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Hill & Smith2010 in review
NRW HOLDINGS
73-75 Dowd Street, WELSHPOOL WA 6106
Telephone: +61 8 9232 4200 Facsimile: +61 8 9311 7336
Email: info@nrw.com.au www.nrw.com.au
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At NRW we see the way forward. We have a
strategic plan to deliver the best service to our
clients - therefore delivering success to our projects,
our employees and our shareholders.
ANNUAL REPORT 2010
2010 in review
NRW HOLDINGS
73-75 Dowd Street, WELSHPOOL WA 6106
Telephone: +61 8 9232 4200 Facsimile: +61 8 9311 7336
Email: info@nrw.com.au www.nrw.com.au
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At NRW we see the way forward. We have a
strategic plan to deliver the best service to our
clients - therefore delivering success to our projects,
our employees and our shareholders.
ANNUAL REPORT 2010
HIGHLIGHTS 2009 / 2010
Karara Concrete
and Earthworks Package
Client // Karara Mining Limited
Value // $114m
Location // Mid-West Western Australia
Duration // Approx 14 months
Representing the largest major concrete works
package NRW has undertaken, this project was a
key strategic win in diversification for NRW in the
2009-2010 financial year.
The $114m Bulk Earthworks and Concrete
Package encompassed most of the preliminary
construction work for the Karara Iron Ore crushing
and processing facility.
Establishment of
Action Drill and Blast
NRW established Action Drill and Blast in early 2010
in a strategic move to provide a broader range of
services and capabilities to our customers. This
new division will address the lack of competitive
alternative drill and blast solutions currently
available in the market, enabling NRW to remain at
the forefront of services to the resources industry.
Action Drill and Blast is currently undertaking
operations at Rio Tinto Iron Ore’s Western Turner
Syncline and BHP Billiton Iron Ore’s RGP5, and will
continue operations for the life of these contracts.
Western Turner Syncline
JV with Eastern Guruma
Client // Rio Tinto Iron Ore
Value // $200m
Location // Pilbara, Western Australia
Duration // Approx 14 months
The mining division’s most significant contract
win of this year was the award of a four year
contract to undertake the design, development and
operation of an iron ore mine and road haulage
services at Western Turner Syncline for Rio Tinto
Iron Ore.
Undertaken as a joint venture with the traditional
landowners of the lease, the Eastern Guruma
people, this contract is NRW’s largest mining
operation in Western Australia and commenced
mobilisation midway through the second half of
FY2010.
PowerUP
NRW’s Indigenous
Development Program
NRW is committed to providing real
opportunities to Indigenous Australians and our
Indigenous Development Program, PowerUP,
engages suitable participants in our innovative
work-start program.
The program consists of a daily routine and five
core units from Certificate II Metalliferous Mining
Operations are part of the course requirements.
Participants are exposed to a simulator and
hands-on activities in a controlled ‘real life
mining pit’ in haul truck and roller operations.
NRW’s most recent PowerUP program was
completed in June 2010 and achieved a
100 percent graduation rate, a sign as to the
commitment of both the attendees and NRW. All
twelve trainees are now employed on current
NRW projects
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HIGHLIGHTS 2009 / 2010
Karara Concrete
and Earthworks Package
Client // Karara Mining Limited
Value // $114m
Location // Mid-West Western Australia
Duration // Approx 14 months
Representing the largest major concrete works
package NRW has undertaken, this project was a
key strategic win in diversification for NRW in the
2009-2010 financial year.
The $114m Bulk Earthworks and Concrete
Package encompassed most of the preliminary
construction work for the Karara Iron Ore crushing
and processing facility.
Establishment of
Action Drill and Blast
NRW established Action Drill and Blast in early 2010
in a strategic move to provide a broader range of
services and capabilities to our customers. This
new division will address the lack of competitive
alternative drill and blast solutions currently
available in the market, enabling NRW to remain at
the forefront of services to the resources industry.
Action Drill and Blast is currently undertaking
operations at Rio Tinto Iron Ore’s Western Turner
Syncline and BHP Billiton Iron Ore’s RGP5, and will
continue operations for the life of these contracts.
Western Turner Syncline
JV with Eastern Guruma
Client // Rio Tinto Iron Ore
Value // $200m
Location // Pilbara, Western Australia
Duration // Approx 14 months
The mining division’s most significant contract
win of this year was the award of a four year
contract to undertake the design, development and
operation of an iron ore mine and road haulage
services at Western Turner Syncline for Rio Tinto
Iron Ore.
Undertaken as a joint venture with the traditional
landowners of the lease, the Eastern Guruma
people, this contract is NRW’s largest mining
operation in Western Australia and commenced
mobilisation midway through the second half of
FY2010.
PowerUP
NRW’s Indigenous
Development Program
NRW is committed to providing real
opportunities to Indigenous Australians and our
Indigenous Development Program, PowerUP,
engages suitable participants in our innovative
work-start program.
The program consists of a daily routine and five
core units from Certificate II Metalliferous Mining
Operations are part of the course requirements.
Participants are exposed to a simulator and
hands-on activities in a controlled ‘real life
mining pit’ in haul truck and roller operations.
NRW’s most recent PowerUP program was
completed in June 2010 and achieved a
100 percent graduation rate, a sign as to the
commitment of both the attendees and NRW. All
twelve trainees are now employed on current
NRW projects
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Contents
Chairman's Letter
Chief Executive Officer: Year in Review
Financial Overview
Civil
Mining
Action Drill and Blast
Action Mining Services
Promac
Human Resources
Health Safety & Environment
Company Outlook
Chief Financial Officer: Financial Year in Review
Corporate Governance Statement
Financial Report
2
4
6
8
10
13
14
15
16
18
19
20
23
29
Corporate Registry
Directors
Dr. Ian F Burston
Non-executive Chairman
Julian Pemberton
Managing Director
and Chief Executive Officer
Michael Arnett
Non-executive Director
Company Secretary
Kim Hyman
Registered Office
73-75 Dowd Street
WELSHPOOL WA 6106
Telephone: +61 8 9232 4200
Facsimile: +61 8 9311 7336
Email:
info@nrw.com.au
Auditor
Deloitte Touche Tohmatsu
Level 14
Woodside Plaza
240 St Georges Terrace
PERTH WA 6000
Share Registry
Link Market Services Limited
Level 2
178 St Georges Terrace
PERTH WA 6000
Telephone: +61 8 9211 6652
Facsimile: +61 8 9211 6660
ASX Code
NWH - NRW Holdings Limited
Fully Paid Ordinary Shares
Web Page
www.nrw.com.au
1»
NRW Annual Report 2010
Chairman’s Letter
Dear Shareholders,
I am pleased to present the Company’s
fourth Annual Financial Report since listing
on the Australian Securities Exchange on 5th
September 2007.
“...we are pleased
to announce a
final dividend for
2010 of 3.00
cents, resulting in
a full year dividend
of 6.00 cents
per share.” in the resources industry as spare capacity
per share.”
In a turbulent year for mining and resources
industries with the proposed ‘Super Tax’ and
the global economy slowly emerging form the
‘GFC’, NRW Holdings Ltd performed exceedingly
well. The Group’s underlying net profit after tax
was $37.9 million, a 2 percent increase from
2009 of $37.1 million. The result was derived
from revenues of $609.7 million representing
an increase of 20 percent over 2009.
The global financial crisis and the resulting
pressure on commodity prices has created
a more competitive tendering environment
in the resources industry as spare capacity
remains under utilised. Although difficult trading
remains under utilised. Although difficult trading
conditions exist, NRW remains optimistic for
conditions exist, NRW remains optimistic for
2011 with a significant pipeline of opportunities
2011 with a significant pipeline of opportunities
expected to build during the year. NRW expects
expected to build during the year. NRW expects
revenue growth of 15 to 20 percent.
revenue growth of 15 to 20 percent.
As indicated in our 2009 Annual General
Meeting, management has conserved cash and
reduced net debt from $40.2 million in 2009
to current levels at 30 June 2010 of $39.0
million. Despite significant capital purchases
that were financed on balance sheet the
Company reduced overall gearing levels. The
Board reviews the Company’s dividend policy on
a regular basis and in doing so we are pleased
to announce a final dividend for 2010 of 3.00
cents, resulting in a full year dividend of 6.00
cents per share.
I take this opportunity to acknowledge and
thank the Board, executives and all staff for
their dedication and hard work culminating
in the excellent result for 2010. In particular
the Board would like to acknowledge the
contribution of outgoing Chief Executive Officer
Mr Jeff McGlinn who departed the Company
in July 2010. Mr McGlinn was a co-founder of
NRW and successfully led the company through
the transition to a listed entity in 2007. The
Board has great confidence that 2011 will be
another challenging but successful year.
Dr. Ian Burston
Chairman
NRW Holdings Limited
2»
NRW Annual Report 2010
Chairman’s Letter
Chairman’s Letter
3»
NRW Annual Report 2010
Chief Executive Officer
Year in Review
“NRW Holdings
Limited achieved
record $609.7
million sales
revenue in
FY2010, a 20
percent increase
on FY2009.”
Mr Julian Pemberton,
NRW Chief Executive Officer
It is with great pleasure that we present to our
shareholders and stakeholders alike, the results
of NRW Holdings Limited for the financial year
ended 30 June 2010.
The 2010 financial year result was pleasing
given the competitive market experienced since
the Global Financial Crisis and more recently
continuing as a result of the proposed Resource
Super Profits Tax. Uncertainty and a lack of
confidence in the sector had a significant
impact through delays in new projects
commencing, and the effect of downward
pressure on margin.
Despite the economic environment NRW
Holdings Limited achieved record $609.7
million sales revenue, a 20 percent increase
on FY2009 and $37.9 million net profit after
tax (“NPAT”) before goodwill write-down, whilst
sustaining our return of capital employed in
excess of 30 percent. We also focussed on
the reduction of net borrowings resulting in a
strengthening of the balance sheet for the next
phase of growth for the company.
NRW has successfully grown the business
through a difficult operating year and diversified
the Group’s services to encompass the addition
of significant new capacity and capability
in our Civil business unit with its concrete
division undertaking the $80 million concrete
component of the Karara civil contract.
During the year we also established Action Drill
and Blast to expand on our core of civil and
mining works and to provide our customers with
adjacent service offerings. Initially providing
services alongside NRW’s civil and mining
projects - such as Western Turner Syncline
and BHP Billiton Iron Ore’s RGP5 - Action Drill
and Blast has expanded its infrastructure and
equipment base to facilitate expected growth to
the wider market.
4»
NRW Annual Report 2010
NRW has continued to build upon excellent
client relationships and also diversify its client
portfolio. The Company continues its efforts to
bring depth and diversity to the business by
seeking opportunities in market sectors that we
are not already active within. Credit is given to
our diligent and hard working employees and to
our management team that have delivered this
years’ result.
HigHLigHts »
« 20% increase in revenue to $609.7 million
« Decrease in net debt to equity to 23%
« 2% increase of NPAT to $37.9 million, before goodwill write down
« Strong Balance Sheet for future growth
« Order book strong with 75% of FY11 Revenue secured
« Final dividend declared 3.00 cents / full year fully franked dividend 6.00 cents
5»
NRW Annual Report 2010
“With the
expansion of the
mining division,
NRW has been
awarded projects
with tenure in
excess of
three years.”
Mr Julian Pemberton,
Chief Executive Officer
Financial Overview
Financial Position
Equity attributable to shareholders, increased
by 19 percent, compared to 2009 and valued
at $169.1 million at the end of FY10. Building
upon initiatives undertaken in 2009 to de-gear
the balance sheet, NRW’s net borrowings have
continued to decline to a prudent 23 percent
net debt to equity. Working capital increased
above 2009 levels but is reflective of the growth
of the business and the increase and timing
of monthly billed revenue. Payment cycles are
positive which in turn is illustrated in the cash
balance of the Group.
Financial Performance
NRW Holdings Limited has successfully
increased revenue by 20 percent to $609.7
million. Despite a very competitive tendering
market resulting in margin pressure, the NRW
Group was able to expand services and increase
profits (before write down) to $37.9 million.
Strong return on capital employed reflects
excellent management of the need to balance
growth, capital utilisation and margins in a
competitive and cautious environment.
With the Promac subsidiary significantly
reducing its activities, NRW elected to write off
goodwill associated with the company to the
total value of $2.71 million. The table below
summarises the results of the Group excluding
the write-down;
$M’s
Mining
Civil
Drill & Blast
Action Mining
Promac
Other / Eliminations
SALES
EBITDA
EBIT
UNDERLYING NPAT
FY07
77.8
158.9
-
4.8
28.6
(12.8)
FY08
107.2
336.8
-
26.2
21.2
(20.2)
FY09
189.4
294.1
-
25.6
31.8
(31.4)
FY10
Annual Change
201.1
383.6
7.0
24.5
17.1
(23.6)
$257.4
$471.2
$509.6
$609.7
45.2
33.6
$20.1
71.9
53.8
$32.8
79.7
58.7
$37.1
92.4
62.4
$37.9
▲ 20%
▲ 16%
▲ 6%
▲ 2%
6»
NRW Annual Report 2010
Financial Overview
Dividend
On the 26 August 2010, the Board of NRW
Holdings Limited declared a final dividend for
the Financial Year ending 30 June 2010. The
final dividend payable is 3.00 cents per share
and brings the full year dividend to 6.00 cents
per share fully franked.
Cash
Cash provided by operating activities for the
financial year was $71.0 million compared to
$88.1 million in 2009; the prior year benefited
from variation claims related to the 2008
financial year. Cash flow since the December
2009 half has returned to within normal
parameters.
Funding
Base secured funding is in excess of $270
million comprising facilities for working capital
and performance guarantees with ANZ Banking
Corporation, and a combination of equipment
finance and other banking facilities for capital
purchases.
$M’s
Working capital & bank
guarantees (ANZ)
OEM & other banking
Total
Utilisation of facilities June 2010
Headroom
FY10
86.3
185.9
$272.2
$99.3
$172.9
The table above illustrates the current
headroom of facilities for further growth and
the acquisition of income producing capital.
NRW has successfully negotiated substantial
facilities to enable the Company to tender
projects with secured funding options.
NRW matches funding requirements with
project size and tenure. The pool of funds
available is more than sufficient to achieve
targeted FY11 revenue growth of 15 to
20 percent.
Order Book
NRW has consistently grown its order book
since the 2005 operating year. In the past the
Company has had the majority of its order book
of a short term nature; but with the expansion
of the mining division, NRW has been awarded
projects with tenure in excess of three years.
Capital Expenditure
Group capital expenditure in 2010 was $60
million compared to $26 million in 2009. NRW
undertook strategic investments in new and
replacement equipment in the first half of
the 2010 financial year, in order to meet the
expected requirements of existing and new
projects. The majority of the plant purchased
was for Bootu Creek (where a hired fleet of
CAT 785 dump trucks was replaced) and for
the Western Turner Syncline contract, which
commenced during the second half. In addition
a number of drill rigs were acquired for the
establishment of our new subsidiary Action Drill
and Blast.
7»
NRW Annual Report 2010
Civil
›
Earthworks and Rail construction for BHP
Billiton Iron Ore - Cowra to Yandi.
› Ore processing facility earthworks at
Christmas Creek for Fortescue.
›
Earthworks and rail construction for BHP
Billiton Iron Ore’s RGP5.
› Construction of dredge bund and
embankment walls at Finucane Island for
BHP Billiton Iron Ore.
›
The signing of a Master Service Agreement
with Rio Tinto Iron Ore for ongoing
miscellaneous works.
› Construction of accommodation, roads and
earthworks for BHP Billiton Iron Ore’s RGP5.
Significant Achievements throughout the year
included:
› Growth in revenue despite reduced
opportunities following Global Financial
Crisis (GFC)
›
Enhanced reputation across an increasing
client base
› Securing high quality project staff to permit
ongoing business growth
› Successful expansion of concrete capability
Industry leader in Indigenous engagement
›
Outlook
The first half of FY11 will be focussed upon
completion of current projects such as the
Chichester Deviation project for BHP Billiton Iron
Ore and finalising the works at Cape Preston for
CITIC Pacific Mining, with our major contract at
Karara continuing on throughout the second half.
Timing in approvals and contract awards,
for the main part due to the RSPT, has had a
significant impact in pushing the bulk of the civil
contracting opportunities out into the second
half of FY11. Tender activity is high, however
still remains very competitive. With many new
projects scheduled to commence during the
second half, NRW is optimistic of significant
improvement in the sector particularly into FY12.
The division will continue its successful strategy
of engaging in joint venture participation with
suitable partners on large projects and with our
Indigenous partners whose communities directly
benefit in job creation and sharing of profits.
The division has also recently appointed a
Civil construction manager based in Brisbane
to expand our capability base and assess
opportunities for expansion independently and
by way of joint venture on the East coast.
NRW civil contracting projects have included
construction of access roads, rail formations
(greenfields and duplication), rail sidings,
seawalls, airstrips, camp villages, greenfield
mine development, power station foundations,
bridges, run-of-mine pads and iron ore storage
facilities.
Revenue for the civil contracting division was
$383.6 million (2009: $294.1 million) in the
2010 financial year - an increase of 31 percent.
The addition of concreting capabilities has
provided diversity to the suite of services the
civil division offers to clients.
The Division’s growth continues to be driven
by the Pilbara iron ore producers need for new
or enhanced infrastructure to meet expanding
demand for product.
Operations
Contracts and contract extensions undertaken
during the period included:
›
Flood damaged bridge and rail rectification
at Pannawonica for Rio Tinto Iron Ore.
› Cape Preston - Bulk Earthworks
and breakwater for CITIC Pacific Mining.
› Concrete and civil earthworks works at the
Karara Iron Ore Project for Karara Mining.
› Cloudbreak to Christmas Creek rail
extension for Fortescue Metals Group.
8»
NRW Annual Report 2010
Civil
“the award of the Karara contract is a tremendous step
forward in the diversification of the NRW skill base with
the significant concrete component. it represents an
opportunity to build a strong relationship with gindalbie
and Ansteel for future works.”
Mr Mal Stewart, General Manager, Civil
Case Study - Karara Bulk
Earthworks and Concrete Package
Client: Karara Mining Limited
Scope of Works: Concrete and Bulk Earthworks
Value: $114 million
Location: Mid-West Western Australia
Duration: Approx 14 months
NRW employees: 300-400
Of particular strategic importance to NRW in 2010 was the award
of the Karara Iron Ore Project $114 million Bulk Earthworks
and Concrete Package, encompassing most of the preliminary
construction work for the iron ore crushing and processing facility.
Representing the largest major concrete works package NRW
has undertaken, this project includes the construction of major
concrete foundations and structures for the plant and associated
infrastructure, including Ball Mills, Primary and Secondary Crushers,
Load out vault, and conveyor trestle foundations. The pouring of more
than 40,000m3 of concrete is a major component of the project.
As well as site earthworks and concrete foundations, the contract
includes construction of site drains, site roads, a retention pond
and the all-weather airstrip. The earthworks and roadworks for the
plant site and associated infrastructure have an approximate total
volume of bulk earthworks of 500,000 cubic metres of cut to fill
and borrow to fill which takes into account approximately 18 kms of
roadworks. NRW’s internal division, Action Drill and Blast, is carrying
out approximately 50,000 cubic metres of drill and blasting.
9»
NRW Annual Report 2010
Mining
Contracts awarded and extensions during
the period were:
› Rio Tinto Iron Ore: Mine and transport iron
ore at the Western Turner Syncline deposit.
›
Fortescue Metals Group: Waste and Ore
mining at Fortescue’s Christmas Creek
Eyre pit.
› Simfer SA (Rio Tinto Guinea): Simandou
Pre Development (Guinea, West Africa)
- Exploration access, infrastructure
development and trial mining.
Outlook
Consistent with the civil division’s outlook the
mining contracting opportunities have also been
affected by delays due to the RSPT, however
those opportunities are now resurfacing with the
pipeline of new projects growing strongly.
The mining division is focused on retaining,
supporting and providing the best possible
service to all of our existing projects whilst
achieving further growth into the 2011 financial
year through potential areas of opportunity
particularly in Western Australia, Queensland
and West Africa.
As part of our ongoing strategy to grow our
mining business and increase our long term
earnings visibility we continue to focus our
attention on further diversification of client and
commodity.
The division provides contract mining services
to resource and minerals companies and has
extensive experience in remote locations.
Significant work has been undertaken in the iron
ore, gold, manganese and mineral sand sectors.
Services include earth moving, waste and ore
mining, drill and blast, ore haulage and related
ancillary services.
Revenue was $201 million (2009: $189.4
million) in the 2010 financial year, representing
a 6% increase. The Division’s revenue was
derived primarily from commencement of new
and continuation of various existing projects for
Rio Tinto Iron Ore, Fortescue and OM Holdings.
Although the year on year revenue growth was
only modest, the division delivered on a core
component of our mining services strategy,
which is to continue to extend the tenure of our
mining contracts giving the group increased
visibility on future earnings.
The mining division’s most significant contract
win of the year was the award of a four year
contract to undertake mining operations at
Western Turner Syncline for Rio Tinto together
with NRW’s Indigenous joint venture partner
Eastern Guruma. This contract commenced
mobilisation midway through the second half of
FY2010. The division also undertook works at
Simandou (Guinea), Tom Price and Hope Downs
for Rio Tinto; Bootu Creek for OM Holdings and
Christmas Creek for Fortescue.
The division has established a reputation for
reliable delivery of services and additional
opportunities are being pursued in the iron ore,
coal and gold sectors within Australia as well
as opportunities overseas predominately in
West Africa building on the experience gained
in Guinea.
“Western turner syncline is a significant
mining contract and the culmination of
months of hard work and dedication. it
symbolises a step in the right direction
towards our overall strategic plan of
strengthening our mining portfolio.”
Mr Willie Rooney, Managing Director, NRW Civil and Mining
10»
NRW Annual Report 2010
Case Study - Simandou
NRW has been operating in Simandou, Guinea (West Africa)
for Rio Tinto since 2007, assisting with site access and drill
pad development.
The original scope of works developed into further works
over the last three years and now includes the Beyla airstrip,
surface mining trials, the National/Regional Roads Program and
drill pad and access road construction at Simandou Mountain.
Mining
During time on site NRW has:
›
Established onsite offices and workshop
facilities
›
Established labour, materials and plant
suppliers in Guinea and Europe
› Accelerated the onsite drill pad
development and rehabilitation program
› Completed the Beyla airstrip
› Constructed a new access road to
Oueleba
› Completed the Canga East, Moribadou and
Beyla road upgrades
› Completed the surface mining trial
› Maintaining villages and National roads
› Pre construction earth works
›
› Helipad construction
› National highway upgrade Beyla to
Leach drainage for waste water refuse
N’Zerekore
This project is an example of NRW’s
geographical diversification strategy which
provides a competitive advantage as we
pursue further opportunities in the region.
11»
NRW Annual Report 2010
12»
NRW Annual Report 2010
Action Drill and Blast
“Our team
has built a
significant
pipeline of
opportunities
which it is
now actively
tendering.”
Mr Warren Fair, General Manager,
Action Drill & Blast
NRW established Action Drill and Blast to
provide a broader range of services and
capabilities to our customers and to address
the lack of competitive alternative solutions
currently available in the market. The Drill
and Blast business commenced operations at
the Western Turner Syncline and Chichester
Deviation projects and will continue operations
for the life of these contracts.
Outlook
NRW has identified further opportunities for
development of the Drill and Blast division
in Western Australian iron ore as well as the
coal sector in the Queensland Bowen Basin
region. Our drill and blast capabilities are being
marketed throughout the industry and our team
has built a significant pipeline of opportunities
which it is now actively tendering.
Case Study - BHP
Billiton Iron Ore’s RGP5
Action Drill and Blast is carrying out the civil
drill and blast on BHP Billiton Iron Ore’s RGP5.
Safety remains the highest priority on site and
the proximity to heritage sites and the active rail
requires skilled, controlled blasting.
Duration:
Approx 5-6 months
Average Production Rate:
3,500bcm per day
Equipment Used:
› 4 x top hole hammer drills (THH):
- Atlas Copco F9C
- Pantera 1500
- GD5000,
- Montabert
› 2 Explosive trucks (MPUs)
13»
NRW Annual Report 2010
Action Mining Services
In addition, fabricated products comprising
service modules, water tankers, Drill support
trucks and our range of Modified High Cube
Sea-Containers, purpose built Maintenance
orientated Site workshop Sea-Containers have
been successfully developed and remain highly
regarded throughout the industry. It is expected
that the future will provide strong demand
from customers both in the Civil and Mining
industry. New products within this field that take
advantage of our AMS skill base and the group
customer relationships are currently being
developed to widen the client base and sales
locations within Australia.
Action Mining Services (AMS) provides
earthmoving and mining equipment repairs
to all brands of equipment. A comprehensive
mechanical repair and rebuild facility, sand
blasting, painting, boiler making repair and
fabrication services are offered to our clients.
A separate fabrication and assembly shop is
also on the premises where 6x4 and 8x4 service
truck and water tanker fabrication is undertaken.
These products are fully mine site compliant
and are marketed to both resources and mining
services companies.
Revenue for the Services Division was $24.5
million (2009: $25.6 million); growth remained
static due to a significant decline in activities in
the resources sector.
Product/Service Line
Revenue
Service & Water Trucks Division
Mechanical Division
Other
Total ($M’s)
9.0
9.6
6.2
$24.5
The service, water truck and mechanical
divisions comprised 75% of total sales for AMS
and it is expected that demand will steadily
increase in the mining sector in line with the
commencement of projects in the second half.
Outlook
The outlook for continuing growth within
the services division remains influenced by
investment in the resources and oil and gas
sector. However with several large projects
commencing in WA the outlook remains positive
particularly from the second half, with AMS well
placed to take advantage of growth.
Apprentice development continues to be a focus
with current apprentice numbers at 28 with
intakes occurring January and July. Apprentices
complete the first two years at Action Mining
Services and are then rotated throughout the
various NRW Civil and Mining sites to gain
practical site experience.
Case Study: AMS at Gorgon
The Gorgon project has been favourable to Action Mining Services generating a steady
revenue stream. Work related to the Gorgon Project continues to perform well with one
formalised quarantine contract in place with a major Gorgon contractor. Additionally,
new Gorgon related contractors continue to approach Action Mining Services for
quarantine work with various clients requesting additional repairs, site specification
requirements, modifications and alterations for equipment of all types.
Action Mining Services continues to receive further enquiries regarding formal
Quarantine contracts from other engaged contractors on the Gorgon project which are
highly likely to materialise during the course of the Project life. Action Mining Services
Management continues to review additional opportunities relating to quarantine works
on the Gorgon Project.
14»
NRW Annual Report 2010
“the outlook
remains positive
particularly from
the second half,
with Action Mining
services well placed
to take advantage
of growth.”
Mr Rob Roper, Action Mining Services,
General Manager.
Promac
Promac achieved revenue of $17.1 million
compared to $31.8 million in 2009. The
Promac entity ceased trade in July 2010.
After several years of disappointing results
and a restructure in March 2009 the Board
and management took the view the Promac
business did not form part of core operations.
Although $15 million of the total sales were
external, margins for the products continued
to be competitive. It has been determined
that the company’s resources can be better
employed to grow the Civil, Mining and Drill
and Blast divisions.
15»
NRW Annual Report 2010
Human Resources
“At the end of the first year of the
Western turner syncline contract NRW
anticipate 25 percent indigenous
involvement, rising over the course of
the Contract with the goal of reaching
50 percent by the completion of the
Contract.”
Mr Keith Bassett, General Manager Human Resources
NRW’s current and future success’ is directly
linked to that of our people. We are driven
to provide our people with a workplace
that provides excellent reward, combined
with development opportunities and most
importantly, attention to safety.
As a company operating in an environment
where skilled labour is in short supply, NRW
remains focussed on the attraction and retention
of quality employees. NRW provides its people
with development opportunities at all levels by
identifying employees with potential and allowing
access to high quality training and development.
The last 12 months has seen an excellent
up take of training opportunities with strong
participation and progress by our work-force
towards formal qualifications in the form of the
Certificate II in Metaliferous Mining as well as
the Diploma of Management and Advanced
Diploma of Management. These qualifications
are encouraged by our Health Safety, Training
and Environment department and are open to
all site based operational employees.
Training consists of the following:
Life style skills whilst on site
Traffic control & Management
› Mentoring
› Senior First Aid
›
›
Financial management awareness
›
› HR training and licence acquisition
› Mandatory cultural awareness for working in Pilbara
› Dump Truck, Roller and Light Vehicle theory and practical
› Simulator training included.
›
Five core units certificate 2 metalliferous mining:
NRW’s most recent PowerUP completed in June 2010,
achieved a 100 percent graduation rate. All twelve
trainees are now employed on current NRW projects.
Case Study - PowerUP
NRW is committed to providing real opportunities to Indigenous
Australians with no relevant industry experience but who would
like to break into the resources industry. NRW’s Indigenous
Development Program, PowerUP, engages suitable participants in
our innovated work-start program.
The only necessary prerequisites are possessing a normal
manual driver’s licence, being healthy and having an eagerness
to be employed. PowerUP differs from similar programs in that
participants are guaranteed full time work upon satisfactory
completion.
The four week program consists of a daily routine with a 7am
start and a 5pm conclusion. Five core units from Certificate II
Metalliferous Mining Operation Operations are also part of the
course requirements. Participants are exposed to a simulator and
hands-on activities in a controlled ‘real life mining pit’ in haul truck
and roller operations.
16»
NRW Annual Report 2010
Human Resources
Rapid response to mobilisation needs in
conjunction with client requirements remains
a strong focus for the Human Resources
department and NRW boasts a dedicated
recruitment and mobilisation team who
understand that delays in sourcing the right
candidates equates to real economic cost to
both NRW and our clients.
As at 30 June 2010, the NRW Group had a
total workforce of approximately 1,614. Our
workforce includes 147 Indigenous employees
and sub contractors and 23 apprentices,
reflecting the strong commitment to Indigenous
employment and training. In addition NRW
continues to employ a large number of
subcontractors through strategic alliances with
Indigenous organisations.
NRW has implemented several Indigenous training
programs including PowerUP in conjunction with
the Department of Education, Employment and
Workplace Relations. The PowerUP program
provides training and employment opportunities
for long term unemployed. NRW also conducts
its Cultural Awareness Program for all employees
and sub contractors with PEEDAC Pty Limited
(an Indigenous training organisation). It is through
these initiatives that NRW has maintained a
significant and highly valued Indigenous workforce.
Training and Assessment
During 2010 NRW continued its nationally
accredited Certificate II in the Metaliferous
Competencies for all operators employed by
the Company.
To date 901 employees have successfully
completed the ‘Five Core Unit’ workshops
and have received a nationally accredited
qualification for the plant which they operate.
This programme has proven very popular with
NRW employees with many having attended
the courses in their own time and has proven
commercially valuable as clients continue
to focus on the training and certification of
operators.
The introduction of the Certificate II in
the Metaliferous Competencies has
achieved considerable attention from
BHP Billiton Iron Ore in particular
with recognition of the independent
nature of the assessment
assisting in the fast tracking of
the Verification of Competency
(VOC) process at project
start up.
NRW introduced the Diploma of Management
(Cert IV) for all Managers and Supervisors and to
date approximately 145 employees are studying
the four modules. This Diploma has been
specifically tailored to train our management
team in the management of our business.
Case Study:
Community Support
NRW proudly supports the communities
in which it operates by sponsoring a range
of charities, community events and sporting
clubs both domestically and internationally.
One such initiative is the annual Murdoch
University Chiropractic field trip to remote Western
Australia sponsored by NRW. During August 2010,
a group of final year Murdoch University Chiropractic
students spent ten days in Tom Price providing free
treatment to miners, the community and Indigenous
people at Wakathuni and Jigalong.
17»
NRW Annual Report 2010
Health, Safety & Environment
“NRW is
committed to
achieving the
highest possible
performance
in occupational
health and
safety across
all business
operations.”
Mr Bob McNair, General Manager, HSE & T
Health & Safety
NRW is committed to achieving the highest
possible performance in occupational health
and safety across all business operations.
NRW’s Occupational Health and Safety
Management Systems are accredited to
AS4801:2001, the applicable Australian
Standard and subject to continuous audit.
The Company manages risk through hazard
identification, minimisation, monitoring and
control procedures, and by reviewing safety
performance.
NRW ensures that all employees, including
subcontractors’ employees, are fully instructed,
trained and assessed in the tasks each will be
required to perform, and in the operation of
plant and equipment.
This year saw the continuation of the Bodysmart
program, designed to increase awareness across
all sites of measures to prevent back and related
injuries. This program is managed by NRW’s
dedicated Occupational Health Nurse (OHN).
The health programme also has been extended
to include personal dust monitoring and noise
surveys which are also conducted by the OHN.
It was pleasing to note a decrease in the LTIFR
to 1.8 and a corresponding decrease in AIFR
to 12.62. Total man hours for the period was
3,327,100.
Environment
NRW maintained certification to AS/NZS ISO
14001: 2004 Environmental Management
Systems which covers Environmental
Management Systems in the civil engineering
and mining industries. This certification
reinforces NRW’s commitment to maintaining
strict environmental protocols on all projects
undertaken. This certification is also subject to
continuing audit by external agencies.
Quality Assurance
NRW maintained certification to ISO standard
9001: 2008 and AS/NZS 4801 (achieved in
May 2009) for its Quality Management System.
Case Study: Environmental Surety at Cape Preston
Constructing a breakwater more than
2.5 kilometres into the sea presents an
enormous challenge, particularly if the waters
encompassing the breakwater are in a proposed
marine park and island nature reserves are
in close proximity. It was clear from project
inception that the Cape Preston earthworks
and breakwater package represented a high
environmental risk.
Potential impacts to turtles, whales, migratory
birds and coral habitats were identified and
construction techniques employed to mitigate
these risks.
Environmental education was delivered
throughout the project to raise awareness of the
area’s conservation significance.
Constant water turbidity monitoring occurred
during the breakwater construction. Exclusion
zones were established around beaches utilised
by turtles and lighting was redirected away from
the beaches in order to minimise light spill.
Every team member had a role to play to ensure
the conservation values associated with this
coastal environment were maintained.
18»
NRW Annual Report 2010
Company Outlook
The outlook for the NRW Holdings Limited
Group is optimistic and we look forward to
continuing our strong growth profile during the
2011 financial year. We see demand for civil
and mining services becoming robust in the
second half of FY11 with expectations of high
demand for services continuing through FY12
and beyond.
At the present time the civil and mining tender
activity is gaining momentum however the overall
environment still remains very competitive.
Following a restructure of our business model
and reporting lines for the FY11 year a new
strategy has been developed and is now being
implemented to continue the outstanding
growth profile consistent with our performance
to date. We are committed to building new
revenue streams through expansion of services
in our core businesses. We will carefully
consider targeted acquisitions that increase
NRW’s relevance to our customers and that
enable the Group to maintain our strong return
on capital employed.
In addition to servicing the expanding iron
ore sector, NRW’s civil construction business
will grow its footprint through capitalising on
opportunities in the Oil and Gas sectors where
our skills and track record allow a natural entry
and where significant expansion is expected
over the next 12-24 months.
In Queensland, the appointment of a
civil construction manager will enable
the assessment of tender opportunities
independently and by way of partnering in both
the resources and government works sectors.
NRW’s mining division expects to capitalise on
greenfields projects and potential expansion of
existing projects in Western Australia, as well as
continuing to identify opportunities in the coal
market, particularly in Queensland.
The African continent continues to be an
area of specific interest to complement
the operations already being carried out in
Guinea for Rio Tinto. NRW is actively tendering
opportunities in West Africa.
The key to our successful business model is to
continue offering the best possible service to our
clients where our solid reputation has been built
over many years by the quality of work and the
outstanding effort and diligence of our people.
The newly established Action Drill and Blast
The newly established Action Drill and Blast
business has the potential to grow strongly
business has the potential to grow strongly
and has the opportunity to be a significant
and has the opportunity to be a significant
future contributor to NRW’s customer-focused
future contributor to NRW’s customer-focused
capabilities and earnings over the coming years.
capabilities and earnings over the coming years.
Action Mining Services is expected to be a
stable contributor and an improved outlook
should evolve through product development and
through expected gains in sector momentum
into the second half of 2011.
NRW is conservatively geared, generating
strong cash flows with strong return on capital
employed. We have the capacity for strong
growth into FY11/12 contingent upon prevailing
market influences. Revenue growth for FY11
is expected to be in the range of 15 percent to
20 percent with continuation of a tight margin
environment.
Mr Julian Pemberton,
Managing Director and Chief Executive Officer
19»
NRW Annual Report 2010
Chief Financial Officer
Financial Year in Review
“The balance sheet is in excellent
shape to underpin expansion
opportunities as well as the growth
expected in FY11.”
Mr Mark Wallace, Chief Financial Officer, NRW Holdings
The 2010 financial year was another year
of controlled growth across the NRW Civil &
Mining operations. The NRW Group increased
revenue and net earnings (excluding the write
down of goodwill) in a challenging economic
environment.
The Group continued to achieve high returns
on average capital employed through a
combination of high utility of plant, project
execution and a clear focus on balance sheet,
cash and resource allocation.
Capital Expenditure
NRW increased capital expenditure primarily
in the first half of FY10. Most of the plant and
equipment purchased was for long term projects
being undertaken by the Mining division.
In total, an amount of $60 million of capital
goods, leasehold improvements and
consumable items were acquired during the
year ended 30 June 2010 compared to $25
million in FY09. The purchases of mobile
equipment were heavily discounted, due to the
prevailing economic conditions, and replacing
capital hired on a long term basis.
$m’s except where stated
June 10
June 09
Change %
Revenue
EBIT (excluding goodwill expense)
$609.7
$62.4
$509.6
58.7
EPS (cents)
Interest cover (x times)
Net debt to equity
Return on equity %
Return on average capital employed %
0.14
7.3
23%
20%
33%
0.15
6.8
28%
26%
33%
20%
6%
(6%)
6%
(18%)
(23%)
-
20»
NRW Annual Report 2010
Cash flow
Operating cash flow was strong overall with
minimal investment of cash being tied up in net
working capital - a good outcome given that
new projects had commenced and revenue had
increased by $100 million.
Following a difficult calendar year ended
31 December 2009, the company’s cash
conversion rate dramatically improved in the
second half of FY10.
Balance Sheet & Debt
Following 2008, NRW’s management undertook
a program of de-gearing the balance sheet in
order to strengthen the company during the
financial downturn. In FY09 net debt to equity
was 28 percent and despite an increase in
capital expenditure during FY10, net debt for the
Group continued to trend at a conservative level
of 23 percent. See graph.
The balance sheet is in excellent shape to
underpin expansion opportunities as well as
the growth expected in FY11. Sufficient funding
facilities have been agreed with financiers
and currently the group has a total capacity in
excess of $270 million, of which there is $170
million in headroom available if required.
Taxation & Franking Credits
Company income tax increased in 2010 despite
lower profit than 2009. The increase is due to
the non-deductibility of the goodwill write off
related to Promac in 2010 and the concessions
gained in 2009 from the Federal Governments
investment allowances for purchases of plant
and equipment.
The company has built up sufficient franking
credits to fully frank dividends for the
foreseeable future.
Systems
NRW has implemented new management
systems to improve transparency of project
performance, resource allocation and cash
management to assist on-site project managers
as well as the corporate management of the
company.
The systems are designed so as to integrate
information pertaining to all facets of the
business including human resource, plant
assets, project costing and supply chain
management in a timely manner.
We will continue to develop the business’
systems and tools in order to provide better
management of risk with the aim of providing
beneficial outcomes for all our stakeholders.
Mr Mark Wallace
Chief Financial Officer
21»
NRW Annual Report 2010
22»
NRW Annual Report 2010
Corporate Governance Statement
ASX Governance Principles
and ASX Recommendations
The Australian Stock Exchange Corporate
Governance Council sets out best practice
recommendations, including corporate
governance practices and suggested
disclosures. ASX Listing Rule 4.10.3 requires
companies to disclose the extent to which they
have complied with the ASX recommendations
and to give reasons for not following them.
Unless otherwise indicated the best practice
recommendations of the ASX Corporate
Governance Council, including corporate
governance practices and suggested
disclosures, have been adopted by the
Company for the full year ended 30 June 2010.
In addition, the Company has a Corporate
Governance section on its website:
www.nrw.com.au which includes the relevant
documentation suggested by the ASX
Recommendations.
The extent to which NRW has complied with
the ASX Recommendations during the year
ended 30 June 2010, and the main corporate
governance practices in place are set out below.
Principle 2: Structure of the
Board to Add Value
BOARD COMPOSITION
Details of the Directors in office at the date
of this report, including their qualifications,
experience, date of appointment and their status
as non-executive, independent or executive
Directors are set out in the Director’s Report.
The Board Charter (a copy of which has been
published on the Company’s website) currently
provides that at least one third of its Directors
will be independent non-executive directors and
that the Chairman must also be an independent
non-executive director.
The Board currently has three Directors, two
of whom are non-executive. The two non-
executive Directors, including the Chairman, are
considered to be independent.
The roles of the Chair and Managing Director
are exercised by different individuals.
INDEPENDENT DECISION-MAKING
The Board agrees that all Directors should
bring an independent judgement to bear in
decision-making.
Accordingly, the Board:
›
›
›
has adopted a procedure for Directors to
take independent professional advice if
necessary at the Company’s expense (with
the prior approval of the Chairman, which
will not be unreasonably withheld)
as much as is reasonably practicable within
the constraints of its current Board size and
structure, the Board sets aside sessions at
its scheduled meetings to confer without
management present
has described in the Board Charter the
considerations it takes into account when
determining independence.
Principle 1: Lay Solid
Foundation for Management
and Oversight
The Board has implemented a Board Charter
that details its functions and responsibilities
together with those of the Chairman and
individual Directors.
Key responsibilities of the Board include:
›
approving the strategic objectives of the
Group and establishing goals to promote
their achievement;
› monitoring the operational and financial
position and performance of the Group;
›
›
›
›
›
›
ensuring the Directors inform themselves of
the Group’s business and financial status;
establishing investment criteria including
acquisitions and divestments, approving
investments, and implementing ongoing
evaluations of investments against such
criteria;
providing oversight of the Company,
including its control and accountability
systems;
exercising due care and diligence and sound
business judgment in the performance of
those functions and responsibilities;
considering and approving the Group’s
budgets;
reviewing and ratifying systems of risk
management and internal compliance
and control, codes of conduct and legal
compliance;
› monitoring senior management’s
performance and implementation of
strategy and ensuring appropriate
resources are available;
›
›
›
ensuring that business risks facing the
Group are, where possible, identified and
that appropriate monitoring and reporting
internal controls are in place to manage
such risks;
approving and monitoring financial and
other reporting; and
ensuring the Company complies with its
responsibilities under the Corporations
Act, the ASX Listing Rules, the Company’s
Constitution and other relevant laws and
regulations.
23»
NRW Annual Report 2010
has no material contractual relationship with
the Group other than as a director of the
Company;
The Charter states that Directors must comply
strictly with Corporations Act requirements and
the Board Charter for the avoidance of conflicts.
›
›
›
›
›
›
›
DIRECTOR INDEPENDENCE
The Board’s Charter lists relationships it takes
into account when determining the independent
status of Directors.
Criteria that the Board takes into account when
determining Director Independence include:
is not a substantial shareholder of the
Company or an officer of, or otherwise
associated directly with a substantial
shareholder of the Company (as defined in
section 9 of the Corporations Act 2001);
has not, within the last 3 years, been
employed in an executive capacity by a
member of the Group, or been a director
after ceasing to hold any such employment;
has not, within the last 3 years, been a
principal of a material professional adviser
or a material consultant to the Group, or
an employee materially associated with the
service provided;
is not a material supplier or customer of
the Group, or an officer of or otherwise
associated, directly or indirectly, with a
material supplier or customer;
has not served on the Board for a period
which could, or could reasonably be
perceived to, materially interfere with the
director’s ability to act in the best interests
of the Company; and
is free from any interest and any business
or other relationship which could, or could
reasonably be perceived to, materially
interfere with the Director’s ability to act in
the best interests of the Company.
The Board has reviewed the independence
status of its Directors and has determined the
following Directors to be “independent” (in
accordance with the criteria listed above):
› Dr Ian Burston (Chairman)
› Mr Michael Arnett.
24»
NRW Annual Report 2010
The period of office held by each director in office is as follows:
Director
Date Appointed
Period in office
Due for Re-election
Dr. Ian Burston
27 July 2007
Mr. Jeff McGlinn
10 February 2006
Mr. Michael Arnett
27 July 2007
Mr. Julian Pemberton
1 July 2006
3 years
4 years
3 years
4 years
2010 AGM
Not applicable
2011 AGM
Not Applicable
Mr McGlinn resigned as an Executive Director and as Chief Executive Officer effective 7 July 2010.
CONFLICTS OF INTEREST
A Director’s obligations to avoid a conflict
of interest are set out in the Board Charter
and reinforced in the Code of Conduct - The
Company’s Obligations to Stakeholders.
Directors and employees of the Company are
expected to act at all times in the Company’s
best interests and to exercise sound judgment
unclouded by personal interests or divided
loyalties. They must avoid the appearance of, as
well as actual, conflicts of interest both in their
performance of duties for the Company and in
their outside activities.
NOMINATION AND REMUNERATION
COMMITTEE
The Board has established a Nomination and
Remuneration Committee and adopted a
Charter that sets out the committee’s role and
responsibilities, composition and membership
requirements.
Nomination responsibilities:
The role of the Nomination and Remuneration
Committee when carrying out its Nomination
responsibilities includes:
›
›
›
›
identifying nominees for directorships and
other key executive appointments;
the composition of the Board;
ensuring that effective induction and
education procedures exist for new Board
appointees and key executives; and
ensuring that appropriate procedures exist
to assess and review the performance of the
Chair, executive and non-executive directors,
senior management, Board committees and
the Board as a whole.
The responsibilities of this Committee with respect
to remuneration are set out under Principle 8.
Composition of the Committee
The Committee Charter states that the
composition should include:
›
›
a minimum of three members, the majority
of whom must be independent, and
a Chairman who is an independent Director.
Committee membership is disclosed in the
Directors Report included as part of the
Annual Report along with details of meetings
attended. Membership is consistent with the
composition requirements of the Charter and
the recommendations of the ASXCGC Principles.
During the 2010 financial year two meetings
of the Nomination & Remuneration Committee
were held. Certain responsibilities of the
Nomination and Remuneration Committee were
also considered at Board meetings by the full
Board as required.
SELECTION, APPOINTMENT,
INDUCTION AND CONTINUING
DEVELOPMENT PROCESSES
Directors must retire at the third AGM following
their election or most recent re-election. At least
one third of Directors must stand for election
at each AGM. Any Director appointed to fill a
casual vacancy since the date of the previous
AGM must submit themselves to shareholders
for election at the next AGM. Re-appointment of
Directors by rotation is not automatic (the above
retirement and re-election provisions do not
apply to the Managing Director).
All notices of meeting at which a Director
is standing for election or re-election are
accompanied by information to enable
shareholders to make an informed decision.
As part of the induction process, meetings will
be arranged with other Board members and key
executives prior to the Director’s appointment.
All Directors are expected to maintain the
skills required to discharge their obligations
to the Company. Directors are encouraged to
undertake continuing professional education
and where this involves industry seminars and
approved education courses, to be paid for by
the Company where appropriate.
The skills, experience and expertise relevant to
the position of director held by each director
in office at the date of the Annual Report is
set out in the Directors Report included in the
Annual Report.
The Board will undertake an annual
performance evaluation that reviews:
›
›
›
›
performance of the Board against the
requirements of the Board Charter;
performance of Board Committees against
the requirements of their respective
Charters;
individual performances of the Chair,
Managing Director, Directors, and Chief
Executive Officer and
The Board Charter, the Committee Charters
and the procedures of the Board with a view
to continuous improvement.
COMPANY SECRETARY
The Company Secretary plays an important role
in supporting the effectiveness of the Board by
monitoring that Board policy and procedures are
followed, and co-ordinating the timely completion
and despatch of Board agenda and briefing
material. The responsibilities of the Company
Secretary are stated in the Board Charter.
All Directors have access to the Company
Secretary.
The appointment and removal of the Company
Secretary is a matter for decision by the Board.
Principle 3: Promote
Ethical and Responsible
Decision Making
CODE OF BUSINESS ETHICS
AND CONDUCT
NRW has adopted a Code of Business Ethics
and Conduct that applies to its Directors,
management and employees and which seeks
to establish the minimum standards the Board
believes are necessary to maintain the highest
level of confidence for all stakeholders in
the integrity of the NRW group. This Code is
published on the Company’s website.
SECURITIES DEALING POLICY
The Board has adopted a Securities Dealing
Policy that is binding on all Directors,
employees, contractors, consultants and
advisers to NRW. The Policy is intended to assist
in maintaining market confidence in the integrity
of dealings in the Company’s securities.
This Policy is provided to all new employees at
induction. The Company will obtain a periodic
acknowledgement from members of the
management team of their compliance with
this policy.
Principle 4: Safeguard
Integrity in Financial
Reporting
AUDIT AND RISK MANAGEMENT
COMMITTEE
The Board has established an Audit and Risk
Management Committee to assist the Board
in discharging its oversight responsibilities
and has adopted a formal Charter that sets
out the Committee’s role and responsibilities,
composition and membership requirements.
The role of the Audit and Risk Management
Committee includes:
›
›
reviewing the integrity of management’s
presentation of the Company’s financial
position;
reviewing the integrity of management
reporting on Company performance in all
other key operational compliance areas
subject to external audit, and
›
ensuring the independence and competence
of the Company’s external auditors.
Corporate Governance Statement
In order to assist the Audit and Risk
Management Committee, chartered
accountants and business advisors Grant
Thornton have been engaged to conduct
internal audit of systems and processes for the
NRW Holdings Ltd group of companies.
COMPOSITION OF THE COMMITTEE
The Board has determined that the Audit and
Risk Management Committee should comprise:
›
›
›
at least three members
a majority of independent non-executive
directors
an independent chair who is not the Chair
of the Board.
In addition, the Audit and Risk Management
Committee should include:
› members who are financially literate
at least one member with relevant
›
qualifications and experience
›
at least one member with an understanding
of the industry in which the entity operates.
Committee membership is disclosed in the
Directors Report included as part of the Annual
Report along with details of meetings attended.
Membership is consistent with the composition
requirements of the Charter and the ASX
Principles.
The Charter is published on the Company’s
website. The website also contains information
on the procedures for the selection and
appointment of the external auditor and for the
rotation of external audit partners.
Principle 5: Make Timely
and Balanced Disclosure
The Company is committed to ensuring that:
›
all investors have equal and timely access
to material information concerning the
Company - including its financial situation,
performance, ownership and governance
› Company announcements are factual and
presented in a clear and balanced way.
The Board has adopted a Continuous
Disclosure Policy that complies with ASX
and other statutory obligations with the
Company Secretary responsible for external
communications.
25»
NRW Annual Report 2010
Principle 6: Respect the
Rights of Shareholders
The Company is committed to effective
communications with its shareholders, providing
them with understandable and accessible
information about the Company and facilitating
shareholder participation at general meetings.
The Board has established a Shareholder
Communications Policy, its purpose being to
set out in conjunction with the Continuous
Disclosure obligations:
› Company strategy;
›
›
strategy implementation; and
financial results flowing from the
implementation of Company strategy.
The full Shareholder Communications Policy is
published on the Company website.
ELECTRONIC COMMUNICATIONS
The Company maintains an up-to-date website
on which all ASX and media announcements
are posted. Prior to the AGM shareholders are
also invited to submit questions to the Company
through the office of the Company Secretary.
EXTERNAL AUDITOR’S AGM
ATTENDANCE
The external auditor is required to attend the
Company’s AGM and to respond to questions from
shareholders about the conduct of the audit and
the preparation and content of the auditor’s report.
26»
NRW Annual Report 2010
Principle 7: Recognise and
Manage Risk
Principle 8: Remunerate
Fairly and Responsibly
RISK MANAGEMENT POLICY
The Company has adopted a Risk Management
Policy, the primary objective of which is
to ensure that the Company maintains an
up-to-date understanding of areas where
the Company may be exposed to risk and
compliance issues and implement effective
management of those issues.
This Policy is published on the Company’s
website under the Charter of Audit and Risk
Management.
Oversight of Risk Management is undertaken by
the amalgamated Audit and Risk Management
Committee.
This Committee assists the Board in its
oversight role by:
›
the implementation and review of
risk management and related internal
compliance and control systems,
› monitoring the Company’s policies,
programs and procedures to ensure
compliance with relevant laws, the
Company’s Code of Conduct and,
›
the establishment and ongoing review of the
Company’s corporate governance policies,
procedures and practices.
The Board require management to report
to it, directly, or through the Audit and
Risk Management Committee, as to the
effectiveness of the Company’s management of
its material business risks.
The Managing Director is required to report
to the Board on the progress of, and on all
matters associated with, risk management. The
Managing Director is to report to the Board as
to the effectiveness of the Company’s material
business risks at least annually.
NRW has established a risk management
foundation that will be developed and
enhanced over time to meet best practice
standards including the recent appointment of
an internal auditor.
The Board has received an assurance from the
Managing Director and Chief Financial Officer
that there is a sound system of risk management
and internal control and that the system is
operating effectively in all material respects in
relation to the financial reporting risks.
NOMINATION AND REMUNERATION
COMMITTEE
The Board has established a Nomination and
Remuneration Committee and adopted a
Charter that sets out the committee’s role and
responsibilities, composition and membership
requirements.
Remuneration responsibilities:
The role of the Nomination and Remuneration
Committee when carrying out its Remuneration
responsibilities includes:
›
›
›
›
responsibility for providing the Board with
advice and recommendations regarding
the ongoing development of an executive
remuneration policy that:
is designed to attract, maintain and motivate
directors and senior management with the
aim of enhancing the performance and
long-term growth of the Company; and
clearly sets out the relationship between the
individual’s performance and remuneration.
complies with the reporting requirements
relating to the remuneration of directors
and key executives as required by ASX
Listing Rules, Accounting Standards and the
Corporations Act.
The Committee must review the remuneration
policy and other relevant policies on an ongoing
basis and recommend any necessary changes
to the Board.
The composition requirements for and
membership of this Committee is consistent
with the Charter and with ASXCGC Principles.
Committee membership is disclosed in the
Directors Report included as part of the Annual
Report along with details of meetings attended.
A copy of this Committee’s Charter is on the
Company’s website.
EXECUTIVE REMUNERATION
The Board periodically reviews executive
remuneration practices with a view to ensuring
there is an appropriate balance between fixed
and incentive pay, and that the balance reflects
short and long term performance objectives
appropriate to the Company’s circumstances
and goals.
Executive remuneration will be published in the
Remuneration Report in the Company’s Annual
Report each year (including the Remuneration
Report contained in this Annual Report).
NON-EXECUTIVE DIRECTOR
REMUNERATION
ASX guidelines for appropriate practice in
non-executive director remuneration are that
non-executive directors should:
›
›
›
›
normally be remunerated by way of fees
(in the form of cash, non-cash benefits,
superannuation contributions or salary
sacrifice into equity)
not normally participate in schemes
designed for the remuneration of executives
not receive options or bonus payments
not be provided with retirement benefits
other than superannuation.
The Company’s current practice for
remunerating non-executive directors is
consistent with these guidelines.
The details of Directors’ remuneration are set
out in the Remuneration Report contained in the
Annual Report.
REMUNERATION POLICY
DISCLOSURES
Disclosure of the Company’s remuneration
policies is best served through a transparent
and readily understandable framework for
executive remuneration that details the costs
and benefits.
The Company intends to meet its transparency
obligations in the following manner:
›
›
›
›
›
publishing a detailed Remuneration Report
in the Annual Report each year
continuous disclosure of employment
agreements with key executives where
those agreements, or obligations falling
due under those agreements, may trigger a
continuous disclosure obligation under ASX
Listing Rule 3.1.
presentation of the Remuneration Report
to shareholders for their consideration and
non-binding vote at the Company’s AGM
taking into account the outcome of the non-
binding shareholder vote when determining
future remuneration policy and,
providing a response to shareholder
questions on policy where appropriate.
Corporate Governance Statement
27»
NRW Annual Report 2010
the 2010 financial year was another
year of strong growth across the NRW
Civil & Mining operations.
28»
NRW Annual Report 2010
For the year ended 30 June 2010
Financial Report
Director’s Report
Auditor’s Independence Declaration
Directors’ Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Shareholder Information
Independent Auditor Report
30
39
40
41
42
43
44
45
87
89
Director’s Report
The Directors present their report together with the financial report of NRW Holdings Limited (“the Company”) and of the Consolidated Group (also referred
to as “the Group”), comprising the Company and its subsidiaries, for the financial year ended 30 June 2010.
Directors
The following persons held office as Directors of NRW Holdings Limited during the financial year and up to the date of this report:
Name
Status
Qualifications, special responsibilities and other Directorships
Dr Ian Burston
Chairman
Dr Ian F Burston was appointed as a Director and Chairman on 27 July 2007.
Independent Non-
Executive Director
His career includes former positions as Managing Director of Portman Limited, Managing Director and Chief Executive
Officer of Aurora Gold Ltd, Chief Executive Officer of Kalgoorlie Consolidated Gold Mines Pty Ltd, Vice President – WA
Business Development of CRA Ltd and Managing Director of Hamersley Iron Pty Ltd. He was a non-executive Director
of the Esperance Port Authority for ten years and executive Chairman of Cape Lambert Iron Ore Ltd, and is currently a
non-executive Chairman of Broome Port Authority and Imdex Ltd and a non-executive Director of Mincor Resources NL
and Fortescue Metals Group.
Dr I F Burston has a Bachelor of Engineering (Mech) degree from Melbourne University and a Diploma in Aeronautical
Engineering from Royal Melbourne Institute of Technology. He has completed the Insead Management Course in Paris
and the Harvard Advanced Management Program in Boston.
He was awarded the Western Australian Citizen of the Year (category of Industry and Commerce) in 1992, the Order of
Australia (General Division) in 1993 and an Honorary Doctor of Science (Curtin) in 1995.
Dr I F Burston has held the following directorships of listed companies in the 3 years immediately before the end of the
financial year:
›
›
›
›
›
›
›
Non Executive Chairman, Imdex Limited (Resigned 15 October 2009)
Non Executive Director, Mincor Resources NL
Non Executive Director, Kansai Mining Corporation
Non Executive Chairman, Cape Lambert Iron Ore Limited (Resigned 15 August 2008)
Non Executive Director, Fortescue Metals Group
Non Executive Director, Carrick Gold Limited (Resigned 2010)
Non Executive Director, Condor Nickel Limited (Resigned 2010)
Jeffery McGlinn
Managing Director
Mr McGlinn was appointed a Director on 10 February 2006 and resigned effective 7 July 2010.
Mr McGlinn was the founding Managing Director of NRW. He has over 30 years of experience in civil contracting, mining
and marketing.
His major responsibilities within NRW were in the areas of Group management and finance including strategy,
acquisitions and overall business development.
Mr Pemberton was appointed as a Director on 1 July 2006. Appointed as Chief Executive Officer & Managing Director 7
July 2010.
He has over 20 years of experience in business, sales and management in both Australia and the United Kingdom. Mr
Pemberton joined NRW in 1997 and initially worked on site before progressing into the sales and hire area. He has held
roles as Operations Manager, General Manager and Chief Operating Officer for NRW prior to his current role.
Mr Arnett was appointed as a Director on 27 July 2007.
Michael Arnett is a consultant to and former partner of and member of the Board of Directors and national head of
the Natural Resources Business Unit of the law firm Deacons. Michael has been involved in significant corporate and
commercial legal work for the resource industry for over 20 years.
Mr Arnett has held the following directorships of listed companies in the 3 years immediately before the end of the
financial year:
›
›
›
›
›
›
›
Non Executive Director, Anzon Australia Limited (Resigned 2008)
Non Executive Director, Anzon Energy Limited (Resigned 2008)
Non Executive Director, Archipelago Resources PLC
Non Executive Director, Axiom Mining Limited (Resigned 2008)
Non Executive Director, Queensland Energy Resources Limited
Chairman, New Guinea Energy NL
Non Executive Director, Nexus Energy Limited
Julian Pemberton
Chief Executive
Officer and
Managing Director
Michael Arnett
Non-executive
Director
30»
NRW Annual Report 2010
Director’s Report
Company Secretary
Mr Kim Hyman was appointed to the position of company secretary on 10 July 2007. Mr Hyman has responsibility for company secretarial services and
coordination of general legal services, as well as the risk management portfolio.
Directors’ meetings
The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company during the financial year are:
Director
Ian Burston
Michael Arnett
Jeffery McGlinn
Julian Pemberton
Directors’ Meetings Attended
Directors’ Meetings Held
5
5
4
5
5
5
5
5
The Remuneration Committee met once during this period. This meeting comprised of Michael Arnett and Ian Burston as the Remuneration Committee.
The Nomination Committee was not required to meet during this period.
The Audit and Risk Management Committee met in conjunction with each Board Meeting held.
Principal activities
The principal continuing activities of the Group, comprising the Company and the entities that it controlled during the financial year, were:
civil contracting services
›
› mining services
›
›
›
equipment rental and sales
fabrication, quarantine and repair services
drilling and blasting services
State of Affairs
With the exception of winding up the operations within Promac Rental and Sales Pty Ltd, there were no significant changes in the state of affairs of the
Company or the Group during the financial year.
Review of Operations and Results
A review of the operations and results for the Group for the financial year to 30 June 2010, as well as information on the financial position of the Group, is
set out in the Year in Review on pages 4 to 21 in this Annual Financial Report.
Significant Events after Year End
No matter or circumstance has arisen since the end of the financial year that has significantly affected, or may significantly affect, the Group’s operations,
the results of those operations, or its state of affairs in future financial years.
Likely Developments
Likely developments in the Group’s operations in future financial years and the expected results of those operations are reported, as appropriate, in the
Year in Review on pages 4 to 21 in this Annual Financial Report. Further information about likely developments in the Group’s operations in future financial
years, the expected results of those operations and the Group’s business strategy and prospects for future financial years has not been included in this
report because disclosure of such information would be likely to result in unreasonable prejudice to the Company and the Group.
31»
NRW Annual Report 2010
Directors’ Interests
At the 24th September 2010 the relevant interest of each Director in the ordinary share capital of the Company was:
Director
Julian Pemberton
Ian Burston
Michael Arnett
Ordinary Shares (NWH)
2,534,540
324,992
275,000
Transactions between entities within the Group and Director-related entities are set out in Note 38 to the financial statements.
Dividends
A fully franked interim dividend of $0.03 per ordinary share was paid during the financial year ended 30 June 2010.
The Directors have declared a fully franked final dividend of $0.03 cent per share, in relation to 30 June 2010, payable on 29 October 2010.
Options over unissued Shares or Interests
Other than those mentioned in the remuneration policy, there were no options for ordinary shares on issue during the financial year, and none had been
granted or were on issue as at the date of this report.
Auditor
The Company’s auditor is Deloitte Touche Tohmatsu who was appointed at the AGM held on November 28, 2007.
During the financial year there were no officers of the Company who were former partners or directors of Deloitte.
Auditor’s Independence and Non Audit Services
The Directors received the Auditor’s Independence Declaration from the auditor of the Company, which is included on page 41 of this report.
Details of amounts paid or payable to the auditor for non-audit services provided during the year are outlined in note 10 (page 64) to the financial
statements.
The Directors are satisfied that the provision of non-audit services, during the 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 10 (page 64) to the financial statements do not compromise the external auditors
independence, based on advice received from the Audit and Risk Management Committee, for the following reasons:
› All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
› None of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for
Professional Accountants issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work,
acting in a management or decision making capacity for the company, acting as advocate for the company or jointly sharing economic risks and
rewards.
Indemnification and Insurance of Officers and Auditors
The Company has executed a deed of access, indemnity and insurance in favour of each Director. The indemnity requires the Company to indemnify each
Director for liability incurred by the Director as an officer of the Company subject to the restrictions prescribed in the Corporations Act. The deed also gives
each Director a right of access to Board papers and requires the Company to maintain insurance cover for the Directors.
The Company has also executed an indemnity and insurance deed in favour of certain executives of the Company. The deed requires the Company to
indemnify each of these executives for liability incurred by them as executives of NRW subject to the restrictions prescribed in the Corporations Act. The
deed also requires the Company to maintain insurance cover for these executives. The total amount of insurance premiums paid during the financial year
was $91,385 (2009: $150,020).
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an
officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.
32»
NRW Annual Report 2010
Director’s Report
Environmental Regulations
The Group holds various licenses and is subject to various environmental regulations. No known environmental breaches have occurred in relation to the
Group’s operations.
Remuneration Report (Audited)
The following were key management personnel of the Group at any time during the period and unless otherwise indicated were key management
personnel for the entire period:
Name
Directors
Dr I F Burston
Mr M Arnett
Mr J W McGlinn
Positions held
Resigned / Appointed
Chairman and Non Executive Director
Appointed as Non-executive Director, 27th July 2007
Non Executive Director
Appointed as Non-executive Director, 27th July 2007
Managing Director & Chief Executive Officer
Appointed as a Director, 10th February 2006. Resigned, 7th
July 2010.
Mr J A Pemberton
Managing Director & Chief Executive Officer
Appointed as Director of the Company 1st July 2006 and as
Chief Executive Officer 7th July 2010.
Executives
Mr K Hyman
Mr M Wallace
Company Secretary, Risk Management & Legal
Appointed 10th July 2007
Chief Financial Officer
Appointed 8th December 2008
Mr NJR Silverthorne
Director – Business Development
Appointed 22nd November 1994
Mr K Bounsell
Mr W Rooney
Mr M Stewart
Mr S Ridley
Mr P Miguel
Mr K Bassett
Mr S Lucas
General Manager – Assets
Appointed 22nd November 1994
Managing Director - Civil and Mining
Appointed 1st October 2008
General Manager – Civil
General Manager – West Coast and Overseas
Mining
Appointed 1st July 2008
Appointed 1st March 2010
Manager Project Plant & Equipment
Appointed 20th July 1998
General Manager – Human Resources
Appointed 2nd March 2004
General Manager - East Coast Mining
Appointed 1st January 2008
REMUNERATION COMMITTEE
The remuneration committee’s principal function is reviewing and making recommendations to the Board on remuneration packages and policies
applicable to Directors and senior executives to ensure that those packages and policies are consistent with the Company’s strategic goals and objectives.
The role and responsibilities, composition, structure and membership requirements of the remuneration committee are set out in detail in a Remuneration
Committee Charter approved by the Board.
The composition of the Remuneration Committee is as follows:
› Michael Arnett (non-executive Director)
Ian Burston (non-executive Director)
›
PRINCIPLES OF COMPENSATION
Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company and the Group, including
directors of the Company and other executives.
33»
NRW Annual Report 2010
Key management personnel compensation is competitively set to attract and retain appropriately qualified and experienced directors and executives, reward the
achievement of strategic objectives, and achieve the broader outcome of creating shareholder value. The compensation structures take into account:
›
›
›
capability and experience of the individuals
individual’s ability to manage and control the relevant performance criteria
the overall Group performance considering Group earnings, share price and returns on shareholder’s wealth.
Historic Performance (since listing):
Measure
Market Capitalisation
Market Capitalisation at IPO
Share Price at end of year
Share Price at beginning of year
Net Profit After Tax
Interim Dividend paid
Final Dividend declared in respect of the year
2010
$246.2 million
$502.5 million
$0.98
$0.95
2009
$238.7 million
$502.5 million
$0.95
$1.95
2008
$489.9 million
$502.5 million
$1.95
-
2007(2)
-
-
-
-
$35.1 million(1)
$37.1 million
$32.8 million
$13.8 million
$0.03
$0.03
$0.01
$0.01
$0.04
$0.0423
-
-
(1) Excludes writedown of goodwill associated with Promac of $2.71 million
(2) NRW Holdings Limited floated on the ASX on 5 September 2007. Prior to this date comparative concepts were not available.
Compensation consists of a mix of fixed and variable compensation and short and long term performance based incentives.
FIXED COMPENSATION
Fixed compensation consists of base compensation (which is calculated on a total cost basis and includes the cost of non-cash benefits provided to key
management personnel), as well as employer contributions to superannuation funds.
Compensation levels are reviewed annually by the remuneration committee through a process that considers individual, segment and overall Group
performance. In addition, external consultants provide analysis and advice to ensure the directors’ and senior executives’ compensation is competitive in
the market place. A senior executive’s compensation is also reviewed on promotion.
PERFORMANCE LINKED COMPENSATION
Performance linked compensation includes both long term and short term incentives and is designed to reward key management personnel for meeting or
exceeding their financial and personal objectives. The short term incentive is a bonus provided in the form of cash plus statutory employer superannuation
contributions. The long term incentive comprises options over the ordinary shares of the Company under the Senior Management and Director Option Plan
(SMDOP). No options have yet been issued under the Senior Management and Director Option Plan (SMDOP).
IN-SUBSTANCE OPTIONS
Limited recourse loans were issued to key management personnel whereby loans were to be repaid and accrue interest at a rate of 7.5% per annum,
payable half-yearly. The loans were issued in order for selected key management persons to acquire shares in the Company at market rates prior to the
listing of NRW on the ASX.
The employees’ obligation for repayment of the loans was limited to the dividends declared and the capital returns by the Company, and in the event that
the employee ceases employment, the market price achieved on the sale of the shares held as security by the Company for the loans. The employee has
no exposure to unfavourable changes in market price below the price at which the shares were issued. The shares issued under the limited recourse loan
arrangements are accordingly accounted for as in-substance options (equity-settled share-based payments).
The loans have all been repaid in full and at 30 June 2010 no balance remains unpaid.
No new issues have been provided under this arrangement in the year to 30 June 2010. Historically the balance of 4,999,128 ordinary shares have been
issued and remain unchanged.
The Board does not impose any restrictions in relation to a person limiting his or her exposure to the risk in relation to the options issued by the Company.
34»
NRW Annual Report 2010
Director’s Report
SHORT TERM INCENTIVE BONUS
Each year the remuneration committee sets the measures of performance for the key management personnel. The measures are determined in order to
align the individual’s reward with the strategy, objectives and performance of the Group.
The financial performance objectives are ‘profit after tax’ compared to budgeted amounts. The non-financial measures vary with position and responsibility
and include such aspects as achieving strategic outcomes, safety, customer relationship management and staff development.
At the end of the financial year the remuneration committee assesses the actual performance of the Group and the individual against the measures
determined at the beginning of the period. A percentage of the pre-determined maximum amount will be awarded depending on the extent to which the
individual exceeded the performance measures. No bonus is awarded where performance falls below the minimum expectations.
The remuneration committee recommends the cash incentive to be paid to the individuals for approval by the board, where applicable.
No short term incentive bonus was paid during this financial year (2009: $0).
LONG TERM INCENTIVE
Options may be issued under the Senior Management and Director Option Plan “(SMDOP)”, in accordance with the thresholds set in the terms of the
SMDOP. The objective of the SMDOP is to recognise the ability and efforts of senior executives who contribute to the Group’s success, provide an incentive
to achieve individual long term performance objectives and assist in the recruitment and retention of quality senior executives.
The board has the discretion to determine the terms and conditions applying to each offer of options under the SMDOP including conditions attaching
to the exercise of options, restrictions on transfer and disposal, exercise price of options and amount payable for a grant of options. As at the date of
issue of this report the board had not resolved to issue any options under the SMDOP. It is expected that the board will attach conditions to the issue of
options under the SMDOP where the right to exercise the options is conditional on the Group achieving certain performance hurdles as determined by the
remuneration committee.
To date, no options have been issued under the SMDOP.
OTHER BENEFITS
Key management personnel can receive additional benefits in the form of non-cash benefits, as part of the terms and conditions of their appointment. Non-
cash benefits typically include the provision of motor vehicles, motor vehicle running costs and other personal expense payments, and the applicable Fringe
Benefits Tax on these amounts.
SERVICE CONTRACTS
NRW has for the year ended 30 June 2010, executive service agreements with each of Jeffrey McGlinn as Chief Executive Officer, John Silverthorne as
Director – Business Development, and Julian Pemberton as Chief Operating Officer. The executive service agreements:
›
›
›
are not fixed term agreements and continue on an ongoing basis until terminated;
contain non-complete provisions restraining the executives from operating or being associated with an entity that competes with the business of NRW
in Western Australia for 12 months after termination;
provide for annual salaries of $1,510,000 for Jeffrey McGlinn and $1,000,000 for John Silverthorne who in addition receive statutory superannuation
contributions, motor vehicle benefits and other fringe benefits. Julian Pemberton has packaged arrangements where by his service agreement allows
for a package of $800,000 for year ended 30 June 2010;
provide for remuneration to be reviewed by NRW annually; and
›
› may be terminated by either the executive or the Company giving six months’ notice of termination, or in the case of Julian Pemberton’s agreement,
three months’ notice.
DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION (COMPANY AND GROUP)
The details of the nature and amount of each major element of remuneration of each director of the Company, and relevant Company and Group executives
and key management personnel, who receive the highest remuneration, are outlined in the following tables.
35»
NRW Annual Report 2010
Directors’ and executive officers’ remuneration (Company and Group)
IN AUD $
2010
KEY MANAGEMENT
PERSONNEL
Salary & fees
DIRECTORS
Mr J W McGlinn(4)
1,787,583
Mr J A Pemberton
677,433
NON-EXECUTIVE DIRECTORS
Dr I Burston
Mr M Arnett
EXECUTIVES
91,743
80,000
Mr NJR Silverthorne
999,999
Mr K Bounsell
Mr M Wallace
Mr M Stewart
Mr W Rooney
Mr K Hyman
Mr S Ridley(5)
Mr P Miguel
Mr K Bassett
Mr S Lucas
400,000
339,917
595,256
713,479
243,118
107,692
244,477
258,320
373,803
Total
Compensated
(Consolidated)
6,912,820
Short Term Benefits
STI cash
bonus
$
Non cash
benefit (1)
$
Annual
Leave (2)
$
Post
Employment
Benefits
Other Long
Term Benefits
Share Based Payments
Total
Superannuation
$
Other (3)
$
Equity
$
In substance
options
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,759
108,546
44,535
51,966
197,481
13,745
-
13,333
5,320
-
104,990
74,779
-
41,294
18,622
3,306
-
9,463
-
-
-
76,716
22,994
17,403
-
6,281
13,041
12,170
-
-
33,207
30,222
8,257
7,200
90,000
36,000
30,593
54,000
64,213
21,881
9,692
22,706
23,848
33,642
-
-
-
6,666
-
-
-
4,912
-
4,833
-
-
437,286
275,328
613,258
29,744
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,067,358
865,023
105,320
87,200
1,271,705
540,438
387,912
690,550
802,595
286,257
129,555
281,480
282,168
470,875
8,268,436
(1) - The non cash benefits comprise fringe benefits including motor vehicle allowances and related expenses offered to key management personnel.
(2) - Represents accrued annual leave movement FY 2010; this item represents an accrual only.
(4) - Resigned, 7 July 2010.
(3) - Represents accrued long service leave movement for the FY 2010: this item represents an accrual only.
(5) - Appointed 1st March 2010.
36»
NRW Annual Report 2010
Director’s Report
Short Term Benefits
Post
Employment
Benefits
Other Long
Term Benefits
Share Based Payments
Total
Salary &
Fees
$
STI Cash
Bonus
$
Non Cash
Benefit (1)
$
Annual
Leave (5)
$
Superannuation
$
Other (3)
$
Equity
$
In substance
options (6)
$
Total
$
IN AUD $
2009
KEY MANAGEMENT
PERSONNEL
DIRECTORS
Mr J W McGlinn
1,510,000
Mr J A Pemberton
645,421
NON-EXECUTIVE DIRECTORS
Dr I F Burston
Mr M Arnett
EXECUTIVES
Mr K Hyman
Mr M Wallace(4)
Mr M Stewart(4)
Mr W Rooney(4)
Mr P Miguel
Mr K Bassett
100,000
80,000
238,144
148,200
636,153
510,796
250,091
256,240
Mr NJR Silverthorne
1,000,000
Mr S Lucas
Mr K Bounsell
Total
compensation
(Consolidated)
300,000
400,000
6,075,045
-
-
-
-
-
-
-
-
-
-
-
-
-
-
197,555
109,714
149,277
82,301
147,639
13,745
58,048
79,982
2,846
-
61,428
5,566
15,245
7,598
15,974
-
140,443
43,169
103,308
-
-
24,755
5,960
28,609
25,422
14,021
8,198
76,711
23,013
2,992
9,000
7,200
21,433
13,338
57,254
45,972
22,508
23,062
90,000
27,000
36,000
-
-
11,711
-
-
-
18,086
-
17,247
-
6,899
702,846
441,259
514,151
191,973
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,062,519
110,218
1,041,381
-
-
-
-
-
-
-
-
-
-
-
111,846
87,200
357,471
173,064
737,261
589,788
320,680
287,499
1,324,401
393,182
549,199
110,218
8,035,491
(1) - The non cash benefits comprise fringe benefits including motor vehicle allowances and related expenses offered to key management personnel.
(2) - The key management personnel have terminated their employment.
(3) - Represents accrued long service leave for the FY 2009.
(4) - Mr Mark Wallace appointed as Chief Financial Officer on 8th December 2008, Mr M Stewart appointed as GM Civil on 1st July 2008, Mr W Rooney appointed as MD Mining and Civil
on 1st October 2008.
(5) - Represents accrued annual leave for the FY 2009.
(6) - In-substance options relate to the revaluation of loan agreements of key personal staff.
37»
NRW Annual Report 2010
Director’s Report
Non-executive directors
Non-executive directors do not receive performance related compensation.
The Company’s Constitution provides that non-executive Directors’ remuneration must not exceed the maximum aggregate sum determined by the
Company in general meeting. At present, the nominated sum is fixed at a maximum of $350,000, in aggregate, per annum. This maximum sum cannot be
increased without members’ approval by ordinary resolution at a general meeting.
Non-executive Directors’ fees (excluding superannuation and non cash benefits) to be paid by the Company are as follows:
Director
Dr I F Burston
Mr M Arnett
Fee per annum AUD
100,000
80,000
Non-executive directors are also entitled to receive reimbursement for travelling and other expenses that they properly incur in attending Directors’
meetings, attending any general meetings of the Company or in connection with the Company’s business.
ROUNDING OF AMOUNTS
The amounts contained in this report and the financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option
available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.
This report has been made in accordance with a resolution of the Directors of the Company.
Mr Julian Pemberton
Chief Executive Officer
Perth, 24th September 2010
Dr Ian F Burston
Chairman
38»
NRW Annual Report 2010
Auditor’s Independence Declaration
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Woodside Plaza
Level 14
240 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
The Board of Directors
NRW Holdings Limited
73 – 75 Dowd Street
Welshpool WA 6106
24 September 2010
The Board of Directors
NRW Holdings Limited
Dear Board Members
73 – 75 Dowd Street
Welshpool WA 6106
NRW Holdings Limited
DX 206
Tel: +61 (0) 8 9365 7000
Deloitte Touche Tohmatsu
Fax: +61 (0) 8 9365 7001
ABN 74 490 121 060
www.deloitte.com.au
Woodside Plaza
Level 14
240 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
DX 206
Tel: +61 (0) 8 9365 7000
Fax: +61 (0) 8 9365 7001
www.deloitte.com.au
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of NRW Holdings Limited.
24 September 2010
As lead audit partner for the audit of the financial statements of NRW Holdings Limited for the
financial year ended 30 June 2010, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
Dear Board Members
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of NRW Holdings Limited.
(ii) any applicable code of professional conduct in relation to the audit.
NRW Holdings Limited
As lead audit partner for the audit of the financial statements of NRW Holdings Limited for the
financial year ended 30 June 2010, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
Yours sincerely
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
DELOITTE TOUCHE TOHMATSU
A T Richards
Yours sincerely
Partner
Chartered Accountants
DELOITTE TOUCHE TOHMATSU
A T Richards
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
39»
NRW Annual Report 2010
Liability limited by a scheme approved under Professional Standards Legislation.
Directors’ Declaration
The directors declare that:
(a)
(b)
(c)
in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable
in the directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 2 to
the financial statements
in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance
with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity, and
(d)
the directors have been given the declarations required by s.295A of the Corporations Act 2001.
At the date of this declaration, the company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the deed of cross
guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed of
cross guarantee.
In the directors’ opinion, there are reasonable grounds to believe that the company and the companies to which the ASIC Class Order applies, as detailed
in note 19 to the financial statements will, as a group, be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of
the deed of cross guarantee.
Signed in accordance with a resolution of the directors made pursuant to s.295 (5) of the Corporations Act 2001.
On behalf of the Directors
Mr Julian Pemberton
Chief Executive Officer
Perth, 24th September 2010
Dr Ian F Burston
Chairman
40»
NRW Annual Report 2010
Continuing Operations
Revenue
Other income
Financial income
Financial expenses
Materials and consumables used
Employee benefits expense
Subcontractor costs
Depreciation and amortisation expenses
Impairment expense
Plant and equipment costs
Travel and accommodation
Other expenses
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
Exchange differences arising on translation of foreign operations
Total comprehensive income
Profit Attributable to:
Equity holders of the Company
Total Comprehensive Income Attributable to:
Equity holders of the Company
Earnings per share (cents per share)
Basic earnings per share (AUD)
Diluted earnings per share (AUD)
Notes to the financial statements are included on pages 45 to 86.
For the year ended 30 June 2010
Consolidated Statement of
Comprehensive Income
Consolidated
2010
$’000
2009
$’000
Note
6
7
9
9
8b
12
13
11
15
609,737
509,603
5,887
169
(8,672)
(120,935)
(150,906)
(101,762)
(30,025)
(2,710)
(96,954)
(29,998)
(22,641)
51,190
(16,052)
35,138
3,542
207
(8,341)
(84,487)
(125,754)
(89,233)
(21,102)
-
(98,731)
(18,729)
(14,997)
51,978
(14,886)
37,092
(9)
35,129
(24)
37,068
16
35,138
37,092
35,129
37,068
17
17
14.0 cents
14.0 cents
15.0 cents
14.9 cents
41»
NRW Annual Report 2010
For the year ended 30 June 2010
Consolidated Statement
of Financial Position
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
Notes to the financial statements are included on pages 45 to 86.
42»
NRW Annual Report 2010
Consolidated
2010
$’000
2009
$’000
Note
20
22
23
24
12
13
27
25
28
26
36
28
36
14
15
16
21,443
168,103
13,364
2,723
205,633
152,936
24,417
1,419
178,772
384,405
140,290
29,347
6,748
7,036
20,603
118,293
13,181
3,046
155,123
125,922
27,127
3,608
156,657
311,780
98,108
34,722
4,019
5,978
183,421
142,828
31,510
405
31,915
215,336
169,069
26,096
602
26,698
169,526
142,254
82,211
1,602
85,256
80,560
1,527
60,167
169,069
142,254
For the year ended 30 June 2010
Consolidated Statement
of Changes in Equity
Fully paid
ordinary shares
Foreign
currency
translation
reserve
Option reserve
Retained
earnings
$’000
$’000
$’000
$’000
Balance at 1 July 2008
Profit for the year
Exchange differences arising on translation of foreign operations
Total comprehensive income for the period
Interest on Employee Share Plan loans
Related income tax
Net income recognised directly in equity
Payment of dividends
Repayment of limited recourse loan as part of the Employee Share Plan
Balance at 30 June 2009
Balance at 1 July 2009
Profit for the period
Exchange differences arising on translation of foreign operations
Total comprehensive income for the period
Interest on Employee Share Plan loans
Related income tax
Net income recognised directly in equity
Payment of dividends
Repayment of limited recourse loan as part of the Employee Share Plan
Balance at 30 June 2010
Notes to the financial statements are included on pages 45 to 86.
79,528
-
-
-
-
-
-
-
1,032
80,560
80,560
-
-
-
-
-
-
-
1,651
82,211
-
-
(24)
(24)
-
-
-
-
-
(24)
(24)
-
(9)
(9)
-
-
-
-
-
1,475
-
-
-
108
(32)
76
-
-
1,551
1,551
-
-
-
120
(36)
84
-
-
(33)
1,635
36,213
37,092
-
37,092
-
-
-
(13,138)
-
60,167
60,167
35,138
-
35,138
-
-
-
(10,049)
-
85,256
Total
$’000
117,216
37,092
(24)
37,068
108
(32)
76
(13,138)
1,032
142,254
142,254
35,138
(9)
35,129
120
(36)
84
(10,049)
1,651
169,069
43»
NRW Annual Report 2010
For the financial year ended 30 June 2010
Consolidated Statement
of Cash Flows
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Interest paid
Interest received
Income tax paid
Net cash provided by operating activities
Cash flows from investing activities
Proceeds from the sale of property, plant and equipment
Payments for property, plant and equipment(1)
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings and finance/hire purchase liabilities
Proceeds from repayment of Employee Share Plan loans
Payment of dividends to shareholders
Advances to related parties(2)
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at the end of the period
Consolidated
2010
$’000
2009
$’000
Notes
568,421
(477,861)
(8,672)
289
(11,169)
71,009
3,686
(20,960)
(17,274)
538,583
(416,163)
(8,341)
280
(26,242)
88,117
2,119
(7,254)
(5,135)
10,897
15,145
(50,422)
(54,183)
1,651
(10,049)
(4,972)
(52,895)
840
20,603
21,443
1,032
(13,138)
-
(51,144)
31,838
(11,235)
20,603
21
15
39
20
(1) Exclusive of property, plant and equipment acquired by way of finance lease/hire purchase contracts.
(2) Relates to unpaid amounts from certain related parties regarding the settlement deed with Pilbara Iron Company (Services) Pty Ltd (“PICS”). Subsequent to the 30 June 2010, the amount has
been received from the related parties.
Notes to the financial statements are included on pages 45 to 86.
44»
NRW Annual Report 2010
Notes to the Financial Statements
For the financial year ended 30 June 2010
1. Reporting Entity
NRW Holdings Limited (the ‘Company’) is a public company listed on the Australian Stock Exchange and incorporated in Australia. The address of the
Company’s registered office is 73-75 Dowd Street, Welshpool, Western Australia. The consolidated financial statements of the Company for the year ended
30 June 2010 comprise the Company and its subsidiaries (together referred to as ‘Consolidated’, the ‘Consolidated Group’ or the ‘Group’). The Group is
primarily involved in civil and mining contracting, the fabrication and, repairs to plant and equipment and sales of earthmoving equipment. In the financial
year ended 30 June 2010, the Group added drilling and blasting activities to its portfolio of services provided. An entity has been set up to operate the
drilling and blasting services from 1 July 2010 being a wholly owned subsidiary within the Group – NRW Drill and Blast Pty Ltd.
2. Basis of Preparation
(a) Statement of Compliance
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting
Standards and Interpretations, and complies with other requirements of the law.
Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘AIFRS’). Compliance with AIFRS ensures that the
financial statements and notes of the Group comply with International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the Board of Directors on 24th September 2010.
(b) Basis of Measurement
The financial report has been prepared on the basis of historical cost modified by the revaluation of certain non-current assets and financial
instruments. Cost is based on fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless
otherwise noted.
The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and consequently the amounts in the financial
report are rounded off to the nearest thousand dollars, unless otherwise indicated.
(c) Use of Estimates and Judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most
significant effect on the amount recognised in the financial statements are described in the following notes:
(i) Construction Work in Progress
Essentially these amounts comprise revenue earned, but not billed at 30 June 2010, mostly in relation to civil and some mining income
claims. These amounts may comprise variations to contract particulars, and changes to scope beyond the original tendered contract. The
process requires the client to accept or come to an arrangement with NRW for these types of claims.
(ii) Goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been
allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit
and a suitable discount rate in order to calculate present value. In this regard the future cash flows are estimated based on approved budgets
relating to the cash-generating units.
(iii) Employee entitlements
Management judgement is applied in determining the following key assumptions used in the calculation of long service leave at balance date:
›
›
›
future increases in wages and salaries;
future on cost rates; and
experience of employee departures and period of service.
45»
NRW Annual Report 2010
3. Adoption of new and revised Accounting Standards
3.1 Standards and Interpretations affecting amounts reported in the current period (and/or prior periods)
The following new and revised Standards and Interpretations have been adopted in the current period and have affected the amounts reported in these
financial statements. Details of other Standards and Interpretations adopted in these financial statements but that have had no effect on the amounts
reported are set out in section 3.2.
Standards affecting presentation and disclosure
AASB 101 Presentation of Financial Statements (as revised in September 2007),
AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB
101 and AASB 2007-10 Further Amendments to Australian Accounting Standards
arising from AASB 101
AASB 101(September 2007) has introduced terminology changes (including revised
titles for the financial statements) and changes in the format and content of the
financial statements. In addition, the revised Standard has required the presentation
of a third statement of financial position at 1 July 2008, because the entity has
applied new accounting policies retrospectively (see below).
AASB 8 Operating Segments
AASB 8 is a disclosure Standard that has resulted in a redesignation of the Groups
reportable segments (see note 6).
AASB 2009-2 Amendments to Australian Accounting Standards - Improving
Disclosures about Financial Instruments
The amendments to AASB 7 expand the disclosures required in respect of fair value
measurements and liquidity risk. The Group has elected not to provide comparative
information for these expanded disclosures in the current year in accordance with
the transitional reliefs offered in these amendments.
Amendments to AASB 5 Noncurrent Assets Held for Sale and Discontinued
Operations (adopted in advance of effective date of 1 January 2010)
Amendments to AASB 107 Statement of Cash Flows (adopted in advance of effective
date of 1 January 2010)
Disclosures in these financial statements have been modified to reflect the
clarification in AASB 2009-5 Further Amendments to Australian Accounting
Standards arising from the Annual Improvements Project that the disclosure
requirements in Standards other than AASB 5 do not generally apply to noncurrent
assets classified as held for sale and discontinued operations.
The amendments (part of AASB 2009-5 Further Amendments to Australian
Accounting Standards arising from the Annual Improvements Project ) specify that
only expenditures that result in a recognised asset in the statement of financial
position can be classified as investing activities in the statement of cash flows.
Consequently, cash flows in respect of development costs that do not meet the
criteria in AASB 138 Intangible Assets for capitalisation as part of an internally
generated intangible asset (and, therefore, are recognised in profit or loss as
incurred) have been reclassified from investing to operating activities in the
statement of cash flows. Prior year amounts have been restated for consistent
presentation.
46»
NRW Annual Report 2010
Notes to the Financial Statements
3. Adoption of new and revised Accounting Standards (continued)
3.2 Standards and Interpretations adopted with no effect on financial statements
The following new and revised Standards and Interpretations have also been adopted in these financial statements. Their adoption has not had any
significant impact on the amounts reported in these financial statements but may affect the accounting for future transactions or arrangements.
AASB 2008-7 Amendments to Australian Accounting Standards Cost
of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
AASB 2008-1 Amendments to Australian Accounting Standard -
Share-based Payments: Vesting Conditions and Cancellations
The amendments deal with the measurement of the cost of investments in subsidiaries,
jointly controlled entities and associates when adopting A-IFRS for the first time and with the
recognition of dividend income from subsidiaries in a parents separate financial statements.
The amendments clarify the definition of vesting conditions for the purposes of AASB 2,
introduce the concept of non-vesting conditions, and clarify the accounting treatment for
cancellations.
AASB 123 Borrowing Costs (as revised in 2007) and AASB 20076
Amendments to Australian Accounting Standards arising from AASB
123
The principal change to AASB 123 was to eliminate the option to expense all borrowing costs
when incurred. This change has had no impact on these financial statements because it has
always been the Groups accounting policy to capitalise borrowing costs incurred on qualifying
assets.
AASB 2008-2 Amendments to Australian Accounting Standards
Puttable Financial Instruments and Obligations Arising on Liquidation
The revisions to AASB 132 Financial Instruments: Presentation amend the criteria for debt/
equity classification by permitting certain puttable financial instruments and instruments (or
components of instruments) that impose on an entity an obligation to deliver to another party
a pro-rata share of the net assets of the entity only on liquidation, to be classified as equity,
subject to specified criteria being met.
AASB 2008-8 Amendments to Australian Accounting Standards
Eligible Hedged Items
The amendments provide clarification on two aspects of hedge accounting: identifying inflation
as a hedged risk or portion, and hedging with options.
Interpretation 15 Agreements for the Construction of Real Estate
The Interpretation addresses how entities should determine whether an agreement for the
construction of real estate is within the scope of AASB 111 Construction Contracts or AASB
118 Revenue and when revenue from the construction of real estate should be recognised. The
requirements have not affected the accounting for the Groups construction activities.
Interpretation 16 Hedges of a Net Investment in a Foreign Operation
The Interpretation provides guidance on the detailed requirements for net investment hedging
for certain hedge accounting designations.
Interpretation 17 Distributions of Non-cash Assets to Owners and
AASB 2008-13 Amendments to Australian Accounting Standards
arising from AASB Interpretation 17 Distributions of Non-cash Assets
to Owners
The Interpretation provides guidance on the appropriate accounting treatment when an entity
distributes assets other than cash as dividends to its shareholders.
47»
NRW Annual Report 2010
3. Adoption of new and revised Accounting Standards (continued)
Interpretation 18 Transfers of Assets from Customers
The Interpretation addresses the accounting by recipients for transfers of property, plant
and equipment from customers and concludes that when the item of property, plant
and equipment transferred meets the definition of an asset from the perspective of the
recipient, the recipient should recognise the asset at its fair value on the date of the
transfer, with the credit recognised as revenue in accordance with AASB 118 Revenue.
AASB 2008-5 Amendments to Australian Accounting Standards arising
from the Annual Improvements Project and AASB 2008-6 Further
Amendments to Australian Accounting Standards arising from the
Annual Improvements Project
In addition to the changes affecting amounts reported in the financial statements
described at 3.1 above, the amendments have led to a number of changes in the detail of
the Groups accounting policies some of which are changes in terminology only, and some
of which are substantive but have had no material effect on amounts reported.
AASB 2009-4 Amendments to Australian Accounting Standards arising
from the Annual Improvements Project and AASB 2009-5 Further
Amendments to Australian Accounting Standards arising from the
Annual Improvements Project
In addition to the amendments to AASB 5 and AASB 107 described earlier in this section,
and the amendments to AASB 1 17 discussed in section 3.3 below, the amendments
have led to a number of changes in the detail of the Groups accounting policies some of
which are changes in terminology only, and some of which are substantive but have had
no material effect on amounts reported. Except as noted in 3.3 below, the changes in
AASB 2009-5 have been adopted in advance of their effective dates of 1 January 2010.
3.3 Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective.
Standard/Interpretation
Effective for annual reporting
periods beginning on or after
Expected to be initially applied in
the financial year ending
AASB 2009-5 Further Amendments to Australian Accounting Standards arising from
the Annual Improvements Project (1)
1 January 2010
30 June 2011
AASB 2009-8 Amendments to Australian Accounting Standards Group Cash-Settled
Share-based Payment Transactions
1 January 2010
30 June 2011
AASB 2009-10 Amendments to Australian Accounting Standards Classification of
Rights Issues
1 February 2010
30 June 2011
AASB 124 Related Party Disclosures (revised December 2009), AASB 2009-12
Amendments to Australian Accounting Standards
1 January 2011
30 June 2012
AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting
Standards arising from AASB 9
1 January 2013
30 June 2014
AASB 2009-14 Amendments to Australian Interpretation Prepayments of a Minimum
Funding Requirement
1 January 2011
30 June 2012
Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments
July 2010
30 June 2011
(1) AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project specify amendments resulting from the IASBs annual improvement project
to various Australian accounting standards and interpretations. As permitted, the group has early adopted most of the amendments in AASB 2009-5 (refer note 3.2). However, the amendments
to AASB 117 Leases have not been early adopted. Adoption of these amendments will potentially result in the reclassification of several leases over land as finance leases. The amendments,
which apply retrospectively to unexpired leases from 1 July 2010, remove the guidance from AASB 117 which effectively prohibited the classification of leases over land as finance leases. It is not
practical to provide a reasonable estimate of the impact of this amendment until a detailed review of existing leases has been completed.
There are no standards/interpretations following IASB Standards and IFRIC Interpretations but not yet effective, although Australian equivalent Standards/
Interpretations have not yet been issued.
48»
NRW Annual Report 2010
Notes to the Financial Statements
4. Significant accounting policies
The accounting policies described below have been applied consistently by the Group entities:
(a) Principles of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries).
Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
All intra-Group transactions, balances, income and expenses are eliminated in full on consolidation.
A list of controlled entities is contained in Note 19 to the financial statements. All controlled entities have a 30 June financial year-end with the
exception of NRW SARL which has a 31 December financial year end.
Inter-company loans which have no interest or repayment terms are effectively investments in controlled entities and are reflected at cost.
All intra-Group balances and transactions between entities in the consolidated Group, including any unrealised profits or losses, have been
eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those policies
applied by the parent entity.
Where controlled entities have entered or left the consolidated Group during the year, their operating results have been included from the date
control was obtained or until the date control ceased.
(b) Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period.
It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior
periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences between the tax base of an asset or
liability and its carrying amount in the balance sheet. The tax base of an asset or liability is the amount attributed to that asset or liability for tax
purposes.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it
is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets
can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit.
Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates and interests in
joint ventures except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences
will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and
interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to
them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement
of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting
date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/Group intends
to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period is recognised as an expense or income in the Income Statement, except when it relates to items credited
or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a
business combination, in which case it is taken into account in the determination of goodwill or excess.
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NRW Annual Report 2010
4. Significant accounting policies (continued)
(b) Income tax (continued)
Tax consolidation
The Company and all its wholly-owned Australian resident entities are not part of a tax consolidated group under Australian taxation law.
Management is reviewing this position and may choose to alter the groups tax consolidated position in the future.
(c) Inventories
Inventories are stated at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses,
are assigned to inventories by the method most appropriate to each particular class of inventory, with all categories being valued on a first in first out
basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make
the sale.
Construction work in progress represents the gross unbilled amount expected to be collected from customers for contract work performed to date.
It is measured at cost plus profit recognised to date less progress billings and recognised losses. Cost includes all expenditure related directly to
specific projects and an allocation of fixed and variable overheads incurred in the Group’s contract activities based on normal operating capacity.
Construction work in progress is presented as part of trade and other receivables in the balance sheet. If payments received from customers exceed
the income recognised, then the difference is presented as deferred income in the balance sheet.
(d) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment
losses.
Property
a.
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are carried in the balance sheet at
cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated
to the revalued amount of the asset.
Plant and equipment
b.
Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Construction in progress is
stated at cost. Cost includes expenditure that is directly attributable to the acquisition or construction of the item. In the event that settlement of all
or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the
date of acquisition.
c. Depreciation
The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a
diminishing value basis over their useful lives to the consolidated Group commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Buildings
2.5% - 7.5%
Leasehold improvements
7.5% - 33.3%
Plant and equipment
7.5% - 66.67%
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the
income statement.
Tyres on major plant and equipment have been amortised at effective lives. These effective lives are based on estimated usage and are adjusted for
any premature failure or wear so that the amortisation is appropriate to the application of the tyres. All tyres are fully amortised within 12 months of
the initial fit date.
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NRW Annual Report 2010
Notes to the Financial Statements
4. Significant accounting policies (continued)
(e) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, are classified as finance leases, all other
leases are classified as operating leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the
present value of the minimum lease payments, including any unguaranteed residual values expected to accrue at the end of the lease term. Lease
payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a diminishing value basis over the shorter of their estimated useful lives or the lease term. Lease payments
for operating leases, are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more
representative of the time patterns in which economic benefits from the leased asset are consumed. Lease incentives under operating leases
are recognised as a liability and amortised on a straight-line basis over the life of the lease term except where another systematic basis is more
representative of the time pattern in which economic benefits from the leased assets are consumed.
(f) Financial Instruments
(i) Recognition
Financial instruments are initially measured at fair value, net of transaction costs, on trade date, which includes transaction costs, when the related
contractual rights or obligations exist for the delivery of the investment within the timeframe established by the market concerned. Subsequent to
initial recognition these instruments are measured as set out below.
Investments in Subsidiaries
(ii)
Subsequent to initial recognition investments in subsidiaries are measured at cost in the Company financial statements.
(iii) Financial assets at fair value through profit and loss
A financial asset is classified in this category if acquired principally for the purpose of selling in the short term, is part of an identified portfolio of
financial instruments that the group manages together and has a recent actual pattern of short term profit making. Derivatives are also categorised
as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of these
assets are included in the income statement in the period in which they arise.
(iv) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated
at amortised cost using the effective interest rate method, less impairment.
(v) Held-to-maturity investments
These investments have fixed maturities, and it is the Group’s intention and ability to hold these investments to maturity. Any held-to-maturity
investments held by the Group are stated at amortised cost using the effective interest rate method, less impairment.
(vi) Available-for-sale financial assets
Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at
fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity, with the exception of impairment losses. Interest is
calculated using the effective interest method and foreign exchange gains and losses on monetary assets are recognised directly in the profit and loss.
(vii) Financial liabilities
Financial guarantee contract liabilities
Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the higher of:
›
›
the amount of the obligation under the contract, as determined under AASB 137 ‘Provisions, Contingent Liabilities and Contingent Assets’; and
the amount initially recognised less, where appropriate, cumulative amortisation in accordance with the revenue recognition policies described in
note 4(m) and 4(o).
Financial Liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit and loss or other financial liabilities.
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NRW Annual Report 2010
4. Significant accounting policies (continued)
Financial liabilities at fair value through profit and loss
Financial liabilities are classified as at fair value through profit and loss where the financial liability is either held for trading or it is designated as at
fair value through profit and loss. A financial liability is held for trading if:
›
›
›
it has been incurred principally for the purpose of repurchasing in the near future; or
it is part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term
profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading is designated as at fair value through profit and loss upon initial recognition if:
›
›
such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance evaluated on
a fair value basis, in accordance with the Group’s documented risk management or investments strategy, and information about the grouping is
provided internally on that basis.
Financial liabilities at fair value through profit and loss are stated at fair value, with any resultant gain or loss recognised in profit and loss. The net
gain or loss recognised in profit and loss incorporates any interest paid on the financial liability.
Other Financial Liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an
effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability,
or, where appropriate, a shorter period.
(viii) Derivative financial instruments
The Group enters into occasional derivative financial instruments mainly to manage its exposure to foreign exchange rate risk, including foreign
exchange forward contracts. Further details of derivative financial instruments are disclosed in note 30 to the financial statements.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value
at each reporting date if considered material. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated
and effective as a hedging instrument, in which event, the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
The Group designates certain derivatives as either hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedges),
hedges of highly probable forecast transactions or hedges of foreign currency risk of firm commitments (cash flow hedges), or hedges of net
investments in foreign operations.
The fair value of a hedging derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more
than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.
(ix) Embedded derivatives
Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are
not closely related to those of host contracts and the host contracts are not measured at fair value with changes in fair value recognised in profit or loss.
(x) Hedge accounting
Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges. At the inception of the hedge relationship the entity
documents the relationship between the hedging instrument and hedged item, along with its risk management objectives and its strategy for
undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the
hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values or cash flows of the hedged item.
52»
NRW Annual Report 2010
Notes to the Financial Statements
4. Significant accounting policies (continued)
(xi) Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss immediately, together with
any changes in the fair value of the hedged item that is attributable to the hedged risk.
Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or
exercised, or no longer qualifies for hedge accounting. The adjustment to the carrying amount of the hedged item arising from the hedged risk is
amortised to profit or loss from that date.
(xii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are deferred in equity. The gain or
loss relating to the ineffective portion is recognised immediately in profit or loss as part of other expenses or other income Amounts deferred in equity are
recycled in profit or loss in the periods when the hedged item is recognised in profit or loss in the same line of the income statement as the recognised
hedged item. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the
gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability.
Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or
exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was deferred in equity is recognised immediately in profit or loss.
(xiii) Hedges of net investments in foreign operations
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating
to the effective portion of the hedge is recognised in the foreign currency translation reserve.
(xiv) Share Capital
Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any related income tax benefit.
(xv) Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all
unlisted securities, including recent arms length transactions, reference to similar instruments and option pricing models.
(xvi) Impairment
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial
assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial
asset the estimated future cash flows of the investment have been impacted.
At each reporting date, the Group assess whether there is objective evidence that a financial asset has been impaired, other than those at fair value
through profit and loss. In the case of available-for sale financial instruments, a prolonged decline in the value of the instrument is considered to
determine whether impairment has arisen. Impairment losses are recognised in the income statement.
(g) Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that
those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less
costs to sell or value in use, is compared to the assets carrying value. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset for which the estimated future cash flows have not been adjusted. Any excess of the assets carrying value over its recoverable amount is
expensed to the income statement.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised directly in
profit or loss.
53»
NRW Annual Report 2010
4. Significant accounting policies (continued)
(h) Intangibles
(i) Goodwill
Goodwill acquired in a business combination is initially measured at its cost, being the excess of the cost of the business combination over the
Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised at the date of the acquisition. Goodwill
is subsequently measured at its cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each
of the Group’s cash generating units, or groups of cash-generating units, expected to benefit from the synergies of the business combination. Cash-
generating units or groups of cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently if
events or changes in circumstances indicate that goodwill might be impaired. If the recoverable amount of the cash-generating unit (or group of
cash-generating units) is less than the carrying amount of the cash-generating unit (or groups of cash-generating units), the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or groups of cash-generating units) and then to
the other assets of the cash generating units pro-rata on the basis of the carrying amount of each asset in the cash-generating unit (or groups of
cash-generating units). An impairment loss recognised for goodwill is recognised immediately in profit or loss and is not reversed in a subsequent
period. On disposal of an operation within a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or
loss on disposal of the operation.
(ii) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity
operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign
currency monetary items are translated at the yearend exchange rate. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair
values were determined.
Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a
qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly
recognised in equity otherwise the exchange difference is recognised in the income statement.
On consolidation, the assets and liabilities of the Group’s foreign operations are translated into Australian dollars at exchange rates prevailing on
the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are
classified as equity and transferred to the Group’s foreign currency translation reserve. Such exchange differences are recognised in profit or loss in
the period in which the foreign operation is disposed.
(i) Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date in respect of wages
and salaries, annual leave, long service leave and sick leave. Employee benefits that are expected to be settled within one year have been measured
at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for
those benefits.
Obligations for contributions to defined contribution superannuation funds are recognised as an expense in profit or loss when they are due.
54»
NRW Annual Report 2010
Notes to the Financial Statements
4. Significant accounting policies (continued)
(j) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of
economic benefits will result and that outflow can be reliably measured.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into
account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are
expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
(k) Share-based payments
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight-line basis over the vesting period,
based on the estimate of shares that will eventually vest.
At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original
estimates, if any, is recognised in profit or loss over the remaining vesting period, with corresponding adjustments to the equity-settled employee
benefits reserve.
The Employee Share Plan (‘ESP’) is accounted for as an “in-substance” option plan due to the limited recourse nature of the loan between the
employees and the Company to finance the purchase of ordinary shares. The dilutive effect, if any, of outstanding options is reflected as additional
share dilution in the computation of earnings per share. Shares in the Group held under the ESP are deducted from equity, and the grant date fair
value of the options recognised at reporting date is credited to Options Reserve.
(l) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities
of three months or less. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.
(m) Revenue
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances. Revenue is
recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the
associated costs and possible return of the goods can be estimated reliably, and there is no continuing management involvement with the goods.
Revenue from the rendering of a service is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting
date. The stage of completion is assessed by reference to surveys of work performed.
Construction contract revenue is recognised in profit or loss when the outcome of a construction contract can be measured reliably, in proportion
to the stage of completion of the contract. Contract revenue includes the initial amount agreed in the contract plus any variations in contract work,
claims and incentive payments to the extent that it is probable that they will result in revenue and can be measured reliably. The stage of completion
is assessed by reference to surveys of work performed. When the outcome of a construction contract cannot be measured reliably, contract revenue
is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognised immediately
in profit or loss.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
Dividend revenue is recognised when the right to receive a dividend has been established.
All revenue is stated net of the amount of goods and services tax (GST).
(n) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to
prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended
use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
55»
NRW Annual Report 2010
4. Significant accounting policies (continued)
(o) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the
Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the
expense.
Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are
disclosed as operating cash flows.
(p) Business combinations
The purchase method of accounting is used to account for all business combinations within the scope of AASB 3, regardless of whether equity
instruments or other assets are acquired. Cost is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or
assumed at the date of the exchange plus costs directly attributable to the acquisition. Transaction costs arising on the issue of equity instruments
are recognised directly in equity.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at
acquisition date, except for non-current assets that are classified as held-for-sale in accordance with AASB 5 ‘ Non-current assets held for sale’ and
discontinued operations, which are recognised at fair value less costs to sell.
The excess of the costs of the acquisition over the fair value of the identifiable net assets acquired is recorded as goodwill. If the cost of the
acquisition is less than the Group’s share of fair value of the identifiable net assets of the subsidiary acquired, the difference is recognised directly in
the income statement, but only after reassessment of the identification and measurement of the net assets acquired.
(q) Joint Venture Arrangements
Jointly Controlled Operations
The Group adopts the proportionate distribution method as permitted under AASB 131. As such incorporated in the Consolidated Group’s financial
statements are the distribution from the joint venture operations. The Group recognises the assets that it jointly controls and the liabilities that
it incurs, along with the expenses that it incurs and the Group’s share of the income that it earns from the sale of goods or services by the joint
venture.
The joint ventures are characterised as jointly controlled operations rather than establishment of a corporation, partnership or other entity. Each
venturer uses its own property, plant and equipment and carries its own inventories as applicable. It also incurs its own expenses and liabilities and
raises its own finance which represents its own obligations.
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NRW Annual Report 2010
Notes to the Financial Statements
5. Segment reporting
The Group adopted in the 2008 year AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB
8 in advance of their effective dates. As such the Group’s reportable segments under AASB 8 remain unchanged. Information regarding these segments is
reported below. The accounting policies for the reportable segments are the same as the Group’s accounting policies.
Segment results and segment assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise predominantly interest bearing loans, borrowings, and corporate assets and expenses. Inter-segment pricing is determined on
an arm’s length basis.
(a) Reportable segments
The Board has identified the following reportable segments:
› Civil Contracting. The provision of civil infrastructure and other construction services including rail formation, concrete works, bulk earthworks
and detailed road and tunnel construction.
› Mining Services. This segment continues to operate in mining contracting services including earth moving, waste stripping, ore haulage and
related ancillary services.
›
›
Equipment Sales. Rental operations effectively ceased 30-06-09. Sales of plant mostly comprised of water and service trucks, spare parts,
generators, lighting towers and tyre sales.
Fabrication and Repair Services. The provision of equipment repairs, sandblasting and painting services, service truck and water tanker
fabrication and import services, including quarantine cleaning.
› Drilling and Blasting. To provide services to internal and external requirements regarding drilling and blasting activities, commencing in Australia.
(b) Geographical Information
The Civil Contracting and Mining Services segments aim to service worldwide projects, at present servicing two distinct areas being Australia and
West Africa – Guinea. The other segments being Equipment Sales (and Rental in 2009), Fabrication and Repair Services operate predominantly
in Australia with some business representation overseas for equipment sales. It is expected these overseas destinations will be a source of future
projects and sales turnover.
The following table represents a breakdown of the activity between the two operating segments:
Australia
West Africa - Guinea
Total
Revenue from External Customers
Total Assets
2010
$’000
582,499
27,238
609,737
2009
$’000
479,487
30,116
509,603
2010
$’000
367,356
17,049
384,405
2009
$’000
292,252
19,527
311,780
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NRW Annual Report 2010
Segment Revenue
Segment Profit (Loss)
2010
$’000
383,556
201,061
6,981
17,052
24,467
(23,380)
609,737
2009
$’000
294,142
189,434
-
31,833
25,578
(31,384)
509,603
2010
$’000
38,008
30,634
500
(3,621)
2,699
-
68,220
(8,527)
(8,503)
(16,052)
35,138
2009
$’000
27,737
31,157
-
6,552
3,138
-
68,584
(8,472)
(8,134)
(14,886)
37,092
Segment Profit (Loss)
2010
$’000
226,164
118,337
4,114
5,699
28,258
1,833
2009
$’000
144,732
93,210
-
38,854
30,202
4,782
384,405
311,780
5. Segment reporting (continued)
(c) Segment Revenues and Profit
Civil Contracting
Mining Services
Drilling & Blasting Services
Equipment Rental & Sales(1)
Fabrication & Repair Services
Eliminations
Total for continuing operations
Other unallocated expenses
Net finance costs
Income tax expense
Profit for the period
(1) 2010 Segment loss includes the write off - goodwill $2,710,000.
(d) Segment Assets and Liabilities
Segment assets
Civil Contracting
Mining Services
Drilling & Blasting Services
Equipment Rental & Sales
Fabrication & Repair Services
Other unallocated assets
Consolidated assets
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NRW Annual Report 2010
5. Segment reporting (continued)
(d) Segment Assets and Liabilities (continued)
Segment liabilities
Civil Contracting
Mining Services
Drilling & Blasting Services
Equipment Rental & Sales
Fabrication & Repair Services
Other unallocated liabilities
Consolidated liabilities
(e) Other Segment Information
Civil Contracting
Mining Services
Drilling & Blasting Services
Equipment Rental & Sales
Fabrication & Repair Services
Total for continuing operations
Notes to the Financial Statements
Segment Profit (Loss)
2010
$’000
(121,090)
(63,359)
(2,203)
(3,619)
(3,364)
(21,701)
2009
$’000
(83,239)
(53,608)
-
(27,250)
(2,841)
(2,588)
(215,336)
(169,526)
Depreciation and amortisation
Additions to non-current assets
2010
$’000
9,156
20,460
31
76
302
30,025
2009
$’000
3,385
14,300
-
3,080
337
21,102
2010
$’000
39,295
20,560
715
463
200
61,223
2009
$’000
13,785
8,878
-
2,948
217
25,153
› Major customers of each segment revenue comprise $156.6 million (2009:$220.1 million) in the civil division, $94.5 million (2009:$112.0
million) in the mining division, $3.7 million (2009:$0) in the drilling and blasting division, $1.86 million (2009:$15.9 million) in the Equipment
Rental & Sales division and $7.1 million (2009:$11.5 million) in the Fabrication & Repair division.
59»
NRW Annual Report 2010
6. Revenue
Revenue from the sale of goods
Revenue from the rendering of services
Total Revenue
7. Other income
Net loss on sale of property plant and equipment
Other income
Total
8. Profit for the year
(a) Gains and losses
Profit for the year has been arrived at after charging the following gains and losses:
Loss on disposal of property, plant and equipment
Consolidated
2010
$’000
16,086
593,651
609,737
2009
$’000
25,708
483,895
509,603
Consolidated
2010
$’000
(201)
6,088
5,887
2009
$’000
(103)
3,645
3,542
Consolidated
2010
$’000
2009
$’000
(201)
(103)
60»
NRW Annual Report 2010
8. Profit for the year (continued)
(b) Other expenses
Profit for the year includes the following expenses:
Impairment of trade receivables
Impairment of goodwill
Depreciation of non-current assets(1)
Operating lease payments
Rental hire payments
Employee benefits expense:
Superannuation contributions
Wages and salaries
(1) Includes tyre amortisation in FY10 $3.314 million.
9. Finance Income and Expense
Interest Income
Total Finance Income
Interest on bank overdrafts and loans
Interest on obligations under finance leases
Total Finance expense
Notes to the Financial Statements
Consolidated
2010
$’000
2009
$’000
(10)
(188)
(2,710)
(30,025)
(32,735)
(1,933)
(87,549)
(89,482)
(10,870)
(131,506)
(142,376)
-
(21,102)
(21,102)
(717)
(86,977)
(87,694)
(8,955)
(109,862)
(118,817)
Consolidated
2010
$’000
169
169
(2,734)
(5,938)
(8,672)
2009
$’000
207
207
(2,083)
(6,258)
(8,341)
61»
NRW Annual Report 2010
Consolidated
2010
$
2009
$
166,000
133,750
709
-
166,709
133,750
Consolidated
2010
$’000
17,574
(16)
17,558
(1,506)
16,052
2009
$’000
15,231
(4)
15,228
(342)
14,886
10. Auditors’ remuneration
Auditor of the parent entity
Deloitte Touche Tohmatsu
Audit and review of financial reports
Non-audit services
Total (in whole dollars)
11. Income tax expense
(a) Recognised in profit or loss
Current tax expense
Current period
Adjustments for prior years
Deferred tax expense
Origination and reversal of temporary differences
Total income tax expense
62»
NRW Annual Report 2010
11. Income tax expense (continued)
(b) Numerical reconciliation between tax expense and pre-tax net profit
Profit for the period
Notes to the Financial Statements
Consolidated
2010
$’000
2009
$’000
51,190
51,978
Income tax using the Company’s domestic tax rate of 30%
15,357
15,594
Changes in income tax expense due to:
Non-allowable expenses
Tax concessions (Investment Allowance)
Non-deductible (Goodwill Write Off)
Under provision for prior years
Effect of different income tax rates for subsidiaries operating in a different tax jurisdiction
Total income tax expense
Effective tax rate
The Group is reviewing its position in regards to a possible tax consolidation structure.
(c) Recognised directly in equity
Current tax
Interest received on ESP loan balances outstanding
Total
119
(251)
813
(16)
30
83
(733)
-
(4)
(54)
16,052
14,886
31.36%
28.64%
Consolidated
2010
$’000
36
36
2009
$’000
32
32
63»
NRW Annual Report 2010
12. Property, plant and equipment
Property, plant and equipment held by the consolidated entity includes:
Buildings
Leasehold
improvements
Plant and
equipment
$’000
$’000
$’000
Total
$’000
851
-
(384)
467
-
321
-
788
75
55
-
(46)
83
71
-
-
-
1,121
189
-
1,307
-
507
(18)
170,048
172,020
25,694
(5,132)
25,883
(5,516)
190,610
192,384
(4)
59,691
(8,000)
(4)
60,520
(8,018)
1,796
242,297
244,882
44
118
-
-
162
103
-
-
-
48,523
20,929
-
(3,255)
66,218
29,850
(9)
-
(4,533)
91,526
48,662
21,102
-
(3,301)
66,463
30,025
(9)
-
(4,533)
91,946
154
265
384
634
1,145
1,531
124,392
150,771
125,922
152,936
Cost
Balance at 1 July 2008
Other acquisitions
Disposals
Balance at 1 July 2009
Effect of foreign currency exchange differences
Other acquisitions
Disposals
Balance at 30 June 2010
Depreciation
Balance at 1 July 2008
Depreciation and amortisation expense
Impairment expense
Disposals
Balance at 1 July 2009
Depreciation and amortisation expense
Effect of foreign currency exchange differences
Impairment expense
Disposals
Balance at 30 June 2010
Net book value
At 1 July 2009
At 30 June 2010
64»
NRW Annual Report 2010
13. Goodwill
As part of the Board’s review the Group’s Goodwill has been reviewed and held at carrying amounts as follows:
Cost
Accumulated impairment losses
Cost
Balance at beginning of financial year
Balance at end of financial year
Accumulated impairment
Balance at beginning of financial year
Impairment losses recognised during the year
Balance at end of financial year
Notes to the Financial Statements
Consolidated
2010
$’000
27,127
(2,710)
24,417
2009
$’000
27,127
-
27,127
Consolidated
2010
$’000
27,127
24,417
2009
$’000
27,127
27,127
Consolidated
2010
$’000
-
(2,710)
(2,710)
2009
$’000
-
-
-
At the end of the reporting period, the Group assessed the recoverable amount of goodwill, and determined that goodwill associated with the Group’s
activities undertaken by the Equipment Sales division, was impaired by $2,710,000 (2009: Nil). The recoverable amount was assessed by reference to the
Equipment Sales cash-generating unit’s value in use.
The main factor contributing to the impairment of the Equipment Sales cash generating unit was the cessation of its equipment rental activities combined
with its reduced market presence in the OTR earthmoving tyres market place. The Directors have decided to focus the Group’s future operations away from
these activities and have consequently determined to write off the goodwill directly related to the activities of Equipment Sales.
The impairment loss has been reported separately in the statement of comprehensive income noting the following:
› Actionblast Pty Ltd (fabrication, service and repairs) continues as a cash generating unit;
› Goodwill carrying amount of $24,417,000 is retained in relation to Actionblast Pty Ltd;
›
›
›
›
the calculation of the recoverable amount is based on the value in use, adopting the approved Board budget for full year 30 June 2011. Cash flows
beyond one year have been extrapolated using a consistent 4% growth rate;
the terminal value has been estimated at the end of the 5 year period based on the projected cash flow;
a weighted average cost of capital including a risk margin has been set at pre tax discount rate of 14.2%;
the Directors have applied a sensitivity movement of 10% to the value in use analysis. On this basis, there was no impairment loss.
65»
NRW Annual Report 2010
14. Issued capital
Ordinary shares
251,223,000 fully paid ordinary shares (2009: 251,223,000)
Total
Consolidated
2010
$’000
82,211
82,211
2009
$’000
80,560
80,560
The Company does not have a limited amount of authorised capital and issued shares do not have a par value due to changes to the corporations’ law
abolishing these concepts.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Fully paid ordinary shares
Balance at the beginning of the financial year
Repayment of limited recourse loan as part of the ‘ESP’
Balance at the end of the period
15. Reserves
Option reserve
Balance at the beginning of the financial year
Interest received on employee loan balances due under the ‘ESP’
Related income tax
Balance at the end of the financial year
Consolidated
Consolidated
2010
2009
No. ‘000
No. ’000
251,223
251,223
-
-
251,223
251,223
2010
$’000
80,560
1,651
82,211
2009
$’000
79,528
1,032
80,560
Consolidated
2010
$’000
1,551
120
(36)
1,635
2009
$’000
1,475
108
(32)
1,551
The option reserve arose on the grant of ordinary shares to key management personnel financed by way of limited recourse loans with the Company
creating an in-substance option over the ordinary shares.
Foreign currency translation reserve
Balance at the beginning of the financial year
Exchange differences arising on translation of foreign operations
Balance at the end of the financial year
Total Reserves
66»
NRW Annual Report 2010
Consolidated
2010
$’000
(24)
(9)
(33)
2009
$’000
-
(24)
(24)
1,602
1,527
16. Retained earnings
Balance at the beginning of the financial year
Net profit attributable to members of the parent entity
Dividends paid
Balance at the end of the financial year
17. Earnings per share
The income and share data used in the calculation of basic and dilutive earnings per share are as follows:
Basic earnings per share
Diluted earnings per share
(a) Basic earnings per share
Notes to the Financial Statements
Consolidated
2010
$’000
60,167
35,138
(10,049)
85,256
2009
$’000
36,213
37,092
(13,138)
60,167
Notes
19
Consolidated
2010
2009
14.0 cents
14.0 cents
15.0 cents
14.9 cents
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:
Profit for the year
2010
2009
Number of
shares
No. ’000
Total
$’000
35,138
Number of
shares
No.’000
Total
$’000
37,092
Weighted average number of ordinary shares for the purpose of
diluted earnings per share
250,678
247,986
(b) Diluted earnings per share
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:
Profit attributable to ordinary shareholders
2010
2009
Number of
shares
No. ‘000
Total
$’000
35,138
Number of
shares
No. ’000
Total
$’000
37,092
Weighted average number of ordinary shares for the purpose of basic
earnings per share
250,678
247,986
Shares deemed to be issued for no consideration in respect of:
Shares provided to employees related to in substance options
303
Weighted average number of ordinary shares for the purpose of diluted earnings per share
250,981
920
248,906
67»
NRW Annual Report 2010
18. Dividends
(a) Dividends Paid
Recognised amounts paid:
Fully paid ordinary shares
Final dividend to 30 June 2008:
Fully franked at 30% tax rate
Interim dividend to 31 December 2008:
Fully franked at 30% tax rate
Final dividend to 30 June 2009:
Fully franked at 30% tax rate
Interim dividend to 31 December 2009:
Fully franked at 30% tax rate
Unrecognised amounts:
Final dividend to 30 June 2010
Fully franked at 30% tax rate
(b) Franking Account Balance
Franking account balance at 1 July
Australian income tax paid
Franking credits attached to dividends paid:
- as final dividend
- as interim dividend
Franking account balance at 30 June
2010
2009
Cents per share
Total
$’000
Cents per share
Total
$’000
1.00
2,512
3.00
7,537
3.00
7,537
4.23
10,627
1.00
2,512
Consolidated
2010
$’000
29,750
11,055
(1,077)
(3,230)
36,498
2009
$’000
9,250
26,131
(4,554)
(1,077)
29,750
Franking credits that will arise from the payment of income tax payable as at reporting date
6,632
4,018
Franking credits that will arise from the payment of dividends declared before the financial report was authorised for issue
but not recognised as a distribution to equity holders during the period.
Net franking credits available
(3,230)
39,900
(1,077)
32,691
68»
NRW Annual Report 2010
19. Controlled entities
Parent entity
NRW Holdings Limited
Wholly owned subsidiaries
NRW Pty Ltd as trustee for NRW Unit Trust
Actionblast Pty Ltd
NRW Mining Pty Ltd
NRW Intermediate Holdings Pty Ltd
Promac Rental & Sales Pty Ltd
NRW Guinea SARL
Indigenous Mining & Exploration Company Pty Ltd
NRW International Holdings Pty Ltd (incorporated 12/8/09)
NRW Drill & Blast Pty Ltd (incorporated 17/6/10)
Notes to the Financial Statements
Country of
incorporation
Ownership interest
2010
2009
Australia
-
-
Australia
Australia
Australia
Australia
Australia
Guinea
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
All of the wholly-owned subsidiaries in Australia have entered into a deed of cross guarantee with NRW Holdings Ltd pursuant to the ASIC Class Order
98/1418 and are relieved from the requirement to prepare and lodge an audited financial report.
NRW SARL is a wholly owned subsidiary of NRW Holdings Limited and is incorporated in the Republique of Guinea (West Africa) and not part of the above
deed of cross guarantee arrangements.
The consolidated Statement of Comprehensive Income of the entities party to the deed of cross guarantees are:
Statement of Comprehensive Income
Revenue
Other income
Financial income
Financial expenses
Materials and consumables used
Employee benefits expense
Subcontractor costs
Depreciation and amortisation expenses
Impairment expense
Plant and equipment costs
Travel and accommodation
Other expenses
Profit before income tax
Income tax expense
Profit for the year
Consolidated
2010
$’000
2009
$’000
609,519
509,277
5,690
169
(8,672)
(120,672)
(149,123)
(101,762)
(29,998)
(2,710)
(96,954)
(29,998)
(24,867)
50,622
(15,852)
34,770
9,310
207
(8,341)
(90,079)
(124,132)
(89,233)
(21,093)
-
(96,070)
(18,729)
(18,053)
53,064
(15,266)
37,798
69»
NRW Annual Report 2010
19. Controlled entities (continued)
The consolidated balance sheets of the entities party to the deed of cross guarantees are:
Balance Sheet
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Financial assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
70»
NRW Annual Report 2010
Consolidated
2010
$’000
2009
$’000
21,001
168,084
13,364
2,617
20,342
118,245
13,181
3,046
205,066
154,813
152,878
24,417
3
1,419
178,716
383,782
140,322
29,347
6,632
7,036
125,860
27,127
-
3,608
156,598
311,411
97,920
34,722
4,018
5,979
183,337
142,638
31,510
26,096
405
-
31,915
215,252
168,530
82,211
1,635
84,684
-
602
26,698
169,336
142,075
80,560
1,550
59,964
168,530
142,075
Notes to the Financial Statements
20. Cash and cash equivalents
(a) Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks. Cash and cash equivalents at the end
of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows:
Cash and cash equivalents
Total
Consolidated
2010
$’000
21,443
21,443
2009
$’000
20,603
20,603
(b) Reconciliation of profit for the period to net cash flows from operating activities
During the year, the Group acquired $39,565,000 (2009: $18,632,000) of equipment under finance lease. These acquisitions will be reflected in the
cash flow statement over the term of the finance leases via repayments of finance leases.
21. Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit for the year
Adjustments for:
Gain on sale of property, plant and equipment
Net foreign exchange gain / loss
Depreciation & Amortisation
Impairment of goodwill
Interest on ‘ESP’ loans accounted for directly in equity
Operating profit before changes in working capital and provisions
Change in trade and other receivables(1)
Change in provision for doubtful debts
Change in inventories
Change in other assets
Change in trade and other payables
Change in provisions and employee benefits
Change in provision for income tax
Change in deferred tax balances
Consolidated
2010
$’000
2009
$’000
35,138
37,092
(200)
(10)
30,025
2,710
120
67,783
(44,848)
10
(183)
322
42,182
861
2,693
2,189
102
-
21,100
-
108
58,402
28,565
188
(2,852)
102
13,350
1,718
(11,015)
(341)
Net cash from operating activities
71,009
88,117
(1) Change in trade and other receivables above, excludes a receivable amount of $4.97m pertaining to related party advances. This component of trade and other receivables is classified as
a financing activity in the statement of cash flows and relates to the settlement deed with Pilbara Iron Company (Services) Pty Ltd (“PICS”).
71»
NRW Annual Report 2010
22. Trade and Other Receivables
(a) Receivables
Current Receivables
Trade Receivables
Other Receivable
Retentions
Securities (Property Bonds)
Amounts due from jointly controlled operations
Allowance for Doubtful Debts (b)
Subtotal
Construction Work in Progress
Total Trade & Other Receivables
Consolidated
2010
$’000
69,477
(2)10,122
280
28
200
(198)
79,909
88,194
168,103
2009
$’000
83,192
(1)11,474
1,541
22
-
(188)
96,041
22,252
118,293
(1) On 30 May 2008, Promac entered into a Settlement Deed with Pilbara Iron Company (Services) Pty Ltd (“PICS”) in relation to matters arising from a one-off series of transactions in 2006
in which Promac supplied a number of second-hand tyres to PICS. NRW guaranteed certain obligations of Promac under the Settlement Deed. The terms of the Settlement Deed are
confidential.
As a result of the arrangements described above, NRW and Promac are fully indemnified in respect of matters arising from the supply of second-hand tyres to PICS in 2006. Title to and
risk in the second-hand tyres has passed to the Indemnifiers.
This amount was received in full at date of this report.
(2) Subsequent to the 30 June 2010, an amount of $4.97m has been received from the related parties.
(b) Movement in the allowance for doubtful debts:
Balance at the beginning of the year
Impairment losses recognised on receivables
Amounts resolved during the year
Balance at end of year
Ageing of impaired trade receivables
60-90 days
90-120 days
120+ days
Balance at end of year
Consolidated
2010
$’000
(188)
(56)
46
(198)
2009
$’000
-
(188)
-
(188)
Consolidated
2010
$’000
-
-
198
198
2009
$’000
-
25
163
188
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality and other operational issue of the trade
receivable, from the date credit was initially granted up to the reporting date. The Directors believe that there is no further allowance required in
excess of the allowance for doubtful debts.
72»
NRW Annual Report 2010
22. Trade and Other Receivables (continued)
(c) Ageing of past due but not impaired – accounts receivable:
60-90 days
90-120 days
120+ days
Total
23. Inventories
Raw materials and consumables
Work in progress
Finished goods
Balance at 30 June
Notes to the Financial Statements
Consolidated
2010
$’000
1,647
348
2,447
4,443
2009
$’000
702
339
2,153
3,194
Consolidated
2010
$’000
8,422
1,154
3,788
13,364
2009
$’000
8,898
1,158
3,125
13,181
The cost of inventories recognised as an expense during the period in respect of continuing operations was $67.3 million (2009: $55.8 million).
24. Other assets
Current
Prepayments
Other
Total
Consolidated
2010
$’000
2,723
-
2,723
2009
$’000
3,036
9
3,046
73»
NRW Annual Report 2010
25. Trade and other payables
Current Payables
Trade Payables
Goods and Service Tax
Other Payables
Non Trade Payables and accruals
Deferred Income
(1) Includes an amount payable to Pilbara Iron Company (Services) Pty Ltd (‘PICS’). Refer note 22 for detailed disclosure of this transaction.
26. Current tax Liability
Consolidated
2010
$’000
88,240
2,891
347
48,812
-
140,290
2009
$’000
68,050
2,279
(1)10,352
15,263
2,164
98,108
Consolidated
Current tax liability
Income tax payable
27. Deferred tax assets and liabilities
Costs of the initial public offer
Provisions
Work in progress
Inventories
PP&E
Other creditors and accruals
Other assets
Doubtful debts
Losses
Total
2010
$’000
6,748
6,748
Assets
Liabilities
2010
$’000
1,717
2,232
-
39
46
2,028
368
59
342
2009
$’000
2,660
1,974
-
103
151
2,687
342
52
-
2010
$’000
-
-
(345)
(3,065)
(1,559)
-
(444)
-
-
2009
$’000
4,019
4,019
2009
$’000
-
-
(347)
(2,293)
(1,710)
-
(11)
-
-
6,832
7,969
(5,413)
(4,361)
Net tax assets / (liabilities)
1,419
3,608
74»
NRW Annual Report 2010
28. Borrowings
(a) The Groups borrowings comprised of:
Secured at Amortised Cost
Current
Finance lease liability
Insurance Funding
Trade Finance Liability
Total Current
Non Current
Finance lease liability
Total Non Current
Group Total
Notes to the Financial Statements
Consolidated
2010
$’000
28,538
809
-
29,347
31,510
31,510
2009
$’000
32,887
298
1,537
34,722
26,096
26,096
60,857
60,818
(b) Finance Facilities
Consolidated finance facilities as at 30 June 2010
Finance Description
Asset Financing
Bank Overdraft
Trade Finance
Other
Face Value (limit)
$’000
Carrying Amount
$’000
Unutilised Amount
$’000
185,921
40,000
4,580
2,429
60,048
-
-
809
125,873
40,000
4,580
1,620
Consolidated finance facilities as at 30 June 2009
Finance Description
Asset Financing
Bank Overdraft
Trade Finance
Other
Security
Face Value (limit)
$’000
Carrying Amount
$’000
Unutilised Amount
$’000
133,000
40,000
7,000
299
58,983
-
1,537
298
74,017
40,000
5,463
1
The main finance provider is the ANZ Banking Group which provides overdraft, trade finance, performance guarantees, asset financing etc. Annual
and periodic reviews take place as necessary subject to bank covenants and conditions as set in the agreement between the parties. As such the
ANZ Banking Group has in place security by way of a fixed and floating charge over all the Groups present and future assets, undertaking (including
goodwill) and unpaid/uncalled capital of the Company excluding security attaching to other asset financiers.
75»
NRW Annual Report 2010
29. Unincorporated joint ventures
The Group has in the year ended 30 June 2010 been a party to the following jointly controlled operations. These have been accounted for using the
proportionate method.
Name of Venture
NRW VDM Joint Venture
LJN Consortium
NYFL Joint Venture
Principal Activity
Mine Asset Development (earthworks) and Breakwater
Construction.
Asset Development Projects (camps rail etc).
Rail bridge rectification
NRW Eastern Guruma Joint Venture
Mining and haulage of Section 10 iron ore deposit.
Statement of Financial Performance
Revenue
Expenses
Statement of Financial Position
Current assets
Non-current Assets
Current Liabilities
Non-current Liabilities
30. Financial instruments
Financial Risk Management
Group Interest
2010
50%
33%
50%
50%
2009
50%
33%
-
-
Consolidated
2010
$’000
2009
$’000
166,172
7,059
164,234
6,977
36,028
-
34,939
-
7,566
-
7,484
-
The financial instruments adopted by the Group primarily lie in the area of credit risk, liquidity risk, and market risk.
The Board has ultimate responsibility to manage the Groups exposure to risk and prevention. In particular the Board assesses which systems are employed
to deliver the most appropriate level of controls including; systems of compliance and adherence to any relevant limits. Furthermore, the risk policies and
procedures are reviewed periodically and aim to reflect market conditions, recent activities and other relevant dynamic changes that may occur.
The Groups overall financial risk management strategy seeks to ensure appropriate funding levels, approved treasury directives and identification of risks
faced by the Group. In addition it is seen as critical that the going concern basis is maintained and capital availability held ready to meet operational and
financial objectives.
Primarily interest bearing debt, cash and cash deposits, trade receivables and payables are the main focus of financial instruments engaged by the Group.
The Group is also exposed to some foreign currency risks although considered minimal.
Capital Risk Management
The capital structure of the Group comprises of debt (including borrowings), cash and cash equivalents, and equity to the relevant stakeholders.
Primarily the Board aims to provide a sound capital funding structure that allows market confidence (from all sectors) and which delivers sustained
current and future growth. The majority of capital funding is required for the long term purchase of operating assets. These are primarily placed under hire
purchase borrowing arrangements.
As in prior years the cash position is reviewed regularly and ensures the Group will be able to pay its debts as and when they fall due. Borrowings and
operating cash flows are primarily used to cater for general day to day operations and funding of dividend and tax disbursements.
76»
NRW Annual Report 2010
Notes to the Financial Statements
30. Financial instruments (continued)
Gearing Ratio:
The Board meets regularly to determine the level of borrowings and funding required. The gearing ratio is influenced directly from the capital structure
including the payment of dividends and any other movement in debt such as for expansion. At year end the gearing ratio was:
Borrowing Note 30
Debt (Note 28)
Cash (Note 20)
Net Debt
Equity
Net Debt to Equity Ratio
Fair Value of Financial Instruments
Consolidated
2010
$’000
60,857
(21,443)
39,414
169,069
23%
2009
$’000
60,818
(20,603)
40,216
142,254
28%
The carrying amount of financial assets and financial liabilities recorded in the financial statement continue to approximate their fair values. There has been
no impairment charge or adjustments made to any of the carrying values, as such the fair values are in line with carrying values.
The consolidated Group and the Company’s remaining contractual maturity for its financial liabilities and financial assets are set out in the following tables.
As applicable the table shows the effective interest rates and average interest rates.
Interest rate risk management
The Group has been highly successful in renegotiating its borrowings with its primary lenders. No material changes have occurred from prior years. It is not
expected that any material fluctuations or volatility will occur in the short term. Any rate rise or change in the near future would not result in any material
impact.
The Board continues to review its risk associated with any covenants and borrowing conditions. The Group enjoys a mixture of fixed and variable borrowings to
manage both cash and long term capital purchases. The long term debt specifically relating to capital purchases of plant and machinery is fixed.
The Group does not enter into any specific swaps or hedging relative to any interest rate volatility. Predominantly the exposure is on the bank borrowings,
which are primarily the bank overdraft and the annual review was completed successfully during the financial year ended 30 June 2010. Other
considerations of debt and borrowings lie in funding new developments which forms part of the risk management strategy of the Group.
Given the Group has most of the financing under fixed rate hire purchase or other similar asset financing agreements, the exposure to market volatility
of interest rate lies mainly in the overdraft facilities. Applying a conservative movement of 150 basis points to the average overdraft would add a cost
of $105,000 AUD plus or minus depending on market swings and balances. It is not considered material that such a swing will impact on the business
should this arise.
77»
NRW Annual Report 2010
0 to 30 days
31 days to < 1
year
1 to 5 years
> 5 years
$’000s
$’000s
$’000s
$’000s
2,255
2,255
25,455
-
36,109
644
62,208
1,552
1,552
31,510
-
-
-
31,510
-
-
-
-
-
-
-
-
140,290
104,181
809
165
201,147
107,430
0 to 30 days
31 days to < 1
year
1 to 5 years
> 5 years
$’000s
$’000s
$’000s
$’000s
30. Financial instruments (continued)
Consolidated Interest and Liquidity Analysis 2010:
Financial Assets
Cash and Cash Equivalents
Trade and Other Receivables
Financial Liabilities
Asset Financing
Trade Finance
Trade and Other Payables
Other Borrowings
Effective
interest rate
%
3.4
(N/A)
8.79
7.78
(N/A)
6.77
Total
$’000s
21,443
168,103
189,546
60,048
-
Consolidated Interest and Liquidity Analysis 2009:
Financial Assets
Cash and Cash Equivalents
Trade and Other Receivables
Financial Liabilities
Asset Financing
Trade Finance
Trade and Other Payables
Other Borrowings
Effective
Interest Rate
%
2.45
(N/A)
8.65
6.54
(N/A)
9.33
Total
$’000s
20,603
118,293
138,896
58,983
1,537
95,944
298
21,443
164,295
185,738
3,084
-
20,603
82,029
102,632
2,805
840
56,037
-
-
36,263
36,263
30,081
697
39,907
298
70,983
-
-
-
26,096
-
-
-
26,096
-
-
-
-
-
-
-
-
Foreign Exchange and currency exposure
156,762
59,682
The Group has a reportable and functional currency in Australian dollars. However there are some transactions of an operational and capital nature that
may be denominated in a foreign currency. The Board considers that movements in foreign currency (negative or positive) will have minimal impact on
operating profits, given that most projects are agreed in Australian dollars. Any new developments which the Group considers or bids for are considered as
part of the risk management by the board.
During the year ended 30 June 2010 and where applicable this risk strategy incorporates the use of forward exchange contracts. This has generally only
been required for specific hedging of short term transactions within the normal operating cycle whether they be receivable or payable. The Group is not in
the business of trading such that forward exchange contracts are aimed at placing a fixed and determinable value on the receivable or payable so as to
mitigate any unexpected peak or trough in the underlying budgeted outcome. Other than specific transactions or purchases the majority of transactions are
dealt with at spot.
The Groups operations in West Africa – Guinea have a continued minor exposure to foreign currency movements. The structure has not materially changed
from prior years and as such predominantly the exposure is based on the transfer of funds for services rendered in the country of West Africa - Guinea. The
Cash balances at 30 June 2010 (at spot) were $242,845 AUD (2009:247,508 AUD) and $241,160 AUD (2009: 96,833 AUD).
At this stage no hedging is entered into for the purposes of the Guinea operations. Cash is converted to USD and then into GNF as required. Volatile market
movements is considered low risk, given the majority of the cash is utilised quickly. Contract income however is negotiated and invoiced in Australian
dollars. In this regard foreign exchange movements are considered minimal and immaterial.
78»
NRW Annual Report 2010
Notes to the Financial Statements
30. Financial instruments (continued)
Credit risk
The credit risk associated with the Group is primarily if any third party fails to meet its obligations to pay its debt as and when they fall due. Trade and
other receivables continue in the 30 to 60 day band with some falling outside this timeframe. Cash retentions are subject to the variety of contracts that
the Group is engaged in. The main security is normally by way of bank guarantee or insurance bond. The retention or guarantee/bond period varies from
contract to contract.
Where terms are exceeded no interest is charged on late payments, however management follow a strict credit policy as part of day to day cash flow
management.
The carrying amount of financial assets recorded in the financial statements net of any allowance for losses, represents the Groups maximum exposure to
credit risk without taking into account the value of any collateral obtained.
The total amount of guarantees/bonds stand at $39,276,000 (2009: $35,839,000) and cash retentions held as accounts receivable stand at $281,000
(2009: $1,541,000).
31. Finance Leases
Finance leases as lessee
Non cancellable finance leases are payable as follows:
The types of finance lease the Group mainly enters into are in relation to the acquisition of new capital, primarily plant and equipment. The majority of new
plant and equipment purchases are financed utilising these finance leases, under hire purchase or chattel mortgage. They are fixed contracts with a fixed
and determinable measure of finance cost for the period.
Minimum future lease payments
Present value of minimum future
lease payments
No Later than 1 year
Later than 1 year and not later than 5 years
Later than five years
Minimum future lease payments(1)
Less future finance charges
Present value of minimum lease payments
2010
$’000
32,460
34,280
-
66,740
(6,692)
60,048
2009
$’000
36,522
27,560
-
64,082
(5,099)
58,983
(1) Minimum future lease payments include the aggregate of all the lease payments and any guaranteed residual value.
Included in the financial statement as: (note 28 ‘Borrowings’):
Current borrowings
Non-Current borrowings
2010
$’000
28,539
31,510
-
60,048
-
60,048
2010
$’000
28,538
31,510
60,048
2009
$’000
32,887
26,096
-
58,983
-
58,983
2009
$’000
32,887
26,096
58,983
79»
NRW Annual Report 2010
32. Operating Leases
Operating leases as lessee
Non cancellable operating lease rentals (excluding property rentals - see below) are payable are as follows:
Less than one year
Between one and five years
More than five years
Total
Property lease rentals are payable as follows:
Less than one year
Between one and five years
More than five years
Total
Consolidated
2010
$’000
2,452
5,588
-
8,039
2009
$’000
455
9
-
464
Consolidated
2010
$’000
1,455
3,044
1,280
5,778
2009
$’000
1,347
3,266
1,920
6,533
The majority of property leases continue to primarily relate to commercial property leases. These leases consist of 5 year terms with options to renew every
5 years until the year commencing 28 February 2022. All commercial property leases contain market or CPI review clauses during the term of the leases.
The Group does not have the option to purchase the leased assets at the end of the lease period.
33. Capital and other commitments
Capital expenditure commitments – Plant and equipment and Other
Within one year
Between one and five years
Later than five years
Consolidated
2010
$’000
2,984
8,951
-
11,934
2009
$’000
2,163
6,490
-
8,563
80»
NRW Annual Report 2010
34. Contingencies
Contingent Liabilities
Bank guarantees
Insurance Bonds
Notes to the Financial Statements
Consolidated
2010
$’000
33,110
6,166
39,276
2009
$’000
29,673
6,166
35,839
Bank guarantees and insurance bonds are issued to minimise cash retentions and are a function of operational revenue. The period of each guarantee/
bond varies from contract to contract.
35. Share based payments
Senior Management and Director Option Plan (“SMDOP”)
The SMDOP is a senior management and director share option plan and has been put in place since NRW’s admission to the ASX. No options have been
issued under the plan to date. The board has the discretion to determine the terms and conditions applying to each offer of options under the SMDOP
including performance conditions attaching to the exercise of options, restrictions on transfer and disposal, exercise price of options and amount payable
for a grant of options.
The SMDOP will be accounted for as equity settled share-based payments where the fair value determined at the grant date is expensed on a straight-line
basis over the vesting period, based on the estimate of shares that will eventually vest.
Employee Gift Offer (“EGO”)
No new issues of shares have been provided during the year ended 30 June 2010.
In-substance options
No new limited recourse loans were issued to key management personnel.
Historically, the employees’ obligation for repayment of these loans is limited to the dividends declared and the capital returns by the Company, and in the
event that the employee ceases employment, the market price achieved on the sale of the shares held as security by the Company for the loans.
Prior loans were repaid in full and no balances exist as unpaid at 30 June 2010.
81»
NRW Annual Report 2010
36. Provisions
Current
Employee benefits
Warranty
Total current provisions
Non current
Employee benefits
Total non current provisions
Consolidated
2010
$’000
6,777
259
7,036
405
405
2009
$’000
5,939
39
5,978
602
602
Total current and non current provisions
7,442
6,580
Balance at 1 July 2009
Provisions made during the year
Provisions used during the year
Provisions reversed during the year
Balance at 30 June 2010
Short-term provisions
Long-term provisions
Total balance at 30 June 2010
Consolidated
Warranty
provision
Employee
benefits
$’000
$’000
39
336
-
(116)
259
259
-
259
6,541
6,960
(6,318)
-
7,183
6,777
405
7,183
Total
$’000
6,580
7,296
(6,318)
(116)
7,442
7,036
405
7,442
The warranty provisions relate to the sale of plant and equipment, whilst the provision for employee benefits comprise of the employee on costs specifically
annual leave and vested long service leave.
37. Subsequent events
There has not arisen in the interval between the end of the financial year and the date of this report any transaction or event of a material nature likely
in the opinion of the Directors, to affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity in subsequent financial years.
On the 26th August 2010, the Board of NRW Holdings Limited declared a final dividend for the Financial Year ending June 30, 2010. The final dividend
payable is 3.0 cent per share and brings the full year dividend to 6.0 cents per share.
82»
NRW Annual Report 2010
Notes to the Financial Statements
38. Related parties
Individual directors and executives compensation disclosures
Information regarding individual directors and executives compensation and some equity instruments disclosures are provided in the Directors’ report page 23.
Throughout the year the Group transacted with various related parties. These related parties are related by director interests and others as listed. The
following transactions have occurred and the amounts are all considered to be at arms length and at normal market rates.
Key management person and/or related party.
Transaction Booked in Group
(ii) Other related party – Revenue
Mr J W McGlinn
- Mystica Trust
- Fallbrook Pty Ltd
Mr C Lindsay-Rae
Mr J W McGlinn
- Springpark Mining Services Pty Ltd
Mr J W McGlinn & Mr C Lindsay-Rae
- Springpark Australia Pty Ltd
Revenue on back charges for mobile phone use and sale of
printer.
Revenue on services income for earthmoving contract works.
Revenue on back charge and sale of motor vehicle/laptops.
Mr J W McGlinn & Mr C Lindsay-Rae
Revenue on back charges of travel and other.
- Springpark International Ltd
(iii) Other related party – Expense
Mr J W McGlinn
- McGlinn Property Trust
Mr NJR Silverthorne
- Silverthorne Trust
Mr C Lindsay-Rae
Mr J W McGlinn
- Springpark Australia Pty Ltd
Mr J W McGlinn – Newstream Group
Mr J W McGlinn – Fallbrook Pty Ltd
Mr J W McGlinn
- Springpark Accommodation
Mr C Lindsay-Rae
Mr J W McGlinn
Expense on rent paid.
Expense on rent paid.
Expense on purchase of subcontractor services and hire.
Expense on purchasing of Consultancy services.
Expense on back charges for travel and charters.
Expense on purchase of accommodation at various mine sites
Expense on purchase of subcontractor services, machine
transport and various back charges.
- Springpark Mining Services Pty Ltd
Mr J W McGlinn
- Maxem Aviation as agent for Fallbrook Pty Ltd
Expense on charter flight services.
Transaction Value
2010
$
2009
$
52,775
9,748
-
5,280,590
499
105,013
-
1,494
512,991
283,000
123,712
114,195
-
51,895
28,060
947,330
148,837
338,577
-
726,509
199,804
521,176
-
-
83»
NRW Annual Report 2010
38. Related parties (continued)
The inter group transactions are in relation to transactions within the Group between the entities. All transactions are considered at arms length and at fair
market rates. The amounts comprise of:
Key management person and / or related party.
Transaction Booked in Group
Transaction value
2010
$
2009
$
(iv) Inter Group Transactions
NRW Pty Ltd – Purchases from Promac Rental & Sales Pty Ltd
Purchases of tyres, electrical equipment and back charge of
repairs and maintenance.
1,759,636
4,033,987
NRW Pty Ltd – Purchases from Promac Rental & Sales Pty Ltd
Hire charges for rental of plant and equipment.
-
11,834,033
NRW Pty Ltd – Purchases from Action Mining Services
Repairs and maintenance, plant and module purchases and
labour hire.
NRW Pty Ltd – Sales to Action Mining Services
Back charges for labour and miscellaneous.
6,829,335
4,114,661
59,900
42,109
NRW Pty Ltd – Sales to Promac Rental & Sales Pty Ltd
Back charges for repairs and maintenance, management fee
and miscellaneous
732,400
235,272
NRW Pty Ltd - Transfer of grants or government advances from
NRW Holdings
Transfer of grants and government incentives or payments
received
NRW Pty Ltd - Sales to NRW VDM Joint Venture
NRW Pty Ltd - Sales to NRW NYFL Joint Venture
NRW Pty Ltd - Sales to LJN Joint Venture
Subcontractor Services
Subcontractor Services
Subcontractor Services
NRW Pty Ltd - Sales to NRW Eastern Guruma Joint Venture
Subcontractor Services
NRW Pty Ltd - Purchases from NRW VDM Joint Venture
Employee travel and accommodation charges
NRW Pty Ltd - Purchases from LJN Joint Venture
Diesel consumed by NRW plant
NRW Pty Ltd - Purchases from NRW SARL
Management Fee
NRW Pty Ltd - Sales to NRW Eastern Guruma Joint Venture
Subcontractor Services
310,227
360,682
131,032,743
10,316,885
15,139,746
107,308,081
4,000,000
3,051,800
11,675,472
-
-
-
-
-
3,411,135
4,667,794
4,000,000
-
Assets and liabilities balances arising from the related party transactions
Amounts receivable from or payable to related parties at reporting date were as follows:
Account Receivable Balances
Inter Group (Subsidiaries)
Other Related Party
Current receivables/total assets
Accounts Payable Balances
Other related party
Inter Group (Subsidiaries)
Total related party payables
Consolidated
2010
$
2009
$
-
5,669
(2)5,009,359
(1)10,058,571
5,009,359
10,064,240
227,848
-
227,848
-
20,000
20,000
(1) The indemnification related to the PICS Settlement described in Note 22. – Trade and Other Receivables. The amount receivable from the Indemnifiers as at 30 June 2009 was $10,000,000 and
$58,571 other minor related party.
(2) The amount includes balances of the indemnities of $4,971,501 which have been received by the Group post 30 June 2010 and prior to the signing of this financial report.
Options and rights over equity instruments
Apart from the in-substance options described in the director’s report, no options were issued to or held by key management personnel or their related
parties during the reporting period.
84»
NRW Annual Report 2010
Notes to the Financial Statements
38. Related parties (continued)
Key management personnel compensation
The key management personnel compensation included in ‘Employee benefits expense’ (see note 8) is as follows:
Short term employee benefits
Other long term benefits
Post employment benefits
Termination benefits
Share-based payments
Total
Consolidated
2010
$
2009
$
7,625,434
7,219,150
29,744
613,258
-
-
191,973
514,151
-
110,218
8,268,436
8,035,491
Movements in shares
The movement during the reporting period in the number of ordinary shares in NRW Holdings Ltd held directly, indirectly or beneficially, by each key
management person, including their related parties, is:
For the year ended 30 June 2010
Key Person
Held at 1 July 2009
Purchases(1)
Received as
compensation
Received on
options exercised
Sales / transfers(2)
Held at 30 June
2010
Mr J W McGlinn
Mr J A Pemberton
Dr I F Burston
Mr M Arnett
Mr K Hyman
26,195,641
2,534,540
324,992
275,000
17,000
Mr NJR Silverthorne
26,506,027
Mr K Bounsell
3,381,843
59,235,043
For the year ended 30 June 2009
54,400
-
-
-
-
-
-
54,400
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26,250,041
2,534,540
324,992
275,000
17,000
26,506,027
3,381,843
59,289,443
Key Person
Held at 1 July 2008
Purchases(1)
Received as
compensation
Received on
options exercised
Sales / transfers(2)
Held at 30 June
2009
Mr J W McGlinn
Mr J A Pemberton
Dr I F Burston
Mr M Arnett
Mr K Hyman
22,859,402
2,534,540
50,000
175,000
17,000
3,336,239
-
274,992
100,000
-
Mr NJR Silverthorne
21,418,735
11,020,640
Mr K Bounsell
3,381,843
50,436,520
-
14,731,871
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,933,348)
-
(5,933,348)
26,195,641
2,534,540
324,992
275,000
17,000
26,506,027
3,381,843
59,235,043
(1) All purchases were made via purchases of shares on-market.
(2) Sales/transfers of shares during the year consist of the portion of shares sold down by the vendor shareholders as part of the IPO.
85»
NRW Annual Report 2010
Notes to the Financial Statements
39. PARENT ENTITY DISCLOSURES
(a) Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
Equity
Issued capital
Retained earnings
Reserves
Option reserve
Total Equity
(b) Financial Performance
Profit for the year
Other comprehensive income
Total comprehensive income
(c) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries:
Debt borrowings
Total
86»
NRW Annual Report 2010
Parent
2009
$’000
102,240
37,076
139,316
5,416
-
5,416
133,900
2010
$’000
142,187
36,143
178,330
8,336
3,607
11,943
166,387
82,211
82,541
80,560
51,790
1,635
166,387
1,550
133,900
Parent
2010
$’000
40,801
-
40,801
2009
$’000
33,354
-
33,354
Parent
2010
$’000
2009
$’000
60,857
60,818
60,857
60,818
For the financial year ended 30 June 2010
Shareholder Information
The shareholder information set out below was applicable as at 8 September 2010.
NRW’s issued capital comprises 251,223,000 fully paid ordinary shares.
Distribution of shareholdings:
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable Parcels
Securities
212,339,741
27,679,753
6,228,754
4,445,019
529,733
251,223,000
15,948
%
84.52
11.02
2.48
1.77
0.21
100.00
0.01
No of Holders
99
996
766
1,428
910
4,199
98
%
2.36
23.72
18.24
34.01
21.67
100.00
2.33
NRW’s 20 Largest Shareholders
Rank
Name
Shares
% Interest
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
J P MORGAN NOMINEES AUSTRALIA LIMITED
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
JEFFERY WILLIAM MCGLINN
COGENT NOMINEES PTY LIMITED
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