ANNUAL REPORT
2022
Macmahon Holdings Limited (ACN 007 611 485) is the
parent company of the Macmahon group of companies.
In this Report, unless otherwise stated, references to
‘Macmahon’, the ‘Company’, or the 'Group' refer to
Macmahon Holdings Limited and its controlled entities.
The information in this Report covers all offices, sites,
and facilities wholly owned and operated by Macmahon,
including the operational footprint that covers
Macmahon Holdings Limited and its subsidiaries.
CONTENTS
2
4
6
Year at a Glance
Our Business
Our Capabilities
8
Vision, Values
and Strategy
16
Operational and
Financial Review
10
Letter from
the Chair
40
12
CEO and
MD Report
44
Sustainability
Directors’ Report
50
Remuneration
Report
66
Financial
Statements
122
Directors’
Declaration
124
130
132
Independent
Auditor’s Report
Summary of
Consolidated Reports
ASX Additional
Information
136
Corporate Directory
and Glossary
1
YEAR AT A GLANCE
FINANCIAL YEAR 2022 HIGHLIGHTS
FINANCIALS
Revenue
$1.7bn
Underlying EBITDA
Underlying EBIT (A)
$291m
$101m
FY20
FY21
FY22
1.38bn
1.35bn
Underlying Operating
Cash Flow
Order Book
1.7bn
$270m
$5.0bn
REVENUE DIVERSIFICATION
Commodity
Commodity
Commodity
Commodity
4%
4%
4%
4%
Activity
Activity
Activity
Activity
11%
11%
11%
11%
Country/Region
Country/Region
Country/Region
Country/Region
Gold
Gold
22%
Copper/Gold
Copper/Gold
Met Coal
Met Coal
Other
Other
22%
Gold
Gold
Copper/Gold
Copper/Gold
22%
22%
Met Coal
Met Coal
Other
Other
Surface
Underground
Mining Support
Services
Surface
Surface
Surface
Underground
Underground
Underground
Mining Support
Mining Support
Mining Support
Services
Services
Services
25%
25%
25%
53%
21%
21%
53%
53%
53%
21%
21%
Client
Client
Client
25%
64%
64%
64%
64%
18%
18%
18%
17%
17%
17%
Australia
Australia
Southeast
Southeast
Asia
Asia
Australia
Southeast
Asia
21%
Australia
Southeast
Asia
21%
21%
21%
79%
79%
79%
79%
Commodity
Commodity
4%
4%
Activity
Activity
11%
11%
Country/Region
Country/Region
1%
1%
2%
2%
1%
2%
AngloGold Ashanti
PT AMNT
QCoal
Newcrest
Silver Lake
St Barbara
Dacian Gold
Qmetco
Anglo American
Red 5 Limited
Calidus
Other
AngloGold Ashanti
AngloGold Ashanti
PT AMNT
PT AMNT
QCoal
QCoal
Newcrest
Newcrest
Silver Lake
Silver Lake
St Barbara
St Barbara
Dacian Gold
Dacian Gold
Qmetco
Qmetco
Anglo American
Anglo American
Red 5 Limited
Red 5 Limited
Calidus
Calidus
Other
Other
4%
4%
4%
5%
5%
5%
5%
5%
5%
6%
6%
6%
Gold
Gold
Copper/Gold
Copper/Gold
Met Coal
Met Coal
Other
Other
22%
22%
21%
21%
16%
16%
16%
10%
10%
10%
7%
7%
7%
9%
9%
9%
2
Surface
Surface
Underground
Mining Support
Services
Underground
Mining Support
25%
Services
25%
64%
53%
53%
21%
21%
Australia
Southeast
Asia
Australia
Southeast
Asia
79%
64%
79%
Macmahon Annual Report 2022 PEOPLE
We invest in building strong teams and seek individuals who want to
make a significant contribution to our business.
Group Workforce
Safety
7,848 TRIFR**
4.8
FY22
24.9%
Total People Trained
Apprentices
Graduates
Trainees
1,030*
102
29
467
* 929 Macmahon people plus 101 external
**Total Recordable Injury Frequency Rate
MAJOR NEW PROJECT COMMENCEMENTS
Dawson South
QUEENSLAND
King of the Hills
WESTERN AUSTRALIA
Warrawoona
WESTERN AUSTRALIA
Client: Anglo American
Contract: Surface Mining
Commodity: Metallurgical Coal
Project commenced: Jul 2021
Client: Red 5 Limited
Contract: Surface & Underground
Commodity: Gold
Project commenced: Jan 2022
Client: Calidus Resources
Contract: Surface Mining
Commodity: Gold
Project commenced: Mar 2022
3
OUR BUSINESS
MALAYSIA
INDONESIA
Macmahon is a diversified contractor with leading capabilities
in surface and underground mining, and mining support services.
As an ASX-listed company, we provide services to
many of the largest resources projects in Australia
and Southeast Asia.
Founded in 1963, Macmahon services resource
companies across various commodity sectors.
Our end-to-end mining services encompass
mine development and materials delivery
through to engineering, civil construction,
on-site mining services, rehabilitation, site
remediation, training and equipment
maintenance and refurbishment services.
OUR OPERATIONS
1 UNDERGROUND
Tanami
35
TOTAL SITES
Australia
Indonesia
Malaysia
4
OFFICES
Perth
Brisbane
Jakarta
Kalgoorlie
4
WORKSHOPS
Perth
Boulder
Coppabella
Lonsdale
7
COMMODITIES
Gold
Metallurgical Coal
Copper
Limestone
Nickel
Mineral Sands
Uranium
4
2 SURFACE
Batu Hijau
Martabe
1 UNDERGROUND
Tujuh Bukit
1 MINING SUPPORT SERVICES
Hu’u Project
NORTHERN
TERRITORY
QUEENSLAND
TOTAL
SITES
6
2 SURFACE
Byerwen
Dawson South
Blackwater
Foxleigh
Peak Downs
Saraji
4 MINING SUPPORT SERVICES
TOTAL
SITES
4
TOTAL
SITES
1
TOTAL
SITES
1
SOUTH
AUSTRALIA
VICTORIA
TOTAL
SITES
1
3 MINING SUPPORT SERVICES
1 UNDERGROUND
Olympic Dam
1 UNDERGROUND
Fosterville
TOTAL
SITES
1
1 SURFACE
Langkawi
WESTERN
AUSTRALIA
TOTAL
SITES
21
5 SURFACE
Julius
King of the Hills
Mt Morgans
Telfer
Tropicana
13 UNDERGROUND
Bellevue
Boston Shaker
Cock-eyed Bob
Daisy Milano
Deflector
Granny Smith
Gwalia
King of the Hills
Leinster
Maxwells
Nicolsons
Santa
Wagtail
Coburn
Fimiston
Warrawoona
Macmahon Annual Report 2022
MALAYSIA
INDONESIA
TOTAL
SITES
1
1 SURFACE
Langkawi
WESTERN
AUSTRALIA
TOTAL
SITES
21
5 SURFACE
Julius
King of the Hills
Mt Morgans
Telfer
Tropicana
13 UNDERGROUND
Bellevue
Boston Shaker
Cock-eyed Bob
Daisy Milano
Deflector
Granny Smith
Gwalia
King of the Hills
Leinster
Maxwells
Nicolsons
Santa
Wagtail
TOTAL
SITES
4
2 SURFACE
Batu Hijau
Martabe
1 UNDERGROUND
Tujuh Bukit
1 MINING SUPPORT SERVICES
Hu’u Project
NORTHERN
TERRITORY
QUEENSLAND
TOTAL
SITES
1
TOTAL
SITES
6
1 UNDERGROUND
Tanami
2 SURFACE
Byerwen
Dawson South
4 MINING SUPPORT SERVICES
Blackwater
Foxleigh
Peak Downs
Saraji
SOUTH
AUSTRALIA
VICTORIA
TOTAL
SITES
1
TOTAL
SITES
1
3 MINING SUPPORT SERVICES
Coburn
Fimiston
Warrawoona
1 UNDERGROUND
Olympic Dam
1 UNDERGROUND
Fosterville
5
OUR CAPABILITIES
SURFACE MINING
Our surface mining division operates in Australia
and overseas, offering a broad range of services
including:
• Bulk and selective mining
• Mine planning and analysis
• Drill and blast
• Crushing and screening
• Fixed plant maintenance
• Water management
• Equipment operation and maintenance
• Technology solutions partnering
UNDERGROUND MINING
Macmahon has a growing and highly experienced
underground division specialising in underground
mining and engineering services, including:
• Mine development
• Mine production
• Raise drilling
• Cablebolting
• Technology solutions partnering
• Shotcreting
• Remote shaft lining
• Production drilling
• Shaft sinking
MINING SUPPORT SERVICES
Civil Construction
Macmahon offers a wide range of design, civil
earthworks, mine rehabilitation, and closure services
to mine owners, including:
• Topsoil and overburden stripping
• Bulk earthworks
• Road design and construction
• Train loading facilities
• Water infrastructure - dams, creek diversions,
flood levies, and drainage structures
• Revegetation
• Rehabilitation monitoring and maintenance
• Non-process infrastructure
Engineering
Macmahon’s extensive engineering capabilities
provide clients with tailored mining solutions for
projects both above and below ground with the
ability to undertake design and fabrication and
complete on-site construction.
Macmahon can deliver a comprehensive
engineering, procurement, and construction
offering from design to completion and
maintenance, including:
• Shaft lining and maintenance
• Conveying, crushing, materials handling
• Emergency egress systems
• Pump stations and rising mains
• Site workshops and infrastructure
Business Improvement Consulting and Training
Macmahon offers advisory operational
improvement and training services that can provide
mine owners with the benefit of our contracting
experience including:
• Operator coaching and industry skills training
• Cultural change programs for employees
• Advice and assistance with mine planning,
maintenance and employee engagement
Equipment Maintenance, Refurbishment and
Support Services
Macmahon offers comprehensive equipment
maintenance, refurbishment and support services
for a wide range of mining equipment. Our facilities
in Western Australia, Queensland and South
Australia provide Macmahon with the ability to:
• Service and maintain equipment, full in-frame
rebuilds including components, and complete
repairs in workshops and/or in-field.
• Rapidly and efficiently deploy critical spares,
parts and supplies to client locations.
• Train apprentices and employ a range of
experienced tradespeople for rapid deployment
to regional and remote sites.
6
Macmahon Annual Report 2022 BATU HIJAU
SURFACE MINING | COPPER/GOLD
Life of Mine
Duration
PT AMNT
Client
HIGHLIGHT PROJECT
Macmahon has a life of mine, alliance style mining services contract
at the Batu Hijau Mine in Indonesia. Batu Hijau is a large open pit,
porphyry copper-gold deposit located on Sumbawa Island in
Indonesia. It is the second-largest copper-gold mine in Indonesia.
7
VISION, VALUES AND STRATEGY
Vision
To be the preferred contracting and services company:
For employees
to work for
For customers
to use
For shareholders
to invest in
Values
In everything we do, we think and behave according
to our values.
UNITED
Be Inclusive • Work Together • Support Each Other
We value diversity, inclusion and working together to achieve
exceptional outcomes.
COURAGE
Be Brave • Speak Up • Challenge Yourself
We persevere and push through boundaries to strengthen our team.
INTEGRITY
Be Honest • Respect People • Be Accountable
We are transparent, we live our values and take accountability
for our actions.
PRIDE
Be Humble • Work Hard • Celebrate Wins
We set high standards, pursue excellence, show humility and
celebrate success.
8
Macmahon Annual Report 2022 Strategy
Macmahon is focused on expanding and improving its
end-to-end mining service capabilities to achieve sustainable
growth and optimised financial returns.
Our people are focused on improving efficiencies, investing
in future relevance and diversifying and expanding our
service offering.
Strategic Overview
IMPROVE
INVEST
EXPAND
DIVERSIFY
VALUE
Margins and
execution
• Systems and
processes
• Contract
management
• Operational
excellence
Relevance and
competitive
advantage
• Advanced
contractor
• Structure and
capability
• Technology
solutions
to enhance
sustainability
Growth in
current markets
Build
scalability
• Mining
Support
Services
• Underground
• Future /
battery
minerals
• Additional
services with
existing clients
• Grow market
share in
Indonesia with
trusted clients
where skilled
labour market
supports
organic growth
Grow
shareholder
value
• Strengthen
Balance Sheet
• Acquisitions,
JV’s and/
or Teaming
arrangements
• Exit non-core
businesses
9
LETTER FROM THE CHAIR
Dear Shareholders,
I’m very pleased that Macmahon has delivered strategically,
operationally and financially for the 2022 financial year, despite
challenging economic conditions in Australia and globally,
and the ongoing impacts of COVID-19.
This is highlighted by Macmahon achieving record
underlying EBITDA and underlying EBIT(A), as
well as meeting revenue and earnings guidance
for the year. This is the fifth consecutive year that
Macmahon has met or exceeded market guidance.
Our full year results and solid financial position
reflect the Company's ability to successfully
navigate this current period of market volatility,
and challenging market conditions to deliver
sustainable profitable growth.
We achieved revenue of $1.7 billion and underlying
EBIT(A) of $100.8 million. Macmahon ended the
year with $5.0 billion of contracted work in hand,
underpinning a high-level of secured revenue
and earnings for FY23 and beyond. Macmahon
maintained a liquidity position of $255.8 million
as at 30 June, providing capacity to capitalise on
growth opportunities.
We continue to seek to diversify our revenue mix
and order book in less capital intensive and higher
Return on Average Capital Employed projects,
particularly in the underground segment, as well
as the rehabilitation, engineering and civil space.
On a macroeconomic level, the mining industry
and our business have been impacted by
continued supply chain disruptions, rapidly
rising global inflationary pressures, and escalating
labour costs. Coupled with a shortage of skilled
labour exacerbated by the COVID-19 pandemic,
labour availability and costs have been a
significant challenge that management has
been actively addressing.
We have proactively implemented a prudent cost
management strategy to mitigate the extent of
cost pressures to our business, which Managing
Director and CEO, Mick Finnegan will discuss in
further detail in his report. Pleasingly, the impacts
of the COVID-19 pandemic have been gradually
ameliorating in line with vaccination rollouts and
travel restrictions easing, however remain an
ongoing risk. Macmahon will continue to carefully
manage these risks in our business to protect
our workforce and stakeholders, and safeguard
business continuity.
Accomplishing these strong results
in such a challenging environment
is commendable and is a testament
to the quality, commitment and
diligence of all our people.
Speaking of our people, our business saw significant
growth in our workforce during the year, despite
the tight labour market. Our people’s safety and
wellbeing remain at the core of how we do business
and is always a critical focus area for Macmahon.
I am delighted that we are able to report a
significant improvement in safety performance
during the year. We are not taking this result for
granted and will continue to pursue improving
health and safety outcomes.
Furthermore, during FY22 Macmahon participated
in the WA parliamentary inquiry into sexual
harassment against women in the FIFO mining
industry, and we have reinforced our commitment,
backed by tangible action, to ensure all our people
feel safe and comfortable at work.
10
Macmahon Annual Report 2022 OUR FY22 HIGHLIGHTS
Met our environmental, social and
governance obligations.
Improved safety performance.
Focused on eliminating sexual harassment,
not only from our business but also from
our industry.
Published our stand-alone FY22
Sustainability Report.
Delivered strategically, operationally,
and financially in FY22 despite
challenging economic conditions and
the COVID-19 pandemic.
Declared a final dividend of 0.35 cents
per share, bringing our full year dividend
to 0.65 cents per share.
Governance is a key consideration for our Board,
and its composition has regard to a diverse range
of skills and experience. The key change during
the year was the retirement of Vyril Vella as a
Non-Executive Director after having been involved
with the Company since 2007. Vyril made an
outstanding contribution to Macmahon over
many years and I sincerely wish him the best
for his retirement.
Our standalone Sustainability Report for FY22
expands upon the information provided in this
Annual Report and further outlines progress on
Environmental, Social and Governance activities and
initiatives. We remain focused on our commitment
and advancing disclosure across the ESG spectrum
with a view to continuous improvement.
In line with the capital allocation policy, Macmahon
is committed to paying a sustainable dividend and
is currently targeting a payout ratio of 10-25% of
underlying earnings per share. We are pleased to
advise that the Board has declared a final dividend
for the 2022 financial year of 0.35 cents per share,
bringing the full year dividend to 0.65 cents per
share. This is in line with the full year FY21 dividend
and represents a payout ratio of 21.7% of underlying
earnings per share.
On behalf of the Board, I would like to thank
Managing Director and CEO Mick Finnegan, and
all our people for their dedication and significant
contributions this year, along with our shareholders,
clients and suppliers for their ongoing support.
EVA SKIRA, AM
Independent, Non-Executive
Chair
11
CEO AND MD REPORT
KEY ACHIEVEMENTS
A disciplined execution of our strategy has enabled
Macmahon to achieve positive financial results for
FY22, during a year that has been financially and
operationally challenging for the mining services
industry at large.
Macmahon has delivered record earnings with
underlying EBIT(A) of $100.8 million, compared to
our underlying FY22 EBIT(A) guidance range of
$95 million to $105 million. We are extremely proud
that the Company has continued its track record
of meeting or exceeding earnings guidance for five
consecutive years.
This performance was delivered during the
COVID-19 pandemic (COVID) and broader
economic headwinds. COVID related challenges
included sickness related absenteeism, supply chain
disruption, extremely tight skilled labour markets in
Australia with an almost record low unemployment
rate, and rising cost and wage inflation. Our 7,848
strong workforce has risen to the challenges over
the year to deliver this record result and deserve
recognition for this.
The Group reported revenue of $1.7 billion, meeting
our full year guidance range for FY22 of $1.6 billion
to $1.7 billion. Full year revenue increased by 26%
over the prior year, driven by increased activity
across all business areas, which included several
new project start-ups in Australia and the impact of
escalation cost recovery.
Our Statutory Net Profit After Tax was $27.4 million,
due to the inclusion of the GBF earn-out finalised
during the first half, Software as a Service (SaaS)
costs and amortisation of customer contract assets
after (SaaS) customisation before costs recognised
on acquisitions as well as impairment of non-core
discontinued business assets which will be disposed
of. Excluding these non-recurring costs, underlying
FY22 NPAT(A) was $63.0 million.
KEY CLIENT AND OPERATIONAL
HIGHLIGHTS DURING THE 2022
FINANCIAL YEAR INCLUDED:
Ending FY22 with a $5.0 billion order book
including $1.45 billion secured for FY23.
Civil works for Calidus Resources being
the construction of their new Warrawoona
mine site, a tailings storage facility buttress
at Fimiston for Northern Star Resources
and various mine services and rehabilitation
projects on the east coast of Australia.
Ramping up Foxleigh and Gwalia to a steady
state and the commencement of Dawson
South, Fimiston, Warrawoona and King of
the Hills surface and underground projects.
Telfer contract following re-negotiations in
FY21 is delivering improved performance.
Successful redeployment of Mt Morgans
workforce and plant to other Macmahon
projects following closure of the Mt Morgans
project by Dacian Gold late in the
financial year.
Advancing our mining equipment
technology deployment roadmap in both
the surface and underground operations
to enhance safe and efficient productivity.
12
Macmahon Annual Report 2022 HEALTH AND SAFETY
As noted by our Chair, we are extremely pleased
to be able to report a significantly improved safety
Total Recordable Injury Frequency Rate (TRIFR)
performance during FY22. Health and safety is
our highest priority, and as a Company we are
perennially looking to implement measures to
improve safety outcomes.
Macmahon’s TRIFR for FY22 decreased to 4.80
from 6.39 in the previous year. This is a terrific
improvement, but as always there is still work to
do. Importantly, we are focussing on how to evolve
our culture and we have developed a Winning at
Macmahon (WAM) formula. Part of this formula
includes evolving our values, that are foundational
to culture, which we expect will further benefit
safety outcomes. I’ll comment more on WAM in
the People section that follows.
Also as mentioned by our Chair, during the year
we participated in the WA parliamentary inquiry
into sexual harassment against women in the FIFO
mining industry. We are already delivering on our
commitment to do more in addressing this issue
through the implementation of tangible actions
and roadmaps. We know as we mature in this area
we will learn more and our approach is designed
to be agile and adaptive to ensure we can apply
the learnings to our program quickly. It is critical
to us that we ensure all our people are safe and
comfortable at work.
For example, we have introduced enhanced
respectful workplace behaviour and bystander
training, which has already yielded positive results
– such as an increased incidence of bystanders
stepping forward to call out inappropriate behaviour.
Additionally, we have strengthened reporting
mechanisms and policies, as well as broadened our
pre-employment background checks.
Finally, I can’t talk about safety without also
addressing mental health and wellbeing, which
continues to be an important part of our safety
efforts. We have been extending our leading
Strong Minds, Strong Mines program to our wider
community and are now also piloting a Strong
Minds, Strong Schools program.
PEOPLE
An unemployment rate approaching record lows in
Australia in conjunction with increased demand for
contract mining services and COVID related labour
disruptions have resulted in a significantly tightened
labour market in Australia throughout the year.
In response to the tight labour market,
Macmahon continues to focus on the retention
and development of our people and attracting
skilled people and new industry entrants to
support our growing business. The Company has
increased its focus on apprenticeships, internal and
industry training, and across FY22, developed 467
trainees, 102 apprentices and, 29 graduates. We
delivered or were delivering training to 1,030 people
during FY22, which includes 101 non-Macmahon
industry participants.
Our workforce expanded during the year to reach
7,848 and we have demonstrated our ability to
successfully resource and ramp up to support
growing our business for our clients.
The Company has also proactively undertaken
various initiatives to retain and develop people
in the longer-term, including more frequent
benchmarking pay reviews, offering flexible FIFO
rosters, international recruitment, the establishment
of a training school and investment in significant
training of our people as mentioned earlier.
Our focus on retaining and attracting people
into our business has also involved reviewing
our culture and evolving it to better position
Macmahon for long-term success. This review,
which involved 40 leaders across the business, in
a three-day workshop held during late May 2022,
resulted in the creation of the WAM formula. This
formula, developed by our leaders, has three
key elements being; the Macmahon Winning
Statement, Macmahon Winning Equation (MWE)
and Macmahon Winning Values. The MWE focusses
on people, values and performance to drive
success. The WAM formula is being launched to
our workforce during the first quarter of FY23
and the program includes evolving our values to
develop culture in a way that enhances employee
engagement, and commitment to high performance
which will contribute to delivering long-term
success. I look forward to providing further updates
on WAM as we progress through FY23.
Macmahon has an agile and flexible workforce, and
this was demonstrated late in the fiscal year when
Dacian Gold suspended mining at Mt Morgans. We
have already redeployed all Macmahon employees
previously at Mt Morgans to other sites the
Company operates at.
13
CAPITAL DISCIPLINE AND
STRONG CASH CONVERSION
Following recent years of large growth capital
investment, Macmahon is focussed on delivering
improved underlying EBIT(A), high underlying
EDITDA cash conversion and sufficient free cash
flow generation to maintain a strong balance sheet.
We have also enhanced our liquidity position with
extension to tenure and upsizing of our syndicated
debt facility (SFA) as you will read below, and our
disciplined capital management focus has elevated
Return on Average Capital Employed as a key metric.
Macmahon has recently successfully increased its
$170 million SFA to $200 million, and extended
the maturity by more than three years at reduced
interest rate margins. We have a very robust
available liquidity of $255.8 million at year-end
which provides optionality to support the delivery
of our strategy.
We achieved strong EBITDA cash conversion
of 92.6%, and our gearing and EBITDA leverage
ratio stood at 27.8% and 0.74, respectively,
both an improvement on our H1 FY22 results.
This performance is noteworthy given the
macroeconomic environment difficulties navigated
during the second half of the fiscal year.
Pleasingly, the strong EBITDA cash conversion
in FY22 enabled the funding of growth capex,
payment of dividends, and delivery of a healthy
financial position. Together with the increased
SFA which was announced to the market on
28 July 2022, this provides us with the flexibility
to pursue suitable opportunities and execute on
the Company’s strategy.
STRATEGY
We advanced our strategy during FY22 by
continuing to diversify our business mix;
predominately growing our mining support
services and underground divisions.
On this front, we made some significant progress
in the year, including:
• The underground division increasing its
contribution to 25% of group revenue.
• Continuing to ramp up positively at the major
King of the Hills and Gwalia underground
projects.
• Progress on expanding our civil offering
into Western Australia, including for Calidus
Resources at Warrawoona and Northern Star
Resources at Fimiston as mentioned earlier in
this report.
• Formally entering into a Teaming arrangement
with a Party that has a complementary skill
set and Partnering arrangements with parties
that have complementary skill sets that will
accelerate our growth in mining support
services and enable us to secure larger scale
projects on acceptable commercial terms.
In addition to the diversification of our business
mix, Macmahon’s technological roadmap is
evolving in order to further boost the Company’s
operational efficiency and broader sustainability.
This includes progressing the deployment of our
business intelligence systems in both underground
and surface mining; notably both solutions use
advanced data and mine digitisation technologies
with the capacity to expand the offering in coming
years dependent on client priorities.
In FY22, Macmahon welcomed new executives
who bolster the diversity, breadth and depth of
capabilities among our leadership group. This
encompassed Ursula Lummis being promoted to
Chief Financial Officer, the appointment of Donald
James as Chief Commercial Officer, and Richard
McLeod joining as Chief Operating Officer.
Our refreshed leadership team, consistent with
our evolving strategy, is increasing its focus
on improvement in Return on Average Capital
Employed as a key performance metric, optimising
gearing to strengthen our balance sheet, and
targeting lower capital intensity growth to better
leverage our balance sheet capacity. Delivering
operationally for our clients and respectfully
partnering to deliver fair financial returns is
foundational to delivering on these outcomes.
14
Macmahon Annual Report 2022 Macmahon’s commitment to the safe and efficient
execution of its order book positions the business
well to navigate current and emerging challenges
and capitalise on meaningful strategically aligned
opportunities ahead.
CONCLUSION
To conclude, I would like to thank the Board
and our stakeholders for their ongoing support,
including our clients for their shared approach to
supporting and protecting the health and wellbeing
of our people. I would also like to commend our
people for their crucial contribution and resilience
over the year.
MICHAEL FINNEGAN
Managing Director and
Chief Executive Officer
This pragmatic strategy and focus will create a
stronger, more sustainable business and, most
importantly, support our core objective of delivering
higher quality investment returns for shareholders.
OUTLOOK
Macmahon is anticipating another positive year in
FY23, underpinned by a $5.0 billion order book
comprised of an increasingly diverse mix of
surface, underground and mining support service
contracts, with a significant concentration of
alliance contracts that provide greater operational
and commercial flexibility.
On a macroeconomic level, the tight labour market
across Australia and global inflationary pressures
are key issues and these challenges are being
managed by the business. As previously mentioned,
we grew our workforce during FY22 and have
already successfully implemented significant
training, upskilling and wellbeing programs to
facilitate the longer-term retention of employees.
Our focus and investment on our people will
continue as we move forward.
We have a strong pipeline of highly filtered
strategically and operationally aligned opportunities
worth approximately $8.4 billion, in addition to
numerous contract extensions we are targeting.
The Company's solid financial position at FY22
year-end will support the capital investment for
future Batu Hijau Phase 8 expansion and contract
wins. Continuing contracts are expected to
consolidate FY22 performance, deliver earnings
growth, and improve ROACE in FY23. Our capital
management discipline will also support maintaining
a strong balance sheet.
15
Operational
and Financial
Review
Macmahon provides mining, infrastructure and support
services to miners throughout Australia and internationally.
Headquartered in Perth, Western Australia, the Group derives revenue from activities including surface
and underground mining and mining support services which includes civil design and construction
(primarily on mine sites), equipment refurbishment and maintenance, training, design and fabrication
of mining infrastructure, and mine site maintenance and rehabilitation services.
A breakdown of our revenue by activity, country, client and commodity is shown in the charts below:
Commodity
Commodity
Activity
Activity
Country/Region
Country/Region
Activity
Activity
Surface
Surface
Underground
Underground
Mining Support
Mining Support
Surface
Surface
Services
Services
Underground
Underground
Mining Support
Mining Support
Services
Services
25%
25%
11%
11%
11%
11%
25%
25%
64%
64%
64%
64%
Client
Client
2%
5%
18%
6%
17%
16%
Country/Region
Country/Region
Australia
Australia
Southeast
Southeast
Asia
Asia
21%
21%
Australia
Southeast
Asia
Australia
Southeast
Asia
21%
21%
79%
79%
79%
79%
1%
2%
Client
AngloGold Ashanti
PT AMNT
PT AMNT
AngloGold Ashanti
QCoal
QCoal
Newcrest
AngloGold Ashanti
Calidus
Silver Lake
PT AMNT
Silver Lake
St Barbara
QCoal
Newcrest
Dacian Gold
Newcrest
Dacian Gold
Qmetco
Silver Lake
Anglo American
Anglo American
St Barbara
Other
Red 5 Limited
Dacian Gold
Red 5 Limited
Calidus
Qmetco
St Barbara
Other
Anglo American
Qmetco
Red 5 Limited
Calidus
Other
4%
18%
1%
5%
2%
5%
4%
4%
5%
6%
5%
5%
7%
9%
9%
7%
6%
7%
9%
18%
17%
Commodity
4%
Activity
11%
16%
17%
16%
10%
10%
10%
1%
Gold
Copper/Gold
Met Coal
Other
22%
21%
53%
Surface
Underground
Mining Support
Services
25%
Country/Region
21%
Australia
Southeast
Asia
64%
79%
53%
53%
53%
53%
16
4%
4%
4%
4%
Commodity
Commodity
Gold
Gold
22%
22%
Copper/Gold
Copper/Gold
Met Coal
Met Coal
Other
Gold
Other
Gold
Copper/Gold
Copper/Gold
Met Coal
Met Coal
Other
Other
22%
22%
21%
21%
21%
21%
Macmahon Annual Report 2022 17
SURFACE MINING
Macmahon’s surface mining division offers a broad range of services
including bulk and selective mining, mine planning, drill and blast,
crushing and screening, water management, as well as equipment
operation and maintenance.
Macmahon’s surface mining fleet currently includes
a broad range of excavators, dump trucks, front
end loaders, dozers, and drill rigs. Macmahon’s
fleet is sourced from a range of providers including
Caterpillar, Hitachi, Liebherr and Epiroc.
KEY PROJECT ACTIVITY
During the year, Macmahon provided services to
the following projects:
Tropicana Gold Mine
Macmahon is fulfilling a life of mine contract at
the Tropicana project in Western Australia for
AngloGold Ashanti and joint venture partner, Regis
Resources. During the period, Macmahon invested
in its first electric haul truck fleet to increase
production and improve safety.
Telfer Gold Mine
Macmahon is fulfilling a life of mine contract at the
Telfer project in Western Australia for Newcrest.
Byerwen Coking Coal Mine
Macmahon has been providing open cut mining
services at the Byerwen coking coal mine in
Queensland’s Bowen Basin for QCoal since the
establishment of the mine in November 2017.
Dawson South
Macmahon commenced a three-year contract in
March 2022 to provide surface mining services for
Anglo American’s Dawson South operations, an
open-cut metallurgical coal mine located in the
Bowen Basin in Queensland.
Mt Morgans Gold Mine
Macmahon provided open pit mining services to
Dacian Gold’s Mt Morgans contract located near
Laverton in Western Australia from 2017 until 30
June 2022. Rehandling services will continue in
the immediate future.
Julius Gold Mine
Macmahon completed an open cut mining services
contract at the Julius mine in the Goldfields of
Western Australia for Northern Star Resources.
Warrawoona Gold Project
Macmahon commenced an open cut mining
services contract in March 2022 with Calidus
Resources at the Warrawoona Gold Project in
Western Australia. This follows the completion
of the early civil construction works contract.
King of the Hills Gold Mine
In January 2022, Macmahon commenced a
five-year contract with Red 5 to provide surface
and underground mining services at the King of the
Hills Project near Laverton in Western Australia.
Batu Hijau Copper/Gold Mine
Macmahon is performing its life of mine contract to
provide all mining services at the Batu Hijau mine
in Indonesia for PT Amman Mineral Nusa Tenggara
(AMNT). Batu Hijau is a well-established, world-class
copper/gold deposit.
Martabe Gold Mine
Macmahon is contracted by PT Agincourt
Resources to provide mining services at the
Martabe Gold Mine in the North Sumatra province
of Indonesia.
Langkawi Quarry
Macmahon is currently fulfilling a mining services
quarry contract for YTL Cement on Langkawi
Island in Malaysia.
18
Macmahon Annual Report 2022 19
UNDERGROUND MINING
Macmahon’s underground mining division offers underground
development and production services, a broad range of ground
support services, as well as services to facilitate ventilation and
access to underground mines including shaft sinking, raise drilling
and shaft lining.
Macmahon’s underground mining fleet is comprised
of trucks, loaders, and drills. This equipment is
predominantly sourced from Sandvik, Komatsu,
Epiroc and Caterpillar.
KEY PROJECT ACTIVITY
During the year, Macmahon provided services
to the following projects:
Gwalia Gold Mine
Macmahon is fulfilling an underground mining
services contract with St Barbara at its Gwalia
Gold Mine in Western Australia. The scope of work
includes mine development, ground support,
production drilling and blasting, loading and
trucking, shotcreting and paste fill reticulation.
Boston Shaker Gold Mine
Macmahon provides all production and
development mining services at the Boston Shaker
underground mine at the Tropicana site, a joint
venture between AngloGold Ashanti and Regis
Resources. The scope includes the development of
the Tropicana surface ore body through the Boston
Shaker decline.
King of The Hills Gold Mine
In January 2022, Macmahon commenced a
contract with Red 5 to provide both surface
and underground services at the King of the
Hills Project near Laverton in Western Australia.
The underground scope of works includes all
development and production.
Deflector Gold/Copper Mine
Macmahon is fulfilling a contract to provide
underground mining services to Silverlake
Resources at the Deflector Gold Project in
Western Australia.
Bellevue Gold Mine
Macmahon provided Stage 1 development works
for Bellevue Gold at its mine north of Leinster in
Western Australia during the year until May 2022.
Mt Belches Gold Project
Macmahon provided mining services to
Silverlake Resources at the Maxwell’s, Cock-Eyed
Bob, Santa and Daisy Milano underground mines
near Kalgoorlie in Western Australia.
Nicolsons Gold Mine
Macmahon provides mining equipment and
maintenance systems and support to Pantoro
Limited at the Nicholson’s mine located in Halls
Creek in Western Australia.
During the year, Macmahon also continued to
perform its existing contracts including:
Ballarat Gold Mine
Macmahon provides production drilling and
cablebolting for Castlemaine Goldfields in Victoria.
Granny Smith Gold Mine
Macmahon provides cablebolting services to
Gold Fields near Laverton in Western Australia.
Fosterville Gold Mine
Macmahon provides cablebolting services to
Kirkland Lake Gold in Victoria.
Leinster Nickel Mine
Macmahon provides production drilling and other
mining services to BHP in the eastern Goldfields in
Western Australia.
Macmahon provides raise drilling services to various
sites in Australia, including the Cassini and Long
Victor Nickel projects in Kambalda for Mincor,
Tomingley Gold Mine in Dubbo, New South Wales
for Alkane Resources and at Olympic Dam in South
Australia for BHP, where Macmahon has been
providing raise drill services for over 30 years.
Macmahon’s growing engineering division provides
various services to a number of clients, including
engineering construction crews to BHP at Leinster
Nickel Operations, shaft and winder refurbishment
to BHP’s Olympic Dam Project, shaft lining at
Glencore’s Ulan Coal Operations and infrastructure
design and installation at Tanami for Newmont.
20
Macmahon Annual Report 2022 21
MINING SUPPORT SERVICES
Macmahon provides consulting, design, procurement, fabrication,
construction, equipment sales and hire, equipment refurbishment,
maintenance, training services, and site rehabilitation services to
the resources sector. Macmahon is focussed on building its civil and
construction business in Australia and Southeast Asia as part of its
ongoing strategy to diversify its business.
EQUIPMENT REFURBISHMENT,
MAINTENANCE AND SUPPORT SERVICES
Macmahon owns and operates world-class
purpose-built equipment maintenance facilities,
allowing it to support frontline contracting services
with a full suite of equipment refurbishment,
maintenance and skilled labour services.
Warrawoona Gold Project
Macmahon completed construction of the new
mine site for Calidus Resources in the east Pilbara
region of Western Australia. Works included
construction of the new mine infrastructure
including roads, pads, drainage, dams, office
facilities and workshops.
Macmahon’s primary workshop, located in Perth,
Western Australia is a key operational asset with the
ability to rebuild both equipment and components.
This facility allows Macmahon to provide specialised
workshop equipment services to internal and
external clients and to rapidly and efficiently deploy
supplies to client locations and conduct essential in
field or on-site maintenance work.
TRAINING SERVICES
Macmahon is a registered training organisation
and has two training hubs located at our facilities
in Lycullin Coppabella Queensland and at the
Perth, Western Australia Corporate Office near the
domestic airport. Programs offered to include
face-to-face training and assessment services
involving mining simulated technologies to a range
of new-to-industry and experienced industry
workers. Our training services include National
Traineeship Programs, apprenticeships, high-risk
work licenses, first aid training and equipment
operator training.
KEY PROJECT ACTIVITY
During the year, Macmahon provided civil
construction services in Western Australia,
Queensland and Indonesia including:
Fimiston
Macmahon has recently completed the Fimiston
Tailings Dam Buttress Project for Northern Star
Resources in Western Australia.
Peak Downs and Saraji Mines
Macmahon through its wholly owned subsidiary,
TMM, provides multiple mining services and
rehabilitation projects in Queensland, including
approximately 100ha of rehabilitation at Peak
Downs and Saraji Mines.
Foxleigh Project
Macmahon is fulfilling a contract to supply
equipment hire and maintenance services for
the Foxleigh coal mine in the Bowen Basin since
March 21.
Hu'u Project
Macmahon is constructing an 11km access road
at the Hu’u copper/gold exploration project on
Sumbawa Island in Indonesia.
Martabe Gold Mine
Macmahon has commenced the construction of the
new tailings dam at the Martabe Gold Mine in North
Sumatra, Indonesia.
Macmahon continued to deliver long-term mining
civil services in addition to a number of rehabilitation
and other projects to clients in the Bowen Basin.
Macmahon is pursuing numerous additional
opportunities to support its growth strategy.
22
Macmahon Annual Report 2022 The Martabe Engineering Team checks
the road quality during construction by
reading the Dynamic Cone Penetrometer
tool to estimate the load-bearing capacity.
23
FINANCIAL REVIEW
FROM OPERATIONS BEFORE SIGNIFICANT ITEMS
Revenue
Australia
Indonesia
Other International
Group Revenue
EBITDA (underlying)
EBIT(A) (underlying)
NPAT (underlying)
EBITDA (reported)
EBIT (reported)
NPAT (reported)
1H22
2H22
2022
20211
643.6
164.6
1.6
809.8
138.7
46.9
31.7
113.9
18.5
3.3
692.4
194.1
1.7
888.2
152.7
53.9
31.3
149.1
46.7
24.1
1,336.0
358.7
3.3
1,698.0
291.4
100.8
63.0
263.1
65.2
27.4
1,019.9
321.8
9.8
1,351.5
249.9
96.3
59.9
248.5
93.9
75.4
Note: With the exception of revenue and NPAT (reported) the other measures above are not defined by IFRS and are unaudited.
Refer to Summary of Consolidated Reports section for reconciliation of underlying results.
1
2021 results have been restated to reflect the Group’s change in accounting policy for costs related to configuration and
customisation of Software-as-a-Service (SaaS). Refer to note 15 to the Financial Statements.
Revenue ($m)
Revenue ($m)
1,380
1,351
1,698
FY 20
1,380
FY 211
1,351
FY 22
1,698
Underlying EBIT(A) ($m)
Underlying EBIT(A) ($m)
92
FY 20
92
96
FY 211
96
101
FY 22
101
100
80
100
60
80
40
60
20
40
0
20
0
FY 20
FY 211
FY 22
FY 20
FY 211
FY 22
Underlying EBITDA ($m)
Underlying EBIT(A) Margin
Underlying EBITDA ($m)
239
FY 20
239
250
FY 211
250
291
FY 22
291
Underlying EBIT(A) Margin
6.6%
FY 20
6.6%
7.1%
FY 211
7.1%
5.9%
FY 22
5.9%
7
6
7
5
6
4
5
3
4
2
3
1
2
0
1
0
1500
1500
1000
1000
500
500
0
0
250
200
250
150
200
100
150
50
100
0
50
0
24
FY 20
FY 211
FY 22
FY 20
FY 211
FY 22
Macmahon Annual Report 2022 PROFIT AND LOSS
Macmahon delivered revenue and earnings growth
in line with its publicly stated guidance. Revenue
for the Group increased by 25.6% to $1.7 billion.
This increase was largely attributed to growth with
the ramp up of existing projects (Gwalia, Julius and
Foxleigh) and commencement of new projects
(Dawson South, Fimiston, King of the Hills and
Warrawoona), along with the organic growth in
existing projects.
Underlying earnings before interest, tax, customer
contracts amortisation and other one-off items
(EBIT(A)) for FY22 increased by 4.7% to $100.8
million (30 June 2021: $96.3 million). Similarly,
underlying earnings before interest, tax,
depreciation and amortisation (EBITDA) increased
by 16.6% over the year to $291.4 million.
Depreciation (excluding amortisation on customer
contracts) and Net Finance Costs
Depreciation (excluding customer contract
amortisation) and net finance costs for the year
increased from $153.6 million and $14.6 million
respectively to $190.6 million and $19.0 million.
This was consistent with the growth in property,
plant and equipment required for new projects
over the period.
Tax
The Group reported a tax expense of $18.7 million.
The effective tax rate of 40.6% primarily resulted
from the one-off non-deductible earn out expense.
Excluding the impact of the non-deductible
expense, the effective tax rate would have
been 27.5%.
BALANCE SHEET
Net assets increased from $535.9 million to
$559.5 million at 30 June 2022. Total assets and
total liabilities increased by $194.8 million and
$171.2 million, respectively, primarily due to the
commencement of new projects.
The Group’s net tangible assets (NTA) increased by
6.0% to $543.5 million at 30 June 2022 (30 June
2021: $512.8 million). As a result, NTA per share
increased from 23.8 cents per share to 25.2 cents
per share.
Working Capital
Investment in net working capital increased by
$19.7 million during the period primarily due to the
commencement of new projects and increased
inventory for critical items to proactively manage
COVID related supply chain pressures. Current
trade and other receivables and inventory increased
from $246.9 million and $68.5 million respectively
to $299.0 million and $89.9 million at 30 June 2022.
The current trade and other payables at 30 June
2022 of $272.4 million, increased from prior year
of $218.5 million.
Net Debt
At 30 June 2022, cash on hand totalled $198.0
million (30 June 2021: $182.1 million) offset by
borrowings of $413.5 million (30 June 2021:
$312.4 million) resulting in net debt at 30 June 2022
of $215.5 million equating to gearing of 27.8%. Net
debt to EBITDA for 30 June 2022 was 0.74 times.
The increase in net debt of $85.2 million was
primarily due to the purchase of plant and
equipment together with increased working capital
to support new and existing projects, increased
inventory of critical items and the earn out
payment for the GBF acquisition, offset partially
by generation of positive operating cash flows.
As at 30 June 2022, cash and unutilised working
capital facilities totalled $255.8 million (30 June
2021: $287.7 million).
25
CASH FLOW
Operating cash flow (excluding interest, tax,
acquisition and SaaS customisation costs) for
the year ended 30 June 2022 was $269.8 (FY21:
$269.0 million), representing a conversion rate from
underlying EBITDA of 92.6%. Cash conversion was
impacted by the increase in working capital relating
to the commencement of new projects and higher
inventory levels to mitigate COVID related supply
chain disruptions.
Capital Expenditure
Capital expenditure for property, plant and
equipment for the year totalled $279.0 million,
comprising $120.2 million acquired through
finance leases, and $158.8 million funded in cash.
DIVIDEND
The Board has approved the payment of a final
dividend of 0.35 cents per share for FY22. This
equates to a total dividend declared for FY22
of 0.65 cents per share.
26
Macmahon Annual Report 2022 27
RISK MANAGEMENT
Macmahon defines risk management as the identification, assessment
and management of risks that have the potential to materially impact
on its operations, people, reputation, and financial results.
Given the breadth of operations, the geographies
and markets in which the Group operates, a
wide range of risk factors have the potential to
impact Macmahon. While Macmahon attempts to
mitigate and manage risks where it is efficient and
practicable to do so, there is no guarantee these
efforts will be successful.
Outlined below is an overview of a number of
material risks facing Macmahon. These risks are not
set out in any particular order and do not comprise
every risk that Macmahon could encounter when
conducting its business. Rather, they are the most
significant risks that, in the opinion of the Board,
should be considered and monitored by both
existing shareholders and potential shareholders
in the Company.
COVID-19 RISK
The global economy has been enduring the
COVID-19 pandemic in recent years. Whilst
restrictions on travel and border closures have
eased recently, it continues to negatively disrupt
trade and various industries including mining,
supply chains, workforce absenteeism and also
continues to create significant uncertainty for
the business, domestic economies and the
global economy.
The health pandemic continues to affect many
countries, and while vaccine rates are improving,
periodic lockdowns and/or restrictions on
movement may be reinstated which can affect
key markets in which Macmahon operates.
Although the pandemic risks have abated in recent
months, there is a material risk that an increase
in severity of these health and safety concerns to
our workforce and across the globe could have a
material impact on the group in the future. Should
the pandemic severity ease, that may present
upside opportunity to the business mainly
through reduced workforce absenteeism and
productivity benefits.
GUIDANCE
Macmahon provides forecasts and predictions
about its future performance (“Guidance”) on
the basis of several assumptions which may
subsequently prove to be incorrect.
Guidance is not a guarantee of future performance,
and is subject to known and unknown risks, many of
which are beyond the control of Macmahon.
Key identified risks that may result in Macmahon not
meeting its Guidance include, but are not limited to,
termination of key contracts, variability in cost and
productivity assumptions, and inability to recover
claims and variations from clients.
Macmahon’s actual results may differ materially
from its Guidance and the assumptions on which
the Guidance is based.
CLIMATE CHANGE
Macmahon recognises the physical and non-
physical impacts of climate change. Risks related
to the physical impacts of climate change include
increased incidence and severity of extreme
weather events that could disrupt mining operations
and impact the health and safety of our workforce.
Non-physical risks arise from a variety of policy,
regulatory, legal, financing and investor responses
to the challenges posed by climate change and the
transition to a lower-carbon economy. Companies
that do not take action on climate change risk
reputational damage. Macmahon will seek continual
improvements in energy efficiency across the
business to understand and reduce the carbon
intensity of operations.
CONTINGENT LIABILITIES
Macmahon is exposed to a number of contingent
liabilities, including those described in the notes to
the Annual Report.
The Guidance provided by Macmahon will be
negatively impacted if those contingent liabilities
that are currently unquantified crystallise into
actual liabilities.
28
Macmahon Annual Report 2022 RELIANCE ON KEY CUSTOMERS
Macmahon’s business relies on a number of
individual contracts and business alliances and
Macmahon derives a significant proportion of its
revenue from a small number of key long-term
customers and business relationships with a
few organisations. In the event that any of these
customers fails to pay, reduces production or
scales back operations, terminates the relationship,
defaults on a contract or fails to renew their
contract with Macmahon, this may have an adverse
impact on the financial performance and/or
financial position of Macmahon.
INDUSTRY AND COMMODITY CYCLES
Macmahon’s financial performance is influenced
by the level of activity in the resources and mining
industry, which is impacted by a number of factors
beyond the control of Macmahon. This includes:
• Demand for mining production, which may
be influenced by factors including (but not
limited to) prices of commodities, exchange
rates and the competitiveness of Australian and
Indonesian mining operations.
• Government policy on infrastructure spending.
• The policies of mine owners including their
decisions to undertake their own mining
operations or to outsource these functions.
• The availability and cost of key resources
including people, large earth moving equipment
and critical consumables.
Macmahon is indirectly exposed to movements
in commodity prices, which can be volatile and
beyond Macmahon’s control.
Adverse movements in commodity prices may
reduce the pipeline of work in the mining sector and
the level of demand for the services of Macmahon’s
mining business, which could have a material
impact on Macmahon’s operating and financial
performance.
FAILURE TO WIN NEW CONTRACTS
Macmahon’s performance is impacted by its
ability to win, extend and complete new contracts.
Any failure by Macmahon to continue to win new
contracts will impact its financial performance
and position.
Macmahon expects to continue to have a broad
range of competitors across all of its operations,
which impacts the margins obtainable on contracts.
There is a risk that existing and increased future
competition may limit the ability to win new
contracts or achieve attractive margins.
EARLY CONTRACT TERMINATION AND
CONTRACT VARIATIONS
Guidance is partly based on current contracts
in hand and Macmahon derives a significant
proportion of its revenue from providing services
under large contracts. A client could terminate
services on short term notice and as a result,
there can be no assurance that work in hand will
be realised as revenue in any future period. There
could be future risks and costs arising from any
termination of contract.
Early termination or failure to renew a contract
by Macmahon’s clients when that renewal is
expected is likely to have an adverse effect on
financial performance.
While Macmahon has no reason to believe any
existing or potential contracts will be terminated,
there can be no assurance that this will not occur.
Due to the nature of Macmahon’s business, there
is also a risk that Macmahon’s claims for contract
variations are disputed and not ultimately agreed
or are insufficiently certain at a point in time such
that they cannot be brought to account in a given
accounting period.
29
PROJECT DELIVERY RISK
Execution and delivery of projects involves
judgement regarding the planning, development
and operation of complex operating facilities and
equipment. As a result, Macmahon’s operations,
cash flows and liquidity could be affected if the
resources or time needed to complete a project
are miscalculated, if it fails to meet contractual
obligations, or if it encounters delays or
unspecified conditions.
MARGINS, OPERATIONS, SAFETY
AND ENVIRONMENT
Cost overruns, unfavourable contract outcomes,
serious or continued operational failure, adverse
industrial relations outcomes, disruption at
key facilities, disruptions to information and
communication systems or a safety incident have
the potential to have an adverse financial impact.
Macmahon is also exposed to input costs through
its operations, such as the cost of fuel and energy
sources, equipment and personnel. To the extent
that these costs cannot be passed on to customers
in a timely manner, or at all, Macmahon’s financial
performance could be adversely affected.
Macmahon’s operations involve risk to personnel
and property. An accident may occur that results
in serious injury or death, damage to property and
environment, which may have an adverse effect on
Macmahon’s financial performance, and reputation
and ability to win new contracts.
CONTRACT PRICING RISK
If Macmahon materially underestimates the cost of
providing services, equipment, or plant, there is a
risk of a negative impact on Macmahon’s financial
performance.
PRICE INFLATION
Macmahon procures goods and services that are
critical to business operations from a range of
suppliers. Cost increases, or price inflation, can
occur in respect of goods and services over a
certain time period for a range of reasons including
strong demand and supply shortages, the cost
of inputs to the production process increasing
(including labour related wages and salaries), and
supply related logistics disruption. The rate of these
price increases can be material and if Macmahon
does not recover price inflation from its clients,
there is a risk of negative impact on Macmahon’s
financial performance.
COMMODITY PRICE EXPOSURE
Gold and copper are the two most important
commodities contributing to Macmahon’s order
book and tender pipeline. If the gold and copper
industries were to suffer, it would have a material
adverse effect on Macmahon revenues and
profitability.
EQUIPMENT AND CONSUMABLE AVAILABILITY
Macmahon has a significant fleet of equipment
and has a substantial ongoing requirement for
consumables including tyres, parts and lubricants.
If Macmahon cannot secure a reliable supply of
equipment, parts and/or consumables, there is a
risk that its operational and financial performance
may be adversely affected.
KEY PERSONNEL
Macmahon’s growth and profitability may be
limited by loss of key operating personnel, inability
to recruit and retain skilled and experienced
employees or by increases in compensation costs.
The growth of activity in the mining sector has
increased demand for quality resources, creating a
tightening market and upward pressures to secure
skilled mining leaders, professionals and personnel.
CURRENCY FLUCTUATION
Macmahon is exposed to fluctuations in the value
of the Australian dollar versus other currencies
due to international operations and Macmahon’s
consolidated results are reported in Australian
dollars. If Macmahon generates sales or earnings
or has assets and liabilities in other currencies,
the translation into Australian dollars for financial
reporting purposes could result in a significant
increase or decrease in the amount of those sales or
earnings and net assets.
PARTNER AND CONTROL RISK
Macmahon may undertake services through and
participate in joint ventures or partnering/alliance
arrangements. The success of these partnering
activities depends on satisfactory operating and
financial performance by Macmahon’s partners. The
failure of partners to meet performance obligations
could impose additional financial and performance
obligations that could cause significant impact
on Macmahon’s reputation and financial results,
including loss or termination of the contract and
loss of profits.
30
Macmahon Annual Report 2022 AMC (which is a related party of AMNT) is the
largest shareholder of Macmahon with a 44.3%
shareholding, giving AMC significant influence
over Macmahon, with the ability to block special
resolutions of shareholders and potentially to pass
or block ordinary resolutions. AMC’s interests as
a shareholder of Macmahon may differ from the
interests of other shareholders, and the existence
of this shareholding (together with other major
shareholdings) may reduce the prospects of persons
making takeover bids for Macmahon in the future.
COUNTRY RISK
While Macmahon has significant operations
in Australia, it has large project operations in
Indonesia. Macmahon also has contracts in Malaysia
and South Africa from time to time. The sovereign
risk in these countries is higher than in Australia.
Operating in international markets can expose
Macmahon to additional adverse economic
conditions, civil unrest, conflicts, terrorism, security
breaches, bribery and corrupt practices.
Some countries in which Macmahon operates, or
may operate in the future, have less developed
legal, regulatory or political systems than in
Australia, which may be subject to unexpected or
sudden change or in which it may be more difficult
to enforce legal rights.
The financial performance and position of
Macmahon’s foreign operations may be adversely
affected by changes in the fiscal or regulatory
regimes applying in the relevant jurisdictions,
changes in, or difficulties in interpreting and
complying with local laws and regulations of
different countries (including tax, labour, foreign
investment law) and nullification, modification or
renegotiation of, or difficulties or delays in enforcing
contracts with clients or joint venture partners that
are subject to the offshore local law(s).
FINANCING RISK
Macmahon has financing facilities with external
financiers. A default under any of these facilities
could result in withdrawal of financial support or an
increase in the cost of financing.
CYBER SECURITY
The potential for cyber security attacks, misuse
and release of sensitive information pose ongoing
and real risks. During FY21, Macmahon conducted
a cyber security maturity assessment and
vulnerability scan, and commenced a three-year
cyber security improvement plan in FY22.
SEXUAL HARASSMENT
Macmahon has a large and geographically spread
workforce where workplace sexual harassment
and other forms of reportable conduct present
as an ongoing and real risk. During FY22,
Macmahon participated in a WA parliamentary
inquiry into sexual harassment against women
in the FIFO mining industry and has reinforced
our commitment, backed by tangible actions, to
minimise sexual harassment and other reportable
conduct in the workplace. Failure to provide our
workforce with a safe working environment has
the potential for reputational damage with a
consequential inability to attract and retain
a workforce and/or clients which would have
negative impact to Macmahon’s operational
and financial performance.
OTHER MATERIAL RISKS THAT COULD AFFECT
MACMAHON INCLUDE:
• A major operational failure or disruption at key
facilities or to communication systems which
interrupt Macmahon’s business.
• Changing government regulation including tax,
occupational health and safety, and changes in
policy and spending.
• Loss of reputation through poor project
outcomes, unsafe work practices, unethical
business practices, and not meeting the market’s
expectation of our financial performance.
• Foreign exchange rates and interest rates in
the ordinary course of business.
• Loss of key Board, management or operational
personnel.
31
OUR BOARD
Our Board comprises 67%
Independent Non-Executive
Directors and are highly experienced
in the resources, governance and
financial services sectors.
EVA SKIRA, AM
Independent, Non-Executive Chair
MICHAEL FINNEGAN
Managing Director and Chief Executive Officer
DENISE MCCOMISH
Independent, Non-Executive Director
BRUCE MUNRO
Independent, Non-Executive Director
ALEX RAMLIE
Non-Independent, Non-Executive Director
ARIEF SIDARTO
Non-Independent, Non-Executive Director
HAMISH TYRWHITT
Independent, Non-Executive Director
32
Macmahon Annual Report 2022 EVA SKIRA, AM
Independent, Non-Executive Chair
Appointed as Non-Executive Director on 26
September 2011; appointed as Chair on 27 June 2019
Qualifications: BA (Hons), MBA, Life Mbr SF Fin,
Life Mbr FAIM, FAICD, FGIA, FCIS
Experience and expertise: Ms Skira has a
background in banking, capital markets,
stockbroking and financial markets, previously
holding executive positions at the Commonwealth
Bank in the Corporate Banking/Capital Markets
divisions, and later with stockbroker Barclays de
Zoete Wedd.
Ms Skira has served on a number of boards in
business, government, and the not-for-profit sectors
across a range of industries, including engineering,
infrastructure, health and finance.
She is currently a Trustee of the Trustees of St John
of God Health Care Inc., a Non-Executive Director
of Western Power, WA Parks Foundation, and the
Western Australia Cricket Association, and Chair of
the Association of Ministerial PJPs Ltd, and Catholic
Education WA. Ms Skira was recognised in the 2019
Australia Day honours list and awarded a Member
of the Order of Australia for her significant service
to business in Western Australia.
She has previously been Deputy Chair at Metrobus,
Non-Executive Director of Doric Construction
Group, Deputy Chancellor of Murdoch University,
and Board Member of MDA National Insurance.
She also has a deep understanding of sustainability
and environmental practices, having been the Chair
of the Water Corporation of Western Australia and
Forest Products Commission.
Current other listed directorships: None
Former Australian listed directorships (last three
years): None
Committee memberships:
• Chair of the Nomination Committee
• Member of the Remuneration Committee
• Member of the Audit and Risk Committee
Interests in ordinary shares: 651,5071
Interests in share rights: 515,2291
MICHAEL FINNEGAN
Managing Director and Chief Executive Officer
Appointed as Managing Director on 1 October 2019
Qualifications: BSc
Experience and expertise: Mr Finnegan has more
than 25 years’ experience in the mining industry.
The last 20 years have primarily been spent in
senior line management positions.
Mr Finnegan has a strong commercial and technical
background, and has spent time in operations on
the east and west coast of Australia, as well as a
number of countries throughout Asia.
Current other listed directorships: None
Former Australian listed directorships (last three
years): None
Committee memberships:
• Member of the Tender Review Committee
Interests in ordinary shares: 5,020,0081
Interests in performance rights: 20,787,1591
DENISE MCCOMISH
Independent, Non-Executive Director
Appointed 1 March 2021
Qualifications: FCA, DipAcctgFoundn (Glam),
MAICD
Experience and expertise: Ms McComish has
extensive financial, corporate, ESG and board
experience across multiple sectors, and is a highly
experienced and credentialled accounting and audit
professional. Denise was a partner with KPMG for
30 years, specialising in audit and advisory services.
Leadership positions held included KPMG Australia
Board member and National Mining Leader.
Ms McComish is a Non-Executive Director of ASX-
listed Webjet Limited and Gold Road Resources
Limited, and not-for-profit organisation Beyond
Blue Limited. Ms McComish has been a member of
the Australian Takeovers Panel since 2013.
Ms McComish is a Fellow of Chartered Accountants
Australia and New Zealand, and a member of the
Australian Institute of Company Directors and
Chief Executive Women. In 2018, she was awarded
an Honorary Doctorate in Business from Edith
Cowan University.
1
Interests as at report date.
33
Current other listed directorships: Webjet Limited
and Gold Road Resources Limited.
Former Australian listed directorships (last three
years): None
Committee memberships:
• Chair of the Audit and Risk Committee
• Member of the Nomination Committee
• Member of the Remuneration Committee
Interests in ordinary shares: 569,9271
Interests in share rights: None1
BRUCE MUNRO
Independent, Non-Executive Director
Appointed 1 October 2019
Qualifications: BE (Hons), FIEAust
Experience and expertise: Mr Munro has more than
40 years’ experience as an engineer and manager
with major construction and mining contractors in a
number of countries, including Australia, Asia, India
and southern Africa. From 2011 until his retirement in
2015, Mr Munro was the Managing Director of Thiess
Pty Ltd, which during this period had approximately
20,000 employees and annual revenues up to
approximately $7 billion. He has been involved as
a contractor in the development and operation of
numerous mines for clients including BHP, Glencore,
Rio Tinto, BP, Peabody, Bumi Resources, Inco,
Wesfarmers, Vale and Fortescue. Whilst Mr Munro
held the role of CEO, Thiess was mining in excess of
approximately 50 million tonnes per annum of coal.
Mr Munro was recently a Non-Executive Director of
Australian Pacific Coal Ltd. Mr Munro is an Honours
graduate from the University of New South Wales
School of Civil Engineering and a Fellow of the
Institution of Engineers Australia. Mr Munro was
previously a Non-Executive Director of then ASX
listed Sedgman Ltd. During his career, he served
as a director on a number of industry bodies,
international business councils and diversity groups.
Current other listed directorships: None
Former Australian listed directorships (last
three years): Australian Pacific Coal Ltd (resigned
March 2020)
Committee memberships:
• Chair of the Tender Review Committee
• Member of the Audit and Risk Committee
• Member of the Nomination Committee
Interests in ordinary shares: 1,720,3671
Interests in share rights: 1,251,5691
ALEX RAMLIE
Non-Independent, Non-Executive Director
(AMNT Nominee) Appointed 8 August 2017
Qualifications: BA, MA (Economics)
Experience and expertise: Mr Ramlie is currently
the President Director, and Chief Executive Officer
of PT Amman Mineral Internasional (“Amman”),
which he joined in 2015 as a member of the Amman
founding team. He played an instrumental role in
the acquisition of PT Newmont Nusa Tenggara (now
renamed PT Amman Mineral Nusa Tenggara) by
Amman from Newmont Mining Corp., Sumitomo
Corp., and PT Multi Daerah Bersaing.
Prior to becoming President Director of Amman,
he was the President Director and Chief Executive
Officer of PT Borneo Lumbung Energi & Metal Tbk
from 2011 to 2015. Borneo is listed on the IDX and
operates a hard coking-coal mine in Tuhup, Central
Kalimantan, which is held by its wholly-owned
subsidiary, PT Asmin Koalindo Tuhup. Between
2012 and 2015, Mr Ramlie was also a Non-Executive
Director of LSE listed Bumi PLC, Vice-President
Commissioner/Vice-Chairman of IDX listed PT
Berau Coal Energy Tbk and its subsidiary, PT Berau
Coal, and held Commissioner positions in IDX listed
PT Bumi Resources Tbk, PT Kaltim Prima Coal, and
PT Arutmin Indonesia.
Mr Ramlie began his career as an investment banker
at Lazard Frères & Co.
Current listed directorships: None
Former Australian listed directorships (last three
years): None
Committee memberships:
• Member of the Nomination Committee
Interests in ordinary shares: 1,588,9871
Interests in share rights: 1,030,4601
1
Interests as at report date.
34
Macmahon Annual Report 2022 ARIEF SIDARTO
Non-Independent, Non-Executive Director
(AMNT Nominee) Appointed 8 August 2017
Qualifications: MBA
Experience and expertise: Mr Sidarto brings his
management experience from financial, mining
and diversified business groups to the Board of
Macmahon. He currently serves as Director of PT
Amman Mineral International.
Previously, Mr Sidarto was Managing Director and
Member of the Board of PT Rajawali Corpora
(“RC”), the holding company of a diversified
business group in palm oil plantation, gold and
other mining assets, transportation, infrastructure,
hotels (St Regis, Four Seasons, Sheraton Hotels),
property and media. At RC, he was member of
the Finance and Investment Committee, the Ethics
Committee and the Audit and Risk Management
Committee.
Mr Sidarto’s vast banking and financial experience
extends to his career at Goldman Sachs in New York,
working in its Structured Finance Division in 1991.
He then relocated to Hong Kong and subsequently
to Singapore to run investment banking as
Chief Operating Officer. During his time, he
was responsible for deal execution (M&As,
LBOs, restructuring, debt and equity capital
raisings), select client relationships and cross
selling (commodities, asset-liability management
products), and was a Member of Goldman Sachs’
Asia Commitments Committee.
Mr Sidarto also holds directorships in Singapore
entities Slate Alt Pte Ltd, Medco Pacific Resources
Pte Ltd, SM Investments Pte Ltd, among others;
and is a President Commissioner of PT Medco Daya
Lestari.
Mr Sidarto holds an MBA from Harvard University
in Boston, USA, and graduated summa cum laude
with dual-bachelor degrees of finance from the
Wharton School, engineering from the School
of Engineering, and Applied Science from the
University of Pennsylvania in Philadelphia, USA.
Current listed directorships: None
Former Australian listed directorships (last three
years): None
Committee memberships:
• Member of the Nomination Committee
Interests in ordinary shares: 1,588,9871
Interests in share rights: 1,030,4601
HAMISH TYRWHITT
Independent, Non-Executive Director
Appointed 1 October 2019
Qualifications: MIE Aust CPEng APEC Engineer
(Fellow), ATSE (Fellow), HKIE
Experience and expertise: Mr Tyrwhitt has three
decades of senior leadership experience in the
global engineering and construction sectors. Mr
Tyrwhitt was the Group CEO of Dubai Financial
Market (DFM) listed construction firm, Arabtec
Holdings, from 2016 to 2019. In addition to his
position as CEO of Arabtec Holding, he also held
the position of Group CEO of Nasdaq Dubai-listed,
interior solutions firm Depa Group, from 2016 to
2019.
Mr Tyrwhitt has served on the Board as an
Executive Director of Depa Limited; as a Non-
Executive Director of Design Studio Group Limited,
a Singapore based subsidiary of Depa Group listed
on the Singapore Stock Exchange; and as a Non-
Executive Director of Jordan Wood Industries PSC,
a listed Jordanian company, which manufactures
office and household furniture.
Prior to his roles at Depa Group and Arabtec
Holdings, Mr Tyrwhitt held the position of CEO
at Asia Resource Minerals Plc, an Indonesian coal
mining company listed in London.
Earlier in his career, Mr Tyrwhitt worked for more
than 25 years with Leighton Group, now CIMIC,
where he served as Group CEO from 2011 to 2014.
From 2007 to 2011, Mr Tyrwhitt oversaw Leighton’s
Asian operations as the Managing Director
for Leighton Asia, from the Leighton’s Asian
headquarters in Hong Kong.
1
Interests as at report date.
35
Mr Tyrwhitt is a fellow of the Australian Academy
of Technological Sciences and Engineering, a fellow
of the Institution of Engineers Australia, a member
of the Hong Kong Institute of Engineers, and a
member of the College of Civil Engineers, Australia.
Current other listed directorships: None
Former Australian listed directorships (last three
years): None
Committee memberships:
• Chair of the Remuneration Committee
• Member of the Nomination Committee
• Member of the Audit and Risk Committee
• Member of the Tender Review Committee
Interests in ordinary shares: 262,8781
Interests in share rights: 407,8901
VYRIL VELLA
Independent, Non-Executive Director
(Resigned 21 October 2021)
Appointed 21 November 2007; resigned 31 October
2018; reappointed 29 June 2019; Resigned 21
October 2021
Qualifications: BSc, BE (Hons), M.Eng.Sc, FIEAust,
FAICD
Experience and expertise: Mr Vella has over 40
years’ experience in the civil engineering, building,
property and construction industries. During Mr
Vella’s 34 years with the Leighton Group (now
CIMIC), he held various positions, including General
Manager NSW, Director of Leighton Contractors
Pty Ltd (now CPB Contractors), Founding Director
of Welded Mesh Pty Ltd, Managing Director of
Leighton Properties, and Associate Director of
Leighton Holdings. Mr Vella was also a consultant to
Leighton Holdings, where he advised on investment
in the residential market, general property issues
and major construction and infrastructure projects.
During his tenure at the Leighton Group, Mr Vella
was involved in the securing and execution of
projects worth many billions of dollars in value for
both public companies and government clients. He
also was Non-Executive Director at Devine Limited.
Current other listed directorships: None
Former Australian listed directorships (last three
years): None
Committee memberships:
• Chair of the Audit and Risk Committee
• Member of the Remuneration Committee
• Member of the Nomination Committee
Interests in ordinary shares: 2,307,8421
Interests in share rights: None1
1
Interests as at report date.
36
Macmahon Annual Report 2022 37
EXECUTIVE
MANAGEMENT TEAM
The diverse range of skills in our Executive Management Team
provides a strong foundation for future strategic and governance
initiatives to ensure we remain fully aligned to our culture, core
values, and success.
MICHAEL FINNEGAN
Chief Executive Officer and Managing Director
Mr Finnegan was appointed as Managing Director
in October 2019. He holds a Bachelor of Science
(Mining) and has more than 25 years’ experience
in the mining industry. The last 20 years have
primarily been spent in senior line management
positions. Mr Finnegan has a strong commercial
and technical background, and has spent time in
operations on the east and west coast of Australia,
as well as a number of countries throughout Asia.
URSULA LUMMIS
Chief Financial Officer
(Appointed
01 November 2021)
Mrs Lummis is a
Chartered Accountant
and holds a Bachelor of
Commerce (Honours)
degree in Accounting, Auditing and Tax. Mrs
Lummis joined Macmahon in 2018 as Group
Financial Controller and was appointed Chief
Financial Officer on 1 November 2021.
Prior to Macmahon, Mrs Lummis has more than
20 years’ experience with KPMG South Africa
and KPMG Australia providing services to a large
number of global listed companies in the mining
and mining services sectors.
RICHARD MCLEOD
Chief Operating Officer
(Commenced
21 March 2022)
Mr McLeod brings
more than 43 years of
comprehensive international
mining experience in open
pit and underground environments.
Over the last eight years, Mr McLeod worked for
Anglo Gold Ashanti at the Tropicana and Sunrise
Dam sites in Senior Management positions. He has
a reputation for driving innovation and positive
change across the industry in Western Australia,
South Africa, and North America. He successfully
adapts and embraces positive values-driven culture
and is a passionate believer in his people’s success.
38
Macmahon Annual Report 2022 DONALD JAMES
Chief Commercial Officer
(Commenced
01 February 2022)
ELIZABETH GRAY
General Manager, Health,
Safety, Environment,
Quality and Training
Mr James is a Fellow
Chartered Accountant
(ANZ) with extensive
commercial, financial,
operational and corporate experience in the
mining and industrial services sectors. Over the
past 21 years and prior to joining Macmahon, Mr
James has been a member of group executive
leadership teams in ASX listed companies including
Seven Group Holdings, NRW and Perenti. He has
held strategic key executive leadership positions
and non-executive director roles in developing
and operational entities, within which he has
demonstrated a strong focus on delivering high
return business outcomes.
Ms Gray holds a Graduate
Diploma in Occupational
Health and Safety and a
Bachelor of Nursing. Ms
Gray has 20 years of experience in the mining
industry in health, safety, environment, training,
and community engagement. She has been
instrumental in implementing strategies to generate
positive HSEQ performance and drive cultural
change. Before Macmahon, Ms Gray held senior
management positions with Peabody Australia,
Sandvik, and BHP (BMA) Daunia Mine.
NICOLA HAMILTON
General Manager, People
Ms Hamilton holds a
Bachelor of Human
Resource Management
(honours). She has more
than 20 years of experience
in people management
with global resources companies, including PTTEP,
Beach Energy and Schlumberger. She specialises
in building and leading HR functions in diverse
climates and cultures with expertise in business
and strategic planning, change management, talent
management and development, and employee
relations.
MAHA CHAAR
General Counsel
(Appointed
01 January 2022)
Ms Chaar joined Macmahon
in 2021 and is a senior
executive and qualified
lawyer with extensive
national and international experience across
legal, commercial, governance, and risk in various
sectors including resources, infrastructure, mining
and commodities, engineering, oil and gas, and
construction.
Ms Chaar has significant experience advising on
large-scale project developments and disputes.
She is also skilled in managing and documenting
complex transactions and commercial contracts.
Ms Chaar hold a Master of Law, a Bachelor of
Laws (Honours), and a Bachelor of Science. She
has authorised several published, peer reviewed
academic papers and articles.
39
Sustainability
The Materiality Assessment carried out last year allowed
Macmahon to consider various sustainability topics within
their operations, leading to further planning and review.
We are continuing to review Macmahon’s overall
approach to sustainability and expanding this
into the company wide Sustainability Framework,
which will describe our key focus areas and the
commitments under each.
of environmental aspects – from the usage of fossil
fuels and greenhouse gas emissions to waste,
water and rehabilitation. The data collated from
the Baseline Project will provide crucial information
for the Macmahon Sustainability Framework.
In engaging with the Executive Leadership Team,
the initial key focus areas are mental health and
wellbeing, diversity and inclusion, biodiversity
and climate change.
In parallel to expanding the Sustainability
Framework, we have commenced a Baseline
Environmental Footprint program to calculate our
baseline footprint for the company across a range
The program will set the foundation for further
environmental and sustainability stewardship. The
program will provide considerable insight into the
impact of Macmahon activities and highlight where
the greatest improvements can be made.
For further information, please refer to the
stand-alone FY22 Annual Sustainability Report.
40
Macmahon Annual Report 2022 41
SUSTAINABILITY
YEAR IN REVIEW FY22
Macmahon has also released a separate Sustainability Report that
is available via the ASX or on the Macmahon website.
GOVERNANCE
Developing
Macmahon's
Sustainability
Framework
Culture employee
engagement survey
resulting in updated
company values
New Sexual Harassment
Policy
No reported incidents
of corruption
ENVIRONMENT
Commenced the
Baseline Environmental
Footprint Project
Overview of Macmahon’s
ESG footprint
TYRE RECYCLING PROGRAM
GREENHOUSE GAS EMISSIONS
tonnes CO2-e
15, 125 SCOPE 1
1,246 SCOPE 2
tonnes CO2-e
1,267
tonnes tyres recycled
LAND REHABILITATION
hectares in Australia
hectares in Indonesia
169
48
42
Macmahon Annual Report 2022 SOCIAL
DIVERSITY
4.7%
33.3%
57.1%
Indigenous Australians
Female Non-Executive
Directors
Females in Executive
Leadership positions
15.1%
30.0%
Female employees across
the whole organisation
Female workforce at
Martabe in Indonesia
We continually improve and are committed to diversity,
equity, inclusion, human rights and modern slavery,
including training of staff in relation to these aspects.
INTERNAL AND EXTERNAL TRAINING
102
467
431
Apprentices
14% Female
Trainees
32% Female
New to Industry
41% Female
Award-winning mental
health program Strong
Minds, Strong Mines
program extended to
wider industry
Launched our mental
health program, Strong
Minds, Strong Schools,
into schools across
Western Australia
In FY22 we developed a Sexual Harassment
Road Map which included Bystander training,
a new whistleblower platform, independent
culture reviews and employee pulse checks.
43
Directors’
Report
The Directors present their report, together with the financial
statements for the consolidated entity (referred to hereafter as
the “Group”) consisting of Macmahon Holdings Limited (referred
to hereafter as the “Parent” or “the Company”) and the entities it
controlled at the end of, or during, the year ended 30 June 2022.
DIRECTORS
The following persons were Directors of Macmahon
Holdings Limited during the financial year and up
to the date of this report, unless otherwise stated.
Particulars of their qualifications, experience,
special responsibilities and any directorships of
other listed Australian companies held within the
last three years are set out in this Annual Report
under the “Our Board” heading on pages 32 to 36
and form part of this report.
Eva Skira, AM, 68 (Chair)
Michael Finnegan, 47
(Chief Executive Officer and Managing Director)
Denise McComish, 62
Bruce Munro, 69
Alexander Ramlie, 49
Arief Widyawan Sidarto, 53
Hamish Tyrwhitt, 59
Vyril Vella, 73 (Resigned 21 October 2021)
44
Macmahon Annual Report 2022 45
Meetings of Directors
The number of meetings of the Company’s Board of Directors (the Board) and of each Board committee
held during the year ended 30 June 2022, and the number of meetings attended by each Director were:
Regular
Special (A)
Audit and
Risk
Committee
Remuneration
Committee
Nomination
Committee
Tender
Committee
Other
Committee
(B)
Attendance
Eligible Attended Eligible Attended Eligible Attended Eligible Attended Eligible Attended Eligible Attended Eligible Attended
E Skira
M J Finnegan
D P McComish
B A Munro
A Ramlie
A W Sidarto
H G Tyrwhitt
V A Vella1
10
10
10
10
10
10
10
2
10
10
10
10
7
9
9
2
4
4
4
4
4
4
4
3
4
4
4
4
4
4
4
3
4
*
4
4
*
*
4
1
4
*
4
4
*
*
4
1
5
*
3
*
*
*
5
2
5
*
3
*
*
*
5
2
2
*
2
2
2
2
2
0
2
*
2
2
0
2
2
0
*
4
*
4
*
*
4
*
*
4
*
4
*
*
4
*
1
*
*
*
*
*
*
1
1
*
*
*
*
*
*
1
Special Board meetings, unscheduled meetings called at short notice
A
B Other committees include sub-committees of the Board
*
1
Not a member of the relevant committee
Mr Vella resigned on 21 October 2021
COMPANY SECRETARIES
Sophie Raven LLB
Ms Raven joined the Company in March 2021
and was appointed as Company Secretary on
1 December 2021.
Gregory Gettingby BA/LLB
(resigned 1 December 2021)
Mr Gettingby joined Macmahon in 2002 and
resigned as Company Secretary effective
1 December 2021.
OFFICERS WHO WERE PREVIOUSLY
PARTNERS OF THE AUDIT FIRM
Ms McComish was a director of the Group during
the financial year and was previously a partner of
the current audit firm, KPMG, at a time when KPMG
undertook an audit of the Group. Ms. McComish
retired from the KPMG partnership on 30 November
2019 and was appointed as a director of the Group
on 1 March 2021.
PRINCIPAL ACTIVITIES
The principal activities of the Group consisted of
providing surface mining, underground mining
and mining support services to mining companies
throughout Australia and Southeast Asia.
Apart from the above, or as noted elsewhere in
this report, there were no significant changes in
the nature of the activities of the Group during the
financial year under review.
46
Macmahon Annual Report 2022 DIVIDENDS
Declared and paid during FY22
Dividends paid or declared by the Company to
members since the end of the previous financial
year were:
MATTERS SUBSEQUENT TO THE
END OF THE FINANCIAL YEAR
Dividends
Subsequent to 30 June 2022, the Board approved
a final dividend on ordinary shares of 0.35 cents per
ordinary share in respect of FY22.
Interim 2022 ordinary
Final 2021 ordinary
Cents
0.30
0.35
Date of
payment
$
6,300,440
6 Apr 22
7,350,514
22 Oct 21
Syndicated debt facility (SFA)
Macmahon increased its $170 million SFA to $200
million, and extended the maturity by more than
three years at reduced interest rate margins.
Declared after year-end
After the balance sheet date, the following
dividends were declared by the Directors:
Cents
$
Date for
payment
Final 2022 ordinary
0.35
7,350,514
7 Oct 22
As the final dividend was declared after 30 June
2022, the financial effect of these dividends has
not been brought to account in the consolidated
financial statements of the Group for the year
ended 30 June 2022.
REVIEW OF OPERATIONS
For the year ended 30 June 2022, the Group
reported increases in revenue, underlying EBIT(A)
and EBITDA. This was driven by organic growth
and the commencement of new projects (Dawson
South, Fimiston, King of the Hills and Warrawoona).
Reported NPAT for the year decreased primarily
due to one-off expenses, being the GBF
acquisition earn out, Software as a Service (SaaS)
customisation costs and amortisation of customer
contracts recognised on acquisition.
A review of and information about the operations of
the Group during FY22 is contained on pages 16 to
26, which form part of this Director’s Report.
SIGNIFICANT CHANGES IN
THE STATE OF AFFAIRS
In the opinion of the Directors, there were no
significant changes in the state of affairs of the
Group that occurred during the financial year under
review.
LIKELY DEVELOPMENTS AND
EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Group
in future financial years and the expected results
of those operations have been included generally
within the annual report.
ENVIRONMENTAL REGULATION
The Group is not subject to any significant
environmental regulation under Australian
Commonwealth or State law.
REMUNERATION REPORT (AUDITED)
The audited remuneration report is set out on pages
50 to 65 and forms part of this Directors’ Report.
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the Directors and
Executives of the Company for costs incurred, in
their capacity as a Director or Executive, for which
they may be held personally liable, except where
there is a lack of good faith.
For the year ended 30 June 2022, the Company
paid a premium in respect of a contract to insure
the Directors and Executives of the Company
against a liability to the extent permitted by the
Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of liability and the
amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the financial
year, indemnified or agreed to indemnify the auditor
of the Company or any related entity against a
liability incurred by the auditor.
During FY22, the Company has not paid a premium
in respect of a contract to insure the auditor of the
Company or any related entity.
47
PROCEEDINGS ON BEHALF
OF THE PARENT ENTITY
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Company, or to
intervene in any proceedings to which the Company
is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those
proceedings.
ROUNDING OF AMOUNTS
The Group is of a kind referred to in ASIC
Corporations (Rounding in Financial/Directors’
Reports) 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
Class Order to the nearest thousand dollars, or in
certain cases, the nearest dollar.
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 49.
AUDITOR
KPMG continues in office in accordance with
section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution
of Directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
EVA SKIRA, AM
Chair
23 August 2022
Perth
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 28
to the consolidated 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 28 to the consolidated 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.
• 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, acting as advocate or
jointly sharing economic risks and rewards.
48
Macmahon Annual Report 2022 49
49 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Macmahon Holdings Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Macmahon Holdings Limited for the financial year ended 30 June 2022 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG R Gambitta Partner Perth 23 August 2022 KPM_INI_01 PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 Remuneration
Report
This Remuneration Report for the year ended 30 June 2022
has been audited by the Company’s external auditor.
The remuneration report details the remuneration arrangements for Key Management Personnel (KMP) as
defined by and in accordance with the requirement of the Corporations Act 2001 (the Act) and its regulations.
50
Macmahon Annual Report 2022 51
1 EXECUTIVE REMUNERATION
1.1 Overview
The Company’s approach to remuneration is to compensate employees in a way that is cost effective and
appropriate for current industry conditions, but also sufficient to attract, retain and incentivise the calibre
of personnel needed to effectively manage the Group’s business. To this end, the remuneration packages
offered to senior executives have three components:
• Market competitive fixed remuneration.
• A short-term incentive opportunity, or the opportunity to earn a cash bonus dependent on performance
over an annual period.
• A long-term incentive opportunity, or the opportunity to earn Macmahon shares dependent on
performance over multiple years.
The targeted remuneration mix for executive KMP for the year ended 30 June 2022 is outlined below:
Michael Finnegan
Chief Executive Officer (CEO) and Managing Director
Ursula Lummis1
Chief Financial Officer (CFO)
Richard McLeod2
Chief Operating Officer (COO)
Donald James3
Chief Commercial Officer (CCO)
At risk
Fixed
remuneration
Short-term
incentive
Long-term
incentive
36%
57%
57%
57%
36%
43%
43%
43%
28%
0%
0%
0%
The percentage of the long-term incentive in this table reflects the accounting standard value as noted in
the remuneration table and includes the FY22 expense for performance rights granted in previous years.
1
Mrs Lummis commenced as CFO on 1 November 2021 and for FY22 was not awarded a LTI subsequent to being appointed.
2 Mr McLeod was appointed as COO on 21 March 2022 and for FY22 was not awarded a LTI subsequent to being appointed.
3 Mr James was appointed as CCO on 1 February 2022 and for FY22 was not awarded a LTI subsequent to being appointed
For FY23, Mrs Lummis, Mr McLeod and Mr James are eligible to participate in the LTI.
1.2 Fixed remuneration
The fixed remuneration paid to executive KMP is based on the size and scope of their role, knowledge and
experience, market benchmarks for that role, and to some extent the Group’s financial circumstances. Fixed
remuneration comprises base salary, any applicable role specific allowances, and superannuation.
Remuneration levels are reviewed annually by the Remuneration Committee through a process that considers
individual and overall performance of the Group. In addition, external advisors and industry surveys may be
used to ensure the KMP’s remuneration is competitive with the market and relevant industry peers.
During the year, benchmarking was completed by Align Advisors for the CEO’s and other KMP’s
remuneration. Based on the results of the market benchmarking review, a remuneration increase of 29% was
provided to the CEO from 1 July 2021. This increase was appropriate to bring the CEO into line with relevant
comparator companies after significant growth in the size and complexity of the Company.
52
Macmahon Annual Report 2022 1.3 FY22 Short term incentive (“STI”)
During FY22, the STI opportunity provided to executive KMP had the following features:
Description
Performance
measures and
weighting
KMP are eligible to participate in the annual STI plan, which comprises a portion of their variable
remuneration and is subject to performance measures.
A combination of specific Group KPI’s are chosen to reflect the core drivers of short-term performance
and to provide a framework for delivering sustainable value to the Group and its shareholders.
The following KPI was chosen for the 2022 financial year:
• EBIT(A) (100%)
Reduced by the following negative modifiers:
• Return on Average Capital Employed (ROACE) (25%)
• Safety performance (10%)
• Growth/order book (15%)
The STI was structured to commence upon achievement of the Company’s publicly stated EBIT(A)
guidance (gateway), and to increase in line with any additional EBIT(A), up to a cap.
Reasons for using
these targets
The KPI and negative modifiers were chosen to reflect the core drivers of short-term performance and
to provide a framework for delivering sustainable value to the group and its shareholders.
Performance period
Performance against the STI targets relate to the period from 1 July 2021 to 30 June 2022.
Form of payment
and timing of
payment
The STI award is determined after the end of the financial year following a review of performance over
the year against the STI performance measures by the Remuneration Committee. The Board approves
the final STI award based on this assessment of performance after which the STI is paid in cash.
Executive claw back
The after-tax STI payment to executive KMP may be claimed back by the Company at any time up to
two years after payment in the event of:
(a) A restatement of the Group’s financial results (other than a restatement caused by a change in
applicable accounting standards or interpretations), the result of which is that any STI awarded to
the KMP would have been a lower amount had it been calculated based on such restated results.
(b) Fraudulent, dishonest or other improper conduct of the executive KMP.
Board discretion
The Board has the right to modify, reduce or remove the STI opportunity at any time, including if there
is a fatality.
Potential bonus awards
The table below shows the potential bonus awards, as a percentage of total fixed remuneration (“TFR”),
available to the executive KMPs under the FY22 STI Plan.
Performance level
Threshold
(lower end of guidance range
$95million EBIT(A))
Target
(mid of guidance range
$100 million EBIT(A))
Stretch
(capped at
$115 million EBIT(A))
M Finnegan
U Lummis
R McLeod
D James
0% of TFR
0% of TFR
0% of TFR
0% of TFR
100% TFR
75% TFR
75% TFR
75% TFR
150% TFR
112.5% TFR
112.5% TFR
112.5% TFR
For FY23, there will be no significant change to the STI plan.
The Board will have the right to modify, reduce or remove the STI opportunity at any time.
53
1.4 Long term incentive (LTI)
At the discretion of the Board, the Company provides a LTI opportunity to executive KMP through the grant
of performance rights. These performance rights can vest into fully paid ordinary shares in the Company, for
no consideration, subject to meeting a performance condition and a continued employment condition. The
purpose of this LTI opportunity is to incentivise executive KMP to deliver sustained increases in shareholder
value over the long-term.
Performance condition
The vesting of performance rights granted on 1 July 2021 are subject to the following vesting conditions
weighted at 50% each:
• Absolute total shareholder return (TSR) over a 3-year performance and service period.
• Strategic objectives subject to the measurement period below and a 3-year service period:
– Year 1 Safety (4%); business mix (14%)
– Year 2 People (4%); business mix (14%)
– Year 3 Business mix (14%)
For the purposes of calculating TSR, the starting share price is based on the volume weighted average price
(VWAP) over the 30 calendar days prior to the first day of the performance period, and the closing share
price is based on the VWAP over the 30 calendar days up to and including the final day of the performance
period.
For performance rights issued during FY22, the portion of each grant of rights eligible to vest at various
levels of increase in Compound Annual Growth Rate (CAGR) TSR is:
Company’s TSR performance
over the performance period
Proportion of performance rights that are eligible
to vest at the end of the performance period
Less than 10% CAGR TSR growth
0%
Between 10% and < 15% CAGR TSR growth
50%, plus a straight-line increase in % award until 15% TSR is achieved
At 15% CAGR TSR growth and above
100%
Continued employment condition
Performance rights lapse if a holder ceases employment before the rights vest unless the Board, in its
absolute discretion, determines otherwise. There is no vesting of performance rights based solely on
continued employment.
Change of control
If a change of control occurs or if the Company is wound up or delisted, the Board may (in its absolute
discretion) determine that all or a portion of the performance rights on issue will vest, notwithstanding the
time restrictions or performance conditions applicable to the performance rights.
Testing of the performance condition
Performance rights are tested for vesting only once at the end of the performance period. That is, there is
no re-testing of performance rights.
54
Macmahon Annual Report 2022 Dividends and voting rights
Performance rights do not have dividend or voting rights. However, the shares allocated upon vesting of
performance rights rank equally with other ordinary shares on issue.
Restriction on disposal of shares
The shares allocated to performance rights holders upon the vesting of those rights are initially held in a
trust and are subject to disposal restrictions in line with the Company’s Trading in Shares Policy.
Performance rights granted in FY22
The number of performance rights granted to participants in the LTI Plan is generally at the discretion
of the Board.
During FY22 a total of 7,805,941 performance rights were granted to current executive KMP. Refer to table
6.3 for further details of performance rights granted during the year.
In addition to the performance rights listed above the Company granted performance rights to other
senior employees of the Group subject to a three-year performance period and continued employment.
Details of all performance rights issued by the Company are set out in note 27 to the consolidated financial
statements included in this Annual Report.
1.5 Statutory performance indicators (including variable remuneration measures)
The table below shows measures of the Group’s financial performance over the past five years as required
by the Corporations Act 2001. However, these measures are not all consistent with the measures used in
determining the variable amounts of remuneration to be awarded to executive KMP. Consequently, there
may not always be a direct correlation between statutory key performance measures and the variable
remuneration awarded to executive KMP.
FY22
FY212
FY20
FY19
FY18
Statutory performance indicators
Profit/(loss) after income tax expense from
continuing operations ($’m)
Reported basic earnings per share from
continuing operations (EPS) (cents)
Dividends declared (cents per share)
Dividends paid (cents per share)1
Share price at 30 June (cents)
27.4
1.30
0.65
0.65
13.5
75.4
3.59
0.65
0.65
19.0
Total Shareholder Return (TSR) (%)
(25.5)
(22.9)
64.9
3.10
0.60
0.75
25.5
41.9
46.1
2.19
0.50
-
18.5
(14.0)
31.3
1.53
-
-
21.5
30.3
1
2
0.65 cents per share includes the final dividend for 2021 of 0.35 cents per share and the interim dividend for 2022 of 0.30
cents per share.
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 in the financial statements
for more details.
55
1.6 Employment contracts
The Company’s executive KMP are engaged under employment contracts that are ongoing and have no
fixed termination date. However, these contracts may be terminated by notice from either party.
Key details of the employment contracts of the current executive KMP are set out below:
Annual fixed
remuneration
including
superannuation
Other
remuneration
Notice periods
to terminate
Termination payments
M Finnegan
$900,000
Statutory entitlements; plus
Short-term and
long-term incentive
opportunities as
described above.
3 months’ notice
by either party or
payment in lieu,
except in certain
circumstances
such as
misconduct
where no notice
period applies.
If the executive is terminated or resigns in
certain circumstances following a change
of control or delisting of Macmahon, a
payment equal to 6 months of annual fixed
remuneration, including superannuation.
Any unvested performance rights held
by the executive KMP lapses upon
termination or resignation, unless the
Board in its absolute discretion determines
otherwise.
Statutory entitlements plus
Any unvested performance rights held
by the executive KMP lapses upon
termination or resignation unless the
Board in its absolute discretion
determines otherwise.
U Lummis1
$465,300
R McLeod2
$638,000
D James3
$550,000
Key details of the employment contracts of the former executive KMP are set out below:
G Gettingby4
$475,000
Short-term and
long-term incentive
opportunities as
described above.
P Pollard5
$532,420
C O'Hehir6
$500,000
3 months’ notice
by either party or
payment in lieu,
except in certain
circumstances
such as
misconduct
where no notice
period applies.
Short-term and
long-term incentive
opportunities as
described above.
Accommodation and
hire vehicle allowance
for a period of 2 years
(maximum of $39,000
per year).
Short-term and long-term
incentive opportunities as
described above.
Living away from home
allowance of $20,000
(annually).
Mrs Lummis commenced in the role as CFO on 1 November 2021.
1
2 Mr McLeod was appointed as COO on 21 March 2022.
3 Mr James was appointed as CCO on 1 February 2022.
4 Mr Gettingby resigned effective 22 January 2022.
5 Mr Pollard resigned as CFO effective 1 November 2021.
6 Mr O’Hehir resigned effective 28 February 2022.
Statutory entitlements; plus
If the executive is terminated or resigns in
certain circumstances following a change
of control or delisting of Macmahon, a
payment equal to 6 months of annual fixed
remuneration, including superannuation.
Any unvested performance rights held
by the executive KMP lapses upon
termination or resignation, unless the
Board in its absolute discretion determines
otherwise.
Statutory entitlements; plus
A potential long-term cash incentive
subject to the same performance hurdles
as the Company’s LTI plan and successful
handover of the CFO role to the successor.
The potential incentive is a maximum of
TFR less cost of accommodation and hire
vehicle paid by the Company during the
performance period
Statutory entitlements; plus
Any unvested performance rights held
by the executive KMP lapses upon
termination or resignation unless the
Board in its absolute discretion determines
otherwise.
56
Macmahon Annual Report 2022 2 NON-EXECUTIVE DIRECTOR REMUNERATION
The structure of the remuneration provided to Non-Executive Directors is distinct from that applicable to
executive KMP. Non-Executive Directors only receive fixed remuneration which is not linked to the financial
performance of the Group.
The remuneration provided to Non-Executive Directors in FY22 is set out below:
Eva Skira
Denise McComish
Bruce Munro
Alexander Ramlie
Arief Sidarto
Hamish Tyrwhitt
Vyril Vella2
Total
Cash
remuneration1
$
Salary sacrifice
for share rights
$
Total
$
185,455
161,667
92,727
10,909
10,909
146,818
51,667
54,545
240,000
-
161,667
77,273
170,000
109,091
120,000
109,091
120,000
43,182
190,000
-
51,667
660,152
393,182
1,053,334
Cash remuneration includes salary, committee fees and superannuation.
1
2 Mr Vella resigned on 21 October 2021.
The maximum aggregate amount that can be paid to Non-Executive Directors is $1,300,000 per annum,
including superannuation (the Fee Pool). The fee pool was increased at the 2021 Annual General Meeting.
Non-Executive Directors have the option to sacrifice a percentage of their fixed remuneration for share rights.
Share rights
A Non-Executive Director Salary Sacrifice Plan (NED SSP) was initiated by the Company during FY19,
pursuant to which Non-Executive Directors may elect to sacrifice all or a portion of their annual pre-tax
directors’ fees and committee fees (excluding superannuation) in the form of share rights. Vesting is
contingent on the Non-Executive Director remaining continuously engaged by the Company as a
Non-Executive Director. Share rights were granted in two tranches on 1 July 2021 (50% vesting on the
day after the release of Macmahon’s half-year results and 50% vesting on the day after the release of
Macmahon’s full-year results). The share rights may be cash settled at the request of the Non-Executive
Director prior to vesting.
For additional information on restrictions or failure to vest, refer to the ASX announcement, dated 5 July 2018.
In accordance with Australian Accounting Standards, as the share rights provide an option over equity, they
have been fair valued as of their grant dates. Details of the share rights are provided in section 6.
3 REMUNERATION GOVERNANCE
The Board oversees the remuneration arrangements of the Company. In performing this function, the Board
is assisted by input and recommendations from the Remuneration Committee (“the Committee”), external
consultants and internal advice. The Committee is responsible for the overview, and recommendation to
the Board, of remuneration arrangements for Non-Executive Directors and executive KMP. The CEO and
Managing Director, in consultation with the Board, sets remuneration arrangements for other executive
KMP. No employee is directly involved in deciding their own remuneration, including the CEO.
Further details of the role and function of the Committee are set out in the Remuneration Committee
Charter on the Company’s website at www.macmahon.com.au.
The Committee obtains advice and market remuneration data from external remuneration advisors as
required. When advice and market remuneration data is obtained, the Committee follows protocols
regarding the engagement and use of external remuneration consultants to ensure ongoing compliance
with executive remuneration legislation. These protocols ensure that any remuneration recommendation
from an external consultant is free from undue influence by any member of the Company’s executive KMP
to whom it relates.
57
The protocols for any external consultant providing remuneration recommendations prohibit them
from providing advice or recommendations to executive KMP or Non-Executive Directors before
recommendations are given to the Committee. These arrangements were implemented to ensure that
any external party will be able to carry out its work, including information capture and formation of its
recommendations, free from undue influence by the individuals to whom they relate.
In FY22, the Company engaged Align Advisors to provide benchmarking information about market
remuneration levels for the CEO and other KMP respectively in a peer group of ASX listed companies.
This information was not a remuneration recommendation as defined by the Act, however, was considered
by the Board in the FY22 remuneration review process.
The Board is satisfied that the remuneration benchmarking data provided by Align Advisors was free from
undue influence by employees of Macmahon.
4 VALUE PROVIDED TO KMP
4.1 Statutory remuneration for the year ended 30 June 2022
Details of the nature and value of each major element of remuneration provided to executive KMP of the
Company during FY22 are set out in the table below. In this table, the value of share based payments has
been calculated in accordance with Australian Accounting Standards.
Short-term
Committee
fees
Cash bonus/
STI
Non-monetary
benefits
Total
short-term
Directors
Non-Executive
E Skira
Chair
D McComish
B Munro
A Ramlie
A Sidarto
H Tyrwhitt
V Vella1
Total compensation
for Non-Executive
Directors
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Salary
$
218,182
194,825
$
-
-
109,091
37,879
36,530
1,522
109,091
45,455
106,545
19,786
109,091
106,545
109,091
106,545
-
-
-
-
109,091
63,636
106,545
24,353
36,364
10,606
106,545
27,397
800,001
157,576
764,080
73,058
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
218,182
194,825
146,970
38,052
154,546
126,331
109,091
106,545
109,091
106,545
172,727
130,898
46,970
133,942
957,577
837,138
1 Mr Vella resigned on 21 October 2021.
2 Represents the fair value at grant date of the share rights issued for salary sacrificed over the vesting period of the award.
58
Post-
Share-based
employment
payment2
Other
long-term
benefits
Super-
annuation
$
Options
Performance
performance
options and
Total
and rights
related
%
related
%
rights
compensation
Compensation
Non-
consisting of
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,818
18,508
14,697
3,615
15,455
12,002
10,909
10,122
10,909
10,122
17,273
12,435
4,697
12,725
95,758
79,529
1,985
1,313
$
-
-
2,813
1,608
3,972
3,019
3,972
3,019
1,572
755
-
-
14,314
9,714
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
241,985
214,646
161,667
41,667
172,814
139,941
123,972
119,686
123,972
119,686
191,572
144,088
51,667
146,667
1,067,649
926,381
Macmahon Annual Report 2022 Directors
Non-Executive
E Skira
Chair
D McComish
B Munro
A Ramlie
A Sidarto
H Tyrwhitt
V Vella1
Total compensation
for Non-Executive
Directors
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
109,091
37,879
36,530
1,522
109,091
45,455
106,545
19,786
Salary
$
218,182
194,825
109,091
106,545
109,091
106,545
$
-
-
-
-
-
-
109,091
63,636
106,545
24,353
36,364
10,606
106,545
27,397
800,001
157,576
764,080
73,058
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
218,182
194,825
146,970
38,052
154,546
126,331
109,091
106,545
109,091
106,545
172,727
130,898
46,970
133,942
957,577
837,138
Short-term
Committee
Cash bonus/
Non-monetary
Total
fees
STI
benefits
short-term
Other
long-term
benefits
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Post-
employment
Share-based
payment2
Super-
annuation
$
21,818
18,508
14,697
3,615
15,455
12,002
10,909
10,122
10,909
10,122
17,273
12,435
4,697
12,725
95,758
79,529
Options
and rights
Performance
related
Non-
performance
related
Compensation
consisting of
options and
rights
Total
compensation
$
1,985
1,313
-
-
2,813
1,608
3,972
3,019
3,972
3,019
1,572
755
-
-
14,314
9,714
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
241,985
214,646
161,667
41,667
172,814
139,941
123,972
119,686
123,972
119,686
191,572
144,088
51,667
146,667
1,067,649
926,381
59
Short-term
Salary and
allowances
Committee
fees
STI
bonus
Non-monetary
benefits
Total
short-term
Executives
M Finnegan
Managing Director and
Chief Executive Officer
U Lummis2
Chief Financial Officer
R McLeod3
Chief Development
Officer
D James4
Chief Commercial
Officer
G Gettingby5
Chief Development
Officer
P Pollard6
Chief Financial Officer
C O’Hehir7
Chief Operating Officer
Total compensation
for executive personnel
Total compensation
for Directors and
Executives
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
$
873,726
678,150
294,001
-
163,913
-
217,892
-
248,692
444,042
161,340
424,908
317,620
371,369
2,277,184
1,918,469
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
$
$
924,000
1,119
1,798,845
78,692
25,774
486,793
259,039
1,119
938,308
120,261
21,850
458,544
236,564
340
530,905
28,020
15,763
-
135,938
-
172,881
-
-
94,411
-
-
-
-
-
447
894
-
299,851
-
390,773
-
249,139
539,347
139,275
13,000
313,615
15,383
15,875
66,062
86,346
-
511,254
12,355
37,896
-
-
13,709
331,329
24,476
17,113
(44,781)
N/A
N/A
328,137
78,512
344
450,225
34,951
18,631
57,260
10
561,067
1,608,658
28,615
3,914,457
206,128
118,341
73,313
518,308
2,357
2,439,134
178,362
103,585
785,709
3,077,185
157,576
1,608,658
28,615
4,872,034
206,128
214,099
87,627
2,682,549
73,058
518,308
2,357
3,276,272
178,362
183,114
795,423
Post-
Share-based
employment
payment
Other
long-term
benefits1
$
Super-
annuation
$
Options
Performance
performance
options and
Total
and rights
related
related
rights8
compensation
Compensation
Non-
consisting of
$
-
-
-
-
-
-
16,277
16,391
21,637
11,274
-
-
-
-
-
-
21,643
16,151
(434,761)
N/A
N/A
(147,828)
10,795
25,208
269,905
%
59
47
41
-
41
-
41
-
43
50
15
24
46
12
32
6
%
41
53
59
-
59
-
59
-
100
57
50
85
100
76
54
28
68
64
%
20
30
-
-
-
-
-
-
$
2,390,104
1,538,963
574,688
332,519
423,684
-
-
-
32
16
845,255
410,935
-
561,505
7
6
2
3
4,312,239
3,506,790
5,379,888
4,433,171
Other long-term benefits related to movement in annual and long service leave liabilities for each Executive
1
2 Mrs Lummis commenced as CFO on 1 November 2021. Remuneration is shown from this date.
3 Mr McLeod was appointed as COO on 21 March 2022.
4 Mr James was appointed as CCO on 1 February 2022.
5 Mr Gettingby resigned as CDO effective 22 January 2022.
6 Mr Pollard resigned as CFO effective 1 November 2021. Remuneration is shown to this date.
7 Mr O'Hehir resigned as COO effective 28 February 2022.
8
Negative share based payment expense represents the reversal of previous expenses as a result of forfeiture of rights
upon resignation.
60
Macmahon Annual Report 2022
Post-
employment
Share-based
payment
Other
long-term
benefits1
$
Super-
annuation
$
Options
and rights
Performance
related
Non-
performance
related
$
924,000
1,119
1,798,845
78,692
25,774
486,793
259,039
1,119
938,308
120,261
21,850
458,544
28,020
15,763
-
-
16,277
16,391
-
-
21,637
11,274
-
-
-
-
-
-
-
-
%
59
47
41
-
41
-
41
-
Short-term
Committee
STI
Non-monetary
Total
fees
bonus
benefits
short-term
$
$
$
163,913
135,938
299,851
217,892
172,881
390,773
236,564
340
530,905
-
-
-
-
-
-
-
-
-
-
-
-
94,411
447
894
249,139
539,347
Executives
M Finnegan
Managing Director and
Chief Executive Officer
U Lummis2
Chief Financial Officer
R McLeod3
Chief Development
Officer
D James4
Chief Commercial
Officer
G Gettingby5
Chief Development
Officer
P Pollard6
Chief Financial Officer
C O’Hehir7
Chief Operating Officer
Total compensation
for executive personnel
Total compensation
for Directors and
Executives
Salary and
allowances
$
873,726
678,150
294,001
-
-
-
248,692
444,042
161,340
424,908
317,620
371,369
2,277,184
1,918,469
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
139,275
13,000
313,615
15,383
15,875
66,062
86,346
-
511,254
12,355
37,896
-
10,795
25,208
269,905
43
50
15
-
13,709
331,329
24,476
17,113
(44,781)
N/A
21,643
16,151
(434,761)
N/A
78,512
344
450,225
34,951
18,631
57,260
1,608,658
28,615
3,914,457
206,128
118,341
73,313
518,308
2,357
2,439,134
178,362
103,585
785,709
3,077,185
157,576
1,608,658
28,615
4,872,034
206,128
214,099
87,627
2,682,549
73,058
518,308
2,357
3,276,272
178,362
183,114
795,423
24
46
12
32
6
%
41
53
59
-
59
-
59
-
100
57
50
85
100
76
54
28
68
64
Compensation
consisting of
options and
rights8
%
Total
compensation
$
20
30
-
-
-
-
-
-
2,390,104
1,538,963
574,688
-
332,519
-
423,684
-
N/A
(147,828)
32
16
845,255
410,935
-
561,505
N/A
328,137
10
561,067
7
6
2
3
4,312,239
3,506,790
5,379,888
4,433,171
61
4.2 Voluntary information – Remuneration received by executive KMP for the year ended 30 June 2022
The amounts disclosed below reflect the benefits received by each KMP during the reporting period.
M Finnegan
U Lummis4
R McLeod5
D James6
P Pollard7
G Gettingby8
C O’Hehir9
Total
Fixed
remuneration1
$
Awarded
STI (cash)2
$
Allowances3
$
Realised
remuneration
received
$
1,158,288
309,764
180,304
229,167
-
-
-
-
13,000
279,343
-
359,153
13,333
426,486
899,500
258,788
309,764
180,304
229,167
177,215
264,843
334,733
-
-
-
89,128
94,310
78,420
2,395,526
520,646
26,333
2,942,505
Fixed remuneration includes base salaries received and payments made to superannuation funds.
The STI paid includes the FY21 STI payment settled in FY22. The FY22 STI has not been paid in FY22.
Allowances include the living away from home allowance.
1
2
3
4 Mrs Lummis commenced as CFO on 1 November 2021. Remuneration is shown from this date.
5 Mr McLeod was appointed as COO on 21 March 2022.
6 Mr James was appointed as CCO on 1 February 2022.
7 Mr Pollard resigned as CFO effective 1 November 2021. Remuneration is shown to this date.
8 Mr Gettingby resigned as CDO effective 22 January 2022.
9 Mr O’Hehir resigned as COO effective 28 February 2022.
The amounts disclosed above are not the same as remuneration expensed in relation to each KMP in
accordance with Australian Accounting Standards (see Table 4.1 above).
Nevertheless, the directors believe that remuneration received is relevant information for the following reasons:
• The statutory remuneration expense for performance rights is based on fair value determined at grant
date for all unvested rights and does not reflect the fair value of the rights vested and actually received
by the KMPs during the year.
• The statutory remuneration shows benefits before they are actually received by the KMPs (deferral and
claw back of STI payments).
• Where performance rights do not vest because a market-based performance condition is not satisfied
(e.g. absolute TSR), the Company must still recognize the full amount of expenses even though the KMPs
will never receive any benefits.
The accuracy of information in this section has been audited together with the rest of the remuneration report.
5 ANALYSIS OF STI BONUSES INCLUDED IN STATUTORY REMUNERATION FOR FY22
Details of the vesting profile of the short-term incentive cash bonuses awarded as remuneration to
executive KMP are as follows:
M Finnegan
U Lummis1
R McLeod2
D James3
P Pollard
Included in statutory
remuneration
$
Vested
in year
%
Forfeited in
the year
%
924,000
236,564
135,938
172,881
139,275
102.7
102.7
102.7
102.7
102.7
0
0
0
0
0
1
2
3
The STI cash component for Mrs Lummis has been pro rated based on her commencement date of 1 November 2021.
The STI cash component for Mr McLeod has been pro rated based on his appointment date of 21 March 2022.
The STI cash component for Mr James has been pro rated based on his appointment date of 1 November 2021.
62
Macmahon Annual Report 2022 6 EQUITY INSTRUMENTS
6.1 Rights over equity instruments granted as compensation
Non-Executive Director share rights
Details of share rights over ordinary shares in the Company granted to Non-Executive Directors during
FY22 as part of the NED SSP were as follows:
E Skira
D McComish
B Munro
A Ramlie
A Sidarto
H Tyrwhitt
V Vella1
Salary
sacrificed
$
Number
of rights
granted2
Fair value at
grant date3
$
Tranche 1
Tranche 2
–
–
Tranche 1
Tranche 2
Tranche 1
Tranche 2
Tranche 1
Tranche 2
Tranche 1
Tranche 2
–
–
27,273
27,273
–
–
38,636
38,636
54,545
54,545
54,545
54,545
21,591
21,591
–
–
147,000
146,999
–
–
208,250
208,249
293,999
293,999
293,999
293,999
116,375
116,374
–
–
717
1,268
–
–
1,016
1,797
1,435
2,537
1,435
2,537
568
1,004
–
–
Vesting
date
Feb 22
Aug 22
–
–
Feb 22
Aug 22
Feb 22
Aug 22
Feb 22
Aug 22
Feb 22
Aug 22
–
–
1
2
3
Mr Vella resigned on 21 October 2021
Share rights are issued under the NED SSP and are not in addition to their fixed remuneration.
In accordance with Australian Accounting Standards, as the share rights granted includes an “option” over ordinary shares,
the option element is required to be fair valued at grant date. The fair value per share is $0.005 for Tranche 1 and $0.009 for
Tranche 2.
Executive KMP performance rights and ordinary shares
During FY22 the following performance rights were granted as compensation to KMP:
Number
of rights
granted
Vesting
conditions
Grant
date
Fair value
per right at
grant date
Earliest
potential
vesting date
M Finnegan
1,886,792
Market
P Pollard
1,886,793
Non-market
717,547
Market
717,547
Non-market
1-Jul-21
1-Jul-21
1-Jul-21
1-Jul-21
0.0993
1-Jul-24
0.1769
1-Jul-24
0.0993
1-Jul-24
0.1769
1-Jul-24
Rights were granted on 1 July 2021, prior to the commencement of the current CFO, COO and CCO.
Rights will expire on the earlier of the termination of the individual’s employment or the day after they are
tested by the Board against the vesting condition and found not to satisfy that condition. In addition to
a continuing performance condition, vesting is conditional on the extent to which the Company achieves
increases in absolute TSR over the performance period.
63
6.2 Details of equity rights affecting current and future remuneration
Details of the vesting profiles of the performance rights over ordinary shares in the Company held by
executive KMP during FY22 are as follows:
Executive
KMP
M Finnegan
G Gettingby
C O’Hehir
P Pollard1
Grant date
(effective
from)
FV on
grant
date
Number
granted
Number
previously
forfeited
Number
forfeited in
2022
Held at
30 June
2022
Financial year in
which the grant vests,
subject to performance
1 Jul 18
1 Jul 20
1 Jul 21
1 Jul 21
1 Jul 18
1 Jul 20
1 Jul 21
1 Jul 21
1 Jul 20
1 Jul 21
1 Jul 21
1 Jul 21
1 Jul 21
0.090
19,394,872
(4,848,718)
0.142
2,467,420
0.099
1,886,792
0.177
1,886,793
-
-
-
-
-
-
-
0.090
12,929,915
(3,232,479)
(9,697,436)
0.142
888,271
0.099
640,162
0.177
640,161
0.090
864,584
0.099
643,084
0.177
673,855
0.090
0.142
717,547
717,547
-
-
-
-
-
-
-
-
(888,271)
(640,162)
(640,161)
(864,584)
(643,084)
(673,855)
14,546,154
FY 21-24 (25% per year)
2,467,420
1,886,792
1,886,793
FY24
FY24
FY24
-
-
-
-
-
-
-
FY 21-24 (25% per year)
FY24
FY24
FY24
FY24
FY24
FY24
FY24
FY24
-
-
717,547
717,547
1
Mr Pollard resigned as CFO on 1 November 2021.
6.3 Analysis of movements in performance rights
The movement during the reporting period, by number of performance rights over ordinary shares in the
Company held, directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:
Held at
1 July 2021
Granted as
compensation
Forfeited
during the year
Held at
30 June 2022
17,013,574
3,773,585
-
-
-
-
-
-
-
-
-
-
10,585,707
1,280,323
(11,866,030)
20,787,159
-
-
-
-
-
1,435,094
-
1,435,094
864,584
1,316,939
(2,181,523)
-
M Finnegan
U Lummis1
R McLeod2
D James3
G Gettingby4
P Pollard5
C O’Hehir6
Mrs Lummis commenced as CFO on 1 November 2021.
1
2 Mr McLeod was appointed as COO on 21 March 2022.
3 Mr James was appointed as CCO on 1 February 2022.
4 Mr Gettingby resigned effective 22 January 2022.
5 Mr Pollard resigned as CFO effective 1 November 2021.
6 Mr O’Hehir resigned effective 28 February 2022.
64
Macmahon Annual Report 2022 6.4 Analysis of movements in share rights
The movement during the reporting period, by number of share rights over ordinary shares in the Company
held, directly, indirectly or beneficially, by Non-Executive Directors, including their related parties, is as follows:
E Skira
D McComish
B Munro
A Ramlie
A Sidarto
H Tyrwhitt
V Vella1
Held at
1 July 2021
Salary Sacrifice
Rights Granted
Vested
during FY22
Held at
30 June 2022
87,508
293,999
(234,508)
146,999
-
-
-
-
107,197
416,499
(315,447)
208,249
201,269
587,998
(495,269)
293,998
201,269
587,998
(495,269)
293,998
50,317
232,749
(166,692)
116,374
-
-
-
-
1
Mr Vella resigned on 21 October 2021.
6.5 Movements in ordinary shareholdings
The movement during FY22 in the number of ordinary shares in the Company held directly, indirectly or
beneficially, by Non-Executive Directors and executive KMP, including their related parties, is as follows:
Non-Executive Directors
E Skira
D McComish
B Munro
A Sidarto
A Ramlie
H Tyrwhitt
V Vella1
Executive KMP
M Finnegan
U Lummis
R McLeod
D James
P Pollard2
G Gettingby3
C O’Hehir4
Total
Held at
1 July
2021
416,999
275,000
1,609,839
1,093,718
1,093,718
96,186
2,307,842
5,020,008
-
-
-
-
3,075,590
-
Other5
Vested
rights6
Held at
30 June 2022
-
234,508
294,927
(204,919)
-
-
-
-
-
-
-
-
-
-
-
-
315,447
495,269
495,269
166,692
-
-
-
-
-
-
-
-
651,507
569,927
1,720,367
1,588,987
1,588,987
262,878
2,307,842
5,020,008
-
-
-
-
3,075,590
-
14,988,900
90,008
1,707,185
16,786,093
Mr Vella resigned on 21 October 2021.
1
2 Mr Pollard resigned on as CFO 1 November 2021.
3 Mr Gettingby resigned on 22 January 2022. Closing details are at the date of effective resignation.
4 Mr O’Hehir resigned on 28 February 2022.
5 Other changes represent shares that were purchased or sold during the year.
6
Rights refers to share rights for Non-Executive Directors and performance rights for executives.
65
Financial
Statements
GENERAL INFORMATION
The financial statements cover Macmahon
Holdings Limited (“the Company” or “the
Parent”) as a consolidated entity (referred to
hereafter as “the Group”) consisting of Macmahon
Holdings Limited and the entities it controlled
at the end of, or during, the year. The financial
statements are presented in Australian dollars,
which is the functional and presentation currency
of the Company.
Macmahon Holdings Limited is a public company
limited by shares, incorporated and domiciled in
Australia. The Group is a for-profit entity.
A description of the nature of the Group’s
operations and its principal activities are included
in the Directors’ Report, which is not part of the
financial statements.
The financial statements were authorised for
issue, in accordance with a resolution of Directors,
on 23 August 2022.
An accounting policy, critical accounting estimate,
assumption or judgement specific to a note is
disclosed within the note itself.
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated
Financial Statements
Directors’ Declaration
Independent Auditor’s Report
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS
15 Hudswell Road, Perth Airport,
Western Australia 6105
68
69
70
71
72
122
124
66
Macmahon Annual Report 2022 67
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Revenue
Other income
Expenses
Materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
Equipment and other short-term lease expenses
Subcontractor costs
Share-based payments expense
Other expenses
Operating profit
Share of profit of equity-accounted investees, net of tax
Operating profit, income and expenses from equity-accounted investees
Net finance costs
Impairment of asset disposal group
Profit before income tax expense
Income tax expense
Note
2
3
2022
$’000
1,698,046
9,777
(445,585)
(706,955)
(197,867)
(104,119)
(71,011)
(103)
(116,211)
65,972
240
66,212
(19,046)
(1,021)
46,145
(18,747)
4
4
27
4
24
4
31
5
Restated 1
2021
$’000
1,351,485
13,033
(441,714)
(526,672)
(154,580)
(40,584)
(45,520)
(926)
(66,117)
88,405
5,519
93,924
(14,605)
-
79,319
(3,912)
Profit after income tax expense for the year
27,398
75,407
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation
9,740
(16,548)
Other comprehensive income / (loss) for the year, net of tax
9,740
(16,548)
Total comprehensive profit for the year attributable to the owners of the Company
37,138
58,859
Earnings per share for profit attributable to
the owners of Macmahon Holdings Limited
Basic earnings per share
Diluted earnings per share
Note
6
6
2022
Cents
2021
Cents
1.30
1.30
3.59
3.55
1
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
68
Macmahon Annual Report 2022
Consolidated Statement of Financial Position
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Assets classified as held for sale
Total current assets
Non-current assets
Investments accounted for using the equity method
Trade and other receivables
Property, plant and equipment
Intangible assets and goodwill
Deferred tax asset
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Income tax payable
Employee benefits
Provisions
Liabilities related to assets held for sale
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Employee benefits
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Issued capital
Reserves
Net accumulated profits/(losses)
Note
2022
$’000
Restated 1
2021
$’000
8
9
10
5
31
24
9
14
15
5
11
17
5
12
13
31
11
17
12
18
19
197,958
299,006
89,949
372
3,490
182,079
246,868
68,498
-
207
590,775
497,652
476
22,962
672,576
15,993
35,496
285
6,444
582,664
23,105
33,333
747,503
645,831
1,338,278
1,143,483
272,375
112,299
-
61,063
25,153
619
218,515
108,186
4,211
52,961
16,160
-
471,509
400,033
384
301,171
5,714
-
204,246
3,341
307,269
207,587
778,778
607,620
559,500
535,863
563,118
(5,901)
2,283
563,118
(14,658)
(12,597)
TOTAL EQUITY
559,500
535,863
1
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
The above consolidated statement of financial position should be read in conjunction with the
accompanying notes.
69
Consolidated Statement of Changes In Equity
Consolidated
Balance at 30 June 2021
Opening balance adjustment on
application of IFRIC decision (note 15)
Issued
capital
$’000
Reserves
$’000
Accumulated
losses
$’000
Retained
profits
$’000
Total
equity
$’000
563,118
(14,658)
(192,396)
189,863
545,927
-
-
-
(10,064)
(10,064)
Restated balance at 1 July 20211
563,118
(14,658)
(192,396)
179,799
535,863
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:
Treasury shares allocated on vesting
of performance rights (note 19)
Treasury shares purchased for
compensation plans (note 19)
Dividends (note 19)
Share-based payments expense (note 27)
Transfer of lapsed performance rights (note 19)
-
-
-
-
-
-
-
-
-
9,740
9,740
307
(319)
-
103
(1,074)
-
-
-
-
-
-
-
-
27,398
-
27,398
9,740
27,398
37,138
59
-
366
(319)
(13,651)
(13,651)
-
1,074
103
-
Balance at 30 June 2022
563,118
(5,901)
(192,396)
194,679
559,500
Consolidated
Balance at 30 June 2020
Opening balance adjustment on
application of IFRIC decision (note 15)
Restated Balance at 1 July 20201
Restated profit after income tax for the year1
Other comprehensive loss for the year, net of tax
Restated total comprehensive income for the year1
Transactions with owners in their capacity as owners:
Treasury shares allocated on vesting of performance
rights (note 19)
Treasury shares purchased for compensation plans
(note 19)
Dividends (note 19)
Share-based payments expense (note 27)
Transfer of lapsed performance rights (note 19)
Issued
capital
$’000
563,118
-
563,118
-
-
-
-
-
-
-
-
Reserves
$’000
Accumulated
losses
$’000
Retained
profits
$’000
Total
equity
$’000
145
(192,396)
126,964
497,831
-
145
-
(16,548)
(16,548)
2,521
(183)
-
926
(1,519)
-
(8,238)
(8,238)
(192,396)
118,726
489,593
-
-
-
-
-
-
-
-
75,407
-
75,407
(16,548)
75,407
58,859
(2,202)
319
-
(183)
(13,651)
(13,651)
-
1,519
926
-
Restated Balance at 30 June 20211
563,118
(14,658)
(192,396)
179,799
535,863
1 30 June 2020 and 30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs
related to configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
70
Macmahon Annual Report 2022
Consolidated Statement of Cash Flows
Note
2022
$’000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments to suppliers and employees for SaaS costs
Receipts from joint venture entities
Payments to joint venture entities
Acquisition costs
Dividends received from equity-accounted investments
24
Interest received
Interest and other finance costs paid
Income taxes paid
1,855,334
(1,585,391)
(4,964)
66
(163)
(351)
-
273
(19,379)
(17,518)
Restated 1
2021
$’000
1,363,496
(1,098,258)
(3,695)
2,327
(123)
(73)
1,595
341
(16,218)
(10,402)
Net cash from operating activities
7
227,907
238,990
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment
Payments for property, plant and equipment
Payments for intangible assets
Investment in joint venture
Earn-out in relation to previous acquisition2
Acquisition of subsidiary, net of cash acquired
Net cash used in investing activities
Cash flows from financing activities
Purchase of own shares
Proceeds from interest-bearing loans
Repayment of interest-bearing loans
Financing from sale and leaseback arrangements
Repayment of lease liabilities
Dividends paid
14
15
11
11
19
17
17
17
19
9,486
(162,559)
(353)
-
(17,095)
-
9,899
(204,174)
(2,421)
(124)
(3,150)
(1,864)
(170,521)
(201,834)
(319)
80,993
(29,413)
-
(83,076)
(13,651)
(183)
73,762
(13,181)
16,249
(57,091)
(13,651)
Net cash from / (used in) financing activities
(45,466)
5,905
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
11,920
182,079
3,959
43,061
141,837
(2,819)
Cash and cash equivalents at the end of the financial year
8
197,958
182,079
1 30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
2 The FY2021 Earn-out has been reclassified. Refer to note 15 for further details.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
71
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
A RESULTS
1 Operating segments
2 Revenue
3 Other income
4 Expenses
5 Tax
6 Earnings per share
B CASH FLOW INFORMATION
73
73
75
76
76
78
81
82
7 Reconciliation of profit after income
tax to net cash from operating activities 82
C WORKING CAPITAL
Inventories
8 Cash and cash equivalents
9 Trade and other receivables
10
11 Trade and other payables
12 Employee benefits
13 Provisions
D FIXED ASSETS
14 Property, plant and equipment
Intangible assets and goodwill
15
E RISK
16 Financial risk management
F DEBT AND EQUITY
17 Borrowings
18 Equity – Issued capital
19 Equity – Reserves
82
82
83
84
85
86
87
88
88
91
94
94
101
101
103
104
G UNRECOGNISED ITEMS
20 Contingent liabilities
21 Commitments
22 Events after the reporting period
H OTHER INFORMATION/GROUP
STRUCTURE
23 Interests in subsidiaries
24 Interests in joint ventures
25 Related party transactions
26 Compensation of key
management personnel
27 Share-based payments
28 Remuneration of auditors
29 Deed of cross guarantee
30 Parent entity information
31 Disposal group held for sale
32 Other significant accounting policies
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
106
106
106
106
107
107
108
109
110
110
114
115
117
118
119
122
124
SUMMARY OF CONSOLIDATED REPORTS
130
ASX ADDITIONAL INFORMATION
132
CORPORATE DIRECTORY AND GLOSSARY 136
72
Macmahon Annual Report 2022 A RESULTS
1 OPERATING SEGMENTS
Identification of reportable operating segments
The Group has identified its reportable segments based on the internal reporting, which is reviewed and
used by the Chief Executive Officer (the Chief Operating Decision Maker) in assessing the performance
and in determining the allocation of resources between business units.
Management have identified three operating segments; Surface Mining, Underground Mining and
International Mining. These segments have been aggregated into “Mining” due to all segments exhibiting
similar economic characteristics regarding the nature of the products and services, production processes,
type or class of customers and methods used in rendering their services.
The following describes the operations of each reportable segment:
Mining
The Group provides a broad range of mining services, which includes surface and underground mining,
civil and rehabilitation services, equipment maintenance, rentals and management.
Financial performance is measured with reference to underlying earnings before interest, tax and customer
amortisation (EBIT(A)), as included in internal reporting reviewed by the Chief Executive Officer, and is
measured consistently with profit or loss in the consolidated financial statements. Segment EBIT(A) is used
to measure financial performance, as management believes that such information is the most relevant in
evaluating the results of certain segments relative to other entities that operate within these industries.
The financial performance of each reportable segment is set out below:
Consolidated – 2022
Revenue
Revenue from contracts with customers
Revenue from contracts with customers - non-cash consideration
Total revenue
Underlying EBITDA
Depreciation and amortisation expense
(excluding customer contracts amortisation)
Underlying EBIT(A)
Finance income
Finance costs
Earn-out in relation to previous - GBF acquisition
Acquisition costs
Share-based payments expense
SaaS customisation costs
Impairment of asset disposal group
Amortisation on customer contracts
Mining
$’000
Unallocated
$’000
Total
$’000
1,698,046
-
1,698,046
-
-
-
1,698,046
-
1,698,046
291,766
(324)
291,442
(189,109)
102,657
-
(18,803)
-
-
-
-
-
(7,225)
(1,533)
(1,857)
273
(516)
(21,945)
(351)
(103)
(4,964)
(1,021)
-
(190,642)
100,800
273
(19,319)
(21,945)
(351)
(103)
(4,964)
(1,021)
(7,225)
Profit / (loss) before income tax expense
76,629
(30,484)
46,145
Segment assets
Segment liabilities
Capital expenditure
1,094,907
243,371
1,338,278
766,504
12,274
778,778
279,355
-
279,355
73
Restated1 Consolidated – 2021
Revenue
Revenue from contracts with customers
Revenue from contracts with customers - non-cash consideration
Total revenue
Underlying EBITDA
Depreciation and amortisation expense
(excluding customer contracts amortisation)
Underlying EBIT(A)
Finance income
Finance costs
Earn-out in relation to previous - TMM acquisition
Acquisition costs
Share-based payments expense
SaaS customisation costs
Fair value uplift on investment in joint venture
Gain on acquisition of subsidiary
Amortisation on customer contracts
Mining
$’000
Unallocated
$’000
Total
$’000
1,255,286
96,199
1,351,485
-
-
-
1,255,286
96,199
1,351,485
250,508
(621)
249,887
(152,973)
(659)
(153,632)
97,535
-
(14,324)
-
-
-
-
-
-
(948)
(1,280)
341
(622)
(3,150)
(73)
(926)
(3,695)
2,140
4,321
-
96,255
341
(14,946)
(3,150)
(73)
(926)
(3,695)
2,140
4,321
(948)
Profit / (loss) before income tax expense
82,263
(2,944)
79,319
Segment assets
Segment liabilities
Capital expenditure
Australia
Indonesia
South Africa
Malaysia
926,236
217,247
1,143,483
591,135
16,485
607,620
298,492
-
298,492
Geographical revenue from
contracts with customers
Geographical
non-current assets
2022
$’000
1,336,022
358,763
71
3,190
2021
$’000
1,019,846
321,794
6,090
3,755
2022
$’000
656,578
82,362
-
8,563
Restated1
2021
$’000
526,422
110,262
-
9,147
1,698,046
1,351,485
747,503
645,831
1
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to configuration
and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
Major customers
The revenue information above is based on the location of customers. Revenue from three projects related
to three customers, individually greater than 10%, amounted to $659.811 million (2021: four projects related
to four customers for $830.433 million), arising from the provision of mining services.
Operating segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. All operating segments’ operating results are regularly reviewed by the
Chief Executive Officer in making decisions about resource allocation and performance assessment, and for
which discrete financial information is available.
Segment results that are reported to the Chief Executive Officer include items directly attributable to
a segment, as well as those that can be allocated on a reasonable basis. Unallocated items comprise of
corporate assets, net foreign exchange differences, finance income, income taxes, share-based payments
and acquisition costs. Segment capital expenditure is the total cost incurred during the year to acquire
property, plant and equipment, and intangible assets other than goodwill.
74
Macmahon Annual Report 2022 2 REVENUE
Revenue from contracts with customers
Revenue from contracts with customers (non-cash consideration)
Consolidated
2022
$’000
1,698,046
-
2021
$’000
1,255,286
96,199
1,698,046
1,351,485
Services revenue
The Group generates revenue from the provision of mining services, which includes surface and
underground mining, civil and rehabilitation services, equipment maintenance, rentals and management.
The activities for each contract were assessed as highly inter-related and, as a result, the Group determined
that one performance obligation exists for each of its mining contracts.
The transaction price for each contract is based on agreed contractual rates to which the Group is entitled,
and may include a variable pricing element which is discussed below.
Revenue for services is recognised over time on the basis of the work completed and billed to the customer
as the customer receives the benefit. Amounts billed to customers are not secured and are typically due
within 5 - 60 days from the invoice issuance.
Sale of goods
The Group generates revenue from the sale of goods in the course of ordinary activities, which is recognised
at a point in time when control has been transferred to the customer, generally being when the goods are
delivered and accepted by the customer. Revenue from the sale of goods is measured at the fair value of
consideration received or receivable, net of trade discounts.
Variable consideration
Certain contracts with customers include a variable element which is subject to the Group meeting either
certain cost targets or material movement KPIs. Variable consideration is recognised when it is highly
probable that a significant reversal of revenue will not occur in a subsequent period.
For the year ended 30 June 2022, variable consideration amounted to $36.772 million (2021: $40.314
million) of which $7.509 million (2021: $16.827 million) was carried as a contract asset (note 9) and has
subsequently been approved by customers.
Non-cash consideration
Where customers contribute materials to the Group to facilitate the fulfilment of the contract, and the Group
obtains control of the contributed materials, the cost of these materials have been included in revenue, as
non-cash consideration received from the customer and the corresponding expense is included in materials
and consumables used in the consolidated statement of profit or loss and other comprehensive income.
Due to COVID-19 and its impact on supply chains, from 1 July 2021, PT AMNT does not permit the Group to
control all supplies on the Batu Hijau site. As a result, materials are not recognised as revenue or expenses
during the period (30 June 2021: $96.199 million). In prior years, the supplies were passed through at cost by
the group and there was no margin attached and therefore net earnings at Batu Hijau remain unchanged.
75
3 OTHER INCOME
Net gain on disposal of plant and equipment
Fair value uplift on investment in joint venture
Gain on acquisition of subsidiary
Other
Consolidated
2022
$’000
3,416
-
-
6,361
9,777
2021
$’000
3,068
2,140
4,321
3,504
13,033
Other income
Other income includes management fees from joint venture partners.
During 2022, the Group did not charge any joint venture partners management fees (2021: $1.061 million).
Refer to Note 25.
For FY 2022 other income primarily relates to training rebates received.
4 EXPENSES
Profit before income tax from continuing operations includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Right-of-use assets
Amortisation
Software
Customer contracts
Consolidated
2022
$’000
8
118,972
71,422
240
7,225
Restated1
2021
$’000
3
98,229
54,915
485
948
197,867
154,580
1 30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to configuration
and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
76
Macmahon Annual Report 2022
Other expenses
Freight expenses
Consulting and other professional services
Recruitment, training and other employee incidentals
Travel and accommodation expenses
Insurance expenses
Expected credit loss (ECL) allowance
Administrative and facilities expenses
Information, communication and technology expenses
SaaS customisation costs
Foreign exchange loss
Acquisition costs
Other expenses
Earn-out in relation to previous acquisitions
Consolidated
2022
$’000
Restated1
2021
$’000
21,127
8,181
14,952
8,228
8,248
599
7,842
10,210
4,964
324
351
9,240
21,945
116,211
15,681
5,844
10,847
5,189
5,697
(11)
5,310
6,640
3,695
620
73
3,382
3,150
66,117
1 30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
Lease expenses
Leases under AASB 16 Leases
Depreciation of right-of-use assets
Interest expense on lease liabilities
Equipment and other short-term lease expenses
Employee benefits expense
Employee benefits expense includes superannuation as follows:
Superannuation
Defined contribution superannuation expense
Consolidated
2022
$’000
2021
$’000
(71,422)
(11,498)
(104,119)
(54,915)
(9,896)
(40,584)
(187,039)
(105,395)
Consolidated
2022
$’000
2021
$’000
38,964
38,964
32,054
32,054
Net finance costs
Finance costs include interest on lease liabilities and are expensed in the period in which they are incurred.
Borrowing costs capitalised are amortised over the term of the facility.
Interest income on term deposits
Interest expense on lease liabilities
Interest expense and other facility charges on interest-bearing loans
Other borrowing costs
Consolidated
2022
$’000
(273)
11,498
5,460
2,361
2021
$’000
(341)
9,896
4,259
791
19,046
14,605
77
5 TAX
a)
Income tax expense
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense before adjustments for prior periods
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible / (taxable) in calculating taxable income:
Share-based payments
Non-deductible expenses / (non-assessable income)2
Foreign tax rate differential
Net temporary difference previously unrecognised
Current year losses for which no deferred tax asset was recognised
Deferred tax asset derecognised due to change in income tax rates
Other3
Income tax expense
Consolidated
2022
$’000
20,926
(2,179)
18,747
46,145
13,844
31
6,531
(3,006)
(557)
(22)
(1,805)
3,731
Restated1
2021
$’000
10,657
(6,745)
3,912
79,319
23,795
278
(1,387)
(2,363)
(17,315)
-
194
710
18,747
3,912
1 30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to configuration
and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
2 Non-deductible expenses primarily relates to the GBF earn out.
3 Including withholding tax on dividends from international subsidiaries.
b) Current assets and liabilities - income tax
Income tax receivable / (payable) - Australian operations
Income tax receivable / (payable) - International operations
Consolidated
2022
$’000
-
372
372
2021
$’000
299
(4,510)
(4,211)
78
Macmahon Annual Report 2022
c) Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Inventories
Property, plant and equipment
Contract assets
Employee benefits
Other payables
Other
Unused tax losses carried forward
Deferred tax asset before adjustments for prior periods
Adjustments recognised for prior periods
Deferred tax asset
Unrecognised deferred tax asset
Available fraction tax losses
Other non-deductible differences
Unrecognised deferred tax asset
Consolidated
2022
$’000
2021
$’000
(4,444)
15,667
(45,133)
23,100
12,492
-
33,814
35,496
-
35,496
5,608
3,873
9,481
(6,134)
23,179
(34,602)
18,472
21,673
126
6,306
29,020
4,313
33,333
5,608
4,406
10,014
Income tax
The effective tax rate in the current year of 40.6% (Restated 30 June 2021: 4.9%) primarily resulted from the
non-deductible expense in the form of earn-out in relation to previous acquisitions, partially offset by the
lower statutory tax rates of foreign operations.
Excluding this one-off non-deductible expense, the effective tax rate for the financial year ended 30 June
2022 approximates 27.5% (Restated 2021: 29.7%).
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised
in profit or loss except to the extent that it relates to items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax
rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of
previous years. Current tax payable also includes any tax liability arising from the declaration of dividends.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
• when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
• when the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when
they reverse, based on laws that have been enacted or substantively enacted at the reporting date.
79
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax assets and liabilities on a net basis or
their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences,
to the extent that it is probable that future taxable profits will be available against which they can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
Additional income tax expenses that arise from the distribution of cash dividends are recognised at the
same time that the liability to pay the related dividend is recognised. The Group does not distribute
non-cash assets as dividends to its shareholders.
Tax consolidation
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group
with effect from 1 July 2003 and are therefore taxed as a single entity from that date. The head entity
within the tax-consolidated group is Macmahon Holdings Limited. Current income tax expense / benefit,
deferred tax liabilities and deferred tax assets arising from temporary differences of the members of
the tax-consolidated group are recognised in the separate financial statements of the members of the
tax-consolidated group using the ‘separate taxpayer within group’ approach by reference to the carrying
amounts of assets and liabilities in the separate financial statements of each entity and the tax values
applying under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the
subsidiaries are assumed by the head entity in the tax-consolidated group and are recognised as amounts
payable to / (receivable from) other entities in the tax consolidated group in conjunction with any tax
funding arrangement amounts (refer below). Any difference between these amounts is recognised by the
Group as an equity contribution or distribution.
The Group recognises deferred tax assets arising from unused tax losses of the tax-consolidated group
to the extent that it is probable that future taxable profits of the tax-consolidated group will be available
against which the unused tax losses can be utilised. Any subsequent period adjustments to deferred tax
assets arising from unused tax losses as a result of revised assessments of the probability of recoverability
is recognised by the head entity only.
Nature of tax funding arrangements and tax sharing arrangements
The head entity, in conjunction with other members of the tax-consolidated group, has entered into a tax
funding arrangement which sets out the funding obligations of members of the tax-consolidated group in
respect of tax amounts. The tax funding arrangements require payments to / (from) the head entity equal
to the current tax asset / (liability) assumed by the head entity and any deferred tax loss asset assumed
by the head entity, resulting in the head entity recognising an inter-entity payable / (receivable) equal in
amount to the tax asset / (liability) assumed. The inter-entity payables / (receivables) are at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect
the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
The head entity in conjunction with other members of the tax-consolidated group has also entered into
a tax sharing agreement. The tax sharing agreement provides for the determination of the allocation of
income tax liabilities between the entities should the head entity default on its tax payment obligations.
No amounts have been recognised in the financial statements in respect of this agreement as payment
of any amounts under the tax sharing agreement is considered remote.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgment is
required in determining the provision for income tax. There are many transactions and calculations
undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.
The Group recognises liabilities for anticipated tax audit issues based on the consolidated entity’s current
understanding of the tax law. Where the final tax outcome of these matters is different from the carrying
amounts, such differences will impact the current and deferred tax provisions in the period in which such
determination is made.
80
Macmahon Annual Report 2022
6 EARNINGS PER SHARE
Profit after income tax attributable to the owners of Macmahon Holdings Limited
Consolidated
2022
$’000
27,398
Restated1
2021
$’000
75,407
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
2,100,166,387
2,100,056,818
Adjustments for calculation of diluted earnings per share:
Effect of performance rights on issue
6,515,039
25,786,294
Weighted average number of ordinary shares used in calculating diluted earnings per share
2,106,681,426
2,125,843,112
Earnings per share for profit attributable to owners of Macmahon Holdings Limited
Basic earnings per share
Diluted earnings per share
Cents
Cents
1.30
1.30
3.59
3.55
1 30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to configuration
and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit / (loss) attributable to the owners of Macmahon
Holdings Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares (if any), and the weighted average number of shares assumed to have been issued
for no consideration in relation to dilutive potential ordinary shares.
81
B CASH FLOW INFORMATION
7 RECONCILIATION OF PROFIT AFTER INCOME TAX
TO NET CASH FROM OPERATING ACTIVITIES
Profit after income tax expense for the year from continuing operations
Adjustments for:
Depreciation and amortisation expense
Net (gain) / loss on disposal of plant and equipment
Share of profit of equity accounted investees, net of tax
Share based payments expense
Net foreign exchange loss / (gain)
Remeasurement of ECL allowance
Impairment of asset disposal group
Other2
Net gain on acquisition of subsidiary
Income tax expense
Income taxes paid
Dividends received from equity accounted investees
Net cash received from equity accounted investees
Change in operating assets and liabilities:
Decrease / (increase) in trade and other receivables
Decrease / (increase) in inventories
Increase / (decrease) in trade and other payables
Increase in employee benefits
Increase / (decrease) in provisions
Net cash from operating activities
Consolidated
2022
$’000
27,398
197,867
(3,416)
(240)
103
324
127
1,021
22,417
-
18,747
(17,518)
-
(97)
(77,828)
(24,897)
65,160
9,946
8,793
Restated1
2021
$’000
75,407
154,580
(3,068)
(5,519)
926
620
(11)
-
2,392
(6,461)
3,912
(10,402)
1,595
2,204
(37,095)
8,979
46,592
7,878
(3,539)
227,907
238,990
1
2
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to configuration
and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
Other includes GBF earn-out (FY21 TMM earn-out).
C WORKING CAPITAL
8 CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
Consolidated
2022
$’000
15
197,943
197,958
2021
$’000
19
182,060
182,079
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short-term highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and subject to an insignificant risk of changes in value.
82
Macmahon Annual Report 2022 9 TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Contract assets
Less: Provision for ECL
Other receivables
Prepayments
Non-current
Contract assets
Other receivables
Agency receivables
Consolidated
2022
$’000
2021
$’000
49,363
201,852
(3,403)
48,176
159,910
(3,112)
247,812
204,974
44,011
7,183
36,758
5,136
299,006
246,868
9,387
4,075
9,500
22,962
3,070
2,278
1,096
6,444
Trade and other receivables
Trade receivables are initially recognised at the fair value of the services provided to the customer and
subsequently at amortised cost less expected credit loss allowances. Other receivables are initially
recognised at cost and subsequently measured at amortised cost less expected credit loss allowances.
Due to the short term nature of these receivables, their carrying amount approximates their fair value.
Other receivables include:
• Contracted reimbursements for project closure costs of $8.569 million (2021: $7.408 million) relating
to the costs recognised as part of the provision for contract closure. Refer to note 13; and,
• VAT receivable of $16.323 million (2021: $10.779 million) relating to input tax credits collected on goods
and services consumed has been classified as current, in part, to the extent that the Group expects to
receive this within the next 12 months. A VAT receivable of $4.075 million continues to be classified as
non-current as at 30 June 2022 (2021: $2.278 million).
Agency receivables
The Group entered into a tripartite agreement with a customer and financier regarding certain mining
equipment acquired for the mining contract. The tripartite agreement provides the financier with a put
option and the customer with a call option over the equipment, whilst the Group acts as an agent
between the financier and the customer, to source and maintain the equipment. The feature of the
put / call transaction results in control and risk or reward of the equipment not being with the Group.
Lease costs paid by the Group in relation to the equipment (including interest) in excess to the receipts
from the customer is recovered from the customer on the earlier of the life of the asset or exercise of the
put / call, which is represented by a non-current receivable at the end of the contract.
Contract assets
Contract assets of $198.033 million (2021: $158.741 million) relate to the Group’s right to consideration
of mining services rendered but not billed as at 30 June 2022. Contract assets are transferred to trade
receivables when the Group issues an invoice to the customer.
Included in contract assets are also current mobilisation costs of $3.819 million (2021: $1.169 million)
capitalised at the commencement of the projects, where the recovery of these costs is included in future
rates. These costs are amortised over the contract period as the income is earned. A balance of $9.387
million of capitalised mobilisation costs is classified as non-current as at 30 June 2022 (2021: $3.070 million)
as the contract term for the projects is over 12 months.
The balance of contract assets varies and is dependent on the scale of mining services rendered for the
claim period, which is ordinarily a calendar month, immediately preceding the end of the reporting period.
83
10 INVENTORIES
Inventories at lower of cost and net realisable value
Less: Allowance for obsolescence
Consolidated
2022
$’000
94,989
(5,040)
2021
$’000
74,516
(6,018)
89,949
68,498
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is based on the weighted average principle and includes expenditure incurred in
acquiring the inventories and other costs incurred in bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs
of completion and estimated costs to sell.
Allowance for obsolescence
The provision for impairment of inventories assessment requires a degree of estimation and judgment.
The level of the provision is assessed by taking into account the recent sales experience, current market
conditions, the ageing of inventories and other factors that affect inventory obsolescence.
84
Macmahon Annual Report 2022
11 TRADE AND OTHER PAYABLES
Current
Trade payables
Accrued expenses
Other payables
Deferred consideration in relation to the acquisition of GBF
Contingent consideration
Non-current
Other payables
Consolidated
2022
$’000
2021
$’000
111,135
129,682
26,458
5,100
-
272,375
384
384
95,046
97,432
22,537
2,000
1,500
218,515
-
-
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and unpaid. Due to their short-term nature, they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 to 60 days of recognition based on
the credit terms.
Accrued wages and salaries between the last pay period and 30 June 2022 of $6.699 million (2021: $8.972
million) are included within accrued expenses.
Refer to note 16 for further details on financial instruments.
Contingent consideration
The GBF acquisition final earn-out expense of $21.945 million for the year ended 30 June 2022 consisted of
a cash outflow of $17.095 million, with the remaining cash payment deferred until 1 July 2022.
Following the finalisation of Macmahon FY2022 results and the consideration of an independent report from
an external accounting firm, an earn-out of $23.5 million was determined under the purchase agreement.
At 30 June 2022, $5.100 million remains to be paid in FY2023.
Refer to ASX announcement made on 25 October 2021 for further details.
85
12 EMPLOYEE BENEFITS
Current
Annual leave
Long-service leave
Other employee benefits
Non-current
Long-service leave
Consolidated
2022
$’000
2021
$’000
41,165
8,459
11,439
61,063
5,714
5,714
33,740
8,129
11,092
52,961
3,341
3,341
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave, long service leave and
accumulating sick leave expected to be settled within 12 months of the reporting date are recognised
in current liabilities in respect of employees’ services up to the reporting date and are measured at the
amounts expected to be paid when the liabilities are settled. Non-accumulating sick leave is expensed
to profit or loss when incurred.
Long service leave
The liability for long service leave is recognised in current and non-current liabilities, depending on the
unconditional right to defer settlement of the liability for at least 12 months after the reporting date. The
liability is measured as 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 on high quality corporate bonds at the
reporting date with terms to maturity and currency that match, as closely as possible, the estimated future
cash outflows.
Defined contribution superannuation expense
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution plans are recognised as an employee benefit expense
in profit or loss in the periods during which services are rendered by employees. Prepaid contributions
are recognised as an asset to the extent that a cash refund or reduction in future payments is available.
Contributions to a defined contribution plan which are due more than 12 months after the end of the period
in which the employees render the service are discounted to their present value.
Termination benefits
Termination benefits are recognised as an expense when the Group is committed demonstrably, without
realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the
normal retirement date, or to provide termination benefits as a result of an offer made to encourage
voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the
Group has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted,
and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after
the reporting date, then they are discounted to their present value.
Superannuation plan
The Trust Company Ltd is the Trustee of the Macmahon Employees Superannuation Fund (the Fund) and is
responsible for all areas of compliance with regard to the Fund. There are less than 5 employees remaining
in the plan.
Other employee benefits
Other employee benefits include short-term incentive plans (prior years deferred entitlements and current
year estimates), site performance bonuses, sick leave accruals, religious holiday allowance for certain
international staff and other short-term benefits.
86
Macmahon Annual Report 2022 13 PROVISIONS
Movements in each class of provision during the current financial year are set out below:
At 1 July 2021
Arising during the year
Reclassified from employee benefits
Released during the year
Utilised during the year
At 30 June 2022
Project
closure
$’000
15,434
4,953
4,192
-
(455)
Other
$’000
726
-
-
303
-
Total
$’000
16,160
4,953
4,192
303
(455)
24,123
1,029
25,153
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of
a past event, it is probable the Group will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation. The amount recognised as a provision is the best estimate of
the consideration required to settle the present obligation at the reporting date, taking into account the
risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are
discounted using a current pre-tax discount rate specific to the liability. The increase in the provision
resulting from the passage of time is recognised as a finance cost.
Provision for project closure
The provision for project closure requires a degree of estimation and judgement around contractual term,
expected redundancy and demobilisation costs. The provision is assessed by taking into account past
history of contract closures and likelihood of contract extensions.
Reclassification from employee benefits
During the current year, the employee redundancy cost was reclassified to the provision for contract closure.
87
D FIXED ASSETS
14 PROPERTY, PLANT AND EQUIPMENT
Set out below are the carrying amounts of property, plant and equipment and right-of-use assets
recognised and movements for the period:
Consolidated
At 30 June 2020
Additions
Acquisitions through a business
combination
Disposals
Depreciation expense
Transfers
Exchange differences
At 30 June 2021
At 1 July 2021
Additions
Disposals
Depreciation expense
Transfers
Exchange differences
At 30 June 2022
Cost
Accumulated depreciation
and impairment losses
Carrying amount at 30 June 2021
Cost
Accumulated depreciation
and impairment losses
Right-of-use assets
Buildings
$’000
Plant &
equipment
$’000
Leasehold
improvements
$’000
Plant &
equipment
$’000
13,592
312
-
(709)
(1,745)
-
-
11,450
11,450
-
-
(1,533)
-
-
9,917
14,485
188,365
101,531
16,333
(5,602)
(53,170)
(6,529)
(64)
240,864
240,864
120,228
(2,103)
(69,889)
1,076
424
290,600
350,659
-
65
-
-
(3)
-
-
62
62
-
-
(8)
-
-
54
569
255,039
194,163
1,904
(19,986)
(98,229)
6,529
(9,132)
330,288
330,288
158,774
(3,761)
(118,972)
1,018
4,658
372,005
860,228
Total
$’000
456,996
296,071
18,237
(26,297)
(153,147)
-
(9,196)
582,664
582,664
279,002
(5,864)
(190,402)
2,094
5,082
672,576
1,225,941
(3,035)
(109,795)
(507)
(529,940)
(643,277)
11,450
14,485
240,864
444,466
62
509
330,288
582,664
1,001,388
1,460,848
(4,568)
(153,866)
(455)
(629,383)
(788,272)
Carrying amount at 30 June 2022
9,917
290,600
54
372,005
672,576
Security
Leasehold improvements and plant and equipment are subject to a registered charge to secure banking
facilities. Refer to note 17.
88
Macmahon Annual Report 2022 Property, plant and equipment
Property, plant and equipment is measured at cost, less accumulated depreciation and accumulated
impairment losses, if any.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-
constructed assets includes the cost of materials and direct labour, any other costs directly attributable to
bringing the assets to a working condition for their intended use, the costs of dismantling and removing
the items and restoring the site on which they are located, and capitalised borrowing costs. Cost may also
include transfers from equity of any gain or loss on qualifying cash flow hedges from foreign currency
purchases of property, plant and equipment. Purchased software that is integral to the functionality of
the related equipment is capitalised as part of that equipment.
The fair value of property, plant and equipment recognised as a result of a business combination is based
on market values. The market value of plant and equipment is the estimated amount for which plant and
equipment could be exchanged, on the date of valuation between a willing buyer and a willing seller in
an arm’s length transaction after proper marketing, wherein the parties had each acted knowledgeably,
prudently and without compulsion. The market value of plant and equipment is based on external market
appraisals from accredited, independent valuation specialists.
When parts of an item of plant and equipment have different useful lives, the items are accounted for as
separate items (i.e. major components) of plant and equipment.
Depreciation and amortisation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual
assets are assessed, and if a component has a useful life that is different from the remainder of that asset,
that component is depreciated separately.
Depreciation on buildings, leasehold improvements and minor plant and equipment is calculated on a
straight-line basis. Depreciation on major plant and equipment and components is calculated on machine
hours worked or straight-line over their estimated useful life. Leased assets are depreciated using the
straight-line method from the commencement date to the end of the lease term, unless the lease transfers
ownership of the underlying asset to the Group by the end of the lease term, or the cost of the right-of-use
asset reflects that the Group will exercise a purchase option. In that case, the right-of-use asset will be
depreciated over the useful life of the underlying asset, which is determined on the same basis as those
property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses,
if any, and adjusted for certain remeasurements of the lease liability. Land is not depreciated.
Depreciation methods, useful lives and residual values are reviewed on regular basis with annual
reassessments for major items and adjusted if appropriate.
The expected useful lives for the current and comparative years are as follows:
• Leasehold improvements: Period of the lease
• Plant and equipment: 3-12 years
• Right-of-use assets: Period of the lease
The carrying amounts of the Group’s assets, other than inventories (see inventory accounting policy)
and deferred tax assets (see income tax accounting policy), are reviewed at each balance sheet date
to determine whether there is any indication of impairment. If any such indication exists, the asset’s
recoverable amount is estimated (see impairment of non-financial assets below).
For goodwill, the recoverable amount is estimated annually or more frequently if events or changes in
circumstances indicate that goodwill might be impaired.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. Impairment losses are recognised in profit or loss.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period
of the lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds
are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred
directly to profits reserve.
89
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied within the
component will flow to the Group, and its cost can be measured reliably. The carrying amount of the
replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are
recognised in profit or loss as incurred.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation expenses
for its property, plant and equipment and finite life intangible assets. The useful lives could change
significantly as a result of technical innovations or some other event. The depreciation and amortisation
expense will increase where the useful lives are less than previously estimated lives, or technically obsolete
or non-strategic assets that have been abandoned or sold will be written off or written down.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life
intangible assets at each reporting date by evaluating conditions specific to the Group and to the particular
asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is
determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate
a number of key estimates and assumptions, including the continued performance of contracted work,
growth rates of the estimated future cash flows and discount rates based on the current cost of capital.
Change in estimates
The group has revised their estimates for the capitalisation and expense of certain components to property,
plant and equipment. These components, including tyres, allocated to the appropriate plant and equipment
on initial recognition are more appropriately depreciated based on their measure of usage of the specific
component. This revised method more appropriately aligns the expense with revenue across the year.
Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. They are measured at the lower of their
carrying amount and fair value less costs of disposal. Costs of disposal are the incremental costs directly
attributable to the disposal of an asset, excluding finance costs and income tax expense.
For non-current assets to be classified as held for sale, those assets must be available for immediate sale
in their present condition and their sale must be highly probable.
Non-current assets classified as held for sale are separately presented on the face of the consolidated
statement of financial position as current assets.
Impairment of assets
For the year ended 30 June 2022, the Group assessed whether there were any indicators of impairment.
The Company’s market capitalisation at 30 June 2022 was below its net assets and management
considered this factor an impairment indicator at 30 June 2022.
The recoverable amount was determined by calculating the higher of Fair Value less Costs of Disposal
(FVLCD) and Value in Use (VIU) for the group CGU’s.
The CGU’s of the Group are Surface and civil, Underground and International. At 30 June 2022, none of
these CGU’s were considered to be impaired as the recoverable amount was greater than the carrying value
of the assets in the CGU, resulting in no impairment.
In addition, an independent desk top valuation was obtained for certain major equipment in Australia.
The valuation exceeded the carrying amount.
90
Macmahon Annual Report 2022
15 INTANGIBLE ASSETS AND GOODWILL
Set out below are the carrying amounts of intangible assets recognised and movements for the period:
Consolidated
Cost
At 30 June 2020
Opening balance adjustment on
application of IFRIC decision
Restated balance as at 1 July 20201
Additions
Acquisition through a business combination
Restated balance as at 30 June 20211
Additions
At 30 June 2022
Accumulated amortisation and impairment
At 30 June 2020
Opening balance adjustment on
application of IFRIC decision
Restated balance as at 1 July 20201
Amortisation
Restated balance as at 30 June 20211
Amortisation
At 30 June 2022
Net book value
Restated balance as at 30 June 20211
At 30 June 2022
Goodwill
$’000
Customer
contracts
$’000
Software
$’000
Total
$’000
8,808
-
8,808
-
-
8,808
-
8,808
-
-
-
-
-
-
-
8,808
8,808
1,100
13,690
23,598
-
(13,690)
(13,690)
1,100
-
12,555
13,655
-
13,655
-
2,421
-
2,421
353
2,774
9,908
2,421
12,555
24,884
353
25,237
(346)
(1,922)
(2,268)
-
(346)
(948)
(1,294)
(7,225)
(8,519)
12,361
5,136
1,922
-
(485)
(485)
(240)
(725)
1,936
2,049
1,922
(346)
(1,433)
(1,779)
(7,465)
(9,244)
23,105
15,993
1
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer below for more details.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at
their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised
at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less
any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any
impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible
assets are measured as the difference between net disposal proceeds and the carrying amount of the
intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes
in the expected pattern of consumption or useful life are accounted for prospectively by changing the
amortisation method or period.
Goodwill
Goodwill is measured at cost, less any accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the
Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether
other assets or liabilities of the acquiree are assigned to those units.
91
Customer contracts
Customer contracts are a separately identifiable intangible asset equal to the present value of future
post-tax cash flows attributed to the portfolio of incomplete underground mining services contracts
assumed at acquisition date through a business combination.
Customer contracts are carried at cost, less accumulated depreciation and impairment losses. Amortisation
of customer contracts is included in depreciation and amortisation expenses in the consolidated statement
of profit or loss and other comprehensive income. The expected useful life of customer contracts ranges from
2 to 3 years.
Software
Development expenditure is capitalised only if development costs can be measured reliably or the process
is technically and commercially feasible, future economic benefits are probable, and the Group intends
to and has sufficient resources to complete development and to use the asset. The software expenditure
capitalised includes the cost of materials, direct labour and overhead costs directly attributable to preparing
the asset for its intended use. Other development expenditure is recognised in profit or loss as incurred.
Capitalised software development expenditure is measured at cost less accumulated amortisation and
impairment losses. The amortisation is included in depreciation and amortisation expenses. The expected
useful life of software is 5 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation,
and are tested annually for impairment, or more frequently if events or changes in circumstances indicate
that they might be impaired. Other non-financial assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss
is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Change in accounting policy and the impact of cash flow reclassification
Software-as-a-Service (SaaS) arrangements
The International Financial Reporting Standards Interpretations Committee (IFRIC) has issued two final
agenda decisions which impact SaaS arrangements:
• Customer’s right to receive access to the supplier’s software hosted on the cloud (March 2019) – this
decision considers whether a customer receives a software asset at the contract commencement date
or a service over the contract term.
• Configuration or customisation costs in a cloud computing arrangement (April 2021) – this decision
discusses whether configuration or customisation expenditure relating to SaaS arrangements can be
recognised as an intangible asset and if not, over what time period the expenditure is expensed.
During the year, the Group revised its accounting policy in relation to configuration and customisation
costs incurred in implementing SaaS arrangements in response to the IFRIC agenda decision clarifying
its interpretation of how current accounting standards apply to these types of arrangements.
The Group’s accounting policy has historically been to capitalise costs related to the implementation,
configuration and customisation of SaaS arrangements as intangible assets in the Consolidated Statement
of Financial Position. Following the adoption of the above IFRIC agenda decision, current software with
underlying SaaS arrangements were identified and assessed to determine if the Group has control of the
software. For those arrangements where the Group does not control the software or the asset, the Group
derecognised the intangible previously capitalised.
The adoption of the above agenda decision has resulted in recognition of costs capitalised on SaaS
arrangements as an expense of $4.964 million in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income for the current year ended 30 June 2022 and $10.064 million as an opening
balance adjustment in retained earnings related to 30 June 2021.
92
Macmahon Annual Report 2022
Historical financial information has been restated to account for the impact of the change in accounting
policy in relation to SaaS arrangements, as follows:
a) Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2021
Other expenses
Depreciation and amortisation expense
Income tax expense
Other profit or loss items
As previously
reported
$’000
(62,422)
(155,666)
(4,695)
300,016
Adjustment
As restated
$’000
(3,695)
1,086
783
-
$’000
(66,117)
(154,580)
(3,912)
300,016
Profit after income tax for the year
77,233
(1,826)
75,407
b) Consolidated Statement of Financial Position
Balances as at 30 June 2021
Intangible assets and goodwill
Deferred tax asset
Other net assets/(liabilities)
Net assets
Retained earnings
Other equity balances
Total equity
c) Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Payments to suppliers and employees
Other operating cashflows
Earn out in relation to previous acquisition1
As previously
reported
$’000
Adjustment
As restated
$’000
$’000
37,482
29,020
479,425
(14,377)
4,313
-
23,105
33,333
479,425
545,927
(10,064)
535,863
(2,533)
548,460
(10,064)
-
(12,597)
548,460
545,927
(10,064)
535,863
As previously
reported
$’000
(1,098,258)
1,340,943
(3,150)
Adjustment
As restated
$’000
$’000
(3,695)
-
3,150
(1,101,953)
1,340,943
-
Net cash from operating activities
239,535
(545)
238,990
Payments for intangible assets
Other investing cashflows
Earn-out in relation to previous acquisition1
(6,116)
(196,263)
3,695
-
(3,150)
(2,421)
(196,263)
(3,150)
Net cash used in investing activities
(202,379)
545
(201,834)
1 Earn-out for the previous earn-out in FY2021 has been moved to align with the current year presentation
93
E RISK
16 FINANCIAL RISK MANAGEMENT
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Borrowings
Consolidated
2022
$’000
2021
$’000
197,958
269,316
467,274
259,579
413,470
673,049
182,079
221,634
403,713
205,725
312,432
518,157
Trade and other receivables excludes prepayments of $7.183 million (2021: $5.136 million), contract closure
reimbursements of $8.569 million (2021: $7.408 million), VAT receivable of $20.398 million (2021: $13.057
million), non-financial contract assets of $13.206 million (2021: $4.239 million), and other non-financial assets
of $3.296 million (2021: $1.838 million).
Trade and other payables excludes GST and other taxes payable of $13.180 million (2021: $12.790 million).
With the exception of contingent consideration, which is measured at fair value through profit or loss,
financial assets and liabilities are otherwise measured at amortised cost.
Financial instruments not measured at fair value
Fair value of cash and cash equivalents, receivables and trade payables approximate their carrying amounts
largely due to the short-term maturities of these instruments.
Financial risk management objectives
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework. This framework is designed to identify, monitor and manage the material risks
throughout the Group to ensure risks remain within appropriate limits.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and
the Group’s activities. The Group, through its training and management standards and procedures, aims to
develop a disciplined and constructive control environment in which all employees understand their roles
and obligations.
The Board of Directors oversees how management monitors compliance with the Group’s risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the
risks faced by the Group. The Board of Directors is assisted in its oversight role by the Audit and Risk
Committee. Internal audits undertaken are reviews of controls and procedures, the results of which are
reported to the Audit and Risk Committee.
The Group has exposure to the following risks from its use of financial instruments:
• Market risk
• Credit risk
• Liquidity risk
This note presents qualitative and quantitative information about the Group’s exposure to each of the
above risks, their objectives, policies and processes for measuring and managing risk, and the
management of capital.
94
Macmahon Annual Report 2022
Market risk
Market risk includes changes in market prices, such as foreign exchange rates and interest rates that will
affect the Group’s income or the value of its financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising returns.
Currency risk
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a
currency other than respective functional currencies of entities within the Group, which are primarily the
Australian Dollar (AUD), but also the US Dollar (USD), Indonesian Rupiah (IDR), Great British Pounds (GBP),
Malaysian Ringgit (MYR), South African Rand (ZAR), Singapore Dollar (SGD) and Ghanaian Cedi (GHS). The
Group is also exposed to foreign currency risk on plant and equipment purchases that are denonimated in a
currency other than AUD. The currencies giving rise to this risk are primarily USD and IDR.
The contracts for mining services and purchases are primarily denominated in the functional currencies of
entities within the Group to minimise the foreign exchange currency risk.
In respect of other monetary assets and liabilities held in currencies other than the AUD, the Group ensures
that the net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates
when necessary to address short-term imbalances.
The average exchange rates and reporting date exchange rates applied were as follows:
Australian Dollars
USD
IDR
MYR
GBP
SGD
Average exchange rates
Reporting date exchange rates
2022
0.7257
10,436
3.0687
0.5454
0.9866
2021
0.7471
10,745
3.0813
0.5545
1.0056
2022
0.6882
10,220
3.0278
0.5675
0.9592
2021
0.7512
10,882
3.1186
0.5429
1.0106
The carrying amount of foreign currency denominated financial assets and financial liabilities at 30 June
were as follows:
Consolidated
USD
IDR1
GBP
Other
Financial assets
Financial liabilities
2022
$’000
12,292
88,208
-
307
100,807
2021
$’000
13,780
32,861
4,804
1,519
52,964
2022
$’000
(389)
(42,175)
-
(302)
2021
$’000
(97)
(14,881)
-
(16)
(42,866)
(14,994)
1
The Group is paid in IDR for services performed in Indonesia, however, the amount of these IDR payments are adjusted
according to movements in the IDR:USD exchange rate up to the date of invoice.
95
The following analysis demonstrates the increase/(decrease) of profit or loss and other comprehensive
income at the reporting date, assuming a 10% strengthening and a 10% weakening of the following
transaction currencies against the functional currencies of the Group companies where the financial assets
and liabilities are recorded. This analysis also assumes that all other variables, in particular interest rates,
remain constant. The analysis is performed on the same basis as 2021.
Consolidated - 2022
USD
IDR
GBP
Other
Consolidated - 2021
USD
IDR
GBP
Other
Weakened by 10%
Strengthened by 10%
Effect
on profit
before tax
$’000
Effect on
other
comprehensive
income
$’000
(1,190)
(4,603)
-
(1)
(5,794)
-
-
-
-
-
Effect
on profit
before tax
$’000
1,190
4,603
-
1
5,794
Effect on
other
comprehensive
income
$’000
-
-
-
-
-
Weakened by 10%
Strengthened by 10%
Effect
on profit
before tax
$’000
(1,368)
(1,798)
(480)
(150)
(3,796)
Effect on
other
comprehensive
income
$’000
Effect
on profit
before tax
$’000
Effect on
other
comprehensive
income
$’000
-
-
-
-
-
1,368
1,798
480
150
3,796
-
-
-
-
-
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
Interest rate risk on variable rate borrowings is managed under the Group’s approved Treasury Policy. Under
this policy, interest rate exposures are managed by entering fixed rate finances for equipment purchases.
At 30 June, the Group was exposed to variable interest rate risk on financial instruments as follows:
Cash and cash equivalents
Interest-bearing loans
Net exposure to interest rate risk
Consolidated
2022
$’000
197,958
(129,216)
2021
$’000
182,079
(65,053)
68,742
117,026
96
Macmahon Annual Report 2022
Cash flow sensitivity analysis for variable rate instruments
The following analysis demonstrates the increase/(decrease) to profit or loss and other comprehensive
income at 30 June 2022, assuming a change in interest rates of 50 basis points. This analysis also assumes
that all other variables, in particular foreign currency rates, remain constant. The analysis has now assumed
higher interest rates of 50 basis points instead of the historical 25 basis points, considering the recent
changes in the Reserve Bank of Australia rates.
Consolidated - 2022
Cash and cash equivalents
Interest-bearing loans
Consolidated - 2021
Cash and cash equivalents
Interest-bearing loans
50 basis point increase
50 basis point decrease
Effect
on profit
before taxes
$’000
990
(646)
344
Effect on
other
comprehensive
income
$’000
-
-
-
Effect
on profit
before taxes
$’000
(990)
646
(344)
Effect on other
comprehensive
income
$’000
-
-
-
25 basis point increase
25 basis point decrease
Effect
on profit
before taxes
$’000
Effect on
other
comprehensive
income
$’000
Effect
on profit
before taxes
$’000
Effect on other
comprehensive
income
$’000
455
(163)
292
-
-
-
(455)
163
(292)
-
-
-
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s trade receivables and
contract assets from customers.
Cash and cash equivalents
The Group limits its exposure to credit risk for cash and cash equivalents by only investing in liquid
securities, and with counterparties that have an acceptable credit rating where possible.
Guarantees
The Group’s policy is to provide financial guarantees only to or for subsidiaries.
Details of outstanding guarantees are provided in note 20.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the characteristics of each individual customer.
The demographics of the Group’s customer base, including the default risk of the industries and countries
in which customers operate, has less influence on credit risk. For the year ended 30 June 2022, 39% of the
Group’s revenue is attributable to revenue transactions with three customers related to three projects (2021:
61% attributed to four customers related to four projects). Geographically, the primary concentration of
credit risk is in Australia and Indonesia.
Under the Group’s systems and procedures, each new customer is analysed individually for creditworthiness
before the Group’s standard payment and delivery terms and conditions are offered. The exposure to credit
risk is monitored on an ongoing basis. The Group’s analysis includes external ratings, when available, and
in some cases bank references. Credit risk is minimised by managing payment terms, receiving advance
payments, receiving the benefit of a bank guarantee, or by entering into credit insurance for customers
considered to be at risk.
97
Exposure to credit risk
The carrying amount of the Group’s financial assets represents its maximum credit exposure as follows:
Cash and cash equivalents
Trade receivables
Contract assets
Other receivables
Agency receivables
Credit risk exposure
Consolidated
2022
$’000
197,958
45,960
198,033
15,823
9,500
2021
$’000
182,079
45,064
158,741
16,733
1,096
467,274
403,713
Trade and other receivables excludes prepayments of $7.183 million (2021: $5.136 million), contract closure
reimbursements of $8.569 million (2021: $7.408 million), VAT receivable of $20.398 million (2021: $13.057
million), non-financial contract assets of $13.206 million (2021: $4.239 million), and other non-financial assets
of $3.296 million (2021: $1.838 million).
The profile of trade and other receivables and contract assets by segment is as follows:
Mining customers
Other
Less: Provision for expected credit losses
Credit risk exposure by customer
Consolidated
2022
$’000
272,719
-
272,719
(3,403)
2021
$’000
219,942
4,804
224,746
(3,112)
269,316
221,634
At 30 June, the exposure to credit risk for trade and other receivables and contract assets by geographic
region was as follows:
Consolidated
2022
$’000
2021
$’000
217,338
53,764
1,617
173,013
48,430
3,303
272,719
224,746
Country
Australia
Indonesia
Other
98
Macmahon Annual Report 2022 Expected credit loss allowance
Consolidated
Current (not past due)
Past due 0 - 30 days
Past due 31-60 days
Over 90 days overdue
2022
2021
Gross
carrying
amount
$’000
230,270
11,243
1,378
4,505
Loss
allowance
$’000
(416)
(33)
(6)
(2,948)
Gross
carrying
amount
$’000
181,322
16,484
1,059
8,052
247,396
(3,403)
206,917
Loss
allowance
$’000
(294)
(74)
(1)
(2,743)
(3,112)
In determining the provision for ECLs, the Group allocates its exposure to a credit risk based on data that is
determined to be predictive of the risk of loss (including, but not limited to external credit ratings, audited
financial statements and available press information) and applying experienced credit judgement. Loss rates
applied to credit risk ratings are sourced from external credit rating agencies.
The following table provides summarised information of the exposure to credit risk on trade receivables and
contract assets as at 30 June 2022:
Credit rating
A- to AAA
BBB- to BBB+
BB- to BB+
B+ to B-
C to CCC
D
Credit
impaired
No
No
No
No
Yes
Yes
Loss rate
0.000 %
0.012 %
0.025 %
0.294 %
N/A
100.000 %
The movement in the provision for ECLs is as follows:
Opening balance
Net remeasurement of provision for ECL
Additional provision assumed as part of acquisition
Receivables expensed as uncollectible during the year
Exchange differences
Gross
carrying
amount
$’000
15,394
56,262
19,617
153,182
-
2,940
247,395
Loss
allowance
$’000
-
(7)
(5)
(451)
-
(2,940)
(3,403)
Consolidated
2022
$’000
3,112
127
-
-
164
3,403
2021
$’000
5,582
(11)
2,523
(4,982)
-
3,112
99
The Group recognises a provision for ECLs on financial assets measured at amortised cost and contract
assets at an amount equal to lifetime ECLs. When determining whether the credit risk of a financial asset
has increased significantly since initial recognition, and when estimating ECLs, the Group considers
reasonable and supportable information that is relevant and available without undue cost or effort.
This includes both quantitative and qualitative information and analysis, based on the Group’s historical
experience and informed credit assessment. The Group assumes a financial asset to be in default when the
debtor is unlikely to pay its credit obligatons to the Group in full, without recourse by the Group to actions,
such as realising security (if any is held) or the financial asset is more than 90 days past due.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, without incurring unacceptable losses or risking damage to the
Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities
by continuously monitoring actual and forecast cash flows, and matching the maturity profiles of financial
assets and liabilities.
On 28 July 2022 the group extended and increased the syndicated finance facility to 30 September 2026.
Refer to note 22 for further details.
Information about changes in term facilities during the year is disclosed in note 17.
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date
on which the financial liabilities are required to be paid. The tables include both interest and principal cash
flows disclosed as remaining contractual maturities, and therefore these totals may differ from their carrying
amount in the statement of financial position.
Consolidated – 2022
Trade payables
Accrued expenses
Other payables
Borrowings
1 year
or less
$’000
(111,135)
(129,682)
(18,378)
(115,071)
Between
1 and 2
years
$’000
-
-
(384)
Between
2 and 5
years
$’000
-
-
-
Over
5 years
$’000
-
-
-
(209,882)
(82,284)
(3,291)
Remaining
contractual
maturities
$’000
(111,135)
(129,682)
(18,762)
(410,528)
Total non-derivatives
(374,266)
(210,266)
(82,284)
(3,291)
(670,107)
Consolidated – 2021
Trade payables
Accrued expenses
Other payables
Borrowings
1 year
or less
$’000
(95,046)
(97,432)
(22,537)
(122,910)
Between
1 and 2
years
$’000
Between
2 and 5
years
$’000
-
-
-
-
-
-
Over
5 years
$’000
-
-
-
(73,193)
(136,193)
(5,236)
Remaining
contractual
maturities
$’000
(95,046)
(97,432)
(22,537)
(337,532)
Total non-derivatives
(337,925)
(73,193)
(136,193)
(5,236)
(552,547)
The cash flows in the maturity analysis are not expected to occur significantly earlier than contractually
disclosed above.
100
Macmahon Annual Report 2022
F DEBT AND EQUITY
17 BORROWINGS
Currency
Interest
rate (%)
Maturity
2022
$’000
2021
$’000
Consolidated
Current borrowings
Lease liabilities
Interest-bearing loans
Non-current borrowings
AUD, USD, MYR, IDR
2.86 - 8.08%
2022 - 2029
AUD, USD
2.99 - 5.19%
2022 - 2027
Lease liabilities
AUD, USD, MYR, IDR
2.86 - 8.08%
2023 - 2029
Interest-bearing loans
AUD, USD
2.99 - 5.19%
2023 - 2027
81,309
30,990
112,299
157,852
143,319
79,910
28,276
108,186
134,587
69,659
301,171
204,246
The movement in the carrying amount of borrowings is set out below:
Consolidated
At 1 July
New borrowings
Assumed as part of a business combination
Interest expensed
Interest paid
Principal repayments
Lease liabilities returned
Transfers
Exchange differences
At 30 June
Interest-bearing loans
Lease liabilities
2022
$’000
97,935
112,065
-
5,460
(4,235)
(29,413)
-
(8,474)
971
2021
$’000
18,502
94,960
-
2,913
(4,186)
(13,181)
-
-
(1,073)
2022
$’000
214,496
99,377
285
11,498
(12,783)
(82,080)
(996)
8,497
867
2021
$’000
184,248
76,961
11,225
9,896
(9,921)
(57,091)
(712)
-
(109)
174,309
97,935
239,161
214,497
Refer to note 16 for further information on financial instruments.
Lease liabilities
The Group leases offices, plant and equipment, and vehicles across the countries in which it operates. Lease
contracts are for fixed periods between 6 months and 10 years and may include extension options.
On 24 August 2021, the Group executed a new syndicated asset finance facility. The total amount
available under this asset finance facility is $145.000 million and it enables the Group to support its capital
requirements for the current financial year. As at 30 June 2022, $119.002 million was utilised.
Interest Bearing Loans
For the existing syndicated multi-option debt facility which has total amount available of $158.000
million, the Group has drawn a total of $118.000 million as cash and $8.546 million as bank guarantees as
at 30 June 2022. (As at 30 June 2021: $60.000 million drawn as cash and $4.401 million drawn as bank
guarantees).
On 28 July 2022 this facility was extended 3 years to 30 September 2026. Refer to note 22.
101
The Group has a number of loans secured against specific equipment with an amount owing of of $45.074
million as at 30 June 2022 (30 June 2021: $37.935 million).
In addition, the Group secured a new USD denominated $8.157 million (AUD $11.547 million) term facility
for its Indonesian operations. This was fully drawn at 30 June 2022 and repayable by April 2025.
Assets pledged as security
The Group’s lease liabilities and specific loans are secured by the relevant assets and in the event of default,
the assets revert to the lessor or financier. All remaining assets of the Group are pledged as security under
the multi-option facility.
Borrowings
Borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date, borrowings are classified as non-current.
102
Macmahon Annual Report 2022
18 EQUITY – ISSUED CAPITAL
Ordinary shares - fully paid
Less: Treasury shares
Consolidated
2022
Shares
2021
Shares
2,154,985,818
2,154,985,818
(54,839,003)
(54,839,003)
2022
$’000
563,118
(12,910)
2021
$’000
563,118
(12,910)
Ordinary shares
2,100,146,815
2,100,146,815
550,208
550,208
On issue at 1 July
On issue at 30 June
Number of Ordinary Shares
2022
2021
2,154,985,818
2,154,985,818
2,154,985,818
2,154,985,818
Ordinary shares
Ordinary shares are classified as equity and entitle the holder to participate in dividends and the proceeds
on the winding up of the Parent in proportion to the number of and amounts paid on the shares held. The
fully paid ordinary shares have no par value, and the Parent does not have authorised capital. Incremental
costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the capital proceeds.
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.
Treasury shares
Ordinary shares purchased on market by the Company are recognised at cost, less incremental costs
directly attributable to the ordinary shares purchased.
Capital risk management
The Group’s objective when managing capital is to safeguard its ability to continue as a going concern so
that it may 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 Group would look to raise capital when an opportunity to invest in a business or company was seen as
value-adding relative to the Parent entity’s current share price at the time of the investment.
The Group is subject to certain financing arrangement covenants, and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements
during the financial year.
The Group monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by
total equity and net debt. Net debt is calculated as ‘borrowings’ less ‘cash and cash equivalents’, as shown
in the consolidated statement of financial position. Total equity is as shown in the consolidated statement of
financial position. At 30 June 2022, the Group was in a net debt position.
The gearing ratio at 30 June is as below:
Borrowings
Less: Cash and cash equivalents
Net debt
Equity
Gearing ratio
Consolidated
2022
$’000
413,470
(197,958)
215,512
559,500
2021
$’000
312,432
(182,079)
130,353
535,863
27.81%
19.57%
103
19 EQUITY – RESERVES
Reserve for own shares (net of tax)
Foreign currency reserve (net of tax)
Share based payments
Consolidated
2022
$’000
(12,910)
4,090
2,919
(5,901)
2021
$’000
(12,910)
(5,650)
3,902
(14,658)
Reserve for own shares
The reserve for Company’s own shares comprises the cost (net of tax) of the Company’s shares held by
the trustee of the Group’s equity compensation plans which were purchased on-market in anticipation of
vesting of share-based payment awards under the equity compensation plans. During the year, 1,707,183
shares were purchased by the Company (2021: 776,857 shares) for the non-executive directors’ salary sacrifice
plan. At 30 June 2022, there were 54,839,003 unallocated shares held in trust (2021: 54,839,003 shares).
Foreign currency reserve
The foreign currency reserve is used to recognise exchange differences arising from the translation of the
financial statements of foreign operations to Australian dollars. It is also used to recognise gains and losses
on the net investments in foreign operations. The foreign currency translation reserve is reclassified to the
profit and loss either on sale or cessation of the underlying foreign operation.
Share based payments reserve
The share based payments reserve is used to record the value of share based payments and performance
rights to employees, including KMP, as part of their remuneration, as well as non-employees. Refer to note 27.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 30 June 2020
Share buy-back
Foreign currency translation
Treasury shares allocated on vesting of performance rights
Share based payments expense (note 27)
Transfer of expired performance rights to retained earnings
Balance at 30 June 2021
Share buy-back
Foreign currency translation
Treasury shares allocated on vesting of performance rights
Share based payments expense (note 27)
Transfer of expired performance rights to retained earnings
Reserve for
own shares
$’000
Foreign
currency
$’000
(16,159)
10,898
(183)
-
3,432
-
-
-
(16,548)
-
-
-
Share-based
payments
$’000
5,406
-
-
(911)
926
(1,519)
Total
$’000
145
(183)
(16,548)
2,521
926
(1,519)
(12,910)
(5,650)
3,902
(14,658)
(319)
-
319
-
-
-
9,740
-
-
-
-
-
(12)
103
(1,074)
2,919
(319)
9,740
307
103
(1,074)
(5,901)
Balance at 30 June 2022
(12,910)
4,090
104
Macmahon Annual Report 2022 Dividends
The Parent has paid and proposed dividends as set out below:
Cash dividends on ordinary shares declared and paid:
Final dividend for 2021: 0.35 cents per share (2020: 0.35 cents per share)
Interim dividend for 2022: 0.30 cents per share (2021: 0.30 cents per share)
Subsequent to year end - Proposed dividends on ordinary shares:
Final cash dividend for 2022: 0.35 cents per share (2021: 0.35 cents per share)
Dividend franking account at 30 June
Amount of franking credits available to shareholders of the Company for future years
2022
$’000
2021
$’000
7,351
6,300
13,651
7,351
7,351
105
7,351
6,300
13,651
7,351
7,351
1,012
The estimated franking account balance after the payment of the final cash dividend for FY22 will be
$0.105 million.
105
G UNRECOGNISED ITEMS
20 CONTINGENT LIABILITIES
The following contingent liabilities existed at 30 June 2022:
Bank guarantees (syndicated multi-option debt facility and cash backed)
Insurance performance bonds
Consolidated
2022
$’000
9,470
15,896
25,366
2021
$’000
5,325
16,650
21,975
Bank guarantees and insurance bonds are issued to contract counterparties in the ordinary course of
business as security for the performance by the Group of its contractual obligations. The Group is also
called upon to provide guarantees and indemnities to contract counterparties in relation to the performance
of contractual and financial obligations. The value of these guarantees and indemnities is indeterminable.
Other contingent liabilities
The Group has the normal contractor’s liability in relation to its current and completed contracts (for
example, liability relating to design, workmanship and damage), as well as liability for personal injury and
property damage during a project. Potential liability may arise from claims, disputes and/or litigation against
Group companies and/or joint venture arrangements in which the Group has an interest. The Group is
currently managing a number of claims, disputes and litigation processes in relation to its contracts, as well
as in relation to personal injury and property damage arising from project delivery.
There were no contingent assets as at 30 June 2022 or 30 June 2021.
21 COMMITMENTS
At 30 June 2022, the Group has contracted capital expenditure commitments, but not provided for in the
financial statements, of $13.217 million (2021: $32.034 million).
22 EVENTS AFTER THE REPORTING PERIOD
Subsequent to 30 June 2022, the Directors declared a final dividend of 0.35 cents per share.
On 28 July 2022, the Group executed a new Syndicated Finance Facility with the current financiers,
refinancing the existing $170 million facility into a new $200 million facility.
The refinancing has extended the maturity date by 3 years to 30 September 2026.
No other matter or circumstance has arisen since 30 June 2022 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.
106
Macmahon Annual Report 2022 H OTHER INFORMATION/GROUP STRUCTURE
23 INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following
subsidiaries:
Incorporated subsidiaries
Macmahon Contractors Pty Ltd
Macmahon Mining Services Pty Ltd
Doorn-Djil Yoordaning Mining and Construction Pty Ltd
Macmahon Underground Pty Ltd
Macmahon Contracting International Pte Ltd
PT Macmahon Indonesia
Macmahon Constructors Sdn Bhd
TMM Group Pty Ltd*
TMM Group (Consult) Pty Ltd
TMM Group (IP) Pty Ltd*
TMM Group (Operations) Pty Ltd
Macmahon East Pty Ltd
Macmahon Maintenance Masters Pty Ltd
Macmahon (Southern) Pty Ltd
Macmahon Africa Pty Ltd*
Macmahon Malaysia Pty Ltd*
Macmahon Sdn Bhd*
PT Macmahon Contractors Indonesia
Macmahon Singapore Pte Ltd*
Macmahon Contractors Nigeria Ltd*
Macmahon Contractors Ghana Limited*
Macmahon Botswana (Pty) Ltd*
Strong Minds Strong Mines Pty Ltd
GF Holdings (WA) Pty Ltd
GBF Mining and Industrial Services Pty Ltd
GBF North Pty Ltd
GBF Number 3 Pty Ltd*
GBF Number 4 Pty Ltd*
GBF Number 5 Pty Ltd*
GBF Number 6 Pty Ltd
Ramex Services Pty Ltd
GBF Project Services S.R.O
PT Macmahon Mining Services
Interest in trusts
Macmahon Holdings Limited Employee Share Ownership Plans Trust
Macmahon Underground Unit Trust
* Entities were dormant for the financial year ended 30 June 2022.
Ownership interest
Country of
incorporation
2022
%
2021
%
Australia
Australia
Australia
Australia
Singapore
Indonesia
Malaysia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Malaysia
Indonesia
Singapore
Nigeria
Ghana
Botswana
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Slovakia
Indonesia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
107
24 INTERESTS IN JOINT VENTURES
Interest in joint ventures are accounted for using the equity method of accounting. Information relating to
joint ventures that are material to the Group are set out below:
Incorporated joint venture
Country of incorporation
PT Macmahon Labour Services
Indonesia
At 1 July
Share of profit of equity-accounted investees, net of tax
Dividends declared and paid
Dividends declared and unpaid
Fair value uplift on investment in joint venture
Fair value of 50% ownership previously held
Exchange differences
At 30 June
Ownership Interest
2022
%
49%
Consolidated
2022
$’000
285
240
-
-
-
-
(49)
476
2021
%
49%
2021
$’000
10,482
5,519
(1,595)
(5,799)
2,140
(9,361)
(1,101)
285
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity
that is subject to joint control.
Investments in joint ventures are accounted for using the equity method.
Under the equity method, the share of the profits or losses of the joint venture is recognised in profit or loss,
and the share of the movements in equity is recognised in other comprehensive income.
For the comparative prior-year ended 30 June 2021, the Group had recognised PT Macmahon Mining
Services (PT MMS) as an incorporated joint venture for the majority of that financial year until it was fully
acquired as a subsidiary in June 2021. Before it became a wholly owned subsidiary of the Group, PT MMS
contributed $5.345 million profit net of tax to the Group for the year ended 30 June 2021.
108
Macmahon Annual Report 2022 25 RELATED PARTY TRANSACTIONS
Parent entity
Macmahon Holdings Limited is the ultimate parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 23.
Joint ventures
Interests in joint venture arrangements are set out in note 24.
Key management personnel
Disclosures relating to key management personnel are set out in note 26 and the remuneration report.
Transaction with related parties - Joint venture
The following transactions occurred with related parties:
Transactions recognised in profit or loss
Costs incurred by the Group on behalf of and recharged to the joint venture
Costs incurred by the joint venture on behalf of and recharged to the Group
Management fee charged to joint venture
Receivable from / (payable to) joint venture
Receivable from / (payable to) joint venture
Consolidated
2022
$’000
66
(163)
-
1
2021
$’000
1,173
(220)
1,061
11
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Transactions with significant shareholders - AMNT
AMNT (including its related entities) is a significant shareholder of the Company. The following transactions
occurred with AMNT in relation to the provision of mining services for the Batu Hijau mine, which is wholly
owned by AMNT:
Transaction recognised in profit or loss
Revenue recognised from shareholder
Non-cash materials and consumables utilised from shareholder
Receivables / (payables) from significant shareholders
Trade receivables and contract assets
Consolidated
2022
$’000
2021
$’000
270,404
-
315,320
(96,199)
37,124
44,081
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
109
26 COMPENSATION OF KEY MANAGEMENT PERSONNEL
Key management personnel compensation for the financial year was as follows:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Consolidated
2022
$’000
2021
$’000
4,872,034
3,660,932
206,128
214,098
-
87,627
178,362
203,947
128,750
339,643
5,379,887
4,511,634
27 SHARE-BASED PAYMENTS
The Group has the following equity compensation arrangements to remunerate non-executive, executive
and employees of the Group:
• Macmahon Executive Equity Plan (EEP);
• Senior Manager Long Term Incentive Plan (LTIP); and
• Non-Executive Director Salary Sacrifice Plan (SSP).
Executives and Senior Management Plans
EEP AND LTIP PLANS
The LTIP and EEP provides Executive and senior management with the opportunity to receive fully paid
ordinary shares in the Company for no consideration, subject to specified time restrictions, continuous
employment and performance conditions being met. Each performance right will entitle participants to
receive one fully paid ordinary share at the time of vesting. The LTIP and EEP are designed to assist with
employee retention, and to incentivise employees to maximise returns and earnings for shareholders.
The Board of Directors determines which employees are eligible to participate and the number of
performance rights granted.
Performance rights granted under prior years EEP plans are set out below:
Performance rights effective on
Grant date
Vesting date
Service period
Tranche and number of performance rights
Remaining number of rights at 30 June 2022
Fair value on grant date
Vesting performance condition
Less than 17% CAGR in TSR
17% CAGR in TSR
25% or more CAGR in TSR
Between 17% and 25% CAGR in TSR
EEP
Performance
Rights 2019
EEP
Performance
Rights 2020
EEP
Performance
Rights 2021
01/07/2018
01/07/2019
01/07/2020
05/10/2018
06/08/2019
01/09/2020
01/07/2021
01/07/2022
01/07/2023
3 years
3 years
8,660,803
10,197,059
2,367,887
$0.1380
3,466,917
$0.0510
3 years
9,558,547
5,249,563
$0.1420
0%
50%
100%
0%
50%
100%
0%
50%
100%
Pro-rata between
50% and 100%
Pro-rata between
50% and 100%
Pro-rata between
50% and 100%
110
Macmahon Annual Report 2022
Performance rights effective on
Grant date
Vesting date
Service period
LTIP Performance Rights 2019
Tranche 1
Tranche 2
Tranche 31
Tranche 31
01/07/2018
01/07/2018
01/07/2018
01/07/2018
01/07/2018
01/07/2018
01/07/2018
01/07/2018
01/07/2020
01/07/2021
01/07/2022
01/07/2023
2 years
3 years
4 years
5 years
Tranche and number of performance rights
16,162,394
16,162,394
16,162,394
16,162,392
Remaining number of rights at 30 June 2022
-
-
4,848,718
4,848,718
Fair value on grant date
$0.0940
$0.0900
$0.0900
$0.0900
Vesting performance condition
Less than 17% CAGR in TSR
17% CAGR in TSR
25% or more CAGR in TSR
Between 17% and 25% CAGR in TSR
0%
50%
100%
0%
50%
100%
0%
50%
100%
0%
50%
100%
Pro-rata between
50% and 100%
Pro-rata between
50% and 100%
Pro-rata between
50% and 100%
Pro-rata between
50% and 100%
1
50% of shares that vest as a result of Tranche 3 2019 LTIP performance rights is subject to a further retention period of 1 year.
Performance rights effective on
Grant date
Vesting date
Service period
Number of performance rights
Remaining number of rights at 30 June 2022
Fair value on grant date
Vesting performance condition
Less than 15% CAGR in TSR
15% CAGR in TSR
25% or more CAGR in TSR
Between 15% and 25% CAGR in TSR
Performance rights granted during the current year are set out below:
Performance rights effective on
Grant date
Vesting date
Service period
Number of performance rights
Remaining number of rights at 30 June 2022
Fair value on grant date
Vesting performance condition
Less than 10% CAGR in TSR
10% CAGR in TSR
15% or more CAGR in TSR
Between 10% and 15% CAGR in TSR
LTIP Performance Rights 2021
01/07/2020
01/09/2020
01/07/2023
3 years
4,220,275
2,467,420
$0.1420
0%
50%
100%
Pro-rata between 50% and 100%
LTIP Performance Rights 2022
Tranche 1
01/07/2021
30/09/2021
01/07/2023
3 years
8,135,369
4,950,704
$0.0993
0%
50%
100%
Pro-rata between 50% and 100%
111
Performance rights effective on
Grant date
Vesting date
Service period
Number of performance rights
Remaining number of rights at 30 June 2022
Fair value on grant date
Vesting performance condition (strategic objectives)
During FY22
Safety – Improve TRIFR2 to 4.8 (20% improvement)
Business Mix – 5% or more Mining Support of Group Revenue
Business Mix – 25% or more Underground of Group Revenue
During FY23
People – Improve employee engagement score year-over-year
Business Mix – 10% or more Mining Support of Group Revenue
Business Mix – 30% or more Underground of Group Revenue
During FY24
Business Mix – 15% or more Mining Support of Group Revenue
Business Mix – 33% or more Underground of Group Revenue
2 TRIFR – Total Recordable Injury Frequency Rate
LTIP Performance Rights 2022
Tranche 2
01/07/2021
30/09/2021
01/07/2023
3 years
8,135,371
4,950,709
$0.1769
8%
14%
14%
8%
14%
14%
14%
14%
The following inputs were used in the measurement of the fair values at grant date of the 2022 LTIP
performance rights:
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility (weighted average volatility)
Option life (expected weighted average life)
Dividend yield
Risk-free interest rate (based on government bonds)
Valuation model
LTIP Performance Rights 2022
Tranche 1
Tranche 2
$0.0993
$0.1950
Nil
45.00%
$0.1769
$0.1950
Nil
45.00%
2.75 years
2.75 years
3.25%
0.25%
Monte-Carlo
Simulation
3.25%
0.25%
Trinomial
Valuation
Expected volatility is estimated taking into account historic average share price volatility.
Non-Executive Director (NED) Salary Sacrifice Plan
The SSP provides Non-Executive Directors with the option to sacrifice a portion of their salary in return for
a fixed number of rights over ordinary but restricted shares, which will vest equally within 8 months and 14
months from grant date. Once vested, the shares will be held on trust on behalf of the recipients but will
be subject to certain restrictions, which limit the recipients’ ability to sell the shares. Trading restrictions will
generally end on the earliest of ceasing to be a Non-Executive Director, the date a change of control occurs
or 15 years after the date the relevant NED share rights were granted.
112
Macmahon Annual Report 2022
The following assumptions were applied in the measurement of the fair values of NED share rights using the
Black-Scholes option pricing model:
Share rights effective on
Grant date
Vesting date
Service period
Tranche and number of share rights
NED Share Rights 2021
NED Share Rights 2022
Tranche 1
Tranche 2
Tranche 1
Tranche 2
01/07/2020
01/07/2020
01/07/2021
01/07/2021
24/06/2020
24/06/2020
16/06/2021
16/06/2021
21/02/2021
25/08/2021
22/02/2022
16/08/2022
8 months
647,563
14 months
647,560
8 months
14 months
1,059,623
1,059,620
Remaining number of share rights at 30 June 2022
-
-
-
1,059,620
Share price at grant date
Discount for lack of marketability
Implied fair value of restricted shares
Exercise price
Risk-free interest rate
Volatility factor
Dividend yield
Implied discount to share price at grant date
Fair value at grant date
$0.245
30%
$0.172
$0.261
0.25%
45%
1.45%
98%
$0.005
$0.245
30%
$0.172
$0.261
0.25%
45%
2.90%
96%
$0.010
$0.185
30%
$0.130
$0.186
0.50%
45%
1.63%
97%
$0.185
30%
$0.130
$0.186
0.50%
45%
3.25%
95%
$0.005
$0.009
Information about performance rights and share rights outstanding at year end
The following unvested unlisted performance rights were outstanding at year end:
Balance at start of year
Granted during the year
Vested during the year
Forfeited during the year
Balance at end of year
LTIP and EEP
Performance Rights
SSP Share Rights
2022
Number
2021
Number
57,415,717
89,063,957
16,270,740
13,778,822
2022
Number
647,560
2,119,243
2021
Number
707,856
1,295,123
-
(4,948,330)
(1,707,183)
(1,355,419)
(40,535,821)
(40,478,732)
-
-
33,150,636
57,415,717
1,059,620
647,560
The following share-based payment expenses were recognised net of forfeitures, to profit or loss,
disaggregated by equity-compensation arrangement:
LTIP performance rights
EEP performance rights
NED share rights
Consolidated
2022
$’000
2021
$’000
(1)
90
14
103
434
483
9
926
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by referencing the fair value
of the equity instruments at the date at which they were granted. The fair value is determined by using
the Binomial, Black-Scholes or Monte Carlo model taking into account the terms and conditions upon
which the instruments were granted. The accounting estimates and assumptions relating to equity-settled
share-based payments would have no impact on the carrying amounts of assets and liabilities with the next
annual reporting period, but may impact profit or loss and equity.
Share-based payments
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
113
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial, Monte Carlo or Black-Scholes option pricing model that takes into
account the exercise price, the term of the option, the impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate
for the term of the option, together with non-vesting conditions that do not determine whether the Group
receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in
equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date
fair value of the award, the best estimate of the number of awards that are likely to vest, and the expired
portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative
amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification
that increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the Group or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the
remaining vesting period unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
If any performance rights have been forfeited for failure to complete a service period, the costs of the
performance rights are trued up, i.e. amounts previously expensed are no longer incurred and accordingly
reversed in the current year. This policy is applied irrespective of whether the employee resigns voluntarily
or is dismissed by the Company.
28 REMUNERATION OF AUDITORS
The auditor of Macmahon Holdings Limited is KPMG Australia. Amounts paid or payable for services
provided by KPMG and other non-KPMG audit firms are as follows:
Group auditors
Audit and review services - KPMG
Audit or review of the financial statements - Australia
Audit or review of the financial statements - Network firms
Other services - KPMG
Taxation services - Australia
Taxation services - Network firms
Other assurance services - Australia
Other advisory services - Australia
Subsidiary auditors
Audit and review services
Audit of the financial statements - PwC Indonesia
114
Consolidated
2022
$
2021
$
438,000
22,401
365,000
38,679
460,401
403,679
52,750
14,253
25,200
9,628
101,831
54,061
16,772
15,168
80,910
166,911
562,232
570,590
119,779
119,774
682,011
690,364
Macmahon Annual Report 2022 29 DEED OF CROSS GUARANTEE
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 (the Instrument), the
wholly-owned subsidiaries listed below are relieved from the Corporations Act 2001 (the Act) requirements
for preparation, audit and lodgement of their financial statements and Directors’ report.
It is a condition of the Instrument that the Parent and each of its subsidiaries (Extended Closed Group)
below enter into a Deed of Cross Guarantee (Deed). The effect of the Deed is that the Parent guarantees to
each creditor, payment in full of any debt in the event of winding up of any of the subsidiaries under certain
provisions of the Act. If a winding up occurs under other provisions of the Act, the Company will only be
liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also
given the same guarantees in the event that the Company is wound up.
The following entities are party to the Deed under which each member guarantees the debts of the others:
• Macmahon Contractors Pty Ltd
• Macmahon Underground Pty Ltd
• Macmahon Mining Services Pty Ltd
• TMM Group Pty Ltd
• TMM Group (Operations) Pty Ltd
• GF Holdings Pty Ltd
• GBF North Pty Ltd
• GBF Mining and Industrial Services Pty Ltd
Set out below is a consolidated statement of profit or loss and other comprehensive income, summary of
movements in consolidated retained earnings and consolidated statement of financial position, comprising
the Company and its controlled entities which are a party to the Deed, after eliminating transactions
between parties to the Deed:
Statement of profit or loss and
other comprehensive income
Revenue
Other income
Materials and consumables used
Employee benefits expense
Subcontractor costs
Depreciation and amortisation expense
Equipment and other operating lease expenses
Net finance costs
Other expenses
Profit before income tax expense
Income tax expense
Profit after income tax expense
Consolidated
2022
$’000
1,326,456
50,707
(278,275)
(649,770)
(59,372)
(127,451)
(96,033)
(17,956)
(102,083)
46,223
(8,143)
38,080
Restated1
2021
$’000
1,000,838
17,735
(236,818)
(485,468)
(40,840)
(105,758)
(39,542)
(13,593)
(54,690)
41,864
(5,291)
36,573
1
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
115
Statement of Financial Position
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Assets classified as held of sale
Total current assets
Non-current assets
Trade and other receivables
Other financial assets
Property, plant and equipment
Intangible assets and goodwill
Deferred tax asset
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Employee benefits
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Issued capital
Reserves
Net accumulated losses
TOTAL EQUITY
Consolidated
2022
$’000
Restated1
2021
$’000
115,816
224,389
88,778
-
-
133,272
178,775
64,366
192
207
428,983
376,812
37,628
17,770
620,268
10,857
4,201
23,304
27,813
483,662
11,120
15,580
690,724
561,479
1,119,707
938,291
230,187
100,864
59,096
18,096
186,807
91,099
46,446
14,524
408,243
338,876
384
286,553
2,009
288,946
-
199,746
1,730
201,476
697,189
540,352
422,518
397,939
563,118
(9,991)
(130,609)
563,118
(9,008)
(156,171)
422,518
397,939
1
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
116
Macmahon Annual Report 2022
30 PARENT ENTITY INFORMATION
Set out below is the supplementary financial information of the Parent as follows:
Statement of profit or loss and other comprehensive income
Profit after income taxes of the Parent
Total comprehensive income of the Parent
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Reserve for own shares
Accumulated losses
Retained profits
Total equity
2022
$’000
5,968
5,968
2021
$’000
30,679
30,679
2022
$’000
2021
$’000
203,107
143,504
417,189
358,191
(49,829)
(42,052)
(155,758)
(89,227)
563,118
2,919
(12,910)
(310,031)
18,335
563,118
3,902
(12,910)
(310,031)
24,885
261,431
268,964
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The Parent has entered into a Deed with the effect that the Parent guarantees the debt of members of the
Extended Closed Group. Further details of the Deed and the Extended Closed Group are disclosed in note 29.
Significant accounting policies
The accounting policies of the Parent are consistent with those of the Group.
117
31 DISPOSAL GROUP HELD FOR SALE
In June 2022, management committed to a plan to sell the assets and liabilities of Ramex Services Pty Ltd
entity. Accrodingly the assets and liabilities of Ramex Services Pty Ltd have been presented as a disposal
group.
Measurement
The disposal group has been remeasured to the lower of fair value less costs to sell and the carrying amount
of the underlying assets. This has resulted in an impairment loss of $1.021 million recognised in “Impairment
of asset disposal group” in the Consolidated Statement of Profit and Loss and Other Comprehensive
Income. The impairment losses have been applied to reduce the carrying amount of property, plant and
equipment within the disposal group.
Disposal group held for sale
At 30 June 2022, the disposal group was stated at fair value less costs to sell and comprised of the
following assets and liabilities.
Trade and other receivables
Inventories
Property, plant and equipment
Assets classified as held for sale
Trade and other payables
Liabilities related to assets held for sale
2022
$’000
767
2,496
227
3,490
619
619
118
Macmahon Annual Report 2022
32 OTHER SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below.
The accounting policies are consistent with those disclosed in the prior period financial statements, except for
the impact of new and amended standards and interpretations, effective 1 July 2021. The adoption of these
standards and interpretations did not result in any significant changes to the Group’s accounting policies.
The Group has not elected to early adopt any new or amended standards or interpretations that are issued
but not yet effective.
New Accounting Standards and Interpretations not effective for the Group at 30 June 2022 or
early adopted
A number of new standards, amendments of standards and interpretations are effective for annual
periods beginning from 1 July 2022 and earlier application is permitted, however, the Group has not early
adopted these standards in preparing these consolidated financial statements.
The Group has reviewed these standards and interpretations and has determined that none of these new
or amended standards and interpretations will significantly affect the Group’s accounting policies, financial
position or performance.
Basis of preparation
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 as appropriate for for-profit orientated entities. These financial statements also
comply with International Financial Reporting Standards issued by the International Accounting Standards
Board (IASB).
The consolidated financial statements provide comparative information in respect of the previous period.
For consistency with the current year’s presentation, where required, comparative information has been
reclassified.
The financial statements have been prepared under the historical cost basis, except for contingent
consideration and certain other financial assets and financial liabilities, which are measured at fair value.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Group’s accounting policies.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates
are significant to the financial statements, are included in the respective notes to the financial statements:
• Note 2 - revenue recognition: estimate of variable consideration
• Note 5 - recognition of deferred tax assets: availability of future taxable profit against which deductable
temporary differences and tax losses carried forward can be utilised
• Note 14 - impairment of non-financial assets
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group
only. Supplementary information about the parent entity is disclosed in note 30.
119
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Macmahon
Holdings Limited as of 30 June 2022 and the results of all subsidiaries for the year then ended. Macmahon
Holdings Limited and its subsidiaries together are referred to in these financial statements as the ‘Group’.
Subsidiaries
Subsidiaries are all those 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. Entities are deconsolidated from
the date that control ceases.
Interest in equity accounted investees
The Group’s interests in equity-accounted investees comprise interests in joint ventures.
A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the
net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
Interests in joint ventures are accounted for using the equity method and are initially recognised at cost,
including transaction costs. Subsequent to initial recognition, the consolidated financial statements include
the Group’s share of the profit or loss, and other comprehensive income of equity accounted investees, until
the date on which significant influence or joint control ceases.
Transactions eliminated on consolidation
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment
of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Macmahon Holdings Limited’s
functional and presentation currency .
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions, and from the translation at the reporting date exchange rates of monetary assets, and
liabilities denominated in foreign currencies are recognised in the profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange
rates at the reporting date. Monetary assets and liabilities denominated in foreign currency at the reporting
date are translated to the functional currency at the exchange rate at that date. The income and expenses
of foreign operations are translated into Australian dollars at the average exchange rates for the period.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign
currency translation reserve in equity.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither
planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary
item are recognised to form part of a net investment in a foreign operation and are recognised in other
comprehensive income, and are presented in the foreign currency translation reserve in equity.
120
Macmahon Annual Report 2022 Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed
in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is classified as current when: it is either expected to be settled in 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.
Goods and Services Tax (GST), Value Added Tax (VAT) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables
in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the tax authority.
Rounding of amounts
The Group is of a kind referred to in ASIC Corporations (Rounding in Financial / Directors’ Reports) 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 Class Order to the nearest thousand
dollars, or in certain cases, the nearest dollar.
121
Directors’
Declaration
IN THE DIRECTORS’ OPINION:
• The attached financial statements and notes,
and the remuneration report on pages 50 to 65
in the Directors’ report are in accordance 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 32 and throughout the financial statements.
• The attached financial statements and notes
give a true and fair view of the Group’s
financial position as at 30 June 2022, and of its
performance for the financial year ended on that
date, and comply with Australian Accounting
Standards and the Corporations Regulations
2001.
• There are reasonable grounds to believe that the
Group will be able to pay its debts as and when
they become due and payable.
• At the date of this declaration, there are
reasonable grounds to believe that the members
of the Extended Closed Group will be able to
meet any obligations or liabilities to which they
are, or may become, subject by virtue of the
deed of cross guarantee (pursuant to ASIC
Corporations (Wholly-owned Companies)
Instrument 2016/785) described in note 29
to the financial statements.
The Directors have been given the declarations
required by section 295A of the Corporations
Act 2001.
Signed in accordance with a resolution of
Directors made pursuant to section 295(5)(a)
of the Corporations Act 2001.
On behalf of the Directors
MS E SKIRA, AM
Independent Non-Executive Chair
23 August 2022
Perth
122
Macmahon Annual Report 2022 123
INDEPENDENT AUDITOR’S
REPORT
124
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 124 Independent Auditor’s Report To the shareholders of Macmahon Holdings Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Macmahon Holdings Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for the year ended on that date; and • Complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2022; • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Notes including a summary of significant accounting policies; and • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 fulfilled our other ethical responsibilities in accordance with the Code. 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 this matter. Macmahon Annual Report 2022 125
125 Revenue recognition ($1,698.1 million) Refer to Note 2 to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s revenue arises from rendering mining and mining related services based on contracts with customers. Revenue recognised is based on contractual rates or on a cost reimbursement basis as performance obligations are met. We focussed on this area as a key audit matter due to its significant value in the Group’s financial report and audit effort associated with a large number of customer contracts. Our procedures included: Evaluating the Group’s revenue recognitionpolicies against the requirements of the relevantaccounting standards;Understanding the Group’s process foraccounting for revenue across differentcontracts against the terms in the customercontracts;Testing key controls in the revenue recognitionprocess such as approval of monthly progressclaims by the Group’s project manager andcustomers prior to billing;Testing a statistical sample of revenuetransactions by agreeing it to documentation tosupport the satisfaction of the performanceobligation;Evaluate key contracts with customers toensure revenue is recognised in accordancewith the requirements of the AccountingStandards;Testing a statistical sample of unbilled revenueaccruals to by agreeing it to documentation tosupport the satisfaction of the performanceobligation;Testing a sample of invoices recognised duringthe period under audit, and in subsequentperiods, to the underlying progress claims tocheck revenue recognition in the correct period;Obtaining significant credit notes recognisedpost year end to check the Group’s recognitionof revenue in the correct period;For key contracts where variable considerationis recognised, evaluating the Group’s evidenceto meet the recognition requirements of highlyprobable by checking to subsequent customerapproval of these amounts; andEvaluating the Group’s disclosures against ourunderstanding obtained from our testing and therequirements of the accounting standards. 126
126 Valuation of property, plant and equipment ($672.6 million) and goodwill ($8.8 million) Refer to Note 14 and 15 to the Financial Report The key audit matter How the matter was addressed in our audit A key audit matter for us was the testing for impairment of the Group’s cash generating units (CGUs), Surface and Civil and Underground and International. Property plant and equipment and goodwill associated with these CGUs amounts to $688.6 million, representing 51.4% of total assets of the Group. This is a key audit matter because of the size of the assets being tested, the deficiency of market capitalisation to net assets and the judgement required in this area. In performing an assessment of the valuation of the property, plant and equipment and goodwill management developed a value in use model which contains significant and judgmental assumptions including: Forecast revenues;Forecast project margins;Forecast capital expenditurerequirements;Growth rates; andDiscount rates.TThheessee aassssuummppttiioonnss rreeqquuiirree mmaannaaggeemmeenntt ttoo aappppllyy ssiiggnniiffiiccaanntt eessttiimmaatteess aanndd jjuuddggeemmeennttss,, wwhhiicchh ccoonnttrriibbuuttee ttoo oouurr ccoonncclluussiioonn tthhaatt vvaalluuaattiioonn ooff pprrooppeerrttyy ppllaanntt aanndd eeqquuiippmmeenntt aanndd ggooooddwwiillll iiss aa kkeeyy aauuddiitt mmaatttteerr.. WWee iinnvvoollvveedd vvaalluuaattiioonn ssppeecciiaalliissttss ttoo ssuupppplleemmeenntt oouurr sseenniioorr aauuddiitt tteeaamm mmeemmbbeerrss iinn aasssseessssiinngg tthhiiss kkeeyy aauuddiitt mmaatttteerr.. Our procedures included: Working with our valuation specialists, weconsidered the appropriateness of the value inuse models applied by the Group to perform theimpairment against the requirements of theaccounting standards;We assessed the integrity of the value in usemodels used, including the accuracy of theunderlying formulas;We assessed the accuracy of previous Groupforecasts to inform our evaluation of forecastsincorporated in the models;We challenged the Group’s forecast cashflows,growth rate assumptions and terminal valuemultiples considering competitive marketconditions and the continuing volatility in theglobal economic environment. We used ourknowledge of the Group, the Group’s past andrecent performance, business and customers,contract tenure and our industry experience;We compared the forecast cash flows containedin the value in use model to Board approvedbudgets;We considered the sensitivity of the models byvarying key assumptions, such as uncontractedrevenues, forecast growth rates, and discountrates, within a reasonably possible range;With the assistance of our valuation specialists,we considered the discount rate rangeindependently developed by management’sexpert considering comparable using publiclyavailable market data for comparable entities tothe Group and the industry it operates in;Consideration of market capitalisation deficiencyin comparison to net assets, having regard tovaluation cross checks such as independentdesktop valuations sourced by the Group for keyitems of plant and equipment; andWe assessed the disclosures in the financialreport against the requirements of theaccounting standards.Macmahon Annual Report 2022 127
127 Other Information Other Information is financial and non-financial information in Macmahon Holdings Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor's Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: •Preparing the Financial Report that gives a true and fair view in accordance with AustralianAccounting Standards and the Corporations Act 2001;•Implementing necessary internal control to enable the preparation of a Financial Report that givesa true and fair view and is free from material misstatement, whether due to fraud or error; and•Assessing the Group and Company’s ability to continue as a going concern and whether the useof the going concern basis of accounting is appropriate. This includes disclosing, as applicable,matters related to going concern and using the going concern basis of accounting unless theyeither intend to liquidate the Group and Company or to cease operations, or have no realisticalternative but to do so.Auditor’s responsibilities for the audit of the Financial Report Our objective is: •To obtain reasonable assurance about whether the Financial Report as a whole is free frommaterial 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 Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They 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 the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. 128
126 Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Macmahon Holdings Limited for the year ended 30 June 2022, complies with Section 300A of the Corporations Act 2001. Directors’ 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 responsibilities We have audited the Remuneration Report included in pages 52 to 65 of the Directors’ report for the year ended 30 June 2022. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG R Gambitta Partner Perth 23 August 2022 128 Macmahon Annual Report 2022 129
SUMMARY OF
CONSOLIDATED REPORTS
Profit and loss ($’m)
2022
Restated1
2021
2020
2019
Revenue from continuing operations
1,698.0
1,351.5
1,380.4
1,103.0
249.9
(153.6)
238.7
(147.1)
181.4
(106.2)
Underlying EBITDA
Depreciation and amortisation (excluding customer contracts)
Underlying EBIT
Other exclusions from underlying items2
Reported EBIT
Net interest
Profit / (loss) before income taxes
Income tax expense
Profit/(loss) after taxes from continuing operations
Minority interests
Profit / (loss) after taxes attributed to Macmahon
Other exclusions from underlying items (net of tax)2
Underlying net profit / (loss) after taxes
attributed to Macmahon
Balance sheet ($'m)
Plant and equipment
Total assets
Net assets
Equity attributable to the Group
Net debt / (net cash)
Cash flow ($'m)
Underlying EBITDA
Net interest paid
Income tax (paid) / refund
Decrease / (increase) in working capital,
provisions and other non-cash items
Net operating cash flows, including joint venture
Investing and financing cash flows (net)
Effect of exchange rates on cash
Cash at beginning of financial year
Closing cash and cash equivalents
291.4
(190.6)
100.8
(35.6)
65.1
(19.0)
46.1
(18.7)
27.4
-
27.4
35.6
63.0
672.6
1,338.3
559.5
559.5
215.5
291.4
(19.1)
(17.5)
(26.9)
227.9
(216.0)
4.0
182.1
198.0
96.2
(2.3)
93.9
(14.6)
79.3
(3.9)
75.4
-
75.4
(15.5)
59.9
582.7
1,143.5
535.9
535.9
130.4
249.9
(15.9)
(10.4)
(15.4)
239
(195.9)
(2.8)
141.8
182.1
91.6
(4.3)
87.3
(14.8)
72.5
(7.5)
64.9
-
64.9
4.3
69.2
457.0
923.0
497.8
497.8
60.9
238.7
(14.8)
(8.5)
(21.7)
193.7
(165.7)
0.6
113.2
141.8
75.1
(10.6)
64.5
(10.7)
53.8
(7.7)
46.1
-
46.1
10.6
56.7
399.6
824.9
447.6
447.6
52.7
181.4
(10.7)
(15.2)
(63.0)
92.5
(89.8)
0.9
109.6
2018
710.3
119.2
(77.7)
41.5
(0.3)
41.2
(2.4)
38.8
(7.5)
31.3
-
31.3
0.3
31.6
380.1
723.3
409.8
409.8
(3.4)
119.2
(2.4)
6.3
(17.3)
105.8
(59.1)
-
62.9
113.2
109.6
1
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to configuration and
customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
2 Other exclusions from underlying items consist of:
• 2022 consists of earn-out in relation to previous acquisition, acquisition costs, share-based payment expenses, SaaS customisation costs,
impairment of asset disposal group and amortisation on customer contracts recognised on acquisitions.
• 2021 consists of earn-out in relation to previous acquisition, acquisition costs, share-based payment expenses, fair value uplift on
investment in joint venture, gain on acquisition of subsidiary SaaS customisation costs, recognition of the deferred tax asset and
amortisation on customer contracts recognised on acquisitions.
• 2020 consists of acquisition costs, share-based payment expenses and amortisation on customer contracts recognised on acquisitions.
• 2019 consists of litigation settlements and related legal fees, acquisition costs and share-based payments expense.
• 2018 consists of share-based payments expense.
Due to rounding, numbers presented may not add.
130
Macmahon Annual Report 2022
People and safety
Number of employees
LTIFR
TRIFR
Order book
Work in hand ($bn)
New contracts and extension ($b)
Revenue growth (%)
Reported NPAT / Revenue (%)
Underlying NPAT / Revenue (%)3
EBIT interest cover (x)
Reported basic EPS from continuing
operations (cents)
Underlying basic EPS from
continuing operations (cents)
Balance sheet ratios
Gearing ratio
Reported return on average capital
employed (ROACE) (%)
Underlying ROACE (%)3
Reported return on equity (ROE) (%)
Underlying ROE (%)3
Reported return on assets (ROA) (%)
Underlying ROA (%)3
Net tangible assets (NTA) per share ($)
Cash flow ratios ($'m)
Net operating cash flow per share (cents)
Shareholders
Shares on issue ('m) at 30 June
Share price at 30 June (cents)
Dividends declared (cents)4
Percentage franked (%)
Market capitalisation ($'m)
Enterprise value (EV)
Price / NTA ($)
2022
Restated1
2021
2020
2019
2018
7,848
0.2
4.8
5.0
1.7
25.6
1.6
3.7
3.4
1.30
3.00
27.8
9.0
13.9
5.0
11.5
2.2
5.1
0.25
10.6
6,082
5,229
0.1
6.4
5.0
2.3
(2.1)
5.6
4.4
6.4
3.59
2.85
19.6
15.3
15.6
14.6
11.6
7.3
5.8
0.24
0.1
3.8
4.5
1.4
25.1
4.7
5.0
5.9
3.10
3.30
10.9
16.4
17.2
13.7
14.6
7.4
7.9
0.22
4,072
0.4
4.0
4.5
0.2
55.3
4.2
5.1
6.0
2.19
2.69
10.5
14.2
16.5
10.8
13.2
6.0
7.3
0.20
3,913
0.5
6.3
5.4
1.2
97.5
4.4
4.4
17.0
1.53
1.55
(0.8)
15.3
15.4
10.5
10.6
6.1
6.2
0.19
11.1
9.0
4.3
4.9
2,155.0
2,155.0
2,155.0
2,155.0
13.5
0.65
-
290.9
506.4
0.5
19.0
0.65
20.0
409.4
539.8
0.8
25.5
0.60
30.0
549.5
610.4
1.2
18.5
0.50
30.0
398.7
451.4
0.9
2,155.0
21.5
-
-
463.3
459.9
1.1
1
30 June 2021 balances have been restated to reflect the Group’s change in accounting policy for costs related to
configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note 15 for more details.
3 Underlying items are adjusted for other exclusions as per footnote 2 on page 130.
4 Subsequent to 30 June 2022, the Board approved the payment of a final dividend of 0.35 cents per share. For the year ended
30 June 2022, the payment of an interim dividend of 0.30 cents per share was also approved by the Board.
The Summary of Consolidated Reports uses non-IFRS financial information, such as underlying EBIT(A) and EBITDA, to measure
the financial performance of the Group. Non-IFRS measures of financial performance are unaudited.
131
ASX ADDITIONAL
INFORMATION
As at 19 August 2022
Additional information required by the Australian Securities Exchange
Limited Listing Rules and not disclosed elsewhere in this report is
set out below.
SHAREHOLDING SUMMARY
The following details of Shareholders of Macmahon
Holdings Limited have been taken from the share
register on 19 August 2022.
a) The twenty largest Shareholders held 84.68%
of the ordinary shares.
b) There were 6,918 ordinary Shareholders as
follows:
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
640
1,995
1,020
2,642
621
6,918
SUBSTANTIAL SHAREHOLDERS
As at 19 August 2022, the register of substantial
shareholders disclosed the following information:
VOTING RIGHTS
The voting rights attaching to ordinary shares
are set out below:
On a show of hands, every member present
in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
FEEDBACK
Macmahon would appreciate your feedback on
this report. Your input will assist us to improve as a
business and develop our report to further suit your
needs. To respond, please:
Email
investors@macmahon.com.au
Mail
Investor Relations
PO Box 198
Cannington WA 6987
Visit
www.macmahon.com.au
www.facebook.com/macmahonmining
www.linkedin.com/company/macmahon
Number of ordinary
shares in which
interest is held
954,064,924
151,647,000
CALENDAR OF EVENTS
Annual General Meeting – October 2022
Release of FY23 Half-Year Results – February 2023
Release of FY23 Full-Year Results – August 2023
Holders giving notice
Amman Mineral Contractors
(Singapore) Pte Ltd
Paradice Investment Management
Pty Ltd
132
Macmahon Annual Report 2022 Twenty largest Shareholders as at 19 August 2022
Rank Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Amman Mineral Contractors (Singapore) Pte Ltd
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
HSBC Custody Nominees Limited
CS Third Nominees Pty Limited
CPU Share Plans Pty Ltd
HSBC Custody Nominees (Australia) Limited
BnP Paribas Noms (Nz) Ltd
Merrysoul Pty Ltd
Rolen Pty Ltd
Moranbah Nominees Pty Ltd
BnP Paribas Nominees Pty Ltd
BnP Paribas Noms Pty Ltd
Mr Amarjit Singh + Mrs Jaswant Kaur
Neweconomy Com Au Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Mr Paulus Gerardus Brouwer + Mr Remy Paulus Brouwer
Jamplat Pty Ltd
20
Maitri Pty Ltd
Units
Percent
954,064,924
225,493,783
44.27
10.46
184,177,346
114,833,001
98,108,360
55,923,369
54,839,003
28,748,175
16,011,133
12,428,075
12,428,075
11,400,494
10,448,008
9,171,647
7,600,000
6,962,730
6,303,890
5,600,000
5,250,000
5,029,750
8.55
5.33
4.55
2.60
2.54
1.33
0.74
0.58
0.58
0.53
0.48
0.43
0.35
0.32
0.29
0.26
0.24
0.23
Totals: Top 20 Holders of Ordinary Shares (Total)
1,824,821,763
84.68
Total Remaining Holders Balance
330,164,055
15.32
133
134
Macmahon Annual Report 2022 135
CORPORATE DIRECTORY
AND GLOSSARY
DIRECTORS
E Skira, AM (Non-Executive Chair)
M Finnegan (Managing Director
and Chief Executive Officer)
D McComish (Non-Executive Director)
B Munro (Non-Executive Director)
A Ramlie (Non-Executive Director)
A Sidarto (Non-Executive Director)
H Tyrwhitt (Non-Executive Director)
COMPANY SECRETARY
S Raven
PRINCIPAL REGISTERED OFFICE
15 Hudswell Road, Perth Airport
Western Australia 6105
Phone: +61 (08) 9232 1000
Fax: +61 (08) 9232 1001
LOCATION OF SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth, Western Australia 6000
SECURITIES EXCHANGE
Macmahon is listed on the Australia Securities
Exchange with an ASX code of “MAH”.
AUDITOR
KPMG
235 St Georges Terrace
Perth, Western Australia 6000
OTHER INFORMATION
Macmahon Holdings Limited
ACN 007 634 406, incorporated and
domiciled in Australia, is a publicly
listed company limited by shares.
GLOSSARY
EBIT
EBIT(A)
EBITDA
EV
Earnings before net interest expense
and tax expense
Earnings before net interest expense,
tax expense and customer contract
amortisation
Earnings before net interest expense,
tax expense, depreciation and
amortisation
Enterprise value, being market
capitalisation plus net debt
Gearing ratio
Net debt/equity plus net debt
LTIFR
TRIFR
NPAT
NTA
ROACE
ROE
ROA
Lost time injury frequency rate
Total recordable injury frequency rate
Net profit after tax
Net tangible assets
Return on average capital employed –
EBIT(A)/average capital employed,
where capital employed is total
assets excluding cash less current
liabilities excluding current debt
Return on equity –
Underlying NPAT/average net assets
Return on assets –
Underlying NPAT/average assets
Note: Refer to Summary of Consolidated Reports
for reconciliation to underlying results.
136
Macmahon Annual Report 2022 Macmahon Holdings Limited
ACN 007 634 406
15 Hudswell Road
Perth Airport WA 6105
Australia
(+61) 08 9232 1000
info@macmahon.com.au
macmahon.com.au