:
the Group has a present legal or constructive obligation as a result of a past event;
/
/
/ a reliable estimate can be made of the obligation.
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.
/ 116
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 20. Provisions (continued)
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement
shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The
reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the
provision.
Provisions are not recognised for future operating losses.
If an entity has a contract that is onerous, a provision is recognised when expected benefits to be derived from a contract of meeting its
obligation under the contract are less than the unavoidable costs.
Depending on the circumstances of the onerous contract, the provision is measured at either the present value of the expected cost of
terminating the contract (if permitted) or the expected net cost of completing the contract, whichever is less.
Contingent assets and contingent liabilities are not recognised unless the contingent liability is acquired as part of a business combination.
After their initial recognition, contingent liabilities recognised in business combinations that are recognised separately are subsequently
measured at the greater of:
/
/
the amount that would be recognised as a provision; and
the amount initially recognised less cumulative amortisation.
Significant judgements and estimates
In arriving to the estimate of provision for loss making contracts, management applies judgements to estimate the costs to complete the
onerous contracts which include estimation of labour, technical costs, penalties from impact of delays and productivity.
Note 21. Other financial liabilities
Current liabilities
Put option liability (i)
Non-current liabilities
Contingent consideration (ii)
(i) Put option liability
2020
$’000
18,890
1,004
19,894
2019
$’000
-
-
-
In 2017, the Company entered into a Share Purchase Agreement with Minnovo Pty Ltd (Minnovo) to acquire 100% of the issued
share capital in Minnovo. The acquisition of Minnovo was completed in July 2018 and the former shareholders of Minnovo accepted
cash and shares of DRA Global Limited as full consideration. The share-based consideration was accepted only on the basis that
the shares of DRA Global Limited would be liquid within 18 months. The original period of 18 months has since lapsed. Whilst the
Company has no obligation under the share purchase agreement to buy-back the shares, the Company has executed a formal put
option agreement with the former shareholders of Minnovo. The put option agreement grants these former shareholders the right
to sell their shares obtained from the acquisition back to the Company at the same price that the shares were issued in terms of
the Share Purchase Agreement only in the event that the Company is not being listed on the ASX by 30 June 2021. The put option
agreement was approved by the shareholders at the Annual General Meeting on 29 July 2020.
As the Company cannot be considered to control the outcome of the listing process on the ASX, the Company does not have the
unconditional right to avoid delivering cash. Accordingly, under AASB 132 Financial Instruments: Presentation, the Company has
recognised a put option liability. The put option liability of $18.9M is calculated based on 2,539,015 number of shares at $7.44 per
share.
(ii) Refer to note 31 ‘Business combinations’.
DRA Global Annual Report 2020 / ACN 622581935
/ 117
// Financial Statements / Notes to the consolidated financial statements
Note 21. Other financial liabilities (continued)
Recognition and measurement
Financial liabilities are measured at amortised costs or fair value at through profit or loss (FVTPL). A financial liability is classified as at
FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL
are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial
liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains
and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss
A financial instrument that creates an obligation or potential obligation for an entity to purchase its own equity instruments for cash or
another financial assets also gives rise to a financial liability. The amount of the financial liability is measured at the present value of the
redemption amount with a corresponding adjustment to equity.
Significant judgements and estimates
The Group entered into a business acquisition agreement which required additional payments based on meeting certain earnings targets
and net working capital position. The Group estimated these amounts payable based on its forecasts. It is reasonably possible that these
forecasts may change which may then impact management’s estimations and may then require a material adjustment in the contingent
consideration.
Capital and risk management
Note 22. Issued capital
Balance at 1 January 2019
Ordinary no par value shares
Movements in fully paid share capital
Ordinary shares (acquisition of New Senet Pty Ltd)
Issue of ordinary shares for services provided
Buy-back of shares
Balance at 1 January 2020
Ordinary shares
Movements in fully paid share capital
Issue of ordinary shares
Buy-back of shares
Balance at 31 December 2020
Ordinary shares
Ordinary shares
Number
$’000
75,852,983
99,548
8,888,889
33,784
(185,796)
8,736,877
64,548
250
(1,558)
63,240
84,589,860
162,788
646,464
(1,135,129)
(488,665)
3,956
(4,197)
(241)
84,101,195
162,547
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the
number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a
limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
/ 118
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 22. Issued capital (continued)
Share Buy-back
At the Annual General Meeting on 31 May 2019, the shareholders approved the selective buy-back of shares for the certain share
schemes and for the Legacy LTIP, subject to approval from the South African Reserve Bank where applicable. During the year, 562,573
shares in relation to Legacy LTIP were bought back at nominal value in accordance with the terms and conditions of Legacy LTIP Share
Buy Back Agreement. Another 572,556 with a total value of $4,196,818 were bought back at an average rate of $7.33 ranging from $7.04
to $7.42 (2019: 185,796 shares with a total value of $1,157,709 at an average rate of $8.25 ranging from $7.99 to $8.40).
Loan shares
Included in the ordinary shares are shares purchased by employees including certain key management personnel between 2014 and 2017
through loans provided by the Group. The loans were denominated in South African Rand and accrue interest at the South African Official
Prime rate less 2.5%, currently 4.5% (2019: 7.25%) and do not have fixed terms of repayment. Dividends that accrue to the underlying
shares are applied to service the loans. These loans provided to employees are deemed as limited recourse loans and in substance
are accounted like a share-based payment. The amount of unrecognised loan receivables and accrued interest was $38,182,855 at 31
December 2020 (2019: $41,287,704).
Accordingly, until the full repayment of the shares issued to employees has been made, the loan receivable from the employees and the
corresponding share capital amount are not recognised in the statement of financial position. Refer to note 36 for accounting policy on
share-based payments.
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for
shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
The capital risk management policy remains unchanged from the 31 December 2019 Annual Report.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as total
borrowings divided by total equity. Total borrowings is calculated as total borrowings including ‘current and non-current borrowings’ and
‘current and non-current lease liabilities’ as shown in the statement of financial position. Total equity is the total equity as shown in the
statement of financial position.
The gearing ratio at the reporting date was as follows:
Total borrowings
Total equity
Gearing ratio
2020
$’000
41,854
308,632
2019
$’000
23,429
332,073
13%
7%
The gearing ratio increased from 7% to 13% as a result of addition to new right-to-use assets which increased the lease liabilities during
the year. Excluding the lease liabilities, the Group has very minimal external borrowings as at 31 December 2020. Refer to note 18.
Recognition and measurement
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
Ordinary shares purchased by the employees through a limited recourse loans from the Group is accounted as a share-based payment
and no loan receivables, related interest expenses and share capital are recognised. Any repayments made are treated as the exercise
price for the shares and accounted as equity when received.
DRA Global Annual Report 2020 / ACN 622581935
/ 119
// Financial Statements / Notes to the consolidated financial statements
Note 23. Reserves
Foreign currency reserve
Share-based payment reserve - Broad Based Black Economic Empowerment Structure
Share-based payment reserve
Put option reserve
Foreign currency reserve
2020
$’000
17,638
3,214
4,038
(18,890)
6,000
2019
$’000
50,082
3,214
2,026
-
55,322
Exchange differences arising on translation of the foreign controlled entities are recognised in other comprehensive income and
accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is
disposed of.
Broad Based Black Economic Empowerment Structure
Share-based payment reserve to account for the liability in terms of Broad Based Black Economic Empowerment legislation within South
Africa.
Share-based payment reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration, and other
parties as part of their compensation for services.
Put option reserve
The reserve is used to recognise the value of the put option arising from a transaction with the Company’s shareholders. Refer to note 21.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Balance at 1 January 2019
Foreign currency translation
Reallocation from Retained Earnings to Non-distributable
reserve
Arising through joint operations
Share-based payment expenses
Balance at 31 December 2019
Foreign currency translation
Share-based payment expenses
Put option
Balance at 31 December 2020
Foreign
currency
reserve
$’000
46,698
3,218
1
165
-
50,082
(32,443)
-
-
Broad
Based Black
Economic
Empower-
ment
Structure
$’000
Share-based
payment
reserve
$’000
Put option
reserve
$’000
3,214
1,725
-
-
-
-
3,214
-
-
-
-
-
-
301
2,026
-
2,011
-
4,037
-
-
-
-
-
-
-
-
(18,890)
(18,890)
17,639
3,214
Total
$’000
51,637
3,218
1
165
301
55,322
(32,443)
2,011
(18,890)
6,000
/ 120
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 24. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking credits
Franking credits of the Company available for subsequent financial years based on a tax rate of 30%
2020
$’000
3,821
2019
$’000
3,821
Recognition and measurement
Distributions to the Company’s shareholders are recognised as a liability in the Group’s financial statements in the period in which the
distributions are appropriately authorised and no longer at the discretion of the Company, on or before the end of the reporting period but
not distributed at the end of the reporting period.
Note 25. Financial instruments
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk),
credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different
types of risk to which it is exposed. These methods include:
sensitivity analysis for interest rate, foreign exchange and other price risks;
/
/ ageing analysis for credit risk;
/
/ beta analysis in respect of investment portfolios for market risk.
rolling cash flow forecasts for liquidity risk; and
The Group’s financial risk management is carried out by a central treasury department (Group Treasury) under policies approved by the
Board. The central treasury department identifies, evaluates, and hedges financial risks in close co-operation with the Group’s operating
units. The Board is responsible for the governance framework and oversight of the risk management within the Group. The Audit and Risk
Committee is responsible for reviewing the governance framework and risk management within the Group. The day to day responsibility
for risk management is carried out by the senior management in the Group.
Market risk
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with
respect to the US Dollar (USD) and South African Rand (ZAR).
Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign
operations by an operating entity that are denominated in currencies other than its own functional currency (FC). Where possible, The
Group does not take on foreign exchange risk. The Group manages its exposure to foreign currency risk by minimising excess foreign
currency balances in overseas jurisdictions not required for working capital, minimising contracting outside of its functional currencies,
entering into hedging arrangement via exchange forward contracts if necessary and passing on foreign exchange risks to customers
where possible.
DRA Global Annual Report 2020 / ACN 622581935
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// Financial Statements / Notes to the consolidated financial statements
Note 25. Financial instruments (continued)
The Group’s significant exposure to foreign currency risk at the end of the reporting period, expressed in Australian Dollars (AUD), was
as follows:
2020
Net financial assets/(liabilities)
FEC contracts (notional amounts)
2019
Net financial assets/(liabilities)
FEC contracts (notional amounts)
USD held
in AUD FC
$’000
USD held
in GNF
FC$’000
USD held
in ZAR FC
$’000
ZAR held
in AUD FC
$’000
ZAR held in
MZN FC
$’000
(35,899)
10,539
-
-
23,951
13,637
2,436
-
(3,391)
-
USD held
in AUD FC
$’000
USD held
in GNF
FC$’000
USD held
in ZAR FC
$’000
ZAR held
in AUD FC
$’000
ZAR held in
MZN FC
$’000
(34,297)
(4,121)
-
-
43,793
20,705
3,375
-
(1,792)
-
As shown in the table above, the Group is primarily exposed to financial assets and liabilities denominated in USD and ZAR held by
entities in the Group that have different functional currencies to these financial assets and liabilities. The significant exposure arises from
changes in USD/AUD, USD/GNF (Guinea Franc), USD/ZAR, ZAR/AUD and ZAR/MZN exchange rates. The sensitivity of profit or loss to
changes in these exchange rates is shown below:
USD/AUD exchange rate - increase 10%
USD/GNF exchange rate - increase 10%
USD/ZAR exchange rate - increase 10%
ZAR/AUD exchange rate - increase 10%
ZAR/MZN exchange rate - increase 10%
Profit/(loss) before tax
2020
$’000
(3,590)
1,054
1,031
244
(339)
2019
$’000
(3,430)
412
2,308
338
(179)
A 10 percent weakening of the ZAR/AUD, USD/ZAR, USD/GNF and USD/AUD would have the equal but opposite effect on the above
currencies to the amounts shown above, on the basis of all other variables held constant.
Interest rate risk
The Group’s main interest rate risk arises from long-term borrowings. Cash, cash equivalents and borrowings issued at variable rates
expose the Group to cash flow interest rate risk. As at the end of the reporting period, the Group had no material variable interest
borrowings.
Credit risk
Credit risk is the risk of financial loss due to counterparties to financial instruments not meeting their contractual obligation.
Each local entity is responsible for managing and analysing the credit risk for each of their new customers before standard payment and
delivery terms and conditions are offered. During the year, the Group has also increased its monitoring of debt recovery as there is an
increased probability of customers delaying payment or being unable to pay, due to COVID-19. Credit risk arises from cash and cash
equivalents and deposits with banks and financial institutions, as well as credit exposures to trade customers, including outstanding
receivables and committed transactions. The Group only deposits cash with major banks with a high quality credit rating.
Significant judgements and estimates
The Group applies the AASB 9 Financial Instruments (AASB 9) simplified approach to measuring expected credit losses which uses a
lifetime expected loss allowance for all trade receivables and contract assets.
/ 122
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 25. Financial instruments (continued)
In determining the recoverability of a trade receivable and contract assets, the local management considers any change in the credit
quality of these financial assets from the date credit was granted up to the reporting date. The concentration of credit risk is limited due
to the customer base being large and geographically diverse. Accordingly, the Group has assessed for any expected credit losses under
AASB 9, and believe that there is no further credit provision required in excess of the allowed provision for impairment of these financial
assets. Management does not expect any material loss from non-performance by counterparties on credit granted during the financial year
under review that has not been provided for.
The expected loss rates are based on the corresponding historical credit losses experienced within this period. The historical loss rates
are adjusted to reflect current and forward-looking information on macroeconomic factors including economic conditions due to COVID-19
affecting the ability of the customers to settle the receivables.
All other financial assets at amortised costs which are considered to have low credit risk, and the loss allowance recognised during the
period was therefore limited to 12 month expected credit losses. These instruments are considered to be low risk when they have a low
risk of default or the counterparty has a strong capacity to meets its obligations within the short term.
For those other financial assets in default and non-performing, a lifetime expected losses was recognised during the period if these assets
have not been previously impaired.
Financial assets exposed to credit risk at year end were as follows:
Contract assets
Trade and other receivables (excluding prepayments)
Cash and cash equivalents
Other financial assets - loans receivable
Other financial assets - FEC contracts
2020
$’000
38,587
119,386
204,809
16,464
876
380,122
2019
$’000
21,982
150,081
126,735
19,833
1,518
320,149
Expected credit loss rates used for trade and other receivables and contract assets
Average rate
Current
More than 30 days past due
More than 60 days past due
More than 90 days past due
Allowance for expected credit losses
Refer to note 11 for reconciliation of allowance for expected credit losses.
Trade and other receivables past due but which are not considered to be impaired at 31 December:
60 - 90 days past due
90 days and over past due
Liquidity risk
1.7%
1.0%
7.6%
66.7%
2020
$’000
3,564
16,214
19,778
2019
$’000
9,083
25,378
34,461
Liquidity risk is the risk that an entity in the Group will not be able to meet its obligations as they become due.
Group treasury manages liquidity risk of the Group. The Group’s liquidity risk is mitigated by the availability of funds to cover future
commitments. Liquidity is reviewed continually by the Group’s treasury department through daily cash monitoring, review of available
credit facilities and rolling cash flow forecasts.
DRA Global Annual Report 2020 / ACN 622581935
/ 123
// Financial Statements / Notes to the consolidated financial statements
Note 25. Financial instruments (continued)
The Group’s liquidity risk is mitigated by the availability of funds to cover future commitments. The Group manages liquidity risk through
an ongoing review of future commitments and credit facilities.
Surplus cash held by the operating entities over and above balances required for working capital management, is invested in interest
bearing current accounts, term deposits and money market deposits. The Group has sufficient cash funds to meet its identified ongoing
operating expenses and commitments.
Remaining contractual maturities
The table below analyses the Group’s financial liabilities and net-settled non-derivative financial liabilities into relevant maturity groupings,
based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscounted cash outflows.
2020
Non-derivatives
Trade and other payables
Interest-bearing borrowings
Lease liabilities
Other financial liabilities
2019
Non-derivatives
Trade and other payables
Interest-bearing borrowings
Lease liabilities
Carrying
amount
$’000
Less
than
1 year
$’000
Between
1 and
5 years
$’000
108,515
108,515
1,182
40,672
19,894
965
11,565
18,890
170,263
139,935
-
250
20,321
1,004
21,575
Over
5 years
$’000
-
-
18,894
-
Remaining
contractual
maturities
$’000
108,515
1,215
50,780
19,894
18,894
180,404
Carrying
amount
$’000
77,394
321
23,108
100,823
Less
than
1 year
$’000
77,394
321
9,308
87,023
Between
1 and
5 years
$’000
Over
5 years
$’000
Remaining
contractual
maturities
$’000
-
-
16,092
16,092
-
-
971
971
77,394
321
26,371
104,086
Note 26. Contingencies
The Group has guarantee facilities of $206.5M (2019: $181.2M) available for utilisation.
The Group has issued financial guarantees as security to various landlords and customers for leases and construction projects, to the
value of $82.8M (2019: $59.3M). Provisions provided for the bank guarantees in FY2020 was $15M (2019: nil) included in provision for
loss making contracts.
On 1 April 2019, the Group acquired a 72.7% interest in New Senet Pty Ltd (”Senet”). The business combination is accounted for as an
acquisition of 100% interest in New Senet Pty Ltd due to the existence of a call and put option agreement which was entered at the same
time to acquire the remaining interest in New Senet Pty Ltd. In the event that Senet meets certain earnings targets in the next three years,
additional consideration of up to $52.8M may be payable in cash. The Group has estimated this liability as nil based on the earnings
forecasts (2019: nil).
The Group occasionally receives legal claims arising from its operations in the course of its normal business. Group entities may also
have potential financial liabilities that could arise from historical commercial contracts. At the date of this report the Group has a number
of claims in progress, however it is not possible to estimate the financial effects of these claims should they be successful and, at the date
of this report, the Directors have assessed the possibility of any net outflow of resources embodying economic benefits, which have not
/ 124
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 26. Contingencies (continued)
already been provided in this report, in relation to these matters to be unlikely. The Directors are of the opinion that the disclosure of any
further information on these matters would be prejudicial to the interests of the Group.
Significant judgements and estimates
The Group assessed and applied judgements to determine whether it has a possible or a present obligation and the likelihood of an
outflow of resources being required. A provision is recognised when there is a present obligation that probably requires an outflow of
resources (refer to note 20). Disclosures are made for any possible obligations or present obligations that may, but probably will not,
require an outflow of resources unless the disclosures will prejudice the position of the Group in a dispute with the other party.
Note 27. Commitments
The Group is a lessee of various office properties as well as motor vehicles under non-cancellable lease agreements. Leases are
accounted for as lease liabilities under AASB 16 Leases. Refer to note 15.
Note 28. Events after the reporting period
Black Economic Empowerment Restructure
DRA South Africa Proprietary Limited (“DRA South Africa”) and its subsidiaries which are controlled by the Group are implementing a
restructure of DRA’s South African operations to facilitate the conclusion of a broad-based black economic empowerment (“B-BBEE”)
ownership transaction in terms of which private equity funds managed by Ascension Capital Partners Proprietary Limited (“Ascension
Funds”) will acquire the following interest in the relevant South African group entities:
/ 35% ordinary share interest in DRA South African Group Holdings Proprietary Limited (“DRA SA Group”)
/ 25% ordinary share interest in Minerals Operations Executive Proprietary Limited (“Minopex SA”) and DRA Plant Operations Holdings
Proprietary Limited (“DRA Plant Operations”)
/ 25% ordinary share interest in DRA Projects Group Holdings Proprietary Limited (“DRA Projects Group”)
Main Street 798 Proprietary Limited (RF) (“Main Street”), DRA SA Group’s previous B-BBEE shareholder, will remain indirectly invested in
DRA South Africa as an investor in Ascension.
In terms of the aforementioned restructure, DRA South Africa Group Holdings will replace DRA South Africa as the holding company of the
Group’s South African interests and DRA Projects Group will become the holding vehicle for the Group’s South African projects business.
The result of the restructure of the B-BBEE shareholding and introduction of Ascension as a B-BBEE partner in South Africa is that DRA’s
major operating businesses in South Africa will be certified 51% B-BBEE-owned and address the main procurement criteria set out in the
South African Mining Charter (Mining Charter 3). By addressing these criteria DRA will be able to continue to effectively compete within
the South African market, ensuring a platform for sustained growth.
At the date of this report the restructure had not been completed.
Stockdale Street’s Selective Share Buy Back
On 28 January 2021, the Company entered into a Share Buy Back Agreement with BPESAM IV M Ltd (IVM) and BPESAM IV N Ltd (IVN)
(together known as Limited Partners of Stockdale Street Investment Partnership IV) to purchase 30,000,000 of the shares in the Company.
The Buy-back consideration includes an initial cash consideration of ZAR 550,000,000 ($47,720,000) payable at completion date, a further
cash consideration of $30,280,000 payable prior to 31 December 2021, totalling approximately $78,000,000 and 25,000,000 Upside
Participants Rights (UPR). The UPRs have an exercise price of $3.10 per share with a price ceiling of $6.5 per share. Consequently, the
maximum gain of the UPRs is limited to $3.40 per UPR. In total, the transaction has a maximum value of approximately $163M which
equates to a maximum value of $5.43 per share receivable by BPESAM IV M Ltd and BPESAM IV N Ltd.
DRA Global Annual Report 2020 / ACN 622581935
/ 125
// Financial Statements / Notes to the consolidated financial statements
Note 28. Events after the reporting period (continued)
A report was obtained from an independent expert that the selective Buy-back was fair and reasonable to the shareholders of the Company
(excluding IVM, IVN and their Associates) and approval of the transaction was obtained at a meeting of the shareholders on 1 April 2021.
Impact of COVID-19
Refer to Operating and Financial Review for the impact of COVID-19 on the Group’s result in the current year.
The Group will continue to assess the impact of COVID-19 on existing Projects and Operations businesses. The duration and spread of
the pandemic and regulations imposed by governments continue to be closely monitored to determine any future impact on the Group.
The Group has a stable cash balance and did not require the use of additional credit facilities.
Other
Kenneth Thomas, Rafael Eliasov and Jean Nel resigned from the position of Non-executive Directors on 11 January 2021, 28 January
2021 and 29 January 2021 respectively. Ben Secrett was appointed as Company Secretary on 1 January 2021.
No other matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly affect the Group’s
operations, the results of those operations, or the Group’s state of affairs in future financial years.
Group structure and other information
Note 29. Related party transactions
Parent entity
DRA Global Limited is the parent entity. Parent entity information is set out in note 30.
Subsidiaries
Interests in material subsidiaries are set out in note 32.
Associates
Interests in associates are set out in note 33.
Joint operations
Interests in joint operations are set out in note 34.
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Share-based payments
Transactions with related parties
2020
$’000
4,057,706
100,524
-
-
531,742
2019
$’000
3,928,564
93,489
-
884,863
77,415
4,689,972
4,984,331
During the year, a total of 82,786 shares at an average price of $7.33 each have been bought back from key management personnel.
/ 126
DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 29. Related party transactions (continued)
Mr Greg McRostie, an Executive Director of the Company, is one of the former Minnovo Shareholders. During the year, the Company
executed a formal put option agreement with the former Minnovo Shareholders. Refer to note 21 for more information.
Loans to related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Loans to key management personnel
2020
$
2019
$
2,213,155
3,079,027
The loans were advanced to key management personnel (KMP) to enable the purchase of ordinary shares in the Group between 2014
and 2017. No further such loans were advanced since then. Some of these transactions took place indirectly with KMP nominated family
trusts, family corporate entities or authorised entities as approved by the shareholders. The loans are South African Rand denominated
and accrue interest at the South African official prime interest rate less 2.5%, currently 4.5% (2019: 7.25%) and do not have fixed terms of
repayment. Dividends that accrue to the underlying shares are applied to service the loans. Refer to note 22.
The above does not include a loan owed by VMF Investments Ltd of $23,839,389, in relation to purchase of the shares in the Company
where Andrew Naude is the one of the named beneficiaries. This entity is owned and controlled by the VMF Investment Trust. Andrew
Naude is not a trustee of the VMF Investment Trust nor does he exercise control over VMF Investments Ltd or the VMF Investment Trust.
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Total comprehensive (loss)/income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Non-distributable reserve
Put option reserve
Retained profits
Total equity
2020
$’000
(3,320)
(3,320)
2020
$’000
25,135
691,137
38,296
38,606
Parent
2019
$’000
52,831
52,831
Parent
2019
$’000
9,279
668,447
(4,269)
(5,627)
617,079
617,147
11
(18,890)
54,331
652,531
(723)
-
57,650
674,074
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// Financial Statements / Notes to the consolidated financial statements
Note 30. Parent entity information (continued)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 31 December 2020 (2019: nil).
Contingent liabilities
DRA Global Limited has provided certain parent company undertakings and indemnities in respect of contract performance by members
of the Group. DRA Global Limited is not party to a Deed of Cross Guarantee but has provided letters of support to certain entities of the
Group.
Note 31. Business combinations
UMM Contracting
On 1 September 2020, the Group acquired a 60% interest in UMM Contracting Pty Ltd (“UMM”) for a net consideration of $1.5M,
comprising cash consideration ($0.4M) and contingent consideration ($1.1M) payable in FY2022. The Group has the option to acquire a
further 20% of UMM’s shares from the sellers expiring a year after the issuing of UMM’s 31 December 2021 financial statements.
Prior year
The Group acquired New Senet Pty Ltd in FY2019 which was provisionally accounted under AASB 3 Business Combinations.
No adjustments were required for the purchase price allocation accounting made in FY2019.
Note 32. Interests in subsidiaries
Material subsidiaries of the Group, which are those with the most significant contribution to the Group’s net profit/(loss) or net assets, are
as follows:
Name
DRA Pacific Pty Ltd
G&S Engineering Services Pty Ltd
G&S Projects Australia Pty Ltd
DRA Americas Inc. (Canada)
Senet Guinea SARLU
Minopex Lesotho Pty Ltd
Ensermo Ltd
DRA Saudi Arabia LLC
DRA Projects Pty Ltd
DRA Projects SA Pty Ltd
New SENET Pty Ltd
Minerals Operations Executive Pty Ltd
DRA Americas Inc. (USA)
Principal place of business/Country of
incorporation
Australia
Australia
Australia
Canada
Guinea
Lesotho
Mozambique
Saudi Arabia
South-Africa
South-Africa
South-Africa
South-Africa
United States
Ownership interest
2020
%
2019
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
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// Financial Statements / Notes to the consolidated financial statements
Note 32. Interests in subsidiaries (continued)
Recognition and measurement
Subsidiaries are all entities (including structured or special purpose entities) over which the Group has control. The Group controls an
entity when the Group 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control ceases. In determining whether control exists the Group
considers all relevant facts and circumstances, including:
/ The size of the company’s voting rights relative to both the size and dispersion of other parties who hold voting rights
/ Substantive potential voting rights held by the company and by other parties
/ Other contractual arrangements
/ Historic patterns in voting attendance.
The results of subsidiaries (including special purpose entities) are included in the consolidated Group annual financial statements from the
effective date of acquisition to the effective date of disposal.
Adjustments are made when necessary to the Group annual financial statements of subsidiaries to bring their accounting policies in line
with those of the Group.
Subsidiaries with different year-ends have been consolidated on the same accounting period.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the Group’s interest
therein, and are recognised within equity. The proportion of the loss of subsidiaries attributable to non-controlling interests are allocated to
the non-controlling interest even if this results in a debit balance being recognised for non-controlling interest.
Changes in ownership interest in subsidiaries without a change in control
Transactions which result in changes in ownership levels, where the Group has control of the subsidiary both before and after the
transaction are regarded as equity transactions and are recognised directly in the statement of changes in equity.
The difference between the fair value of the consideration paid or received and the movement in non-controlling interest for such
transactions is recognised in equity attributable to the owners of the parent.
Where a subsidiary is disposed of and a non-controlling shareholding is retained, the remaining investment is measured to fair value, with
the adjustment to fair value recognised in profit or loss as part of the gain or loss on disposal of the controlling interest.
Disposal of subsidiaries
When the Group ceases to have control of any retained interest in the entity, it is remeasured to its fair value at the date when control
is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related
assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
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// Financial Statements / Notes to the consolidated financial statements
Note 33. Interests in associates
Individually immaterial associates
Interests in associates are accounted for using the equity method of accounting. No individual associates is material to the Group.
Name
LSL Consulting (Pty) Ltd
Tekpro Projects (Pty) Ltd
FineTech Minerals (Pty) Ltd
Principal place of business/Country of
incorporation
South-Africa
South-Africa
South-Africa
Aggregate carrying amount of individually immaterial associates
Aggregate amounts of the Group's share of:
Profit from continuing operations
Dividends paid
Cost of initial investment
Other comprehensive income
Balance at 31 December 2020
Ownership interest
2020
%
25.00%
25.00%
25.00%
2020
$’000
2,154
367
(372)
124
(283)
(164)
2019
%
25.00%
25.00%
-
2019
$’000
2,318
580
(730)
-
66
(84)
There were no impairments of equity accounted associates recognised during the reporting period (2019: nil).
Recognition and measurement
An investment in associate is accounted for using the equity method, except when the investment is classified as held-for-sale in
accordance with AASB 5 Non-current Assets Held-For-Sale and Discontinued Operations. Under the equity method, investments in
associates are carried in the consolidated statement of financial position at cost adjusted for post acquisition changes in the Group’s share
of net assets of the associate, less any impairment losses.
Any goodwill on acquisition of an associate is included in the carrying amount of the investment, however, a gain on acquisition is
recognised immediately in profit or loss.
Profits or losses on transactions between the Group and an associate are eliminated to the extent of the Group’s interest therein.
When the Group reduces its level of significant influence or loses significant influence, the Group proportionately reclassifies the related
items which were previously accumulated in equity through other comprehensive income to profit or loss as a reclassification adjustment.
In such cases, if an investment remains, that investment is measured to fair value, with the fair value adjustment being recognised in profit
or loss as part of the gain or loss on disposal.
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DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 34. Interests in joint operations
The Group has recognised its share of jointly held assets, liabilities, revenues and expenses of joint operations. These have been
incorporated in the financial statements under the appropriate classifications. No individual joint operation is material to the Group.
Name
Principal place of business/Country of
incorporation
Nokeng Joint Venture (Unincorporated)
South-Africa
Ownership interest
2020
%
2019
%
50.00%
50.00%
Recognition and measurement
Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and
obligations of each investor.
Investments in joint operations are proportionately consolidated from the date on which the Group has the power to exercise joint control,
up to the date on which the power to exercise joint control ceases. This excludes cases where the investment is classified as held-for-sale
in accordance with AASB 5 Non-current Assets Held-For-Sale and Discontinued Operations.
The Group’s share of assets, liabilities, income, expenses and cash flows of jointly controlled entities are combined on a line by line basis
with similar items in the consolidated Group annual financial statements.
When the Group loses joint control, the Group proportionately reclassifies the related items which were previously accumulated in equity
through other comprehensive income to profit or loss as a reclassification adjustment. In such cases, if an investment remains, that
investment is measured to fair value, with the fair value adjustment being recognised in profit or loss as part of the gain or loss on disposal.
Significant judgements and estimates
The two parties have direct rights to the assets of the joint arrangement and are jointly and severally liable for the liabilities incurred by the
joint arrangement. This entity is therefore classified as a joint operation and the Group recognises its direct right to the jointly held assets,
liabilities, revenues and expenses.
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// Financial Statements / Notes to the consolidated financial statements
Note 35. Cash flow information
Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
Adjustments for:
Impairment of goodwill
Net gain on disposal of property, plant and equipment
Net fair value gain on other financial assets
Depreciation
Amortisation
Finance income
Foreign exchange differences (i)
Services rendered paid in shares
Non-cash employee benefits expense – share-based payments
Change in operating assets and liabilities:
Decrease in trade and other receivables
Increase in contract assets
Decrease/(increase) in inventories
Increase/(decrease) in trade and other payables
Increase/(decrease) in contract liabilities
Decrease in other provisions
Increase/(decrease) in tax
Net cash from operating activities
2020
$’000
25,619
5,714
(1,053)
(566)
16,879
8,990
(2,167)
(7,248)
-
2,011
26,068
(16,605)
1,019
32,278
8,429
(7,604)
10,110
101,874
2019
$’000
36,009
-
(378)
(1,096)
17,811
8,545
(2,806)
1,003
250
301
38,205
(4,545)
(947)
(33,023)
(5,147)
(25,013)
(4,123)
25,046
(i) The adjustment of foreign exchange differences relate to non-cash related foreign exchange gain/loss recorded in profit or loss.
Non-cash investing and financing activities
Non-cash investing and financing activities disclosed in other notes are:
/ Addition of right-of-use assets - note 15
/ Settlement of shareholder loans with share buy-back - note 22.
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DRA Global Annual Report 2020 / ACN 622581935
// Financial Statements / Notes to the consolidated financial statements
Note 35. Cash flow information (continued)
Changes in liabilities arising from financing activities
Balance at 1 January 2019
Net cash used in financing activities
Loans received
New leases
Changes through business combinations
Balance at 31 December 2019
Net cash used in financing activities
Loans received
New leases
Changes through business combinations
Exchange differences
Balance at 31 December 2020
Lease
liabilities
$’000
22,421
(6,097)
-
6,420
364
23,108
(8,456)
-
27,222
49
(1,251)
40,672
Other
interest
bearing
liabilities
$’000
-
(14,701)
15,022
-
-
321
(2,157)
2,579
-
478
(39)
1,182
Total
$’000
22,421
(20,798)
15,022
6,420
364
23,429
(10,613)
2,579
27,222
527
(1,290)
41,854
Note 36. Share-based payments
The expense recognised for share-based payments during the year is shown in the table below:
Legacy Long-Term Incentive Plan (Legacy LTIP)
Non-executive Directors Share Option Plan
One-off Share Option Plan
Employee Share Option Plan
Legacy LTIP
2020
$
80,571
132,000
596,907
1,201,937
2,011,415
2019
$
300,608
-
-
-
300,608
On 1 July 2016, a group of management personnel (Participants) were issued 10,000,000 share appreciation rights (SARs) of DRA Group
Holdings Pty Ltd (DRAGH). The rights to acquire shares at ZAR 30 (A$2.73) each were intended to vest in three equal tranches on the
2nd, 3rd and 4th anniversary of the grant date based on service conditions only and the options to acquire shares at ZAR 30 would remain
exercisable for a period of 5 years thereafter.
The share-based payment in respect of the SARs was determined at grant date (1 July 2016) using the Black-Scholes model with the
following inputs:
Grant date
Expected volatility
Dividend Yield
Risk-free interest rate
Date of vesting
Share price of DRAGH at grant date*
Fair value per SAR
Tranche 1
Tranche 2
Tranche 3
1 July 2016
1 July 2016
1 July 2016
10%
7%
7.7%
10%
7%
7.8%
10%
7%
7.9%
30 June 2018
30 June 2019
30 June 2020
$2.73
$0.21
$2.73
$0.22
$2.73
$0.22
* As a private company, the DRAGH share price at grant date was not determined based on an observable market price. The share
price was determined with reference to recent arms-length share transactions at the time.
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// Financial Statements / Notes to the consolidated financial statements
Note 36. Share-based payments (continued)
In July 2018, DRAGH was acquired by DRA Global Limited through a Scheme of Arrangement. DRAGH restructured the SARs
arrangement and replaced the remaining SARs with an issue of 5,076,620 ordinary DRAGH shares at a ratio of approximately
0.6 shares per SAR. The modification has not resulted in an incremental fair value under AASB 2 Share-Based Payments and
consequently the expense for the original grant will continue to be recognised as if the terms had not been modified. These ordinary
DRAGH shares participated in the Scheme of Arrangement as ordinary shareholders in DRAGH and were replaced by ordinary
shares of DRA Global Limited. The Participants agreed to restrictions on the sale of the shares received pursuant to this restructure,
specifically restrictions on the sale of these shares prior to specific dates replicating the original vesting profile of the SARs - i.e. sale of
1/3rd restricted until after each of 30 June 2018, 2019, 2020, and further agreed to sell these shares back to the Company at nominal
value if they leave the employment of the Group before these dates.
The following table shows the number of DRA Global Limited’s shares vested and outstanding at the beginning and end of the reporting
period after it replaced DRAGH shares and the SARs:
As at 1 January
Granted during the year
Vested during the year
Forfeited during the year
As at 31 December
Employee Incentive Scheme
2020
Number
2019
Number
1,331,244
3,409,126
-
-
(1,331,244)
(1,515,309)
-
-
(562,573)
1,331,244
A new DRA Global Limited Employee Share Scheme titled “Incentive Option Plan” (the Plan) was established by the Group and approved
by shareholders at the 2019 Annual General Meeting, whereby the Group may, at the discretion of the People, Culture and Remuneration
Committee, grant options over ordinary shares in the Company to certain eligible key employees of the Group. The options are issued
for nil exercise price and are granted in accordance with performance guidelines established by the People, Culture and Remuneration
Committee.
One-off Share Option Plan
On 14 May 2020, the Company granted a one-off share option offer to certain key employees who may not have qualified as participants
of the 2016 Legacy LTIP in recognition of their significant contribution to the Group. A total of 495,000 of these zero exercise price options
(ZEPO) were granted. The ZEPO will vest at the end of 30 June 2022 subject to the employees remaining in the Company. Once vested,
the options remain exercisable for a period of two years. The assessed fair value at grant date of options granted was $4 per option. Given
there was no observable price for the share price of the Company, the fair value at grant date was determined using internal valuation
model using earnings multiples method based on market conditions at grant date. The average earning multiple was determined to be
5.7 times on grant date.
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// Financial Statements / Notes to the consolidated financial statements
Note 36. Share-based payments (continued)
A summary of the options granted under the Plan is set up below:
As at 1 January
Granted during the year
As at 31 December
Forfeited during the year
Vested and exercisable at 31 December
Number of
options
2020
-
495,000
495,000
-
-
Weighted
average
exercise
price
2020
$0.00
$0.00
$0.00
$0.00
No options expired during the period covered by the above tables.
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant date
14 May 2020
Total
Expiry date
Exercise
Price
30 June 2024
$0.00
Weighted average remaining contractual life of options outstanding at end of period
Non-executive Directors (NED) Share Option Plan
Number
of Share
options
31
December
2020
495,000
495,000
3.5 years
Four Non-executive Directors were granted options to the value of 25% of their remuneration. The options will only be issued when the
Company is listed on the ASX by 30 June 2021 or a lump sum cash payment will be paid unless a later date has been agreed. The number
of options to be issued is based on the fair value of the options to be determined after the Company is listed on the ASX. The arrangement
is accounted as equity-settled at the reporting date as the likelihood of listing on the ASX is considered probable at the reporting date.
There are no vesting conditions attached.
FY2020 Share Option Plan
On 31 December 2020, the Company granted options to the value of $7,240,585 to key employees where the number of options to be
issued will be determined based on the Company’s share price after listing. FY2020 Share Option Plan will vest subject to satisfaction of
Absolute Total Shareholders Return (ATSR) (50% of the grant value) and Earnings Per Share (EPS) (50% of the grant value) performance
hurdles. These performance hurdles are mutually exclusive so that if only one of the hurdles is satisfied, vesting occurs for that performance
hurdle.
EPS performance will be assessed against compound annual growth rate targets set by the Board. The target set for FY2020 Share
Option Plan is currently 8% compound average growth rate. If the compound average growth rate over FY2020 to FY2022 is 8% or
greater, the grant will become 100% performance qualified. A minimum of 25% or 50% will vest if at least 2% or 4% compound growth
over FY2020 to FY2022 performance period is achieved respectively.
ATSR performance is measured based on 10-day volume weighted average share price (VWAP) of the Company from date of listing and
compare to the 30-day VWAP till 31 March 2023 (inclusive) assuming dividends are reinvested. If the ATSR from the date of listing to 31
March 2023 is 8% or greater, the grant will become 100% performance qualified. A minimum of 25% or 50% will vest if at least 2% or 4%
of ATSR is achieved from the date of listing to 31 March 2023 respectively. The expiry date of the options is 31 March 2025 with a weighted
average remaining contractual life of options of 4.25 years at the reporting period.
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// Financial Statements / Notes to the consolidated financial statements
Note 36. Share-based payments (continued)
The assessed fair value at grant date for the options issued to the value of $7,240,585 was independently determined to be $4,807,748
after taking into account the performance hurdles and other assumptions. The fair value per option can only be determined once the
number of options to be issued is determined after the Company is listed on the ASX. The fair value of the options is measured using
Monte-Carlo simulation and Binomial models with the following inputs as at 31 December 2020:
Assumptions
Grant Date
Amount granted
Fair value on amount granted
Vesting Date
Expiry Date
Expected Future Volatility
Exercise Price
Risk Free Rate
Dividend Yield
Share price at grant date*
ATSR Performance Hurdle
EPS Performance Hurdle
31-Dec-20
$3,620,293
$1,419,154
31-Mar-23
31-Mar-25
35%
Nil
0.34%
3%
N/A
31-Dec-20
$3,620,293
$3,388,594
31-Mar-23
31-Mar-25
35%
Nil
0.34%
3%
N/A
* Whilst the share price of the Company has not been determined at the grant date, the share price has an inverse relationship between
the number of options and the share price of the Company, due to the product of the number of options and the share price being
equal to the value of the options to be issued. Therefore a range of different indicative share prices were used in determining the
share-based payment expenses of the options.
Recognition and measurement
The fair value of equity-settled share-based payments granted to employees under the Employee Incentive Scheme is recognised as an
employee benefit expense over the relevant service period, being the vesting period of the share-based payments with a corresponding
increase in equity. The fair value is measured at the grant date of the share-based payments including any market performance condition
and impact of any non-vesting conditions if any. At the end of each period, the Group revises its estimates of the number of options that
are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates,
if any, in profit or loss, with a corresponding adjustment to equity.
Significant judgements and estimates
Valuation of share-based payments
The Group is required to estimate the fair value of equity-settled share-based payment transactions with employees at the grant date.
Estimating the fair value requires determination of the most appropriate valuation model which is dependent on the terms and conditions of
the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the earning multiples,
expected life of the share rights, volatility and dividend yield where applicable. The Group has applied the earning multiples model or
Black Scholes option pricing model and Binomial Model to estimate the fair value of the rights with non-market-based vesting conditions.
A hybrid employee share option pricing model and the Monte Carlo simulation have been applied to estimate the fair value of rights with
market-based vesting conditions.
Share-based payment expense
The recognition of share-based payment expense involves making estimates and assumptions about the number of equity instruments
being vested. The vesting of these equity instruments is subject to achievement of predetermined market, non-market performance
conditions and service conditions. If the non-market performance conditions or service conditions are not met during the vesting period
then the estimated number of equity instruments can be revised, reducing the share-based payment expense.
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// Financial Statements / Notes to the consolidated financial statements
Note 37. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO Audit (WA) Pty Ltd, the auditor of the
Company, its network firms and unrelated firms:
Audit services - BDO Audit (WA) Pty Ltd
Audit or review of the financial statements
Other services - BDO Audit (WA) Pty Ltd
Tax advice services
Corporate advisory services
Remuneration advisory services
Total services - BDO Audit (WA) Pty Ltd
Audit services - BDO network firms
Audit or review of the financial statements
Other services - BDO network firms
Tax advice services
Corporate advisory services
Total services - BDO network firms
Audit services - other firms (non-BDO)
Audit or review of the financial statements
Other services - other firms (non-BDO)
Preparation of the tax return
Total services from other firms (non-BDO)
2020
$
2019
$
901,923
686,655
237,455
25,228
153,900
416,583
155,246
205,552
108,399
469,197
1,318,506
1,155,852
870,798
979,885
268,070
198,373
466,443
206,377
64,711
271,088
1,337,241
1,250,973
135,013
192,395
98,460
233,473
18,564
210,959
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// Financial Statements / Notes to the consolidated financial statements
Note 38. New standards and interpretations
New or amended Accounting Standards and Interpretations adopted
The Group has applied the following standards and amendments for the first time for their annual reporting period commencing
1 January 2020:
/ AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material AASB 101 and AASB 108;
/ AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business AASB 3;
/ AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform AASB 7, AASB 9 and AASB 139.
/ AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet issued in
Australia AASB 1054
/ Conceptual Framework for Financial Reporting and AASB 2019-1 Amendments to Australian Accounting Standards – References to
the Conceptual Framework.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Group.
New Accounting Standards and Interpretations issued but not yet effective
A number of new standards, amendments to standards and interpretations are effective for annual reporting periods beginning on or after
1 January 2021, and have not been applied in preparing these consolidated financial statements. The Group’s assessment of the impact
of these new standards, amendments to standards and interpretations is set out below.
Description
AASB 2020-4 Amendments to Australian Accounting Standards –COVID-19-related Rent
Concessions (AASB 16)
AASB 2020-7 Amendments to Australian Accounting Standards –COVID-19-related Rent
Concessions: Tier 2 Disclosures (AASB 16 & AASB 1060)
Impact on Group Financial Report
It is not expected that there will be a material impact to the Group as a result of this amendment
to the standard.
Application of standard
1 June 2020
Description
AASB 2020-8 Amendments to Australian Accounting Standards –Interest Rate Benchmark
Reform Phase 2 (AASB 9, AASB 139, AASB 7, AASB 4 and AASB 16)
Impact on Group Financial Report
It is not expected that there will be a material impact to the Group as a result of this amendment
to the standard.
Application of standards
1 January 2021
Description
AASB 2020-3 Amendments to Australian Accounting Standards –Annual Improvements 2018–
2020 and Other Amendments (AASB 1, AASB 3, AASB 9, AASB 116, AASB 137 & AASB 141)
AASB 2020-3 Amendments to Australian Accounting Standards –Annual Improvements to
IFRS Standards 2018–2020 and Other Amendments (AASB 1, AASB 3, AASB 9, AASB 116,
AASB 137 & AASB 141)
Impact on Group Financial Report
It is not expected that there will be a material impact to the Group as a result of this amendment
to the standard.
Application of standards
1 January 2022
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// Financial Statements / Notes to the consolidated financial statements
Note 38. New standards and interpretations (continued)
Description
AASB 2014-10 Amendments to AASs – Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture (AASB 10 & AASB 128)
Impact on Group Financial Report
It is not expected that there will be a material impact to the Group as a result of this amendment
to the standard.
Application of standards
1 January 2022
Description
AASB 2020-1 AASB 2020-6 Amendments to Australian Accounting Standards –Classification
of Liabilities as Current or Non-current (AASB 101)
Impact on Group Financial Report
It is not expected that there will be a material impact to the Group as a result of this amendment
to the standard.
Application of standards
1 January 2023
Several other amendments to standards and interpretations will apply on or after 1 January 2021, and have not yet been applied, however
they are not expected to impact the Group’s annual consolidated financial statements.
Note 39. Other significant accounting policies
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Dividends
Dividends are recognised, in profit or loss, when the Group’s right to receive payment has been established.
Interest
Interest is recognised, in profit or loss, using the effective interest rate method unless it is doubtful.
Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and
the Group will comply with all attached conditions.
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 the Group’s 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.
A liability is classified as current when: it is either expected to be settled in the Group’s normal operating cycle; it is held primarily for
the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
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// Financial Statements / Notes to the consolidated financial statements
Note 39. Other significant accounting policies (continued)
Derivative financial instruments
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not
qualify for hedge accounting are recognised immediately in profit or loss and are included in other gains/(losses).
Investments and financial assets
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Classification and initial measurement of financial assets
Financial assets are classified according to their business model and the characteristics of their contractual cash flows and are initially
measured at fair value adjusted for transaction costs (where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as hedging instruments, are
classified into the following three categories:
/ Financial assets at amortised cost
/ Financial assets at fair value through profit or loss (FVTPL)
/ Equity instruments at fair value through the statement of other comprehensive income (FVTOCI)
Financial assets at FVTPL
Financial assets at FVTPL comprise quoted and unquoted equity instruments which the Group had not irrevocably elected, at initial
recognition or transition, to classify at FVOCI. This category would also include debt instruments whose cash flow characteristics fail the
SPPI (Solely Payments of Principal and Interest) criterion or are not held within a business model whose objective is either to collect
contractual cash flows, or to both collect contractual cash flows and sell.
Financial assets at amortised cost
Financial assets with contractual cash flows representing SPPI and held within a business model of ‘hold to collect’ contractual cash
flows are accounted for at amortised cost using the effective interest method. The Group’s trade and most other receivables fall into this
category of financial instruments.
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model
whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset represent
contractual cash flows that are solely payments of principal and interest.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at
fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose
of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Group intends to hold for the
foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
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// Financial Statements / Notes to the consolidated financial statements
Note 39. Other significant accounting policies (continued)
Impairment
The Group assesses on a forward looking basis the expected credit losses (ECL) associated with its debt instruments carried at amortised
cost and FVTOCI.
The impairment methodology applied depends on whether there has been a significant increase in credit risk. The Group makes use
of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance at the
amount equal to the expected lifetime credit losses. In using this practical expedient, the Group uses its historical experience, external
indicators and forward looking information to calculate the expected credit losses using a provision matrix. For other financial assets, the
ECL is based on either the 12-month or lifetime ECL. The 12-month ECL is the portion of lifetime ECLs that results from default events
on a financial instrument that are possible within 12 months after the reporting date. When there has been a significant increase in credit
risk since origination, the allowance will be based on the lifetime ECL. In all cases, the Group considers that there has been a significant
increase in credit risk when contractual payments are more than 30 days past due. The Group considers a financial asset in default when
contractual payment are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when
internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group.
Leases
Group as lessor
The Group enters into lease agreements as a lessor with respect to some of its water treatment plants.
Leases for which the Group is a lessor are classified as finance leases. Whenever the terms of the lease transfers substantially all the risks
and rewards of ownership to the lessee, the contract is classified as a finance lease.
Impairment of non-financial assets
The Group assesses, at the end of each reporting period, whether there is any indication that an asset may be impaired. If any such
indication exists, the Group estimates the recoverable amount of the asset.
Irrespective of whether there is any indication of impairment, the Group also:
/
/
tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing
its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every
period.
tests goodwill acquired in a business combination for impairment annually.
If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to
estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs
is determined.
The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value-in-use.
If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable
amount. That reduction is an impairment loss.
An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or
loss. Any impairment loss of a revalued asset is treated as a revaluation decrease. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units, or groups
of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets and
liabilities of the acquiree are assigned to those units or groups of units.
The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being
operating segments.
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An impairment loss is recognised for cash-generating units if the recoverable amount of the unit is less than the carrying amount of the
units. The impairment loss is allocated to reduce the carrying amount of the assets of the unit in the following order:
/
/
first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit and
then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.
The Group assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets
other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets
are estimated.
The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised
immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.
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// Financial Statements / Directors’ declaration
Directors’ declaration
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 Group’s financial position as at 31 December 2020 and of
its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
On behalf of the Directors
___________________________
___________________________
Peter Mansell
Chairman
15 April 2021
Andrew Naude
Chief Executive Officer
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// Financial Statements / Auditor’s independence declaration
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF DRA GLOBAL LIMITED
As lead auditor of DRA Global Limited for the year ended 31 December 2020, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of DRA Global Limited and the entities it controlled during the period.
Neil Smith
Director
BDO Audit (WA) Pty Ltd
Perth, 15 April 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
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// Financial Statements / Independent auditor’s report to the members of DRA Global Limited
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of DRA Global Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of DRA Global Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2020, the
consolidated statement of profit or loss, the consolidated statement of 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 report, 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)
(ii)
Giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its
financial performance for the year ended on that date; and
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 Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We 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.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
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Revenue from Contracts with Customers
Key audit matter
How the matter was addressed in our audit
The Group generates a significant portion of its
Our procedures included, but were not limited to the
revenue from long-term customer contracts for the
following:
design, procurement, construction and the operation
and maintenance of mineral process plants in the form
of EPC and EPCM contracts (“construction contracts”)
as disclosed in Note 3 of the financial report.
Revenue recognition is a key audit matter due to the
significance of revenue generated from construction
contracts and the accounting for construction contracts
involving significant levels of judgement around:
Identifying the performance obligation;
•
Evaluating management’s processes in the
preparation, review and authorisations of
monthly project review reports for significant
contracts;
•
Obtaining an understanding of the terms and
conditions of a sample of contracts with
customers and comparing to management’s
assessment of the contract;
•
Assessing forecast costs to complete through
Determining the transaction price;
discussions with project managers and
Assessing the stage of completion of satisfying
the identified performance obligation;
Forecasting the costs to complete the
contractual works.
commercial personnel and through these
discussions enquiring as to challenges or issues
faced in completing the contractual work and
considering any resulting impact on revenue
recognition;
Testing a sample of actual costs incurred on
contracts with customers and agreeing to
supporting documentation;
Assessing management’s determination of the
transaction price for a sample of contracts with
customers and challenging the estimates made
on variable consideration and uncertified
claims;
Considering exposure to penalties and liquidated
damages for late delivery of contract works;
Reviewing the accounting for foreign exchange
on amounts invoiced in advance of recognition
of revenue; and
Considering the adequacy of disclosures in Note
3 of the financial report.
•
•
•
•
•
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// Financial Statements / Independent auditor’s report to the members of DRA Global Limited
Impairment testing of Goodwill
Key audit matter
How the matter was addressed in our audit
Note 16 of the financial report discloses the carrying
Our procedures included, but were not limited to the
value of goodwill and the assumptions which have been
following:
used by the Group in testing for impairment. As
required by Australian Accounting Standards, the Group
has performed an annual impairment test for each cash
generating unit (“CGU”) to which goodwill has been
allocated to determine whether the recoverable
amount exceeds or is below the carrying amount.
Impairment testing of goodwill was assessed as being a
key audit matter as management’s assessment of the
recoverable amount is based on value in use (“VIU”)
cash flow forecasts which requires estimates and
judgements about future financial performance.
The VIU calculations include significant judgements
such as:
Contract pipeline;
Long term growth rates;
Forecast gross profit margins; and
Discount rates.
•
Evaluating management’s determination of the
Group’s CGU’s, including the change in CGU
allocation from the prior year to ensure they are
appropriate, including being at a level no higher
than the operating segments of the Group;
•
Evaluating the processes and controls in place
over the Groups budgeting process which
produces the forecasts for FY21 and FY22 which
the VIU cash flow forecasts are based on;
•
•
•
•
•
•
•
•
Understanding the business processes
undertaken by management in assessing for
impairment;
Holding discussions with management to
understand the financial performance of each
CGU and whether there were any events or
circumstances that would indicate that goodwill
is impaired;
Challenging key assumptions used in the VIU
such as gross profit margins and probabilities
applied to pipeline opportunities;
Involving our internal valuation specialists in
assessing the discount rates applied to each
CGU;
Testing the arithmetic accuracy of the VIU
models, including cash flow forecasts;
Re-calculating the impairment charge
recognised for the Americas CGU and comparing
against the recorded amount;
Performing sensitivity analysis to stress test the
recoverable amount using different key
assumptions; and
Considering the adequacy of disclosures in Note
16 of the financial report.
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// Financial Statements / Independent auditor’s report to the members of DRA Global Limited
Onerous Contract Provisions and Contingent Liabilities
Key audit matter
How the matter was addressed in our audit
At 31 December 2020, the Group’s statement of
Our procedures included, but were not limited to the
financial position includes a provision for loss making
following:
contracts as disclosed in Note 20. In addition, at times
the Group is exposed to risks associated with claims,
counterclaims, disputes and litigation for its contracts
with customers that may be material.
There is a significant level of estimation and
judgement involved in the calculation of the provision.
While the assessment of potential liabilities associated
with claims, counterclaims, disputes and litigation can
•
•
Read the minutes of the Group’s key governance
meetings (Audit & Risk Committee, Board of
Directors) and reviewing the Group risk register;
Reviewed position papers prepared by
management on key EPC contracts with
customers, including the updated assessment of
provisions and contingent liabilities;
require significant judgement to be exercised based on
•
Agreeing details included in management’s
the information available to the Group at the time.
This was determined to be a key audit matter due to
the nature of the provision and its material impact on
the financial report.
position papers to relevant supporting
documentation and holding discussion with
project managers and regional executives to
obtain an update on the status;
•
•
Reviewing the year end provisions balance and
obtaining support for movements in the
provision during the year;
Holding discussions with in-house legal counsel
and external legal advisors on the status of
certain matters relevant to the provisions and
contingent liabilities;
•
Considering the adequacy of disclosures in Note
20 and Note 26 of the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in the Company’s 2020 Annual Report, but does not include the directors’
report, remuneration report, financial report and our auditor’s report thereon, which we obtained
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the Annual
Report after that date.
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// Financial Statements / Independent auditor’s report to the members of DRA Global Limited
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above 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 on the other information that we obtained prior to the date
of this auditor’s report, 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.
When we read the full annual report, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to the directors and will request that it is corrected. If it is
not corrected, we will seek to have the matter appropriately brought to the attention of users for
whom our report is prepared.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
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A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.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 in the directors’ report for the year ended 31
December 2020.
In our opinion, the Remuneration Report of DRA Global Limited, for the year ended 31 December 2020,
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.
Neil Smith
Director
Perth, 15 April 2021
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// Corporate Directory
CORPORATE DIRECTORY
Directors*
Peter Mansell
Andrew Naude
Non-executive Director and
Chairman
Managing Director and
Chief Executive Officer
Kathleen Bozanic
Non-executive Director
Lee (Les) Guthrie
Non-executive Director
Paulus (Paul) Lombard Non-executive Director
Company secretary
Ben Secrett
Registered office and business address
Level 8, 256 Adelaide Terrace
Perth WA 6000
Australia
Telephone: +61 (0)8 6163 5900
Postal address
PO Box 3130
East Perth WA 6892
Australia
Auditor
BDO Audit (WA) Pty Ltd
38 Station Street Subiaco
WA 6008 Australia
Share register
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000, Australia
and at
Rosebank Towers
15 Biermann Avenue, Rosebank
2196, Gauteng
South Africa
Telephone: +61 (0)8 9323 2000 (Inside Australia)
Telephone: +61 (0)3 9415 4000 (Outside Australia)
Facsimile: +61 (0)3 9473 2500
www.computershare.com
Banker
HSBC
Level 1, 188-190 St George’s Terrace
Perth WA 6000, Australia
Website
www.draglobal.com
* As at 14 May 2021
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Head office
Level 8, 256 Adelaide Terrace
Perth WA 6000 / Australia
Telephone / +61 (0)8 6163 5900
Postal address
PO Box 3130
East Perth WA 6892 / Australia
DRA Global Annual Report 2020 / ACN 622581935
draglobal.com
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