2021
XXXX
Workforce
ASX Code
NWH
CORPORATE REGISTRY
DIRECTORS
SHARE REGISTRY
Link Market Services Limited
Level 4 Central Park
152 St Georges Terrace
Perth WA 6000
Telephone: +61 1300 554 474
Facsimile: +61 2 8287 0303
ASX CODE
NWH – NRW Holdings Limited
Fully Paid Ordinary Shares
nrw.com.au
Michael Arnett
Chairman and Non-Executive
Director
Julian Pemberton
Chief Executive Officer and
Managing Director
Jeff Dowling
Non-Executive Director
Peter Johnston
Non-Executive Director
Fiona Murdoch
Non-Executive Director
COMPANY SECRETARY
Kim Hyman
REGISTERED OFFICE
181 Great Eastern Highway
Belmont WA 6104
Telephone: +61 8 9232 4200
Facsimile: +61 8 9232 4232
AUDITOR
Deloitte Touche Tohmatsu
Tower 2
Brookfield Place
Level 9
123 St Georges Terrace
Perth WA 6000
1
NRW HOLDINGS ANNUAL REPORT 2021 | Contents PageNRW HOLDINGS ANNUAL REPORT 2021 | Corporate Registry
CONTENTS PAGE
03
05
07
Chairman’s Message
About Us
Financial Year Highlights
Business Unit Performance
Civil
CEO Review of Operations
07
07
09
09
09
11
11
People & Safety
Outlook
Mining
Minerals, Energy & Technologies
13
17
18
19
20
21
CFO Financial Report
13
Financial Performance
15
Balance Sheet, Operating Cash
Flow & Capital Expenditure
A Message from the Sustainability Committee
Sustainability Snapshot
NRW’s Business
About this Report
Sustainability Objective
Sustainability at NRW
21
21
22
22
NRW’s Approach
Reporting Frameworks
Sustainability Governance
26
Environment
32
42
27
29
30
Social
32
35
36
37
Climate Change
Resource Use, Rehabilitation
and Management
Innovation
Safety, Health and Wellbeing
Employee Engagement
Workplace Culture and Diversity
Community Engagement
Governance
42
43
43
Corporate Governance
Business Ethics and Transparency
Risk Management
Revenue
$XB
Revenue
$XB
Revenue
$XB
2
NRW HOLDINGS ANNUAL REPORT 2021 | Contents Page
ABOUT US
NRW is a leading provider of diversified contract services to the
resources and infrastructure sectors.
With operations in all Australian States, except Tasmania, and
an office in Canada, NRW’s geographical diversification is
complemented by its ability to deliver a wide range of services.
NRW’s Civil and Mining businesses provide civil construction,
including bulk earthworks, road and rail construction and
concrete installation, together with contract mining and drill and
blast services.
The Minerals, Energy & Technologies (MET) operating unit
offers tailored mine-to-market solutions, specialist maintenance
(shutdown services and onsite maintenance), non-process
infrastructure, innovative materials handling solutions, and
complete turnkey design, construction and operation of minerals
processing and energy projects.
NRW also offers a comprehensive original equipment manufacturer
(OEM) capability, providing refurbishment and rebuild services for
earthmoving equipment and machinery.
NRW has a workforce of around 7,000 people supporting more
than one hundred projects around Australia for clients across the
resources, infrastructure, industrial engineering, maintenance and
urban subdivision sectors.
3
NRW HOLDINGS ANNUAL REPORT 2021 | About Us
NRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of Operations 2019 (FEB)
ACQUISITION
RCR MINING
TECHNOLOGIES
2017 (AUG)
ACQUISITION
GOLDING
2021 (MAR)
ACQUISITION
PRIMERO
2019 (NOV)
ACQUISITION
BGC CONTRACTING &
DIAB ENGINEERING
FUTURE GROWTH
The Primero business has strengthened
the Minerals, Energy & Technologies
operating unit and significantly enhances
NRW’s capability to pursue new business
initiatives across a large pipeline
of opportunities.
NRW HOLDINGS ANNUAL REPORT 2021 | About Us
NRW HOLDINGS ANNUAL REPORT 2021 | About Us
4
NRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of Operations CHAIRMAN’S
MESSAGE
SUSTAINABILITY
In 2020, we established a Sustainability Committee,
responsible
for managing and reporting our
Environmental, Social and Governance (ESG) matters.
Our first Sustainability Report is included within this
Annual Report. This report highlights the alignment
of NRW’s corporate values and operations with the
United Nations Sustainable Development Goals
(SDGs) and is guided by relevant Global Reporting
Initiative (GRI) standards to report on the Group’s
sustainability performance.
NRW has also focused on a number of initiatives
that will make or are making a positive impact on our
environmental management and carbon footprint,
detailed in our Sustainability Report.
LOOKING FORWARD
The Order book at year end totalled $3.4 billion, which
is expected to grow to at least $4.4 billion following the
recently announced letter of intent for the extension of
mining services at Curragh.
The Pipeline of opportunities remains strong at $14.5
billion across all business segments. It is also pleasing
to note that to date around 50% of the work we advised
as our submitted tenders at the half year totalling circa
$5 billion, has resulted in contract awards, notice of
award or letter of intent. These include Karara, Baralaba,
Strandline and Curragh.
The Directors have declared a final dividend for the
financial year of five cents per share. This brings the total
dividend for the year to nine cents per share following
the interim dividend paid in April 2021. The dividend will
be fully franked and paid on 13 October 2021.
In closing, and on behalf of the Board, I would like to
thank Jules Pemberton and his leadership team, our
shareholders, our clients and our employees for their
ongoing loyalty and support.
I look forward to reporting on our team’s further success
in the 2022 financial year.
Michael Arnett
Chairman, NRW Holdings
As Chairman of NRW Holdings, and on behalf of my
fellow Directors, it is with great pleasure I present the
2021 annual financial report.
In FY21, NRW continued to progress its market
and growth strategy, delivering financial growth and
outstanding results for our clients whilst maintaining the
safety of our workforce, despite the interruptions caused
by COVID-19.
Since the pandemic began, we have successfully
integrated three new businesses into the NRW Group;
BGC Contracting, DIAB Engineering and Primero
Group. These acquisitions were all highly strategic
and significantly enhance our capability to deliver
services across the lifecycle of resource projects, from
early planning, design, development, construction to
operations and maintenance.
OUR PEOPLE
NRW has a workforce of 7,000 working on projects and
sites across Australia. The management of our people to
ensure their day-to-day safety remains a priority.
In addition to revised operating procedures resulting from
the COVID-19 pandemic, staff retention and recruitment
have also been affected. These factors have impacted
our productivity, with competition for a limited resource
pool driven by both high construction activity and strong
commodity demand. More information on the operations
of the business are contained in the CEO’s commentary,
which follows.
I would like to express my gratitude to all members of our
workforce for the resilience they have demonstrated and
their commitment to working with our clients to safely
deliver our services.
COMPANY PERFORMANCE
Revenue including associates at $2,301 million
increased by 11.5% compared to $2,062 million in FY20.
The increase in revenue was a result of continued growth
following the FY20 acquisition of BGC Contracting
(subsequently renamed to NRW Contracting ‘NRWC’)
and five months contribution from Primero Group.
There have been a number of significant contract
awards and extensions post the publishing of our full
year results. This includes an EPC contract for the Mt
Holland Concentrator project for Covalent Lithium, a
joint venture between Wesfarmers and SQM, valued at
circa $290 million. This contract is the culmination of an
18-month journey with the Covalent Lithium team and
demonstrates the trust and solid working relationship
between the Primero, NRW and RCRMT teams.
5
NRW HOLDINGS ANNUAL REPORT 2021 | Chairman’s MessageNRW HOLDINGS ANNUAL REPORT 2021 | Chairman’s Message
CHAIRMAN’S
MESSAGE
Since the pandemic began,
we have successfully
integrated three new
businesses into the NRW
Group; BGC Contracting,
DIAB Engineering and
Primero Group.
6
NRW HOLDINGS ANNUAL REPORT 2021 | Chairman’s Message CEO REVIEW
OF OPERATIONS
It is with great pleasure that I present NRW Holdings’
results for the financial year ending June 30 2021.
Before commenting on the operations, I want to
acknowledge our employees for their continued
hard work and dedication over the last 12 months.
Navigating our lives through COVID-19 continues to
be difficult, and I commend their loyalty and ongoing
commitment to NRW.
As well as navigating the day-to-day COVID-19
restrictions due to the pandemic, we were faced with
the additional challenges of a limited labour pool,
higher staff turnover, increased labour costs, and lower
productivity due to specific labour skills shortages in
extended project durations.
Despite these challenges, a number of businesses,
particularly Golding Mining, RCR Mining Technologies
(RCRMT) and DIAB Engineering, continued to deliver
strong performances. This was partly due to having
a more stable workforce through either long-term
contracts or because their activities were predominantly
based at workshops with a mostly long-term and
stable workforce.
In addition to the financial highlights was the
successful completion of the Primero acquisition.
Together with the combined expertise of RCRMT
and DIAB Engineering, the Primero business has
strengthened the Minerals, Energy & Technologies
(MET) operating unit and significantly enhances NRW’s
capability to pursue new business initiatives across a
large pipeline of opportunities.
The enlarged MET business enhances
the
diversification of NRW’s strategic platform to offer
customers continuity of services across the whole
lifecycle of resource projects from early planning,
design, development and construction to operations
and maintenance.
The major challenge throughout the last financial year
and for the foreseeable future remains the ongoing
management of our people to ensure their day-to-
day safety. COVID-19 restrictions have added to the
complexity of delivering projects across almost all of
our activities.
I note that NRW has not accessed any COVID-19
related State or Federal support packages for any part
of its operations.
The financial results this year are a credit to all involved
across the Group.
BUSINESS UNIT PERFORMANCE
FINANCIAL YEAR HIGHLIGHTS
• Revenue up 11.5% to $2,301 million in line
with guidance.
•
•
Earnings (EBITDA) increased to $266.7 million
up 6.7% compared to FY20; Earnings (Operating
EBIT) of $120.6 million were lower than FY20 due
to WA Pilbara project cost increases; earnings in
line with consensus.
Final fully franked dividend declared of 5 cents per
share in line with revised Dividend Policy advised
at the half year.
• Net cash flow from operations of $147.4 million
reflects increased working capital pending
resolution of outstanding claims and variations.
NRW has structured its business reporting into three
segments, Civil, Mining, and Minerals, Energy &
Technologies. In previous reports, the results of Drill
and Blast (Action Drill & Blast) have been reported
separately. The relative size of the Action Drill & Blast
business compared to the other three segments and
the increased dependency on work from the Civil and
Mining segments were the main factors considered in
making this change.
I have provided the highlights of each of the business
units on the following pages. You can read about them
in more detail in the Financial Statements.
7
NRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of Operations
CEO REVIEW
OF OPERATIONS
Revenue
$2.3B
The enlarged MET business
enhances the diversification
of NRW’s strategic platform
to offer customers continuity
of services across the whole
lifecycle of resource projects.
8
NRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of Operations CEO REVIEW OF
OPERATIONS CONTINUED
CIVIL
The Civil business reported revenue of $726.5 million
and earnings of $28.6 million.
Revenue in the Civil business peaked in the calendar
year 2020 due to contracts secured for sustaining iron
ore projects, including work won by BGC Contracting
(acquired in December 2019). Most of the major
projects were completed early in the second half of
FY21 resulting in lower full year and lower second half
revenues compared to last year.
Earnings were lower than last year and lower than
expectations due to the COVID-19 pandemic. Most
of the business’s revenue was generated on West
Australian Pilbara based projects. Measures taken
as a result of the pandemic, including border closures
imposed at State and Federal levels effectively limited
the available labour pool. Our challenge was to deliver
projects in an environment where competition for
people increased significantly, driven by both high
construction activity and strong commodity demand.
This led to higher staff turnover (at a level never
previously experienced), increased labour costs
and lower productivity as a consequence of specific
labour skills shortages, which in turn led to extended
project durations. Most of those projects however were
complete at 30 June 2021, other than resolution of
claims and contract variations.
Civil Infrastructure projects for Main Roads in Western
Australia are ongoing, including the Bunbury Outer
Ring Road and Hodges Drive to Hepburn Avenue
projects being delivered through alliance and joint
venture contracts. The Golding Urban business
continues to remain stable with 23 urban development
projects at various stages of completion. Infrastructure
spend in Western Australia and Queensland continues
to grow, and activity levels are expected to increase in
calendar 2022.
MINING
The Mining business reported growth in revenue
to $1,177.2 million, and earnings of $212.8 million
mostly due to the addition of BGC Contracting’s mining
activities which contributed a full 12 months compared
to seven months in FY20.
Earnings were impacted by both COVID-19 measures
(as noted for the Civil business) and unseasonal
weather events in Western Australia and Queensland,
which affected second half revenue and earnings more
than we have experienced in previous years. Despite
the weather impacts, margins improved in the second
half as measures to mitigate resource availability in
the Pilbara improved productivity; however, staffing
remains a challenge.
9
Mining projects included work for Stanmore Coal at
Isaac Plains, Coronado Coal at Curragh, Wonbindi
Coal at Baralaba and Idemitsu at Boggabri. Iron
ore mining activities included work for Simec at Iron
Baron, Atlas Iron at Mount Webber and Rio Tinto at
Gudai Darri.
The business has a key focus on renewing existing
contracts. Golding and Curragh have signed a Letter
of Intent (LOI) to extend the current six fleet mining
services contract to 31 December 2026. The expected
contract value is anticipated to be between $1.0 billion
and $1.4 billion dependant on final scope.
A major order award in the year was a Notice of Award
from Karara Mining for a five-year contract commencing
in March 2022. The value of this contract is more than
$700 million and will generate revenue in FY22 of circa
$40 million.
MINERALS, ENERGY & TECHNOLOGIES
The Minerals, Energy & Technologies (MET) business
delivered increased revenue of $426.9 million, up from
$187.2 million in FY20. The increased revenue includes
Primero activities from February 2021 and growth in
RCR Mining Technologies and DIAB Engineering.
These businesses were generally less impacted by
COVID-19 restrictions as most of the workforce is
located in company facilities in Bunbury, Geraldton,
and Perth. The fixed nature of these facilities has
contributed to a relatively stable workforce, and
consequently, these businesses experienced lower
staff turnover than the projects based businesses.
Nonetheless, both Primero and DIAB Engineering were
impacted in a similar manner to the Civil business on
their site based activities.
DIAB Engineering provides shutdown services and
given the relatively short-term nature of the work,
resourcing these projects proved challenging. Primero
delivers EPC projects which competed for resources
within the same constraints as the Civil business.
In addition, through the MET division, the Group now
has the capability to participate meaningfully across the
new energy sectors of hydrogen and lithium through
Primero’s existing capability but also in the renewables
sector where our clients are seeking solutions to reduce
reliance on hydrocarbons based energy sources. Our
MET business also gives the Group a build-own-
operate, design and processing capability, so we are
now truly able to participate through the entire life cycle
of resources projects
Earnings improved in line with higher revenues.
Whilst margin in real terms increased, margins as a
percentage of revenue reduced as expected due to
the combination of the Primero business into segment
results from February 2021.
NRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of Operations A
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CIVIL
NRW Civil
Golding Civil
Golding Urban
MINING
NRW Mining
Golding Mining
Action Drill & Blast
AES Equipment Solutions
MINERALS, ENERGY
& TECHNOLOGIES
Primero
RCR Mining Technologies
DIAB Engineering
10
NRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of Operations
CEO REVIEW OF
OPERATIONS CONTINUED
PEOPLE & SAFETY
OUTLOOK
The markets in which NRW operates continue to
provide growth opportunities. Across the Group, we
anticipate growth in Resources, Infrastructure and
Renewables. You can read more about these sectors
on page 14 of the Financial Statements.
The Group’s order book at 30 June 21 was $3.4 billion
compared to $3.0 billion at the same time last year
(pre Bunbury Outer Ring Road award, announced
July 2020). The near term tender pipeline capable of
being awarded in the next 12 months has strengthened
to $14.5 billion compared to $12.9 billion this time
last year.
NRW is forecasting revenue of between $2.4 billion
to $2.5 billion in FY22, of which around $2.0 billion is
either in the order book, the subject of a letter of intent or
notice of award or is expected as repeatable business
by Golding Urban, RCRMT and DIAB Engineering,
with the balance of the work to be won and delivered in
the year.
In closing, I would like to thank all of our valued
employees for their contributions this year. It has been
a challenging year in many ways; however, we have
continued to deliver outstanding projects for our clients
whilst working safely and within a range of restrictions
related to the pandemic.
I would also like to acknowledge my fellow directors and
the Executive Leadership Team for their commitment
and support over the last 12 months.
Jules Pemberton
CEO and Managing Director, NRW Holdings
The business continues to focus on the welfare and
safety of our workforce, which peaked at 7,800 in Q1
FY21. We are incredibly proud of how our people,
working across six states and territories, have
responded to the COVID-19 restrictions and adhered
to revised operating procedures.
NRW’s Total Recordable Injury Frequency Rate
(TRIFR) at June 2021 was 6.25 compared to 5.61 at
June 2020.
We employ a high performing, skilled, experienced
and appropriately qualified team of people across all
our businesses, who provide a wealth of knowledge at
all levels. We have continued to provide development
opportunities for our workforce, despite the challenges
posed by the pandemic.
A snapshot of some of the development opportunities
include:
•
Employment of 89 apprentices.
• Development and training of 65 graduates
and undergraduates.
•
•
112 members of staff working through formal
training programmes.
Leadership and development courses completed
by 173 members of staff.
• Over 10,000 training events undertaken via
eLearning solutions.
NRW continues to embrace diversity and inclusiveness
across all of its activities. NRW relies on and encourages
its employees to act in accordance with the Company
values and contribute a diverse range of skills and
experience. Our objective is to increase participation
across various demographics, ensure we recruit and
retain a skilled workforce, and endorse a safe and
productive working environment that encourages
equality, diversity and inclusion.
NRW has successfully delivered all projects with no
lost time due to industrial disputes, or any form of work
ban or limitation and recognises that our success is the
result of our dedicated workforce.
11
NRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of Operations
$3.4B
Order Book
NRW continues to embrace
diversity and inclusiveness
across all of its activities.
12
NRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2021 | CEO Review of Operations CFO FINANCIAL
REPORT
FINANCIAL PERFORMANCE
NRW reported revenue of $2,301 million, an increase of 11.5% compared to $2,062 million in FY20. The increase in
revenue was a result of continued growth following the acquisitions of BGC Contracting (subsequently renamed to
NRW Contracting ‘NRWC’) and Primero.
The table below provides key financial performance metrics for the current financial year compared to the prior
comparative period:
FY21
FY20
Revenue
Earnings
Revenue
Earnings
$M
2,300.6
(79.1)
Total Revenue(1) / EBITDA(2)
Revenue from Associates
Depreciation
Operating EBIT(3)
Amortisation of Acquisition Intangibles
Non-recurring transactions(4)
EBIT
Net Interest
Profit before income tax
Tax
Statutory Revenue / Net earnings
2,221.5
NPATN(5)
$M
266.7
(146.1)
120.6
(20.2)
(11.2)
89.2
(13.3)
75.9
(21.6)
54.3
75.1
$M
2,062.4
(58.1)
2,004.3
$M
250.0
(109.1)
140.9
(13.0)
(14.9)
113.0
(12.8)
100.2
(26.5)
73.7
89.7
(1) Revenue including our share of revenue earned by our associates and joint ventures.
(2) EBITDA is earnings before interest, tax, depreciation, amortisation of acquisition intangibles and non-recurring transactions.
(3) Operating EBIT / EBITA, is earnings before interest, tax, and amortisation of acquisition intangibles and non-recurring transactions.
(4) Non-recurring transactions include Altura impairment, Gascoyne writeback and Primero transaction costs (FY21) and costs associated
with the acquisition of BGC Contracting (FY20).
(5) NPATN – earnings before amortisation of acquisition intangibles and non-recurring transactions at 30% tax rate.
Earnings (Operating EBIT) of $120.6 million were
lower than last year due to resource challenges as a
consequence of the COVID-19 pandemic, particularly
on Pilbara based projects which experienced high staff
turnover, labour rate increases and skill shortages.
Non-recurring transactions include recoveries from
Gascoyne Resources following their successful
recapitalisation, costs associated with Altura’s
administration and costs related to the acquisition
of Primero.
Net Earnings excluding non-cash amortisation costs for
acquisition intangibles at standard tax rates decreased
to $75.1 million compared to $89.7 million in FY20
due to lower operating earnings which as commented
above were impacted by resource constraints.
13
NRW HOLDINGS ANNUAL REPORT 2021 | CFO Financial ReportNRW HOLDINGS ANNUAL REPORT 2021 | CFO Financial Report CFO FINANCIAL
REPORT
Increase in revenue was a
result of continued
growth following the
FY20 acquisition of BGC
Contracting (Renamed
NRW Contracting)
and Primero.
$120.6M
Operating EBIT
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14
NRW HOLDINGS ANNUAL REPORT 2021 | CFO Financial ReportNRW HOLDINGS ANNUAL REPORT 2021 | CFO Financial Report
CFO FINANCIAL
REPORT CONTINUED
BALANCE SHEET, OPERATING CASH FLOW &
CAPITAL EXPENDITURE
Net Assets increased in the year by $72.7 million to
$545.1 million reflecting earnings in the year net of
dividend payments and equity raised for the acquisition
of Primero ($50.5 million).
Cash balances ended the year at $146.5 million. Net
debt increased to $171.3 million which included $50.0
million of new debt to fund the acquisition of Primero.
The Group announced to the ASX on 12 July 2021 that
Boggabri Coal Operations Pty Ltd (‘BCO’), part of the
Idemitsu Group agreed to acquire the majority of the
major mining equipment of Golding Contractors. This
transaction completed shortly after the year end had a
significant positive change to the balance sheet. Given
this impact we have provided a ‘pro forma’ balance sheet
alongside the statutory balance sheet to show how this
transaction would have changed the year end balance
sheet. You can read more about this transaction on the
ASX release.
A summary of the balance sheet as at the end of the
current financial year and the previous financial year is
provided below.
Pro forma(1)
30 Jun 21
Actual
30 Jun 21
Actual
30 Jun 20
Cash
Financial debt
Lease debt
Net Debt
Property, Plant and equipment
Non-current assets held for sale
Lease assets (right of use)
Working capital
Investments in associates and listed equities
Tax Liabilities
Net Tangible Assets
Intangibles and Goodwill
Net Assets
Gearing
Gearing Excl. AASB 16
$M
163.9
(196.7)
(55.9)
(88.7)
321.4
-
48.2
56.6
15.8
(15.3)
338.0
207.1
545.1
16.3%
6.0%
$M
146.5
(261.9)
(55.9)
(171.3)
321.4
82.6
48.2
56.6
15.8
(15.3)
338.0
207.1
545.1
31.4%
21.2%
$M
170.2
(244.8)
(65.1)
(139.7)
451.8
-
58.3
(18.7)
2.6
(0.9)
353.4
119.0
472.4
29.6%
15.8%
(1) Pro forma balance sheet includes the impact of the sale of the Boggabri mobile equipment. For more information refer note 7.7 of
financial statements.
Capital expenditure totalled $77.9 million compared to
$82.6 million in the previous financial year. Expenditure
was mostly focused on maintenance and new equipment
purchases to replace fleet which had come to the end of
its useful life.
Intangibles and goodwill increased due to the Primero
acquisition partly offset by amortisation charges incurred
in the year.
The income tax expense recognised in net earnings
has reduced the deferred tax asset carrying value as
expected. Tax balances are now carried as a net tax
liability but include within that balance further tax losses.
in April 2021. Overall dividend payments in the year
totalled $35.0 million.
NRW continued to maintain strong relationships with
its banking partners Bankwest and Bank of China.
Developments in the year included agreement of a
new $50.0 million facility with Bankwest to support the
acquisition of Primero Group. All banking covenants
were in compliance at all times during the year and at
30 June 2021.
Returns to shareholders included both a final dividend
for FY20 of 4 cents paid in October 2020 and an interim
dividend for the current financial year of 4 cents paid
Andrew Walsh
CFO, NRW Holdings
15
NRW HOLDINGS ANNUAL REPORT 2021 | CFO Financial Report
NRW HOLDINGS ANNUAL REPORT 2021 | CFO Performance at a Glance
SUSTAINABILITY
REPORT
NRW HOLDINGS ANNUAL REPORT 2020 | CFO Financial Report
A MESSAGE FROM THE
SUSTAINABILITY COMMITTEE
On behalf of the Board of Directors, I am pleased to
provide you with NRW’s first Sustainability Report
(Report). NRW is committed to responsible and
sustainable business practices and to the transparent
reporting of our sustainability performance.
As we have grown, so have our, and our stakeholders’,
expectations of how we report on our sustainability
initiatives and performance. Following the establishment
of the Sustainability Committee (Committee) in FY20,
we determined that we would prepare this Report
which establishes a framework for future sustainability
disclosures and will form the foundation for year on
year reporting.
OUR JOURNEY
Whilst NRW has reported on material environmental,
social and governance (ESG) matters since it listed on
the Australian Securities Exchange in 2007, we recognise
that reporting frameworks have significantly developed
over this time. This, combined with NRW becoming a
larger and more complex organisation, prompted us to
reconsider how we report on our material ESG matters to
our stakeholders.
As a result we adopted the reporting framework under
the Taskforce for Climate-Related Financial Disclosure
(TCFD) which established recommendations
for
voluntary and effective climate related disclosures. A
phased implementation plan to align NRW’s reporting
of climate change risks and climate-related financial
disclosures within the TCFD framework is currently
being developed. In reporting on NRW’s sustainability
performance we will also be guided by relevant Global
Reporting Initiative (GRI) Standards, and have linked our
actions to the Sustainable Development Goals (SDGs).
This Report is the first time NRW has aligned ESG
disclosures to international standards and frameworks
widely recognised as best practice. We acknowledge that
by adopting these standards and frameworks it enables
us to report to our stakeholders on how our ESG initiatives
contribute to a more sustainable future. We consider this
initial Report an important step on our pathway to further
developing our sustainability reporting and disclosures.
In this Report we share what we are doing across a
number of ESG focused initiatives within our business.
These initiatives include:
• Our major partnership with GIVIT, a not-for-profit
organisation focused on community giving to deliver
important social benefits;
17
•
•
•
Supporting the growth of our people through the
development of our training facility which opened
this year;
The introduction of our Company Paid Parental
Leave scheme to support women and improve the
gender composition of our workforce; and
Various investments and partnerships to further the
objectives of a low carbon economy.
We hope that this Report demonstrates to our
stakeholders how our business values ESG matters.
LOOKING FORWARD
We recognise that our long-term commitment to
sustainability is integral to our ongoing success.
Our plan for FY22 is to engage more broadly with our
stakeholders to refine and validate our material issues
and to identify the priority SDGs which will be our focus
moving forward. This will allow us to:
•
•
•
Set priorities with regards to ESG matters for NRW;
Identify ESG areas that will underpin future strategic
development and planning; and
Assist with communication of the Company’s
sustainability objectives.
We will be undertaking our materiality assessment
in accordance with the GRI Standards to validate
our material economic, social, environmental and
governance related issues relevant to our business and
our stakeholders.
Our near-term goal is to develop a five-year sustainability
reporting plan to support sustainable value creation by
tracking our performance over time. The plan will be
progressive in nature, and will focus on material issues
relevant to us and our stakeholders and will include the
identification of specific sustainability metrics and targets.
NRW is committed to supporting our clients and
stakeholders as we work towards a more sustainable
future. We are proud of our achievements to date,
noting that this Report is the beginning of what will be a
committed journey towards furthering our sustainability
disclosure in the future.
Fiona Murdoch
Chair Sustainability Committee
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report A MESSAGE FROM THE
SUSTAINABILITY COMMITTEE
SUSTAINABILITY
SNAPSHOT
Environment
Scope 1 and Scope 2 Greenhouse Gas Emissions (ktCO2-e)
Environmental Breaches or Fines
The Development of an Implementation Plan for
Improved Climate Disclosure Using TCFD Guidance
Social
Total Recordable Injury Frequency Rate
Lost Time Injury Frequency Rate
Safety Prosecutions or Fines
Fatalities
COVID-19 Response – Workforce Support and Assistance Provided
Average Total Workforce FY21
Direct Employees - Female Participation
Total Number of Apprentices
Employees Who Returned to Work Post Parental Leave
Introduction of a Company Paid Parental Leave Policy
10.27
Nil
6.25
0.61
Nil
Nil
6,454
13.21%
89
72%
Major Partnership with GIVIT to Support Local and Regional Communities
$150,000
Governance
Board Members – Female Participation
20%
Announcements Made to the ASX and no Breaches of Continuous Disclosure
37
Board Member Attendance at Board Meetings
100%
Introduction of Modern Slavery Statement
Revenue
18
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report NRW’S BUSINESS
NRW is a leading provider of diversified
contract services to the resources and
infrastructure sectors in Australia. The
way the business performs its work is
integral to its vision to deliver services to
standards above industry expectations.
NRW recognises that responsible environmental and
social management in these sectors plays a significant
role in ensuring sustainable outcomes for the business
and the planet.
Expectations from all stakeholders concerning ESG
matters continues to increase. To fulfil our mission,
NRW recognises the need to challenge ourselves to
improve our performance on key sustainability metrics,
and to invest in the area of sustainability reporting. We
believe this is critical to creating long-term sustainable
value for our shareholders and other stakeholders.
We are committed to addressing the environmental
and social impacts of our businesses and operations
through continuous improvement, engagement with
our stakeholders and consistency in our processes,
while remaining flexible to accommodate our clients’
requirements. Within the facilities that we manage,
including workshops and offices, we are committed to
addressing the environmental and social impacts from
these operations in a sustainable manner.
Although NRW does not own the resources or
infrastructure projects on which it operates, we are
committed to supporting the sustainability objectives
of our clients. These objectives include Aboriginal
and Torres Strait Islander employment targets, local
employment targets, safety benchmarks, adherence to
environmental standards and climate-related initiatives
to reduce or limit greenhouse gas emissions whilst
on site.
19
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report ABOUT THIS REPORT
PURPOSE
IMPORTANT INFORMATION
This Sustainability Report (Report) discloses NRW’s
sustainability performance information for the financial
year ended 30 June 2021 (FY21). The purpose of
this Report is to demonstrate how NRW is managing
its environmental, social and governance risks and
opportunities to deliver sustainable shareholder
returns. Moving forward, NRW is committed to reporting
its sustainability performance annually.
FORMAT
NRW’s sustainability performance is provided as part of
the Annual Report to demonstrate the interconnectivity
and interdependency of sustainability, remuneration
and financial performance. It also enables the Company
the ability to integrate, across the whole report, the
concept of creating value for its stakeholders - including
shareholders, clients, employees and the communities
in which it operates.
NRW Holdings Limited (ACN 118 300 217) is the
parent entity of the NRW group of companies. In this
Report, unless otherwise stated, references to ‘NRW’,
the ‘Company’ or ‘NRW Group’ refer to NRW Holdings
Limited and its wholly owned subsidiaries.
This Report should be read in conjunction with NRW’s
Annual Financial Statements and other periodic
announcements lodged with the Australian Securities
Exchange (ASX), including the Annual Financial
Statements and Corporate Governance Statement, all
of which are available on the NRW website (www.nrw.
com.au) and the ASX platform (ASX: NWH).
NRW’s operations are primarily based in Australia,
with an office in Canada (supporting approximately 30
employees) and operations in Canada and the United
States of America. The Report is limited to the ESG
impacts of the Australian operations only, due to the
limited nature of operations overseas.
20
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report SUSTAINABILITY AT NRW
NRW is committed to improving its sustainability performance and reporting.
SUSTAINABILITY OBJECTIVE
NRW is contributing to a sustainable future through
responsible business practices that deliver economic
returns for its shareholders, creates value for the
communities in which it operates and respects the
environment to leave a positive legacy. The Company
is committed to the sustainable development of
its business through effective management of the
environmental, social and governance issues it
encounters. How NRW achieves this objective will
evolve under the influence of innovation, government
changes and progressive industry ‘best practice’.
SUSTAINABILITY GOVERNANCE
NRW’s sustainability objective is central to our
operation as a responsible business. During
FY20, the Company’s Board of Directors (Board)
formalised responsibility for the management of ESG
matters by establishing a Sustainability Committee
(Committee). The Committee’s role is to provide
advice, recommendations and assistance to the
Board with respect to ESG matters. The Charter of
the Sustainability Committee can be found on the
NRW website (www.nrw.com.au/about-us/corporate-
governance).
Sustainability Reporting Plan
to
NRW is committed to developing a 5-year
track
Sustainability Reporting Plan
the Company’s progress relative to its
sustainability objective. Once finalised, the
reporting structures within the plan will be
incorporated into the Annual Report and will
be shared with stakeholders.
The Board delegates responsibility to the Committee
to review and set the objectives and targets of all
ESG initiatives within the Company, and to monitor
subsequent performance. The Committee has
determined the remit of directors and key executives
with regards to the ESG matters for which they
are accountable.
The Company’s sustainability governance structure is
shown below.
Board
The Board is responsible for the oversight and strategic direction of NRW. The Board
reviews, and as appropriate, approves the sustainability practices within NRW.
Sustainability Committee
The Sustainability Committee is responsible for providing advice, recommendations and
assistance to the Board with respect to sustainability primarily in relation to environmental,
social and corporate governance matters.
CEO and Executive Management
The CEO makes recommendations to the Sustainability Committee regarding the
sustainability objectives and priorities of the NRW Group.
External Advisors
NRW seeks to engage external advisors to provide information and advice on sustainability
related issues where appropriate.
In accordance with the Charter of the Sustainability Committee, the Committee must have a minimum of three
members, all of which must be Non-Executive Directors and the majority of which must be independent Directors.
The Committee comprises the following members.
Fiona Murdoch
Peter Johnston
Michael Arnett
Chair and Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
The Committee met twice during FY21 with all members in attendance and furthered the sustainability initiatives and
objectives of the Company by resolving to prepare this Report.
21
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
SUSTAINABILITY AT NRW CONTINUED
REPORTING FRAMEWORKS
NRW reviewed internationally recognised sustainability
frameworks and standards to support the Company
in developing this Report. The Company has chosen
to publish its sustainability information in accordance
with certain elements of the following standards
and frameworks.
Over recent years there have been significant
developments aimed at better quality and more
consistent sustainability reporting. NRW will continue
to monitor these developments and may adapt its
reporting approach as needed in the future.
UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS
The United Nations Sustainable Development Goals
(SDGs) were developed by the United Nations in
2015 and adopted as part of the 2030 Agenda for
Sustainable Development. The 17 SDGs and their
related targets provide business, government and
civil society organisations with an agenda to focus
their sustainability efforts. While the SDGs are
not a sustainability reporting framework, they are
increasingly being used to guide reporting.
Throughout this Report NRW has highlighted where
it considers its activities align with, and support,
the SDGs.
GLOBAL REPORTING INITIATIVE
The Global Reporting Initiative (GRI) is an independent,
international organisation responsible for developing
the GRI Standards, the world’s most widely used
sustainability reporting standards. The GRI Standards
create a common language for organisations to report
on their sustainability impacts in a consistent and
credible way. This enables global comparability and
allows organisations to be transparent and accountable.
NRW is committed to reporting in accordance with
the GRI Standards as part of its Sustainability
Reporting Plan.
The GRI Standards have informed NRW’s sustainability
reporting practices in FY21 and supported the
Company’s approach to its materiality assessment
and disclosure.
TASKFORCE FOR CLIMATE RELATED
FINANCIAL DISCLOSURE
the
The Financial Stability Board established
industry-led Task Force on Climate-Related Financial
Disclosures (TCFD) to develop a voluntary, consistent,
climate-related financial disclosure framework for use
by companies in providing information to investors,
lenders, insurers and other stakeholders. The TCFD
released its recommendations aligned to the pillars of
Governance, Strategy, Risk Management and Metrics
and Targets in 2017.
NRW has resolved to adopt the TCFD Reporting
Framework. The Company acknowledges its climate-
related disclosures are evolving, and through a phased
approach will work towards increased disclosure under
the TCFD Reporting Framework in the future.
NRW’S APPROACH
This Report reflects an important step in reporting on
NRW’s material environmental, social and governance
impacts. Our initial focus was on understanding the
impact of the business with reference to the GRI
Standards. Across all of our operations, we have
considered the material issues as those that would
have the biggest impact on the economy, the
environment, and society.
In shaping this Report, we referenced a wide range
of internal and external sources to assess what is
considered material, including:
Internal Factors
• NRW’s vision, mission and values.
• NRW’s business operations.
• Geographical spread, including remote and
regional communities across Australia.
• Corporate policies, guidelines, standards, and
business practices.
•
Initiatives identified by its business units and
driven by the executive management team.
External Factors
•
Shareholder expectations based on
Company’s engagement with them over time.
the
• Client expectations and experiences.
• Global trends with regards to sustainability
practices and reporting.
• Mining industry and sector specific trends with
regards to sustainability practices and reporting.
• Opportunities and challenges faced by the mining
services sector.
•
Innovation within industry.
• NRW’s understanding of the communities in which
it operates.
Senior leaders within the Company have reviewed and
validated the outcomes of the assessment, and their
input has helped define the material issues outlined in
this Report.
NRW is undertaking a materiality assessment in FY22,
including external stakeholder engagement, to better
understand the context and inform sustainability
actions within the Company. The outcomes will guide
the Company in refining and prioritising the identified
material issues and will inform the future long-term
action plan to achieve our sustainability objective.
22
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
SUSTAINABILITY AT NRW CONTINUED
STAKEHOLDER ENGAGEMENT
We acknowledge that NRW’s business operations directly impact a wide range of internal and external stakeholders.
Therefore, what is important to our stakeholders is important to the Company.
This is how NRW engaged with its stakeholders during FY21.
Our Shareholders
NRW is focused on creating sustainable long-term value creation for its shareholders. Shareholders consist of institutional and
retail investors.
Areas of Interest
Method of Engagement
•
•
•
•
•
Financial performance
Business strategy
Business ethics
Governance and risk management
Climate related disclosure.
Clients
•
•
•
•
Annual General Meeting
Investor calls and presentations
Distribution of price-sensitive information to shareholders via the ASX
Responses to regular investor, analyst and media enquiries.
NRW is committed to supporting its clients through successful project delivery. Clients range from large listed organisations,
government departments to medium sized private entities.
Areas of Interest
Method of Engagement
•
•
•
•
•
Health and safety practices
Project delivery, including product/service
quality and pricing
Environmental, social and governance practices
Innovation
Supply chain management.
People
•
•
•
Early Contractor Involvement opportunities
Tendering opportunities and submissions which include provision of
company safety, environmental and social performance
Business networking events to develop long-lasting relationships.
NRW values the health, safety and wellbeing of its workforce above all else, and strives to provide a workplace culture that
recognises and values diversity and inclusiveness. NRW’s workforce is large and diverse, engaging approximately 6,500 people
Australia wide.
Areas of Interest
•
•
•
•
Health and safety practices
Diversity and inclusiveness
Training and development
Remuneration practices.
Communities
Method of Engagement
•
•
•
Active communication through the NRW intranet, newsletters and
toolbox meetings (for site and workshop employees)
Important alerts via email and notice-board signage
Training and development opportunities where these opportunities
provide meaningful personal and professional development.
NRW’s long-term success depends on the wellbeing and development of the communities in which it operates. NRW maintains head
offices in Perth and Brisbane, as well as other offices in local and regional areas across Australia.
Areas of Interest
Method of Engagement
•
•
•
Level of community engagement
The direct economic impacts of the business
on the community
Environmental impact of business operations.
•
•
•
•
Targeted recruitment of a local workforce where the required skills
and expertise are available
Prioritisation of spend with local vendors, particularly in remote and
regional areas of operation
Adoption of Aboriginal and Torres Strait Islander participation plans
In-kind and financial contributions to support community initiatives
and objectives.
Other Stakeholder Groups
This includes suppliers, contracting partners, government agencies and other regulatory bodies.
Areas of Interest
Method of Engagement
•
•
•
•
Supplier terms and conditions
Governance and risk management
Climate related disclosure
Regulatory compliance.
•
•
•
Supplier pre-qualification process
Joint venture board and committee meetings
Responding to requests from government agencies and
other regulatory bodies.
23
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report SUSTAINABILITY AT NRW CONTINUED
MATERIAL ISSUES
The issues identified below represent the material issues assessed as relevant to the NRW Group. These material
issues have been mapped to the SDGs to highlight how NRW’s activities can support sustainable development.
Material Issue
Definition
Environment
SDGs
Page
Climate Change
Managing NRW’s contribution to climate change by reducing greenhouse
gas emissions, where possible, from energy use.
Resource Use,
Rehabilitation and
Management
Managing the sustainable use of resources, including water. Ensuring
land rehabilitation and revegetation at facilities both pre and post closure.
Reducing the amount of waste generated through avoidance, reuse
and recycling.
Innovation
Keeping pace with technological innovation to ensure NRW remains
market competitive and meets client expectations.
Social
Safety, Health
and Wellbeing
Maintaining a high safety standard and culture through the organisation,
and being accountable for safety performance.
Employee
Engagement
Attracting and retaining a skilled workforce by establishing NRW as an
employer of choice within the industries and sectors in which it operates,
and providing its workforce access to training and education to facilitate
personal and professional development opportunities.
Workplace Culture
and Diversity
Embedding a strong corporate culture that reflects high ethical standards
and personal integrity, and creating a diverse and inclusive workplace
where employees have a positive attitude and support the Company’s
values.
Community
Engagement
Governance
Corporate
Governance
Supporting the communities in which NRW operates through
partnerships, procurement, sponsorships, donations, training and
employment opportunities.
Adopting good corporate governance practices with respect to
environmental and social matters. Remaining in compliance with its
obligations to industry, government and other regulators.
Business Ethics
and Transparency
Expecting all employees to act lawfully, ethically and responsibly at all
times. This includes engaging with suppliers and contractors to mitigate
the risks of, for example, modern slavery within supply chains.
Risk Management
Implementing risk management practices across the organisation to
identify, assess and manage risks, including non-financial risks, that can
materially impact the businesses sustainability outcomes.
27
29
30
32
35
36
37
42
43
43
The Report that follows provides further information about each material issue and how NRW, as a business,
manages them in line with its sustainability objective. Throughout the Report we also highlight where we consider
our activities align with, and support, the SDGs.
NRW acknowledges that financial and operational performance are material issues for the business and all its
stakeholders. NRW assesses and manages financial and operational risk within the businesses broader risk
management processes, commentary on which is included within the Annual Report. This sustainability report
concentrates on material issues which are more relevant to ESG matters.
24
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report Our Isaac Plains
environmental team has
rehabilitated 585 hectares
of land, which is 39% of all
land that has been disturbed.
ENVIRONMENT
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report ENVIRONMENT
that
NRW understands
responsible
environmental management in the resources
and infrastructure sector plays a significant
role in ensuring its sustainability, and
underpins the Company’s ability to maintain a
social license to operate.
Across all of our operations, the Company actively seeks
to minimise the environmental impacts associated with its
activities by developing and implementing environmental
systems, strategies and plans. Every project undertaken
involves careful environmental planning from project inception
to the operational stages to identify environmental obligations
and
to set management procedures. Environmental
professionals are engaged, where required, to monitor
compliance with these obligations and encourage positive
behaviour and high-quality outcomes.
Environmental management systems, maintained to the
international specification for ISO 14001, provide the
foundation for consistent delivery of the highest level of
environmental management across projects. External
agencies strictly monitor compliance to the specification on
a regular basis.
The Company operates in accordance with all relevant
environmental legislation and licenses and did not receive
any environmental fines or sanctions during FY21.
Seed Hole Analysis Performed at
Action Drill & Blast
During FY21, Action Drill & Blast performed a seed hole
analysis program at one of its sites. Seed Hole Analysis is
a practice used to measure the properties of particular rock
types in relation to blasting.
There are two key benefits to utilising seed hole analysis:
•
•
A more accurate understanding of how blast induced
ground vibrations react in certain ground types - this
allows Action Drill & Blast to more accurately calculate
blast vibrations and refine blasting practices adjacent to
sacred heritage sites to preserve their structural integrity.
This improved accuracy also allows it to utilise larger
diameter blast holes which reduces the amount of drilling
required, thereby reducing carbon emissions.
Enhancing Action Drill & Blasts understanding of the
velocity of pressure waves - this allows it to modify how
a blast is fired to maximise its effectiveness. This results
in a lower consumption of explosives for a more effective
blast result, reducing overall carbon emissions.
26
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report ENVIRONMENT CONTINUED
CLIMATE CHANGE
NRW operates within the capital and carbon-intensive
mining services sector. The Company understands
that the industry in which it operates, and therefore its
work, has an impact on the climate. We are committed
to reducing our impact on the climate and providing
to our climate
transparent reporting
related disclosures.
in regards
Scope 1 (ktCO2-e)(3)
Scope 2 (ktCO2-e)(3)
Scope 1 and Scope 2 (ktCO2-e)
Emissions Intensity(4) (Scope 1 +
Scope 2) (ktCO2-e/$m AUD)
FY21(1)
FY20(2)
5.89
4.38
10.27
5.02
4.92
9.94
0.46
0.50
MANAGING CARBON EMISSIONS
Energy Consumption (GJ)
117,506
106,474
Energy Intensity(4) (GJ/$m AUD)
52.9
53.1
Revenue ($m)
2,222
2,004
(1) Includes BGC Contracting and DIAB Engineering for the full year
and Primero from February 2021.
(2) Includes BGC Contracting and DIAB Engineering from
December 2019.
(3) Scope 1 and Scope 2 GHG Emissions calculated in accordance
with the NGER Act.
(4) Intensity calculated with reference to total group revenue ($ m’s).
NRW notes an increase in Scope 1 GHG Emissions
in FY21 due to the expanded size of our business
operations post-acquisition of Primero Group Ltd
and with a full year of BGC Contracting Pty Ltd, and
increase in work performed (revenue) during the year.
NRW is investing in ways to reduce its GHG emissions
through the following initiatives:
• Utilising renewable energy where this is a viable
option, including solar.
•
•
fleet
staggered
strategy
A
across small drill rigs to newer models with
significant fuel saving technology, and reduced
fuel consumption.
replacement
Energy audits of high energy consumption offices
to identify alternative operating guidelines for
office air-conditioning to reduce peak demand
and improve operational efficiency.
RCR Provides In-Pit Crushing
and Conveying Solutions
RCR’s award-winning In-Pit Crushing & Conveying
units are designed to meet the needs of modern
mining practices through a combination of feeding,
screening, crushing and processing
functions
mounted on a single self-propelled mobile platform.
This innovative product design, when compared to
traditional mining/haul solutions,
reduce carbon
emissions by 75%.
The National Greenhouse and Energy Reporting
Act 2007 (NGER Act) introduced a single national
framework for the reporting of Greenhouse Gas (GHG)
emissions, energy use and energy consumption. NRW
has determined GHG Emissions using the concept of
‘operational control’ as defined by the NGER Act. This
concept is consistent with how NRW internally tracks,
manages and reports on GHG Emissions.
As a contractor to the civil, resource and infrastructure
sectors, NRW’s mine site GHG emissions typically
increase or decrease proportionally in line with the
contracted workload. Generally, NRW’s operations are
under the direction and control of the mine operator,
including a requirement to work in accordance with
the site policies, health and safety practices and
environmental management plan.
For the purposes of the NGER assessment, NRW
is not required to include Scope 1 and Scope 2
GHG emissions on sites where it does not have
‘operational control’ of ‘facilities’. However, it is
required to report this data to the entity that does
have operational control for inclusion in their NGER
assessment, data which NRW provides to clients as
required, or in monthly environmental reports.
NRW has areas of its business with Scope 1 and
Scope 2 GHG Emissions, including a heat treatment
facility, workshops, office buildings, transport-related
emissions (pre-entry to site), and company vehicles.
To date, NRW’s total Scope 1 and Scope 2 GHG
Emissions and energy consumption are under
the facility and corporate reporting threshold as
determined by the NGER Act, and the Company has
therefore not been required to formally report this
data. However, in accordance with our Sustainability
Reporting Plan, NRW has detailed its GHG Emissions
within this Report.
NRW’s Scope 1 and Scope 2 GHG emissions and
energy consumption are shown below.
27
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
ENVIRONMENT CONTINUED
TASKFORCE FOR CLIMATE RELATED
FINANCIAL DISCLOSURE
The Financial Stability Board established
the
industry-led TCFD to develop a voluntary, consistent,
climate-related financial disclosure framework for use
by companies in providing information to investors,
lenders, insurers and other stakeholders.
Governance
Strategy
Risk
Management
Metrics &
Targets
on
four widely adoptable
The TCFD developed
recommendations
financial
climate-related
disclosures that are applicable to organisations across
all sectors. These disclosures allow for more effective
risk assessments, better-informed capital allocation
decisions and better strategic planning with regards
to climate. The TCFD structured its recommendations
around four thematic areas that represent core
elements of how organisations operate: Governance,
Strategy, Risk Management and Metrics and Targets.
Disclose the organisations governance around climate-
related risks and opportunities.
Disclose the actual and potential impacts of climate-related
risks and opportunities on the organisations businesses,
strategy, and financial planning.
Disclose the processes used by the organisation to identify,
assess and manage climate-related risks.
Disclose the metrics and targets used to assess and
management relevant climate-related risks and opportunities.
looking
NRW are
to align our climate-related
disclosures with the TCFD Recommendations. By
aligning to the TCFD Reporting Framework, NRW will
have a clear structure for assessing climate-related
risks and opportunities, and integrating these risks
and opportunities into its strategic decision making.
NRW’s internal expertise in the area of climate
related risks is developing. NRW is utilising the
TCFD Recommendations as the key driver not
only to improve climate-related disclosure, but for
integrating climate risk management into company
practices. Consequently NRW is planning to adopt a
phased approach to the implementation of the TCFD
Recommendations, as shown below. The initial focus
will be on Governance and Risk Management, with
further alignment to Strategy and Metrics and Targets
to follow.
Identity & Plan
Update & Integrate
Adopt & Implement
Define governance and management of
climate related risks.
Update corporate policies and integrate
climate-related processes.
Set metrics and targets for climate related
disclosure and perform scenario analysis.
Activities
Activities
Activities
•
•
•
•
Define how climate related risks and
opportunities will be governed and
managed within the business.
Set corporate strategy and risk appetite
with respect to climate related risks.
Identify industry best practice and
relevant benchmarks, and perform a
gap analysis.
Perform a high level climate-related
risk assessment.
•
•
•
Update corporate policies to reflect
governance and management
frameworks.
Integrate climate-related risk
assessments into enterprise wide risk
management frameworks.
Assess climate-related risks and
opportunities against business policies
and procedures.
•
•
•
Set metrics and targets for the
business to guide and measure
climate-related performance.
Perform scenario analysis to test
business resilience.
Integrate results into strategic
business planning.
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NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
ENVIRONMENT CONTINUED
RESOURCE USE, REHABILITATION
AND MANAGEMENT
WATER MANAGEMENT AND USE
Mining and infrastructure projects can require large
amounts of water, and often have the ability to impact
water quality within the broader environment. NRW
is committed to sustainable water management and
use by working with clients to prevent contamination
and wastage on each of its project sites. This is in
recognition of the potential for the offsite impacts to
water quality, as well as water being a limited resource.
Site specific water management plans are developed
by NRW’s clients and are often contained within the
broader project environmental management plan.
These environmental management plans describe the
specific requirements, procedures and measures that
will be implemented for each project in the appropriate
management of resources, including water. NRW
adheres to all project environmental management
plans whilst operating on site.
Water Quality Measures
Implemented at Golding Sites
NRW’s civil based operations in Queensland often
require detailed water management plans due to
the proximity of the projects to urban areas where
water supply and quality are vital for the community.
Projects may also require detailed project erosion and
sediment control plans and storm water management
plans to manage site runoff in a responsible manner.
Some of the actions under the plans to preserve water
supply and quality include:
LAND REHABILITATION
NRW provides progressive land rehabilitation options
to its clients, including site closure remediation. The
Company’s capability in this regard includes bulk
earthworks, topsoil management, soil amendments,
revegetation, monitoring and maintenance.
As a business, NRW is committed to pursuing mine
site rehabilitation contracts to further its work in this
area. Examples to date where NRW have successfully
helped with land rehabilitation efforts include Isaac
Plains and Argyle Diamond Mine.
Rehabilitation at Isaac Plains
Golding Contractors are engaged to perform all
mine works at the Isaac Plains mine site. This
includes contracted works to design and carry out
re-contouring and topsoil stripping/replacement as
part of the project’s commitment to land rehabilitation.
To date, Golding have rehabilitated 585 hectares of
land at Isaac Plains, which is 39% of all land disturbed
on the site. This includes laydown areas, unused
access roads and ramps.
The seed mix used as part of the land rehabilitation
was an endemic based species blend which had been
identified as growing well on existing rehabilitated
areas. Soil testing was also undertaken to help
Golding Contractors gain a better understanding of
which species and soil amendments may be best
suited to the land. Eventually, this rehabilitated land
will be returned to local landholders for cattle grazing.
•
Staging of works to minimise exposed surfaces
and diversion of water around or through sites;
WASTE MANAGEMENT
• Use of polymer soil binders and geo-fabric cover
to stabilise the site;
•
Installation of high-efficiency sediment basins
fitted with automatic flocculant dosing units in line
with SEPP 2017 and IECA Guidelines;
• Water monitoring to verify release water quality;
• Reuse of sediment basin water for construction
(compaction, dust suppression, revegetation);
and
•
Soil sampling and analysis
amelioration and water treatment.
to guide soil
Waste generated by NRW consists primarily of
general waste, sewerage and wastewater, and
tyres, batteries, scrap metal, oils and lubricants from
company workshops. All waste is segregated into
its respective waste streams on site, or at locations
with appropriate recycling facilities. Waste types are
generally tracked and recorded at each project site for
review and, where possible, reduction.
All NRW operations are required to have waste
management plans in place which address waste
elimination, minimisation, storage,
transportation
and disposal. These waste management plans
are contained within
the project environmental
management plan which is specific to each of the sites
where NRW operates. These plans are in place to
control the risks of waste impacts on the environment
and local communities.
29
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report ENVIRONMENT CONTINUED
INNOVATION
In recent years the mining industry has seen a significant
push towards decarbonisation through, for example, the
adoption of renewable energy.
NRW has various
to support
decarbonisation through the delivery of innovative lower
carbon technological solutions, including:
initiatives underway
• RCR, in partnership with Kiruna Wagon, have the
technology to offer clients a more energy-efficient
solution for unloading heavy, fine-grained bulk goods.
The Kiruna Wagon Helix Dumper requires less energy
than its traditional car dumper alternative due to the
innovative unloading station and discharge process.
•
Primero is working with various clients in the hydrogen
energy sector to reduce reliance on hydrocarbon based
energy sources.
• NRW is partnering with a local company to trial
hydrogen injection technology on mining haul trucks.
The technology gives NRW the potential to utilise
a product that supports decarbonisation, produces
cleaner burning engines, increases fuel efficiency
and ultimately, reduces the carbon footprint of mining
activities. NRW intends to trial the technology on a
CAT785 dump truck over the next twelve months.
Primero Awarded the EPC Contract for
a Hydrogen and Graphite Production
Demonstration Plant
the engineering, procurement
Primero was awarded
and construction (EPC) contract for a hydrogen and
graphite production demonstration plant. This production
demonstration plant is a global and Australian first in
adopting a new hydrogen and graphite technology. Primero
has been tasked with the design, construction, procurement
and commissioning of the fully integrated large scale
demonstration plant. Upon completion, the demonstration
plant will deliver the following:
• Capacity - 100 tonne per annum fuel cell grade hydrogen
capable of being used as a low emission transport fuel,
for power generation, or clean industrial applications.
•
•
Feedstock - Biogas - methane produced
the
wastewater treatment process is utilised to produce
hydrogen. This methane would otherwise be vented as
waste into the atmosphere.
in
Emissions - significant CO2 emission reduction to the
Woodman Point Water Treatment Plant and demonstrate
the potential long-term use for waste biogas produced
from water treatment operations.
The innovative process is a low cost, low emission process
to create two high value, high demand products - hydrogen
and synthetic graphite. Hydrogen and graphite are both key
products in a global decarbonising economy.
30
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report Across the Group we are
focussed on broadening the
messages we deliver and the
initiatives supporting
mental health such as
the Blue Tree Project.
SOCIAL
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report SOCIAL
NRW’s long-term success depends on the wellbeing and development of its people
and the communities in which it operates.
SAFETY, HEALTH AND WELLBEING
NRW is committed to supporting the safety, health
and wellbeing of its workforce, and takes pride in
maintaining an excellent safety record. The Company
is firmly focused on completing daily tasks in a safe
manner, looking out for its people and ultimately
delivering projects that we are proud of for our clients.
NRW Civil & Mining’s ‘A Safe Day,
Every Day’ Initiative
NRW Civil and Mining (NRWCM) implemented its
‘A Safe Day, Every Day.’ program to improve safety
performance. Comprised of safety initiatives and
procedures, the ‘A Safe Day, Every Day.’ program
promotes information sharing and communication
between projects to improve safety performance
across NRWCM by learning through peers. The
program also contains a recognition component where
employees who go above and beyond for safety, or
create a positive safety initiative, are recognised.
The initiative includes safety performance tracking
at each of NRWCM’s projects. This includes setting
targets to measure safety performance using key
performance
indicators (KPI’s). The KPI’s used
to measure the success of the ‘A Safe Day, Every
Day’ program include compliance activities such
as
training
along with lead indicators such as behavioural
based observations, hazards cards and health and
wellbeing programs.
communications and
inspections,
The program is an integral part of NRWCM’s projects
and has been embraced by the workforce and
by clients.
SAFETY
NRW strives to identify and control hazards to provide
a safe workplace for all its people by maintaining a
set of safety systems, controls and processes. The
Occupational Health and Safety (OHS) management
systems NRW has in place are accredited to both
the
AS/NZS 4801:2001,
Government funded Federal Safety Commission.
These certifications are regularly audited by external
third parties to ensure that NRW continues to deliver
a high level of safety for its workforce.
ISO 45001:2018, and
Safety, health and wellbeing at NRW are
intrinsically linked to the way we work. NRW
is committed to achieving the highest possible
performance in occupational health and
safety.
OHS management systems are applied across all
NRW projects to record and monitor OHS events.
It is expected that all OHS incidents occurring on
NRW sites are entered into these database systems
quickly and accurately. These OHS systems allow
a range of issues, incidents and observations to be
quickly and accurately communicated across the
business. This system also provides transparency
of OHS performance across the Group by extracting
and sharing data with the executive leadership team.
This information is then used, for example, to develop
risk mitigation strategies to improve work systems to
create a safer workplace.
Across the business, rigid policies and procedures
support NRW’s OHS management systems, including:
•
•
•
•
•
•
Project risk assessments - held prior to work
commencing on site that looks to identify all
project specific risks and mitigation strategies.
Safety management plans - each project site
has OHS issues and risks which are unique to
that project. The project management team
will develop a safety management plan which
addresses how safety issues and risks will be
managed and controlled for that particular project.
Site safety meetings - including site inductions,
pre-starts,
site briefings, and
toolbox meetings.
return
to
Site safe activities - including notice boards,
alerts, job hazards analysis, hazard cards and
safety walkthroughs/inspections.
Safety training - including incident investigation
and OHS
training,
management systems training.
supervisory
training
Leading and lagging indicators - continuous
monitoring of both leading and lagging indicators
with regards to safety performance.
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NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
NRW’s Response to COVID-19
The COVID-19 pandemic required NRW to make
changes to how it works, and to put systems in place
to protect its people and the communities in which it
operates. NRW did this through the implementation of
the following measures:
•
•
•
Providing financial support to those employees
directly impacted.
accommodation
Securing
interstate
employees to temporarily relocate them to the
State in which they work.
for
Allowing its workforce to adopt flexible work
arrangements, including working from home,
where these arrangements were suitable.
• Distribution of preventative measures, including
face masks and sanitiser.
•
Increased cleaning and sanitation of offices
and sites.
Information relating to COVID-19 and the management
of its risk was regularly distributed across the
business. This information was based on Federal and
State mandates with regards to the management of
the COVID-19 pandemic.
The impact of the COVID-19 pandemic continues to
be a challenge for the business. NRW are closely
monitoring the situation, regularly implementing risk
management measures and continuing to safeguard
business continuity.
SOCIAL CONTINUED
• NRW’s commitment to eliminating incidents and
injuries on project sites remains unchanged
and is supported by the constant review and
improvement of
its safety programs. Some
continuous improvement measures implemented
during FY21 include:
•
revised approach
to standard operating
A
procedures for tasks with a history of injuries and
for frequently performed tasks; and
• Refreshing safety
leadership
training
to be
tailored specifically to projects and systems.
NRW’s safety statistics as at 30 June are
shown below.
TRIFR
LTIFR
FY21
FY20
6.25
0.61
5.21
0.37
Average Total Workforce
6,454
5,648
Fatalities
-
2
NRW operated in accordance with all relevant Federal
and State based safety legislation and regulations
during FY21, and did not receive any safety related
fines or prosecutions during the year.
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SOCIAL CONTINUED
HEALTH AND WELLBEING
NRW understands the benefits to its workforce of being fit
and healthy. In addition to several campaigns relating to
physical health, NRW has an increasing focus on mental
health and wellbeing. Some of the key initiatives include:
•
•
•
•
for
Providing a safe and supportive workplace
all employees by undertaking a review of formal
policies,
including NRW’s Diversity Policy and
Whistleblowing Policy.
Promotion of the Employee Assistance Program (EAP).
The EAP is an independent service, available 24 hours
a day seven days a week, to all employees and their
families. The EAP allows employees access to health
and wellbeing resources, as well as professional
and confidential coaching and support.
Promoting mental health awareness across the business
including R U OK? Day, the Blue Tree Initiative, and
Soldier On.
A recent focus on increasing mental health training
both on site and within offices. This includes tailored
training in mental health first aid which is expected to be
rolled out in FY22.
NRW Supports the Blue Tree
Initiative to Raise Awareness
for Mental Health
During the year, NRW actively contributed to mental health
awareness through support of the Blue Tree Initiative. The
Blue Tree Initiative aims to help spark difficult conversations
and encourage people to speak up when battling mental
health concerns.
Mental health and wellbeing are a focus of the mining sector
given the nature of the work roster and often remote areas in
which operations are located. To raise awareness and show
support for good mental health, NRW endorsed a ‘Blue Tree’
project initiative at Mt Webber.
If you ever get the pleasure of driving to Mt Webber, you’ll
pass a blue tree on the access road. One of NRW’s talented
boilermakers, Mr David Power, was the creator of this
masterpiece. Mr Power designed the tree so that each of the
birds have a different meaning: Anxiety; Depression; Death.
The flowers at the bottom signify hope. And you if you look
very carefully you’ll see a shamrock, the luck of the Irish,
and a reminder of where Mr Power calls home.
Revenue
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NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
SOCIAL CONTINUED
EMPLOYEE ENGAGEMENT
WORKFORCE
NRW employs a high-performing, experienced and
appropriately qualified workforce who provide a
wealth of knowledge at all levels of the business. The
Company is particularly pleased to have a workforce
that consistently returns to NRW as more projects are
secured and positions become available. Previous
NRW employees are considered as first preference
wherever possible, and employees are transferred
from completed projects to new projects to ensure
retention of a skilled workforce.
Meeting productivity objectives is critical to successful
project delivery. Certain parts of NRW’s operations,
particularly projects in the WA Pilbara region, have
been impacted by competition for a limited resource
pool driven by both high construction activity and
strong commodity demand. Covid-related border
restrictions have also impacted employee turnover
and movement between states. NRW envisages that
these issues will continue to have an impact on the
business in FY22 - creating an even greater focus
on supplementing the existing skilled workforce with
more trainees and apprentices.
NRW’s workforce levels increased through the year
to a peak of 7,800 reducing to 6,376 at 30 June 2021
(FY20: 7,053). NRW’s average total workforce, and
the relevant work types, are shown below.
Direct Employees
Contractors
FY21
4,299
2,155
FY20
3,596
2,052
Average Total Workforce
6,454
5,648
Average Total Workforce according to work type is depicted below, along with Total Direct Employees by location.
33.40%
Work Type
66.60%
4.85% 0.67%
10.64%
Location(1)
55.02%
28.82%
Direct Employees
Contractors
WA
QLD
SA
Other Australia States
International
(1) Breakdown by location relates to Total Direct Employees only (excluding Contractors).
NRW has the following policies and programs in place
to support its workforce:
• Code of Conduct - Obligations to Stakeholders
• Company Paid Parental Leave Policy
•
Employee Assistance Program
Investing in its people not only ensures the Company
has the right skills, but also provides its workforce
with the opportunity for personal and professional
development and aids employee retention. NRW has
increased its focus on apprenticeships, graduates,
traineeships and leadership programs during the year,
and plans to continue this focus into FY22.
• Diversity Policy.
89 Apprentices
NRW complied with all relevant Federal and State
based workplace laws and regulations throughout
FY21, including the Fair Work Act 2009.
In FY22 NRW is planning to undertake an employee
survey to better understand the key drivers of
retention, employee wellbeing, and
attraction,
diversity across the business. With this information,
NRW will be able to design targeted strategies and
actions to support its existing workforce, and attract
and retain new talent to the business.
TRAINING AND DEVELOPMENT
To support NRW’s continued growth, the Company
remains committed to training and developing its people.
35
89 apprentices participated in Apprenticeship Programs,
specialising in automotive (heavy mobile equipment), fabrication
(heavy welding), and mechanical (mechanical fitter) works.
65 Graduates
65 graduates and undergraduates were onboarded through a
structured graduate training program, including engineering (civil
and mining), surveying, and commercial contracts students.
112 Formal Training Programs
112 staff participated in formal training programs.
173 Leadership and Development Programs
173 staff were selected and completed internal leadership and
development programs.
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability ReportNRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
SOCIAL CONTINUED
In addition, NRW has a structured performance,
development and review process
its
commitment to the training and development of
its people.
further
to
NRW Training Facility
NRW has established a training facility to give
opportunities for unskilled people to join the mining
industry. This facility will allow NRW the ability to
address the skills shortage experienced during FY20
and FY21 by providing training and development
opportunities
local unskilled and skilled
workforce. NRW expects more than 100 trainees will
graduate from the facility each year.
the
to
It is anticipated that NRW will source trainees from
a variety of difference places, including internal
candidates (upskilling), from sectors affected by
COVID-19, as well as those with transferable skills
and knowledge such as the transport industry.
NRW is also committed to running courses targeted
at Aboriginal and Torres Strait Islander Peoples and
female trainees to increase participation from these
sections of the workforce.
WORKPLACE CULTURE AND DIVERSITY
Diversity contributes to business success. NRW
strives
that
encourages respect and fairness for all participants,
at all times, through its Diversity Policy.
to provide a working environment
NRW’s objective is to increase participation across
a range of demographics to ensure the Company
recruits and retains a skilled workforce and endorse a
safe and productive working environment. In addition
to supporting greater female and Aboriginal and
Torres Strait Islander participation, NRW believes
it also has an opportunity to further support people
with disabilities to enter or re-enter the workforce
with its progress in autonomous/remote-controlled
equipment operation. Work in furthering support of
this demographic is continuing.
Diversity initiatives progressed within the Group
during FY21 include:
•
•
Support of the Western Australian Jobs and Skills
initiative promoting Aboriginal and Torres Strait
Islander employment;
Engaging locally owned and operated Aboriginal
and Torres Strait Islander businesses to supply
goods or services to projects;
•
•
Adopting a Company Paid Parental Leave Policy
for primary carers; and
Engaging the Paraplegic Benefit Fund Australia
to raise safety awareness and learn more about
their programs and how people with disabilities
can be supported and engaged in the workforce.
Action Drill & Blast Engage with
the Paraplegic Benefit Fund (PBF)
Action Drill & Blast have engaged the PBF to present
to site and leadership teams about the long term
physical and psychological impacts of workplace
injuries, and highlight the need to focus on workplace
safety. These presentations form part of Action Drill &
Blasts project leadership development program.
Revenue
In addition to hearing from people impacted by
workplace injury, Action Drill & Blast is committed
to understanding its ability to engage with people
with disabilities to work within the business. By
understanding how people with disabilities can be
supported and engaged in the workforce, Action
Drill & Blast can assess its ability to further these
initiatives internally.
NRW continues to focus on progressing its diversity
and inclusion agenda, particularly with regard to
female participation, engagement of Aboriginal and
Torres Strait Islander Peoples, and employment for
people with disabilities. The Company will continue
to invest in training initiatives to promote greater
participation from these segments of the community
and enable increased participation through upskilling
including, for example, through targeted courses run
within the NRW’s training facility.
NRW’s workforce diversity breakdown as at 30 June
is as follows:
FY21
FY20
Average Total Direct Employees
4,299
3,596
Female Participation %
13.21%
10.56%
Aboriginal and Torres Strait
Islander Participation %
2.79%
1.71%
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NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report SOCIAL CONTINUED
COMMUNITY ENGAGEMENT
COMMUNITY SUPPORT
ABORIGINAL AND TORRES STRAIT
ISLANDER PARTICIPATION
NRW respects the importance of the Aboriginal
and Torres Strait Islander cultures and the rights of
Aboriginal and Torres Strait Islander Peoples. Since
inception, the Company has successfully employed
and supported Aboriginal and Torres Strait Islander
Peoples within
training
its operations
programs, employment, subcontracting and partnering
opportunities. NRW is focused on continuing to develop
these relationships by supporting local community
initiatives and harnessing community expertise
and leadership.
through
NRW Supports Jukawalyi
Resources Pty Ltd
Jukawalyi Resources Pty Ltd is owned and operated
by the Njamal traditional owner group who occupy the
inland area of the Degrey River in the Pilbara Region of
Western Australia.
NRW has partnered with Jukawalyi Resources Pty
Ltd for their logistical expertise in ensuring the safe
transport of freight to the Mt Webber, and other,
NRW projects.
In addition to offering a professional and reliable
transport service, Jukawalyi Resources Pty Ltd ensures
that opportunities for Aboriginal and Torres Strait
Islander Peoples are maximised through employment
and empowering successful business operations.
NRW has a proud history of partnering with
Aboriginal and Torres Strait Islander businesses
across Australia. Current and past joint venture
partners include Ngarluma and Yindjibarndi People
(represented through the Ngarluma and Yindjibarndi
Foundation Limited), Eastern Guruma People
(represented by Eastern Guruma Pty Ltd), Njamal
and ICRG Joint Venture and Eastern Guruma and
Wirlu-Murra Enterprises.
As NRW continues to diversify its business and
increase its national footprint, the Company embraces
the ongoing opportunities to learn from, and work with,
Aboriginal and Torres Strait Islander communities.
During the year, the Company increased its cultural
awareness training for employees to maximise our
ability to achieve this.
By supporting local communities NRW ensures
ongoing community trust in its operations. As a
business, NRW acts beyond minimum requirements to
establish long-term relationships among stakeholders,
including the local communities in which it operates.
NRW contributes to the social and economic prosperity
of these communities through employment, education,
business development and in-kind donations and
community contributions.
NRW often seeks to identify community sponsorship
opportunities and partnerships that align the interests
of the local communities with NRW’s values. The
types of support provided by NRW to further this
objective includes:
• Major partnership with GIVIT, a not-for-profit
organisation supporting community giving to local
and regional communities Australia-wide.
• Donations to major charities including Ronald
McDonald House Charities, The Smith Family
Charity and Foodbank Australia.
•
•
•
•
•
•
Sponsorship of community and local sporting
programs that aim to meet specific local community
needs including the Gunnedah and Districts
Australian Rules Football Club, Boggabri & District
Rugby League Football Club and Baralaba Golf
Course Junior Open.
In-kind and financial support for community
organisations in locations where NRW operates,
such as the donation of scrap metal and timber to
local Men’s Shed organisations.
Support for employee efforts in community
fundraising activities including the Cancer 200
and MSWA Ocean Ride, the Push-Up Challenge
supporting mental health, and World’s Greatest
Shave initiatives.
Engagement with local schools and universities
to support relevant education programs such
as an annual donation to the Greenbushes
Primary School Digital Technologies Program,
a contribution towards playground upgrades at
Pannawonica Primary School, and facilitation
of mine site excursions for the GFG Foundation
Student Program.
Active sourcing of goods and services from
local communities to support local businesses
and employment.
Participation in industry associations and events to
promote the opportunities available in the mining
industry and across the NRW Group.
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Golding Contractors Partners with GIVIT to
Support Local and Regional Communities
Golding Contractors maintains a national
partnership with GIVIT. This partnership
enables GIVIT to continue supporting regional
communities and charities Australia wide in a
variety of ways.
GIVIT is a national not-for-profit organisation
connecting generosity with people in genuine
need, in a private and safe way. GIVIT
fulfils an unmet need within the Australian
community by connecting an online network
of givers.
With Golding’s support, GIVIT is able to
donate more than 10,000 items every week.
GIVIT’s unique virtual warehouse eliminates
the need for organisations to store, sort and
dispose of unwanted items, saving valuable
time, resources and significantly reducing the
volume of materials that would otherwise go
into landfill.
Additionally, the Golding partnership enabled
GIVIT to launch its Disaster Recovery Service
across Australia, supporting Governments,
recovery agencies and local charities by
managing all offers of goods and services
during times of disaster and emergency.
This free of charge service ensures that 100%
of donated relief funds go directly to local
communities, such that they are provided
what they need, when they need it most.
NRW raffled a Harley Davidson,
with all proceeds raised going to
Ronald McDonald House Charities.
A
W
s
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a
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R
i
n
a
M
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SOCIAL CONTINUED
NRW’s Commitment to Sustainability on the Bunbury Outer Ring Road Project
In October 2020 the South West Gateway Alliance, of which NRW is a 40% partner, was awarded
the alliance contract for the Bunbury Outer Ring Road Project. The construction of the Bunbury
Outer Ring Road delivers vital infrastructure to provide a safer and more efficient road system for
the South-West of Western Australia.
Large infrastructure projects, such as the Bunbury Outer Ring Road, can significantly influence
the economic, environmental and social outcomes for local communities. Integrated into the
project design and construction were a number of sustainability commitments which the alliance
partners are managing, including:
•
•
•
Spending $300 million with local businesses in Western Australia’s South West region.
Spending $20 million with Aboriginal and Torres Strait Islander businesses.
Employing 60+ Aboriginal and Torres Strait Islander full-time equivalent employees for the
life of the project.
• Minimising waste generation and maximising reuse and recycling by using products such as
recycled concrete, crumbed rubber, and crushed glass to develop road surfacing, pavements
and road fill.
•
Sourcing materials from local businesses to reduce transport distances and emissions.
• Reducing clearing of native vegetation and fauna habitat, and seeking to improve
ecological outcomes.
•
Salvaging valuable vegetation from areas to be cleared such as orchids, grass trees and
zamia palms.
• Constructing fauna underpasses and overpasses in line with environmental regulators
requirements that cannot be used by vehicles and offer shelter to possums from predators
and allow for dense vegetation planting.
• Working closely with Aboriginal and Torres Strait Islander heritage monitors to identify
significant areas or items and promote heritage values.
• Maximising network efficiency for all road users and encouraging active transport.
•
Incorporating gateway entrance statements to promote tourism in Bunbury, and other
local areas.
• Giving community members the opportunity to engage throughout the development of Urban
Design and Landscaping choices on the project.
NRW’s Projects Undergoing Infrastructure Sustainability Rating of ESG Impacts
The Infrastructure Sustainability (IS) Rating Scheme
is Australia and New Zealand’s only comprehensive
rating system for evaluating economic, social and
environmental performance of infrastructure projects
the planning, design, construction and
across
operational phase. The Infrastructure Sustainability
Council administers the IS Rating Scheme in an effort
to advance infrastructure sustainability and provide
a common language for evaluating sustainability
on projects. NRW currently has
three projects
under-going an IS rating with its Joint Venture and
Alliance partners, through Main Roads WA projects
Bunbury Outer Ring Road and Hodges Drive to
Hepburn Avenue and the Public Transport Authority
project Forrestfield-Airport Link.
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s
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Integrated into the BORR project
design and construction were
a number of sustainability
commitments which are being
managed by the alliance partners.
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NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
NRW believes that adopting and
applying high standards of corporate
governance enhances the Company’s
sustainable long-term performance
and creates long-term shareholder value.
GOVERNANCE
NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report GOVERNANCE
Good corporate governance and risk management practices form the basis on which
NRW delivers its corporate strategy and sustainability objective.
CORPORATE GOVERNANCE
The Board is NRW’s highest governing authority and
instils a culture of accountability, integrity, transparency,
and compliance. A Board Charter has been adopted
which details the functions and responsibilities of the
Company’s Board and management. This Charter
is regularly reviewed and updated to reflect changes
and developments regarding the operation of the
Board, and is published on the NRW website (www.
nrw.com.au/about-us/corporate-governance). NRW’s
Board comprises the following members. The Board
members credentials are published each year in the
Annual Report.
These frameworks exist through a suite of policies
and procedures, developed over time to ensure
compliance with the various legislative and regulatory
requirements applicable to the NRW business. These
policies include, amongst others:
• Code of Conduct for Directors and Key Officers
• Code of Conduct – Obligations to Stakeholders
•
Shareholder Communication Policy.
Corporate Governance policies are published on the
NRW website (www.nrw.com.au/about-us/corporate-
governance).
Michael Arnett
Chairman & Independent
Non-Executive Director
BOARD COMPOSITION
Jules Pemberton
Chief Executive Officer & Managing Director
Jeff Dowling
Independent Non-Executive Director
Peter Johnston
Independent Non-Executive Director
Fiona Murdoch
Independent Non-Executive Director
The Board is ultimately responsible for the governance,
risk and compliance frameworks of the Company.
The Board comprises five directors with diverse skills,
experience, and backgrounds to support NRW in
effective and robust corporate governance practices.
The majority of directors are
independent and
non-executive, including the Chair. The Director’s skills,
experience and diversity, and Board size, are reviewed
the Nomination and Remuneration
regularly by
Committee to ensure it remains fit for the Group’s
needs and in line with best practice requirements. The
Board makeup according to gender, independence and
tenure is depicted below.
20%
20%
40%
20%
Gender
Independence
Tenure
80%
80%
40%
Male
Female
Independent
Non-Independent
0-4 years
5-8 years
10+ years
(1) NRW has one member of the Board who is not independent, being the Managing Director and Chief Executive Officer Jules Pemberton.
The Board has set a board gender diversity target of 33.33% female representation, to be achieved by
31 December 2023.
COMMITTEES OF THE BOARD
The Board has the following sub-committees established to assist it in carrying out its primary role of guiding NRW’s
strategic direction:
Board/Committee Member
Jules Pemberton
Michael Arnett
Jeff Dowling
Peter Johnston
Fiona Murdoch
Board
Audit and Risk Committee
Nomination and
Remuneration Committee
Sustainability Committee
Chair
Chair
Chair
Chair
The Board Committees’ Charters are available on the NRW website (www.nrw.com.au/about-us/corporate-
governance).
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NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report GOVERNANCE CONTINUED
ASX CORPORATE GOVERNANCE COUNCILS
CORPORATE GOVERNANCE PRINCIPLES
AND RECOMMENDATIONS
NRW’s commitment to good corporate governance is
evidenced through its adoption of the ASX Corporate
Governance Council’s Corporate Governance Principles
and Recommendations 4th Edition. Adoption of these
principles and recommendations, and other information
with regards to the Company’s Corporate Governance
Practices, are published in a Corporate Governance
Statement. This Statement, along with the Appendix 4G,
is released to the market annually and available on the
ASX website (www.asx.com.au, ASX Code: NWH).
BUSINESS ETHICS AND TRANSPARENCY
NRW expects all directors, officers and employees
act lawfully, ethically and responsibly. The Company’s
expectations with regards to employee conduct are
contained within Company policies and behavioural
standards documents. These policies and documents
include, amongst others:
• Continuous Disclosure Policy
•
Securities Trading Policy
• Whistleblowing Policy
• Modern Slavery Statement
• Code of Conduct documents.
•
NRW’s Progress on Modern
Slavery Reporting
As a leading provider of contract services within the
Australian resources and construction industries, NRW
acknowledges its inherent responsibility to act ethically
and do its part to respond to social and human rights
issues, including modern slavery. The NRW Group
seeks to integrate respect for human rights into the way
it operates to continuously improve the business and the
way it delivers work.
NRW is committed to improving its understanding of
modern slavery risks in operations and supply chains.
The Company is also committed to raising awareness of
the issue throughout operations and supply chains and
thereby support efforts to combat it by tracing, monitoring
and addressing the risk of modern slavery practices.
NRW has a dedicated Modern Slavery Working Group
to assist the Company in meeting it’s modern slavery
reporting obligations.
NRW submitted its first joint Modern Slavery Statement
(Statement) to the Australian Border Force (ABF) in
March 2020. NRW’s Statement, approved by the Board,
is available on the NRW website (www.nrw.com.au/
about-us/corporate-governance) and on
the ABF’s
Modern Slavery Register (https://modernslaveryregister.
gov.au/).
As at the date of this Report, for FY21, NRW confirms
the following:
• No reported incidents of bribery or corruption.
• No reported breaches to the Company’s Securities
Trading Policy.
• NRW made 37 price-sensitive disclosures to the
market during FY21, and had no reported breaches
to its Continuous Disclosure Policy and no queries
raised from the ASX with regards to meeting its
continuous disclosure obligations.
RISK MANAGEMENT
In conducting its business, NRW takes informed and
appropriate commercial and business risks (including
non-financial risks) to achieve its objectives and
deliver shareholder value. Through an enterprise-wide
approach to risk management, NRW seeks to achieve:
• Compliance with laws and regulations;
•
Assurance
significant risks;
regarding
the management of
• Decisions that pay full regard to risk considerations;
and
•
Efficiency and effectiveness in operations, projects
and strategy.
Risk management is overseen by the Board’s Audit
and Risk Committee. Consistent with its Charter, the
Audit and Risk Committee is responsible for assisting
the Board in fulfilling its responsibilities relating to the
Company’s risk management and compliance practices.
The Charter for the Audit and Risk Committees is
available on the NRW website (www.nrw.com.au/
about-us/corporate-governance).
NRW’s Risk Management strategy is set out in
the Risk Management Corporate Policy. The Risk
Management Corporate Policy is reviewed annually
and outlines the Board’s mandate and commitment to
enterprise-wide risk management. Supporting the Risk
Management Corporate Policy is a documented Risk
Management Procedure, which has been developed
in line with the requirements of the International
Standard for Risk Management ISO 31000:2009, and
the Risk Management Manual. This policy, procedure
and manual, combined, assists the NRW Group with
the
identification, understanding, monitoring and
management of risks and opportunities which can arise
from operations, projects and strategies adopted by
the Company. Supporting this is a dedicated risk and
commercial function that embeds these frameworks
within the business.
Material risks that could adversely affect NRW are
set out in the FY21 Annual Financial Statements.
Consideration of all business
including
environmental, social and governance risks, were
included in this assessment of the most significant risks
to the NRW Group.
risks,
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NRW HOLDINGS ANNUAL REPORT 2021 | Sustainability Report
NRW HOLDINGS ANNUAL REPORT 2021 | CFO Performance at a Glance FINANCIAL
STATEMENTS
NRW HOLDINGS ANNUAL REPORT 2020 | CFO Financial Report
FINANCIAL STATEMENTS
CONTENTS PAGE
04
35
38
39
40
41
42
43
44
91
92
97
98
Directors’ Report
Corporate Governance & Risk Management
Auditor’s Independence Declaration
Directors’ Declaration
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
44
46
52
63
71
75
79
General Notes
Business Performance
Balance Sheet
Capital Structure
Financing
Taxation
Other Notes
Shareholder Information
Independent Auditor’s Report
Appendix 4E
Appendix A
DIRECTORS’
DIRECTORS’
REPORT
REPORT
Directors’ Report
The Directors present their report together with the financial statements 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 2021.
DIRECTORS
The following persons held office as Directors of NRW Holdings Limited during the financial year and up to the
date of this report:
Michael Arnett
Chairman and Non-Executive Director
Mr Arnett was appointed as a Non-Executive Director on 27 July 2007 and appointed Chairman on
9 March 2016.
Mr Arnett is a former consultant to, partner of and member of the Board of Directors and national head of the
Natural Resources Business Unit of the law firm Norton Rose Fulbright (formally Deacons). He 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 three years immediately before the end
of the financial year:
• Non-Executive Chairman, Genmin Limited (Appointed 10 March 2021)
Julian Pemberton
Chief Executive Officer and Managing Director
Mr Pemberton was appointed as a Director on 1 July 2006 and appointed as Chief Executive Officer and
Managing Director on 7 July 2010.
Mr Pemberton has more than 25 years’ experience in both the resources and infrastructure sectors. He joined
NRW in 1996, and prior to his appointment as Chief Executive Officer and Managing Director he held a number
of senior management and executive positions at NRW including Chief Operating Officer.
Jeff Dowling
Non-Executive Director
Mr Dowling was appointed as a Non-Executive Director on 21 August 2013.
Mr Dowling has 36 years’ experience in professional services with Ernst & Young. He has held numerous
leadership roles within Ernst & Young which focused on the mining, oil and gas and other industries.
Mr Dowling has a Bachelor of Commerce from the University of Western Australia and is a fellow of the Institute
of Chartered Accountants, the Australian Institute of Company Directors (AICD) and the Financial Services
Institute of Australasia.
Mr Dowling has held the following directorships of listed companies in the three years immediately before the
end of the financial year:
• Non-Executive Director, S2 Resources Limited (Appointed 29 May 2015)
• Non-Executive Director, Fleetwood Corporation Limited (Appointed 1 July 2017)
• Non-Executive Director, Battery Minerals Limited (Appointed 25 January 2018)
Peter Johnston
Non-Executive Director
Mr Johnston was appointed as a Non-Executive Director on 1 July 2016.
Mr Johnston has served with a number of national and international companies.
Mr Johnston graduated from the University of Western Australia with a Bachelor of Arts majoring in psychology
and industrial relations. He is also a Fellow of the AICD and AusIMM.
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REPORT CONTINUED
REPORT CONTINUED
Mr Johnston has held the following directorships of listed companies in the three years immediately before the
end of the financial year:
• Non-Executive Director, Tronox Ltd (NYSE) (Appointed 1 August 2012)
• Chairman, Jervois Mining Ltd (Appointed 19 June 2018)
Fiona Murdoch
Non-Executive Director
Ms Murdoch was appointed as a Non-Executive Director on 24 February 2020.
Ms Murdoch has over 30 years resource and infrastructure experience in Australia and overseas, holding senior
operational roles with AMCI Investments, MIM Holdings and Xstrata Queensland.
She has extensive domestic and international experience with major projects in Western Australia, Northern
Territory and Queensland, and in South America, Dominican Republic, Papua New Guinea and the Philippines.
Fiona is a Graduate of the AICD Company Director program and holds an MBA as well as an Honours degree
in Law.
Ms Murdoch has held the following directorships of listed companies in the three years immediately before the
end of the financial year:
• Non-Executive Director, Metro Mining Limited (Appointed 11 May 2019)
• Non-Executive Director, KGL Resources Limited (Appointed 12 June 2018)
In addition, Fiona serves on the Joint Venture Committee for the West Pilbara Iron Ore Project and is also Chair
of The Pyjama Foundation, a not-for-profit organisation providing learning-based activities for children in foster
care.
Kim Hyman
Company Secretary
Mr Hyman was appointed to the position of Company Secretary on 10 July 2007. Mr Hyman has responsibility
for company secretarial services and co-ordination of general legal services, as well as the insurance 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 were:
Director
Michael Arnett
Jeff Dowling
Peter Johnston
Fiona Murdoch
Julian Pemberton
Directors’
Meetings Held
Directors’
Meetings Attended
15
15
15
15
15
15
15
15
15
15
NOMINATION & REMUNERATION COMMITTEE
The members of the Nomination & Remuneration Committee (N&RC) are Peter Johnston (Chairman), Michael
Arnett, Jeff Dowling and Fiona Murdoch. During the 2021 financial year, one meeting of the Committee was
held with all members in attendance. Certain responsibilities of the Committee were also considered at board
meetings as required.
AUDIT & RISK COMMITTEE
The members of the Audit & Risk Committee are Jeff Dowling (Chairman), Michael Arnett and Fiona Murdoch.
During the 2021 financial year, two meetings of the Audit & Risk Committee were held with all members in
attendance. In addition, some audit and risk matters were considered in the course of regular board meetings.
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DIRECTORS’
REPORT CONTINUED
REPORT CONTINUED
SUSTAINABLITY COMMITTEE
The members of the sustainability committee are Fiona Murdoch (Chair), Michael Arnett and Peter Johnston.
During the 2021 financial year, two meetings of the Sustainability Committee were held with all members in
attendance. The Committee provides advice, recommendations and assistance to the Board of Directors of the
Company with respect to sustainability, primarily relating to environmental, social and corporate governance
matters.
OPERATING AND FINANCIAL REVIEW
PRINCIPAL ACTIVITIES
NRW is a leading provider of diversified contract services to the resources and infrastructure sectors.
With extensive operations in all Australian States, except Tasmania, and an office in Canada, NRW’s
geographical diversification is complemented by its ability to deliver a wide range of services.
NRW’s Civil and Mining businesses provide civil construction, including bulk earthworks, road and rail
construction and concrete installation, together with contract mining and drill and blast services.
The Minerals, Energy & Technologies (MET) operating unit offers tailored mine to market solutions, specialist
maintenance (shutdown services and onsite maintenance), non-process infrastructure, innovative materials
handling solutions, and complete turnkey design, construction and operation of minerals processing and energy
projects.
NRW also offers a comprehensive original equipment manufacturer (OEM) capability, providing refurbishment
and rebuild services for earthmoving equipment and machinery.
NRW has a workforce of around 7,000 people supporting more than one hundred projects around Australia for
clients across the resources, infrastructure, industrial engineering, maintenance and urban subdivision sectors.
Further detail on the operations of each business division and the Group is provided below.
SIGNIFICANT CHANGES IN BUSINESS ACTIVITIES
The Company acquired Primero Group Limited (Primero) on 17 February 2021, the results of which have been
incorporated into this report from that date.
GROUP RESULTS
OVERVIEW OF OPERATIONS
The financial year ended 30 June 2021 provided a number of challenges and opportunities.
The COVID-19 pandemic had impacts across operations, particularly on West Australian Pilbara based projects.
Measures taken as a result of the pandemic, including border closures imposed at a State and Federal level,
effectively limited the available labour pool. Our challenge was to deliver projects in an environment where
competition for people increased significantly, driven by both high construction activity and strong commodity
demand. This led to higher staff turnover (at a level never previously experienced), increased labour costs and
lower productivity as a consequence of specific labour skills shortages, resulting in extended project durations.
Despite these challenges, a number of businesses, particularly Golding Mining and the RCR Mining
Technologies (RCRMT) and DIAB Engineering businesses, continued to deliver strong performances. This was
partly attributable to having a more stable workforce through either long-term contracts or because their
activities were predominantly based at workshops with a mostly long-term and stable workforce.
The Primero acquisition, successfully completed in the year, has strengthened the Minerals, Energy &
Technologies operating unit. The addition of Primero significantly enhances NRW’s capability to pursue new
business initiatives across a large pipeline of opportunities and leverage the combined expertise of RCRMT and
DIAB Engineering. The enlarged MET business enhances diversification of NRW’s strategic platform to offer
customers continuity of services across the whole lifecycle of resource projects from early planning, design,
development and construction to operations and maintenance.
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REPORT CONTINUED
REPORT CONTINUED
The major challenge throughout the last financial year and the main challenge facing the business remains the
ongoing management of our people to ensure their day-to-day safety. COVID-19 safe measures have added to
the complexity of delivering projects across almost all of our activities.
NRW has not accessed any COVID-19 related State or Federal support packages for any part of its operations.
FINANCIAL PERFORMANCE
A summary of the key financial performance metrics for the current financial year (FY21) is provided below with
comments on significant movements compared to the financial year ended 30 June 2020 (FY20).
Revenue including associates at $2,301 million increased by 11.5% compared to $2,062 million in FY20. The
increase in revenue was a result of continued growth following the FY20 acquisition of BGC Contracting
(subsequently renamed to NRW Contracting ‘NRWC’) and five months contribution from the newly acquired
Primero Group (refer note 7.5 of the financial statements).
FY21
FY20
Revenue
Earnings
Revenue
Earnings
$M
2,300.6
(79.1)
Total Revenue(1) / EBITDA(2)
Revenue from Associates
Depreciation
Operating EBIT(3)
Amortisation of Acquisition Intangibles
Non-recurring transactions(4)
EBIT
Net interest
Profit before income tax
Tax
Statutory Revenue / Net earnings
2,221.5
NPATN(5)
$M
266.7
(146.1)
120.6
(20.2)
(11.2)
89.2
(13.3)
75.9
(21.6)
54.3
75.1
$M
2,062.4
(58.1)
2,004.3
$M
250.0
(109.1)
140.9
(13.0)
(14.9)
113.0
(12.8)
100.2
(26.5)
73.7
89.7
(1) Revenue including our share of revenue earned by our associates and joint ventures.
(2) EBITDA is earnings before interest, tax, depreciation, amortisation of acquisition intangibles and non-recurring transactions.
(3) Operating EBIT / EBITA, is earnings before interest, tax, and amortisation of acquisition intangibles and non-recurring transactions.
(4) Non-recurring transactions include Altura impairment, Gascoyne writeback and Primero transaction costs (FY21) and costs associated
with the acquisition of BGC Contracting (FY20).
(5) NPATN – earnings before amortisation of acquisition intangibles and non-recurring transactions at 30% tax rate.
Earnings including earnings before interest, tax, depreciation, and amortisation of acquisition intangibles
(EBITDA) increased to $266.7 million compared to $250.0 million in FY20. The increase of 6.7% was mostly
due to the recognition of Mining activities acquired from BGC Contracting in FY20 where only seven months of
revenue was included in the results.
Earnings (Operating EBIT) of $120.6 million were lower than last year due to resource challenges particularly
on Pilbara based projects which experienced high staff turnover, labour rate increases and skill shortages.
transactions include recoveries
their successful
Non-recurring
recapitalisation, costs associated with Altura’s administration and costs related to the acquisition of Primero
(see non-recurring transactions section for details).
from Gascoyne Resources
following
Net Earnings excluding non-cash amortisation costs for acquisition intangibles at standard tax rates decreased
to $75.1 million compared to $89.7 million in FY20 due to lower operating earnings as commented above.
Net Assets increased in the year by $72.7 million to $545.1 million reflecting earnings in the year net of dividend
payments and equity related to the acquisition of Primero ($50.5 million). The acquisition of Primero was funded
through new equity and a $50.0 million debt facility (refer to note 7.5 of the financial statements for details).
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REPORT CONTINUED
REPORT CONTINUED
OPERATING SEGMENTS
NRW has structured its business reporting into three segments, Civil, Mining, and Minerals, Energy &
Technologies. In previous reports, the results of Drill and Blast (Action Drill & Blast) have been separately
reported. The relative size of the Action Drill & Blast business in comparison to the other three segments and
the increased dependency on work from the Civil and Mining segments were the main factors which were
considered in making this change. Comparative segment information for the prior periods has been provided
within Appendix A of the financial statements.
Commentary on the performance of each segment is provided below:
Civil
The Civil business specialises in the delivery of private and public civil infrastructure projects, mine
development, bulk earthworks and commercial and residential subdivisions. Civil construction projects include
roads, bridges, tailings storage facilities, rail formation, ports, renewable energy projects, water infrastructure
and concrete installations.
Results summary ($M)
Revenue
EBITDA
Depreciation
EBIT
FY21
FY20
726.5
28.6
(5.7)
22.9
3.9%
3.1%
820.1
34.4
(7.9)
26.5
4.2%
3.2%
Revenue in the Civil business peaked in calendar year 2020 due to contracts secured for sustaining iron ore
projects including work won by BGC Contracting (acquired in December 2019). Most of the major projects
completed early in the second half of FY21 resulting in both lower full year and lower second half revenues
compared to last year. The status of the major projects is provided below.
Resources
• Eliwana stage 1 rail – complete
• Eliwana stage 2 rail – complete
• Koodaideri Plant site – complete
• Koodaideri Rail South – ongoing – scheduled for completion Q1 FY22
•
Iron Bridge – ongoing
• West Angeles – complete
• Olympic Dam Airport – complete
• Blackwater Ramp 47 – complete
• Rio Solar farm – ongoing - new contract awarded in FY21
Infrastructure
Forrestfield-Airport Link – ongoing – scheduled for completion Q3 FY22
•
• Bunbury Outer Ring Road – ongoing – new contract awarded in FY21
• Hodges drive to Hepburn avenue southbound upgrade – ongoing – new contract awarded in FY21
• Woolgoolga to Ballina – complete
•
23 Urban development projects at various stages of completion
Earnings were lower than last year and lower than expectations due to the COVID-19 pandemic. Most of the
business’s revenue was generated on West Australian Pilbara based projects. Measures taken as a result of
the pandemic including border closures imposed at State and Federal level effectively limited the available
labour pool. Our challenge was to deliver projects in an environment where competition for people increased
significantly, driven by both high construction activity and strong commodity demand. This led to higher staff
turnover (at a level never previously experienced), increased labour costs and lower productivity as a
consequence of specific labour skills shortages, which in turn led to extended project durations.
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DIRECTORS’
REPORT CONTINUED
REPORT CONTINUED
OPERATING SEGMENTS CONTINUED
Project cost increases related to the COVID-19 pandemic, other changes requested by clients, and events
leading to a right to recover costs are the subject of claims and variations. Some of these claims and variations
have been agreed in the year, whilst others are currently under negotiation. The total value of claims and
variations agreed in FY21 is $75 million. Note 2.2 discloses the overall value of claims relied upon although the
value of claims currently submitted is clearly much higher than the $68 million disclosed in these accounts. The
total value of claims and variations is clearly commercially sensitive given ongoing negotiations.
Second half earnings were impacted by lower project margins carried forward from the first half (as above),
unseasonal weather events and lower revenues. Business overheads were at similar levels in the second half
(compared to the first half) to support the current high bidding activity.
Mining
The Mining business specialises in mine management, contract mining, load and haul, dragline operations, drill
and blast, coal handling prep plants, maintenance services and the fabrication of water and service vehicles.
Results summary ($M)
Revenue
EBITDA
Depreciation
EBIT
FY21
FY20
1,177.2
212.8
(128.9)
83.9
18.1%
7.1%
1,059.7
201.8
(91.5)
110.3
19.0%
10.4%
The Mining business reported further growth in revenue mostly due to the addition of BGC Contracting’s mining
activities which contributed for a full 12 months compared to seven months in FY20. Major project activity
included:
Isaac Plains – coal – ongoing
• Curragh mine – coal – ongoing – client added additional scope in FY21
•
• Baralaba – coal – ongoing – contract extended in FY21
• Boggabri – coal – ongoing
• Kogan Creek – coal – ongoing
• Phosphate Hill – fertilisers - ongoing
• Simec – iron ore – ongoing
• Mount Webber – iron ore – ongoing
• Koodaideri Pre strip – iron ore – scheduled for completion Q1 FY22
• Roper Bar – iron ore – ongoing – new contract awarded in FY21
• Dalgaranga – gold – ongoing
• Karara Mining – iron ore – new award in FY21 scheduled to commence March 22
Earnings were impacted by both COVID-19 measures (as noted above for the Civil business) and unseasonal
weather events (Western Australia and Queensland) which affected second half revenue and earnings more
than we have experienced in previous years. Despite the weather impacts, margins improved in the second half
as measures to mitigate resource availability in the Pilbara improved productivity but staffing remains a
challenge.
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REPORT CONTINUED
REPORT CONTINUED
OPERATING SEGMENTS CONTINUED
Minerals, Energy & Technologies
The Minerals, Energy & Technologies business includes RCR Mining Technologies (RCRMT) which is a leading
original equipment manufacturer (OEM) that offers innovative materials handling design capability, DIAB
Engineering which has proven capabilities in the metals and mining industry and provides specialist
maintenance (shutdown services and onsite maintenance), industrial engineering and fabrication services and
Primero acquired in February 2021. Primero provides a full engineering, procurement and construction (EPC)
and operational (O&M) capability in the mineral processing, energy and non-process infrastructure market
segments.
Results summary ($M)
Revenue
EBITDA
Depreciation
EBIT
FY21
FY20
426.9
42.1
(8.5)
33.6
9.9%
7.9%
187.2
22.4
(6.5)
15.9
12.0%
8.5%
Revenue increased due to the addition of Primero activities from February 2021 and growth in both RCRMT
and DIAB Engineering. The businesses were generally less impacted by COVID-19 measures as most of the
workforce is located in company facilities in Bunbury, Geraldton, and Perth. The fixed nature of these facilities
has been a contributor to a relatively stable workforce and consequently these businesses experienced lower
staff turnover than the projects based businesses. Nonetheless, both Primero and DIAB Engineering were
impacted in a similar manner to the Civil business on their site based activities. DIAB Engineering provides
shutdown services and given the relatively short-term nature of the work, resourcing these projects proved
challenging. Primero delivers EPC projects which competed for resources within the same constraints as the
Civil business.
Major project activity included:
• Cloudbreak Hopper 9 – completed
• Queens Primary crusher – ongoing – awarded in FY21
• Queens Overland Conveyor – ongoing – awarded in FY21
• Cloudbreek Hopper 10 Primary Crushing – ongoing – awarded in FY21
• Koodaideri mine NPI facilities – ongoing
• Eliwana NPI facilities – ongoing
• Coburn Mineral sands EPC – ongoing – awarded in FY21
• Koolan Island Upgrade to crushing circuit and two year crushing contract – awarded in FY21
Earnings improved in line with higher revenues. Whilst margin in real terms increased, margins as a percentage
of revenue reduced as expected due to the combination of the Primero business into segment results from
February 2021.
NON-RECURRING TRANSACTIONS
Gascoyne recapitalisation
Altura Mining
Costs related to business
combinations
Total
FY21
$M
12.4
(19.1)
(4.5)
(11.2)
FY20
$M
-
-
(14.9)
(14.9)
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NRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Report
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DIRECTORS’
REPORT CONTINUED
REPORT CONTINUED
NON-RECURRING TRANSACTIONS CONTINUED
Gascoyne Recapitalisation
The financial results include the operating activities for Gascoyne Resources’ (ASX: GCY) Dalgaranga project
in the mining segment result on page nine. The recapitalisation of GCY was finalised in October 2020. As part
of the recapitalisation structure, NRW negotiated recovery of pre-administration amounts owed in the form of a
$7 million cash payment, $12 million in GCY shares (at the relisting price) and a structure to recover the balance
of amounts owed through successful gold production. The first two stages of that agreement have been
recognised in these accounts (net of costs). In addition, shares held prior to administration and previously
expensed in FY19 have been recognised at the prevailing share price at the reporting date (refer to note 3.4 of
the financial statements for further details).
Altura Mining
NRW was awarded the mining contract for Altura Mining (Altura) in early 2017. Altura note holders appointed
receivers in October 2020. Given the nature and structure of the deed of company arrangement, NRW is unlikely
to recover any amounts owed ($19.1 million) which includes outstanding debts at the time of the receivership,
work completed but not billed and demobilisation of equipment and staff from the Altura site.
Costs Related to Business Acquisitions
Costs associated with the acquisition of Primero are included in FY21. Costs incurred on the acquisition of BGC
Contracting are shown in the prior comparative period.
BALANCE SHEET, OPERATING CASH FLOW AND CAPITAL EXPENDITURE
A summary of the balance sheet as at the end of the current financial year and the previous financial year is
provided below.
The Group announced to the ASX on 12 July 2021 that Boggabri Coal Operations Pty Ltd (BCO), part of the
Idemitsu Group, agreed to acquire the majority of the major mining equipment of Golding Contractors Pty Ltd
(a wholly owned subsidiary of NRW) that is engaged under the Maintenance Services and Hire Agreement at
the Boggabri Coal Mine (Boggabri transaction). A pro forma balance sheet is provided to show the effect of the
Boggabri transaction (refer to note 7.7 of financial statements for details).
Pro forma(1)
30 Jun 21
Actual
30 Jun 21
Actual
30 Jun 20
Cash
Financial debt
Lease debt
Net Debt
Property, plant and equipment
Non-current assets held for sale
Lease assets (right of use)
Working capital
Investments in associates and listed equities
Tax Liabilities
Net Tangible Assets
Intangibles and Goodwill
Net Assets
Gearing
Gearing Excl. AASB 16
$M
163.9
(196.7)
(55.9)
(88.7)
321.4
-
48.2
56.6
15.8
(15.3)
338.0
207.1
545.1
16.3%
6.0%
$M
146.5
(261.9)
(55.9)
(171.3)
321.4
82.6
48.2
56.6
15.8
(15.3)
338.0
207.1
545.1
31.4%
21.2%
$M
170.2
(244.8)
(65.1)
(139.7)
451.8
-
58.3
(18.7)
2.6
(0.9)
353.4
119.0
472.4
29.6%
15.8%
(1) Pro forma balance sheet includes the impact of the sale of the Boggabri mobile equipment. For more information refer note 7.7 of
financial statements.
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BALANCE SHEET, OPERATING CASH FLOW AND CAPITAL EXPENDITURE
CONTINUED
Cash balances ended the year at $146.5 million. Net debt increased to $171.3 million which included $50.0
million to fund the acquisition of Primero. The Boggabri transaction comprised the sale of $82.6 million of
equipment (shown as held for sale in the year end balance sheet) which reduced pro forma debt by $65.2 million
and increased cash by $17.4 million. Debt repayments in the year included asset financing debt payments of
$60.7 million in line with agreements and $21.4 million of corporate debt which mostly relates to business
acquisition finance. New asset financing in the year totalled $33.2 million with a further $50.0 million debt draw
down to fund the Primero acquisition. Post the Boggabri transaction, gearing reduced to 16.3% representing a
significant reduction compared to last year (29.6%).
Capital expenditure totalled $77.9 million compared to $82.6 million in the previous financial year. Expenditure
was mostly focused on maintenance and sustaining capex which totalled circa $70.0 million. Capex also
included the first PGX1000 crushing plant designed by Primero and jointly constructed by RCR Mining
Technologies and Primero and now deployed at Mount Gibson’s Shine project. This is the first Build Own
Operate project entered into by NRW with more opportunities identified including the recently announced
Miralga crushing contract for Atlas Iron Pty Ltd.
Intangibles and goodwill increased due to the Primero acquisition partly offset by amortisation charges incurred
in the year.
The income tax expense recognised in net earnings has reduced the deferred tax asset carrying value as
expected. Tax balances are now carried as a net tax liability but include within that balance further tax losses.
No income tax was paid in the year and is unlikely to be paid at the current earnings run rate until calendar
year 2022.
Returns to shareholders included both a final dividend for FY20 of 4 cents paid in October 2020 and an interim
dividend for the current financial year of 4 cents paid in April 2021. Overall dividend payments in the year totalled
$35.0 million.
NRW continued to maintain strong relationships with its banking partners Bankwest and Bank of China.
Developments in the year included agreement of a new $50.0 million facility with Bankwest to support the
acquisition of Primero Group. All banking covenants were in compliance at all times during the year and at
30 June 2021.
PEOPLE AND SAFETY / OCCUPATIONAL HEALTH AND SAFETY
The emergence of COVID-19 has raised significant challenges across the business. Our actions continue to be
guided by health advice driven by Federal and State governments in our operating regions. These actions
include social distancing, working from home, changes to how we manage the logistics for getting our workforce
to sites and the implementation of new operating procedures. We are incredibly proud of the way over 7,000
members of our workforce over six states and territories have responded to this unprecedented challenge.
NRW is committed to achieving the highest possible performance in occupational health, safety and
environmental management. Our vision is for every member of our workforce to arrive home safely after each
shift or swing. We focus on continuous improvement and completing our daily tasks in a safe and efficient
manner, looking out for our workmates and ultimately delivering projects to our clients.
Our Occupational Health and Safety Management Systems are accredited to AS4801:2001/ISO18001:2007,
the applicable Australian and International Standards and are subject to continuous auditing by external
third parties.
NRW’s Total Recordable Injury Frequency Rate (TRIFR) at June 2021 was 6.25 compared to 5.61 at
June 2020.
NRW has been able to successfully deliver all projects with no lost time due to industrial disputes, or any form
of work ban or limitation and recognise that our success is the result of our dedicated workforce. We employ a
high performing, skilled, experienced and appropriately qualified team of people across all our companies, who
provide a wealth of knowledge at all levels across our business.
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PEOPLE AND SAFETY / OCCUPATIONAL HEALTH AND SAFETY CONTINUED
The development of our workforce has continued despite the challenges posed by the pandemic. A snapshot
of some of those development opportunities include:
• Employment of 89 apprentices
• Development and training of 65 graduates and undergraduates
•
•
• Over 10,000 training events undertaken via eLearning solutions.
112 members of staff working through formal training programmes
Leadership and development courses completed by 173 members of staff
We ensure that we provide competitive remuneration and benefits to the people who choose to work with us
and we are particularly pleased that we have a workforce that consistently returns to NRW as more projects are
secured and positions become available. We consider previous NRW employees as first preference wherever
possible, and transfer people from completed projects to new projects to ensure we retain our skilled workforce
and have the most knowledgeable people on the job.
NRW’s workforce levels increased through the year to a peak of 7,800 (pre Primero) reducing to 6,376 at
June 21.
NRW continues to embrace diversity and inclusiveness across all of its activities. NRW relies on and encourages
its employees to act in accordance with the Company values and contribute a diverse range of skills and
experience. Our objective is to increase participation across a range of demographics, to ensure we recruit and
retain a skilled workforce and endorse a safe and productive working environment which encourages equality,
diversity and inclusion. Some of the initiatives progressed in the year include:
• Support of the Western Australian Jobs and Skills initiative promoting Indigenous employment;
• A number of site based initiatives to address mental health awareness through the Blue Tree Project;
• Engagement of Jukawayli Resources owned and operated by local Indigenous people in the Pilbara
region to handle the safe transport of freight;
• Accelerated development programmes to support high potential female employees; and
• Adoption of a Primary carers leave scheme.
SUSTAINABILITY
The Group has determined that it will adopt the reporting framework under the Taskforce for Climate-Related
Financial Disclosure (TCFD) which established recommendations for voluntary and effective climate related
disclosures. A phased implementation plan to align NRW’s reporting of climate change risks and climate-related
financial disclosures with the TCFD framework is currently being developed.
In addition, NRW is preparing its first Sustainability Report that will be published as part of the 2021 Annual
Report. This report will highlight the alignment of NRW’s corporate values and operations with the United
Nations Sustainable Development Goals (SDGs) and be guided by relevant Global Reporting Initiative (GRI)
standards to report on the Group’s sustainability performance.
NRW has also focused on a number of initiatives which will make or are making a positive impact on our
environmental management and carbon footprint. These initiatives include:
• Development of and installation of in pit crushing and conveying solutions which reduce carbon
emissions by at least 75% compared to traditional transport solutions;
• NRW is partnering with a local Perth based company to trial a Hydrogen injection technology which is
expected to significantly improve vehicle fuel efficiency;
• Action Drill & Blast is using seed hole analysis to optimise blast vibration prediction for improved blast
design, ultimately reducing mining energy requirements, and to improve the protection of sensitive
infrastructure and culturally sensitive areas; and
• Primero is continuing to work with various clients on projects in the Hydrogen energy sector with new
technologies and markets developing to reduce reliance on hydrocarbons based energy sources.
NRW group companies hold various licenses and are subject to various environmental regulations. No known
environmental breaches have occurred in relation to the Group’s operations.
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RISK MANAGEMENT
NRW has risk management policies and procedures in place to provide early identification of business risks and
to monitor the mitigation of those risks across all aspects of the business. These include risk assessment in the
tender and contracting phase, management of specifically identified project risks, treasury management and
credit risks, responses to the pandemic and climate related risks. We also identify and track appropriate
mitigation actions for identified risks.
OUTLOOK
The markets in which NRW operates continue to provide opportunities for growth. Commentary on the key
sectors in which NRW work is provided below.
Resources
•
Iron ore – NRW has been engaged on all the current sustaining tonnes programmes for the major iron
ore producers and whilst capex is expected to peak in 2021, construction spend to deliver replacement
tonnes is forecast at circa $8 billion a year for a sustained period(1). The Company will continue to
engage with the major iron ore clients to provide a range of solutions including bulk earthworks,
crushing and conveying, non-process infrastructure and support and maintenance;
• Battery minerals – represents a growing opportunity for the Group through established delivery
capabilities in lithium EPC projects undertaken by Primero and contract mining and civil construction
opportunities in copper, lithium and nickel;
• Coal – most of NRW’s coal client’s output is metallurgical coal aligned to steel production or thermal
coal supplied to meet Australian domestic baseload power. Whilst not a high priority target for new
capital investments, extensions of existing contracts with established clients is a major focus for the
business; and
• Resources – other opportunities include projects in gold and fertilisers and a broad range of installed
minerals processing plants with a growing operations and maintenance requirement.
Infrastructure
•
The acquisition of BGC Contracting and Golding capability has already increased the Group’s
presence in an expanding infrastructure sector. The Bunbury Outer Ring Road is the largest public
infrastructure contract on which NRW has participated. Post pandemic underlying project activity is
expected to grow faster with initiatives like the $110 billion, 10 year infrastructure pipeline committed
by the Federal government in response to COVID-19.
Renewables
• New initiatives being pursued by our clients desire for increased energy efficiency and lower carbon
emissions are providing a range of opportunities matched to our capabilities.
o The Perth based civil business is building a solar farm for Rio Tinto’s captive power network
in the Pilbara where construction challenges are well understood by that part of the business.
o RCR Mining Technologies (RCRMT) is delivering relocatable crushing and conveying hubs
which dramatically reduce the carbon footprint compared to traditional mining and processing
operations.
o Primero is continuing to work with various clients on projects in the Hydrogen energy sector
with new technologies and markets developing to reduce reliance on hydrocarbons based
energy sources
The Group’s order book at 30 June 21 was $3.4 billion compared to $3.0 billion at the same time last year (pre
Bunbury Outer Ring Road award, announced July 2020). The near term tender pipeline capable of being
awarded in the next 12 months has strengthened to $14.5 billion compared to $12.9 billion this time last year.
NRW is forecasting revenue of between $2.4 billion to $2.5 billion in FY22 of which around $2.0 billion is either
in the order book, the subject of a letter of intent or notice of award, or is expected as repeatable business in
Urban, RCRMT and DIAB Engineering with the balance of the work to be won and delivered in the year.
(1) Source Euroz and NRW internal assessments.
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SIGNIFICANT EVENTS AFTER PERIOD END
The Group announced to the ASX on 12 July 2021 that Boggabri Coal Operations Pty Ltd (BCO), part of the
Idemitsu Group, agreed to acquire the majority of the major mining equipment of Golding Contractors Pty Ltd
(a wholly owned subsidiary of NRW) that is engaged under the Maintenance Services and Hire Agreement at
the Boggabri Coal Mine.
The transaction was completed on 28 July 2021.
As part of the agreement, Golding will continue to perform maintenance services on site across the assets
acquired by BCO, and another 50 pieces of major mining equipment, engaging a workforce of over 150
personnel on site (refer to note 7.7 of financial statements for details).
DIVIDEND
The Directors have declared a final dividend for the financial year of five cents per share. This brings the total
dividend for the year to nine cents per share following the interim dividend paid in April 2021. The dividend will
be fully franked and paid on 13 October 2021.
DIRECTORS’ INTERESTS
The relevant interest of each Director in the ordinary share capital are set out in note 5.7 of the Remuneration
Report. There were no transactions between entities within the Group and Director related entities as disclosed
in note 7.3 of the financial statements.
PERFORMANCE RIGHTS OVER UNISSUED SHARES OR INTERESTS
As at 30 June 2021 there are 6,200,551 Performance Rights outstanding (2020: 4,187,762).
Details of Performance Rights granted to Executives as part of their remuneration are set out in the
Remuneration Report on pages 16 to 34.
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LETTER FROM CHAIRMAN OF THE NOMINATION & REMUNERATION
COMMITTEE
Dear Shareholders,
On behalf of the Board, I am pleased to present our Remuneration Report (the Report) for the financial year
ended 30 June 2021. The report that follows this letter details the governance, framework and outcomes of the
Company’s remuneration practices.
The Board believes the remuneration framework, which it continues to develop and refine, provides a structure
to retain and attract the right people whilst generating and improving sustainable shareholder returns.
As a Remuneration Committee (the Committee) we firmly believe that growth delivered to shareholders in the
preceding five years highlights our ability to successfully motivate and reward our management team. We also
acknowledge the adverse share price movements, both last year and this year, which have negatively impacted
Total Shareholder Return (TSR). Last year the Company’s share price was impacted, as was the general ASX
stock market, by the COVID-19 pandemic. Pleasingly this was short lived, demonstrated by the strong share
price recovery in the first half of FY21. However, the continuation of COVID-19 measures which has restricted
access to resources (as noted in the Directors report) has again weighed on the share price of NRW, and the
share price of most of its sector peers. The share price has improved since June 21, and further improvements
are expected and will be needed for the management team to meet certain performance hurdles set by the
Committee.
NRW services a key sector within the Australian economy and has continued to do so during very challenging
times. The Board is proud of the entire NRW workforce for its continued commitment during 2021.
Performance Outcomes in FY21
The COVID-19 pandemic has had an unprecedented impact on the Australian economy and community. During
2021, NRW began to experience these impacts across the business. Increased costs associated with the
pandemic negatively impacted Group earnings, as shown in our financial results and discussed within the
Directors report. Despite the challenges experienced widely across the sector, NRW has sustained its workforce
at pre-pandemic levels, has not sought government-funded wage assistance, or required additional funding to
meet our key deliverables.
While the Board is proud of the manner in which the NRW team has navigated the uncertainty of COVID-19, it
recognises that expected financial outcomes cannot be modified as a consequence of the pandemic.
Short-Term Scheme
The intent of the short-term incentive (STI) scheme is to reward executive effort for short-term business
performance through the setting of annual KPI targets. See section 3.3 for an overview of the FY21 STI Scheme.
The Board set aggressive stretch targets for FY21 in order to drive business performance post the BGC
Contracting acquisition in FY20. You will see in this report that as a consequence of issues related to the
pandemic the CEO and the EGM of the NRW Civil and Mining business did not meet these stretch earnings
objectives. The scheme includes strategic targets which have been reviewed and assessed by the Committee
and appropriately recognised in FY21 remuneration outcomes. Details on the specific vesting of hurdles and
outcomes for each KMP are outlined at section 5.2.2 of the Report.
As part of the ongoing review of the STI scheme, the Committee has restructured the safety component to
adjust KMP performance. The revised structure recognises that good safety performance is a non-negotiable
and cannot be earned through an incentive program. The safety adjustment, which was introduced this year,
can only reduce incentives earned under other headings and for the avoidance of doubt cannot increase
earnings within the STI scheme.
This year NRW has provided additional disclosure of performance against financial metrics for the previous
financial year in order to improve the transparency of our remuneration practices. Disclosure has been limited
to the CEO as representative of the broader management team. We consider the disclosure of current year
targets to be commercially sensitive. Disclosure has been included in section 5.2.1 of the Report.
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LETTER FROM CHAIR OF THE NOMINATION & REMUNERATION
COMMITTEE CONTINUED
Long-Term Scheme
The NRW long-term incentive (LTI) scheme is structured to align executive and shareholder interests by
rewarding long-term value creation measured through the delivery of long-term strategic goals. See section 3.4
and section 5.3 of the Report for details of the current LTI schemes in place.
The Performance Rights (Rights) vested to the CFO and CEO during the year were the final Tranche associated
with the 2017 LTI Scheme. The stretch objectives set at the time of award required TSR to double, adding circa
$300 million to the value of the Company across a three year performance period. The 2017 LTI Scheme has
proven to be effective resulting in the final tranche of Rights vesting in November 2020. The vesting of those
Rights rounds out all Rights associated with NRW’s previously structured LTI schemes which included a TSR
measure only.
An issue of Rights was made last financial year under the FY20 LTI Scheme, in line with the Committees move
to an annual Rights grant. The Board firmly believes the LTI Schemes in place are appropriate in terms of value
and structure. The new scheme approved by shareholders at the November 2019 AGM was tested and
supported by an independent remuneration consultant, as detailed in section 2.3 of the Report.
Key Changes Moving Forward
The Committee has developed the existing scheme to recognise the significant increase in the size and
complexity of the business (turnover in FY19 when the scheme was last updated totaled $1.1 billion compared
to $2.3 billion in FY21). In this light, the Committee notes the following:
• There was no change to the CEOs remuneration in FY21. This structure was tested through an
independent remuneration consultant who confirmed both the fixed and variable (at-risk) values were
appropriate, including the split between long and short-term components. Details on this engagement
can be found in section 2.3 of the Report.
• As in previous years an award of Rights to the CEO for the next year of the scheme, FY21, should have
been made at the November 2020 AGM. However the last AGM coincided with two key priorities for Mr
Pemberton and his management team; the off market takeover of Primero and management of the
consequences of the ongoing COVID-19 pandemic. Consequently, the Board deferred addressing this
issue until an appropriate time when the matter could be properly considered. Therefore, the award of
Rights for the FY21 LTI Scheme has been proposed and will be voted on by shareholders at the
forthcoming Extraordinary General Meeting (EGM).
In addition to an award of Rights under the next year of the LTI scheme, the Board has approved an
additional one-off grant of 200,000 Rights to the CEO pursuant to the successful completion of the
Primero acquisition. This acquisition was critical to the creation of the MET business unit which will
significantly enhance the long-term sustainability of NRW. To ensure this grant is aligned to successful
shareholder outcomes, the vesting hurdles applicable to the FY21 LTI Scheme will apply to this one-off
grant. As above, this one-off grant of Rights will be voted on by shareholders at the upcoming EGM.
•
Response to Shareholder Feedback
The Committee acknowledges that more than 25% of shareholder votes did not support last year’s remuneration
report. We have engaged with stakeholders on their specific remuneration concerns in order to address those
concerns through the development of our remuneration schemes where we consider them to be aligned with
our remuneration approach. The Committee believes its agreed LTI structure deals with concerns raised in that:
§
The long-term incentive schemes are three year rolling schemes to be awarded annually to the CEO, as
shown in 5.3 of the Report.
§ Performance metrics are multitiered and include earnings and gearing targets to complement TSR. The
objectives chosen are appropriate to a capital intensive contracting business like NRW. The Committee
acknowledges the inclusion of Gearing needs further explanation (please see commentary at 3.4), but
notes it is fundamental to NRW’s balance sheet structure and management of debt within the organisation
and therefore has been determined to be an appropriate measure of performance.
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LETTER FROM CHAIR OF THE NOMINATION & REMUNERATION
COMMITTEE CONTINUED
Looking Forward
The Committee is listening to shareholders’ responses to our Report as we continue to adopt remuneration
strategies based on your feedback. We have been responsive to change with regards to our remuneration
strategy and consider it appropriate for an organisation that has experienced significant growth, from $345
million turnover in 2017 to circa $2.3 billion in 2021.
The Board is of the view that the Company must now realise long-term sustainable value from the enlarged
NRW business. We are committed to remuneration strategies that focus on medium to long-term business
performance. We are confident the updated remuneration framework will serve shareholders well.
Peter Johnston
Chair Nomination and Remuneration Committee
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1 SCOPE OF REPORT
The pages of the Report that follow have been prepared in accordance with section 300A of the Corporations
Act 2001 (Cth) (the Act) and audited in accordance with Section 308(3C) of the Act.
The Report for the year ended 30 June 2021 outlines the remuneration arrangements in place for the Key
Management Personnel (KMP) of NRW Holdings Ltd (NRW, the Company) which includes Non-Executive
Directors, Executive Directors, and those key executives who have authority and responsibility for planning,
directing and controlling the activities of NRW during the financial year.
KEY MANAGEMENT PERSONNEL
The following persons were classified as KMP during the 2021 financial year, and unless otherwise indicated,
were classified as KMP for the entire year:
Non-Executive Directors
Michael Arnett
Jeff Dowling
Peter Johnston
Fiona Murdoch
Executive Directors
Julian Pemberton
Other Executives
Andrew Walsh
Kim Hyman
Geoff Caton
Ric Buratto
Andrew Broad
Ian Gibbs
Glen Payne
Cameron Henry
Chairman and Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer and Managing Director
Chief Financial Officer
Company Secretary
Executive General Manager – Golding
Executive General Manager – NRW Civil & Mining (retired 9 July 2021)
Executive General Manager – Action Drill & Blast
Executive General Manager – RCR Mining Technologies and Heat Treatment
Executive General Manager – DIAB Engineering
Executive General Manager – Primero Group (from 17 February 2021)
Executive Directors and Other Executives are together referred to as ‘Executives’ within this report.
EXECUTIVE SERVICE AGREEMENTS
The terms of employment for Executives are formalised within an employment contract (Executive Service
Agreement). All Executives listed in the remuneration table are appointed under an Executive Service
Agreement not for any fixed term and carry no termination payments other than statutory entitlements.
Executive Service Agreements normally provide for annual reviews of base salary and up to six months’ notice
of termination by either party. Mr Glen Payne has a twelve month notice period having joined the business from
BGC Contracting.
The Executive Service Agreements in place contain non-compete provisions restraining Executives from
operating or being associated with an entity that competes with the business of NRW up to six months
after termination.
KMP
Julian Pemberton
Andrew Walsh
Kim Hyman
Geoff Caton
Andrew Broad
Ian Gibbs
Glen Payne
Cameron Henry
Notice Period
6 months
6 months
6 months
6 months
4 weeks
6 months
12 months
6 months
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2 REMUNERATION GOVERNANCE
Documented below are NRW’s governance practices with regards to the remuneration and reward of KMPs
within the organisation.
ROLE OF THE BOARD AND THE NOMINATION & REMUNERATION
COMMITTEE
The roles and responsibilities of the NRW Board, Nomination and Remuneration Committee, management and
external advisors in relation to remuneration for Executives and employees of NRW are outlined below.
The Board is responsible for the oversight and strategic direction of NRW.
Board
The NRW Board reviews, and as appropriate, approves the remuneration practices within NRW. The NRW Board
are responsible for the remuneration and remuneration outcomes for the CEO and Non-Executive Directors. Any
changes to the Director fee pool are approved by Shareholders, in line with the Company Constitution.
NRW has established a Nomination & Remuneration Committee (N&RC) consisting of Peter Johnston (Chairman),
Michael Arnett, Jeff Dowling and Fiona Murdoch. The N&RC are governed by the N&RC Committee Charter.
The N&RC is responsible for making recommendations to the Board on the remuneration arrangements for Non-
Executive Directors and KMP as set out in the N&RC Charter. The N&RC provides advice, recommendations, and
assistance to the Board with respect to the following:
The remuneration of Non-Executive Directors, including the Chair of the Board;
• The remuneration policies which are designed to attract and retain Executives with the expertise to enhance the
competitive advantage, performance and growth of NRW;
• Ensuring that the level and composition of Executive remuneration packages are fair, reasonable and adequate
and that the remuneration received by the KMP demonstrates a clear relationship between the performance of
the individual and the performance of NRW;
• Termination and redundancy policies and payments made to outgoing Executives; and
• Disclosures to be included in the corporate governance section of NRW’s annual report which relates to NRW’s
remuneration policies and procedures.
The CEO makes recommendations to the N&RC regarding the remuneration of key Executives.
NRW seeks to engage external advisors to provide information on remuneration related issues, including with
regards to benchmarking and market data. The N&RC is mandated to engage external and independent
remuneration advisors who do not have a relationship with or advise NRW management.
Nomination and
Remuneration
Committee
CEO and
Management
External
Advisors
NRW uses the above information and analysis to make informed decisions on remuneration practices within the organisation in line with
our guiding principles.
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REMUNERATION STRATEGY
The Board has adopted the following overarching principles which recognise the importance of fair, effective
and appropriate remuneration outcomes.
Remuneration Guiding Principles
Alignment
Attract and Retain
Motivate
Appropriate
Alignment of the remuneration
strategy with the interests of
the Company’s shareholders.
The remuneration framework
across NRW has been
established and is regularly
reviewed to ensure that the
Company can attract and retain
appropriate talent across our
workforce.
Remuneration plans are
structured to ensure that our
top talent are rewarded for
achieving both short and long-
term business objectives. The
Company’s short and long-term
variable reward is directly
aligned to performance.
Remuneration packages are
established and reviewed
regularly to ensure that they
reflect contemporary trends in
sectors and regions relevant to
the operations of NRW.
ENGAGEMENT OF REMUNERATION CONSULTANTS IN FY21
In June 2019, the Board engaged Egan Associates (Egan) to review its existing remuneration policies and to
provide recommendations on executive short-term and long-term incentive plan design and non-executive
director remuneration. The advice was based on market analysis of remuneration trends on a comparative and
industry specific basis. This advice resulted in changes to fixed remuneration, short-term incentives and the
structure of the long-term incentive scheme, and was duly implemented with effect from 1 July 2019.
In March 2021, the Board engaged Egan to provide an update to the advice sought in June 2019. The advice
focused on the role of the CEO, CFO and the second-highest paid executive among organisations of
comparable scale across the broad market. Egan also provided research and commentary on fees paid to non-
executive Directors, including Chairpersons and Committee member arrangements. The observations were
provided to the Board for consideration, and changes were implemented to the remuneration structures where
the Board considered it appropriate and in line with Egan recommendations.
Fees paid to Egan for the year ended 30 June 2021 are shown below.
Fees paid to Egan Associates
Total
2021
13,629
13,629
2020
23,730
23,730
The following arrangements were made to ensure that the remuneration recommendations were free from
undue influence:
§ Egan was engaged by, and reported to, the Chairman of the N&RC. The agreement for the provision of the
remuneration consulting services was executed by the Chairman of the N&RC under delegated authority
on behalf of the Board, and the arrangement was executed by the Company Secretary;
The report containing the remuneration recommendations was provided by Egan directly to the Chairman
of the N&RC; and
§
§ Egan was permitted to speak to management throughout the engagement to understand company
processes, practices and other business issues and obtain management perspectives, if so required.
However, Egan was not permitted to provide any member of management with a copy of their draft or final
report that contained remuneration recommendations.
The Board is satisfied that the recommendations were made free from undue influence from any members of
the Key Management Personnel.
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3 EXECUTIVE REMUNERATION FRAMEWORK
EXECUTIVE REMUNERATION COMPONENTS
The NRW remuneration framework recognises that the Group’s overall objectives of delivering profitable growth
will ultimately lead to long-term shareholder returns.
NRW’s remuneration framework combines elements of fixed remuneration and ‘at-risk’ remuneration,
comprising short and long-term incentive schemes. The details of the current structures in place are provided
below.
Fixed Remuneration
Short-term Incentive (STI)
Long-Term Incentive (LTI)
Award
Cash - salary and
superannuation
capped at the relevant
concessional
contribution limit.
Cash or Performance Rights
(Rights) - Executives can earn a
cash based incentive by achieving
specific objectives set by the CEO
and N&RC.
Structure
Fixed
STI award is based on a
percentage of the Executive’s TFR
(see 5.1).
Purpose &
Strategy
Attract, engage and
retain a high
performing workforce
to ensure NRW
delivers on its strategic
objectives.
Reward Executive performance
against annual Key Performance
Indicators (KPIs) to focus
Executive effort on short-term
business performance.
Approach
Fixed remuneration is
set with reference to
role, market and
relevant experience,
which is reviewed
annually and upon
promotion.
Independent advice is
sought where
considered
appropriate, in line
with our Remuneration
Governance
principles.
STI objectives are set for each
Executive based on core
accountabilities.
Awards are generally made
annually. Awards vest under a STI
plan through achieving a set of
objectives which include relevant
financial performance, business
development and strategic targets.
Awards up to the maximum
amount payable can be achieved
when performance is rated as
superior reflecting the achievement
of stretch objectives.
Additional
Terms
Not applicable
Up to 25% of an award can be
deferred for up to 12 months at the
discretion of the N&RC if the
committee determines that
additional time is required to
provide more certainty on specific
business related outcomes.
Subject to approval of the N&RC,
an executive may elect to convert
the total value of the STI Scheme
into a LTI award of Performance
Rights, with performance hurdles
assessed in line with LTI metrics.
Rights - Executives can participate in an equity based
incentive through the award of Rights.
LTI award is based on a percentage of the Executive’s
TFR (see 5.1). The number of rights is determined by
the 30 day Volume Weighted Average Price (VWAP)
up to and including the start date of the performance
period.
Align Executive and shareholder interests by rewarding
long-term value creation and success measured
through the delivery of long-term strategic goals. A
requirement of the scheme is that the participant
remains employed with the Group up to and including
the vesting date promoting long-term employee
retention.
LTI objectives are set for each Executive based on
long-term value creation for shareholders.
Awards are generally made annually and may be split
into tranches which have specific objectives within a
specified timeframe. Rights which vest following the
achievement of objectives are converted to shares
when the vesting conditions are met. Vesting
conditions include continued employment throughout
the performance period, the normal performance period
being a minimum of three years.
Unvested Rights
The N&RC may determine that all or a portion of Rights
which have not yet met the vesting hurdle will vest,
notwithstanding that time restrictions or performance
conditions applicable to the performance rights have
not been satisfied.
Ceasing of Employment
If a KMP’s employment with NRW ceases for reasons
other than death or permanent disability any unvested
Rights will lapse and expire unless the Board of NRW
considers it appropriate in the circumstances to
consider the vesting of any unvested shares. Where a
KMP has died or becomes permanently disabled the
Board may determine that the Rights will not lapse and
will be tested against the Vesting Conditions on the
applicable vesting dates.
Change of Control
Upon a change of control occurring in respect of NRW,
the following rules will apply to determine how
Performance Rights should vest or lapse.
Performance Rights that have met the vesting hurdle
will vest on a date to be determined before the change
of control date.
Performance Rights which have met the vesting hurdle
as a consequence of the change of control (for
example a share price increment) will vest on a date to
be determined before the change of control date.
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3.1
EXECUTIVE REMUNERATION COMPONENTS CONTINUED
Good Leaver
The terms and conditions of the LTI Schemes include a
Good Leaver clause. As a “Good Leaver” any Rights
awarded will be “pro rated” based on the number of
months of completed employment in the performance
period. Awards will then be tested at the relevant
vesting date/date of performance hurdle and the pro
rated number of Rights will vest on the vesting date.
Breach of Obligation
In the event of fraud, dishonesty, gross misconduct or
material misstatement of the financial statements, the
Board may make a determination that could result in
the lapsing of unvested Rights.
Other
Benefits
The opportunity to salary sacrifice benefits on a tax compliant basis is available upon request. NRW also provides basic
income protection cover for all employees.
FIXED REMUNERATION
As the NRW Group continues to grow it is important to ensure that the remuneration levels of the Executive
team support the Group in attracting and retaining high calibre staff to lead the delivery of strategic objectives.
Remuneration for Executives is set dependent on a number of factors including, but not limited to, the scope of
their role, experience and market conditions at the time of employment. NRW engages Egan where required to
benchmark remuneration practices to market.
STI ARRANGEMENTS
Rewarding Executive performance against annual KPIs focuses and rewards effort for delivering short-term
business performance. Delivery of financial targets is the foundation of long-term value creation. The Board
considers the financial measures contained within the STI scheme to be appropriate as they are aligned with
the Groups overall objectives of delivering profitable growth and ultimately over the long-term, shareholder
returns. The non-financial performance measures have been approved by the CEO to drive strategic initiatives
and performance consistent with the overall business strategy.
The following table summarises the key components and operation of the FY21 STI Scheme for Executives.
Scheme Name
Participants
FY21 STI Scheme
All Executives
Performance Period
One year performance period beginning 1 July 2020 and ended on 30 June 2021
Award Value
Award value is equal to a percentage of the KMP’s TFR (as shown in 5.1)
KPIs are made up of two critical financial measures and four individual strategic measures.
Hurdles for financial metrics are set to allow for a staggered approach to achievement of incentive
targets. Objectives are based on achieving a minimum financial target in the performance period at
which time a proportion of the total incentive will be earned. The balance of the total STI is accrued by
achieving progressively higher earnings. Actual financial performance between targets is paid pro rata.
EBIT/EBITDA
Performance Metrics
Earnings before interest and taxes (EBIT) or earnings before interest, taxes, depreciation and
amortisation (EBITDA) is selected dependent upon business unit. EBIT and EBITDA targets are used
as earnings targets and a proxy for ‘cash’ generation at the business unit level.
Order Intake
NRW operates in a contracting environment where securing, as well as delivering, work is critical to
sustaining earnings. Order intake is assessed to ensure continued business growth within the sector.
Annual Business Objectives
Individual performance hurdles are set during the performance period for four strategic objectives.
These strategic objectives vary for each Executive dependent upon the business units they manage.
When are performance
metrics tested?
Incentive payments are determined in line with the approval of the Financial Statements for the end of
the performance period – being the 30 June 2021 annual financial statements.
Financial Targets EBIT/DA
Relationship between
performance and payment
Target 1
Target 2
Target 3
60%
20% earned
Additional 20% earned
Additional 20% earned
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3.3
STI AGREEMENTS CONTINUED
Order Intake Targets
Target 1
Target 2
20%
10% earned
Additional 10% earned
Annual Business Objectives
Four KPIs based on individual business unit
priorities
20%
5% each
Continued employment throughout the performance period.
Other Terms and Conditions
The structure of the scheme ensures that an STI cannot be earned for managing safety. The
expectation is that safety is managed as part of an Executives core responsibility. If safety is not
managed to expectations then any STI earned can be adjusted downwards.
Calculation of Outcome
The above STI outcome percentages are then multiplied by the KPI weighting and individual STI
opportunity to determine the payout amount.
LTI ARRANGEMENTS
The NRW LTI Scheme seeks to align Executive and shareholder interests by rewarding long-term value creation
and success measured through the delivery of long-term strategic goals. A requirement of the scheme is that
the participant remains employed with the Group up to and including the vesting date promoting long-term
employee retention.
Following the engagement of Egan in 2019, a revised structure was approved by the N&RC for new long-term
awards which was approved by shareholders at the November 2019 AGM as part of the award of Rights to the
CEO. The FY21 LTI Scheme follows on from the FY20 Scheme approved in November 2019, and is in line with
Egan recommendations. It is proposed that the CEO will be granted an award of Rights in the FY21 LTI Scheme
subject to the approval of Shareholders at the 2021 EGM. The outline of that scheme is provided in this report.
Additional participants will join the Scheme following Scheme approval at the EGM.
Scheme Name
FY21 LTI Scheme
Participants
CEO, subject to approval at the EGM, and CFO
Performance
Period
Three year performance period starting 1 July 2020 and ending 30 June 2023.
Award Value
Grant of performance rights is equal to a percentage of the KMP’s TFR (as shown in 5.1)
Subject to the achievement of the performance metrics across the performance period, Rights will vest to the CEO
on 30 September 2023.
Vesting Date
Subject to the achievement of the performance metrics across the performance period, Rights will vest to the CFO
in two equal tranches on 30 September 2023 and 30 September 2024.
Performance
Metrics and
Weighting
Rights vest subject to the achievement of a series of performance hurdles chosen to align shareholder interests
and Executive effort. NRW notes that the performance metrics chosen are focussed on delivering increased
earnings and growth in shareholder value, whilst maintaining appropriate levels of gearing within the business.
Rights awarded under this scheme require substantial increments in shareholder returns, growth in earnings and
management of debt.
The number of Rights is allocated equally over the three performance hurdles.
Share price has been selected as a proxy for TSR. The final assessment of TSR will include
appropriate adjustments which will include dividend payments and any equity raisings during the
performance period to reflect actual TSR. TSR targets require a minimum growth objective based
on an initial share price of $1.92, being the 30 day VWAP to 30 June 2020. Targets related to
TSR are:
• Growth of at least 10% per annum from the 30 June 2020 VWAP ($1.92) to meet the minimum
objective
• Growth of more than 12% per annum from the 30 June 2020 VWAP ($1.92) to meet the
maximum objective
Earnings before Interest, Taxes and Amortisation (EBITA) has been selected as the metric for
earnings. Targets related to EBITA are:
• Growth in cumulative EBITA of at least 10% per annum from FY20 to meet the minimum
objective
• Growth of more than 12% per annum from FY20 to meet the maximum objective
Growth in
TSR
(33.3%)
Growth in
Earnings
(33.3%)
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3.4
LTI ARRANGEMENTS CONTINUED
When are
Performance
Metrics
Tested?
Relationship
Between
Performance
and Vesting
NRW operates a capital intensive business where asset purchasing and maintenance are critical to
successful operations. Clients expect upgraded equipment as new contracts are awarded. The
management of gearing over the long-term is critical to ensuring debt is managed appropriately
within the business. Targets related to gearing are:
Gearing
(33.3%)
Gearing not to exceed 40%
The Company defines Gearing as net debt / total equity.
The vesting of Rights is determined in line with the approval of the Financial Statements at the end of the
performance period.
Executive Rights will vest in full subject to the below performance hurdles being met. Where performance is above
the minimum objective but below the maximum objective, the performance rights will vest pro rata to actual
achievement.
The number of Rights awarded under each performance objective is shown below.
Objective
Target
CEO
CFO
30 September 2023
30 September 2023
30 September 2024
No.
Min
$2.56
158,333
No.
62,500
No.
62,500
Max
$2.70
up to 316,666
up to 125,000
up to 125,000
Min
$169M
158,333
62,500
62,500
Max
$176M
up to 316,666
up to 125,000
up to 125,000
TSR (share
price)
EBITA ($M’s)
Gearing (%)
Below
40%
Total
316,668
950,000
125,000
375,000
125,000
375,000
Valuation
Assumptions
The value per Right to determine the total Rights allocated under this scheme is based on the 30 day VWAP to 30
June 2020, being $1.92.
For the purposes of the total FY21 LTI grant to the CEO, the Board has approved an additional one-off grant of
200,000 Rights pursuant to the successful completion of the Primero acquisition. This acquisition was critical to the
creation of the MET business unit which will significantly enhance the long-term sustainability of NRW.
To ensure this grant is aligned to successful shareholder outcomes, the vesting hurdles applicable to the FY21 LTI
Scheme will apply to this one-off grant.
As such, the total FY21 grant of Rights to the CEO subject to shareholder approval at the EGM comprises:
One-Off Issue
of Rights
FY21 LTI Scheme
One-Off Issue of Rights – Primero Acquisition
Total Rights subject to shareholder approval
750,000
200,000
950,000
The structure of the scheme and quantum of Rights awarded to the CEO will be put for approval by Shareholders
at the 2021 EGM, please see the Notice of Meeting for further details.
Performance Metrics
Other Terms
and Conditions
Gearing will be measured by the average Gearing across the performance period.
The TSR objective is expressed as a target share price as a proxy for TSR. The final assessment will include
appropriate adjustments which will include dividend payments and any equity raisings to reflect actual TSR. TSR
will be measured on sustaining returns at target level for a minimum 2 month period in the performance period or
any day the target is achieved in the final 2 months of the performance period.
The FY22 LTI Scheme is currently under construction for all KMP and the Senior Executive Team.
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4 COMPANY PERFORMANCE
A key underlying principle of NRW’s Executive remuneration framework is the delivery of financial targets,
recognising that the delivery of financial targets is the foundation for long-term value creation for Shareholders.
The following information summarises key financial performance of NRW over the medium term.
FIVE YEAR SNAPSHOT
Measure
Market Capitalisation
(30 June) - $ million
Share Price (30 June) - $
Total Revenue - $ million
Earnings per share (EPS)
- cents
Comparative EBITDA
- $ million(1)
Net Profit / (Loss) After
Tax - $ million
NPATA - $ million(2)
Interim Dividend Paid
Final Dividend Declared
in Respect of the Year
Annual Total Shareholder
Return - $ million
2021
657.9
1.47
2,222
12.5
266.7
54.3
75.1
4.0
5.0
2020
793.6
1.86
2,004
18.2
250.0
73.7
89.7
2.5
4.0
2019
943.5
2.51
1,078
8.6
143.9
32.2
40.4
2.0
2.0
2018
630.1
1.70
685
11.6
93.4
42.2
33.9
-
2.0
2017
205.9
0.64
345
9.1
58.8
28.5
16.5
-
-
(143.2)
(244.5)
336.6
391.4
126.2
(1) Comparative EBITDA – Earnings before interest, tax, depreciation, amortisation, transaction costs, Gascoyne impairment and RCRMT
gain on acquisition and or impairment losses.
(2) NPATA – Net profit after Tax adjusted for amortisation of acquisition intangibles and or impairment losses at 30% tax rate.
SHARE PRICE PERFORMANCE
NWH
5 Year Share Price
e
r
a
h
s
/
r
e
p
$
4
3.5
3
2.5
2
1.5
1
0.5
0
6/30/2016
30/6/2016
6/30/2017
30/6/2017
6/30/2018
30/6/2018
6/30/2019
30/6/2019
6/30/2020
30/6/2020
Financial Year
Volume
Close
3 Monthly Moving Average
30
25
20
15
10
5
e
m
u
o
V
l
'
s
0
0
0
,
0
0
0
'
0
6/30/2021
30/6/2021
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5 EXECUTIVE REMUNERATION OUTCOMES
FIXED REMUNERATION
The table below provides information on the remuneration packages of Executives as at 30 June 2021.
Julian Pemberton
Andrew Walsh
Kim Hyman
Geoff Caton
Ric Buratto
Andrew Broad
Ian Gibbs
Glen Payne
Cameron Henry
TFR(1)
1,200,000
800,000(3)
387,136
650,000
600,000
500,691
437,077
429,694
432,525
STIP
80%
0%(3)
20%
33%
33%
33%
33%
33%
33%
LTIP(2)
120%
180%
20%
35%
0%
35%
35%
35%
35%
(1) Annual Total Fixed Remuneration (TFR) as at 30 June 2021.
(2) LTIP structure approved by N&RC.
(3) Mr. Walsh was awarded an increase in fixed remuneration from $725,000 to $800,000 to recognise the growth in the business effective
1 January 2021. His STI was also increased from 60% to 80% of TFR. Mr Walsh elected to convert the value of his STI award into an
equity based award of Performance Rights. Vesting of Rights under this award is subject to performance hurdles assessed in line with
FY20 and FY21 LTI Schemes. These changes were approved by the N&RC and supported by the independent remuneration consultant.
For FY21, the split between fixed and variable remuneration components for the CEO and CFO, if maximum
at-risk remuneration is earned, is as follows.
CEO Remuneration Mix
33%
27%
40%
Fixed
Short-Term Variable
Long-Term Variable
CFO Remuneration Mix
36%
64%
Fixed
Long-Term Variable
During the year there was no change to fixed or variable remuneration received by our CEO. The remuneration
received recognises the activity level and complexity of the NRW business. The current structure was tested
through an independent remuneration consultant who confirmed both the fixed and variable values were
appropriate, including the split between long and short-term components. Details on this engagement can be
found in section 2.3 of the Report.
In addition to the above, a number of changes were made to other KMP TFR during the year to recognise the
expanded business and to keep remuneration competitive within the wider market.
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STI OUTCOMES
5.2.1
FY20 Performance Measures
NRW considers the disclosure of financial hurdles under the STI scheme to be market sensitive. Earnings
expectations for the NRW Group are disclosed in line with our obligations under the Corporations Act, and the
ASX Listing Rules.
This year, however, NRW has provided additional disclosure of performance against financial metrics for the
previous financial year to improve the transparency of its remuneration practices. Disclosure has been limited
to the CEO as representative of the broader management team.
Please see below the performance metrics, and outcomes, of the FY20 STI Scheme.
Performance
Metric
STI
Weighting
Target
($M)
Result
($M)
STI
Earned
Performance Commentary
EBITDA
Target 1
Target 2
Target 3
30%
30%
$160
$170
$175
$250
EBITDA measures were adjusted for the following:
• The acquisition of BGC Contracting; and
• The impacts of AASB 16.
Post adjustment Target 3 was increased to $233.3M.
Order Intake
15%
$1,520
$1,646
15%
Budget values met
Safety
20%
0%
Not awarded due to fatality
BGC
Acquisition
30%
30%
assumptions; and
•
Integration measures.
Integration objectives included:
• Delivery of EBITDA targets consistent with acquisition
Annual
Business
Objectives
5%
100%
5%
80%
5.2.2
FY21 Performance Measures
EBITDA targets have been adjusted and reflected at ‘EBITDA’
above.
Primarily related to acquisitions, integration and strategic growth
markets. Performance was assessed in line with the expectations
of the N&RC.
The following table provides information on the outcome of the STIP for each Executive for the year ended
30 June 2021. The value of the award is outlined in the remuneration table in 6.1.
Julian Pemberton
Andrew Walsh
Kim Hyman
Geoff Caton
Ric Buratto
Andrew Broad
Ian Gibbs
Glen Payne
Cameron Henry(2)
FY21
FY20
STIP Earned
STIP Forfeited
STIP Earned
STIP Forfeited
65%
-(1)
65%
100%
0%
100%
100%
100%
-
35%
-(1)
35%
0%
100%
0%
0%
0%
-
80%
80%
-
65%
50%
80%
80%
0%
N/A
20%
20%
-
35%
50%
20%
20%
100%
N/A
(1) Mr. Walsh elected to convert the value of his STI award into an equity based award of Performance Rights. See Note 3 under 5.1.
(2) Cameron Henry joined in February 2021 and was therefore not eligible for the FY21 STI Scheme.
The award structure and outcomes by hurdle are shown below for each KMP who was eligible to participate in
the FY21 STI Scheme.
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5.2
STI OUTCOMES CONTINUED
Julian Pemberton
Kim Hyman
Glen Payne
Ian Gibbs
Andrew Broad
Geoff Caton
STIP Earned FY21
By Performance Hurdle
25%
25%
20%
20%
20%
20%
60%
60%
60%
60%
20%
20%
20%
20%
20%
20%
20%
20%
Earnings
Order Intake
Strategic
For clarity, we also include the STI outcomes by hurdle for the CEO as listed below.
CEO STI Performance By Performance Hurdle
FY21
EBITDA Target 1
EBITDA Target 2
25%
EBITDA Target 3
Order Intake Target 1
Order Intake Target 2
Strategic - EBITDA Target of MET
Strategic - Order Intake Target of MET
Strategic - Operational Integration of MET
Strategic - Succession Planning
75%
100%
100%
100%
100%
100%
100%
100%
100%
A summary of the CEO’s STI performance over the last four years is set out below.
Earned
Forfeited
2018
2019
2020
2021
Historical CEO STI Performance
100%
50%
50%
80%
65%
20%
35%
Earned
Forfeited
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LTI OUTCOMES
The structure of the Company’s current year LTI scheme is set out in section 3.4. Details of specific awards and
progress on meeting objectives within those awards is provided below. The comparative results include an
earlier scheme which resulted in rights vesting in November last year, details of which can be found in the FY20
remuneration report.
CEO and CFO
NRW has the current LTIP schemes in place which have an impact in FY21 for the CEO and CFO. The structure
of the FY21 LTI Scheme and quantum of Rights awarded will be put for approval by Shareholders at the 2021
EGM, please see the Notice of Meeting for further details.
Scheme
2017 LTI Scheme
FY20 LTI Scheme
FY21 LTI Scheme
Participants
CEO, CFO
CEO, CFO
CEO, CFO
Rights were awarded in three equal
tranches with increasing
performance hurdles set for each
year. The objectives set at the time
of the award required the market
capitalisation (TSR) to be doubled in
the performance period.
Rights were awarded under this
revised scheme following the advice
from Egan, an independent advisor
on executive remuneration. This
scheme requires yearly incremental
shareholder returns, growth in
earnings and management of debt.
Rights awarded under this scheme
require substantial increments in
shareholder returns, growth in
earnings and management of debt.
FY18, FY19, FY20
FY20, FY21, FY22, FY23
FY21, FY22, FY23
Scheme
Details
Performance
Period
Award Period
FY18, FY19, FY20
FY21, FY22
FY23
30 November 2018
30 November 2022
Vesting Date
30 November 2019
30 November 2020
30 September 2023 (CFO)
30 November 2023 (CEO)
Testing Time
30 June 2020
Performance
Hurdles
As a result of the very strong
increase in the share price the
performance hurdles for all three
tranches have been met and Rights
have now fully vested. Please see
prior year remuneration reports for
further details on the performance
hurdles for this scheme.
30 June 2022
30 June 2023
Annual growth in TSR of:
• At least 10% to meet the
minimum objective
• More than 12% to meet the
maximum objective
Growth in annual accumulated
EBITDA of:
• At least 10% to meet the
minimum objective
• More than 12% to meet the
maximum objective
Maximum gearing objective of 40%.
Please note the performance
hurdles set have been adjusted for
the impacts of AASB16.
Additional
Details
The structure of the plan and the
quantum of rights awarded in these
plans to the CEO were approved by
shareholders at the 2017 AGM.
The structure of the plan and the
quantum of rights awarded in these
plans to the CEO were approved by
shareholders at the 2019 AGM.
30 September 2023
30 September 2024 (CFO only)
30 June 2023
Annual growth in TSR of:
• At least 10% per annum to
meet the minimum objective
• More than 12% per annum to
meet the maximum objective
Growth in cumulative EBITA of:
• At least 10% per annum to meet
the minimum objective
• More than 12% per annum to
meet the maximum objective
Maximum gearing objective of 40%.
The structure of the plan and
quantum of Rights awarded will be
put for approval by Shareholders at
the 2021 EGM, please see the
Notice of Meeting for further details.
For the purposes of the total FY21
LTI grant to the CEO, the Board has
approved an additional one-off grant
of 200,000 Rights pursuant to the
successful completion of the Primero
acquisition. Please see disclosure
under 3.4, above, for further details.
Rights Vested
2,837,500
Rights
Outstanding
Nil
No Rights have vested under this
Scheme.
No Rights have vested under this
Scheme.
2,664,492
1,700,000
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NRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Report
DIRECTORS’
DIRECTORS’
REPORT CONTINUED
REPORT CONTINUED
All Other Executives
NRW has the current LTIP schemes in place which have an impact in FY21 for Executives other than the CFO
and CEO.
Scheme
2017 LTI Scheme
FY20 LTI Scheme
Participants
EGM RCR Mining Technologies (RCRMT)
All Executives excluding CEO and CFO
Scheme Details
Performance
Period
Following the acquisition of RCRMT in 2020, the 2017
LTIP Scheme was rolled out to the EGM of RCRMT. The
relatively short performance period reflects the agreed
business recovery objectives consistent with the
acquisition valuation assumptions.
Rights were awarded under this revised scheme
following the advice from Egan, an independent advisor
on executive remuneration. This scheme requires yearly
incremental shareholder returns, growth in earnings and
management of debt.
15 February 2019 – 31 October 2020/2021
FY20, FY21, FY22, FY23
Award Period
FY19
Vesting Date
Testing Times
30 November 2020
30 November 2021
30 October 2020
30 October 2021
Performance
Hurdles
•
•
Increase in share price (30 day VWAP) to $2.80 by
October 2020; and
Increase in share price (30 day VWAP) to $2.90 by
October 2021.
As a result of the strong increase in the share price the
performance hurdles for both tranches have been met.
FY20, FY21, FY22
30 November 2022
30 November 2023
30 June 2022
30 June 2023
Annual growth in TSR of:
• At least 10% to meet the minimum objective
• More than 12% to meet the maximum objective
Growth in annual accumulated EBITDA of:
• At least 10% to meet the minimum objective
• More than 12% to meet the maximum objective
Maximum gearing objective of 40%.
Please note the performance hurdles set have been
adjusted for the impacts of AASB16.
Additional
Details
The structure of the plan was approved by shareholders
at the 2017 AGM as part of the Rights awarded to the
CEO.
The structure of the plan was approved by shareholders
at the 2019 AGM as part of the Rights awarded to the
CEO.
Rights Vested
in FY21
Rights
Outstanding
77,885
77,885
LTI Awards and Vesting Status
No Rights have vested under this Scheme.
689,334
The above Schemes have resulted in the following movement of Rights during FY21.
Name
Allocation
Date
Julian
Pemberton
Andrew
Walsh
4/12/2017
to
30/06/2021
4/12/2017
to
01/06/2021
Geoff Caton
20/07/2020
Andrew
Broad
Ian Gibbs
27/07/2020
15/02/2019
to
20/07/2020
Balance of
Unvested
Equity
Awards as
at 1 July
2020
Granted in
FY21
Vested in
FY21
Balance of
Unvested
Equity
Awards as
at 30 June
2021
Fair Value
Per
Security
Fair Value
at Grant
Date
Share
Based
Payments
Expense
FY21
Number
Number
Number
Number
Cents
$
$
3,301,992
950,000(1)
(2,137,500)
2,114,492
27.0 to 182
3,381,572
887,999
700,000
2,250,000(2)
(700,000)
2,250,000
34 to 153
2,719,626
849,496
-
-
275,960
164,975
-
-
275,960
30.1 to 182
380,160
110,222
164,975
30.1 to 182
227,268
65,893
155,770
96,112
(77,885)
173,997
30.1 to 182
290,977
86,106
Glen Payne
20/07/2020
-
152,287
-
152,287
30.1 to 182
209,790
60,826
Includes one-off Rights issue in accordance with 3.4, above. Subject to shareholder approval at the upcoming EGM.
(1)
(2) Rights granted during the year includes the election to convert the value of STI award into an equity based award. See Note 3 under 5.1.
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NRW HOLDINGS ANNUAL REPORT 2021 | Directors’ ReportNRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Report
DIRECTORS’
DIRECTORS’
REPORT CONTINUED
REPORT CONTINUED
Further details in relation to the KMP long-term incentive awards are set out in note 4.7 to the financial
statements.
6 NON-EXECUTIVE DIRECTORS’ ARRANGEMENTS
NON-EXECUTIVE REMUNERATION FRAMEWORK
Non-Executive Directors received a fixed fee for Board and Committee duties and are not entitled to any
performance related remuneration. The NRW constitution provides that Non-Executive Directors’ remuneration
must not exceed the maximum aggregate sum determined by the Company in a general meeting. At present,
the maximum sum is fixed at $750,000, in aggregate, per annum. This maximum sum cannot be increased
without member’s approval by ordinary resolution at a general meeting.
Non-Executive Director fees (excluding superannuation and non-cash benefits) to be paid by the Company to
the Chairman is $150,000 (2020: $150,000) and to Non-Executive Directors is $100,000 (2020: $100,000). In
addition, the chair of the Audit & Risk committee receives an additional fee of $25,000 (2020: $25,000). Non-
Executive Directors are also entitled to receive reimbursement for travelling and other expenses that they
properly incur in attending Board meetings, attending any general meetings of the Company or in connection
with the Company’s business.
NON-EXECUTIVE REMUNERATION OUTCOMES
The table below sets out the remuneration arrangements for each of NRW’s Non-Executive Directors:
Remuneration
Salary & fees
Non cash
benefit
Post-Employment
Benefits
Superannuation
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
150,000
150,000
125,000
125,000
100,000
100,000
100,000
38,387
475,000
413,387
-
-
-
-
-
-
-
-
-
-
14,250
14,250
11,875
11,875
9,500
9,500
9,500
3,330
45,125
38,955
Total
164,250
164,250
136,875
136,875
109,500
109,500
109,500
41,717
520,125
452,342
Michael Arnett
Jeff Dowling
Peter Johnston
Fiona Murdoch
TOTAL
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NRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Report
DIRECTORS’
DIRECTORS’
REPORT CONTINUED
REPORT CONTINUED
7 OTHER STATUTORY DISCLOSURES
EXECUTIVE REMUNERATION TABLES
The table below sets out the remuneration outcomes for each of NRW’s Executive KMP for the financial year
ended 30 June 2021 and 30 June 2020.
Year
Salary &
fees
Cash
Based
Awards
(STI)
Annual
Leave(1)
Post
Employment
Benefits
(Super)
Other
Long-Term
Benefits(2)
Equity
Based
Awards
(LTI)
Total
EXECUTIVE DIRECTOR
2021
1,178,997
619,787
90,665
21,694
19,656
887,999
2,818,798
2020
1,178,997
768,000
150,473
21,003
39,207
818,939
2,976,619
Julian
Pemberton
EXECUTIVES
Andrew Walsh
Kim Hyman
Geoff Caton
Ric Buratto
2021
741,497
-(8)
16,230
2020
703,997
348,000
37,215
2021
363,568
50,328
22,365
2020
363,568
-
14,459
2021
625,000
214,500
48,011
2020
625,000
139,425
26,509
2021
557,645
-
21,456
2020
557,645
99,000
17,031
Andrew Broad(3)
2021
478,997
165,229
(3,695)
2020
156,595
43,759
12,042
Jeff Whiteman(4)
2021
-
-
2020
356,400
42,433
-
-
21,695
21,003
21,694
21,003
25,000
25,000
21,694
21,003
21,694
7,876
-
-
-
-
6,060
9,755
849,496
1,628,918
118,100
1,228,315
-
-
464,015
408,785
10,400
110,222
1,033,133
10,433
11,339
837,706
-
-
-
-
-
-
-
-
600,795
694,679
65,893
728,118
-
-
-
220,272
-
398,833
Ian Gibbs(5)
Glen Payne(6)
Cameron
Henry(7)
2021
415,383
144,235
15,336
21,694
(43,935)
86,106
638,819
2020
415,383
120,079
(23,975)
19,485
(41,139)
71,924
561,757
2021
408,000
141,799
26,668
21,694
2020
298,154
2021
151,923
2020
-
-
-
-
(52,460)
11,309
10,059
14,433
-
-
6,801
7,237
3,205
-
60,826
665,788
-
-
-
264,240
179,620
-
Total 2021
2021
4,921,010
1,335,878
247,095
191,292
2,187
2,060,542
8,758,004
Total 2020
2020
4,655,739
1,560,696
181,294
147,682
25,493
1,020,302
7,591,206
(1) Represents the movement in accrued annual leave.
(2) Represents the movement in accrued long service leave.
(3) Mr A Broad joined on 1 March 2020 as Executive General Manager of Action Drill & Blast.
(4) Mr J Whiteman ceased his role as Executive General Manager of Action Drill & Blast on 28 February 2020.
(5) Mr I Gibbs joined on the 15 February 2019 as Executive General Manager of RCR Mining Technologies.
(6) Mr G Payne joined on 9 December 2019 as Executive General Manager of DIAB Engineering.
(7) Mr C Henry joined on 17 February 2021 as Executive General Manager of Primero Group.
(8) Mr A Walsh elected to convert the value of his STI award into an equity based award of Performance Rights. See Note 3 under 5.1.
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NRW HOLDINGS ANNUAL REPORT 2021 | Directors’ ReportNRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Report
DIRECTORS’
DIRECTORS’
REPORT CONTINUED
REPORT CONTINUED
SHARE OWNERSHIP
The table below sets out the current shareholding and movement for the last two financial years for each of the
KMP who hold shares in the Company.
Held at
30 June 19
Purchases
Rights
vested
Share
Sales
Held at
30 June 20
Purchases
Rights
vested
Share
Sales
Held at
30 June 21
Michael Arnett
1,009,179
3,355
Jeff Dowling
364,705
-
Peter Johnston
109,416
3,355
Fiona Murdoch
-
13,700
-
-
-
-
-
-
-
-
1,012,534
364,705
-
-
112,771
25,000
13,700
7,000
-
-
-
-
Julian
Pemberton
10,208,497
-
2,762,500
(3,650,000)
9,320,997
Andrew Walsh
2,895,498
3,355
981,250
(570,000)
3,310,103
Geoff Caton
Ric Buratto
Ian Gibbs
Cameron Henry
-
-
-
-
-
-
-
-
357,798
(357,798)
-
288,000
(200,000)
88,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,012,534
364,705
137,771
20,700
11,458,497
2,137,500
700,000
(700,000)
3,310,103
-
-
-
(88,000)
-
-
77,885
256,816(1)
-
-
-
77,885
256,816
TOTAL
14,587,295
23,765
4,389,548
(4,777,798)
14,222,810
288,816
2,915,385
(788,000)
16,639,011
(1) Relates to share allotment as part of the takeover consideration received as part of the Primero acquisition.
RELATED PARTY TRANSACTIONS
All loans or related party transactions made to KMP or their associates during the 2021 financial year are
disclosed at note 7.3 of the financial statements.
End of Remuneration Report (Audited)
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NRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Report
CORPORATE GOVERNANCE &
CORPORATE GOVERNANCE &
RISK MANAGEMENT
RISK MANAGEMENT
Corporate Governance & Risk Management
Good corporate governance and risk management is fundamental to all aspects of NRW’s activities. Set out
below is the Company’s response to the corporate governance principles, followed by a review of the key risks.
CORPORATE GOVERNANCE PRINCIPLES AND RECOMMENDATIONS
The Australian Securities Exchange (ASX) 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 year ended 30 June 2021.
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.
RISK MANAGEMENT
Risk is an inherent part of NRW’s business and management of those risks is therefore critical to the Company’s
performance and financial strength.
Material risks that could adversely affect the Company have been identified below along with commentary on
the risk and mitigating actions. The risks are not listed in order of significance nor are they all encompassing,
rather they reflect the most significant risks identified at a whole-of-entity or consolidated level.
Market Risk
NRW’s financial performance is influenced by the level of activity in the resources and mining industry, and the
construction and engineering sector, which is impacted by a number of factors outside the control of NRW.
These factors include:
• Demand for mining production, which may be influenced by factors including (but not limited to) prices
of commodities, exchange rates, the competitiveness of Australian mining operations, macro-economic
cycles (in particular capital expenditure in natural resources), and government policy on infrastructure
spend;
• The policies of mine owners including their decisions to undertake their own mining operations or to
outsource these functions; and
• The availability and cost of key resources including people, earth moving equipment, and critical
consumables.
Further, NRW operates in a competitive market and it is difficult to predict whether new contracts will be awarded
due to multiple factors influencing how clients evaluate potential service providers.
Mitigation actions include the development of a diversified service offering with contractual counterparties in
infrastructure and across a range of commodities in the resources sector.
Loss of Contracts / Reduction in Contract Scope
NRW’s revenues are subject to underlying contracts with varying terms. There is a risk that NRW’s contracts
may be cancelled (whether for convenience or with cause) or may not be renewed if NRW’s clients decide to
reduce their levels of spending, potentially reducing revenue generated on those projects.
Contract operations are also vulnerable to the risk of interruption as a result of a variety of factors, which may
be beyond NRW’s control, including prolonged heavy rainfall or cyclones, geological instability, accidents or
unsafe conditions, equipment breakdowns, industrial relations issues, and scarcity of materials and equipment.
Interruptions to existing operations or delays in commencing operations experienced by NRW’s clients may
result in lost revenue and, in some circumstances, result in NRW incurring additional costs, which may have a
material adverse effect on NRW’s business, results of operations and financial condition.
NRW is also dependant on our client’s assessments of the financial viability of their projects which includes
ensuring they have access to sufficient funding to meet project working capital and debt covenant requirements.
If a client fails to obtain sufficient funding to successfully develop its project or otherwise fails to meet its working
capital or debt covenant requirements, the client may seek to scale back or cancel its contract with NRW, which
may have a material adverse impact on NRW’s financial performance.
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NRW HOLDINGS ANNUAL REPORT 2021 | Corporate Governance & Risk ManagementNRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Report
CORPORATE GOVERNANCE &
CORPORATE GOVERNANCE &
RISK MANAGEMENT CONTINUED
RISK MANAGEMENT CONTINUED
Mitigation actions include working closely with our clients to ensure we understand the issues faced by them
and to identify opportunities where we can assist in ensuring the impact of the types of issues identified above
are minimised.
Delivery Performance
NRW’s execution and delivery of projects involves judgement regarding the planning, development and
management of complex operating facilities and equipment. As a result, NRW’s operations, cash flows and
liquidity could be affected if the resources or time needed to complete a project are miscalculated, if it fails to
meet contractual obligations, or if it encounters delays or unspecified conditions. Some of NRW’s contracts are
‘lump sum’ in nature and to the extent costs exceed the contracted price, there is a risk these amounts may not
be recovered. From time to time variations to the planned scope occurs or issues arise during the construction
phase of a project not anticipated at the time of bid. This may give rise to claims under the contract with the
clients in the ordinary course of business. Where such claims are not resolved in the ordinary course of business
they may enter formal dispute and the outcome upon resolution of these claims may be materially different to
the position taken by NRW.
NRW is also exposed to input costs through its operations, such as the cost of fuel and energy sources,
equipment and personnel. To the extent that these costs cannot be passed on to customers in a timely manner,
or at all, NRW’s financial performance could be adversely affected. If NRW materially underestimates the cost
of providing services, equipment or plant, there is a risk of a negative impact on NRW’s financial performance.
Mitigation actions include the development of robust tender and contract review processes which have been
structured to identify risk and develop specific mitigation plans to address issues as they arise. A number of
contracts include a rise and fall clause which mitigates changes in input costs to NRW.
Access to Resources
NRW’s growth and profitability may be limited by loss of key management or operational personnel or due to
being unable to recruit and retain skilled and experienced staff. Further, NRW is reliant on third party equipment
to perform contract obligations which may not be available or may be subject to pricing premiums in order to
secure appropriate equipment.
Mitigation actions include the maintenance of a database of staff who have worked for the Company on all of
its projects and pricing of contracts includes estimates of the likely costs required to attract the right people to
perform the contract. NRW has developed strong working relationships with a number of equipment suppliers
in order to ensure equipment requirements are understood ahead of time in order to minimise any potential risk
around availability.
Engineer Design Risk
NRW operates as a ‘design, construct and operate’ contractor in the engineering sector. Such projects and
contracts place an obligation on NRW to design ‘fit for purpose’ infrastructure and to give warranties to such
effect. Any failure in design may see NRW exposed to contractual claims for breach of ‘fit for purpose’ or design
obligations and, from time to time, to performance and liquidated damages.
NRW is particularly exposed to risk in circumstances where it has agreed to an engineering, procurement and
construction (EPC) contract where it may suffer loss in the event expenses exceed anticipated costings for the
project. NRW constructs large often complex processing plants which may operate under extreme conditions.
The potential for failure of components is always present. If this failure results in a loss to NRW, NRW may have
exposure to rectification of these failures which may result in a call on performance guarantees provided by
NRW to its clients (if any), or in some cases, may exceed the quantum of any such performance guarantees.
Mitigation actions include maintaining professional indemnity insurance and also engaging appropriate third
party design consultants for complex or specialist design expertise.
Climate Related Risks
NRW recognises the potential challenges posed by a number of factors which can be grouped under the
heading ‘climate risk’. These risks mainly relate to the operations of our clients which NRW currently works for
but could nonetheless impact operations over the medium to long-term. Risks include reduction to current
activity levels, and potential disruption to operations from activists. NRW operates within the strict environmental
obligations defined by its clients which requires the project ‘environmental footprint’ to be respected at all times.
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NRW HOLDINGS ANNUAL REPORT 2021 | Corporate Governance & Risk Management
CORPORATE GOVERNANCE &
CORPORATE GOVERNANCE &
RISK MANAGEMENT CONTINUED
RISK MANAGEMENT CONTINUED
NRW, through its Sustainability Committee, has adopted a number of initiatives to monitor the effect that climate
related risks have on its operations and take appropriate action to ensure there is a balanced approach to capital
allocation and the sustainable growth objectives of the Company.
Regulatory Compliance
NRW must meet regulatory requirements that are subject to continual review, including inspection by regulatory
authorities. Failure by NRW to continuously comply with regulatory requirements or failure to take satisfactory
corrective action in response to adverse inspection could result in enforcement actions. NRW operates in a
regulated environment with the potential for significant penalties for non-compliance with applicable laws and
regulations. NRW’s future growth prospects are reliant on its ability to market it services and any regulatory
change, event or enforcement action which would restrict those activities could have a material impact on
NRW’s growth and future financial performance. Amendments to current law and regulations governing
operations or more stringent implementation of laws and regulations could have an adverse impact on NRW,
including increases in expenses, capital expenditure and costs. The impact of future regulatory and legislative
change upon the business of NRW cannot be predicted.
NRW is also dependent on various technical and financial accreditations to operate the business. These include
safety accreditations, quality assurance standards, technical accreditations and various financial accreditations.
Any failure to maintain or comply with accreditation can impact the eligibility of NRW to participate in certain
projects and sectors.
Mitigation actions include the monitoring of regulatory and legislative changes that impact the organisation and
ensuring NRW is up to date with its compliance obligations.
Intellectual Property
NRW’s ability to leverage innovation and expertise depends upon its ability to protect intellectual property and
any improvements to it. Such intellectual property may not be capable of being legally protected and may be
the subject of unauthorised disclosure or unlawfully infringed. NRW may incur substantial costs in asserting or
defending its intellectual property rights.
Mitigation actions include continual internal assessment to identify any potential intellectual property and where
able, the legal protection of such rights.
Pandemic
The ongoing challenges related to the COVID-19 pandemic require constant monitoring. The COVID-19
pandemic has had a significant impact across our operations to date. Measures taken as a result of the
pandemic, including border closures imposed at a State and Federal level, have effectively restricted the
available labour pool. Our challenge remains to deliver projects in an environment where competition for people
has increased significantly, driven by both high construction activity and strong commodity demand. This
restriction on available labour may lead to higher staff turnover, increased labour costs and lower productivity.
Our clients depend on open access to international markets without which they may need to reduce or
temporarily suspend operations currently performed by NRW. We employ over 7,000 people across the Group
and rely on them to apply social distancing both at work and when not at work. We cannot assume that we are
immune to a local infection which may require operations to be temporarily suspended.
NRW’s supply chain is reliant on overseas sourcing and normal logistical support timeframes. Its operation
could be impacted by delays brought about by responses to the pandemic which could delay project timeframes
and lead to increased costs.
There is a risk that a material outbreak related to the virus may impact operations through both reductions in
revenue and increases in costs which could result in the carrying values of certain assets being overstated.
NRW has carried out additional impairment scenario testing including stress testing the current business plan
assumptions to ensure the carrying value of assets can continue to be supported.
Mitigation actions include alignment with State and Federal advice, regular reviews of processes adopted as a
result of the pandemic to ensure they are as effective as they can be in preventing the spread of the virus.
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NRW HOLDINGS ANNUAL REPORT 2021 | Corporate Governance & Risk Management
AUDITOR’S INDEPENDENCE
DECLARATION
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
The Board of Directors
NRW Holdings Limited
181 Great Eastern Highway
Belmont WA 6104
19 August 2021
Dear Board Members
NNRRWW HHoollddiinnggss LLiimmiitteedd
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.
As lead audit partner for the audit of the financial statements of NRW Holdings Limited for the financial year
ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions
of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours sincerely
DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU
DD KK AAnnddrreewwss
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation
38
NRW HOLDINGS ANNUAL REPORT 2021 | Auditor’s Independence Declaration
DIRECTORS’
DIRECTORS’
DECLARATION
DECLARATION
Directors’ Declaration
THE DIRECTORS DECLARE THAT:
(a) 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;
(b) in the Directors’ opinion, the attached financial statements are in compliance with International Financial
Reporting Standards, as stated in note 1.2 to the financial statements;
(c) 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 7.1 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
Julian Pemberton
Chief Executive Officer and Managing Director
Michael Arnett
Chairman and Non-Executive Director
Perth, 19 August 2021
NRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Declaration
39
39
NRW HOLDINGS ANNUAL REPORT 2021 | Directors’ Report
CONSOLIDATED STATEMENT OF PROFIT OR
CONSOLIDATED STATEMENT OF
LOSS AND OTHER COMPREHENSIVE INCOME
PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2021
REVENUE
Other income
Materials and consumables
Employee benefits expense
Subcontractor costs
Plant and equipment costs
Depreciation and amortisation expenses
Other expenses
Share of profit / (loss) from associates
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
Profit and Other Comprehensive Income Attributable to:
Equity holders of the Company
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
Consolidated
Notes
2021
$’000
2020
$’000
2.2
2.3
2.4
2.4
2.4
3.5
2.5
6.1
4.6
4.6
2,221,479
2,004,362
14,712
(476,333)
(720,130)
(466,906)
(271,726)
(166,297)
(47,012)
1,435
(13,332)
75,890
(21,595)
54,295
311
(390,599)
(570,183)
(441,929)
(343,961)
(122,081)
(22,856)
(42)
(12,804)
100,218
(26,469)
73,749
54,295
73,749
Cents
12.5
12.4
Cents
18.2
18.0
The consolidated statement of profit and loss and other comprehensive income should be read in conjunction with the accompanying notes.
40
40
NRW HOLDINGS ANNUAL REPORT 2021 | Consolidated Statement of Profit or Loss and Other Comprehensive Income
CONSOLIDATED STATEMENT OF
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
FINANCIAL POSITION
Consolidated Statement of Financial Position
As at 30 June 2021
Consolidated
Notes
2021
$’000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Lease receivable
Inventories
Non-current assets held for sale
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Lease assets (right of use)
Lease receivable
Investments in listed equities
Investments in associates
Intangibles
Goodwill
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial debt
Lease debt
Provisions
Current tax liability
Total current liabilities
Non-current liabilities
Financial debt
Lease debt
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained profits
Total equity
3.1
3.2
3.8
3.3
3.3
3.4
3.5
3.6
3.7
3.9
5.3
5.4
3.10
6.3
5.3
5.4
3.10
6.3
4.2
4.3
4.4
2020(1)
$’000
170,229
369,906
2,546
57,358
-
8,771
146,549
412,577
2,794
57,055
82,612
7,321
708,908
608,810
321,408
48,163
180
13,616
2,233
44,123
162,981
592,704
1,301,612
330,755
92,056
13,621
71,966
418
451,825
58,276
2,545
-
2,610
33,961
85,036
634,253
1,243,063
331,642
81,799
14,757
110,442
-
508,816
538,640
169,852
162,996
42,303
20,670
14,848
247,673
756,489
545,123
383,416
11,359
150,348
545,123
50,301
17,871
866
232,034
770,674
472,389
332,863
8,453
131,073
472,389
(1) Restated to reflect finalisation of BGC Contracting Purchase Price Accounting – refer to note 7.5.
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
41
41
NRW HOLDINGS ANNUAL REPORT 2021 | Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
CHANGES IN EQUITY
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2021
Notes
Contributed
Equity
Foreign
Currency
Translation
Reserve
Share Based
Payment
Reserve
Total
Reserves
Retained
Earnings
Total
Equity
$’000
$’000
206,126
(208)
$’000
7,032
$’000
$’000
$’000
6,824
75,613
288,563
4.4
-
4.2
120,000
4.2
4.2
4.2
4.5
4.3
10,000
(3,287)
24
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(24)
(24)
73,749
73,749
-
-
-
-
120,000
10,000
(3,287)
-
-
-
(18,289)
(18,289)
1,653
1,653
-
1,653
332,863
(208)
8,661
8,453
131,073
472,389
4.4
-
4.2
4.5
4.3
50,553
-
-
-
-
-
-
67
-
-
-
-
-
-
-
-
67
2,839
2,839
54,295
54,295
-
50,553
(35,020)
(35,020)
-
-
67
2,839
383,416
(141)
11,500
11,359
150,348
545,123
Balance at
30 June 2019
Total profit and
other
comprehensive
income for the year
Issue of ordinary
shares under
institutional share
placement
Share purchase
plan
Share issue costs
(net of tax benefit)
Treasury shares
transferred to
contributed equity
Dividends paid
Share-based
payments
Balance at
30 June 2020
Total profit and
other
comprehensive
income for the year
Issue of ordinary
shares as part of
business
acquisition
Dividends paid
Movements in
foreign currency
Share-based
payments
Balance at
30 June 2021
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
42
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NRW HOLDINGS ANNUAL REPORT 2021 | Consolidated Statement of Changes in Equity
CONSOLIDATED STATEMENT OF
CONSOLIDATED STATEMENT OF
CASH FLOWS
CASH FLOWS
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest paid
Interest received
Income tax paid
Net cash flow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of property, plant and equipment
Proceeds from Associates
Acquisition of Gascoyne shares
Acquisition of property, plant and equipment
Acquisition of intangible assets
Payment for subsidiary
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of equity instruments of the Company
Payment for share issue costs
Proceeds from borrowings
Repayment of borrowings
Repayment of lease debt
Payment of dividends to shareholders
Net cash (used in) / from financing activities
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at the end of the year
Consolidated
Notes
2021
$’000
2020
$’000
2.5
2.5
5.1
3.5
3.4
3.3
3.6
7.5
5.3
5.3
5.4
4.5
2,363,455
2,120,573
(2,202,685)
(1,892,067)
(13,676)
(13,310)
344
-
506
-
147,438
215,702
4,214
1,812
(4,312)
(77,895)
(703)
(44,796)
(121,680)
-
-
83,197
(82,092)
(15,523)
(35,020)
(49,438)
(23,680)
170,229
146,549
1,377
-
-
(82,622)
-
(111,759)
(193,004)
130,000
(4,694)
68,469
(82,434)
(10,552)
(18,289)
82,500
105,198
65,031
170,229
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
NRW HOLDINGS ANNUAL REPORT 2020 | Consolidated Statement of Cash Flows
43
43
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENT
FINANCIAL STATEMENTS
Notes to Financial Statements
1 GENERAL NOTES
GENERAL INFORMATION
NRW Holdings Limited is a public company listed on the Australian Securities Exchange which is incorporated
and domiciled in Australia. The address of the Company’s registered office is 181 Great Eastern Highway,
Belmont, Western Australia. The consolidated financial statements of the Company for the year ended 30 June
2021 comprises the Company and its subsidiaries together referred to as the Group. The Group is primarily
involved in the provision of diversified contract services to the resources and infrastructure sectors in Australia.
BASIS OF PREPARATION
This section sets out the basis of preparation and the Group accounting policies that relate to the consolidated
financial statements as a whole. Significant and other accounting policies that summarise the measurement
basis used and are relevant to an understanding of the financial statements are provided throughout the notes
to the financial statements to which it relates.
The financial report is a general purpose financial report which:
• Has been prepared in accordance with Australian Accounting Standards (AASBs), including Australian
Accounting Interpretations adopted by the Australian Accounting Standards Board, and the
Corporations Act 2001. The financial report of the Group also complies with International Financial
Reporting Standards (IFRSs) and Interpretations as issued by the International Accounting Standards
Board (IASB);
• Has been prepared on the basis of historical cost except for the revaluation of financial instruments.
Historical cost is based on the fair values of the consideration given in exchange for goods and services;
Is presented in Australian dollars (AUD);
Is rounded to the nearest thousand ($000), unless otherwise stated, in accordance with ASIC
Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191;
•
•
• Adopts all new and amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant to the operations of the Group and effective
for reporting periods beginning on or after 1 July 2020. Refer to note 1.4 for further details;
• Does not early adopt any Accounting Standards and Interpretations that have been issued or amended
but are not yet effective. Refer to note 1.4 for further details; and
• Has applied the Group accounting policies consistently to all periods presented.
The financial statements were authorised for issue by the Directors on 19 August 2021.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
• Has power over the investee;
•
• Has the ability to use its power to affect its returns.
Is exposed, or has rights, to variable returns from its involvement with the investee; and
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control listed above.
44
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
1.3
BASIS OF CONSOLIDATION CONTINUED
When the Company has less than a majority of the voting rights of an investee, it considers that it has power
over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities
of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether
or not the Company’s voting rights in an investee are sufficient to give it power, including:
• The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the
other vote holders;
• Potential voting rights held by the Company, other vote holders or other parties;
• Rights arising from other contractual arrangements; and
• Any additional facts and circumstances that indicate that the Company has, or does not have, the
current ability to direct the relevant activities at the time that decisions need to be made, including voting
patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when
the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or
disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive
income from the date the Company gains control until the date when the Company ceases to control the
subsidiary.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting
policies used in line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to material transactions
between members of the Group are eliminated on consolidation.
NEW ACCOUNTING STANDARDS
The Group has adopted all the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current
financial year:
Standard/Interpretation
Definition of a Business
AASB 2018-6 Amendments to Australian Accounting Standards (AASB 3)
Definition of Material
AASB 2018-7 Amendment to Australian Accounting Standards (AASB 1 and AASB 8)
Conceptual Framework for
Financial Reporting
AASB 2019 -1 Amendments to References to the Conceptual Framework in AASB Standard
OTHER ACCOUNTING POLICIES
Significant and other accounting policies that summarise the measurement basis used and are relevant to an
understanding of the financial statements are provided throughout the notes to the financial statements.
ACCOUNTING JUDGMENTS AND ESTIMATES
In applying the Group’s accounting policies, which are described throughout the notes to the financial
statements, management are required to make judgements (other than those involving estimations) that have
a significant impact on the amounts recognised and to make estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and various other factors that are considered to be reasonable
under the circumstances. Actual results may differ from these estimates.
The 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:
•
•
If the revision affects only that period; or
In the period of the revision and future periods if the revision affects both current and future periods.
Throughout the notes to the financial statements further information is provided about key judgements and
estimates that we consider material to the financial statements.
45
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
2 BUSINESS PERFORMANCE
SEGMENT REPORTING
NRW is comprised of three reportable segments, Civil, Mining and Minerals, Energy & Technologies. Business
activities are conducted primarily in Australia, with some operations in Canada and the USA.
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other components
of the Group), whose operating results are regularly reviewed by the Group’s Chief Operating Decision Maker
(the Board of Directors) to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available.
In previous reports, the results of Drill and Blast (Action Drill & Blast) have been separately reported. The relative
size of the Action Drill & Blast business in comparison to the other three segments and the increased
dependency on work from the Civil and Mining segments were the main factors which were considered in
making this change. Comparative segment information for prior periods has been provided within Appendix A
of the financial statements.
Significant Business Acquisition
On 17 February 2021, the Company completed the acquisition of Primero Group Limited (Primero). The Primero
business has been integrated into the Minerals, Energy & Technologies (MET) segment. For further details on
the acquisition of the Primero Group refer to note 7.5.
Reportable Segments
NRW has structured its business reporting into three segments, Civil, Mining, and Minerals, Energy
& Technologies.
• Civil: The Civil business specialises in the delivery of private and public civil infrastructure projects,
mine development, bulk earthworks and commercial and residential subdivisions. Civil construction
projects include roads, bridges, tailings storage facilities, rail formation, ports, renewable energy
projects, water infrastructure and concrete installations.
• Mining: The Mining business specialises in mine management, contract mining, load and haul, dragline
operations, drill and blast, coal handling prep plants, maintenance services and the fabrication of water
and service vehicles.
• Minerals, Energy & Technologies: The Minerals, Energy & Technologies business incudes RCR
Mining Technologies which is a leading original equipment manufacturer (OEM) that offers innovative
materials handling design capability, DIAB Engineering which has proven capabilities in the metals and
mining industry and provides specialist maintenance (shutdown services and onsite maintenance),
industrial engineering and fabrication services and Primero acquired in February 2021. Primero
provides a full engineering procurement construction capability that operates in the Mineral Processing,
Energy and Non-Process Infrastructure market segments.
Segment results include items directly attributable to a segment as well as those that can be allocated on a
reasonable basis. Unallocated items comprise predominantly corporate expenses. Inter-segment pricing is
determined on an arm’s length basis.
46
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
2.1
SEGMENT REPORTING CONTINUED
Reportable Segment Revenues and Results
2021
$’000
Revenue(1)
Civil
Mining
MET
Corporate /
Eliminations
Total
726,514
1,177,240
426,907
(30,053)
2,300,608
Revenue from associates
(79,129)
-
-
-
(79,129)
Statutory revenue
EBITDA(2)
EBITDA margin (%)
Depreciation and amortisation(3)
EBITA(4)
EBITA margin (%)
Amortisation of acquisition intangibles(5)
Non-recurring transactions(6)
Net interest
Profit before income tax
Income tax expense
Profit for the year
647,385
1,177,240
426,907
(30,053)
2,221,479
28,600
3.9%
(5,739)
22,861
3.1%
212,769
18.1%
(128,888)
83,881
7.1%
42,104
9.9%
(8,547)
33,557
7.9%
(16,738)
266,735
-
11.6%
(2,916)
(146,090)
(19,654)
120,645
-
5.2%
(20,207)
(11,216)
(13,332)
75,890
(21,595)
54,295
2020
$’000
Revenue(1)
Civil
Mining
MET
Corporate /
Eliminations
Total
820,097
1,059,714
187,167
(4,532)
2,062,446
Revenue from associates
(58,084)
-
-
762,013
1,059,714
187,167
34,386
4.2%
(7,917)
26,469
3.2%
201,809
19.0%
(91,508)
110,301
10.4%
22,384
12.0%
(6,532)
15,852
8.5%
Statutory revenue
EBITDA(2)
EBITDA margin (%)
Depreciation and amortisation(3)
EBITA(4)
EBITA margin (%)
Amortisation of acquisition intangibles(5)
Non-recurring transactions(6)
Net interest
Profit before income tax
Income tax expense
Profit for the year
-
(4,532)
(8,555)
-
(58,084)
2,004,362
250,024
12.1%
(3,124)
(109,081)
(11,679)
140,943
-
6.8%
(13,000)
(14,921)
(12,804)
100,218
(26,469)
73,749
Includes depreciation, and amortisation of software.
(1) Revenue including our share of revenue earned by our associates and joint ventures.
(2) EBITDA is earnings before interest, tax, depreciation, amortisation of acquisition intangibles and non-recurring transactions.
(3)
(4) EBITA is earnings before interest, tax, and amortisation of acquisition intangibles and non-recurring transactions.
(5) Amortisation of intangibles as part of business acquisitions.
(6) Non-recurring transactions include Altura impairment, Gascoyne writeback and Primero transaction costs (FY21) and costs associated
with the acquisition of BGC Contracting (FY20).
47
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
2.1
SEGMENT REPORTING CONTINUED
Segment Assets and Liabilities
Segment Assets
Segment Liabilities
2021
$’000
89,950
760,019
273,571
178,072
2020
$’000
202,757
733,726
106,066
200,514
1,301,612
1,243,063
2021
$’000
123,065
357,058
160,533
115,833
756,489
2020
$’000
194,959
430,143
63,041
82,531
770,674
Civil
Mining
MET
Unallocated
Consolidated
Information About Major Customers
Included in the revenues arising from sales of the reportable segments are approximate revenues to arise from
the sales to the Group’s largest customers.
These are summarised by segment below for the year end 30 June 2021:
Major customer 1
Major customer 2
Total
Civil
$’000
215,363
195,470
410,833
Mining
$’000
96,101
12,745
108,846
MET
$’000
208,447
149,085
357,532
These are summarised by segment below for the comparative year end 30 June 2020:
Civil
$’000
239,871
169,178
-
409,049
Mining
$’000
36,509
14,310
214,667
265,486
MET
$’000
13,819
32,346
-
46,165
Major customer 1
Major customer 2
Major customer 3
Total
REVENUE
Total
$’000
519,911
357,300
877,211
Total
$’000
290,199
215,834
214,667
720,700
Revenue - group and equity accounted joint ventures(1)
Equity accounted investments in associates
Revenue from contracts with customers
Consolidated
2021
$’000
2,300,608
(79,129)
2,221,479
2020
$’000
2,062,446
(58,084)
2,004,362
(1) The Group defines aggregated revenue as revenue and income calculated in accordance with relevant accounting standards plus our
share of revenue earned by our associates and joint ventures.
48
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
2.2
REVENUE CONTINUED
(i) Construction Contracts
Revenues from construction contracts are recognised by reference to the stage of completion of the contract
activity. Measurement is based on the proportion of contract costs incurred for work performed to date relative
to the estimate total contract costs, except where this would not be representative of the stage of completion.
The Directors consider that this input method is an appropriate measure of the progress towards complete
satisfaction of performance obligations under AASB 15: Revenue from Contracts with Customers.
The Group becomes entitled to invoice customers for construction contracts based on achieving a series of
performance-related milestones. When a particular milestone is reached the customer is sent a relevant
statement of work signed by a third party assessor and an invoice for the related milestone payment. The Group
will previously have recognised a contract asset for any work performed. Any amount previously recognised as
a contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer. If the
milestone payment exceeds the revenue recognised to date under the cost-to-cost method then the Group
recognises a contract liability for the difference.
(ii) Service Contracts
Revenue from service contracts is recognised on the basis of the value of work completed. Customer contracts
are generally based on schedule of rates for each of the activities performed which identify value for the work
performed and hence the value of revenue to be recognised.
Revenue for preventative maintenance contracts is recognised progressively over the contract term.
Transaction Price and Contract Modifications
The transaction price is the amount of consideration to which the Company expects to be entitled to under the
customer contract and which is used to value total revenue and is allocated to each performance obligation.
The determination of this amount includes both ‘fixed consideration’, (for example the agreed lump sum,
aggregated schedule of rates or pricing for services) and ‘variable consideration’.
The main variable consideration elements are claims (contract modifications) and consideration for optional
works and provisional sums, each of which need to be assessed. Contract modifications are changes to the
contract approved by the parties to the contract. When determining whether approval has been granted by the
parties to the contract, the Group takes into consideration factors including, but not limited to, contract terms,
customary business practices, the status of the negotiation process, the ability to enforce the other party and
expert legal opinion.
A contract modification may exist even though the parties to the contract may not have finalised the scope or
price (or both) of the modification. Contract modifications may include a claim, which is an amount that the
contractor seeks to collect as reimbursement for costs incurred (and/or to be incurred) due to reasons or events
that could not be foreseen and are not attributable to the contractor, for more work performed (and/or to be
performed) or variations that were not formalised in the contract scope.
The right to income from a contract modification shall be provided to the extent the agreement with the customer
creates enforceable rights and obligations. Once the enforceable right has been identified, the Group applies
the guidance given in AASB 15 in relation to variable consideration. This requires an assessment that it is highly
probable that there will not be a significant reversal of this revenue in the future.
Costs to Obtain and Fulfil a Contract
Costs incurred during the tender/bid process are expensed, unless they are incremental to obtaining the
contract and the Group expects to recover those costs or where they are explicitly chargeable to the customer
regardless of whether the contract is obtained. The incremental costs of obtaining a contract are those costs
that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not
been obtained.
Financing Components
The Group does not expect to have any contracts where the period between the transfer of the promised goods
or services to the customer represents a financing component. As a consequence, the Group does not adjust
any of the transaction prices for the time value of money.
49
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
2.2
REVENUE CONTINUED
Warranties
Generally, construction and services contracts include defect and warranty periods following completion of the
project. These obligations are not deemed to be separate performance obligations and therefore estimated and
included in the total costs of the contracts. Where required, amounts are recognised accordingly in line with
AASB 137: Provisions, Contingent Liabilities and Contingent Assets. Refer to note 3.10 for further details.
Key Judgements and Estimates
Stage of completion
Determining the stage of completion requires an estimate of expenses incurred to date as a percentage of
total estimated costs. Key assumptions regarding costs to complete include estimations of labour, technical
costs, impact of delays and productivity. These estimates are performed by qualified professionals within the
project teams.
Variable consideration
The measurement of the additional consideration arising from claims is subject to a high level of uncertainty,
both in terms of the amounts that the customer will pay and the collection times, which usually depend on
the outcome of negotiations between the parties or decisions taken by judicial/arbitration bodies. The Group
considers all the relevant aspects and circumstances such as the contract terms, business and negotiating
practices of the sector, the Group’s historical experiences with similar contracts and consideration of those
factors that affect the variable consideration that are out of the control of the Group or other supporting
evidence when making the above decision.
The estimate of variable consideration can only be recognised to the extent it is highly probable that a
significant revenue reversal will not occur in future. As at 30 June 2021, the Group has recognised revenue
of $68.0 million (2020: $39.5 million) from unapproved claims based on the relative stage of completion.
Remaining Performance Obligations (Work in Hand)
The transaction price allocated to remaining performance obligations (unsatisfied or partially satisfied) at
30 June 2021 are set out below.
Civil
Mining
MET
Total
Within one year
More than one year
Total
Consolidated
Consolidated
2021
$’000
518,413
2,488,859
341,308
3,348,580
2021
$’000
1,560,297
1,788,283
3,348,580
2020
$’000
476,706
2,483,023
79,880
3,039,609
2020
$’000
1,752,699
1,286,910
3,039,609
NRW’s contracts in its operating sectors have varying lengths. The average duration of contracts is given below.
Revenue is typically earned over these varying timeframes.
• Construction
• Contract mining
• Mineral processing equipment
• Maintenance services
1-2 years
1-6 years
1-2 years
1-5 years
50
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
OTHER INCOME
Gascoyne Resources
Lease income
All other income
Total
Gascoyne
Consolidated
2021
$’000
12,437
382
1,893
14,712
2020
$’000
-
311
-
311
The recapitalisation of Gascoyne Resources (GCY) was finalised in October 2020. As part of the recapitalisation
structure NRW negotiated recovery of pre-administration amounts owed in the form a cash payment, issue of
GCY shares and a structure to recover the balance of amounts owed through successful gold production (refer
to note 3.4 for further details).
Lease Income
Includes income from sub-leasing plant and machinery. Under AASB 16, the Group classifies particular sub-
leases as a finance lease because the sub-lease contracts are for the whole of the remaining term of the
underlying life of the plant. The Group has recognised a lease receivable, showing the undiscounted lease
payments to be received after the reporting date.
OTHER EXPENSES
Consolidated
EMPLOYEE BENEFITS EXPENSE
Wages and salaries
Superannuation contributions
Share based payments
Total
DEPRECIATION & AMORTISATION
Depreciation of non-current assets (note 3.3)
Amortisation of intangibles (note 3.6)
Amortisation of capitalised contract costs
Total
OTHER EXPENSES
Insurance
Professional services
Loss on sale of property, plant and equipment
Non-recurring transactions – Altura Mining
All other expenses
Total
2021
$’000
(667,893)
(49,398)
(2,839)
(720,130)
(144,704)
(20,584)
(1,009)
(166,297)
(14,207)
(1,440)
(366)
(19,057)
(11,942)
(47,012)
2020
$’000
(527,207)
(41,323)
(1,653)
(570,183)
(108,802)
(13,279)
-
(122,081)
(9,862)
(2,826)
(1,477)
-
(8,691)
(22,856)
51
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
NET FINANCE EXPENSES
Interest income
Total finance income
Interest expense on financial debt
Interest expense on lease debt
Total finance expenses
Net finance expense
Interest Income
Consolidated
2021
$’000
344
344
(10,059)
(3,617)
(13,676)
(13,332)
2020
$’000
506
506
(9,889)
(3,421)
(13,310)
(12,804)
Interest income is accrued on a time basis, by reference to the principal amount outstanding and at the effective
interest rate applicable, which is the rate that discounts estimated future cash receipts through the expected life
of the financial asset of that asset’s net carrying amount.
Interest Expense
Interest expense is recognised using the effective interest method. 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 discounts estimated future cash payments through the expected life
of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
3 BALANCE SHEET
TRADE AND OTHER RECEIVABLES
Trade receivables
Contract assets
Total contract debtors
Other receivables
Loans to associates
Total trade and other receivables
Trade Receivables
2021
$’000
181,606
222,629
404,235
5,922
2,420
412,577
Consolidated
2020
$’000
153,571
210,060
363,631
5,863
412
369,906
Trade receivables represent receivables in respect of which the Group’s right to consideration is unconditional
subject only to the passage of time. Trade receivables and other receivables are initially recognised at fair value
and subsequently at amortised cost using the effective interest rate method, less an allowance for expected
credit losses.
The average credit period on trade receivables ranges from 30 to 75 days in most cases. In determining the
recoverability of a trade receivable, the Group used the expected credit loss model as per AASB 9. The expected
credit loss model requires the Group to account for expected credit losses at each reporting date to reflect
changes in credit risk since initial recognition of the financial assets. In other words, it is no longer necessary
for a credit default to have occurred before credit losses are recognised.
52
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
3.1
TRADE AND OTHER RECEIVABLES CONTINUED
Contract Assets
AASB 15 uses the terms ‘contract asset’ and ‘contract liability’ to describe what might more commonly be known
as ‘accrued revenue’ and ‘deferred revenue’. Contract assets represent the Group’s right to consideration for
services provided to customers for which the Group’s right remains conditional on something other than the
passage of time. Amounts are generally reclassified to trade receivables when contract performance obligations
have been certified or invoiced to the customer. Contract liabilities arise where payment is received prior to work
being performed.
Age of Trade Receivables That are Past Due
60-90 days
90-120 days
Total
Consolidated
2020
$’000
361
870
1,231
2021
$’000
48
562
610
Past due is defined under AASB 7 Financial Instruments: Disclosures to mean any amount outstanding for one
or more days after the contractual due date. Past due amounts relate to a number of trade receivable balances
where for various reasons the payment terms may not have been met. The expected credit losses are
immaterial. Refer to note 4.1 for further details.
Key Judgements and Estimates
Estimation of contract revenue (contract assets)
Where performance obligations are satisfied over time, revenue is recognised in the consolidated income
statement by reference to the progress towards complete satisfaction of each performance obligation.
Fundamental to this calculation is a reliable estimate of the transaction price, refer to note 2.2 for judgements
applied in determining the amount of unbilled revenue to recognise.
INVENTORIES
Raw materials and consumables
Work in progress
Total inventories
Consolidated
2021
$’000
47,507
9,548
57,055
2020(1)
$’000
50,629
6,729
57,358
(1) Restated to reflect finalisation of BGC Contracting Purchase Price Accounting – refer to note 7.5.
Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated
selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
53
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
PROPERTY, PLANT AND EQUIPMENT
Land
Buildings
Leasehold
improvements
Plant and
equipment
PPE
Total
RoU
buildings
RoU
plant and
equipment
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Lease
assets
(RoU)
Total
$’000
3,218
6,732
1,680
604,930
616,560
-
-
-
-
-
-
-
-
-
-
63
-
-
-
-
-
36,301
9,601
45,902
912
227,633
228,545
4,154
1,348
5,502
-
-
-
82,559
82,622
8,067
11,672
19,739
(31,816)
(31,816)
-
-
-
(482)
(18)
-
(18)
(482)
3,218
6,795
2,592
883,306
895,911
48,040
22,603
70,643
-
-
-
-
-
-
-
281
-
-
940
-
294
-
-
7,559
8,499
(377)
(377)
-
-
77,320
77,895
4,897
2,466
2,466
-
943
-
5,840
(31,082)
(31,082)
(1,150)
(1,928)
(3,078)
(112,151)
(112,151)
-
-
-
3,218
7,076
3,826
824,575
838,695
51,787
24,084
75,871
1,000
5,495
1,508
368,630
376,633
-
-
-
-
-
190
-
27
-
96,202
96,419
6,469
5,914
12,383
(28,966)
(28,966)
-
(16)
(16)
1,000
5,685
1,535
435,866
444,086
6,469
5,898
12,367
-
-
-
-
200
86
129,148
129,434
6,415
9,047
15,462
-
-
-
-
-
-
(192)
(192)
-
(26,502)
(26,502)
(26)
(29,539)
(29,539)
-
-
(95)
-
-
(121)
-
1,000
5,885
1,621
508,781
517,287
12,858
14,850
27,708
COST
Balance as at
30 June 2019
Adoption of AASB16
Acquisitions through
business
combinations
(note 7.5)
Additions
Disposals
Impairment
Balance as at
30 June 2020(1)
Acquisitions through
business
combinations
(note 7.5)
Transfer to intangibles
Additions
Disposals
Assets held for sale
Balance as at
30 June 2021
DEPRECIATION
Balance as at
30 June 2019
Depreciation expense
Disposals
Balance as at
30 June 2020
Depreciation expense
Transfer to intangibles
Disposals
Assets held for sale
Balance as at
30 June 2021
CARRYING VALUES
At 30 June 2020
2,218
1,110
At 30 June 2021
2,218
1,191
1,057
2,205
447,440
451,825
41,571
16,705
58,276
315,794
321,408
38,929
9,234
48,163
(1) Restated to reflect finalisation of BGC Contracting Purchase Price Accounting – refer to note 7.5.
54
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
3.3
PROPERTY, PLANT AND EQUIPMENT CONTINUED
Recognition and Measurement
The value of property, plant and equipment is measured as the cost of the asset less accumulated depreciation
and impairment. All property, plant and equipment, other than freehold land, is depreciated or amortised at rates
appropriate to the estimated useful life of the assets or in the case of certain leased plant and equipment, the
shorter lease term or hours (usage) reflecting the effective lives. The normal expected useful lives bands are:
Buildings
Leasehold improvements
Major plant and equipment
Minor plant and equipment
Office equipment
Furniture and fittings
Motor vehicles
4 to 40 years
2 to 7 years
5 to 10 years (normally based on machine hours)
1.5 to 10 years
2 to 8 years
2 to 5 years
3 to 7 years
The bands provide a range of effective lives regardless of methodology used in the depreciation process (either
machine hours, or straight line).
Depreciation rates and methods are normally reviewed at least annually. Where depreciation rates or methods
are changed, the net written down value of the asset is depreciated from the date of the change in accordance
with the new depreciation rate or method. Depreciation recognised in prior financial years shall not be changed,
that is, the change in depreciation rate or method shall be accounted for on a ‘prospective’ basis. An asset’s
carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement
of an item of property, plant and equipment is determined as the difference between the sales proceeds and
the carrying amount of the asset and is recognised in profit or loss.
Lease Assets (Right of Use Assets)
The lease assets comprise the initial measurement of the corresponding lease debt, lease payments made at
or before the commencement day, less any lease incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and impairment losses.
Lease assets are depreciated over the shorter period of lease term and useful life of the underlying asset (refer
to normal expected useful lives bands for details). If a lease transfers ownership of the underlying asset or the
cost of the lease asset reflects that the Group expects to exercise a purchase option, the related lease asset is
depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of
the lease.
Key Judgements and Estimates
Estimates of useful economic lives
A technical assessment of the operating life of an asset requires significant judgement. Useful lives are
amended prospectively when a change in the operating life is determined.
Lease vs ‘in substance’ sale or purchase
When assessing the nature of a lease contract under AASB 16 Leases, the Group considers whether the
contract transfers control of the underlying asset as opposed to conveying the right to control the use of the
underlying asset for a period of time.
If the lease contract is assessed to transfer control of the asset, the asset is treated as property, plant and
equipment and is not considered a lease asset under AASB 16.
If the lease contract is assessed not to transfer control of the asset, the contract is assessed against relevant
criteria set out in AASB 16 and if it meets those criteria the asset is recognised as a lease asset.
55
55
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
INVESTMENTS IN LISTED EQUITIES
Investments at fair value through profit and loss
Gascoyne Resources Limited (ASX: GCY)
Barton Gold Limited (ASX: BGD)
Other listed equities
Total investments in listed equities
Consolidated
2021
$’000
11,081
1,496
1,039
13,616
2020
$’000
-
-
-
-
All equity investments in scope of AASB 9 are measured at fair value in the statement of financial position, with
value changes recognised in profit or loss, except for those equity investments for which the entity has elected
to present value changes in other comprehensive income.
Gascoyne Resources
Following the successful recapitalisation of Gascoyne Resources, NRW received 480 million shares in
exchange for amounts owed pre-administration. At the same time, 86.2 million of pre-existing shares
were reinstated.
In addition, NRW subscribed to 172.5 million shares under the entitlement offer bringing total NRW shareholding
to 738.7 million pre-share consolidation, 36.9 million shares post share consolidation (on 22 September 2020
GCY announced a 20:1 share consolidation).
The investment in Gascoyne Resources is accounted for at fair value through profit and loss and has been
valued at 30 cents per share at 30 June 2021.
Gascoyne Recapitalisation Reconciliation
The following table summarises the impairment recognised in the financial year 30 June 2019, following
Gascoyne Resources entering Voluntary Administration in June 2019, together with the corresponding effect
on these financial statements of the recovery of amounts following the successful recapitalisation of Gascoyne
Resources in October 2020.
Loss Recognised
30 June
2019
$’000
GCY Recapitalisation
30 June 2021
Recover
P&L
Equity
Invest.
Operating
Cash
Flow
Investing
Cash
Flow
Non Cash
$’000
$’000
$’000
$’000
$’000
$’000
Secured loans
(10,000)
Equity settlement of
secured loan
12,000
12,000
12,000
Listed shares
(4,312)
Relisting shares
2,156
2,156
2,156
Trade debtors
(19,211)
Cash settlement
(excl. GST)
6,364
6,364
Future entitlement
15,780(1)
804
-
-
-
-
6,364
804
Total
(33,523)
Subtotal
36,300
21,324
14,156
7,168
-
-
-
-
-
12,000
2,156
-
-
14,156
Subscription for new
share (2:1 rights
entitlement)
Remeasurement of GCY
equity FVTPL(2)
Related costs
Total
-
-
-
-
-
4,312
(7,387)
(7,387)
-
-
(1,500)
-
(1,500)
(4,312)
-
-
-
(7,387)
-
12,437(3)
11,081
5,668
(4,312)(4)
6,769(5)
(1) NRW negotiated a structure to recover the balance of amounts owed through successful gold production. Amounts have since been
received in FY21.
(2) Fair value through profit and loss.
(3) Disclosed as Other Income in the Consolidated Statement of Profit or Loss.
(4) Disclosed as an Investing Activity in the Consolidated Statement of Cash Flows.
(5) Disclosed as adjustment to working capital in note 5.1.
56
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
INVESTMENT IN ASSOCIATES
Interest in Associates:
Salini Impregilo NRW Joint Venture
Southwest Connex Alliance
Hepburn to Hodges Joint Venture
NewGen Drilling Pty Ltd
Consolidated
2021
20%
40%
50%
20%
Reconciliation and Movement in the Group’s Carrying Value of its Investments:
Opening balance of investment in associates
Share of profit/(loss) from equity accounted investments
Distributions received from associates
Closing balance of investment in associates
Consolidated
2021
$’000
2,610
1,435
(1,812)
2,233
2020
20%
-
-
20%
2020
$’000
2,652
(42)
-
2,610
Investments in entities over which the Group has the ability to exercise significant influence, but not control, are
accounted for using the equity method of accounting. The investment in associates is carried at cost plus post-
acquisition changes in the Group’s share of the associates’ net assets, less any impairment in value.
The requirements of AASB 136 are applied to determine whether it is necessary to recognise any impairment
loss with respect to the Group’s investment in an associate. When necessary, the entire carrying amount of the
investment (including goodwill) is tested for impairment in accordance with AASB 136 Impairment of Assets as
a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal)
with its carrying amount, any impairment loss recognised forms part of the carrying amount of the investment.
Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the
recoverable amount of the investment subsequently increases.
Key Judgements and Estimates
Determination of control
The Company considers all relevant facts and circumstances in assessing whether or not the Company’s
voting rights in an investee are sufficient to give it control, including:
• The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of
the other vote holders;
• Potential voting rights held by the Company, other vote holders or other parties;
• Rights arising from other contractual arrangements; and
• Any additional facts and circumstances that indicate that the Company has, or does not have, the
current ability to direct the relevant activities at the time that decisions need to be made, including
voting patterns at previous shareholders’ meetings.
57
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
INTANGIBLE ASSETS
Software and
System
Development
Patent
Technology
Brand
Names
Customer
Relationships
Total
$’000
$’000
$’000
$’000
$’000
COST
Balance as at 30 June 2019
21,142
9,460
11,638
24,210
Assets recognised on business combinations (note 7.5)
-
-
2,291
21,208
66,450
23,499
Balance as at 30 June 2020
21,142
9,460
13,929
45,418
89,949
Transferred from property, plant and equipment
Additions
Disposals
Assets recognised on business combinations (note 7.5)
377
703
(9,029)
-
-
-
-
-
-
-
-
-
-
-
377
703
(9,029)
4,038
25,628
29,666
Balance as at 30 June 2021
13,193
9,460
17,967
71,046
111,666
AMORTISATION
Balance as at 30 June 2019
Amortisation expense (note 2.4)
Balance as at 30 June 2020
Transferred from property, plant and equipment
Amortisation expense (note 2.4)
Disposals
Balance as at 30 June 2021
CARRYING VALUES
At 30 June 2020
At 30 June 2021
20,863
279
21,142
192
185
(9,029)
12,490
-
703
2,353
3,601
5,954
-
3,506
-
9,460
-
-
-
-
-
-
-
19,493
9,399
42,709
13,279
28,892
55,988
-
192
16,701
20,392
-
(9,029)
45,593
67,543
3,506
13,929
16,526
33,961
-
17,967
25,453
44,123
Intangible Assets Acquired in a Business Combination
Intangible assets acquired in a business combination and recognised separately from goodwill are recognised
initially at their fair value at the acquisition date (which is regarded as their deemed cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses.
Software and System Development
Software is recognised at cost of acquisition. Software has a finite life and is carried at cost less any
accumulated amortisation and any impairment losses. Software is amortised over its useful life ranging from
two to five years.
Patent Technology
Patents are initially recognised at their fair value at the acquisition date (which is regarded as their deemed
cost). Patents have a finite life and are carried at cost less any accumulated amortisation and any impairment
losses. They are amortised over their useful life of up to five years.
Brand Names
Brand names recognised by the Group have an indefinite useful life and are not amortised. Each period, the
useful life of this asset is reviewed to determine whether events and circumstances continue to support an
indefinite useful life assessment for the asset. Such assets are tested for impairment at least annually or more
frequently whenever there is the presence of other indicators of impairment.
58
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
3.6
INTANGIBLE ASSETS CONTINUED
Customer Relationships
Customer relationships are initially recognised at their fair value at the acquisition date (which is regarded as
their deemed cost). Customer relationships have a finite life and are carried at cost less any accumulated
amortisation and any impairment losses. They are amortised over their useful life of up to five years.
GOODWILL
Balance at beginning of the period
Amounts recognised from business combinations occurring during the period (note 7.5)
Balance at end of the period
(1) Restated to reflect finalisation of BGC Contracting Purchase Price Accounting – refer to note 7.5.
Consolidated
2021
$’000
85,036
77,945
162,981
2020(1)
$’000
40,103
44,933
85,036
Goodwill arising on an acquisition of a business is carried at cost established at the date of the acquisition of
the business less accumulated impairment losses, if any. Goodwill is not amortised, but it is tested for
impairment annually or more frequently if there is an indication that it might be impaired.
Goodwill is attributable to Cash Generating Units (CGU) aggregated in the following reporting segments whose
results are regularly reviewed by the Group’s Chief Operating Decision Maker:
Civil
Mining
MET
Balance at end of the period
(1) Restated to reflect finalisation of BGC Contracting Purchase Price Accounting – refer to note 7.5.
2021
$’000
18,513
59,858
84,610
162,981
2020(1)
$’000
18,513
59,858
6,665
85,036
If the recoverable amount of a CGU to which goodwill is allocated is less than its carrying amount, the
impairment loss is allocated first to goodwill and then to the identifiable assets on a pro rata basis. Any
impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill
cannot be reversed in subsequent periods. On disposal of the relevant CGU, the attributable amount of goodwill
is included in the determination of the profit or loss on disposal.
Impairment of Assets
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those assets may have suffered an impairment loss.
The determination of the existence of impairment indicators requires a degree of management judgement. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of
the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset,
the Group estimates the recoverable amount of a CGU to which the asset belongs. When a reasonable and
consistent basis of allocation can be identified, corporate assets are also allocated to individual CGU’s, or
otherwise they are allocated to the smallest group of CGU’s for which a reasonable and consistent allocation
basis can be identified.
Intangible assets with indefinite useful lives, intangible assets not yet available for use, and goodwill are tested
for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. 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 estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than its’ carrying amount, the carrying
amount of the asset (or CGU) is reduced to its recoverable amount.
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NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
3.7
GOODWILL CONTINUED
An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a revaluation decrease.
The Company undertook formal impairment testing for those obligatory CGU’s to which Goodwill and indefinite-
life Intangibles are allocated, and those where the Company determined the existence of impairment indicators.
The Group has prepared five year discounted cash flow forecasts, and extrapolated the cash flows beyond the
terminal year using a terminal growth-rate.
The Group has paid particular attention to those indicators impacted by the global COVID-19 pandemic. We
have considered the effect of the pandemic on our clients activities which may include changes to long-term
commodity prices, awards of new contracts, deferrals of existing contracts, disruptions to supply chain and
disruptions to existing operations. To date, most of the Group’s operations were classified as essential services
and have continued materially unaffected. The management team continue to monitor and manage the impacts
and risks arising from the global pandemic, and at the time of compiling future cash flows there were no known
detrimental changes.
Key areas of management judgement required in this assessment include:
Value in Use Assumptions and Key Estimates
Sales and earnings growth
The five year cash flow estimates used in assessments for all CGU’s were based on Board approved budgets
for the year ending 30 June 2022 adjusted for material known transactions. Growth assumptions thereafter
are 2.5% (2020: 3%) per annum for each future year. The terminal value assumes perpetual growth of 2.5%
(2020: 0%). Growth rates do not exceed historical averages.
Discount rate
A pre-tax discount rate of 13.3% (2020: 13.3%) which includes a risk margin was applied to the cash flows
within each of the CGU’s.
Working capital and capital expenditure
Working capital has been adjusted to return to, and continue to reflect, what management estimate to be
normal operating levels in order to continue to support the underlying businesses.
Capital expenditure forecasts were based on the various strategic business plans and those levels
considered appropriate to sustain current growth projections above current level of operating activities.
The Company was satisfied that the recoverable values were sufficiently in excess of their carrying values at
reporting date. This conclusion was supported having applied a sensitivity analysis on the key assumptions
used in determining the recoverable values.
Sensitivity Analysis
Short-term assumptions
The Company simulated several scenarios to sensitise future cash flows for different outcomes associated
with the short-term COVID-19 risks identified in assessing indicators of potential impairment, highlighted
above. These included the net future cash flow impacts of:
• An absolute, or timing delay, for disruptions at a current client’s operations; or
• A non-award, or delay to an award, of future contracts.
Long-term assumptions
In addition, the Company undertook sensitivity analysis with regard to the longer term drivers of future cash
flow relating to:
• Future years’ growth rate assumption adjusted to a range of 0%-2.5% growth per annum; and
• Pre-tax discount rate assumption increased from 13.3% to as high as 20.0%, representing the higher
degree of risk to returns through an extended period of higher global uncertainty related to events
like an extended pandemic (COVID-19) or similar global event.
Each of these sensitivities were performed in isolation of each other and did not result in recoverable values
to be lower than the carrying values of the CGUs as at 30 June 2021.
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
NON-CURRENT ASSETS HELD FOR SALE
NON-CURRENT ASSETS HELD FOR SALE
The Group announced to the ASX on 12 July 2021 that Boggabri Coal Operations Pty Ltd (BCO), part of the
The Group announced to the ASX on 12 July 2021 that Boggabri Coal Operations Pty Ltd (BCO), part of the
Idemitsu Group, agreed to acquire the majority of the major mining equipment of Golding Contractors Pty Ltd
Idemitsu Group, agreed to acquire the majority of the major mining equipment of Golding Contractors Pty Ltd
(a wholly owned subsidiary of NRW) that is engaged under the Maintenance Services and Hire Agreement at
(a wholly owned subsidiary of NRW) that is engaged under the Maintenance Services and Hire Agreement at
the Boggabri Coal Mine. Accordingly, relevant assets have been presented as held for sale.
the Boggabri Coal Mine. Accordingly, relevant assets have been presented as held for sale.
No impairment loss was recognised on the reclassification of the plant and equipment given the fair value
No impairment loss was recognised on the reclassification of the plant and equipment given the fair value
estimates (based on recent market prices) less costs to sell are higher than the carrying amount.
estimates (based on recent market prices) less costs to sell are higher than the carrying amount.
Assets held for sale and associated liabilities:
Assets held for sale and associated liabilities:
Current assets
Current assets
Plant and equipment held for sale
Plant and equipment held for sale
Current liabilities
Current liabilities
Financial debt
Financial debt
Non-current liabilities
Non-current liabilities
Financial debt
Financial debt
Total liabilities
Total liabilities
2021
2021
$’000
$’000
82,612
82,612
18,220
18,220
46,961
46,961
65,181
65,181
Key Judgements and Estimates
Key Judgements and Estimates
Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value
Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value
less costs to sell.
less costs to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be
recovered through a sale transaction rather than through continuing use. This condition is regarded as met
recovered through a sale transaction rather than through continuing use. This condition is regarded as met
only when the sale is highly probable and the asset is available for immediate sale in its present condition.
only when the sale is highly probable and the asset is available for immediate sale in its present condition.
Management must be committed to the sale which should be expected to qualify for recognition as a
Management must be committed to the sale which should be expected to qualify for recognition as a
completed sale within one year from the date of classification.
completed sale within one year from the date of classification.
TRADE AND OTHER PAYABLES
TRADE AND OTHER PAYABLES
CURRENT PAYABLES
CURRENT PAYABLES
Trade payables
Trade payables
Goods and service tax
Goods and service tax
Other payables
Other payables
Accruals
Accruals
Total trade and other payables
Total trade and other payables
Consolidated
Consolidated
2020
2020
$’000
$’000
142,944
142,944
6,360
6,360
23,495
23,495
158,843
158,843
331,642
331,642
2021
2021
$’000
$’000
176,794
176,794
18,559
18,559
23,299
23,299
112,103
112,103
330,755
330,755
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial
year which are unpaid. The amounts are unsecured and are usually paid within 30 to 75 days of recognition.
year which are unpaid. The amounts are unsecured and are usually paid within 30 to 75 days of recognition.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months from
Trade and other payables are presented as current liabilities unless payment is not due within 12 months from
the reporting date.
the reporting date.
The Group has financial risk management policies in place to ensure that all payables are paid within
The Group has financial risk management policies in place to ensure that all payables are paid within
pre-agreed credit terms. All payables are expected to be settled within the next 12 months.
pre-agreed credit terms. All payables are expected to be settled within the next 12 months.
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NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
PROVISIONS
Current provisions
Non-current provisions
Total balance as at 30 June 2020(1)
Current provisions
Non-current provisions
Total balance as at 30 June 2021
Consolidated
Onerous
Contracts
Warranty
& Other
Employee
Benefits
$’000
42,564
811
43,375
3,475
1,608
5,083
$’000
3,049
222
3,271
1,671
123
1,794
$’000
64,829
16,838
81,667
66,820
18,939
85,759
Total
$’000
110,442
17,871
128,313
71,966
20,670
92,636
(1) Restated to reflect finalisation of BGC Contracting Purchase Price Accounting – refer to note 7.5.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. When 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 (where the effect of the time
value of money is material).
(i) Onerous Contracts
A provision is made for the difference between the expected cost of fulfilling a contract and the expected
unearned portion of the transaction price where the forecast costs are greater than the forecast revenue. The
provision is recognised in full in the period in which loss making contracts are identified under AASB 137.
(ii) Warranties and Other
Provisions for warranties and defect claims are made for the estimated liability on all products still under
warranty at balance sheet date and known defects arising under service and construction contracts.
(iii) Employee Benefits
The employee benefits liability represents accrued wages and salaries, leave entitlements and other incentives
recognised in respect of employees’ services up to the end of the reporting period. These liabilities are
measured at the amounts expected to be paid when they are settled and include related on-costs.
Key Judgements and Estimates
Onerous contracts
These provisions have been calculated based on management’s best estimate of discounted net cash
outflows required to fulfil the contracts (where the effect of the time value of money is material). The status
of these contracts and the adequacy of provisions are assessed at each reporting date.
Warranties
The provision is estimated having regard to previous claims experience.
Long service leave
Management judgement is applied in determining employee entitlements for long service leave. This
determination considers future increases in wages and salaries, future on cost rates, employee departures
and period of service. Expected future payments are discounted using the market yield at the reporting date
on Australian corporate bonds with terms to maturity and currencies to match, as close as possible, the
estimate future cash outflows.
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
4 CAPITAL STRUCTURE
The Group manages its capital structure to ensure that entities in the Group will be able to continue as a going
concern while maximising returns to shareholders.
Gearing Ratio
The Board meets regularly to determine the level of borrowings and shareholder funding required to
appropriately support business operations. The gearing ratio is a function of the capital structure, dividends and
movements in debt. The gearing ratio was calculated at 30 June 2021 as:
Cash and cash equivalents
Financial debt
Lease debt
Net Debt
Total equity
Net Debt to Equity Ratio
Pro forma(1)
Consolidated
2021
$’000
163,980
(196,727)
(55,924)
(88,671)
545,123
16.3%
2021
$’000
146,549
(261,908)
(55,924)
(171,283)
545,123
31.4%
2020
$’000
170,229
(244,795)
(65,058)
(139,624)
472,389
29.6%
(1) Pro forma includes the impact of the sale of the Boggabri mobile equipment. For more information refer note 7.7 of financial statements.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Capital Risk Management
The capital structure of the Group comprises of debt and equity. In order to maintain or adjust the capital
structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or increase or decrease debt.
The Group’s objectives when managing capital are to safeguard its ability to operate as a going concern so that
it can meet all its financial obligations when they fall due, provide adequate returns to shareholders, maintain
an appropriate capital structure to optimise its cost of capital and maintain an Investment Grade credit rating to
ensure ongoing access to funding. The Group is subject to certain financing arrangement covenants and
meeting these is given priority in all capital risk management decisions. There have been no events of default
on the financing arrangements during the financial year.
Financial Risk Management
The Group’s overall financial risk strategy seeks to ensure appropriate funding levels, approved treasury
directives to meet ongoing project needs and to allow flexibility for growth. The Board has ultimate responsibility
for the Group’s policy of risk management. The risk policies and procedures are reviewed periodically. In
addition, the going concern basis is reviewed throughout the year, ensuring adequate working capital
is available.
The financial instruments in the Group primarily consist of interest bearing debt, cash, trade receivables and
payables. The Group has minimal foreign currency risks.
Interest Rate Risk Management
Interest rate risk is the risk that the value of a financial instrument or cash flow associated with the instrument
will fluctuate due to changes in the market interest rates. Sources of financial exposure include variable-rate
borrowings (cash flow risk) and fixed-rate borrowings (fair value risk). Interest rate exposures are kept within an
acceptable range as determined by the Board.
The Board considers the exposure to market rate volatility as low. If the Group were to consider a movement of
100 basis points in interest rates or cost of funds, there would be no material impact to the cost of capital. Refer
to the Consolidated Interest and Liquidity table on the following page for further details around interest rate
profiles.
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NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
4.1
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT CONTINUED
Foreign Exchange and Currency Exposure
The Group consolidated financial statements are presented in Australian dollars (AUD). The Board considers
that movements in foreign currency will have virtually no impact on operating profits, given that most projects
are agreed and billed in Australian dollars and cash holdings in other currencies other than AUD are negligible.
Should foreign operations expand then suitable risk measures would be put in place accordingly. Any new
developments which the Group considers or bids for are considered as part of the risk management reviews
held by the Board. Other than specific transactions or purchases negotiated with the supplier, transactions
dealing in foreign currency are dealt with at spot rates.
Liquidity Risk Management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Ultimate
responsibility for liquidity risk management rests with the Board, which has established an appropriate liquidity
risk management framework for the management of the Company’s short, medium and long-term funding and
liquidity management requirements. The Company manages liquidity risk by maintaining appropriate banking
facilities, ensuring a suitable credit control program, continuously monitoring forecast and actual cash flows,
and considering the level of capital commitment commensurate with project demands and other market forces.
The estimated contractual maturity for its financial liabilities and financial assets is set out in the following tables.
The tables show the effective interest rates and average interest rates as relevant to each class.
Consolidated interest and liquidity analysis 2021
Effective
Interest rate
Total
0 to 30 days
31 days to
< 1 year
1 to 5 yrs
> 5yrs
$’000
$’000
$’000
$’000
$’000
FINANCIAL ASSETS
Cash and cash equivalents
0.3%
146,549
146,549
-
Trade and other receivables(1)
412,577
178,428
234,149
Lease receivables
Subtotal
FINANCIAL LIABILITIES
Bank loans
Equipment finance
Lease debt
2,974
242
2,552
562,100
325,219
236,701
2.3%
4.3%
6.1%
74,945
173,390
55,924
-
5,874
1,169
20,570
52,039
12,452
Trade and other payables(2)
330,755
163,699
167,056
-
-
180
180
54,375
114,735
42,303
-
-
-
-
-
-
-
742
-
-
-
Other
Subtotal
(1) Normal trade receivable terms. See note 3.1.
(2) Normal trade payable terms. See note 3.7.
13,573
11,131
2,442
648,587
181,873
254,559
211,413
742
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
4.1
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT CONTINUED
Consolidated interest and liquidity analysis 2020
Effective
interest rate
Total
0 to 30 days
31 days to
< 1 year
1 to 5 yrs
> 5yrs
$’000
$’000
$’000
$’000
$’000
FINANCIAL ASSETS
Cash and cash equivalents
0.3%
170,229
170,229
-
Trade and other receivables(1)
369,906
191,962
177,944
Lease receivable
9.4%
5,091
203
2,343
Subtotal
545,226
362,394
180,287
FINANCIAL LIABILITIES
Bank loans
Equipment finance
Lease debt
4.4%
4.6%
6.1%
48,717
196,078
65,058
282
5,524
1,150
24,435
51,558
13,607
-
-
2,545
2,545
24,000
138,996
-
-
-
-
-
-
35,501
14,800
Trade and other payables(2)
331,642
174,043
157,599
-
-
Subtotal
641,495
180,999
247,199
198,497
14,800
(1) Normal trade receivable terms. See note 3.1.
(2) Normal trade payable terms. See note 3.7.
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations.
The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its
financing activities, including deposits with banks and financial institutions and other financial instruments. The
carrying amount of financial assets recorded in the financial statements net of any allowance for losses,
represents the Group’s maximum exposure to credit risk without taking into account the value of any collateral.
Trade and other receivables payment terms are primarily 30 to 75 days. Cash retentions are low as clients
require bonds and bank guarantees. The Group’s exposure and the credit ratings of these counterparties are
regularly monitored and transactions are diversified among approved counterparties.
Expected Credit Losses
The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are
measured at amortised cost including, lease receivables, amounts due from customers and on loan
commitments.
The Group has elected to measure the loss allowance for a financial instrument at an amount equal to the
lifetime expected credit losses (ECL) if the credit risk of that financial instrument has increased significantly
since initial recognition. Lifetime ECL represents the expected credit losses that will result from all possible
default events over the expected life of a financial instrument.
In making the assessment, management takes into consideration Group’s historical credit loss experience,
adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both
the current as well as the forecast direction of conditions at the reporting date, including time value of money
where appropriate.
The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since
initial recognition of the respective financial instrument.
As at 30 June 2021 expected credit losses are immaterial.
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
ISSUED CAPITAL
Fully Paid Ordinary Shares
ORDINARY SHARES
449,051,657 fully paid ordinary shares
(2020: 426,685,384)
Consolidated
2021
$’000
2020
$’000
383,416
332,863
All issued shares are fully paid and rank equally. Fully paid ordinary shares carry one vote per share and carry
a right to dividends.
Consolidated
2021
No. ‘000
2021
$‘000
2020
No. ‘000
FULLY PAID ORDINARY SHARES
Balance at the beginning of the financial year
426,686
332,863
375,880
Capital raising at $2.85 share
Share purchase plan at $2.85 share
Share issue costs net of tax
Issue of shares to executives
Issue of shares as part of business acquisition
Treasury shares transferred to contributed equity
-
-
-
2,943
19,423
-
-
-
-
-
50,553
-
42,106
3,509
-
5,180
-
11
2020
$‘000
206,126
120,000
10,000
(3,287)
-
-
24
Balance at the end of the period
449,052
383,416
426,686
332,863
RESERVES
Share based payment reserve
Foreign currency reserve
Total reserves
Share Based Payment Reserve
Balance at the beginning of the financial year
Share based payments
Treasury shares issued for vested rights
Balance at the end of the financial year
Consolidated
Consolidated
2021
$’000
11,500
(141)
11,359
2021
$’000
8,661
2,839
-
11,500
2020
$’000
8,661
(208)
8,453
2020
$’000
7,032
1,653
(24)
8,661
Information relating to performance rights, including details of issued, exercised and lapsed during the financial
year and outstanding at the end of the financial year, is set out in the Remuneration Report and at note 4.7.
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
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
DIVIDENDS
Consolidated
2021
$’000
131,073
54,295
(35,020)
150,348
2020
$’000
75,613
73,749
(18,289)
131,073
During the period, NRW Holdings Limited made the following dividend payments:
Fully paid ordinary shares
Consolidated year ended
30 June 2021
Consolidated year ended
30 June 2020
Final dividend (FY20 / FY19)
Interim dividend (FY21 / FY20)
Total dividend payments
Cents per share
$’000
Cents per share
4.0
4.0
17,067
17,953
35,020
2.0
2.5
$’000
7,621
10,668
18,289
The Directors have declared a dividend for the current financial year of 5.0 cents per share. The dividend will
be fully franked and paid on 13 October 2021.
Franking Account
Consolidated
Franking account balance at 1 July
Australian income tax paid
Franking credits transferred to head entity upon acquisition
Franking credits attached to dividends paid:
As final dividend
As interim dividend
Franking account balance at 30 June
Franking credits that will attach to the payment of fully franked dividends
declared but not paid as at reporting date
Net franking credits available
EARNINGS PER SHARE
Profit for the year
Weighted average number of shares for the
purposes of basic earnings per share (000’s)
2021
$’000
43,101
-
6,727
(7,315)
(7,694)
34,819
(9,623)
25,196
2021
$’000
54,295
Consolidated
2020
$’000
50,939
-
-
(3,266)
(4,572)
43,101
(7,315)
35,786
2020
$’000
73,749
435,534
405,024
Basic earnings per share
12.5 cents per share
18.2 cents per share
Shares deemed to be issued for no consideration in respect of:
Performance rights (000’s)
Weighted average number of shares used for the
purposes of diluted earnings per share (000’s)
4,063
439,597
5,671
410,695
Diluted earnings per share
12.4 cents per share
18.0 cents per share
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
4.6
EARNINGS PER SHARE CONTINUED
Basic Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares on issue during the financial year.
Diluted Earnings Per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in
relation to dilutive potential ordinary shares.
SHARE BASED PAYMENTS
Share based compensation payments are provided to employees in accordance with the NRW Holdings Limited
Performance Rights Plan (PRP) detailed in the remuneration report.
Share based compensation payments are measured at the fair value of the equity instruments at the grant date.
The choice of valuation methodology is determined by the structure of the awards, particularly the vesting
conditions:
• Market based valuations – a Monte-Carlo simulation valuation methodology is used to determine the
share based payment cost relative to TSR growth. The valuation methodology used is chosen from
those available to incorporate an appropriate amount of flexibility with respect to the particular
performance and vesting conditions of the award.
• Non-market based valuations – EBITDA and Gearing targets are based on a 30 day VWAP up to and
including the grant date, risk-weighted for the likelihood of achievement of the vesting conditions. The
valuation methodology assumes between 90% and 100% achievement of vesting conditions.
The variables in the valuation model are the share price on the date of the award, the duration of the award, the
risk free interest rate, share price volatility and dividend yield. The inputs used for each of the current schemes
are provided below.
Scheme ID
Risk Free Interest Rate
Share Price Volatility
Dividend Yield
G
K
L
M
N
O
P
Q
R
S
T
U
1.96%
1.44%
1.35%
1.44%
1.35%
0.29%
0.26%
0.27%
0.07%
0.29%
0.29%
0.43%
103.20%
55.14%
64.05%
47.26%
53.62%
62.74%
50.05%
54.27%
62.74%
92.52%
87.82%
65.21%
10.2%
1.20%
1.20%
1.20%
1.20%
1.34%
3.62%
3.62%
3.62%
3.62%
3.62%
3.62%
Value (cents
per share)
34.0
79.7
123.9
75.3
101.1
30.1 to 182.0
6.5
14.2
37.6 to 40.3
56.1 to 77.4
60.5 to 61.1
27.0 to 153.0
For all awards, the volatility assumption is representative of the level of uncertainty expected in the movements
of the Company’s share price over the life of the award. The assessment of the volatility includes the historic
volatility of the market price of the Company’s share and the mean reversion tendency of volatilities.
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
4.7
SHARE BASED PAYMENTS CONTINUED
Details of the awards for each scheme, the status of those awards and share based payment expense for KMP’s and non KMP’s
is provided in the table below.
Name / Scheme
Scheme
ID
Allocation
Date
Vesting
Date
Balance of
Unvested
Equity
Awards as
at 1 July
2020
Granted
Vested in
FY21
Balance of
Unvested
Equity
Awards as
at 30 June
2021
Fair
Value
Per
Security
Fair Value
at Grant
Date
Fair Value
at Vesting
Date
Share
Based
Payments
Expense
FY21
Number of
Rights
Number
of Rights
Number of
Rights
Number of
Rights
Cents
$
$
$
FY21 Tranche 2
T
01/06/2021
30/09/2024
J Pemberton
2018 Tranche 3
FY20 Tranche 1
FY20 Tranche 2
FY21 Tranche 1
Total
A Walsh
2018 Tranche 3
FY20 Tranche 1
FY20 Tranche 2
FY21 Tranche 1
G
O
O
U
G
R
S
S
Total
G Payne
FY20 Tranche 1
FY20 Tranche 2
Total
A Broad
FY20 Tranche 1
FY20 Tranche 2
Total
G Caton
FY20 Tranche 1
FY20 Tranche 2
Total
4/12/2017
30/11/2020
2,137,500
26/11/2019
30/11/2022
582,246
26/11/2019
30/11/2023
582,246
-
-
-
30/06/2021
30/09/2023
-
950,000
(2,137,500)
-
34.0
726,750
5,664,375
72,675
-
-
-
582,246
582,246
950,000
30.1 to
182.0
30.1 to
182.0
27.0 to
153.0
768,785
835,411
1,050,626
-
-
-
256,262
208,853
350,209
3,301,992
950,000
(2,137,500)
2,114,492
3,381,572
5,664,375
887,999
4/12/2017
30/11/2020
700,000
-
(700,000)
-
34.0
238,000
1,855,000
23,800
01/06/2021
30/11/2022
01/06/2021
30/09/2023
01/06/2021
30/09/2023
-
-
-
-
750,000
750,000
375,000
375,000
-
-
-
-
750,000
750,000
375,000
375,000
37.6 to
153.0
58.2 to
153.0
56.1 to
153.0
61.1 to
153.0
860,593
717,458
455,506
448,069
-
-
-
-
286,340
238,715
151,558
149,083
700,000
2,250,000
(700,000)
2,250,000
2,719,626
1,855,000
849,496
O
O
O
O
O
O
20/07/2020
30/11/2022
20/07/2020
30/11/2023
20/07/2020
30/11/2022
20/07/2020
30/11/2023
20/07/2020
30/11/2022
20/07/2020
30/11/2023
-
-
-
-
-
-
-
-
76,144
76,144
152,288
82,487
82,487
164,974
137,980
137,980
275,960
-
-
-
-
-
-
-
-
-
76,144
76,144
152,288
82,487
82,487
164,974
137,980
137,980
275,960
30.1 to
182.0
30.1 to
182.0
30.1 to
182.0
30.1 to
182.0
30.1 to
182.0
30.1 to
182.0
100,538
109,251
209,789
108,915
118,354
227,269
182,185
197,975
380,160
-
-
-
-
-
-
-
-
-
33,513
27,313
60,826
36,305
29,588
65,893
60,728
49,494
110,222
69
69
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
4.7
SHARE BASED PAYMENTS CONTINUED
Name / Scheme
Scheme
ID
Allocation
Date
Vesting
Date
Balance of
Unvested
Equity
Awards as
at 1 July
2020
Granted
Vested in
FY21
Balance of
Unvested
Equity
Awards as
at 30 June
2021
Fair
Value
Per
Security
Fair Value
at Grant
Date
Fair Value
at Vesting
Date
Share
Based
Payments
Expense
FY21
Number of
Rights
Number
of Rights
Number of
Rights
Number of
Rights
Cents
$
$
$
I Gibbs
2019 Scheme 1
Tranche 1
2019 Scheme 1
Tranche 2
FY20 Tranche 1
FY20 Tranche 2
Total
Non KMP
2019 Scheme 2
Tranche 1
2019 Scheme 2
Tranche 2
2019 Tranche 1
2019 Tranche 2
FY20 Tranche 1
FY20 Tranche 2
Total
TOTAL
K
L
O
O
M
N
P
Q
O
O
15/02/2019
30/11/2020
77,885
15/02/2019
30/11/2021
77,885
20/07/2020
30/11/2022
20/07/2020
30/11/2023
-
-
-
-
48,056
48,056
(77,885)
-
79.7
62,074
206,395
12,103
-
-
-
77,885
123.9
96,500
48,056
48,056
30.1 to
182.0
30.1 to
182.0
63,452
68,951
-
-
-
35,614
21,151
17,238
155,770
96,112
(77,885)
173,997
290,977
206,395
86,106
18/04/2019
30/11/2020
15,000
18/04/2019
30/11/2021
15,000
-
-
(15,000)
-
75.3
11,295
39,750
2,445
-
15,000
101.1
15,165
-
5,971
14/07/2020
30/11/2020
14/07/2020
30/11/2021
20/07/2020
30/11/2022
20/07/2020
30/11/2023
-
-
-
-
12,500
(12,500)
-
12,500
520,670
520,670
-
-
-
12,500
520,670
520,670
6.5
14.2
30.1 to
182.0
30.1 to
182.0
812
33,125
1,775
687,482
747,061
-
-
-
812
812
229,161
186,765
30,000
1,066,340
(27,500)
1,068,840
1,463,590
72,875
425,966
4,187,762
4,955,674
(2,942,885)
6,200,551
8,672,983
7,798,645
2,486,508
70
70
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
5 FINANCING
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.
Reconciliation of Profit for the Period to Net Cash Flows from Operating Activities
Consolidated
PROFIT FOR THE PERIOD
Adjustments for:
Loss on sale of property, plant and equipment
Depreciation and amortisation
Lease asset (RoU) impairment
Share of (loss) / gain from associates
Share based payment expense
Gascoyne recovery
Net cash generated before movement in working capital
Change in trade and other receivables
Change in lease receivables
Change in inventories
Change in other assets
Change in trade and other payables
Change in provisions
Change in deferred tax balances
Net cash from operating activities
GUARANTEES
Bank guarantees
Insurance bonds
Balance at the end of the financial year
2021
$’000
54,295
366
166,297
1,111
(1,435)
2,839
(6,769)
216,704
(13,726)
2,117
3,847
1,673
(45,164)
(39,608)
21,595
147,438
2021
$’000
32,825
202,982
235,807
Consolidated
2020
$’000
73,749
1,477
122,081
482
42
1,653
-
199,484
(85,449)
1,383
(1,755)
169
66,280
9,122
26,468
215,702
2020
$’000
16,464
178,563
195,027
The Group has contract performance bank guarantees and insurance bonds issued in the normal course of
business in respect to its contracts.
71
71
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
FINANCIAL DEBT
Consolidated
SECURED AT AMORTISED COST
Current
Bank loans
Equipment finance
Other
Total current financial debt
Non-current
Bank loans
Equipment finance
Total non-current financial debt
Total financial debt
2021
$’000
20,570
57,912
13,574
92,056
54,375
115,477
169,852
261,908
2020
$’000
24,717
57,082
-
81,799
24,000
138,996
162,996
244,795
All loans and financial debt are initially recognised at fair value, being the amount received less attributable
transaction costs. After initial recognition, interest bearing liabilities are stated at amortised cost with any
difference between cost and redemption value being recognised in the statement of profit or loss over the period
of the borrowings on an effective interest basis.
Various financial institutions provide the Group with fixed interest rate finance leases, secured by the underlying
assets financed.
As at the date of signing the annual accounts, the Company is in compliance with its obligations under its
facilities. The Company expects to be in compliance with agreed covenants throughout the year ending 30 June
2022.
The Company currently has in place a multi-option general banking facility with Bankwest and Bank of China.
The agreement provides NRW with facilities to be used for contract guarantees, and facilities which can be used
for either contract guarantees or as working capital (an overdraft facility).
Financial debt movement reconciliation for the year ended 30 June 2021:
Consolidated
Opening balance
Equipment finance assumed (through business acquisition)
Debts assumed (through business acquisition)
New equipment finance
Repayment of equipment finance
New financial debt
Net repayment of financial debt
Total financial debt
2021
$’000
244,795
4,736
11,273
33,197
(60,720)
50,000
(21,372)
261,908
2020
$’000
100,459
158,301
-
37,679
(41,144)
30,790
(41,290)
244,795
72
72
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
5.3
FINANCIAL DEBT CONTINUED
Interest Bearing Finance Facilities
Consolidated finance facilities as at 30 June 2021
Finance Description
Face Value (limit)
Carrying Amount (utilised)
Unutilised Amount
Banking facilities(1)
Equipment finance(2)
Guarantees and insurance bonds(3)
$’000
99,945
198,337
434,231
$’000
74,945
173,389
235,807
$’000
25,000
24,948
198,424
Consolidated finance facilities as at 30 June 2020
Finance Description
Face Value (limit)
Carrying Amount (utilised)
Unutilised Amount
Banking facilities(1)
Equipment finance(2)
Guarantees and insurance bonds(3)
$’000
75,435
223,548
356,055
$’000
48,717
196,078
195,027
$’000
26,718
27,470
161,028
(1)
Includes: cash advance facilities, bank guarantee facilities (reflected within guarantees and insurance bonds line item) and an overdraft
facility.
(2) Terms range from one to five years.
(3) $10.0 million of the overall limit is interchangeable as an overdraft facility.
LEASE DEBT
Opening balance
New leases through a business combination (see note 7.5)
New leases
Net repayayments
Balance at 30 June
Current
Non-current
Total lease debt
Consolidated
2021
$’000
65,058
2,576
3,813
2020
$’000
50,369
5,502
19,739
(15,523)
(10,552)
55,924
13,621
42,303
55,924
65,058
14,757
50,301
65,058
Group lease debt relates mainly to properties, the balance comprised of plant and equipment, various types of
vehicles and IT equipment.
With the adoption of AASB 16 Leases, the Group assesses whether a contract is or contains a lease at inception
of the contract. The Group recognises a lease asset and a corresponding lease debt with respect to all lease
arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12
months or less) and leases of low value assets (such as tablets and personal computers, small items of office
furniture and telephones). For these leases, the Group recognises the lease payments as an operating expense
on a straight-line basis over the term of the lease unless another systematic basis is more representative of the
time pattern in which economic benefits from the leased assets are consumed.
The lease debt is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined,
the lessee uses its incremental borrowing rate.
Lease payments included in the measurement of the lease debt comprise:
• Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that depend on an index or rate, initially measured using the index or rate at
the commencement date;
73
73
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
5.4
LEASE DEBT CONTINUED
• The amount expected to be payable by the lessee under residual value guarantees;
• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease.
The lease debt is subsequently measured by increasing the carrying amount to reflect interest on the lease debt
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease debt (and makes a corresponding adjustment to the related lease asset)
whenever:
• The lease term has changed or there is a significant event or change in circumstances resulting in a
change in the assessment of exercise of a purchase option, in which case the lease debt is remeasured
by discounting the revised lease payments using a revised discount rate.
• The lease payments change due to changes in an index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease debt is remeasured by discounting the revised
lease payments using an unchanged discount rate (unless the lease payments change is due to a
change in a floating interest rate, in which case a revised discount rate is used).
Lease contract is modified and the lease modification is not accounted for as a separate lease, in which
case the lease debt is remeasured based on the lease term of the modified lease by discounting the
revised lease payments using a revised discount rate at the effective date of the modification.
•
The Group did not make any material adjustments during the periods presented.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease debt
and the right-of-use asset. The related payments are recognised as an expense in the period in which the event
or condition that triggers those payments occurs.
Key Judgements and Estimates
Determination of the existence of leases
Identifying a lease will sometimes require a significant amount of judgement based on the elements of the
definition of a lease, including identification of the leased asset, whether the contract passes the right to
obtain substantially all of the economic benefits from the use of an identified assets within the defined scope
of the contract and whether the supplier has a substantive right to substitute the identified assets throughout
the period of use.
Lease extension periods
In determining the lease term, the Group considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods
after termination options) are only included in the lease term if the lease is reasonably certain to be extended
(or not terminated). After the commencement date, the Group reassesses the lease term if there is a
significant event or change in circumstances that is within its control and affects its ability to exercise (or not
to exercise) the option to renew.
Incremental borrowing rate
In determining the present value of the future lease payments, the Group discounts the lease payments using
an incremental borrowing rate (IBR). The IBR reflects the financing characteristics and duration of the
underlying lease. Once a discount rate has been set for a leased asset (or portfolio of assets with similar
characteristics), this rate will remain unchanged for the term of that lease. When a lease modification occurs,
and it is not accounted for as a separate lease, a new IBR will be assigned to reflect the new characteristics
of the lease.
CAPITAL AND OTHER COMMITMENTS
As at 30 June 2021 the Group has capital and other commitments totalling $3.2 million (2020: $6.8 million).
74
74
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
6 TAXATION
INCOME TAX RECOGNISED IN PROFIT OR LOSS
CURRENT TAX EXPENSE
Current year income tax
Adjustments for prior years income tax
Subtotal
DEFERRED TAX EXPENSE
Origination and reversal of temporary differences
Total income tax expense / (benefit)
RECONCILIATION OF EFFECTIVE TAX RATE
Profit before tax for the period
INCOME TAX USING THE COMPANY’S DOMESTIC TAX RATE OF 30%
Changes in income tax expense due to:
Share based payments
Adjustments recognised in the current year in relation to the effect of tax
consolidation in prior years
Effect of different income tax rates for subsidiaries operating in a different
tax jurisdiction
Effect of impairment of financial assets relating to the Gascoyne Resources loan
and equity instruments
Adjustments recognised in the current year in relation to the current tax of prior
years (effect of expenses that are not deductible in determining taxable profit)
Non-Deductible Transaction Costs
Transfer duties on acquisitions of RCRMT and BGC Contracting
Deferred tax assets brought to account
Effect of expenses that are not deductible in determining taxable profit
Joint ventures
Total income tax expense / (benefit)
Consolidated
Consolidated
2020
$’000
-
-
-
26,469
26,469
2020
$’000
100,218
30,065
2021
$’000
418
(335)
83
21,512
21,595
2021
$’000
75,890
22,767
(1,783)
(4,235)
319
4
1,569
(1,624)
1,098
-
-
(732)
(23)
21,595
-
-
-
(670)
-
891
(33)
451
-
26,469
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in
the consolidated statement of comprehensive income because of items of income or expense that are taxable
or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax
is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Income taxes are paid in the jurisdictions where the Group operates, predominantly Australia. Significant
judgement is involved in applying the tax rules and regulations relevant in deriving the final provision for income
tax. If in subsequent periods matters arise that cause the final tax outcome to vary to the reported carrying
amounts, such differences will alter the deferred tax balances in the period the change is identified.
75
75
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
CURRENT AND DEFERRED TAX BALANCES
Current Tax Liabilities
Tax losses have been applied to offset any Australian taxable income. The reported current tax liabilities as at
30 June 2021 (2020: Nil) related to the assumed liability from the Primero acquisition, and foreign tax due and
payable in other jurisdictions.
Deferred Tax Balances
Receivables (contract assets)
Inventories
Other current assets
Property, plant and equipment
Investment in associates
Intangibles
Lease debt
Provisions
Payables
Costs of equity raising
Share based payments
2021
$’000
-
-
2,577
3,693
2,843
-
21,864
24,475
8,720
226
1,453
Assets
Liabilities
Net
2020
$’000
-
290
2,829
1,922
4,133
2021
$’000
2020
$’000
2021
$’000
2020
$’000
(23,711)
(41,893)
(23,711)
(41,893)
(5,716)
(4,985)
-
(5,024)
(5,716)
(2,408)
290
(2,195)
(48,932)
(38,828)
(45,239)
(36,906)
-
-
2,843
4,133
-
(12,257)
(9,360)
(12,257)
(9,360)
(20,034)
(24,180)
1,830
26,215
28,034
7,337
1,305
295
-
-
-
-
-
-
-
-
-
-
24,475
8,720
226
1,453
2,035
28,034
7,337
1,305
295
Losses
34,936
37,182
34,936
37,182
Deferred tax assets / (liabilities)
100,787
109,542
(115,635)
(119,285)
(14,848)
(9,743)
Movement of Deferred Tax Balances
DEFERRED TAX EXPENSE
Recognised in profit or loss (note 6.1)
Recognised directly in equity
Balance acquired through business combinations (note 7.5)
Balance restated to reflect finalisation of BGC Contracting purchase price
accounting
Total
Consolidated
2020
$’000
(26,469)
2,637
(7,975)
-
(31,807)
2021
$’000
(21,512)
7
7,523
8,877
(5,105)
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in
the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from
goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
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 difference and it is probable that the temporary difference will not reverse in the
foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such
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.
76
76
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
6.3 CURRENT AND DEFERRED TAX BALANCES CONTINUED
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and is adjusted to
recognise the estimated value of future tax liabilities likely to arise based on risk assessed forecasts.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period. 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 end of the
reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Unrecognised Deferred Tax Balances
During the year there were no deductible temporary differences, unused tax losses and unused tax credits for
which no deferred tax assets have been recognised.
RELEVANCE OF TAX CONSOLIDATION TO THE GROUP
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group under
Australian taxation law with effect from 1 July 2014 and are therefore taxed as a single entity from that date.
The head entity within the tax-consolidated group is NRW Holdings Limited. The members of the tax-
consolidated group are identified in note 7.1. The acquisition of Primero during the year resulted in the Australian
Primero entities joining the tax-consolidated group on 24 March 2021.
Tax expense / income, deferred tax liabilities and deferred tax assets arising from temporary differences of the
members of the tax-consolidated group are recognised in the separate financial statements of the members of
the tax-consolidated group using the ‘stand-alone taxpayer’ approach by reference to the carrying amounts in
the separate financial statements of each entity and the tax values applying under tax consolidation. Current
tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members
of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).
Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts
are recognised as payable to or receivable by the Company and each member of the Group in relation to the
tax contribution amounts paid or payable between the parent entity and the other members of the tax-
consolidated group in accordance with the arrangement.
Nature of Tax Funding Arrangements and Tax Sharing Agreements
Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing
agreement with the head entity. Under the terms of the tax funding arrangement, NRW Holdings Limited and
each of the entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or from the
head entity, based on the current tax liability or current tax asset of the entity. The tax sharing agreement
entered into between members of the tax-consolidated group provides for the determination of the allocation of
income tax liabilities between the entities should the head entity default on its tax payment obligations or if an
entity should leave the tax consolidated group. The effect of the tax sharing agreement is that each member’s
liability for tax payable by the tax-consolidated group is limited to the amount payable to the head entity under
the tax funding arrangement.
Upon entering the tax consolidated group on 24 March 2021, the Australian Primero entities formally entered
into a tax sharing and tax funding agreement with NRW Holdings Ltd.
77
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
GOODS AND SERVICES
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
• Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as
part of the cost of acquisition of an asset or as part of an item of expense; or
• Receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows
arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is
classified within operating cash flows.
TAX POLICY, STRATEGY AND GOVERNANCE
Approach to Tax Governance
NRW has developed a Board approved Tax Risk Management Framework to govern the way in which the Group
manages its tax obligations. The Tax Risk Management Framework has been designed in line with the
Australian Taxation Office (ATO) Tax Risk Management and Governance Review Guide. The Tax Risk
Management Framework applies to all entities within the NRW tax consolidated group.
In accordance with the Tax Risk Management Framework, decisions on tax risk are reviewed by the Chief
Financial Officer and reported to the Audit and Risk Committee as appropriate. Ultimate responsibility for tax
governance is borne by the Board. Tax risk assessments are conducted and are consistent with the risk
tolerance levels applied to other decisions in the business.
Corporate Income Tax Contribution Summary
NRW is currently utilising available carry-forward Australian tax losses. As at 30 June 2021, NRW has estimated
carry forward tax losses of $34.9M on its balance sheet as a deferred tax asset. This position results in zero
income tax payable in Australia. The NRW tax consolidated group will commence paying corporate tax in
Australia once these losses are fully utilised.
The ATO publish the income tax information of taxpayers with a total income of $100 million or more. The
information is published in the Report of Entity Tax Information online. NRW confirms the following disclosures
under the ATO regime.
Total Income
Taxable/Net Income
Tax Payable
2015-16
$’000
291,949
Nil
Nil
2016-17
$’000
367,184
Nil
Nil
2017-18
$’000
676,658
Nil
Nil
2018-19
$’000
2019-20(1)
$’000
1,087,568
2,011,916
Nil
Nil
Nil
Nil
(1) Not yet disclosed by the ATO under the Report of Entity Tax Information regime online.
Relationships with Tax Authorities
NRW is committed to open and transparent dealings with the ATO and other relevant tax authorities. NRWs
approach to engagement with these authorities is to be compliant with tax laws to ensure its statutory obligations
are met.
NRW is included in the ATO's Justified Trust review program. NRW’s last assurance review under this regime
was finalised in September 2018. The ATO obtained an overall high level of assurance that NRW paid the right
amount of Australian income tax for the income years reviewed.
International Related Party Dealings
The NRW group includes entities incorporated under foreign jurisdictions where corporate tax is remitted in
accordance with the applicable taxation authorities and laws.
NRW does not have material operations located outside of Australia, resulting in minor international related
party dealings. These dealings are disclosed to the ATO within the International Related Party Dealings
Schedule.
78
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7 OTHER NOTES
SUBSIDIARIES
Information about the composition of the Group at the end of the reporting period is as follows:
Entity
Principal Activities
Country of
Incorporation
Ownership Interest
2021
2020
NRW Holdings Limited
(ACN 118 300 217) <
Actionblast Pty Ltd
(ACN 058 473 331) <
Action Drill & Blast Pty Ltd
(ACN 144 682 413) <
Hughes Drilling 1 Pty Ltd
(ACN 011 007 702) <
NRW Pty Ltd
(ACN 067 272 119) <
The trustee for NRW Unit Trust
(ABN 69 828 799 317)
NRW Contracting Pty Ltd
(ACN 008 766 407) <
NRW Contracting (NO.2) Pty Ltd
(ACN 621 008 473) <
DIAB Engineering Pty Ltd
(ACN 611 036 689) <
NRW Intermediate Holdings Pty Ltd
(ACN 120 448 179) <
Holding Company
Australia
-
-
Mining Equipment
Solutions
Australia
100%
100%
Drill & Blast
Australia
100%
100%
Drill & Blast
Australia
100%
100%
Civil & Mining
Australia
100%
100%
Civil & Mining
Australia
100%
100%
Civil, Mining & Urban
Australia
100%
100%
Mining
Australia
100%
100%
MET
Australia
100%
100%
Intermediary
Australia
100%
100%
Indigenous Mining & Exploration Company Pty Ltd
(ACN 114 493 579) <
Investment Shell
Australia
100%
100%
NRW International Holdings Pty Ltd
(ACN 138 827 451) <
RCR Heat Treatment Pty Ltd
(ACN 631 155 032)
RCR Mining Technologies Pty Ltd
(ACN 107 724 274) <
NRW Mining Pty Ltd
(ACN 117 524 277) <
Golding Group Pty Ltd
(ACN 129 247 025) <
Golding Employee Equity Pty Ltd
(ACN 134 623 680) <
Golding Finance Pty Ltd
(ACN 128 839 056) <
Golding Contractors Pty Ltd
(ACN 009 734 794) <
Golding Civil Pty Ltd
(ACN 628 709 777)
Golding Mining Pty Ltd
(ACN 628 709 740)
Golding Services Pty Ltd
(ACN 628 709 768)
Golding Urban Pty Ltd
(ACN 628 709 759)
Golding PNG Limited
Investment Shell
Australia
100%
100%
Heat Treatment
Australia
100%
100%
MET
Australia
100%
100%
Investment Shell
Australia
100%
100%
Holding Company
Australia
100%
100%
Dormant
Australia
100%
100%
Holding Company
Australia
100%
100%
Civil, Mining & Urban
Australia
100%
100%
Civil
Australia
100%
100%
Mining
Australia
100%
100%
Civil, Mining & Urban
Australia
100%
100%
Urban
Mining
Australia
100%
100%
Papua New
Guinea
100%
100%
79
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.1
SUBSIDIARIES CONTINUED
Entity
Principal Activities
Country of
Incorporation
Ownership Interest
2021
2020
NRW Guinea SARL
Dormant
Guinea
100%
100%
The Trustee for NRW Holdings Employee Share Trust
(ABN 85 324 493 658)
Dormant
Australia
100%
100%
Primero Group Limited
(ACN 149 964 045)
PGX Ops Pty Ltd
(ACN 645 420 542)
Primero Group Americas Inc
Primero USA Inc
MET
MET
MET
MET
Australia
100%
Australia
100%
Canada
100%
USA
100%
-
-
-
-
< Entered into ASIC Corporations instrument 98/1418 Deed of Cross Guarantee with NRW Holdings Limited.
the wholly-owned subsidiaries and Parent entity,
All of
Consolidation Group.
incorporated
in Australia,
form
the Tax
Deed of Cross Guarantees
Pursuant to ASIC Class Order 98/1418 (as amended) dated 22 June 2011, the wholly-owned subsidiaries listed
in note 7.1 as parties to the Deed of Cross Guarantee are relieved from the Corporations Act 2001 requirements
for preparation, audit and lodgement of Financial Reports and Directors’ Reports.
The consolidated statement of comprehensive income of the entities party to the Deed of Cross guarantees is
as follows:
Consolidated
STATEMENT OF COMPREHENSIVE INCOME
Revenue
Other income
Materials and consumables used
Employee benefits expense
Subcontractor costs
Plant and equipment costs
Depreciation and amortisation expenses
Other expenses
Share of profit / (loss) in associate
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
OTHER COMPREHENSIVE INCOME
2021
$’000
2,071,537
14,666
(418,458)
(665,596)
(450,953)
(263,009)
(162,042)
(43,483)
1,435
(12,588)
71,509
(21,364)
50,145
2020
$’000
1,997,152
311
(389,712)
(566,902)
(441,912)
(343,296)
(120,920)
(22,099)
(42)
(12,812)
99,768
(26,334)
73,434
Total comprehensive income for the year
50,145
73,434
80
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.1
SUBSIDIARIES CONTINUED
The consolidated statement of financial position of the entities party to the Deed of Cross guarantees is:
Consolidated
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Lease receivable
Inventories
Non-current assets held for sale
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Lease assets (right of use)
Lease receivable
Investment in listed equities
Investments in associates
Intangibles
Goodwill
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial debt
Lease debt
Provisions
Total current liabilities
Non-current liabilities
Financial debt
Lease debt
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Total equity
2021
$’000
138,172
368,006
2,794
52,782
82,612
5,008
2020
$’000
168,336
368,687
2,546
57,355
-
8,762
649,374
605,686
304,569
45,913
180
11,081
110,390
15,618
85,036
572,787
1,222,161
277,451
77,259
12,853
61,251
428,814
166,669
40,711
19,912
22,638
249,930
678,744
543,417
383,416
11,446
148,555
543,417
451,244
58,276
2,545
-
6,561
31,710
85,036
635,372
1,241,058
331,146
81,799
14,757
109,942
537,644
162,996
50,301
17,804
424
263,525
769,169
471,889
332,863
8,453
130,573
471,889
81
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.1
SUBSIDIARIES CONTINUED
Changes in the Group’s Ownership Interests in Existing Subsidiaries
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over
the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and
the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as
the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any
retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the
subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income
in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or
liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as
specified/permitted by applicable AASBs). The fair value of any investment retained in the former subsidiary at
the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under
AASB 139, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
UNINCORPORATED JOINT OPERATIONS
The Group has significant balances in the following jointly controlled operations:
Name of Operation
Principal Activity
Country of Operation
Group Interest
BGC Contracting Pty Ltd & Laing O’Rourke
Australia Construction Pty Ltd
NorthLink WA roads
Australia
50%
50%
The following amounts are included in the Group’s consolidated financial statements as a result of the
proportionate consolidation of the above interests in joint operations.
2021
2020
Financial Information
STATEMENT OF FINANCIAL PERFORMANCE
Revenue
Expenses
STATEMENT OF FINANCIAL POSITION
Cash
Other Current assets
Current liabilities
Consolidated
2021
$’000
726
537
2,525
8,250
(1,754)
2020
$’000
1,046
(2,869)
777
7,950
(969)
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing control.
When a group entity undertakes its activities under joint operations, the Group as a joint operator recognises in
relation to its interest in a joint operation:
•
•
•
•
•
Its assets, including its share of any assets held jointly;
Its liabilities, including its share of any liabilities incurred jointly;
Its revenue from the sale of its share of the output arising from the joint operation;
Its share of the revenue from the sale of the output by the joint operation; and
Its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation
in accordance with the AASBs applicable to the particular assets, liabilities, revenues and expenses.
82
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.2
UNINCORPORATED JOINT OPERATIONS CONTINUED
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a sale or
contribution of assets), the Group is considered to be conducting the transaction with the other parties to the
joint operation, and gains and losses resulting from the transactions are recognised in the Group’s consolidated
financial statements only to the extent of other parties’ interests in the joint operation.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a
purchase of assets), the Group does not recognise its share of the gains and losses until it resells those assets
to a third party.
RELATED PARTIES
The ultimate parent entity within the Group is NRW Holdings Limited. The interests in subsidiaries are set out
in note 7.1.
Key Management Personnel Transactions
During the financial year, rental of commercial properties to the value of $442,556 (2020: $256,141) were
provided to the NRW Group on normal commercial terms and conditions from Belle Creed Pty Ltd and Payne
Property Unit Trust, both related parties of Mr G Payne (Executive General Manager of DIAB Engineering Pty
Ltd). This transaction dates back to when members of the Payne family owned the DIAB Engineering business.
The premises are the main DIAB Engineering workshops and facilities in Geraldton which are key to operations
of that business. The increase represents 12 months’ rent for FY21 compared to seven months in FY20 (BGC
Contracting acquisition).
There are no other transactions and balances with key management personnel and their related parties.
PARENT ENTITY INFORMATION
As at, and throughout, the financial year ended 30 June 2021 the parent company of the Group was NRW
Holdings Limited.
The accounting policies of the parent entity, which have been applied in determining the financial information
shown below, are the same as those applied in the consolidated financial statements.
Financial Position
ASSETS
Current assets
Non-current assets
Total assets
LIABILITIES
Current liabilities
Non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Retained earnings
Share based payment reserve
Total equity
2021
$’000
203,674
311,473
515,147
27,589
65,997
93,586
421,561
383,416
26,699
11,446
421,561
Parent
2020
$’000
210,912
200,156
411,068
22,002
37,463
59,465
351,603
332,863
10,132
8,608
351,603
83
83
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.4
PARENT ENTITY INFORMATION CONTINUED
Financial Performance
Profit for the year
Total comprehensive income
Parent
2021
$’000
51,586
51,586
Guarantees Entered into by the Parent in Relation to the Debts of its Subsidiaries
Asset finance
Total
Parent
2021
$’000
169,037
169,037
2020
$’000
17,216
17,216
2020
$’000
199,573
199,573
NRW Holdings Limited has entered into a Deed of Cross Guarantee as disclosed in note 7.1.
BUSINESS COMBINATIONS
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values
of the assets transferred by the Company, liabilities incurred by the Company to the former owners of the
acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Acquisition-
related costs are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognised at their fair
value, except that:
• Deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are
recognised and measured in accordance with AASB 112 Income Taxes and AASB 119 Employee
Benefits respectively;
Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-
based payment arrangements of the Company entered into to replace share-based payment
arrangements of the acquiree are measured in accordance with AASB 2 Share Based Payment at the
acquisition date; and
•
• Assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 Noncurrent
Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-
controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the
acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and the liabilities
assumed. If, after reassessment, the net of the acquisition date amounts of the identifiable assets acquired and
liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests
in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is
recognised immediately in profit or loss as a gain on acquisition.
When the consideration transferred by the Company in a business combination includes assets or liabilities
resulting from a contingent consideration arrangement, the contingent consideration is measured at its
acquisition date fair value and included as part of the consideration transferred in a business combination.
Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are
adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments
are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot
exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
84
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.5
BUSINESS COMBINATIONS CONTINUED
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is
remeasured at subsequent reporting dates in accordance with AASB 139, or AASB 137 Provisions, Contingent
Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit
or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see above), or additional assets or
liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the
acquisition date that, if known, would have affected the amounts recognised at that date.
2021 Acquisitions
Primero Group Limited acquisition
On 17 February 2021, the Company completed the acquisition of Primero Group Limited (Primero). Total
consideration for Primero was $99.9 million for 100% of the shares.
Primero provides services to the engineering, procurement and construction (EPC) services across three core
business segments:
• Design – metallurgical test work, process design, feasibility studies, automation and control, and
technical due diligence;
• Construction – fabrication and installation of facilities with a variety of specialities such as process
plants, power generation, and hydrocarbon storage and distribution; and
• Operation – operational readiness services, restart, refurbishment and recommissioning, and
maintenance and shutdown services.
Costs of a one-off nature relating to the acquisition amounting to $4.5 million have been excluded from the
consideration transferred and have been recognised as an expense in the consolidated statement of profit or
loss for the year ended 30 June 2021.
The fair values of the acquisition balances are provisional due to the timing of the acquisition.
Acquisition Cost of Funding
Consideration paid in cash
Consideration paid in equity
Total consideration
Less cash and cash equivalents acquired
Net outflow on acquisition
Add financial debt assumed
Net purchase consideration
2021
$’000
49,435
50,553
99,988
(4,639)
95,349
16,009
111,358
85
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.5
BUSINESS COMBINATIONS CONTINUED
Provisional Fair Value of Assets Acquired and Liabilities Assumed at the Date of the Acquisition
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
Lease assets (right of use)
Investments in listed equities
Intangibles
Deferred tax asset
Total non-current assets
Total assets
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Financial debt
Lease debt
Provisions
Unearned revenue
Current tax liability
Total current liabilities
NON-CURRENT LIABILITIES
Financial debt
Lease debt
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS ACQUIRED
2021
$’000
4,639
31,074
3,544
1,602
40,859
8,499
2,466
2,536
29,666
7,593
50,760
91,619
45,054
11,273
856
2,534
2,416
418
62,551
4,736
1,720
569
7,025
69,576
22,043
86
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.5
BUSINESS COMBINATIONS CONTINUED
Provisional Goodwill Arising on Acquisition
Consideration paid in cash
Consideration paid in equity
Total consideration
Less fair value of identifiable net assets acquired
Goodwill
2021
$’000
49,435
50,553
99,988
(22,043)
77,945
Primero Group business combination resulted in goodwill purchase transaction as consideration paid for the
combination included amounts in relation to the benefit of expected synergies, future market development, and
the assembled workforce of Primero. These benefits are not recognised separately from goodwill as they do
not meet the recognition criteria for identifiable intangible assets.
An independent assessment has determined the carrying value of the intangibles relating to ‘customer contracts
and relationships’ and the Primero brand as part of the acquisition. Customer contracts and relationships are
being amortised in line with the valuation assessment. Brand name has an indefinite useful life and is therefore
not amortised but is tested for impairment at least annually.
Impact of Acquisition on the Results of the Group
The activities of Primero were progressively integrated into the operations of the NRW group structure over the
five months following completion of the acquisition. The estimates of revenue and earnings which follow
represent our best assessment of contributions from Primero in the five months. It is estimated that Primero
generated a profit before tax of circa $3.3 million for the five months from 17 February 2021 to the reporting
date. Revenue for the five months to 30 June 2021 was circa $143 million.
2020 Acquisitions
BGC Contracting Pty Ltd acquisition
On 9 December 2019, the Company completed the acquisition of BGC Contracting Pty Ltd. BGC Contracting
was subsequently renamed to NRW Contracting (NRWC). Total consideration for NRWC was $140.4 million for
100% of the shares.
NRWC provides services to the resources, energy and infrastructure sectors across three core businesses:
• Mining – open cut contract mining business, contract crushing and processing;
• Construction – civil construction business with capability across the public infrastructure, energy and
resources sectors; and
• DIAB Engineering – key capabilities include maintenance (shutdown services and onsite
maintenance), construction and fabrication in the resources sector across Australia.
Costs of a one-off nature relating to the acquisition amounting to $14.9 million have been excluded from the
consideration transferred and have been recognised as an expense in the consolidated statement of profit or
loss for the year ended 30 June 2020.
87
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NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.5
BUSINESS COMBINATIONS CONTINUED
Acquisition Cost of Funding
Consideration paid in cash to vendor (from equity raising)
Consideration paid from new banking facility (to repay exiting asset financier)
Total cash consideration
Less cash and cash equivalents acquired
Net cash outflow on acquisition (refer to consolidated statement of cash flows)
Add asset finance debt assumed
Net purchase consideration (Excl. AASB 16)
Recognition of lease debt
Net purchase consideration
2020
$’000
116,388
24,003
140,391
(28,632)
111,759
158,301
270,060
5,502
275,562
Fair Value of Assets Acquired and Liabilities Assumed at the Date of the Acquisition
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Lease receivable
Other current assets
Total current assets
NON-CURRENT ASSETS
Property, plant and equipment
Lease assets (right of use)
Lease receivable
Intangibles
Deferred tax asset
Total non-current assets
Total assets
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Financial debt
Lease debt
Provisions
Total current liabilities
NON-CURRENT LIABILITIES
Financial debt
Lease debt
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS ACQUIRED
88
2020
$’000
28,632
130,286
25,021
2,415
2,499
188,853
228,545
5,502
4,059
23,499
902
262,507
451,360
107,606
62,528
1,445
81,774
253,353
95,773
4,058
2,718
102,549
355,902
95,458
88
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.5
BUSINESS COMBINATIONS CONTINUED
Goodwill Arising on Acquisition
Consideration paid in cash to vendor (from equity raising)
Consideration paid from new banking facility (to repay existing asset financier)
Total cash consideration
Less fair value of identifiable net assets acquired
Goodwill
2020
$’000
116,388
24,003
140,391
(95,458)
44,933
NRWC business combination resulted in goodwill purchase transaction as consideration paid for the
combination included amounts in relation to the benefit of expected synergies, future market development,
and the assembled workforce of NRWC. These benefits are not recognised separately from goodwill as they
do not meet the recognition criteria for identifiable intangible assets.
An independent assessment has determined the carrying value of the intangibles relating to ‘customer
contracts and relationships’ and the DIAB Engineering brand as part of the acquisition. Customer contracts
and relationships are being amortised in line with the valuation assessment. Brand name has an indefinite
useful life and is therefore not amortised but is tested for impairment at least annually.
AUDITORS REMUNERATION
AUDIT SERVICES
Auditors of the Company
Deloitte Touche Tohmatsu
OTHER SERVICES
Industry specific compliance audits
Assurance services related to business acquisitions
Total
Consolidated
2021
$
2020
$
548,000
581,000
26,500
22,000
596,500
18,500
30,000
629,500
EVENTS AFTER THE REPORTING PERIOD
The Directors have declared a fully franked dividend for the current financial year of five cents per share,
payable on 13 October 2021.
The Group announced to the ASX on 12 July 2021 that Boggabri Coal Operations Pty Ltd (BCO), part of the
Idemitsu Group agreed to acquire the majority of the major mining equipment of Golding Contractors Pty Ltd
(a wholly owned subsidiary of NRW) that is engaged under the Maintenance Services and Hire Agreement
at the Boggabri Coal Mine.
The transaction was completed on 28 July 2021.
As part of the agreement, Golding will continue to perform maintenance services on site across the assets
acquired by BCO, and another 50 pieces of major mining equipment, engaging a workforce of over 150
personnel on site.
89
89
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
NOTES TO THE
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
7.7
EVENTS AFTER THE REPORTING PERIOD CONTINUED
The impact of the sale on the current financial results, had it occurred prior to 30 June 2021 is set out below:
Financial Position
ASSETS
Cash and cash equivalents
Non-current assets held for sale
Other current assets
Property, plant and equipment
Other non-current assets
Total assets
LIABILITIES
Trade and other payables
Borrowings – current
Other current liabilities
Borrowings – non-current
Other non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
Total equity
Consolidated
Pro forma
2021
$’000
163,980
-
479,747
321,408
271,296
2021
$’000
146,549
82,612
479,747
321,408
271,296
1,301,612
1,236,431
330,755
92,056
86,005
169,852
77,821
756,489
545,123
383,416
11,359
150,348
545,123
330,755
73,836
86,005
122,891
77,821
691,308
545,123
383,416
11,359
150,348
545,123
Other than the events noted above, 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 years.
90
90
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
SHAREHOLDER
SHAREHOLDER
INFORMATION
INFORMATION
Shareholder Information
The shareholder information set out below was applicable as at 30 July 2021. NRW's contributed equity
comprises 449,051,657 fully paid ordinary shares.
Distribution of Shareholdings
%
No of Holders
%
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Subtotal
Fully Paid
Ordinary Shares
360,596,538
56,980,972
12,835,325
9,318,861
1,332,652
81.76%
12.92%
2.91%
2.11%
0.30%
441,064,348
100.00%
Shares held in escrow
Unmarketable parcels
7,987,309
76,092
1.78%
0.02%
NRW’s 20 Largest Shareholders
227
2,098
1,672
3,358
2,756
10,111
5
704
2.25%
20.75%
16.54%
33.21%
27.25%
100.00%
0.05%
6.96%
Rank
Name
Shares
% Interest
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
103,570,597
23.48%
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
MR DAVID RONALDSON
JULIAN ALEXANDER PEMBERTON
ZERO NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
SANDHURST TRUSTEES LTD
MR ANDREW JOHN WALSH
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR JULIAN ALEXANDER PEMBERTON
CITICORP NOMINEES PTY LIMITED
JEFFRESS NOMINEES PTY LTD
MR PETER HOWELLS
GABRIELLA NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR STEVEN SCHALIT & MS CANDICE SCHALIT
MS LESLEY ANN JEFFRESS
57,925,710
49,748,909
19,158,142
12,714,621
8,020,392
7,973,702
7,000,000
6,242,685
4,319,129
3,310,103
3,224,144
3,000,000
2,932,142
2,213,920
2,053,355
2,006,702
1,914,783
1,612,125
1,575,226
13.13
11.28
4.34
2.88
1.82
1.81
1.59
1.42
0.98
0.75
0.73
0.68
0.66
0.50
0.47
0.45
0.43
0.37
0.36
Voting Rights
Every shareholder present in person or represented by a proxy or other representative, shall have one vote for
each share held by them.
NRW HOLDINGS ANNUAL REPORT 2021 | Shareholder Information
91
91
NRW HOLDINGS ANNUAL REPORT 2021 | Notes to the Financial Statements
INDEPENDENT AUDITOR’S
REPORT
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff NNRRWW
HHoollddiinnggss LLiimmiitteedd
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
We have audited the financial report of NRW Holdings Limited (the “Company”) and its subsidiaries (the
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other explanatory information, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation
92
NRW HOLDINGS ANNUAL REPORT 2021 | Independent Auditor’s Report
INDEPENDENT AUDITOR’S
REPORT CONTINUED
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
KKeeyy AAuuddiitt MMaatttteerr
RReevveennuuee rreeccooggnniittiioonn
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Our procedures included, but were not limited to:
As disclosed in Note 2.2, the Group’s revenues
from construction contracts are recognised by
reference to the stage of completion of the
contract activity.
•
Revenue is recognised by management after
assessing all factors relevant to each contract,
including:
• Determination of stage of completion and
measurement of progress towards
satisfaction of performance obligations;
•
Estimation of total contract revenue and
costs including the estimation of cost
contingencies;
• Determination of contractual entitlement
and assessment of the probability of
customer approval of changes in scope
and/or price; and
•
Estimation of project completion date.
The Group recognises in contract assets and
contract receivables progressive measurement of
the value to customers of goods and services
transferred and valuation of work completed as
well as amounts invoiced to customers. The
recognition of these amounts is based on
management’s assessment of the expected
amounts recoverable.
NRW have submitted contract variations and
claims on certain projects which requires
management to exercise judgement in
determining the amount of revenue to be
recognised in relation to these items.
Evaluating management’s processes and controls in
respect of the recognition of construction contract
revenue. As part of this process we tested key
controls including:
o The review process conducted at the tendering
phase; and
o The preparation, review and authorisation of
monthly valuation reports for contracts which
includes forecasts costs to completion and
unapproved variations.
• Obtaining an understanding of the contract terms
and conditions to evaluate whether these were
reflected in management’s estimate of forecast
costs and revenue;
•
Testing a sample of costs incurred to date and
agreeing these to supporting documentation;
• Assessing the forecast costs to complete through
discussion and challenging of project managers and
finance personnel;
•
•
•
Testing contractual entitlement for changes,
variations and claims recognised within contract
revenue to supporting documentation and by
reference to the underlying contract;
Evaluating significant exposures to liquidated
damages for late delivery of contract works; and
Evaluating the probability of recovery of outstanding
amounts by reference to the status of contract
negotiations, historical recoveries and other
supporting documentation.
We also assessed the appropriateness of the
disclosures in Note 2.2 to the financial
statements.
NRW HOLDINGS ANNUAL REPORT 2021 | Independent Auditor’s Report
93
INDEPENDENT AUDITOR’S
REPORT CONTINUED
AAccqquuiissiittiioonn ooff PPrriimmeerroo GGrroouupp LLiimmiitteedd ((‘‘PPrriimmeerroo’’))
Our procedures included, but were not limited to:
As disclosed in Note 7.5, the Group completed
the acquisition of Primero on 17 February 2021
for net purchase consideration of $99.9 million.
• Reading the relevant agreements to understand the
key terms and conditions, and confirming our
understanding of the transaction;
Management provisionally allocated the
purchase price to identifiable assets, liabilities
and separately identifiable intangible assets as
relevant.
This process involved estimation and judgement
in determining the purchase price, provisions,
customer relationships, customer backlog, brand
value and discount rate applied to future cash
flow forecasts.
•
•
•
Evaluating management’s process for the
identification of the assets and liabilities acquired;
Evaluating management’s process for the
determination of the fair value of the identifiable
assets and liabilities acquired;
In conjunction with our valuation specialists,
assessing the competence and objectivity of
management’s specialist who valued the intangible
assets; and
• Challenging the values attributable to equipment,
inventory, provisions, customer relationships and
brand value recognised in respect of the acquisition,
including the appropriateness of the resulting
goodwill.
We also assessed the appropriateness of the disclosures
in Note 7.5 to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2021 but does not include the financial report
and our auditor’s report thereon. The annual report is expected to be made available to us after the date of this
auditor's report.
Our opinion on the financial report does not cover the other information and we will not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
94
NRW HOLDINGS ANNUAL REPORT 2021 | Independent Auditor’s Report
INDEPENDENT AUDITOR’S
REPORT CONTINUED
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the Group’s audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
NRW HOLDINGS ANNUAL REPORT 2021 | Independent Auditor’s Report
95
INDEPENDENT AUDITOR’S
REPORT CONTINUED
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in on pages 16 to 34 of the Directors’ Report for the year
ended 30 June 2021.
In our opinion, the Remuneration Report of NRW Holdings Limited, for the year ended 30 June 2021, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU
DD KK AAnnddrreewwss
Partner
Chartered Accountants
Perth, 19 August 2021
96
NRW HOLDINGS ANNUAL REPORT 2021 | Independent Auditor’s Report
APPENDIX
APPENDIX
4E
4E
Appendix 4E
RESULTS FOR ANNOUNCEMENT TO THE MARKET
For the Year Ended 30 June 2021
Revenues from ordinary activities
Profit from ordinary activities after tax attributable to members
Total Comprehensive Income
INTERIM DIVIDEND
Date dividend is payable
% Change
Up / (down)
Year Ended
30 June 2021
Year Ended
30 June 2020
10.8
(26.4)
(26.4)
$’000
$’000
2,221,479
2,004,362
54,295
54,295
73,749
73,749
8 April 2021
9 June 2020
Record date to determine entitlements to dividend
23 March 2021
30 March 2020
Interim dividend payable per security (cents)
Franked amount of dividend per security (cents)
4.0
4.0
2.5
2.5
FINAL DIVIDEND
Date dividend is payable
13 October 2021
14 October 2020
Record date to determine entitlements to dividend
24 September 2021
29 September 2020
Final dividend payable per security (cents)
Franked amount of dividend per security (cents)
RATIOS AND OTHER MEASURES
5.0
5.0
4.0
4.0
Net tangible asset backing per ordinary security
$0.75
$0.84
Commentary on the Results for the Year
A commentary for the results for the year is contained in the statutory financial report dated 19 August 2021.
Status of Accounts
This statutory financial report is based on audited accounts.
NRW Holdings Limited - ACN 118 300 217
NRW HOLDINGS ANNUAL REPORT 2021 | Appendix 4E
97
97
APPENDIX
APPENDIX
A
A
Appendix A
Segment Information Adjusted to Reflect Change in Reportable Segments
In previous reports, the results of Drill & Blast have been separately reported. For comparative purposes, prior
period segment information now reflects the Drill & Blast reallocation into the Civil and Mining sgments.
First Half Year 2021
$’000
Revenue(1)
Revenue from associates
Statutory revenue
EBITDA(2)
EBITDA margin (%)
Depreciation and amortisation(3)
EBITA(4)
EBITA margin (%)
Second Half Year 2021
$’000
Revenue(1)
Revenue from associates
Statutory revenue
EBITDA(2)
EBITDA margin (%)
Depreciation and amortisation(3)
EBITA(4)
EBITA margin (%)
Civil
Mining
MET
Corporate /
Eliminations
Total
474,697
(30,321)
444,376
20,240
4.3%
(3,941)
16,299
3.4%
585,394
118,296
(10,368)
1,168,019
-
585,394
104,505
17.9%
(64,590)
39,915
6.8%
-
-
(30,321)
118,296
(10,368)
1,137,698
15,606
13.2%
(3,834)
11,772
10.0%
(7,543)
-
(1,459)
(9,002)
-
132,808
11.4%
(73,824)
58,984
5.0%
Civil
Mining
MET
Corporate /
Eliminations
Total
251,817
(48,808)
203,009
8,360
3.3%
(1,798)
6,562
2.6%
591,846
308,611
(19,685)
1,132,589
-
591,846
108,264
18.3%
(64,298)
43,966
7.4%
-
-
(48,808)
308,611
(19,685)
1,083,781
26,498
8.6%
(4,713)
21,785
7.1%
(9,195)
-
(1,457)
(10,652)
-
133,927
11.8%
(72,266)
61,661
5.4%
Total Reportable Segment Revenues and Results 2021
$’000
Revenue(1)
Revenue from associates
Statutory revenue
EBITDA(2)
EBITDA margin (%)
Depreciation and amortisation(3)
EBITA(4)
EBITA margin (%)
Civil
Mining
MET
Corporate /
Eliminations
Total
726,514
(79,129)
647,385
28,600
3.9%
(5,739)
22,861
3.1%
1,177,240
426,907
(30,053)
2,300,608
-
-
1,177,240
426,907
212,769
18.1%
(128,888)
83,881
7.1%
42,104
9.9%
(8,547)
33,557
7.9%
-
(30,053)
(16,738)
-
(79,129)
2,221,479
266,735
11.6%
(2,916)
(146,090)
(19,654)
120,645
-
5.2%
(1) Revenue including associates and joint ventures.
(2) EBITDA is earnings before interest, tax, depreciation, amortisation of acquisition intangibles and non-recurring transactions.
(3)
(4) EBITA is earnings before interest, tax, and amortisation of acquisition intangibles and non-recurring transactions.
Includes depreciation, and amortisation of software.
98
NRW HOLDINGS ANNUAL REPORT 2021 | Appendix A
98
APPENDIX
APPENDIX A
A CONTINUED
CONTINUED
Segment Information Adjusted to Reflect Change in Reportable Segments Continued
First Half Year 2020
$’000
Revenue(1)
Revenue from associates
Statutory revenue
EBITDA(2)
EBITDA margin (%)
Depreciation and amortisation(3)
EBITA(4)
EBITA margin (%)
Second Half Year 2020
$’000
Revenue(1)
Revenue from associates
Statutory revenue
EBITDA(2)
EBITDA margin (%)
Depreciation and amortisation(3)
EBITA(4)
EBITA margin (%)
Civil
Mining
MET
Corporate /
Eliminations
305,017
(25,077)
279,939
13,278
4.4%
(3,463)
9,815
3.2%
424,070
74,055
-
424,070
84,823
20.0%
(30,892)
53,931
12.7%
-
74,055
7,418
10.0 %
(2,469)
4,949
6.7%
5,542
-
5,542
(1,700)
-
(1,422)
(3,122)
-
Total
808,684
(25,077)
783,607
103,819
12.8%
(38,246)
65,573
8.1%
Civil
Mining
MET
Corporate /
Eliminations
Total
515,080
(33,007)
482,073
21,108
4.1%
(4,454)
16,654
3.2%
635,644
113,112
(10,074)
1,253,762
-
635,644
116,986
18.4%
(60,616)
56,370
8.9%
-
-
(33,007)
113,112
(10,074)
1,220,755
14,966
13.2%
(4,063)
10,903
9.6%
(6,855)
-
(1,702)
(8,557)
-
146,205
11.7%
(70,835)
75,370
6.0%
Total Reportable Segment Revenues and Results 2020
$’000
Revenue(1)
Revenue from associates
Statutory revenue
EBITDA(2)
EBITDA margin (%)
Depreciation and amortisation(3)
EBITA(4)
EBITA margin (%)
Civil
Mining
MET
Corporate /
Eliminations
Total
820,097
(58,084)
762,013
34,386
4.2%
(7,917)
26,469
3.2%
1,059,714
187,167
(4,532)
2,062,446
-
-
1,059,714
187,167
201,809
19.0%
(91,508)
110,301
10.4%
22,384
12.0%
(6,532)
15,852
8.5%
-
(4,532)
(8,555)
-
(58,084)
2,004,362
250,024
12.1%
(3,124)
(109,081)
(11,679)
140,943
-
6.8%
(1) Revenue including associates and joint ventures.
(2) EBITDA is earnings before interest, tax, depreciation, amortisation of acquisition intangibles and non-recurring transactions.
(3)
(4) EBITA is earnings before interest, tax, and amortisation of acquisition intangibles and non-recurring transactions.
Includes depreciation, and amortisation of software.
NRW HOLDINGS ANNUAL REPORT 2021 | Appendix A
99
99
Our objective is to increase
participation across various
demographics, ensure we recruit
and retain a skilled workforce,
and endorse a safe and productive
working environment that encourages
equality, diversity and inclusion.