CORPORATE REGISTRY
DIRECTORS
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:
Facsimile:
+61 8 9232 4200
+61 8 9232 4232
AUDITOR
Deloitte Touche Tohmatsu
Tower 2
Brookfield Place
Level 9
123 St Georges Terrace
Perth WA 6000
SHARE REGISTRY
Link Market Services Limited
Level 4 Central Park
152 St Georges Terrace
Perth WA 6000
Telephone:
Facsimile:
+61 1300 554 474
+61 2 8287 0303
ASX CODE
NWH – NRW Holdings Limited
Fully Paid Ordinary Shares
nrw.com.au
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NRW HOLDINGS ANNUAL REPORT 2023 | Corporate RegistryNRW HOLDINGS ANNUAL REPORT 2023 | Corporate Registry
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NRW HOLDINGS ANNUAL REPORT 2023 | Corporate Registry
CONTENTS PAGE
05
07
08
09
11
13
About This Report
About Us
Our Growth Journey
Our Capability
Chairman’s Message
CEO Review of Operations
13 Financial Year Highlights
13 Business Unit Performance
15 Civil
15 Mining
15 Minerals, Energy & Technologies
17 People & Safety
17 Climate & Environment
17 Outlook
19
CFO Financial Report
19 Financial Performance
19 Balance Sheet, Operating Cash Flow
& Capital Expenditure
23
33
Climate Related Financial Disclosures
Financial Statements
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NRW HOLDINGS ANNUAL REPORT 2023 | Contents Page
ABOUT THIS REPORT
ANNUAL REPORT 2023
OUR ANNUAL REPORTING SUITE
This Annual Report (Report) discloses a summary
of NRW’s operations, activities and performance
information for the financial year 1 July 2022 to 30 June
2023 (FY23).
You can view all documents in the NRW Holdings Ltd’s
Annual Reporting Suite on the company’s website
(www.nrw.com.au), including:
for
its stakeholders,
This Report forms part of NRW’s Annual Reporting
Suite to enable the Company to integrate the concept
of creating value
including
shareholders, clients, employees and the communities
in which we operate. This Report should be read in
conjunction with the other documents in NRW’s Annual
Reporting Suite and other periodic announcements
lodged with the Australian Securities Exchange (ASX),
including the Annual Financial Statements, all of which
are available on the NRW website (www.nrw.com.au)
and the ASX platform.
Annual Report
Sustainability Report
Corporate Governance Statement
Modern Slavery Statement
NRW Holdings Limited (ACN 118 300 217) is the
parent entity of the NRW group of companies, and its
shares are listed on the ASX (ASX Code: NWH). In this
Report, unless otherwise stated, references to ‘NRW’,
‘we’, ‘our’, the ‘Company’ or ‘NRW Group’ refer to NRW
Holdings Limited and its wholly owned subsidiaries
listed on page 82 – 83 of NRW’s Annual Financial
Statements for the year ended 30 June 2023 (2023
Annual Financial Statements) released to the ASX on
17 August 2023.
To the extent this Report contains certain “forward-
looking statements” and comments about future events
(including projections, guidance on future earnings
and estimates), these statements are provided as
a general guide only and should not be relied upon
as an indication or guarantee of future performance.
Such statements, by their nature, involve known and
unknown risks, uncertainty and other factors, many of
which are outside the control of NRW. As such, undue
reliance should not be placed on any forward-looking
statement and no representation or warranty is made
by any person as to the likelihood of achievement or
reasonableness of any forward-looking statements,
forecast financial
forecast.
Similarly, past performance should not be relied upon
(and is not) an indication of future performance. It
represents NRW’s historical financial position at a
specific date (and reference should be had to the full
accounts released to ASX from which it is derived).
information or other
Unless otherwise stated, financial information in this
report is presented on the basis described in the 2023
Annual Financial Statements - Basis of Preparation
on page 43, and monetary amounts in this Report are
expressed in AUD dollars.
5
NRW HOLDINGS ANNUAL REPORT 2023 | About This ReportNRW HOLDINGS ANNUAL REPORT 2023 | About This Report i
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NRW HOLDINGS ANNUAL REPORT 2023 | About This Report
OUR GROWTH
JOURNEY
ABOUT US
NRW is a leading provider of diversified contract services
to the resources and infrastructure sectors. NRW has a
workforce of around 7,200 people, supporting projects
around Australia for clients across the resources,
renewable energy, infrastructure, industrial engineering,
maintenance and urban subdivision sectors.
With extensive operations across all of Australia, and
engineering offices in Canada and the USA, 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
segment offers
tailored mine-to-market solutions,
specialist maintenance (shutdown services and onsite
maintenance), non-process infrastructure, innovative
materials handling solutions, Build-Own-Operate (BOO)
process plant 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
for earthmoving equipment
and machinery.
rebuild services
7
NRW HOLDINGS ANNUAL REPORT 2023 | Our Growth JourneyNRW HOLDINGS ANNUAL REPORT 2023 | About Us OUR GROWTH
JOURNEY
OFI ACQUISITION
OFI added process controls, instrumentation
design, switchboard/panel manufacture and
electrical installation capability, together with an
entry to Defence contracting.
2023
NEW CAPABILITIES
& MARKETS
PRIMERO ACQUISITION
Primero added significant design, construction and
operations and maintenance (O&M) capability to
Minerals, Energy & Technologies.
2021
ADDED SIGNIFICANT
EPC CAPABILITIES
BGC CONTRACTING &
DIAB ENGINEERING ACQUISITION
BGC Contracting significantly enhanced NRW’s
ability to participate as a large construction partner
in public works projects. DIAB Engineering added
maintenance, construction and shutdown capability.
2019
INCREASED SCALE
& CAPABILITIES
RCR MINING TECHNOLOGIES
ACQUISITION
Established mining technologies and maintenance
pillar. Platform for growth across OEM products and
fixed plant maintenance.
2019
INCREASED
CAPABILITIES
GOLDING ACQUISITION
Increased exposure to east coast civil
infrastructure, urban and mining markets.
2017
GEOGRAPHIC
EXPANSION
8
NRW HOLDINGS ANNUAL REPORT 2023 | Our Growth Journey OUR CAPABILITY
OPERATING UNITS
NRW Holdings has expanded and diversified its capabilities across three reportable segments: Civil, Mining and
Minerals, Energy & Technologies (MET), with operations spanning Australia and engineering offices in Canada and
the USA, enhancing its geographic reach and service diversity.
CIVIL
NRW Civil | Golding Civil | Golding Urban
Our Civil businesses deliver a range of leading civil
contract services for Tier One clients in the resources
and infrastructure sectors Australia-wide.
MINING
NRW Mining | Golding Mining | Action Drill & Blast
AES Equipment Solutions
Our Mining businesses operate nationwide providing
an extensive range of value-adding services for key
clients, delivered to the highest industry standards.
MINERALS, ENERGY
& TECHNOLOGIES
Primero | RCR Mining Technologies | DIAB Engineering | OFI
Our MET businesses provide innovative materials handling
solutions and integrated engineering, construction and
maintenance services and OEM equipment for
minerals processing and energy projects
in Australia and North America.
9
NRW HOLDINGS ANNUAL REPORT 2023 | Our CapabilityNRW HOLDINGS ANNUAL REPORT 2023 | Our Capability OUR CAPABILITY CONTINUED
DIVERSIFIED MODEL
Across our three operating segments, our strategy has successfully created a
diversified business model applicable to civil and public infrastructure and utilities. This
model provides comprehensive capabilities throughout the project lifecycle, spanning
engineering, construction, operations, maintenance and shutdowns.
EXTENDED
CAPABILITIES
PROCESS &
DESIGN
MINE
DEVELOPMENT
MINING
DRILL &
BLAST
CIVIL
INFRASTRUCTURE
MATERIAL
HANDLING
PROCESS
PLANT
OEM
E&I
AUTOMATION
LOAD OUT
INFRASTRUCTURE
NRW CIVIL & MINING
GOLDING
PRIMERO
ACTION DRILL & BLAST
RCR MINING TECHNOLOGIES
DIAB ENGINEERING
AES
OFI
NPI
INFRASTRUCTURE
TAILINGS
STORAGE FACILITY
EQUIPMENT
MAINTENANCE & REBUILD
RENEWABLE
ENERGY
OPERATIONS &
MAINTENANCE
CIVIL/URBAN
INFRASTRUCTURE
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NRW HOLDINGS ANNUAL REPORT 2023 | Our Capability
CHAIRMAN’S
MESSAGE
Through the continual reduction in our Total Recordable
Injury Frequency Rate, and the work done to date to
proactively address psychosocial risks, we continue to
promote a safe and supportive workplace. As always,
we will continue to strive to improve these results as a
key operational objective each year.
SUSTAINABILITY
Our standalone Sustainability Report
for FY23
expands upon the information provided in this annual
report and further outlines our continued efforts to
embed sustainability principles in our business. Under
the leadership of Fiona Murdoch, our Sustainability
Committee diligently manages and reports on our
Environmental, Social and Governance
(ESG)
matters. I would encourage all our shareholders to
read the report to further understand how NRW’s ESG
initiatives are benefiting our clients, communities and
broader stakeholders.
FINAL DIVIDEND PAYMENT
Disciplined capital management is always front of
mind, and NRW is committed to paying a sustainable
dividend in line with the Company’s dividend policy.
The Board is pleased to have declared a final fully
franked dividend of 8.0 cents per share, up from the
interim dividend which was equivalent to 6.0 cents per
share on a comparable franked basis. This brings the
final total FY23 dividend payment to 16.5 cents per
share, delivering a record dividend to our shareholders.
In closing, and on behalf of the Board, I would like
to thank our Managing Director and CEO, Jules
Pemberton,
in delivering
another excellent result, and extend our thanks to our
clients, employees and shareholders for their loyalty
and support.
leading our
team
for
Michael Arnett
Chairman, NRW Holdings
As Chairman of NRW Holdings, and on behalf of my
fellow Directors, I am delighted to present this year’s
annual report.
OUR PERFORMANCE
The FY23 result was a record in the Group’s history
and was delivered in conjunction with another year of
improved safety and financial operational performance
across the Group. This was an outstanding outcome
during a period of exceptionally challenging conditions
across each of our key markets. This included significant
unseasonal wet weather in the first half, considerable
cost inflation and persistent skilled labour pressures,
approval-driven factors delaying the award of several
key projects and continued price competition for new
work. The extensive diversification of the Group’s
business model allowed NRW to respond quickly to
changing conditions.
This strong operational performance saw NRW
deliver record revenue, earnings and cash, enabling
the payment of a record dividend. Looking ahead,
the Group has a record order book and a high level
of secured work for FY24, which gives us confidence
that our track record of earnings delivery and delivering
on our commitments to shareholders will continue into
FY24 and beyond.
Underpinning
this performance was a continued
focus on the disciplined execution of our strategy to
drive growth within the business. We welcome the
acquisition of OFI Group Holdings Ltd and its workforce
industrial electrical
to NRW. OFI specialises
engineering, automation, instrumentation and design
and construction. The acquisition strengthens and
enhances the capabilities and service delivery within
the MET segment, and we are proud to continue
to invest in local operations in the Southwest of
Western Australia.
in
OUR PEOPLE
Our people are our greatest asset, and the safety,
health and wellbeing of our workforce is of paramount
importance to us. Over this reporting period, we have
recorded zero fatalities and zero serious injuries. I would
like to thank and acknowledge the dedicated efforts of
our 7,200 people as they have been instrumental in
ensuring safe and successful project delivery this year.
Despite facing various challenges, the team has shown
resilience and determination, and they have continued
to safely deliver on our commitments to our clients.
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NRW HOLDINGS ANNUAL REPORT 2023 | Chairman’s MessageNRW HOLDINGS ANNUAL REPORT 2023 | Chairman’s Message A
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NRW’s diversification
strategy delivers value
in FY23 and underpins
growth for the future.
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NRW HOLDINGS ANNUAL REPORT 2023 | Chairman’s Message
CEO REVIEW
OF OPERATIONS
I am pleased to present NRW Holdings’ operations
review for the financial year ending 30 June 2023.
REVENUE GROWTH
Before commenting on the operations, I want to extend
my gratitude to the remarkable employees who make
our business so successful. Their dedication and
commitment have been pivotal in ensuring safe and
profitable project delivery throughout the year.
FY23 presented us with a unique set of challenges,
from extreme weather conditions in Queensland to
new project delays and industry-wide pressures such
as cost inflation and skilled labour shortages. Despite
these hurdles, our results for the year showcase the
strength of our diversification strategy, enabling us to
adapt quickly and maintain profitability.
I have listed the financial highlights below which are the
best results in the Group’s history.
FINANCIAL YEAR HIGHLIGHTS
• Revenue $2.7 billion up 11.4% on FY22
• EBITA $166.3 million up 13.3% on FY22
• Normalised Earnings per share 23.2 cps, up 11.0%
on FY22
• Record Cash holdings $227.6 million up from $219.3
million in FY22, with cash conversion at 99.0%
$2,718M
$2,418M
$2,252M
$2,009M
$1,130M
$707M
$351M
2017
2018
2019
2020
2021
2022
2023
EBITA
$166.3M
$140.9M
$146.7M
$120.6M
• Record Annual Dividend payout ratio – 71.5%
(60.7% on comparable franked basis)
$64.2M
$54.9M
• Final fully franked dividend declared of 8.0 cents per
share, increasing total dividend for the year to 16.5
cents per share, a 12.0% increase from FY22
$31.6M
• Net debt of $84.3 million, gearing of 13.8% including
2017
2018
2019
2020
2021
2022
2023
leases, 5.4% excluding leases
• Record Order Book of $5.9 billion
• Record Secured Work for FY24 of $2.7 billion.
ORDER BOOK
BUSINESS UNIT PERFORMANCE
The acquisitions undertaken over recent years have
resulted in a highly diversified business model and a
portfolio of businesses servicing the resources and
infrastructure sectors. The breadth and reach of our
business model extends across geographies, multiple
commodities, numerous clients and a range of different
services, allowing the Group to spread and mitigate
its business risk exposure, together with positioning
NRW to access an ever-evolving and exciting range of
future opportunities.
$5.9B
$5.2B
$3.5B
$3.4B
$2.2B
$2.2B
$0.9B
2017
2018
2019
2020
2021
2022
2023
13
NRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of Operations
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For FY24, we have achieved
a record $2.7 billion in
secured work and currently
maintain a record order
book of $5.9 billion.
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NRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of Operations
CEO REVIEW OF
OPERATIONS CONTINUED
BUSINESS UNIT PERFORMANCE
CONTINUED
NRW currently comprises three reportable segments:
Civil, Mining and Minerals, Energy & Technologies
(MET). Business activities are conducted primarily in
Australia, with engineering operations in Canada and
the USA.
CIVIL
The Civil segment delivered an increase in revenue
to $550.3 million from a national portfolio of multi-year
projects. Difficult market conditions brought about by
factors such as an East Coast La Niña weather pattern,
delayed awards and extended tendering, together with
a disciplined approach to pricing in a highly competitive
market, affected profitability during the year. The EBIT
result was still strong at $20.7 million, however the
margin was impacted by these conditions.
Looking forward to FY24, the outlook for the Civil
business is strong as excess market capacity shrinks
with the rising volume of new projects in the resources
and public infrastructure sectors. Factors contributing
to this include the commencement of a new iron ore
replacement and sustaining capital cycle, major new
gold and battery critical mineral mine developments
starting in FY25, the continuation of the multi-year
public infrastructure projects in Western Australia and
Queensland and South East Queensland’s expanding
urban development fueled by population growth.
MINING
Despite the challenges posed by the La Niña weather
pattern during the first seven months of the year, our
Mining segment delivered robust growth in FY23.
Notably, revenue increased 13.2% from $1,273.2 million
in FY22, to $1,441.0 million in FY23. Furthermore,
earnings saw a substantial increase, reaching $134.1
million compared to the previous year’s $106.6 million,
delivering a margin improvement from 8.4% to 9.3%.
A key factor contributing to this growth was the extension
of long-term mining contracts, which commenced late
in the prior year and continued into the current year.
These extensions included projects such as Baralaba,
Curragh and the Mt Webber Iron Ore Mine. Additionally,
the Mining business secured new multi-year contracts
during the year, such as the $230.0 million contract for
Jellinbah East, the $300.0 million contract with Talison
Lithium and the $332.0 million contract for Allkem at the
Mt Cattlin Lithium mine.
Throughout the year, we remained committed to a
disciplined approach to capital allocation and ensured
that our investments met minimum return thresholds.
15
Looking ahead, we are pleased to report that virtually
all the revenue expected to be delivered in FY24 has
been secured through these long-term contracts.
This exceptional positioning allows
the Mining
businesses to be highly selective in evaluating future
project opportunities.
MINERALS, ENERGY & TECHNOLOGIES
(MET)
In FY23, the MET segment saw its revenue grow
to $729.1 million, up from $690.7 million in FY22.
However, earnings decreased to $30.5 million from
$38.0 million, mainly due to delayed project starts
and cost overruns on now completed projects in the
Primero business.
RCR’s historically reliable product support, maintenance
and heat treatment business units performed to
expectations, however the projects business was
impacted by clients’ deferral of new project starts.
These market conditions are now improving and we
expect to see growth in all RCR business units in FY24.
DIAB had a very successful year, delivering very strong
growth in revenue and earnings from significant projects
for key clients such as Lynas, Iluka and Rio Tinto. This
portfolio of work will continue, and we expect another
strong financial performance in FY24.
The performance of the Primero business was impacted
by the close out of pre-COVID fixed-price construction
contracts which had to absorb increased costs from low
labour productivity and a high inflationary environment.
These legacy projects delivered financial outcomes
that were well below the tendered margins. They are
however now fully closed out and have been replaced
by significant new risk-balanced contracts.
Going forward, these new target cost incentive projects,
such as the Fimiston expansion project for Northern
Star, together with an ever-expanding portfolio of base
metal and battery critical mineral engineering study
projects in Australia and North America, will provide
a strong foundation for the recovery of profitability
in FY24.
In addition, the Group acquired OFI during the
year, adding strategically important electrical and
instrumentation design and construction capability
to the portfolio, and we are very pleased to welcome
OFI’s employees to NRW.
Overall, the MET segment is well-positioned for future
growth and success. For more details, please refer to
the Directors’ Report.
NRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of Operations i
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The MET business has a
diversified portfolio of projects
across the iron ore, gold, rare
earths and battery critical
minerals sectors.
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NRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of Operations
CEO REVIEW OF
OPERATIONS CONTINUED
PEOPLE & SAFETY
the
NRW’s people have played a pivotal role in driving
success over the last year. Despite facing various
challenges,
team has shown resilience and
determination and their efforts have led to several
notable successes. In a competitive labour market,
NRW’s commitment to attracting and retaining top
talent has remained constant. As a result, NRW has
built a skilled and passionate workforce of 7,200 (FY22:
7,000) across the Group, enabling it to successfully
deliver numerous projects and services. NRW’s
people continue to be the cornerstone of the Group’s
achievements, and the Company is grateful for their
dedication and contributions.
HEADCOUNT
environment. NRW has progressed the development of
the Group’s carbon reduction roadmap which will drive
its commitment to carbon reduction initiatives over the
short, medium and long-term.
The Company has appropriate systems in place for
the management of its environmental requirements
and is not aware of any significant breach of those
environmental requirements as they apply to the
operations of the Group. NRW has not received any
fines or penalties for environmental breaches during
the period and is operating in compliance with all
environment management plans and requirements.
We have released our third Sustainability Report this
year. You can access a copy of this report on our
corporate website.
7,053
7,000
6,376
OUTLOOK
7,200
3,145
2,000
1,000
2017
2018
2019
2020
2021
2022
2023
In FY23, the Australian resources industry experienced
a shortage of skilled labour, which has resulted
in many new workers entering the industry. The
Company recognises the risk this brings to the safety
of operations as NRW seeks to recruit and mobilise
a less experienced workforce. As a company, NRW
remains committed to training and upskilling people,
and reinforcing a safety-first culture on site.
NRW has continued to progress its critical risk
management program across the Group. Workshops
have been held within the Group with a number of
subject matter experts across various disciplines. This
ensures we understand the critical risks from an “end
users” perspective and provide the practical controls
that need to be in place to prevent fatality events. The
program is due to commence rollout in the first half
of FY24.
in
to
We will continue
training and
invest
development of our people, to ensure we can safely
deliver our services in the long-term. You can read
more about our People and Safety initiatives in the
Directors’ Report.
the
CLIMATE & ENVIRONMENT
NRW is committed to undertaking all the Group’s
business activities in an environmentally responsible
manner and understands the needs of its stakeholders
to adequately assess its carbon footprint in light of
the impacts that climate change is having on the
17
The Group’s overall pipeline currently stands at
an
impressive $17.1 billion, with approximately
$1.6 billion in submitted tenders awaiting consideration.
Importantly, this pipeline is being converted as the work
in hand has reached a historic high of $5.9 billion, and
for FY24, we have secured work valued at around
$2.7 billion. This record level of secured work provides
us with clear visibility of the Group’s revenue and
earnings potential into FY24 and beyond, particularly
when we also have $2.5 billion of work already secured
for FY25.
For FY24, revenue is expected to exceed $2.8 billion
with earnings (EBITA) expected
to be between
$175.0 million to $185.0 million. We expect cash
and gearing levels to remain consistent with our
long-term averages.
As I reflect on the successful conclusion of a challenging
FY23, I am optimistic about the outlook for the medium-
term, supported by improving market conditions,
a
towards more balanced risk-sharing
contract structures and strong and growing demand for
our services.
transition
In closing, I would again like to express my gratitude
for the commitment and effort demonstrated by our
senior management team and all our employees in
our various businesses. I also extend my appreciation
to my fellow directors, as well as our shareholders
and stakeholders, for their continued support of
our company.
Jules Pemberton
CEO and Managing Director, NRW Holdings
NRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of OperationsNRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of Operations
We have continued to invest
in the growth of our businesses
and the development of our
people and infrastructure, to
secure the opportunities that
will come in FY24.
18
NRW HOLDINGS ANNUAL REPORT 2023 | CEO Review of Operations CFO FINANCIAL
REPORT
Having joined NRW Holdings as Chief Financial Officer
in October 2022, I am pleased to present the Group’s
financial performance for the first time.
FINANCIAL PERFORMANCE
NRW reported revenues, including those generated
by associates, of $2,669.3 million
(statutory
revenue of $2,667.1 million) an 11.4% increase on
$2,396.4 million (statutory revenue of $2,367.4 million)
in FY22. The growth in revenue resulted from increased
activity levels across the major contracts and projects
in all three operating segments.
The table below provides key financial performance
metrics for the current financial year compared to the
prior comparative period:
FY23
FY22(8)
Revenue
Earnings
Revenue
Earnings
$M
2,669.3
(2.3)
Total Revenue(1) / EBITDA(2)
Revenue from Associates
Depreciation and Amortisation(3)
Operating EBIT / EBITA(4)
Amortisation of Acquisition Intangibles(5)
Non-recurring Transactions(6)
EBIT
Net Interest
Profit before Income Tax
Income Tax Expense
Statutory Revenue / Net Earnings
2,667.1
NPATN(7)
Refer to definitions on page 7 of the Directors’ Report in the financial statements.
$M
288.8
(122.5)
166.3
(5.9)
(18.3)
142.1
(17.2)
124.9
(39.3)
85.6
104.4
$M
2,396.4
(29.0)
2,367.4
$M
262.1
(115.4)
146.7
(7.9)
-
138.8
(12.9)
125.9
(35.7)
90.2
93.7
Operating EBIT of $166.3 million was up 13.3% from
FY22, driven by a strong margin improvement in the
Mining businesses.
the
The margin performance across
individual
businesses varied as each responded to significant
and varying challenges in their respective markets,
demonstrating the strength through diversification of the
Group’s business model. Overall margin performance
was broadly consistent with FY22, increasing slightly to
6.2% from 6.1%.
Interest costs increased, reflecting a succession of base
rate rises and the funding of new capital expenditure
during the year, to support the mining contract portfolio.
Statutory earnings for the year totalled $85.6 million
which was a reduction from the FY22 result of $90.2
million, with statutory earnings per share reducing from
20.1 cents per share in FY22 to 19.0 cents per share
in FY23.
Normalised Net Earnings (NPATN) increased by 11.4%
to $104.4 million up from $93.7 million in the prior year,
reflecting the growth that occurred across the Group.
BALANCE SHEET, OPERATING CASH
FLOW & CAPITAL EXPENDITURE
The year end cash balance was $227.6 million, an
increase over the prior year. Debt repayments in
the year included asset financing debt repayments
of $65.0 million,
line with agreements, and
$12.5 million of corporate debt, which relates to
business acquisition finance.
in
19
NRW HOLDINGS ANNUAL REPORT 2023 | CFO Financial ReportNRW HOLDINGS ANNUAL REPORT 2023 | CFO Financial Report n
o
r
I
s
a
l
t
A
,
k
e
e
r
C
a
g
a
r
i
l
M
The growth in revenue
resulted from increased
activity levels across the
major contracts and projects
in all three operating segments.
20
NRW HOLDINGS ANNUAL REPORT 2023 | CFO Financial Report
CFO FINANCIAL
REPORT CONTINUED
BALANCE SHEET, OPERATING CASH
FLOW & CAPITAL EXPENDITURE
CONTINUED
2022 and an interim unfranked dividend for the current
financial year of 8.5 cents, paid in April 2023. Overall
dividend payments in the year totalled $69.8 million.
asset
financing
totalled
New
$104.4 million, mostly to fund new capital expenditure
associated with the Karara Mining contract and other
growth expenditure.
year
the
in
All banking covenants were in compliance at all times
during the year and at 30 June 2023.
Capital expenditure totalled $187.3 million (2022:
$206.3 million) of which circa $68.4 million was for the
Karara Mining project. A total of $78.3 million represents
sustaining and maintenance capital expenditure, which
is normal for the Group.
Returns to shareholders included both a final fully
franked dividend for FY22 of 7.0 cents paid in October
Investments increased mostly due to shares acquired
in Green Technology Metals Limited (ASX: GT1) and
Grid Metals Corp (TSXV: GRDM).
During the period, the Group acquired OFI, the net
effect of which was approximately a $1.9 million
increase to goodwill.
Net Assets increased in the year by $19.0 million to
$610.1 million, reflecting earnings in the year net of
dividend payments.
A summary of the balance sheet as at the end of the
current financial year and the previous financial year is
provided below:
30 Jun 23
30 Jun 22 (1)
Cash
Financial Debt
Lease Debt
Net Debt
Property, Plant and Equipment
Right-of-use Assets
Working Capital
Investments
Tax Liabilities
Net Tangible Assets
Intangibles and Goodwill
Net Assets
Gearing
Gearing Excl. Lease Debt
$M
227.6
(260.4)
(51.5)
(84.3)
491.0
44.9
8.9
26.9
(90.4)
397.0
213.1
610.1
13.8%
5.4%
$M
219.3
(233.2)
(52.8)
(66.6)
423.5
44.5
9.2
22.4
(51.1)
381.8
209.3
591.1
11.3%
2.3%
(1) Restated to reflect prior period adjustment – refer to note 1.9 in the financial statements.
At the conclusion of my first year with NRW, I would
like to extend my thanks to Jules, the NRW Board
and my predecessor Andrew Walsh for their collective
support during my transition into the role.
I am pleased to have joined NRW at a very exciting
time in the Group’s history as it leverages its strong
financial position to embark upon the next phase of
its evolution.
Richard Simons
CFO, NRW Holdings
21
NRW HOLDINGS ANNUAL REPORT 2023 | CFO Financial ReportNRW HOLDINGS ANNUAL REPORT 2023 | CFO Financial Report
The acquisition of
OFI Group in March
enhanced capabilities
and service delivery in
our MET segment.
22
NRW HOLDINGS ANNUAL REPORT 2023 | CFO Financial Report CLIMATE RELATED
FINANCIAL DISCLOSURES
CONTENTS PAGE
25
Task Force for Climate Related Financial Disclosures
26 Governance
27 Strategy
30 Risk Management
31 Metrics and Targets
23
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial DisclosuresNRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial DisclosuresNRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures 24
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial DisclosuresNRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures CLIMATE RELATED
FINANCIAL DISCLOSURES
TASK FORCE FOR CLIMATE RELATED FINANCIAL DISCLOSURES
This year, NRW reports for the first time on the Task Force for Climate Related Financial Disclosures (TCFD)
recommendations within our 2023 Annual Report, reinforcing our commitment to high quality and transparent
climate-related disclosures.
Climate change is recognised internationally as presenting material risks to the global financial system – risks which
need to be managed by capital markets, regulators and corporations. These include physical risks of climate change
and the transition risks associated with policy, regulatory and technological change brought on by efforts to mitigate
climate change.
NRW acknowledges a well-recognised and important tool to manage both individual and systemic climate-related
financial risks is disclosure of those risks.
The TCFD was established by the Financial Stability Board to improve reporting of climate-related risks and
opportunities. The TCFD developed four widely adoptable recommendations on climate-related financial disclosures
that are applicable to organisations across all sectors. These voluntary disclosures allow for more effective risk
assessments, better-informed capital allocation decisions and better strategic planning with regards to climate.
Governance
Strategy
Risk
Management
Metrics &
Targets
The organisation’s governance around climate-related risks
and opportunities.
The actual and potential impacts of climate-related risks and
opportunities on the organisation’s businesses, strategy and
financial planning.
The processes used by the organisation to identify, assess
and manage climate-related risks.
The metrics and targets used to assess and manage relevant
climate-related risks and opportunities.
Figure 1: Core Elements of Recommended Climate Related Financial Disclosures
The Group recognises that transparent disclosures on our climate-related risks and opportunities support our
shareholders to make long-term investment decisions. As such, we have structured our climate-related disclosures
according to the TCFD recommendations, taking steps each year to provide greater granularity on NRW’s initiatives
to enhance our climate-related disclosure.
NRW recognises the work of the International Financial Reporting Standards (IFRS) Foundation and the International
Sustainability Standards Board (ISSB) in developing a consistent global baseline for sustainability-related financial
disclosures following the release of IFRS S1 General Requirements for Disclosure of Sustainability-related
Financial Information and IFRS S2 Climate-related Disclosures in June 2023. NRW is committed to transitioning
and aligning our climate-related disclosures with any mandatory Australian requirements once these have been
formalised through Australian Treasury. This work would include the capture and reporting of Scope 3 GHG
emissions, in addition to climate-scenario analysis in line with any legislative guidance which we are committed
to performing.
25
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial DisclosuresNRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures CLIMATE RELATED
FINANCIAL DISCLOSURES CONTINUED
GOVERNANCE
Disclose the organisation’s governance around climate-related risks and opportunities.
Describe the Board’s oversight of climate-related risks and opportunities
The NRW Board is responsible for the oversight of the strategic direction across the Group. The Board has
delegated responsibility for Environmental, Social and Governance related matters, including climate-related
topics, to the Sustainability Committee. Together, NRW’s Board and Sustainability Committee oversee the
governance of climate-related risks and opportunities.
In accordance with the Sustainability Committee Charter, the Committee is responsible for making
recommendations to the Board regarding the Group’s climate change strategy. This includes, providing
oversight to ensure both physical and transitional climate-related risks and opportunities which affect the
Group’s ability to achieve its objectives are identified, assessed and where relevant, mitigated, and agreeing
and monitoring climate-related metrics and targets. This includes oversight of a climate change strategy that
maps the Group’s pathway to a practical and appropriate level of carbon reduction for the business. The
Committee reports to the Board periodically throughout the year on NRW’s climate-related activities.
The Sustainability Committee endorses policies that are relevant to the Group’s management of climate-
related risk, sustainability and other key topics. The Sustainability Committee also oversees the management
of specific climate-related risks and opportunities through the regular review of global best practice, internal
compliance programs and relevant sustainability frameworks. The NRW Board and Sustainability Committee
oversees the development and adoption of the sustainability strategy, while the NRW executive team ensures
its implementation.
For further information on the Sustainability Committee, including its members and how often the Sustainability
Committee met during FY23, please see page 6 of the Annual Financial Statements.
Describe management’s role in assessing and managing climate-related risks and
opportunities
The NRW executive team is responsible for the strategic and operational leadership and management of
the Group, which includes consideration of climate-related risks and opportunities. The Chief Health, Safety,
Environment and Sustainability Officer (Chief – HSES Officer) is charged with coordinating and updating
the Board and Sustainability Committee on management’s progress and activities related to climate at each
Sustainability Committee Meeting.
Supporting the Chief – HSES Officer is the Carbon Reduction Working Group, formed to optimise alignment
at the Group level and to monitor progress on the implementation of climate-related matters included in the
Group Sustainability Strategy. This working group is responsible for matters and activities related specifically
to climate-related risks and opportunities, as well as carbon reduction projects to reduce NRW’s carbon
footprint. The working group will support the integration of climate change strategy into our businesses
and be pivotal in progressing internal GHG targets across operations, ensuring that these are aligned with
the Board’s commitments. The working group is comprised of subject matter experts. Climate-related risks
and opportunities and agreed actions are discussed in these forums and escalated, when required, to the
Sustainability Committee via the Chief – HSES Officer.
NRW’s management is responsible for coordinating, reviewing and monitoring and reporting to the Board
where appropriate, on matters including:
• The coordination and review of climate-related risks, strategy and reporting.
• The development and implementation of initiatives regarding emissions reduction.
• The policies and systems for ensuring compliance with applicable legal and regulatory requirements
associated with climate-related matters.
• The Group’s performance in relation to climate-related matters.
• The Group’s reporting regarding climate-related matters.
26
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures CLIMATE RELATED
FINANCIAL DISCLOSURES CONTINUED
STRATEGY
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s
businesses, strategy and financial planning.
Describe the climate-related risks and opportunities the organisation has identified over
the short, medium and long-term
When performing NRW’s climate risk assessment, NRW considered climate-related risks and opportunities
across three time horizons:
• Short term (to the end of 2030);
• Medium term (from 2031 to the end of 2040); and
• Long term (2041 and beyond).
TCFD categorises climate-related transition risks as policy and legal, market, reputation, technology and
physical. It also refers to climate-related acute and chronic physical risks and opportunities. A description of
the process used to identify the climate-related risks that could have a material financial impact on the Group
is outlined under the Risk Management section.
PHYSICAL RISK
We have identified the following physical climate-related risks as having the potential to impact the Group.
Physical risks can be event driven (acute), including increased severity of extreme weather events, or
longer-term shifts (chronic) in climate patterns, such as increased temperature causing rising sea levels or
heat waves.
Risk
Acute
•
Increase in frequency and
severity of extreme weather
events
Potential Financial Impacts
Risk Mitigation Steps
Timeframe: Short to Long Term
Impacts:
•
Increased operating costs due to
increased project downtime / delays or
the potential for liquidated damages
• Decreased revenue due to lower
productivity resulting from supply chain
or freight disruptions
• Damage to assets increasing capital
•
costs of repairs
Increased costs for insurance premiums
for operations in certain geographical
areas
• Project / location-specific risk
assessments that consider the short and
medium term risk of inclement weather
and bushfire
• Continue to operate across
geographically diverse locations
• Provision of certified environment
management systems to record and
report environmental issues on site
Chronic
Timeframe: Medium to Long Term
• Changes in precipitation
patterns and extreme variability
in weather patterns
• Rising mean temperatures
• Rising sea levels
Impacts:
• Decreased revenue due to lower
•
•
productivity resulting from supply chain
or freight disruptions
Increased costs due to the negative
employee health impacts from working
in areas with volatile weather patterns or
hostile work environments
Increased costs for insurance premiums
for operations in certain geographical
areas
• Decreased revenue from unfeasible
projects in geographical areas of high
risk
• Develop strategic partnerships with
suppliers, industry experts and OEMs to
stay abreast of technological advances
to incorporate into future business
planning
• Build internal capability to adopt and
deploy new technologies
• Ensure our fleet strategy includes
assessment of emissions-intensive
equipment lifespan against external
carbon reduction expectations
27
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial DisclosuresNRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures CLIMATE RELATED
FINANCIAL DISCLOSURES CONTINUED
STRATEGY CONTINUED
TRANSITIONAL RISK
NRW has identified the following transitional climate-related risks as having the potential to impact the
Group. Transitional risks refer to those associated with transitioning to a low carbon economy, which may be
due to changes in policies, technologies and markets, and can impact reputation.
Risk
Potential Financial Impacts
Risk Mitigation Steps
Policy and Legal
Timeframe: Short to Medium Term
• GHG emissions pricing
• Enhanced climate reporting
obligations
• Mandates on or regulation of
assets and services that are
emissions-intensive
• Exposure to litigation
•
•
Impacts:
•
Increased operating costs due to pricing of
GHG emissions within the market
Increased operating costs due to increased
compliance burden on companies
Increased costs for insurance premiums for
operating in certain industries (for example
mining, mining services), geographical areas
(for example high risk areas such as the
Pilbara or North Queensland) or operating
certain assets (such as our large manufacturing
facilities)
Technology
Timeframe: Short to Long Term
• Substitution of existing
products and services with
lower emissions options
• Costs to transition to lower
emissions technologies
• Uncertainty / reliability
and availability of new
technologies
• Human resource availability
and skills required in adoption
of new technologies
Impacts:
•
Increased operating costs due to write-offs
and impairment of existing emissions-intensive
assets such as our large mining fleet
•
• Reduced revenue from decreased demand for
emissions-intensive products and services
Increased capital costs to transition to lower
emissions technologies such as the capital
costs associated with purchasing lower
emissions fleet
Increased operating costs to adopt and deploy
new technologies within the business such
as upskilling our maintenance teams on new
equipment and implementing new policies and
manuals to operate new types of equipment
•
• Build internal capability to monitor,
respond to and communicate policy
and regulatory changes
• Adopt and comply with best practice
climate disclosure regimes to prepare
for mandatory legislative requirements
• Develop and implement a carbon
reduction roadmap to de-risk impact of
future policy and pricing
• Maintain appropriate insurance
coverage
• Develop strategic partnerships with
suppliers, industry experts and OEMs
to stay abreast of technological
advances to incorporate into future
business planning
• Build internal capability to adopt and
deploy new technologies
• Ensure our fleet strategy includes
assessment of emissions-intensive
equipment lifespan against external
carbon reduction expectations
Reputation
Timeframe: Short to Medium Term
• Shifts in client or consumer
preferences
• Reputational damage if
•
climate action is viewed as
inadequate
Increased societal and
stakeholder pressure to
increase disclosure and
targets
• Stigmatisation of certain
commodities or sectors
Impacts:
• Reduced revenue from decreased demand for
•
emissions-intensive products and services such
as thermal coal mining
Increased operating costs for workforce
attraction and retention resulting from the
negative impacts of emissions-intensive
activities, sectors and commodities NRW
works in
• Decreased revenue and ability to win new work
if NRW is not proactive with our response to
climate and carbon reduction
• Reduced access to capital due to exposure
to certain emissions-intensive industries and
commodities
Increased costs to build capability and capacity
to stay abreast of stakeholder expectations and
associated reporting
•
• Continue to operate across a broad
range of future focused minerals and
technologies
• Develop and communicate a
carbon reduction strategy to ensure
stakeholders understand our pathway
to reducing our carbon footprint
• Maintain an honest and transparent
approach through enhanced reporting
and disclosure, and upskilling of
internal employees to communicate
in a way that meets stakeholder
expectations
• Engagement with our clients, capital
providers and investors to understand
expectations
Market
Timeframe: Short to Medium Term
• Changing and uncertain
•
market signals, client and
consumer behaviour
Increased input costs of
emissions-intensive products,
services and materials
Impacts:
• Reduced revenue from decreased demand for
•
emissions-intensive products and services such
as thermal coal mining
Increased operating costs due to increased
input prices from carbon taxes and compliance
obligations
• Diversify service offerings to clients to
include low carbon emissions products
/ services
• Continue to operate across a broad
range of future focused minerals and
technologies
• Reduce/eliminate exposure to thermal
coal contracts
28
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures CLIMATE RELATED
FINANCIAL DISCLOSURES CONTINUED
STRATEGY CONTINUED
NRW recognises that material climate-related risks are present and require mitigation. These risks, including
our mitigation strategies, are disclosed in the Risk Management & Corporate Governance section of our
Annual Financial Statements.
Describe the impact of climate-related risks and opportunities on the organisation’s
businesses, strategy and financial planning
The impacts of climate change are significant, varied and affect all aspects of businesses and communities
as the world transitions to a low carbon economy. NRW acknowledges the role we have to play in working
with our clients and suppliers to reduce greenhouse gas emissions across the value chain.
The mining sector is a key enabler of the energy transition as the demand for a wider range of commodities
accelerates. NRW is therefore seeking to diversify and operate across a range of commodities including
critical minerals important for the world’s transition to a low carbon economy. Our business spans the early
works, mining and production of minerals and minerals infrastructure, and we strive to operate across a
broad range of future focused critical minerals and technologies.
As a contract service provider, NRW is simultaneously focused on the reduction of our carbon footprint in
the form of Scope 1 and Scope 2 GHG emissions. We recognise that demand for our future services will
be inherently linked to our ability to show stakeholders our commitment to an appropriate level of carbon
reduction over time. We have identified three core areas of focus to reduce our carbon footprint over the
short-term which are the implementation of renewable energy systems across our facilities, prioritising
the transition to hybrid or electric vehicles to reduce fuel usage within our light vehicle fleet and, where
viable, investing in modernised and hybrid road transport options to minimise diesel consumption within our
transport activities.
Describe the resilience of the organisation’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario
NRW has not yet undertaken scenario analysis. We are, however, continuously striving to increase our
climate-related reporting in accordance with the TCFD recommendations.
29
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial DisclosuresNRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures CLIMATE RELATED
FINANCIAL DISCLOSURES CONTINUED
RISK MANAGEMENT
Disclose how the organisation identifies, assesses and manages climate-related risks.
Describe the organisation’s processes for identifying and assessing climate-related risks
To ensure a consistent approach to the recognition, measurement and evaluation of risks, NRW applies a
consistent, Group-wide risk management process. The risk management process comprehensively sets
out the requirement for consistent identification, assessment, escalation, management and monitoring of
risks across the Group. At a high level, NRW utilised qualitative and quantitative measures to assess risk,
including the consideration of likelihood and consequence.
In FY23, the Group performed a climate risk assessment. This climate risk assessment was performed
through various workshops with engagement from each of our business units on the specific climate-
related issues impacting our operations and business over the short, medium and long term. Climate-
related risks identified during this assessment were then collated within a central repository under the
headings of ‘transitional risk’ or ‘physical risk’. Transitional risks were further categorised as policy and legal,
market, reputation, technology and physical. Physical risks were further categorised as acute and chronic
physical risks.
Further work will be completed in FY24 to assess the impacts of climate-related risks within our business,
and in line with the broader enterprise-wide risk framework.
Describe the organisation’s processes for managing climate-related risks
NRW’s governance framework includes policies, standards and procedures to address numerous types of
risk, including climate risk. As work continues in FY24 to assess the impacts of climate-related risk across
the business, we will ensure our governance framework appropriately responds to and manages climate-
related risk.
NRW’s group risk management process specifically sets out how the Group is to manage risk within the
enterprise-wide risk register. The enterprise-wide risk register is where risk is prioritised and materiality
determinations are made on an enterprise-wide basis for disclosure and discussion with the Audit & Risk
Committee and the Board. The enterprise-wide risk register includes current controls in place for identified
risks, as well as the actions required to mitigate the impacts of the risks.
All material group risks are disclosed in the Corporate Governance & Risk Management section of the
Annual Financial Statements, including further information in relation to NRW’s mitigating controls.
Describe how processes for identifying, assessing and managing climate-related risks
are integrated into the organisation’s overall risk management
NRW takes a consistent approach to risk management across our business through a structured approach
to identifying, assessing and managing material risks, including climate-related risks, for inclusion in the
enterprise-wide risk register. We seek to understand the potential for climate-related transition and physical
risks to impact our business, in particular the possible impact on financial, operational and reputational risks.
We anticipate this work to occur in FY24.
30
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures CLIMATE RELATED
FINANCIAL DISCLOSURES CONTINUED
METRICS AND TARGETS
Disclose the metrics and targets used to assess and manage relevant climate-related risks and
opportunities, where such information is material.
Disclose the metrics used by the organisation to assess climate-related risks and
opportunities in line with its strategy and risk management process
As a contractor to the civil, resources and infrastructure sectors, NRW’s mine site GHG emissions typically
increase or decrease proportionally in line with the contracted workload. Therefore, we utilise emissions
intensity1 as the key metric to measure and manage our climate-related risks and performance. Our
emissions intensity is calculated with reference to revenue ($M).
We quantify and measure the Scope 1 and Scope 2 GHG emissions generated by the activities where we
have ‘operational control’ as prescribed by the Australian National Greenhouse and Energy Reporting Act
2007 (NGER Act). These GHG emissions include:
• Scope 1 GHG emissions released as a direct result of NRW’s activities at a facility level, including project
work for which NRW is deemed to have operational control, NRW owned and operated transport and
freight, warehousing and stores, Group vehicles, heat treatment activities and workshop maintenance
and manufacturing facilities.
• Scope 2 GHG emissions released from the indirect consumption of energy at a facility level, including
corporate offices, workshop maintenance and manufacturing facilities, warehousing and stores and
project work for which NRW is deemed to have operational control (from purchased electricity).
The total of our Scope 1 and Scope 2 GHG Emissions are then factored proportionally to total Group
revenue ($M) to generate NRW’s emissions intensity.
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the related
risks
NRW has determined its GHG emissions boundary using the definition of ‘operational control’ as prescribed
by the National Greenhouse and Energy Reporting Act 2007 (NGER Act).
In accordance with the NGER Act, NRW is not required to include Scope 1 and Scope 2 GHG emissions on
sites where it does not have ‘operational control’ of ‘facilities’. However, we are required to report this data
to the entity that does have operational control for inclusion in their NGER assessment, data which NRW
provides to clients in monthly environmental reports. This concept is consistent with how NRW internally
tracks, manages and reports on GHG Emissions. Please see below FY23 GHG emissions information
for NRW:
Energy & Emissions
Scope 1 (ktCO2-e)2
Scope 2 (ktCO2-e)2
Total Scope 1 & Scope 2 (ktCO2-e)2
Emissions Intensity (Scope 1 + Scope 2) (tCO2-e/$M AUD)
Energy Consumption (GJ)
Energy Intensity (GJ/$M AUD)
Revenue ($M)
FY23
8.94
4.73
13.67
5.13
FY22
6.23
4.08
10.31
4.36
161,193
120,046
60.4
2,667
50.7
2,367
1 Calculated as Scope 1 Emissions plus Scope 2 Emissions divided by Group Revenue for the financial year.
31
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FINANCIAL DISCLOSURES CONTINUED
METRICS AND TARGETS CONTINUED
During the period, NRW experienced an increase in emissions and energy intensity largely due to an
increase in Scope 1 and energy consumption from the ramping up of two civil projects which are under
NRW’s ‘operational control’.
Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets
NRW recognises that the setting of targets drives business decisions aligned to the management of climate-
related risks, and ultimately reduced carbon emissions. We believe that achieving a carbon neutral footprint is
realised through the ongoing commitment and action from industry, government and the broader community
to create incremental positive outcomes that transition the planet to a low carbon economy. Recognising this,
NRW is committed to aligning with the Australian Government’s Nationally Determined Contribution (NDC)
to reduce greenhouse gas (GHG) emissions2.
NRW is committed to a 25% reduction in Scope 13 and Scope 24 greenhouse gas emissions from 2020
levels5 by 20306. We will achieve this commitment through:
•
Implementation of Renewable Energy7: Where viable, we will actively install renewable energy systems
across our facilities8 to minimise emissions associated with electricity consumption.
• Transitioning to Hybrid or Electric Vehicles: We will prioritise the adoption of hybrid or electric vehicles to
reduce fuel usage within our light vehicle fleet9.
•
Investing in Modernised and Hybrid Road Transport: We are committed to assessing and where viable
investing in modernised and/or hybrid road transport options10 to minimise diesel consumption within our
transport activities.
2 NRW has aligned to the Australian Government’s NDC of 43% on 2005 level by factoring in the Government’s progress from 2005 levels to our baseline year, being
2020. Between 2005 and 2020, the Australian Government achieved an 18% reduction in total carbon emissions. Therefore, from 2020 to 2030 (NRW’s commit-
ment period) the Australian Government must get an additional 25% reduction in carbon emissions to achieve it’s 43% NDC target.
3 NRW classifies Scope 1 GHG emissions in line with the National Greenhouse and Energy Reporting (NGER) scheme established by the NGER Act. NRW assesses
our organisation boundary based on the concepts of operational control as defined in the NGER Act and includes facilities under our operational control where there
is no reporting transfer certificate (RTC) in place under the NGER Act.
4 NRW classifies Scope 2 GHG emissions in line with the NGER scheme established by the NGER Act. NRW assesses our organisation boundary based on the
concepts of operational control as defined in the NGER Act and includes facilities under our operational control where there is no RTC in place under the NGER Act.
5 NRW’s 2020 levels will be based on our assessment of GHG emissions under the NGER Act for the financial year ended 30 June 2020. Our 2020 baseline will be
adjusted for any material transactions based on GHG emissions at the time of the transaction.
6 Achievement of our 2030 target will be based on our assessment of GHG emissions under the NGER Act for the financial year ended 30 June 2030.
7 Renewable energy includes energy generated from the installation of solar panels and similar structures on NRW owned and leased premises, in addition to elec-
tricity drawn from the State-owned electricity grid which would include a portion of renewable energy.
8 Refers to facilities under our operational control as defined in the NGER Act.
9 Refers to fleet under our operational control as defined in the NGER Act.
10 Refers to transport fleet under our operational control as defined in the NGER Act.
32
NRW HOLDINGS ANNUAL REPORT 2023 | Climate Related Financial Disclosures FINANCIAL STATEMENTS
CONTENTS PAGE
04
18
32
37
38
39
40
41
42
43
89
90
94
Directors’ Report
Remuneration 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
Shareholder Information
Independent Auditor’s Report
Appendix 4E
33
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DIRECTORS’ REPORT
DIRECTORS’ REPORT
Directors’ Repor t
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 2023.
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
Chairperson and Non-Executive Director
Mr Arnett was appointed as a Non-Executive Director on 27 July 2007 and appointed Chairperson 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 resources 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 Chairperson, 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 over 35 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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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)
• Chairperson, Jervois Global Limited (Appointed 19 June 2018)
• Non-Executive Director, Red 5 Limited (Appointed 1 July 2023)
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, holding senior operational roles with
MIM Holdings, Xstrata Queensland and the AMCI Group.
She has extensive domestic and international experience with major projects and operations in Western
Australia, Northern Territory and Queensland, and in the United Kingdom, Germany, South America, Dominican
Republic, Papua New Guinea and the Philippines.
Ms Murdoch 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, Ramelius Resources Limited (Appointed 1 December 2021)
• Non-Executive Director, KGL Resources Limited (Appointed 12 June 2018), resigned 15 October 2021
In addition, Ms Murdoch serves on the Joint Venture Committee for the Australian Premium Iron Joint Venture
and is also Chairperson 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
Directors’
Meetings Held
Directors’
Meetings Attended
Michael Arnett
Jeff Dowling
Peter Johnston
Fiona Murdoch
Julian Pemberton
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15
15
15
15
15
15
15
15
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NOMINATION & REMUNERATION COMMITTEE
The members of the Nomination & Remuneration Committee (N&RC) are Peter Johnston (Chairperson),
Michael Arnett, Jeff Dowling and Fiona Murdoch. During the 2023 financial year, three meetings of the N&RC
were held with all members in attendance. Certain responsibilities of the N&RC were also considered at board
meetings as required.
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AUDIT & RISK COMMITTEE
The members of the Audit & Risk Committee are Jeff Dowling (Chairperson), Peter Johnston and Fiona
Murdoch. During the 2023 financial year, four 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.
SUSTAINABILITY COMMITTEE
The members of the Sustainability Committee are Fiona Murdoch (Chairperson), Michael Arnett and Peter
Johnston. During the 2023 financial year, five 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 and climate related
risks and opportunities, social and corporate governance matters.
The Company has adopted a sustainability reporting regime that will see material Environmental, Social and
Governance topics disclosed within an annual Sustainability Report and published as part of the Annual Report.
This report will highlight NRW’s alignment with the United Nations Sustainable Development Goals (SDGs).
This Sustainability Report will also be guided by relevant reporting frameworks, including the Global Reporting
Initiative (GRI) Standards and Taskforce for Climate Related Financial Disclosure Recommendations.
OPERATING AND FINANCIAL REVIEW
PRINCIPAL ACTIVITIES
NRW is a leading provider of diversified contract services to the resources and infrastructure sectors.
With extensive operations across all of Australia and engineering offices in Canada and the USA, 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, Build-Own-Operate (BOO) process plant 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 7,200 people supporting projects for clients across the resources, renewable
energy, infrastructure, industrial engineering, maintenance and urban subdivision sectors.
FINANCIAL PERFORMANCE
A summary of the key financial performance metrics for the current financial year (FY23) is provided below with
comments on significant movements compared to the financial year ended 30 June 2022 (FY22).
NRW reported revenues including those generated by associates, of $2,669.3 million (statutory revenue of
$2,667.1 million) a 11.4% increase on $2,396.4 million (statutory revenue of $2,367.4 million) in FY22. The
growth in revenue resulted from increased activity levels across the major contracts and projects in all three
operating segments.
Operating EBIT of $166.3 million was up 13.3% from FY22, driven by a strong margin improvement in the Mining
businesses. The margin performance across the individual businesses varied as each responded to significant
and varying challenges in their respective markets, demonstrating the strength through diversification of the
Group’s business model. Overall margin performance was broadly consistent with FY22, increasing slightly to
6.2% from 6.1%.
During the year, employee benefit expenses increased by 17.2% as direct headcount increased by 10.0%, to
support the requirements of construction projects. Plant costs also increased in line with revenue to support
new and extended mining contracts.
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FINANCIAL PERFORMANCE CONTINUED
Interest costs increased, reflecting rate rises and the funding of new capital expenditure during the year, to
support the mining contract portfolio.
The effective tax rate for the year was 31.4% (FY22: 28.4%) mainly reflecting the impact of non-deductible
expenses and non-recoverable withholding taxes. Current tax expense predominantly comprised taxes arising
from the Group’s foreign operations, due to the Group’s Australian taxable income being offset by available
carry forward tax losses.
Statutory earnings for the year totalled $85.6 million which was a reduction from the FY22 result of $90.2 million,
with statutory earnings per share reducing from 20.1 cents per share in FY22 to 19.0 cents per share in FY23.
Normalised Net Earnings (NPATN) increased by 11.4% to $104.4 million from $93.7 million in the year prior,
reflecting the growth that occurred across the Group.
The table below summarises the financial performance for FY23 compared to FY22.
FY23
FY22(8)
Revenue
Earnings
Revenue
Earnings
$M
2,669.3
(2.3)
Total Revenue(1) / EBITDA(2)
Revenue from Associates
Depreciation and Amortisation(3)
Operating EBIT / EBITA(4)
Amortisation of Acquisition Intangibles(5)
Non-recurring transactions(6)
EBIT
Net interest
Profit before income tax
Income Tax Expense
Statutory Revenue / Net earnings
2,667.1
NPATN(7)
$M
288.8
(122.5)
166.3
(5.9)
(18.3)
142.1
(17.2)
124.9
(39.3)
85.6
104.4
$M
2,396.4
(29.0)
2,367.4
$M
262.1
(115.4)
146.7
(7.9)
-
138.8
(12.9)
125.9
(35.7)
90.2
93.7
Includes depreciation and amortisation of software.
(1) Revenue including NRW’s share of revenue earned by its associates and joint ventures.
(2) EBITDA is earnings before interest, tax, depreciation, amortisation of acquisition intangibles and non-recurring transactions.
(3)
(4) Operating EBIT / 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 included transactions relating to Gascoyne Resources and Nathan River Resources.
(7) NPATN is Operating EBIT less interest and tax (at a 30% tax rate).
(8) Restated to reflect prior period adjustment – refer to note 1.9 of the financial statements.
Refer to the above definitions throughout the report.
OPERATING SEGMENTS
NRW is comprised of three reportable segments, Civil, Mining and Minerals, Energy & Technologies (MET).
Business activities are conducted primarily in Australia, with engineering offices in Canada and the USA. The
results for each of the segments are provided below and in note 2 to these accounts. The Civil and MET segment
results have been presented at EBIT level given the current low level of capital intensity in these businesses.
The Mining segment has been presented at both EBIT and EBITDA levels, recognising that this segment has
significantly higher capital intensity than the other two segments.
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OPERATING SEGMENTS CONTINUED
Commentary on the performance of each segment follows:
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 formations, ports, renewable energy projects, water infrastructure
and concrete installations.
Results summary ($M)
Revenue
EBIT
550.3
20.7
3.8%
483.3
20.3
4.2%
FY23
FY22
Revenue in the Civil business increased from the prior period by 13.9% to $550.3 million as a number of multi-
year projects continued to be delivered. Market conditions were however very challenging due to the impact of
the La Niña weather pattern and the continuing delayed award of new projects, resulting in protracted tender
activity and increased overheads. In addition, the Group’s disciplined approach to responsible pricing and the
maintenance of margins, resulted in some projects not being awarded to NRW. The combination of these factors
impacted profitability during the year with the overall margin reducing to 3.8%.
The increase in revenue resulted from higher levels of activity on key multi-year projects in both Western
Australia and Queensland. The key projects in Western Australia include the Bunbury Outer Ring Road, Smart
Freeway Mitchell Southbound Reid Highway to Vincent Street and Hester Avenue to Warwick Road freeway
widening projects for Main Roads WA. In Queensland, the Olive Downs Rail Loop and CHPP projects for
Pembroke Resources, the Boomerang Creek Diversion project for BHP Mitsubishi Alliance and the Yarrabilba
subdivision project for Lendlease, were the key contributing projects.
During the year, the Civil business successfully completed projects at Rio Tinto’s West Angelas mine site and
BCI Minerals Mardie Salt project. Construction also completed on Rio Tinto’s Gudai-Darri Solar Farm (GDSF),
notably the first solar renewable energy project for both Rio Tinto and NRW. GDSF achieved initial energisation
in June 2023 and is the first of a number of renewable energy projects for the resources sector for which NRW
is positioned.
The Civil business in the Pilbara secured new work from FMG at their Christmas Creek Hall Hub project and
continued to undertake additional works post completion of the original contract works at FMG’s Iron Bridge
project, finally demobilising in May 2023. The business also undertook ECI work for tier one clients to assist in
project development as well as positioning for the next round of projects with Main Roads WA, BHP, FMG, Rio
Tinto and Roy Hill.
The award of the strategic Mackay Ring Road project marked Civil’s re-entry into the road infrastructure
business in Queensland. In addition, the Civil business was recently awarded a $113.0 million cost reimbursable
contract by the Toowoomba Regional Council to reconstruct Council infrastructure assets that were damaged
during the La Niña caused flood events.
The continuing public infrastructure expenditure programs in Queensland, together with the resilient residential
market in South East Queensland and the infrastructure programs that will precede the 2032 Brisbane Olympic
Games, support a strong outlook for continued growth opportunities in the public infrastructure market.
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OPERATING SEGMENTS CONTINUED
Mining
The Mining business specialises in mine management, contract mining, load and haul, dragline operations, drill
and blast, coal handling prep plants, maintenance services and the fabrication of water and service vehicles.
Results summary ($M)
Revenue
EBITDA
Depreciation
EBIT
FY23
FY22
1,441.0
234.0
(100.0)
134.1
16.2%
9.3%
1,273.2
199.3
(92.7)
106.6
15.7%
8.4%
Mining delivered solid growth during the year, despite the La Niña weather pattern impacts experienced in the
first half of the year. Revenue grew by 13.2% and earnings by 25.7%. Profit margin also improved to 9.3%.
The following existing long-term mining contracts were extended late in the prior year and during the current
year:
• Baralaba - $800 million, five-year extension;
• Curragh - $1.2 billion, five-year extension; and
• Mt Webber Iron Ore Mine - $60 million, two-year extension.
These extensions demonstrate the strength of the long-term relationships with NRW’s existing clients and are
a testament to the high value outcomes delivered by the Group’s people.
A number of new contracts were also awarded during the year including:
• A $65 million contract over five years to provide drill and blast services for Stanmore Resources at the
South Walker Creek Mine;
• A $230 million mining services agreement with Jellinbah Mining to provide services at the Jellinbah
East mine over a five-year term;
• A $300 million contract with Talison Lithium to provide drill and blast services over a seven-year term
at the Greenbushes Mine;
• A $24 million surface mining and construction contract at the Bellevue Gold Project;
• A $179 million contract over 70 months with EQ Resources for the restart of mining operations at the
Mt Carbine Tungsten Mine; and
• A $332 million contract for the provision of mining services over a three-year term for Allkem at the
Mt Cattlin lithium mine.
The fleets for all of the above projects, with the exception of the Mt Cattlin and Talison contracts, have been
fully mobilised to site and are generating revenue. The Mt Cattlin mining fleet is presently being mobilised to
site to commence operations in September 2023. The Talison drill fleet is also in the midst of mobilisation to
expand the existing drill fleet numbers on site to meet the increased production requirements under the new
contract.
This large base of secured long-term work provides clear visibility of the future earnings of the Mining business
and allows the business to be highly selective in the evaluation of future opportunities.
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OPERATING SEGMENTS CONTINUED
Minerals, Energy & Technologies
The Minerals, Energy & Technologies (MET) business includes RCR Mining Technologies (RCR), DIAB
Engineering (DIAB), Primero Group (Primero) and Overflow Industrial (OFI). RCR is a leading Original
Equipment Manufacturer (OEM) that offers innovative materials handling design capability. DIAB is an
engineering and fabrication services provider to the metals and mining industry and provides specialist
maintenance (shutdown services and onsite maintenance), industrial engineering and construction services.
Primero is a multidisciplinary engineering business that specialises in the design, construction, operation and
maintenance of global resource projects across the mineral processing, energy and non-process infrastructure
market segments. OFI specialises in industrial electrical engineering, automation, switchboard design and
manufacture, instrumentation and electrical design and construction across a number of sectors including
mining and resources, government and defence, fuels and explosives, infrastructure, utilities and industrial
processing.
Results summary ($M)
Revenue
EBIT
729.1
30.5
4.2%
690.7
38.0
5.5%
(1) Restated to reflect prior period adjustment – refer to note 1.9 of the financial statements.
FY23
FY22(1)
MET revenue increased to $729.1 million from $690.7 million in FY22. Earnings however decreased from
$38.0 million in FY22 to $30.5 million in FY23. The reduction in earnings resulted from lower levels of sales
activity at RCR due to the delayed award of new projects, and cost overruns incurred on fixed price projects in
Primero. This resulted in the margin contribution from MET falling from 5.5% to 4.2%.
RCR
RCR’s product support, maintenance and heat treatment divisions performed to expectations, however the
Projects division suffered from a lack of volume of new work awards. This was caused by the significant delays
in the award of new contracts by RCR’s key customers.
Primero
In Primero, the impacts of a high inflationary environment, low labour productivity (resulting from a shortage of
experienced labour) and legacy impacts from the commercial close out of pre COVID-19 fixed price construction
contracts resulted in lower earnings. During the year, Primero reached a commercial settlement on the
Gudai-Darri NPI project and completed the construction of Strandline Resources Coburn Mineral Sands project.
Both of these completed fixed price projects delivered financial outcomes below expectations. These were
however offset by better contributions from Primero’s other construction projects and portfolio of engineering
study projects in Australia and North America.
The construction of Covalent Lithium’s Mount Holland concentrator project was the major driver of revenue in
MET, accounting for 26.9% of FY23 revenue. This strategic project is nearing completion with commissioning
well progressed at year end.
The multi-year Operations and Maintenance (O&M) contract at Core Lithium’s Finniss mine, and Build-Own-
Operate (BOO) contracts at Atlas Iron’s Mt Webber and Miralga, have also contributed to the increase in
revenues throughout the year. These recurring long-term contracts are a key addition to the Group’s capability.
The recently awarded Western Range NPI project for Rio Tinto and the KCGM Fimiston Growth Project for
Northern Star Resources, together with the O&M and BOO contracts, will underpin Primero’s earnings in FY24.
In particular, the Fimiston project, due to its size and alliance style incentivised target cost commercial model,
will be a key contributor in FY24.
DIAB
DIAB had a very successful year substantially growing both revenue and earnings over the prior period to record
levels. The Lynas Rare Earths contracts for the filter building and associated equipment underpinned this result.
In addition, the contribution from the Rio Tinto dust suppression systems contract and DIAB’s portfolio of
repeatable maintenance contracts supported the business’s strong performance.
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OPERATING SEGMENTS CONTINUED
OPERATING SEGMENTS CONTINUED
OFI
OFI
The OFI business was acquired late in the year and has made a minor contribution to the year’s results. OFI’s
The OFI business was acquired late in the year and has made a minor contribution to the year’s results. OFI’s
capabilities will augment and enhance the capabilities of the other MET businesses, as well as expand the
capabilities will augment and enhance the capabilities of the other MET businesses, as well as expand the
Group’s reach into new sectors such as defence and utilities. OFI’s integration into the Group is well underway
Group’s reach into new sectors such as defence and utilities. OFI’s integration into the Group is well underway
and is progressing in line with expectations.
and is progressing in line with expectations.
BALANCE SHEET, OPERATING CASH FLOW AND CAPITAL EXPENDITURE
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
A summary of the balance sheet as at the end of the current financial year and the previous financial year is
provided below.
provided below.
Cash
Cash
Financial debt
Financial debt
Lease debt
Lease debt
Net Debt
Net Debt
Property, plant and equipment
Property, plant and equipment
Right-of-use assets
Right-of-use assets
Working capital
Working capital
Investments
Investments
Tax liabilities
Tax liabilities
Net Tangible Assets
Net Tangible Assets
Intangibles and goodwill
Intangibles and goodwill
Net Assets
Net Assets
Gearing
Gearing
Gearing excl. lease debt
Gearing excl. lease debt
30 Jun 23
30 Jun 23
$M
$M
227.6
227.6
(260.4)
(260.4)
(51.5)
(51.5)
(84.3)
(84.3)
491.0
491.0
44.9
44.9
8.9
8.9
26.9
26.9
(90.4)
(90.4)
397.0
397.0
213.1
213.1
610.1
610.1
13.8%
13.8%
5.4%
5.4%
30 Jun 22(1)
30 Jun 22(1)
$M
$M
219.3
219.3
(233.2)
(233.2)
(52.8)
(52.8)
(66.6)
(66.6)
423.5
423.5
44.5
44.5
9.2
9.2
22.4
22.4
(51.1)
(51.1)
381.8
381.8
209.3
209.3
591.1
591.1
11.3%
11.3%
2.3%
2.3%
(1) Restated to reflect prior period adjustment – refer to note 1.9 of the financial statements.
(1) Restated to reflect prior period adjustment – refer to note 1.9 of the financial statements.
Cash balances ended the year at $227.6 million. Debt repayments in the year included asset financing debt
Cash balances ended the year at $227.6 million. Debt repayments in the year included asset financing debt
repayments of $65.0 million, in line with agreements, and $12.5 million of corporate debt, which relates to
repayments of $65.0 million, in line with agreements, and $12.5 million of corporate debt, which relates to
business acquisition finance. New asset financing in the year totalled $104.4 million, mostly to fund new capital
business acquisition finance. New asset financing in the year totalled $104.4 million, mostly to fund new capital
expenditure associated with the Karara Mining contract and other growth expenditure.
expenditure associated with the Karara Mining contract and other growth expenditure.
Capital expenditure totalled $187.3 million (2022: $206.3 million) of which circa $68.4 million was for the Karara
Capital expenditure totalled $187.3 million (2022: $206.3 million) of which circa $68.4 million was for the Karara
Mining project. A total of $78.3 million represents sustaining and maintenance capital expenditure, in line with
Mining project. A total of $78.3 million represents sustaining and maintenance capital expenditure, in line with
previous guidance on annual spend rates of circa $80.0 million.
previous guidance on annual spend rates of circa $80.0 million.
Tax balances are carried as net tax liabilities but included within that balance are carried forward tax losses.
Tax balances are carried as net tax liabilities but included within that balance are carried forward tax losses.
The majority of tax expense was offset by tax losses, except for tax paid and payable in overseas jurisdictions
The majority of tax expense was offset by tax losses, except for tax paid and payable in overseas jurisdictions
and for OFI, relating to the pre-acquisition period. During FY23, NRW continued to benefit from the ATO’s
and for OFI, relating to the pre-acquisition period. During FY23, NRW continued to benefit from the ATO’s
introduction of Temporary Full Expensing, which ended on 30 June 2023 for eligible capital expenditure.
introduction of Temporary Full Expensing, which ended on 30 June 2023 for eligible capital expenditure.
Returns to shareholders included both a final fully franked dividend for FY22 of 7.0 cents paid in October 2022
Returns to shareholders included both a final fully franked dividend for FY22 of 7.0 cents paid in October 2022
and an interim unfranked dividend for the current financial year of 8.5 cents paid in April 2023. Overall dividend
and an interim unfranked dividend for the current financial year of 8.5 cents paid in April 2023. Overall dividend
payments in the year totalled $69.8 million.
payments in the year totalled $69.8 million.
All banking covenants were in compliance at all times during the year and at 30 June 2023.
All banking covenants were in compliance at all times during the year and at 30 June 2023.
Investments increased mostly due to shares acquired in Green Technology Metals Limited (ASX: GT1) and
Investments increased mostly due to shares acquired in Green Technology Metals Limited (ASX: GT1) and
Grid Metals Corp (TSXV: GRDM).
Grid Metals Corp (TSXV: GRDM).
During the period, the Group acquired OFI, the net effect of which was approximately a $1.9 million increase to
During the period, the Group acquired OFI, the net effect of which was approximately a $1.9 million increase to
goodwill.
goodwill.
Net Assets increased in the year by $19.0 million to $610.1 million, reflecting earnings in the year net of dividend
Net Assets increased in the year by $19.0 million to $610.1 million, reflecting earnings in the year net of dividend
payments.
payments.
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HEALTH AND SAFETY
In FY23, the Australian resources industry experienced a shortage of skilled labour. This has resulted in many
new workers entering the resources industry. The Company recognises the risk this brings to the safety of
operations as NRW seeks to recruit and mobilise a less experienced workforce. As a company, NRW remains
committed to training and upskilling people, and reinforcing a safety-first culture on site.
NRW has continued to progress its critical risk management program across the Group. Workshops have been
held within the Group with a number of subject matter experts across various disciplines to ensure NRW
understands critical risks, and the practical controls that need to be in place to prevent fatality events. The
program is due to commence rollout in the first half of FY24.
The Company performed a psychosocial hazard risk assessment during FY23 in line with the Work Health and
Safety Act 2020 (WA) amendments, reflecting the Group’s commitment to maintaining a safe and compliant
workplace for NRW’s people. The Human Resources (HR) and Health and Safety (HSE) teams are currently
analysing the results for discussion with the operational leadership team, and business systems and processes
are being updated to accommodate the new regulations.
NRW has robust safety management systems across the Group. NRW’s Occupational Health and Safety
International Standards
Management Systems are accredited
(AS4801:2001/ISO18001:2007) and are subject to continuous auditing by third parties.
the applicable Australian and
to
NRW’s Total Recordable Injury Frequency Rate at 30 June 2023 was 5.06 (FY22: 5.73).
CLIMATE AND ENVIRONMENT
NRW is committed to undertaking all of the Group’s business activities in an environmentally responsible
manner and understands the needs of its stakeholders to adequately assess its carbon footprint in light of the
impacts that climate change is having on the environment. NRW has progressed the development of the Group’s
carbon reduction roadmap which will drive its commitment to carbon reduction initiatives over the short, medium
and long-term.
The Company assesses the Group as part of its compliance with the National Greenhouse and Energy
Reporting Act, and reports relevant greenhouse gas emissions, and energy usage and production for the
financial year to the Clean Energy Regulator.
The Company has adequate systems in place for the management of its environmental requirements and is not
aware of any significant breach of those environmental requirements as they apply to the operations of the
Group. NRW has not received any fines or penalties for environmental breaches during the period and is
operating in compliance with all environment management plans and requirements.
During the period, the International Sustainability Standards Board (ISSB) published the following sustainability
reporting standards:
•
•
IFRS S1 General Requirements of Sustainability related Financial Information, which sets out the core
content for a complete set of sustainability related financial disclosures, thereby establishing a
comprehensive baseline of sustainability related financial information; and
IFRS S2 Climate-related Disclosures, which will require the Group to provide information that enables
the users of its financial statements to understand the Group’s governance, strategy, risk management,
and metrics and targets in relation to climate-related risks and opportunities.
Notwithstanding that these standards are not mandatory for adoption for the financial period ended
30 June 2023, the Group acknowledges the growing importance of sustainability related disclosures and has
considered the potential impacts of sustainability related matters within the relevant notes in the financial
statements.
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PEOPLE AND CULTURE
NRW’s people have played a pivotal role in driving success over the last year. Despite facing various challenges,
the team has shown resilience and determination, and their efforts have led to several notable successes. In a
competitive labour market, NRW’s commitment to attracting and retaining top talent has remained constant. As
a result, NRW has built a skilled and passionate workforce of 7,200 (FY22: 7,000) across the Group, enabling
it to successfully deliver numerous projects and services. NRW’s people continue to be the cornerstone of the
Group’s achievements, and the Company is grateful for their dedication and contributions.
The development of NRW’s people remains a top priority, and the Company has continued to expand initiatives
across the Group to foster growth and learning. These initiatives include employment of 234 apprentices and
trainees, development and training of 32 graduates and undergraduates, over 240 members of staff working
through formal training programs and various other leadership and development courses undertaken by
members of staff.
NRW has worked to ensure compliance with the amendments to the Fair Work Act 2009 (Cth), Work Health
and Safety Act 2020 (WA) and Work Health and Safety Act 2011 (QLD), reflecting the Group’s commitment to
maintaining a safe and compliant workplace for its people. Based on valuable feedback from NRW’s workforce
surveys and focus groups, a Workplace Behaviour Policy has been implemented and the Group has provided
training on Workplace Behaviour and Identifying & Preventing Sexual Harassment. As a business, NRW knows
that collaborative groups of operational, HR and HSE professionals remain at the forefront of driving and
developing the Group’s strategies to eliminate and mitigate psychosocial risks in the workplaces.
OUTLOOK
Civil
The outlook for the Civil business continues to be buoyant across the key markets of resources and public
infrastructure. NRW expects the contribution from this segment to continue to recover from the years impacted
by COVID-19. Across the country, governments continue to support large programs of new multi-year
infrastructure projects and based on their published forward expenditure estimates, the public infrastructure
market will continue to be robust for the foreseeable future in Western Australia and Queensland, particularly
ahead of the 2032 Brisbane Olympic Games.
Both the NRW Civil and Golding businesses are well positioned in these markets with prominent existing
projects and solid pipelines of current opportunities. The urban business in particular is well positioned in the
South East Queensland land development market and is benefiting from the continuous growth in that region’s
residential market.
Activity levels in the private infrastructure sector are also recovering. In the resources sector, the iron ore
replacement and Sustaining Capital cycle creates a visible pipeline of new mine developments, expansions and
upgrades as the major miners continue to expand the footprint of their operations to access replacement
tonnages, maintaining their production levels and supporting growth. These activities support a steady pipeline
of new project opportunities. In addition, the renewable energy commitments of the resources sector’s clients
will drive significant new investment in mine site renewable energy generation and associated infrastructure, for
which the Civil business is well positioned.
Beyond iron ore, the rapid expansion of the battery critical minerals sector is seeing the development of new
mining and processing projects, often in very remote locations, driving a sustained need for supporting
infrastructure.
The challenging macroeconomic environment, characterised by high inflation and tight labour market conditions,
together with persistent delays in regulatory approvals continued to impact confidence levels in certain sectors,
delaying clients’ approvals of new projects. However, NRW has recently begun to see the impact of these
factors fading as clients adjust their criteria for capital investment decisions to these conditions, which are
expected to continue for the foreseeable future.
In addition, abnormally high rainfall levels in Queensland and parts of Western Australia that impacted the Civil
business at the beginning of the year have abated.
Work in hand currently totals $0.6 billion and there are current active tenders totalling circa $0.4 billion.
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OUTLOOK CONTINUED
Mining
The Mining business has a fully secured orderbook for FY24 which includes forecast growth. Further, the
long-term nature of these contracts means there is currently a significant level of revenue secured in FY25 and
beyond. This allows the business to be selective in targeting specific projects and commodities, including key
battery critical minerals and gold. In addition, the strong order book supports the business maintaining its
disciplined approach to the allocation of capital.
Work in hand in the Mining business currently totals $3.9 billion and there are current active tenders totalling
circa $0.4 billion.
Minerals, Energy & Technologies
The MET business has a diversified portfolio of projects across the iron ore, gold, rare earths and battery critical
minerals sectors. Each of these industry sectors is experiencing significant sustained capital investment which
is delivering strategically important new project opportunities for MET.
In Australia, the sustained investment in the iron ore sector discussed above is resulting in contracts for the
MET business across a number of capabilities including Non-Processing Infrastructure, materials handling, ore
processing and beneficiation for key clients including Rio Tinto and FMG. This is repeated across the gold and
rare earths sectors with major projects awarded in the current year, and continuing into FY24 and beyond, for
Northern Star Resources, Lynas Corporation and Iluka Resources.
It is in the battery critical minerals sector that Primero continues to have an international market leading
advantage. Across the Australian and North American markets, Primero is positioned as the leading process
design and construction company for the refinement of ores into mineral concentrates, and now moving
downstream into refined battery grade minerals. This reputation has been developed from Primero’s direct
involvement in most of the lithium concentration and refinery projects that exist today in Australia. Leveraging
this reputation into North America, Primero is engaged in a number of detailed engineering scoping studies for
the development of similar US based projects, which it supports from its Montreal and Houston offices. This
market is some years behind the Australian market which is the largest producer globally.
During the year, the US Government’s introduction of the Inflation Reduction Act, and similar legislation in
Canada aimed at driving self-sufficiency in clean energy production, has provided a significant stimulus to the
development of the battery critical minerals industry in North America – and will continue to do so for the
foreseeable future. Primero’s early-stage positioning in this market, supporting clients that range from single
asset developers to global multi-asset owners and downstream clients, provides a strong growth trajectory over
coming years.
In addition, MET is actively supporting clients on a range of green energy development projects, including
hydrogen processing and production and decarbonisation projects. These capabilities, which are at the forefront
of renewable and green energy technologies, are helping to position Primero as a leader in this emerging sector.
Work in hand in MET currently totals $1.4 billion and there are active tenders totalling $0.8 billion.
Group
The overall Group pipeline sits at $17.1 billion of which circa $1.6 billion are submitted tenders. Work in hand
currently sits at $5.9 billion with the value of work secured for FY24 circa $2.7 billion. This provides clear visibility
of the revenue and earnings potential for the Group for the future.
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SIGNIFICANT EVENTS AFTER PERIOD END
Other than the information disclosed elsewhere in the Directors’ Report, in the opinion of the Directors, there
were no significant events after the reporting period.
DIVIDEND
The Directors have declared a final fully franked dividend for the financial year of 8.0 cents per share, following
an interim unfranked dividend of 8.5 cents per share paid in April 2023. This brings the total dividend for the
year to 16.5 cents per share. The final dividend will be paid in October 2023.
DIRECTORS’ INTERESTS
The relevant interests of each Director in the ordinary share capital are set out in note 8.2 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 2023, there are 9,242,336 Performance Rights outstanding (2022: 9,231,011).
Details of Performance Rights granted to Executives as part of their remuneration are set out in the
Remuneration Report on pages 18 to 31.
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LETTER FROM CHAIRPERSON 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 2023. The report that follows this letter details the governance, framework and outcomes of the
Company’s remuneration practices.
The Nomination & Remuneration Committee (N&RC) continues to align NRW’s executive remuneration
framework to market best practice and respond to both internal and external developments, including a highly
competitive talent environment. This ensures NRW’s remuneration structures attract, retain and reward our
people for executing on the Company’s strategy and ultimately, delivering shareholder returns. Work in this area
includes extending our short and long-term incentive plans more broadly within the business to drive deliberate
and focused discretionary effort, and investing in key experienced personnel to improve operational leadership,
oversight and overall business capability.
A key element of our continued success is the contribution made by the people working across our business,
which has been particularly challenging in the current economic environment. The Board is proud of the entire
NRW workforce for its continued commitment during FY23.
Business Performance
FY23 has been another successful year with the Group again delivering record earnings, supported by strong
cashflow from operations. Despite the global macroeconomic factors that have affected the economy and the
operational impacts caused by the La Nîna weather patterns in Queensland, NRW has delivered solid growth
in the year. The Group’s diversified business model allowed it to respond rapidly to these challenges and,
moreover, to continue to grow its base across multiple commodities, services and industries. In FY23, the Group
delivered the following outcomes:
• Record revenue of $2,669.3 million (statutory revenue of $2,667.1 million) and growth in underlying
earnings before interest, tax and amortisation (EBITA) to $166.3 million;
• A final fully franked dividend of 8.0 cents per share, following an interim unfranked dividend of 8.5
cents per share, bringing the total FY23 to 16.5 cents per share;
• Earnings per share (EPS) at 23.2 cents;
•
• A record cash balance of $227.6 million and gearing excluding lease debt at 5.4%.
Total Shareholder Return (TSR) for the period of $463.6 million; and
These strong results, together with the substantial capacity in the Group’s balance sheet, strongly positions
NRW to continue the growth from the ongoing implementation of the strategic plan.
Short-Term Incentive (STI)
The Executive Management Team, which has been restructured during the year, has successfully delivered a
strong set of results as outlined above, improving on the performance of FY22, resulting in the vesting of most
of the short-terms incentives as set out at section 8.1 of the Report. The plan also includes strategic targets
which have been reviewed and assessed by the N&RC and appropriately recognised in FY23 remuneration
outcomes. Due to the prior period restatement (see note 1.9 of the annual financial statements), cash paid
under the FY22 STI Scheme was retrospectively reduced to reflect the reduction in EBITA for the FY22 financial
year. This cash adjustment will be deducted from the relevant FY23 STI cash payment.
Long-Term Incentive (LTI)
The LTI award granted in FY20 was tested for vesting against the performance hurdles in FY23. The Total
Shareholder Return (TSR), EBITDA and Gearing components all met threshold performance and vested at
100%.
In order to confirm the appropriateness of the vesting of the TSR hurdle, the N&RC requested a relative TSR
assessment to be completed. Given the extreme fluctuations in the share market over the performance period
due to COVID-19, labour shortages and price inflation, it was considered important to ensure relative
performance to NRW’s peers also reflected upper quartile performance (as anticipated when the absolute TSR
hurdles were set). The relative TSR assessment put NRW’s performance in the upper quartile of peers and on
a relative TSR basis supports the vesting proposal. The Board feels this outcome is reflective of the Company’s
performance over the LTI performance period.
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LETTER FROM CHAIRPERSON OF THE NOMINATION & REMUNERATION
COMMITTEE CONTINUED
I am pleased that our shareholders approved the FY23 Performance Rights Plan at the 2022 Annual General
Meeting. Following shareholder approval, the N&RC rolled out to the Executive Team the FY23 annual
Performance Rights award. The award has a three-year performance period up to 30 June 2025 and focuses
on medium to long-term business performance, as shown in section 5.3 of the Remuneration Report.
Executive Remuneration Changes
During the year, the N&RC notes the following changes to Executive Remuneration:
•
• As detailed in the 2022 Notice of Meeting, the Board awarded Mr Pemberton a fixed salary increase
from $1,250,000 to $1,300,000 effective 1 July 2022. The fixed salary increase equates to a 4% pay
rise to Mr Pemberton’s base salary and is driven by and in line with broader market conditions and
awards.
Following the investment in key operational leadership capability, and in accordance with accounting
standards, the role of Chief Operating Officer across the Group has been included as KMP and the
remuneration structure for this position has been disclosed within this Report.
In line with the N&RC’s focus on delivering increased earnings and growth in shareholder value, the
FY23 award has an increased weighting of Performance Rights allocated to TSR and Earnings Per
Share (EPS), subsequently reducing the weighting of Gearing as a performance measure within the
LTI performance rights plans. This has resulted in a 40:40:20 weighting to TSR, EPS and Gearing,
respectively.
•
• Benchmark data was sought from Egan Associates during the year on the CEO and Executive
remuneration structures. Egan’s general observations were that our CEO and Executives are
competitively rewarded, and the level of annual incentive participation and long-term incentive
participation is in line with other organisations reflective of NRW’s industry sector. This advice
reinforced Board sentiment that our remuneration structures are sound and appropriate, and therefore
no changes were made as a result of this advice.
Fee levels for Board roles have remained unchanged since 1 July 2021.
•
Looking Forward
The N&RC is satisfied that the framework provides a balanced approach to remuneration that seeks to
appropriately reward financial and non-financial performance and shareholder value creation. In addition, the
FY23 remuneration outcomes reflect and support the Company’s strategic and financial performance, giving us
confidence that we are adopting effective remuneration frameworks.
Peter Johnston
Chairperson Nomination and Remuneration Committee
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Remunerati on Report
1 SCOPE OF REPORT
The Report for the year ended 30 June 2023 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.
The Report that follows forms part of the Directors’ Report, and has 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.
2 KEY MANAGEMENT PERSONNEL
With the aim to support the Group’s continued growth and secure operational synergies, it was decided that the
NRW executive leadership team would transition to a new operating model, with the appointment of Chief
Operating Officers within the business. These key appointments support the Chief Executive Officer with
oversight of operational leadership at a business unit level, in addition to providing strategic direction for the
broader NRW Group, and in accordance with accounting standards, have resulted in a change to KMP during
the financial year. As a result, the following persons were classified as KMP during the financial year ended 30
June 2023 and unless otherwise indicated, were classified as KMP for the entire year:
Key Management Personnel
Non-Executive Directors
Michael Arnett
Jeff Dowling
Peter Johnston
Fiona Murdoch
Executive Directors
Chairperson and Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Julian Pemberton
Chief Executive Officer and Managing Director (CEO)
Other Executives
Andrew Walsh
Richard Simons
Geoff Caton
Chief Financial Officer (retired 9 December 2022)
Chief Financial Officer (appointed 3 October 2022)
Chief Operating Officer – Golding
Michael Gollschewski
Chief Operating Officer – Minerals, Energy & Technologies (appointed 1 February 2023)
Executive Directors and Other Executives are together referred to as ‘Executives’ within this report. The terms
of employment for Executives are formalised within an employment contract (Executive Service Agreement).
All Executives listed in the Key Management Personnel table are appointed under an Executive Service
Agreement not for any fixed term and carry no termination payments other than statutory entitlements.
All KMP have a notice period of six months. 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 for up to six months after termination.
3 REMUNERATION PRINCIPLES
NRW’s remuneration strategy is guided by its Remuneration Guiding Principles. The Board has adopted the
following over-arching principles which recognise the importance of fair, effective and appropriate remuneration
outcomes.
Alignment
Alignment of the remuneration strategy with the interests of the Company’s shareholders.
Attract and Retain
The remuneration framework across NRW has been established and is regularly reviewed to ensure that the
Company can attract and retain appropriate talent across its workforce.
Motivate
Appropriate
Remuneration plans are structured to ensure that NRW’s 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.
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4 REMUNERATION GOVERNANCE
Documented below are NRW’s governance practices with regards to the remuneration and reward of KMP.
4.1
ROLES AND RESPONSIBILITIES
The roles and responsibilities of the NRW Board, Nomination & Remuneration Committee, management and
external advisors, in relation to remuneration for Executives and employees of NRW, are outlined below.
Board
The Board is responsible for the oversight and strategic direction of NRW. The Board reviews, and as
appropriate, approves the remuneration practices within NRW. The Board is 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 the following independent
Non-Executive Directors:
Nomination and
Remuneration
Committee
•
•
•
•
Peter Johnston (Chairperson)
Michael Arnett
Jeff Dowling
Fiona Murdoch
The N&RC is 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. The
N&RC convened regularly throughout FY23 and invited CEO and external advisor input where required. For
further details in relation to the responsibilities of the N&RC, please see the N&RC Charter on the NRW website.
CEO and
Management
External Advisors
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.
4.2
ENGAGEMENT OF INDEPENDENT REMUNERATION CONSULTANTS
During the year, the N&RC engaged Egan Associates (Egan) to provide benchmark guidance for key executive
roles within NRW, including the CEO, taking both a broad market perspective and a more focused industry
specific perspective to ensure its remuneration practices remain relevant in the context of the broader market
conditions. Egan also provided research and commentary on fees paid to Non-Executive Directors, including
Chairpersons and Committee member arrangements.
Egan’s observations were provided directly to the Chairperson of the N&RC for consideration. Egan’s general
observations were that Executives are competitively rewarded, and the level of annual incentive participation
and long-term incentive participation is broadly in line with organisations reflective of the industry sector. No
significant changes were made to NRW’s remuneration structure or arrangements in FY23, signalling that its
remuneration structures are competitive and in line with Egan’s recommendations. Fees paid to Egan for the
year ended 30 June 2023 are shown below.
Fees paid to Egan Associates
Total
2023
$
29,600
29,600
2022
$
9,240
9,240
The Board is satisfied that the recommendations were made free from undue influence from any members of
the Key Management Personnel due to the following arrangements:
• Egan was engaged by, and reported to, the Chairperson of the N&RC. The agreement for the provision
of the remuneration consulting services was executed by the N&RC Chairperson 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
Chairperson 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.
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5 EXECUTIVE REMUNERATION ARRANGEMENTS
The remuneration framework is designed to support the Company’s strategy and to reward its people for its
successful execution. NRW’s remuneration framework combines elements of fixed remuneration and ‘at-risk’
remuneration, comprising short and long-term incentive plans, as detailed below.
The NRW remuneration framework recognises that the Group’s overall objectives of delivering profitable growth
will ultimately lead to long-term shareholder returns.
Fixed Remuneration
Short-Term Incentive (STI)
Long-Term Incentive (LTI)
Award
Cash – salary and superannuation
capped at the relevant
concessional contribution limit.
Cash – Executives can earn a cash
based incentive by achieving specific
objectives set by the CEO and
N&RC(1)
Rights – Executives can participate in
an equity based incentive through the
award of Performance Rights.
Structure
Fixed
STI award is based on a percentage
of the Executive’s TFR (see 5.1).
Purpose
Attract, engage and retain a high
performing workforce to ensure
NRW delivers on its strategic
objectives.
Reward Executive performance
against annual performance metrics
(both financial and strategic) 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.
Annual STI objectives are set for
each Executive based on core
accountabilities. Awards vest through
achieving a set of relevant business
objectives. Awards up to the
maximum amount payable can be
achieved when stretch objectives are
met.
Continued Employment
the Group
Participants must remain employed
the
with
performance period for STI awards to
vest. The normal performance period
being one-year.
throughout
Key Terms
Award Deferral
Up to 25% of an award can be
deferred for up to 12 months at the
discretion of the N&RC, if they
determine that additional time is
required to provide more certainty on
specific business-related outcomes.
Award Adjustment
NRW may adjust the value of the
award paid under this Plan in
circumstances approved by the
N&RC including, but not limited to,
unpaid claims where the value of the
claim has previously been assessed
under this Plan.
LTI award is based on a percentage of
the Executive’s TFR (see 5.1) and
determined with reference to 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 measured through the delivery
of long-term strategic goals and
promoting employee retention by
requiring participants remain employed
with NRW throughout the performance
period, up to and including vesting date.
Annual LTI objectives are set for each
Executive based on long-term value
creation for shareholders. Rights, which
vest following the achievement of
objectives, are converted to shares on
the vesting date.
Continued Employment
Participants must remain employed with
the Group throughout the performance
period, up to and including the vesting
date, for LTI awards to vest. The
normal performance period being three-
years.
Other Key Provisions
Other key provisions, including related
to Breach of Obligation, Good Leaver,
Change of Control and Ceasing of
Employment, are detailed in NRW
Holdings Limited Performance Rights
Plan Terms and Conditions. Vesting of
Performance Rights under LTI
Schemes are subject to Board
discretion and approval.
Other
Benefits
The opportunity to salary sacrifices benefits on a tax compliant basis is available upon request. NRW also provides
basic income protection cover for all employees.
(1) Executives can elect to convert the value of STI (cash) award into an equity based award of Performance Rights. Vesting of Rights
under this award is subject to performance hurdles assessed in line with the applicable LTI Plans and is subject to approval by the
N&RC.
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5.1
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 external consultants
where required to benchmark remuneration practices to market.
During the year, the Board awarded Mr. Pemberton a fixed salary increase from $1,250,000 to $1,300,000
effective 1 July 2022. The fixed salary increase equates to a 4% pay rise to Mr. Pemberton’s base salary and
is driven by and in line with broader market conditions and awards.
The table below provides information on the remuneration packages of Executives as at 30 June 2023.
Julian Pemberton
Andrew Walsh(3)
Richard Simons(5)
Geoff Caton
Michael Gollschewski(6)
TFR(1)
1,300,000
832,792
675,000
711,692
705,000
STI
80%
0%(4)
50%
33%
33%
LTI(2)
120%
180%
80%
35%
35%
(1) Annual Total Fixed Remuneration (TFR) as at 30 June 2023.
(2) LTI structure approved by N&RC.
(3) Mr. A Walsh retired on 9 December 2022.
(4) Mr. A Walsh elected to convert the value of his STI into an equity based award of Performance Rights, the vesting of which is subject
to performance hurdles assessed in line with FY20 and FY21 LTI Plans. These changes were approved by the N&RC and supported
by the independent remuneration consultant.
(5) Mr. R Simons was appointed on 3 October 2022.
(6) Mr. M Gollschewski was appointed on 1 February 2023.
Executive Remuneration Mix
At Maximum Award
Chief Executive Officer
33%
27%
40%
Chief Financial Officer
43%
22%
35%
Chief Operating Officer
60%
20%
20%
Fixed
Short-Term Variable
Long-Term Variable
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5.2
STI ARRANGEMENTS
Rewarding Executive performance against annual KPIs, focuses and rewards effort for delivering short-term
business performance. The Board considers the financial measures contained within the STI plan to be
appropriate as they are aligned with the Group’s overall objectives of delivering profitable growth and ultimately
over the long-term, shareholder returns. The non-financial performance measures of the CEO have been
approved by the N&RC. Those non-financial performance measures of the other KMP are 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 FY23 STI plan.
Plan Name
FY23 STI Plan
Participants
All Executives
Plan Approval
The structure of the plan and quantum of award to the CEO was approved by the N&RC.
Performance
Period
Award Value
Vesting Date
Performance
Metrics
One-year performance period beginning 1 July 2022 and ended 30 June 2023.
Award value 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, cash will be paid post
approval of the financial statements by the Board of Directors.
Performance metrics are made up of two critical financial measures and four individual strategic measures. Hurdles
for financial measures are set to allow for a staggered approach to achievement of incentive targets.
Earnings (measured by EBITA)
Earnings before interest, taxes, and amortisation (EBITA) is selected as a proxy for ‘cash’ generation at the
business unit level.
Revenue Growth Objectives
NRW operates in a contracting environment where securing, as well as delivering, work is critical to sustaining
earnings. Achievement of this financial target is measured against the extent to which the businesses’ approved
FY24 budget reflects a revenue forecast at or above the objectives included in the businesses’ strategic plan.
Strategic 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.
Testing Date
Incentive payments are determined in line with the approval of the Financial Statements for the end of the
performance period – being the 30 June 2023 annual financial statements.
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.
Earnings
Target 1
Target 2
Target 3
Relationship
between
performance and
payment
60%
20% earned
additional 20% earned
additional 20% earned
Revenue Growth Objectives
20%
Target 1
Target 2
10% earned
additional 10% earned
Strategic Objectives
20%
Safety Moderator
If safety is not managed to expectations, then any STI earned can be adjusted downwards.
Other Terms and
Conditions
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5.3
LTI ARRANGEMENTS
The LTI Plan seeks to align Executive and Shareholder interests by rewarding long-term value creation and
success measured through the delivery of long-term strategic goals. The Board considers the performance
metrics chosen to be appropriate as they are focused on delivering increased earnings and growth in
shareholder value, whilst maintaining appropriate levels of gearing within the business. The CEO was granted
an award of Rights under the FY23 LTI Plan post approval of Shareholders at the 2022 AGM.
The following table summarises the key components and operation of the FY23 LTI Plan.
Plan Name
FY23 LTI Plan
Participants
All Executives
Plan Approval
Performance
Period
Award Value
Valuation
Assumptions
Vesting Date
Performance
Metrics
The structure of the plan and quantum of Rights awarded to the CEO was approved by Shareholders at the 2022
AGM. Please see the 2022 Notice of Meeting for further details.
Three-year performance period beginning 1 July 2022 and ending 30 June 2025.
Grant of performance rights is equal to a percentage of the KMP’s TFR (as shown in 5.1).
The value per Performance Right to determine the total Performance Rights allocated under this plan is based on
the 30-day VWAP to 30 June 2022, being $1.81 per share.
Subject to the achievement of the performance metrics across the performance period, Rights will vest on 30
September 2025.
Performance measures for the vesting of Performance Rights under the plan are included below.
Total
Shareholder
Return (TSR)(1)
Earnings Per
Share (EPS)(2)
Min
Max
Min
Max
$2.92
$3.35
26.0 cents
29.9 cents
Gearing(3)
Below
40%
TSR targets require minimum growth of 5% per annum based
on an initial share price of $2.52 being the 30-day VWAP
post FY22 Annual Financial Statements release.
EPS targets require delivery of at least 5% per annum growth
from FY22 actual results.
Gearing targets require growth to be funded through a
balance sheet structure where debt to equity does not
exceed 40%.
Testing Date
The vesting of Rights is determined in line with the approval of the Financial Statements at the end of the
performance period – being 30 June 2025.
Executive Rights will vest in full subject to the above 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.
Relationship
between
performance and
vesting
TSR
At min
At max
EPS
At min
At max
Gearing
40%
20% earned
additional 20% earned
40%
20% earned
additional 20% earned
20%
Other Terms and
Conditions
There are no other Terms and Conditions associated with this Plan.
(1) The TSR objective is expressed as a target share price 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 will
be measured on sustaining returns at target level for a minimum three-month period in the performance period or any day the target is
achieved in the final three months of the performance period.
(2) The final assessment of EPS will exclude the amortisation of acquisition intangibles and non-operating transactions (acquisition
transaction costs for example) at normal tax rates.
(3) The Company defines Gearing as net debt / total equity and will be measured by the average Gearing across the performance period.
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5.3
LTI ARRANGEMENTS CONTINUED
Details in relation to the outstanding LTI Plans identified above are outlined below.
Plan
FY23 LTI Plan
FY22 LTI Plan
FY21 LTI Plan
FY20 LTI Plan(2)
Participants
All Executives
All Executives
All Executives
All Executives
Plan Details
Performance
Period
Plan approved by
Shareholders at the 2022
AGM.
Plan approved by
Shareholders at the 2021
AGM.
Plan approved by
Shareholders at the 2021
AGM.
Plan approved by
Shareholders at the 2019
AGM.
FY23, FY24, FY25
FY22, FY23, FY24
FY21, FY22, FY23
FY20, FY21, FY22, FY23
Value Period
FY23
FY22
FY21
FY20
Vesting Date
30 September 2025
30 September 2024
30 September 2023
30 November 2023
Details of the FY23 LTI
Plan performance hurdles
can be found at section
5.3, above.
Details of the FY22 LTI
Plan performance hurdles
can be found in the FY22
Remuneration Report.
Details of the FY21 LTI
Plan performance hurdles
can be found in the FY21
Remuneration Report.
Details of the FY20 LTI Plan
performance hurdles can be
found in the FY20
Remuneration Report.
Performance
Hurdles
TSR
Min
$2.92
Min
$2.81
Min
$2.56
TSR
TSR
TSR
Max
$3.35
Max
$3.02
Max
$2.70
EPS
(cents)
Min
26.0
Max
29.9
EPS
(cents)
Min
27.8c
Max
29.5c
EBITA
($M’s)
Min
$169
Max
$176
EBITDA(1)
($M’s)
Min
$3.46
Max
$3.66
Min
$245
Max
$263
Gearing Below
40% Gearing Below
40% Gearing Below
40%
Gearing
Below
40%
Rights
Outstanding
2,607,948
2,517,297
2,156,396
1,960,695
(1) The performance hurdles set have been adjusted for the impacts of AASB16.
(2) The FY20 LTI Plan was issued in two Tranches, Tranche one vested in FY23. The vesting outcomes of which are within note 8.2.2.
The following chart summarises the remuneration cycle and timelines for the preceding three award periods in
place for the CEO.
Jun 19
Jun 20
Jun 21
Jun 22
Jun 23
Jun 24
Jun 25
Jun 26
FY21 LTI Award
FY22 LTI Award
FY23 LTI Award
FY24 LTI Award(1)
(1) The FY24 LTI Award is currently under consideration and will be put for Shareholder approval at the 2023 AGM.
Performance Period
Award Period
FY24 LTI Plan [under consideration]
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6 NON-EXECUTIVE DIRECTORS’ REMUNERATION ARRANGEMENTS
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 aggregate Non-Executive Director sum is $1,500,000 per annum.
6.1
NON-EXECUTIVE DIRECTOR FEES
Non-Executive Director fees (excluding superannuation and non-cash benefits) to be paid by the Company are
outlined below.
$
Board Chairperson
Board Members
Audit & Risk Committee Chairperson(1)
Sustainability Committee Chairperson(1)
Nomination & Remuneration Committee Chairperson(1)
FY23
225,000
125,000
25,000
10,000
10,000
FY22
225,000
125,000
25,000
10,000
10,000
(1) Fees are in addition to Board Member fees recognising the additional work involved in Chairing Board Committees.
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.
The table below sets out the remuneration arrangements for each of NRW’s Non-Executive Directors.
$
Michael Arnett
Jeff Dowling
Peter Johnston
Fiona Murdoch
TOTAL
Short-term Employment
Benefits
Post Employment
Benefits
Salary & fees
Non-cash benefit
Superannuation
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
225,000
225,000
150,000
150,000
135,000
135,000
135,000
135,000
645,000
645,000
-
-
-
4,003
-
-
-
-
-
4,003
23,625
22,500
15,750
15,000
14,175
13,500
14,175
13,500
67,725
64,500
Total
248,625
247,500
165,750
169,003
149,175
148,500
149,175
148,500
712,725
713,503
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7 LINK BETWEEN REMUNERATION AND 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 last five financial years.
Measure
2023
2022(1)
Market Capitalisation (30 June)
- $ million
Share Price (30 June) - $
Total Revenue - $ million
1,141.7
2.53
2,667
761.4
1.70
2,367
2021
657.9
1.47
2,222
2020
2019
793.6
1.86
2,004
943.5
2.51
1,078
EPS
19.0 cents
20.1 cents
12.5 cents
18.2 cents
8.6 cents
Comparative EBITDA - $
million(2)
288.8
262.1
266.7
250.0
143.9
Net Profit After Tax - $ million
85.6
NPATN - $ million(3)
Interim Dividend Paid - cents
Final Dividend Declared in
Respect of the Year - cents
104.4
8.5(5)
8.0
90.2
93.7
5.5
7.0
54.3
75.1
4.0
5.0
73.7
89.7
2.5
4.0
32.2
40.4
2.0
2.0
Annual TSR(4) - $ million
463.6
170.9
(143.2)
(244.5)
336.6
(1) Restated to reflect prior period adjustment – refer to note 1.9 of the annual financial statements.
(2) Comparative EBITDA – Earnings before interest, taxes, depreciation and amortisation as disclosed in the annual financial statements
in the relevant year.
(3) NPATN – Net profit after tax adjusted for acquisition amortisation and or impairment losses at normal tax rates.
(4) TSR – Total shareholder return calculated as the change in market capitalisation adjusted for capital raisings plus dividends paid.
(5) This was an unfranked dividend.
The following graph shows the Group’s share price over the last five financial years.
NRW Holdings Ltd (ASX: 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
e
m
u
o
V
l
25
20
15
10
5
0
'
s
0
0
0
,
0
0
0
'
30/06/2018
30/06/2019
30/06/2020
30/06/2021
30/06/2022
30/06/2023
Financial Year
Volume
Share Price
3 Monthly Moving Average
26
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8 EXECUTIVE REMUNERATION OUTCOMES
8.1
STI OUTCOMES
SHORT-TERM PERFORMANCE OUTCOMES
The following table provides information on the outcome of the STI Plan for each Executive for the year ended
30 June 2023. The value of the award is outlined in the remuneration table in section 9.1.
Julian Pemberton
Andrew Walsh(2)
Richard Simons(4)
Geoff Caton
Michael Gollschewski(5)
FY23
FY22(6)
STI Earned
STI Forfeited
STI Earned
STI Forfeited
89%
-
89%
100%
40%
11%
-
11%
0%
60%
71%(1)
-(3)
-
92%
-
29%(1)
-(3)
-
8%
-
(1) Restated to reflect prior period adjustment – refer to note 1.9 of the annual financial statements.
(2) Mr. A Walsh retired on 9 December 2022 and was therefore not eligible for the FY23 STIP.
(3) Mr. A Walsh elected to convert the value of his STI into an equity based award of Performance Rights. See note 4 under section 5.1.
(4) Mr. R Simons was appointed on 3 October 2022 and was therefore not eligible for the FY22 STIP.
(5) Mr. M Gollschewski was appointed on 1 February 2023 and was therefore not eligible for the FY22 STIP.
(6) NRW transitioned to a new operating model during FY23 resulting in the following prior year KMP no longer being classified as KMP
under the Australian accounting standards: Kim Hyman, Andrew Broad, Brendan Dorricott, Glen Payne, Cameron Henry and Brett
McIntosh. FY22 remuneration related disclosure for these employees has therefore been removed from FY23 comparatives. Please
refer to FY22 Annual report for remuneration with these KMP.
The outcomes by hurdle are shown below for each KMP who was eligible to participate in the FY23 STI Plan.
STI Earned FY23
By Performance Hurdle
Jules Pemberton
Richard Simons
Geoff Caton
Michael Gollschewski
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Earnings
Revenue Growth Objectives
Strategic
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SHORT-TERM PERFORMANCE MEASURES
To improve the transparency of its remuneration practices, NRW has committed to disclosing performance
against financial metrics for the current (and comparative) financial year. Disclosure has been limited to the
CEO as representative of the broader executive management team.
STI Performance Outcomes for the year ended 30 June 2023
FY23 has been another successful year with the Group delivering record earnings, supported by strong
cashflow from operations. Despite the global macroeconomic factors that have affected the economy and the
operational impacts caused by the La Nîna weather patterns in Queensland, NRW has delivered solid growth
in the year. In FY23, the Group delivered the following outcomes:
• Record revenue of $2,669.3 million (statutory revenue of $2,667.1 million) and growth in underlying
EBITA to $166.3 million;
• A final fully franked dividend of 8.0 cents bringing the total FY23 dividend to 16.5 cents;
• EPS at 23.2 cents and TSR for the period of $463.6 million; and
• A record cash balance of $227.6 million and gearing excluding lease debt at 5.4%.
The Executive Management Team has successfully delivered these results, improving on the performance of
FY22, resulting in the vesting of most short-terms incentives. The STI Plan also includes strategic targets which
have been reviewed and assessed by the N&RC and appropriately recognised in FY23 remuneration outcomes.
Performance Metrics
STI Weighting
Target ($M)
Result ($M)
STI Earned
Performance Commentary
EBITA
Target 1
Target 2
Target 3
60%
$166.3
49%
$155
$162
$172
2024 Plan Revenue
20%
20%
Target 1
Target 2
Undisclosed
Undisclosed
Strategic Objectives
20%
100%
20%
89%
The Company recognised FY23 EBITA of $166.3 million
resulting in the partial vesting of this award.
FY24 Plan Revenue has been determined in June 2023
in accordance with the Board approved FY24 budget.
This objective was met at stretch target, resulting in full
vesting of this part of the award. Due to the commercially
sensitive nature of the Plan Revenue target information,
this result will be disclosed in FY24.
Delivery of strategic objectives related to integration of
the MET business, succession planning, development of
the sustainability strategy and development of a strategy
to support workplace culture.
STI Performance Outcomes for the year ended 30 June 2022
Due to the prior period restatement (see note 1.9 of the annual financial statements), cash paid under the FY22
STI Scheme was retrospectively reduced to reflect the reduction in EBITA for the FY22 financial year. This cash
adjustment will be deducted from the FY23 STI cash payment.
Performance Metrics
STI Weighting
Target ($M)
Result ($M)
STI Earned
Performance Commentary
EBITA
Target 1
Target 2
Target 3
60%
$146.7
33%
$140
$150
$160
2023 Plan Revenue
20%
$2,680
18%
Target 1
Target 2
$2,600
$2,700
Strategic Objectives
20%
100%
28
20%
71%
The Company produced EBITA of $146.7M. This
amount has been restated to reflect the prior period
adjustment
financial
statements. These strong financial results resulted in
the vesting of most of this award.
in note 1.9 of
the annual
FY23 Plan Revenue was determined in June 2022 in
accordance with the Board approved FY23 budget was
between base and stretch targets, resulting in partial
vesting of this award.
Delivery of strategic objectives primarily related to
acquisitions and integration, risk management and
diversity.
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8.2
LTI OUTCOMES
LONG-TERM PERFORMANCE MEASURES
The first tranche of Performance Rights issued under the FY20 LTI Plan were tested for vesting following the
end of the performance period. The Performance Rights were subject to TSR, EBITDA and Gearing measures
under the Plan, and vesting outcomes have been shown below.
Performance
Metrics
LTI
Weighting
Target
Result
LTI
Earned
Performance Commentary
TSR
33.33%
$3.57
100%
Minimum
Maximum
EBITDA
Minimum
Maximum
$3.22
$3.36
33.33%
$262.1M(1)
100%
$224M
$237M
TSR has been measured on sustaining returns at a target level for a minimum
two-month period within the performance period and assessed utilising a 60-day
VWAP. The final assessment of TSR includes appropriate adjustments for dividend
payments (+ 42 cents per share) and equity raisings (- 3 cents per share) to reflect
actual TSR. This was achieved in the period January to February 2020.
EBITDA was assessed in line with the audited financial statements and adjusted for
the prior period adjustment outlined in note 1.9 of the annual financial statements.
EBITDA for FY22 was $262.1 million(1) and consequently the maximum outcome for
this hurdle has been achieved.
Gearing
33.34%
24.0%
100%
Below
40%
Gearing reduced significantly in FY22 following the sale of the Boggabri mobile
equipment acquired as part of the BGC Contracting acquisition. Average Gearing for
the period was well below 40%, resulting in the full vesting of this award.
100%
100%
(1) Result assessed incorporating the prior period adjustment – refer to note 1.9 of the annual financial statements.
LONG-TERM PERFORMANCE OUTCOMES
The above LTI performance assessment has resulted in the following vesting of Performance Rights in FY23.
Name
LTI Plan
Allocation Date
Vesting Date
Performance
Rights Granted
Performance Rights
Vested
Value at
Grant Date(1)
Julian Pemberton
FY20 LTI Plan
20/07/2020
Andrew Walsh
FY20 LTI Plan
01/06/2021
30/11/2022
30/11/2022
Geoff Caton
FY20 LTI Plan
20/07/2020
30/11/2022
Number
582,245
750,000
137,980
Number
582,245
750,000
137,980
$
1,438,145
1,852,500
340,811
(1) Value at Grant Date is the number of Performance Rights issued multiplied by the 30 day VWAP to 30 June 2019 ($2.47).
PERFORMANCE RIGHTS AWARD AND STATUS
The above LTI Plans resulted in the following movement of Performance Rights during FY23. The probability of
Executives achieving the relevant performance hurdles for vesting of LTI plans currently outstanding, has been
reflected in the share based payment expense. Further details in relation to the KMP long-term incentive awards,
including the share based payment expense, are set out in note 4.7 to the annual financial statements.
Name
Allocation
Date
Balance of
Unvested
Equity
Awards as at
1 July 2022
Granted
in FY23
Vested in
FY23
Forfeited
in FY23
Balance of
Unvested
Equity
Awards as at
30 June 2023
Fair
Value
Per
Security
Fair
Value at
Grant
Date
Share
Based
Payments
Expense
FY23
Number
Number
Number
Number
Number
Cents
$
$
Julian
Pemberton
20/07/2020 to
18/11/2022
2,901,334
862,167
(582,245)
-
3,181,256
Andrew Walsh
01/06/2021
2,250,000
-
(750,000)
(253,125)
1,246,875
Richard
Simons
Geoff Caton
Michael
Gollschewski
18/11/2022
-
221,298
-
20/07/2020 to
18/11/2022
552,180
137,620
(137,980)
08/02/2023
-
55,804
-
-
-
-
221,298
551,820
55,804
12.8 to
252
37.6 to
153
47.9 to
252
12.8 to
252
55.9 to
298
4,428,657
1,103,599
2,575,593
744,102
363,150
121,050
829,829
192,386
108,111
36,037
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9 OTHER STATUTORY DISCLOSURES
9.1
EXECUTIVE REMUNERATION TABLES
The table below sets out the remuneration outcomes for each of NRW’s Executive KMP for the year ended
30 June 2023.
Year
Salary &
Fees
Cash
Based
Awards
(STI)
Annual
Leave(1)
Post
Employment
Benefits
(Super)
Other
Long-term
Benefits(2)
Cost of
Equity Grants
(LTI)
Total
EXECUTIVE DIRECTOR
Julian
Pemberton
EXECUTIVES
Andrew Walsh(4)
Richard
Simons(6)
Geoff Caton
Michael
Gollschewski(7)
2023
1,292,096
714,968(3)
83,320
25,292
2022
1,226,432
920,290
112,999
23,568
21,249
24,955
1,103,599
3,240,524
939,422
3,247,666
2023
644,408
2022
781,318
-
-(5)
(145,811)
12,646
(114,419)
744,102
1,140,926
29,309
23,568
24,122
833,569
1,691,886
2023
474,786
221,681
(23,462)
18,969
2022
-
-
-
-
2023
683,474
234,858
10,723
27,500
2022
656,750
207,117
44,084
2023
269,269
38,008
5,021
27,500
12,646
2022
-
-
-
-
-
-
11,440
21,226
-
-
121,050
813,024
-
-
192,386
1,160,381
185,882
1,142,559
36,037
360,981
-
-
Total 2023
2023
3,364,033
1,209,515
(70,209)
97,053
(81,730)
2,197,174
6,715,836
Total 2022(8)
2022
2,664,500
1,127,407
186,392
74,636
70,303
1,958,873
6,082,111
(1) Represents the movement in accrued annual leave.
(2) Represents the movement in accrued long service leave.
(3) Adjusted to reflect prior period adjustment – refer to note 1.9 of the annual financial statements.
(4) Mr. A Walsh retired on 9 December 2022.
(5) Mr. A Walsh elected to convert the value of his STI into an equity based award of Performance Rights. See note 4 under section 5.1.
(6) Mr. R Simons was appointed on 3 October 2022.
(7) Mr. M Gollschewski was appointed on 1 February 2023.
(8) NRW transitioned to a new operating model during FY23 resulting in the following prior year KMP no longer being classified as KMP
under the Australian accounting standards: Kim Hyman, Andrew Broad, Brendan Dorricott, Glen Payne, Cameron Henry and Brett
McIntosh. FY22 remuneration related disclosure for these employees has therefore been removed from FY23 comparatives. Please
refer to FY22 Annual report for remuneration with these KMP.
9.2
SHARE OWNERSHIP
Shareholding and Transactions
The number of ordinary shares in NRW Holdings Ltd (ASX: NWH) held directly, indirectly or beneficially, by
each individual (including shares held in the name of all close members of the Director’s or Executive’s family
and entities over which either the Director or Executive or the family member has, directly or indirectly, control,
joint control or significant influence) are shown below. These are ordinary shares held without performance
conditions or restrictions for the preceding two financial years.
Held at 30
June 2021
Purchases
Share
Sales
Held at 30
June 2022(1)
Rights
Vested
Share Sales
Michael Arnett
1,012,534
Jeff Dowling
364,705
Peter Johnston
137,771
-
-
-
Fiona Murdoch
20,700
7,800
Julian Pemberton
11,458,497
Andrew Walsh
3,310,103
Geoff Caton
-
-
-
-
-
-
-
-
1,012,534
364,705
137,771
28,500
-
-
-
-
(3,000,000)
8,458,497
582,245
-
-
-
-
-
(862,179)
2,447,924
750,000
(2,200,000)
997,924
-
-
137,980
(137,980)
-
Held at 30
June 2023
1,012,534
364,705
137,771
28,500
9,040,742
TOTAL
16,304,310
7,800
(3,862,179)
12,449,931
1,470,225
(2,337,980)
11,582,176
(1) NRW transitioned to a new operating model during FY23 resulting in the following prior year KMP no longer being classified as KMP
under the Australian accounting standards: Brendan Dorricott and Cameron Henry. FY22 remuneration related disclosure for these
employees has therefore been removed from FY23 comparatives. Please refer to FY22 Annual report for remuneration with these
KMP.
30
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NRW HOLDINGS ANNUAL REPORT 2023 | Remuneration Report
REMUNERATION REPORT
REMUNERATION REPORT
CONTINUED
CONTINUED
9.2
SHARE OWNERSHIP CONTINUED
Prohibition on Hedging of shares and invested equity awards
The Company’s share trading policy prohibits employees (including KMP) from dealing in NWH shares if the
dealing is prohibited under the Corporate Act. Therefore, in accordance with this policy, all KMP are prohibited
from entering into arrangements in connection with NWH shares which operate to limit the executives’ economic
risk under any equity based incentive schemes.
The ability to deal with unvested Performance Rights is restricted in the relevant Performance Rights Plan Rules
which apply to the Performance Rights which have been granted.
9.3
RELATED PARTY TRANSACTIONS
All transactions between the Company and its KMP or their associates during the 2023 financial year are
disclosed at note 7.3 to the annual financial statements.
End of Remuneration Report (Audited)
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NRW HOLDINGS ANNUAL REPORT 2023 | Remuneration ReportNRW HOLDINGS ANNUAL REPORT 2023 | Remuneration Report
CORPORATE GOVERNANCE & RISK MANAGEMENT
CORPORATE GOVERNANCE AND RISK MANAGEMENT
Corporate Gover nanc e & Risk M anag ement
Good corporate governance and risk management are 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, through the ASX
Corporate Governance Principles and Recommendations (the ASX Recommendations). 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.
The NRW Board endorses the ASX Recommendations which have been fully adopted by the Company for the
year ended 30 June 2023. Please see the Company’s Appendix 4G and accompanying Corporate Governance
Statement, which is released on the ASX platform annually, for further information. The Company also has a
Corporate Governance section on its website: www.nrw.com.au which includes the relevant documentation
suggested for disclosure by the ASX Recommendations.
RISK MANAGEMENT
Risk is an inherent part of NRW’s business and management of risks is therefore critical to the Company’s
ability to deliver on its strategic objectives. There are a number of risk factors both specific to the Company and
of a general nature which may impact the future operating and financial performance of the Group. The
performance of the Company is also influenced by a variety of different general economic and business
conditions, including interest rates, exchange rates, access to debt and capital markets and government
policies.
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 an enterprise-wide or consolidated level.
Workplace Health and Safety
NRW recognises its moral and legal responsibilities to provide a safe and healthy work environment for all
employees and contractors, and that this responsibility extends to psychosocial hazards. Any failure to
adequately address these responsibilities could result in serious injury and/or death and negatively impact the
Company’s reputation and profitability, including via the imposition of significant fines, the temporary shutdown
of operations/sites or the inability to win new work due to reputational damage.
Mitigation actions include an ongoing work program to embed a safety culture across the business through
training and leadership programs. These programs focus on critical risk management and control verification
processes which provide the framework for managing serious injury and fatality risk. The Group also maintains
a high standard of safety systems, policies and procedures for all businesses, which are overseen by health
and safety specialists at all levels of the organisation.
Market
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 the 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,
macroeconomic 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; the availability and cost of key resources including people, earth
moving equipment and critical consumables; and the rate of technological improvements within the resources
and mining industry, including the potential for new competing technologies by direct and indirect competitors.
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. NRW also continues to monitor the
market for new technologies relevant to NRW’s business and deploys such technologies where appropriate.
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NRW HOLDINGS ANNUAL REPORT 2023 | Corporate Governance & Risk Management
CORPORATE GOVERNANCE & RISK MANAGEMENT
CORPORATE GOVERNANCE AND RISK MANAGEMENT
CONTINUED
CONTINUED
RISK MANAGEMENT CONTINUED
Loss of Contracts / Reduction in Contract Scope
NRW’s revenues is 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 its clients’ 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 an adverse material impact on NRW’s financial performance.
Mitigation actions include working closely with NRW’s clients to ensure an understanding of the issues faced
by them and to identify opportunities where NRW 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 should costs exceed the contracted price, there is a risk these amounts may not be
recovered. From time-to-time, variations to the planned scope occur or issues arise during the construction
phase of a project that are 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. NRW is operating 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 combined with the competitive labour market may lead
to higher staff turnover, increased labour costs and lower productivity.
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. NRW’s supply chain is reliant on
overseas sourcing and normal logistical support timeframes, without which, it could experience delays to project
timeframes, leading to increased costs.
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NRW HOLDINGS ANNUAL REPORT 2023 | Corporate Governance & Risk Management
CORPORATE GOVERNANCE & RISK MANAGEMENT
CORPORATE GOVERNANCE AND RISK MANAGEMENT
CONTINUED
CONTINUED
RISK MANAGEMENT CONTINUED
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 also developed strong working relationships with a number of equipment
suppliers in order to ensure equipment requirements are understood ahead of time and to minimise any potential
risk around availability.
Financial
NRW requires sufficient cash flow to be able to meet its financial obligations as they fall due. The ability of the
Company to access cash could be impacted by counterparty risk, poor project performance and the inability of
the businesses to repatriate cash on a timely basis. This could result in the withdrawal of financial support or
an increased cost to finance businesses’ operations.
NRW also requires access to capital to ensure the Group can meet its future growth ambitions and other funding
requirements as and when required. The inability to access cash could impact the Group’s ability to win new
work, fund future growth plans and deliver on its overall strategic objectives.
Mitigating actions include a proactive approach to treasury management, the scale of the business and the
large number of counterparties and projects that contribute to the Group’s cash flows such that NRW is not
reliant on any one project or counterparty. In addition, the Company maintains a stringent approach to cash
flow forecasting such that it monitors and manages minimum liquidity levels within the Group to meet financial
obligations. NRW also maintains a disciplined capital allocation process ensuring an appropriately balanced
debt and equity capital structure to fund growth opportunities.
Engineer Design
NRW operates as a ‘design, construct and operate’ contractor in the engineering sector and as a Build-Own-
Operate service provider. 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, liquidated damages.
NRW is particularly exposed to risk in circumstances where it has agreed to fixed price or lump sum contract
terms where it may suffer loss in the event actual expenses exceed anticipated costings for the project. NRW
constructs complex processing plants and infrastructure which may operate under extreme conditions. The
potential for failure of components or NRW’s design is always present. If this failure results in a loss to NRW,
NRW may have exposure to rectification of these failures under warranties at NRW’s own expense. Funding
such potential expenses may place additional unforeseen pressure on NRW’s cashflow.
Mitigation actions include maintaining professional indemnity insurance and also engaging appropriate third
party design consultants for complex or specialist design expertise.
Environmental, Social and Governance (ESG) Responsibility
NRW’s stakeholders have expectations of the Company on a range of important environmental, social and
governance matters. A failure to acknowledge and adequately address these expectations could negatively
impact NRW’s reputation and profitability. There is also a risk that investing in ESG programs and strategies to
meet stakeholder expectations increase NRW’s cost structure.
NRW is committed to approaching all aspects of its business operations in a sustainable and responsible
manner to deliver lasting value to its stakeholders. NRW will do this by minimising its environmental footprint,
making a positive social impact and applying ethical business and governance practices to everything the Group
does.
Mitigation actions include engagement with NRW stakeholders to understand material ESG topics, a
sustainability strategy that embeds pragmatic ESG practices across the organisation and a focus on ESG
reporting that aligns to global best practice.
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NRW HOLDINGS ANNUAL REPORT 2023 | Corporate Governance & Risk Management
CORPORATE GOVERNANCE & RISK MANAGEMENT
CORPORATE GOVERNANCE AND RISK MANAGEMENT
CONTINUED
CONTINUED
RISK MANAGEMENT CONTINUED
Climate Related Risks
NRW operates in industries that may have a negative impact on the environment, including with respect to
greenhouse gas emissions, and recognises the potential challenges posed by a number of factors which can
be grouped under the heading ‘climate risk’. Responding to the challenges presented by climate risk is critical
to NRW’s ability to operate sustainably. Risks include reduction to current activity levels in certain sectors, the
physical and transitional risks associated with moving to a low-carbon economy (for example, that its mining
fleet meets current and forecast client demand) and increased Government policy and mandates.
Mitigation actions include ensuring climate related risks and opportunities form part of its strategic decision
making process; updating risk management process to include climate related risks and opportunities;
identifying and implementing opportunities within the business that reduce NRW’s carbon footprint; offering
clients low-carbon solutions to support their emissions reduction targets; partnering with industry to invest in
and drive low emissions technology development where relevant to our business; being transparent, clear and
practical when setting objectives and actions in response to climate change; and adopting and reporting against
the Task Force for Climate-Related Financial Disclosures (TCFD) recommendations.
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 findings, 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 its 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.
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.
Cyber Security and Data Protection
NRW relies upon information technology systems and networks in connection with a variety of business
activities and is therefore exposed to the growing frequency and sophistication of cyber security attacks,
including the misuse and release of sensitive information, denial of service and ransomware attacks. Information
technology security threats arise from situations such as user error or cyber security attacks designed to gain
unauthorised access to NRW’s systems, networks and data. The potential consequences of a material cyber
security attack include reputational damage, litigation with third parties, government enforcement actions,
penalties, disruption to systems, unauthorised release of confidential or otherwise protected information,
corruption of data and increased cyber security protection and remediation costs. This in turn could adversely
affect the Company’s competitiveness, results of operations and financial condition.
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NRW HOLDINGS ANNUAL REPORT 2023 | Corporate Governance & Risk Management
CORPORATE GOVERNANCE & RISK MANAGEMENT
CORPORATE GOVERNANCE AND RISK MANAGEMENT
CONTINUED
CONTINUED
RISK MANAGEMENT CONTINUED
Mitigation actions include significant investment in people, systems and infrastructure to protect NRW’s
information technology systems and networks, including the use of information technology security measures
such as encryption, multi-factor authentication and penetration testing, provision of anti-malware / endpoint
detection and response detection software, IT security awareness and training materials and business resilience
planning.
Global Pandemic
The Group is exposed both directly and indirectly to the risks associated with pandemics, such as COVID-19,
which has impacted certain underlying markets, labour availability and supply chains and negatively impacted
macroeconomic conditions and commodity prices. Key operational risks to the Group include the potential
closure of locations such as sites, camps, workshops and offices, disruption to the supply chain, inability to
access appropriately skilled labour and government mandated lockdowns. These risks may impact client
demand and the ability of NRW to schedule and complete the work required to deliver contracted works on a
timely basis. This could result in additional costs being incurred by NRW.
Mitigation actions include ensuring the Group has up to date Business Continuity Plans, flexible work structures
which include IT infrastructure to support remote work arrangements, the maintenance of a database of staff
who have worked for the Company on all of its projects in an attempt to combat labour shortages and the
development of strong working relationships with a number of equipment suppliers in order to ensure equipment
requirements are understood ahead of time, to minimise any potential risk around availability.
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NRW HOLDINGS ANNUAL REPORT 2023 | 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
16 August 2023
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 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
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.
37
NRW HOLDINGS ANNUAL REPORT 2023 | Auditor’s Independence Declaration DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
Directors’ Decl aration
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
Chairperson and Non-Executive Director
Perth, 16 August 2023
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NRW HOLDINGS ANNUAL REPORT 2023 | Directors’ Declaration
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
AND OTHER COMPREHENSIVE INCOME
Cons olidated Statem ent of Pr ofit or Los s & Other C ompr ehensive Incom e
For the Year Ended 30 June 2023
REVENUE
Other income
Materials and consumables
Employee benefits expense
Subcontractor costs
Plant and equipment costs
Consolidated
2023
$’000
2022(1)
$’000
2,667,064
2,367,430
Notes
2.2
2.3
6,001
(697,315)
2.4
(931,412)
(477,942)
(238,957)
23,624
(689,151)
(795,056)
(410,716)
(199,891)
(123,291)
(33,638)
(482)
(12,880)
125,949
(35,744)
90,205
Depreciation and amortisation expenses
2.4
(128,418)
Other expenses
Share of (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
3.6
2.5
6.1
4.6
4.6
(56,443)
(495)
(17,165)
124,918
(39,283)
85,635
85,635
90,205
Cents
19.0
18.6
Cents
20.1
19.8
(1) Restated to reflect prior period adjustment – refer to note 1.9.
The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
39
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NRW HOLDINGS ANNUAL REPORT 2023 | Consolidated Statement of Profit or Loss and Other Comprehensive Income
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANICAL POSITION
CONSOLIDATED STATEMENT OF FINANICAL POSITION
CONSOLIDATED STATEMENT OF FINANICAL POSITION
CONSOLIDATED STATEMENT OF FINANICAL POSITION
Cons olidated Statem ent of Financial Position
Cons olidated Statem ent of Financial Position
Cons olidated Statem ent of Financial Position
Cons olidated Statem ent of Financial Position
As at 30 June 2023
As at 30 June 2023
As at 30 June 2023
As at 30 June 2023
Consolidated
Consolidated
Consolidated
Consolidated
ASSETS
ASSETS
ASSETS
ASSETS
Current assets
Current assets
Current assets
Current assets
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Trade and other receivables
Trade and other receivables
Trade and other receivables
Trade and other receivables
Lease receivables
Lease receivables
Lease receivables
Lease receivables
Inventories
Inventories
Inventories
Inventories
Current tax assets
Current tax assets
Current tax assets
Current tax assets
Other current assets
Other current assets
Other current assets
Other current assets
Total current assets
Total current assets
Total current assets
Total current assets
Non-current assets
Non-current assets
Non-current assets
Non-current assets
Property, plant and equipment
Property, plant and equipment
Property, plant and equipment
Property, plant and equipment
Right-of-use assets
Right-of-use assets
Right-of-use assets
Right-of-use assets
Investments in listed equities
Investments in listed equities
Investments in listed equities
Investments in listed equities
Investments in associates
Investments in associates
Investments in associates
Investments in associates
Intangibles
Intangibles
Intangibles
Intangibles
Goodwill
Goodwill
Goodwill
Goodwill
Total non-current assets
Total non-current assets
Total non-current assets
Total non-current assets
Total assets
Total assets
Total assets
Total assets
LIABILITIES
LIABILITIES
LIABILITIES
LIABILITIES
Current liabilities
Current liabilities
Current liabilities
Current liabilities
Trade and other payables
Trade and other payables
Trade and other payables
Trade and other payables
Financial debt
Financial debt
Financial debt
Financial debt
Lease debt
Lease debt
Lease debt
Lease debt
Provisions
Provisions
Provisions
Provisions
Notes
Notes
Notes
Notes
3.1
3.1
3.1
3.1
3.2
3.2
3.2
3.2
6.3
6.3
6.3
6.3
3.3
3.3
3.3
3.3
3.4
3.4
3.4
3.4
3.5
3.5
3.5
3.5
3.6
3.6
3.6
3.6
3.7
3.7
3.7
3.7
3.8
3.8
3.8
3.8
3.9
3.9
3.9
3.9
5.3
5.3
5.3
5.3
5.4
5.4
5.4
5.4
3.10
3.10
3.10
3.10
Current tax liabilities
Current tax liabilities
Current tax liabilities
Current tax liabilities
Total current liabilities
Total current liabilities
Total current liabilities
Total current liabilities
Non-current liabilities
Non-current liabilities
Non-current liabilities
Non-current liabilities
Financial debt
Financial debt
Financial debt
Financial debt
Lease debt
Lease debt
Lease debt
Lease debt
6.3
6.3
6.3
6.3
5.3
5.3
5.3
5.3
5.4
5.4
5.4
5.4
Provisions
Provisions
Provisions
Provisions
Deferred tax liabilities
Deferred tax liabilities
Deferred tax liabilities
Deferred tax liabilities
Total non-current liabilities
Total non-current liabilities
Total non-current liabilities
Total non-current liabilities
Total liabilities
Total liabilities
Total liabilities
Total liabilities
Net assets
Net assets
Net assets
Net assets
EQUITY
EQUITY
EQUITY
EQUITY
Contributed equity
Contributed equity
Contributed equity
Contributed equity
Reserves
Reserves
Reserves
Reserves
Retained profits
Retained profits
Retained profits
Retained profits
Total equity
Total equity
Total equity
Total equity
3.10
3.10
3.10
3.10
6.3
6.3
6.3
6.3
4.2
4.2
4.2
4.2
4.3
4.3
4.3
4.3
4.4
4.4
4.4
4.4
2023
2023
2023
2023
$’000
$’000
$’000
$’000
2022(1)
2022(1)
2022(1)
2022(1)
$’000
$’000
$’000
$’000
227,580
227,580
227,580
227,580
219,338
219,338
219,338
219,338
363,961
363,961
363,961
363,961
407,028
407,028
407,028
407,028
-
-
-
-
97,298
97,298
97,298
97,298
180
180
180
180
69,942
69,942
69,942
69,942
-
-
-
-
12
12
12
12
25,142
25,142
25,142
25,142
22,448
22,448
22,448
22,448
713,981
713,981
713,981
713,981
718,948
718,948
718,948
718,948
490,959
490,959
490,959
490,959
423,509
423,509
423,509
423,509
44,941
44,941
44,941
44,941
44,468
44,468
44,468
44,468
25,822
25,822
25,822
25,822
20,754
20,754
20,754
20,754
1,104
1,104
1,104
1,104
1,599
1,599
1,599
1,599
42,791
42,791
42,791
42,791
40,803
40,803
40,803
40,803
170,323
170,323
170,323
170,323
168,467
168,467
168,467
168,467
775,940
775,940
775,940
775,940
699,600
699,600
699,600
699,600
1,489,921
1,489,921
1,489,921
1,489,921
1,418,548
1,418,548
1,418,548
1,418,548
387,137
387,137
387,137
387,137
391,040
391,040
391,040
391,040
78,902
78,902
78,902
78,902
69,439
69,439
69,439
69,439
14,342
14,342
14,342
14,342
13,261
13,261
13,261
13,261
81,280
81,280
81,280
81,280
82,356
82,356
82,356
82,356
272
272
272
272
-
-
-
-
561,933
561,933
561,933
561,933
556,096
556,096
556,096
556,096
181,515
181,515
181,515
181,515
163,721
163,721
163,721
163,721
37,161
37,161
37,161
37,161
39,500
39,500
39,500
39,500
9,093
9,093
9,093
9,093
90,097
90,097
90,097
90,097
17,061
17,061
17,061
17,061
51,080
51,080
51,080
51,080
317,866
317,866
317,866
317,866
271,362
271,362
271,362
271,362
879,799
879,799
879,799
879,799
827,458
827,458
827,458
827,458
610,122
610,122
610,122
610,122
591,090
591,090
591,090
591,090
383,416
383,416
383,416
383,416
383,416
383,416
383,416
383,416
17,477
17,477
17,477
17,477
14,279
14,279
14,279
14,279
209,229
209,229
209,229
209,229
610,122
610,122
610,122
610,122
193,395
193,395
193,395
193,395
591,090
591,090
591,090
591,090
(1) Restated to reflect prior period adjustment – refer to note 1.9.
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
(1) Restated to reflect prior period adjustment – refer to note 1.9.
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
(1) Restated to reflect prior period adjustment – refer to note 1.9.
(1) Restated to reflect prior period adjustment – refer to note 1.9.
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
40
40
40
40
40
NRW HOLDINGS ANNUAL REPORT 2023 | Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Cons olidated Statem ent of Chang es i n Equity
For the Year Ended 30 June 2023
Notes
Contributed
Equity
Foreign
Currency
Translation
Reserve
Share Based
Payment
Reserve
Total
Reserves
Retained
Earnings
Total
Equity
$’000
$’000
$’000
$’000
$’000
$’000
383,416
(141)
11,500
11,359
150,348
545,123
4.4
4.5
4.3
4.4
4.5
4.3
-
-
-
-
-
-
62
-
-
-
-
-
-
62
2,858
2,858
97,414
97,414
(47,158)
(47,158)
-
-
62
2,858
383,416
(79)
14,358
14,279
200,604
598,299
-
-
-
-
(7,209)
(7,209)
383,416
(79)
14,358
14,279
193,395
591,090
-
-
-
-
383,416
-
-
77
-
(2)
-
-
-
-
-
77
3,121
3,121
85,635
85,635
(69,801)
(69,801)
-
-
77
3,121
17,479
17,477
209,229
610,122
Balance at
30 June 2021
Total profit and
other
comprehensive
income for the year
Dividends paid
Movements in
foreign currency
Share based
payments
Balance as
reported at
30 June 2022
Prior period
adjustment (1)
Restated balance
as reported at
30 June 2022(1)
Total profit and
other
comprehensive
income for the year
Dividends paid
Movements in
foreign currency
Share based
payments
Balance at
30 June 2023
(1) Restated to reflect prior period adjustment – refer to note 1.9.
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
41
41
NRW HOLDINGS ANNUAL REPORT 2023 | Consolidated Statement of Changes in Equity
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS
Cons olidated Statem ent of Cas h Fl ows
For the Year Ended 30 June 2023
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 the sale of shares in listed equities
Proceeds from the sale of non-current assets held for sale
Proceeds from Associates
Acquisition of shares in listed equities
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 borrowings
Repayment of borrowings
Repayment of lease debt
Payment of dividends to shareholders
Net cash used in financing activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of the year
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of the year
Consolidated
Notes
2023
$’000
2022
$’000
2,993,310
2,665,470
(2,728,039)
(2,364,172)
2.5
2.5
5.1
3.6
3.5
3.3
3.7
5.3
5.3
5.4
4.5
(18,500)
1,335
(1,112)
246,994
10,593
35
-
-
(1,792)
(183,400)
(3,896)
(2,113)
(13,255)
375
(418)
288,000
2,301
-
82,612
152
(3,473)
(201,431)
(4,915)
-
(180,573)
(124,754)
104,411
(77,476)
(15,390)
(69,801)
(58,256)
8,165
219,338
77
227,580
110,516
(139,264)
(14,613)
(47,158)
(90,519)
72,727
146,549
62
219,338
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
42
42
NRW HOLDINGS ANNUAL REPORT 2023 | Consolidated Statement of Cash Flows
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
Notes to Fi nanci al Statem ents
1 GENERAL NOTES
1.1
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 2023, 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.
1.2
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 (IFRS) 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 2022. 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; and
• Has applied the Group accounting policies consistently to all periods presented.
The financial statements were authorised for issue by the Directors on 16 August 2023.
1.3
GOING CONCERN
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Group
have adequate resources to continue in operational existence for the foreseeable future. Therefore the Group
has continued to adopt the going concern basis of accounting in preparing the financial statements.
1.4
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.
43
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
1.4
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 intra-Group assets and liabilities, equity, income, expenses and cash flows, relating to material transactions
between members of the Group, are eliminated on consolidation.
1.5
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
AASB 2022-1 Amendments to Australian Accounting Standards – Initial Application of AASB 17 and AASB 9 – Comparative Information
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other Amendments
AASB 2021-7 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128
1.6
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.
1.7
ACCOUNTING JUDGMENTS AND ESTIMATES
In applying the Group’s accounting policies, which are described throughout the notes to the financial
statements, management is 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 the Group consider material to the financial statements.
44
44
NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
1.8
CLIMATE RELATED CONSIDERATIONS
Climate related risk is a developing issue that can affect NRW’s business through a reduction to current activity
levels in certain sectors, the physical and transitional risks associated with moving to a low-carbon economy,
and increased Government policy and mandates.
The accounting related measurement and disclosure items that are most impacted by commitments, and climate
related risks more generally, relate to those areas in the financial statements that are prepared based on
historical cost and subject to estimation uncertainties in the medium-term. Climate change impacts can also
introduce greater volatility in assets measured or carried at fair value.
The Group’s current climate related commitment is reflected in the Group’s key judgments and estimates, and
therefore the financial statements, within note 3.3 and note 3.8.
1.9
PRIOR PERIOD ADJUSTMENT
During the year, the Group identified a prior period error in how its subsidiary, Primero Group Limited (Primero),
was recognising revenue. The effect of the error was to overstate revenue and margin by $10.3 million in the
year ended 30 June 2022.
The error was in contravention of NRW’s Group accounting policies and affected the reported financial results
of certain projects that were completed in the 2022 financial year.
NRW has performed a full review of the financial results of projects completed in the prior period and projects
completed and in progress in the 2023 year. This review has confirmed that the error does not extend beyond
projects that were completed during the prior year.
Primero is required to restate its 30 June 2022 financial statements to correct the error.
The Directors are satisfied that the quantum of the error is not material in the context of the Group’s prior period
results (being 0.4% of reported revenue and 3.6% of EBITDA). However, NRW has restated the Group’s 2022
results to correct the error in accordance with the requirements of Australian Accounting Standard AASB 108.
The correction of the error in the current period is presented as an adjustment to opening retained earnings at
1 July 2022.
Impact on Presentation of the Statement of Profit or Loss and Other Comprehensive Income
REVENUE
EBITDA
Profit before income tax
Income tax expense
Profit for the year
Notes
2022
Reported
$’000
2.2
2,377,728
272,418
Consolidated
2022
Adjustment
$’000
(10,298)
(10,298)
136,247
(10,298)
6.1
(38,833)
97,414
3,089
(7,209)
2022
Restated
$’000
2,367,430
262,120
125,949
(35,744)
90,205
Profit and Other Comprehensive Income Attributable to:
Equity holders of the Company
97,414
(7,209)
90,205
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
4.6
4.6
Cents
21.7
21.4
(1.6)
(1.6)
Cents
20.1
19.8
45
45
NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
1.9
PRIOR PERIOD ADJUSTMENT CONTINUED
Impact on Presentation of the Statement of Financial Position
ASSETS
Current assets
Trade and other receivables
Total current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Total current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Retained profits
Total equity
Notes
2022
Reported
$’000
Consolidated
2022
Adjustment
$’000
3.1
417,326
729,246
699,600
(10,298)
(10,298)
-
2022
Restated
$’000
407,028
718,948
699,600
1,428,846
(10,298)
1,418,548
6.3
556,096
54,169
274,451
830,547
598,299
4.4
200,604
598,299
-
(3,089)
(3,089)
(3,089)
(7,209)
(7,209)
(7,209)
556,096
51,080
271,362
827,458
591,090
193,395
591,090
The restatement changes did not have any impact on the Statement of Cashflows.
46
46
NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
2 BUSINESS PERFORMANCE
2.1
SEGMENT REPORTING
NRW is comprised of three reportable segments, Civil, Mining and Minerals, Energy & Technologies. Business
activities are conducted primarily in Australia, with engineering offices 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). Their operating results are regularly reviewed by the Group’s Chief Operating Decision Maker
(the Board of Directors) who make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available.
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 formations, 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, DIAB Engineering, Primero Group and Overflow Industrial. RCR Mining
Technologies is a leading Original Equipment Manufacturer (OEM) that offers innovative materials
handling design capability. DIAB Engineering is an engineering and fabrication services provider to
the metals and mining industry and provides specialist maintenance (shutdown services and onsite
maintenance), industrial engineering and construction services. Primero is a multidisciplinary
engineering business that specialises in the design, construction, operation and maintenance of global
resource projects across the mineral processing, energy and non-process infrastructure market
segments. OFI specialises in industrial electrical engineering, automation, switchboard design and
manufacture, instrumentation and electrical design and construction across a number of sectors
including mining and resources, government and defence, fuels and explosives, infrastructure, utilities
and industrial processing.
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.
47
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
2.1
SEGMENT REPORTING CONTINUED
Reportable Segment Revenues and Results
2023
$’000
Revenue(1)
Civil
Mining
MET
Corporate /
Eliminations
Total
550,295
1,441,042
729,114
(51,125)
2,669,326
Revenue from associates
(2,262)
-
-
-
(2,262)
Statutory revenue
EBITDA(2)
EBITDA margin (%)
548,033
1,441,042
729,114
(51,125)
2,667,064
23,387
234,039
43,964
(12,587)
288,803
4.2%
16.2%
6.0%
-
10.8%
Depreciation and amortisation(3)
(2,727)
(99,986)
(13,500)
(6,315)
(122,528)
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
20,660
134,053
30,464
(18,902)
166,275
3.8%
9.3%
4.2%
-
6.2%
(5,890)
(18,302)
(17,165)
124,918
(39,283)
85,635
2022(7)
$’000
Revenue(1)(7)
Civil
Mining
MET
Corporate /
Eliminations
Total
483,344
1,273,178
690,676
(50,792)
2,396,406
Revenue from associates
(28,976)
-
-
-
(28,976)
Statutory revenue(7)
EBITDA(2)(7)
EBITDA margin (%)(7)
454,368
1,273,178
690,676
(50,792)
2,367,430
26,253
199,348
51,028
(14,509)
262,120
5.4%
15.7%
7.4%
-
10.9%
Depreciation and amortisation(3)
(5,928)
(92,714)
(12,981)
(3,778)
(115,401)
EBITA(4)(7)
EBITA margin (%)(7)
Amortisation of acquisition intangibles(5)
Net interest
Profit before income tax(7)
Income tax expense(7)
Profit for the year(7)
20,325
106,634
38,047.0
(18,287)
146,719
4.2%
8.4%
5.5%
-
6.1%
(7,890)
(12,880)
125,949
(35,744)
90,205
(1) Revenue including NRW’s share of revenue earned by its associates and joint ventures.
(2) EBITDA is earnings before interest, tax, depreciation, amortisation of acquisition intangibles and non-recurring transactions.
(3) Includes depreciation, and amortisation of software.
(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 included transactions relating to Gascoyne Resources and Nathan River Resources.
(7) Restated to reflect prior period adjustment – refer to note 1.9.
48
48
NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
2.1
SEGMENT REPORTING CONTINUED
Segment Assets and Liabilities
Segment Assets
Segment Liabilities
2023
$’000
98,403
776,866
375,062
239,590
2022(1)
$’000
102,125
757,185
326,417
232,821
1,489,921
1,418,548
2023
$’000
96,368
461,070
191,640
130,721
879,799
2022(1)
$’000
114,864
379,884
196,101
136,609
827,458
Civil
Mining
MET
Unallocated
Consolidated
(1) Restated to reflect prior period adjustment – refer to note 1.9.
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.
For the year end 30 June 2023, there was only one major customer contributing 11% of group revenue being
$297.1 million for the Mining division.
For the year end 30 June 2022, there were no individual customers contributing more than 10% of Group
revenue.
2.2
REVENUE
Revenue - Group and equity accounted joint ventures(1)
Equity accounted investments in associates
Revenue from contracts with customers
Consolidated
2023
$’000
2,669,326
(2,262)
2,667,064
2022(2)
$’000
2,396,406
(28,976)
2,367,430
(1) The Group defines aggregated revenue as revenue and income calculated in accordance with relevant accounting standards plus
NRW’s share of revenue earned by its associates and joint ventures.
(2) Restated to reflect prior period adjustment – refer to note 1.9.
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.
49
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
2.2
REVENUE CONTINUED
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: Revenue from Contracts with Customers 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.
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 are therefore estimated
and included in the total costs of the contracts. Where required, amounts are recognised accordingly in line with
AASB 137: Provisions, Contingent Liabilities and Contingent Assets. Refer to note 3.10 for further details.
50
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
2.2
REVENUE CONTINUED
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.
Remaining Performance Obligations (Work in Hand)
The transaction price allocated to remaining performance obligations (unsatisfied or partially satisfied) at
30 June 2023 is set out below.
Civil
Mining
MET
Total
(1) Restated to reflect prior period adjustment – refer to note 1.9.
2.3
OTHER INCOME
Gascoyne Resources and other settlements
Profit on sale of property, plant and equipment
Share investment revaluations
All other income
Total
Consolidated
Consolidated
2023
$’000
591,477
3,886,150
1,412,328
5,889,955
2023
$’000
(965)
1,997
2,393
2,576
6,001
2022(1)
$’000
652,408
4,224,543
321,808
5,198,759
2022
$’000
14,132
1,255
5,696
2,541
23,624
51
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
2.4
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 & 3.4)
Amortisation of intangibles (note 3.7)
Amortisation of capitalised contract costs
Total
2.5
NET FINANCE COSTS
Interest income
Total finance income
Interest expense on financial debt
Interest expense on lease debt
Total finance expenses
Net finance costs
Interest Income
2023
$’000
(868,228)
(60,063)
(3,121)
(931,412)
(121,867)
(6,551)
-
(128,418)
2023
$’000
1,335
1,335
(15,424)
(3,076)
(18,500)
(17,165)
Consolidated
2022
$’000
(744,128)
(48,070)
(2,858)
(795,056)
(112,354)
(8,235)
(2,702)
(123,291)
2022
$’000
375
375
(9,859)
(3,396)
(13,255)
(12,880)
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.
52
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3 BALANCE SHEET
3.1
TRADE AND OTHER RECEIVABLES
Trade receivables
Contract assets
Other receivables including loans to associates
Total trade and other receivables
(1) Restated to reflect prior period adjustment – refer to note 1.9.
Trade Receivables
Consolidated
2023
$’000
108,423
240,085
15,453
363,961
2022(1)
$’000
128,003
250,641
28,384
407,028
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: Financial
Instruments. 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.
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
61 - 90 days
91 days+
Total
Consolidated
2023
$’000
888
559
1,447
2022
$’000
372
554
926
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.
53
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.2
INVENTORIES
Raw materials and consumables
Work in progress
Total inventories
Consolidated
2023
$’000
84,363
12,935
97,298
2022
$’000
57,831
12,111
69,942
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.
3.3
PROPERTY, PLANT AND EQUIPMENT
Land
Buildings
Leasehold
Improvements
Plant and
Equipment
$’000
$’000
$’000
$’000
COST
Balance as at 30 June 2021
Additions
Disposals
Balance as at 30 June 2022
Acquisitions from business combination
Additions
Disposals
3,218
-
-
3,218
-
-
-
Balance as at 30 June 2023
3,218
7,076
173
-
7,249
-
-
(20)
7,229
DEPRECIATION
Balance as at 30 June 2021
1,000
5,885
Depreciation expense
Disposals
Balance as at 30 June 2022
Depreciation expense
Disposals
Balance as at 30 June 2023
CARRYING VALUES
At 30 June 2022
At 30 June 2023
-
-
1,000
-
-
1,000
2,218
2,218
209
-
6,094
223
(18)
6,299
1,155
930
Total
$’000
838,695
201,431
(27,340)
1,012,786
854
183,400
(88,664)
3,826
654
(116)
4,364
165
60
-
824,575
200,604
(27,224)
997,955
689
183,340
(88,644)
4,589
1,093,340
1,108,376
1,621
669
(116)
2,174
232
-
2,406
2,190
2,183
508,781
97,406
(26,178)
580,009
107,753
(80,050)
607,712
517,287
98,284
(26,294)
589,277
108,208
(80,068)
617,417
417,946
485,628
423,509
490,959
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.
54
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.3
PROPERTY, PLANT AND EQUIPMENT CONTINUED
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.
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 is not changed, that
is, the change in depreciation rate or method is 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.
Property, plant, and equipment as well as intangible assets are systematically depreciated or amortised to their
estimated residual values over their projected useful lives. The determination of these useful lives, and
consequently the rate of depreciation or amortisation, aligns with NRW’s climate related commitments.
The Group’s policies regarding property, plant, and equipment, as well as intangible assets, are also subject to
considerations of impairment estimation uncertainties, as detailed in note 3.8. This note provides information
on key judgments and estimates related to climate related matters which could potentially impact the useful
economic lives of the associated assets.
55
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.4
RIGHT-OF-USE (ROU) ASSETS
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.
COST
Balance as at 30 June 2021
Additions
Disposals
Balance as at 30 June 2022
Acquisitions from business
combinations
Additions
Disposals
Balance as at 30 June 2023
DEPRECIATION
Balance as at 30 June 2021
Depreciation expense
Disposals
Balance as at 30 June 2022
Depreciation expense
Disposals
Balance as at 30 June 2023
CARRYING VALUES
At 30 June 2022
At 30 June 2023
RoU
Buildings
$’000
51,787
7,241
(1,937)
57,091
235
5,718
(3,590)
59,454
12,858
8,448
(862)
20,444
8,493
(3,590)
25,347
36,647
34,107
RoU
Plant and Equipment
$’000
24,084
4,209
(13,143)
15,150
-
8,179
(4,411)
18,918
14,850
5,622
(13,143)
7,329
5,166
(4,411)
8,084
7,821
10,834
Total
$’000
75,871
11,450
(15,080)
72,241
235
13,897
(8,001)
78,372
27,708
14,070
(14,005)
27,773
13,659
(8,001)
33,431
44,468
44,941
56
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.5
INVESTMENTS IN LISTED EQUITIES
Investments at fair value through profit and loss
Green Technology Metals Limited (ASX: GT1)(1)
Gascoyne Resources Limited (ASX: GCY)
Barton Gold Limited (ASX: BGD)
Grid Metals Corp. (TSXV: GRDM.V)(2)
Other listed equities
Total investments in listed equities
Consolidated
2023
$’000
11,960
9,964
1,983
1,644
271
25,822
2022
$’000
9,857
9,049
1,421
-
427
20,754
(1) Includes acquisition and subscription of shares during the period of $0.4 million.
(2) Includes acquisition and subscription of shares during the period of $1.3 million.
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 Group has elected
the option to present value changes in other comprehensive income if it is not held for trading. The fair value of
the listed equities is determined based on prices quoted on stock exchanges at the close of trading on
30 June 2023. The quoted prices are derived from active markets, ensuring a high degree of reliability in the
valuation process.
3.6
INVESTMENT IN ASSOCIATES
Interest in Associates
Salini Impregilo NRW Joint Venture
NewGen Drilling Pty Ltd
Consolidated
2023
20%
20%
Reconciliation and Movement in the Group’s Carrying Value of its Investments:
Opening balance of investment in associates
Share of (loss) / profit from equity accounted investments
Distributions received from associates
Closing balance of investment in associates
Consolidated
2023
$’000
1,599
(495)
-
1,104
2022
20%
20%
2022
$’000
2,233
(482)
(152)
1,599
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: Impairment of Assets 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 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.
57
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.6
INVESTMENT IN ASSOCIATES CONTINUED
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.
3.7
INTANGIBLE ASSETS
COST
Balance as at 30 June 2021
Software under development
Additions
Balance as at 30 June 2022
Additions
Assets recognised on business combinations
Software and
System
Development
Patent
Technology
Brand
Names
Customer
Relationships
Total
$’000
$’000
$’000
$’000
$’000
13,193
9,460
17,967
71,046
111,666
4,649
266
18,108
3,896
-
-
-
-
-
-
-
4,649
266
9,460
17,967
71,046
116,581
-
-
-
703
-
3,940
3,896
4,643
Balance as at 30 June 2023
22,004
9,460
18,670
74,986
125,120
AMORTISATION
Balance as at 30 June 2021
Amortisation expense
Balance as at 30 June 2022
Amortisation expense
Balance as at 30 June 2023
CARRYING VALUES
At 30 June 2022
At 30 June 2023
12,490
9,460
345
12,835
661
-
9,460
-
13,496
9,460
-
-
-
-
-
45,593
7,890
53,483
5,890
67,543
8,235
75,778
6,551
59,373
82,329
5,273
8,508
-
-
17,967
17,563
40,803
18,670
15,613
42,791
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 seven years.
58
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.7
INTANGIBLE ASSETS CONTINUED
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.
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.
3.8
GOODWILL
Balance at beginning of the period
Amounts recognised on business combinations
Balance at end of the period
Consolidated
2023
$’000
168,467
1,856
170,323
2022
$’000
168,467
-
168,467
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.
Increase in goodwill during the period represents goodwill generated from acquisition of OFI of $1.9 million
effective 31 March 2023.
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
2023
$’000
18,513
59,858
91,952
170,323
2022
$’000
18,513
59,858
90,096
168,467
If the recoverable amount of a CGU or group of CGUs 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.
59
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.8
GOODWILL CONTINUED
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 CGUs, or
otherwise they are allocated to the smallest group of CGUs 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 (VIU). 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.
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 CGUs 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 conducts assessments of recoverable amounts for assets or CGUs when there are indications of
impairment or impairment reversal. When determining the recoverable amount using the VIU method, estimates
are made regarding the present value of future cash flows. These estimates are based on internal budgets,
forecasts and asset life plans. Factors such as prices, operating costs, capital expenditure, taxes, risk
adjustments applied to cash flows and discount rates are considered in these projections. It should be noted
that some assumptions and values may differ from those of market participants, as they reflect management's
perspective.
All estimates involve management's judgments and assumptions, and they are inherently subject to risks and
uncertainties beyond the control of the Group. Consequently, changes in circumstances have the potential to
significantly impact projections, thereby affecting the recoverable amount of assets/CGUs at each reporting
date.
The Group recognises that climate related impacts can affect NRW’s business and can potentially result in
either an increase or decrease in demand for the Group's services due to policy, regulatory (including carbon
pricing mechanisms), legal, technological, market or societal responses towards climate change, along with
certain physical impacts which might arise from heightened risks stemming from more frequent or severe
extreme weather events and long-term alterations in climate patterns. These impacts have been considered
when assessing the recoverable amounts for assets or CGUs within the Group.
60
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
GOODWILL CONTINUED
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 CGUs were based on Board approved budgets
for the year ending 30 June 2024 adjusted for material known transactions. Growth assumptions thereafter are
2.5% (2022: 2.5%) per annum for each future year. The terminal value assumes perpetual growth of 2.5%
(2022: 2.5%). Growth rates do not exceed historical averages.
Discount rate
A pre-tax discount rate of 14.1% (2022: 14.2%), which includes a risk margin, was applied to the cash flows
within each of the CGUs.
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 climate related 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 1.5% to 3.5% growth per annum; and
•
• Pre-tax discount rate assumption increased from 14.1% to 15.5%, representing the higher degree of
risk to returns through an extended period of higher uncertainty surrounding input costs due to global
inflationary pressures, labour availability, supply chain constraints and climate related impacts.
Each of these individual sensitivities were performed in isolation of the other and did not result in the carrying
values of any CGU exceeding their respective recoverable amounts assessed at 30 June 2023.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.9
TRADE AND OTHER PAYABLES
CURRENT PAYABLES
Trade payables
Goods and service tax
Other payables
Accruals
Total trade and other payables
Consolidated
2023
$’000
250,060
9,416
34,011
93,650
387,137
2022
$’000
234,350
8,843
36,165
111,682
391,040
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 60 days of recognition.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months from
the reporting date.
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.
3.10 PROVISIONS
Total balance as at 30 June 2022
Provisions obtained through business combinations
Provisions made during the year
Provisions applied during the year
Balance as at 30 June 2023
Current provisions
Non-current provisions
Total balance as at 30 June 2023
Onerous
Contracts
$’000
-
-
130
-
130
130
-
130
Consolidated
Warranty
& Other
$’000
3,313
-
2,656
(4,045)
1,924
1,105
819
1,924
Employee
Benefits
$’000
Total
$’000
96,104
99,417
560
560
76,058
78,844
(84,403)
(88,448)
88,319
80,045
8,274
88,319
90,373
81,280
9,093
90,373
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).
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.
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.
62
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
3.10 PROVISIONS CONTINUED
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
estimated future cash outflows.
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 2023 as:
Consolidated
Cash and cash equivalents
Financial debt
Lease debt
Net Debt
Total equity
Net Debt to Equity Ratio
Net Debt to Equity Ratio (Excluding lease debt)
(1) Restated to reflect prior period adjustment – refer to note 1.9.
2023
$’000
227,580
(260,417)
(51,503)
(84,340)
610,122
13.8%
5.4%
2022(1)
$’000
219,338
(233,160)
(52,761)
(66,583)
591,090
11.3%
2.3%
63
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
4.1
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 continues to monitor the Group’s exposure to market rate volatility. If the Group were to consider a
movement of 200 basis points in interest rates or cost of funds, this would have an immaterial impact circa
$0.8 million to the cost of debt. Refer to the Consolidated Interest and Liquidity table on the following page for
further details around interest rate profiles.
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, 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.
64
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
4.1
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT CONTINUED
Consolidated interest and liquidity analysis 2023
Effective Interest Rate
Total
0 to 30
Days
31 Days to
< 1 Year
1 to 5
Years
> 5
Years
$’000
$’000
$’000
$’000
$’000
FINANCIAL ASSETS
Cash and cash equivalents
2.6%
227,580
227,580
-
363,961
147,194
216,767
591,541
374,774
216,767
-
-
-
42,037
162
12,500
29,375
218,181
6,879
59,162
152,140
51,503
1,217
13,125
34,133
3,028
387,137
212,460
174,677
199
33
166
-
-
-
-
699,057
220,751
259,630
215,648
3,028
Effective Interest Rate
Total
0 to 30
Days
31 Days to
< 1 Year
1 to 5
Years
> 5 Years
$’000
$’000
$’000
$’000
$’000
FINANCIAL ASSETS
Cash and cash equivalents
0.4%
219,338
219,338
-
Trade and other receivables(1)(3)
407,028
124,479
282,549
6.7%
180
23
157
626,546
343,840
282,706
-
-
-
-
Trade and other receivables(1)
Subtotal
FINANCIAL LIABILITIES
Bank loans
Equipment finance
Lease debt
Trade and other payables(2)
Other
Subtotal
6.0%
5.0%
6.3%
(1) Normal trade receivable terms. See note 3.1.
(2) Normal trade payable terms. See note 3.9.
Consolidated interest and liquidity analysis 2022
Lease receivables
Subtotal
FINANCIAL LIABILITIES
Bank loans
Equipment finance
Lease debt
Trade and other payables(2)
Other
Subtotal
3.0%
4.2%
6.2%
(1) Normal trade receivable terms. See note 3.1.
(2) Normal trade payable terms. See note 3.9.
(3) Restated to reflect prior period adjustment – refer to note 1.9.
-
-
-
-
-
-
-
-
-
-
-
54,489
3,239
9,375
41,875
178,454
4,922
51,686
121,846
52,761
1,190
12,071
32,101
7,399
391,040
166,997
224,043
217
36
181
-
-
-
-
676,961
176,384
297,356
195,822
7,399
65
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
4.1
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT CONTINUED
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 (ECL) 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 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 the 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 ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of
the respective financial instrument.
As at 30 June 2023, expected credit losses are immaterial.
4.2
ISSUED CAPITAL
Fully Paid Ordinary Shares
ORDINARY SHARES
451,247,975(1) fully paid ordinary shares
(2022: 449,193,491(1))
Consolidated
2023
$’000
2022
$’000
383,416
383,416
(1) Amounts reported include 1,393,511 shares in escrow for FY23 and 7,987,309 shares in escrow for FY23
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
2023
No. ‘000
2023
$‘000
2022
No. ‘000
2022
$‘000
FULLY PAID ORDINARY SHARES
Balance at the beginning of the financial year
449,194
383,416
449,052
383,416
Issue of shares to executives and employees
2,054
-
142
-
Balance at the end of the period
451,248
383,416
449,194
383,416
66
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
4.3
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
Balance at the end of the financial year
Consolidated
Consolidated
2023
$’000
17,479
(2)
17,477
2023
$’000
14,358
3,121
17,479
2022
$’000
14,358
(79)
14,279
2022
$’000
11,500
2,858
14,358
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.
4.4
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
(1) Restated to reflect prior period adjustment – refer to note 1.9.
4.5
DIVIDENDS
Consolidated
2023
$’000
193,395
85,635
(69,801)
209,229
2022(1)
$’000
150,348
90,205
(47,158)
193,395
During the period, NRW Holdings Limited made the following dividend payments:
Fully Paid Ordinary Shares
Final dividend (FY22 / FY21)
Interim dividend (FY23 / FY22)
Total dividend payments
(1) This was an unfranked dividend.
Consolidated Year Ended
30 June 2023
Consolidated Year Ended
30 June 2022
Cents per share
$’000
Cents per share
$’000
7.0
8.5(1)
31,444
38,357
69,801
5.0
5.5
22,452
24,706
47,158
The Directors have declared a dividend for the current financial year of 8.0 cents per share. The dividend will
be fully franked and paid in October 2023.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
4.5
DIVIDENDS CONTINUED
Franking Account
Franking account balance at 1 July
Australian income tax paid
Franking credits transferred to head entity upon acquisition
Franking credits attached to dividends paid:
As final dividend
As interim dividend
Accrued dividend paid to vendors of acquired company after acquisition
Franking account balance at 30 June
Franking credits that will attach to the payment of fully franked dividends
declared but not paid as at reporting date
4.6
EARNINGS PER SHARE
Profit for the year ($’000)
Weighted average number of shares for the
purposes of basic earnings per share (000’s)
Consolidated
Consolidated
2023
$’000
14,985
278
972
(13,476)
-
(961)
1,798
(15,471)
2023
85,635
450,404
2022
$’000
34,819
377
-
(9,623)
(10,588)
-
14,985
(13,476)
2022(1)
90,205
449,134
Basic earnings per share
19.0 cents per share
20.1 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)
9,063
459,467
6,136
455,269
Diluted earnings per share
18.6 cents per share
19.8 cents per share
(1) Restated to reflect prior period adjustment – refer to note 1.9.
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.
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
4.7
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; and
• Non-market-based valuations – EBITDA, EBITA, EPS 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 25% 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
Value (cents per share)
O
R
S
T
U
W
X
Y - F
0.29%
0.07%
0.29%
0.29%
0.27%
1.02%
0.42%
3.12%
62.74%
62.74%
92.52%
87.82%
65.21%
62.08%
62.12%
61.10%
1.34%
3.62%
3.62%
3.62%
3.62%
6.57%
6.57%
8.13%
30.1 to 182.0
37.6 to 40.3
56.1 to 77.4
60.5 to 61.1
38.7 to 192.0
20.2 to 165.4
12.8 to 152.0
32.4 to 298.0
For all awards, the share price 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.
69
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
$
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S
7
.
4
7
.
4
NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
5 FINANCING
5.1
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term
highly liquid investments with original maturities of three months or less.
Reconciliation of Profit for the Period to Net Cash Flows from Operating Activities
Consolidated
PROFIT FOR THE PERIOD
Adjustments for:
Profit on sale of property, plant and equipment
Profit on sale of investments
Depreciation and amortisation
Non-cash impairment
Share of loss from associates
Share based payment expense
Movements in investments and listed equities
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 current tax liabilities
Change in deferred tax balances
Net cash from operating activities
(1) Restated to reflect prior period adjustment – refer to note 1.9.
5.2
GUARANTEES
Bank guarantees
Insurance bonds
Balance at the end of the financial year
2023
$’000
85,635
(1,997)
(4)
128,418
-
495
3,121
(3,307)
212,361
44,687
180
(26,988)
(2,597)
(8,108)
(10,404)
148
37,715
246,994
2023
$’000
27,410
154,740
182,150
Consolidated
2022(1)
$’000
90,205
(1,255)
-
123,291
1,075
482
2,858
(3,664)
212,992
9,547
2,794
(12,886)
(17,828)
51,285
6,780
(430)
35,746
288,000
2022
$’000
29,775
164,575
194,350
The Group has contract performance bank guarantees and insurance bonds issued in the normal course of
business in respect to its contracts.
72
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
5.3
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
2023
$’000
12,662
66,041
199
78,902
29,375
152,140
181,515
260,417
2022
$’000
12,614
56,608
217
69,439
41,875
121,846
163,721
233,160
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 30 June 2023, 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 2024.
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 2023.
Consolidated
Opening balance
Equipment finance assumed (through business acquisition)
New equipment finance
Repayment of equipment finance
Net repayments related to sale of Boggabri assets
Net repayment of financial debt
Total financial debt
2023
$’000
233,160
322
104,411
(65,006)
-
(12,470)
260,417
2022
$’000
261,908
-
110,516
(46,568)
(63,883)
(28,813)
233,160
73
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
5.3
FINANCIAL DEBT CONTINUED
Interest Bearing Finance Facilities
Consolidated finance facilities as at 30 June 2023
Finance Description
Face Value (limit)
Carrying Amount (utilised)
Unutilised Amount
Banking facilities(1)
Equipment finance(2)
Guarantees and insurance bonds(3)
$’000
135,300
514,785
399,001
$’000
42,037
218,181
182,150
$’000
93,263
296,604
216,851
Consolidated finance facilities as at 30 June 2022
Finance Description
Face Value (limit)
Carrying Amount (utilised)
Unutilised Amount
Banking facilities(1)
Equipment finance(2)
Guarantees and insurance bonds(3)
$’000
125,000
320,605
404,925
$’000
54,489
178,454
194,350
$’000
70,511
142,151
210,575
(1) Includes cash advance facilities 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.
5.4
LEASE DEBT
Opening balance
New leases through a business combination
New leases
Net repayments
Balance at 30 June
Current
Non-current
Total lease debt
Consolidated
2023
$’000
52,761
235
13,897
(15,390)
51,503
14,342
37,161
51,503
2022
$’000
55,924
-
11,450
(14,613)
52,761
13,261
39,500
52,761
74
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
5.4
LEASE DEBT CONTINUED
Group lease debt relates mainly to properties, with 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;
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 case, 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); and
The 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.
75
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
5.4
LEASE DEBT CONTINUED
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 identified assets within the defined scope of
the contract and whether the supplier has a substantive right to substitute 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.
5.5
CAPITAL AND OTHER COMMITMENTS
CAPITAL AND OTHER COMMITMENTS
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
Total capital and other commitments
Consolidated
2023
$’000
68,151
790
16
68,957
2022
$’000
87,255
422
-
87,677
76
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
6 TAXATION
6.1
INCOME TAX RECOGNISED IN PROFIT OR LOSS
CURRENT TAX EXPENSE
Current year income tax
Other adjustments
Subtotal
DEFERRED TAX EXPENSE
Origination and reversal of temporary differences
Deferred tax assets not brought to account
Total income tax expense / (benefit)
(1) Restated to reflect prior period adjustment – refer to note 1.9.
6.2
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:
Adjustments recognised in the current year in relation to the current tax of prior
years
Non-deductible costs
Share based payments
Adjustments to carrying amounts for deferred tax balances
Non-recoverable withholding taxes
Effect of different income tax rates for subsidiaries operating in a different tax
jurisdiction
Current year tax losses not recognised as deferred tax assets
Consolidated
Consolidated
2022(1)
$’000
(12)
(476)
(488)
36,232
-
35,744
2022(1)
$’000
125,949
37,785
(2,547)
349
(37)
134
-
60
-
2023
$’000
1,521
47
1,568
37,589
126
39,283
2023
$’000
124,918
37,475
696
1,425
(1,062)
486
316
(179)
126
Total income tax expense / (benefit)
39,283
35,744
(1) Restated to reflect prior period adjustment – refer to note 1.9.
77
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
6.3
CURRENT AND DEFERRED TAX BALANCES
Current Tax Liabilities
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 in the relevant jurisdictions 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 tax balances in the period the change is identified.
Tax losses have been applied to offset Australian taxable income. The reported current tax liabilities at
30 June 2023 relate to tax payable in foreign jurisdictions (2022: $12,000 tax asset).
Deferred Tax Balances
Assets
Liabilities
Net
Accrued income
Inventories
2023
$’000
-
-
2022(1)
$’000
-
-
2023
$’000
(28,828)
(3,399)
2022(1)
$’000
(26,514)
(3,684)
Property, plant and equipment
37,462
5,004
(136,533)
(64,982)
Investments and joint ventures
Intangibles
Leases
Provisions
Accrued expenses
Corporate costs
Share based payments
Losses
Other
-
-
23,911
32,619
4,278
949
2,381
13,381
589
95
-
23,047
28,975
7,061
1,197
1,956
10,843
413
(3,144)
(10,618)
(21,959)
-
(10,627)
(20,972)
-
-
-
-
-
-
-
-
-
-
(1,186)
(2,892)
2023
$’000
(28,828)
(3,399)
(99,071)
(3,144)
(10,618)
1,952
32,619
4,278
949
2,381
13,381
(597)
2022(1)
$’000
(26,514)
(3,684)
(59,978)
95
(10,627)
2,075
28,975
7,061
1,197
1,956
10,843
(2,479)
Deferred tax assets / (liabilities)
115,570
78,591
(205,667)
(129,671)
(90,097)
(51,080)
(1) Restated to reflect prior period adjustment – refer to note 1.9.
Movement of Deferred Tax Balances
DEFERRED TAX EXPENSE
Recognised in profit or loss (note 6.1)
Balance acquired through business combinations
Balance restated to reflect finalisation of purchase price accounting
Total
(1) Restated to reflect prior period adjustment – refer to note 1.9.
78
Consolidated
2023
$’000
(37,715)
(1,303)
-
(39,018)
2022(1)
$’000
(36,232)
-
486
(35,746)
78
NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
6.3
CURRENT AND DEFERRED TAX BALANCES CONTINUED
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.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
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
No deferred tax asset has been recognised in respect of current year foreign tax losses. During the year there
were no deductible temporary differences or unused tax credits for which deferred tax assets have not been
recognised.
6.4
RELEVANCE OF TAX CONSOLIDATION TO THE GROUP
The Company and its wholly owned Australian resident entities 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.
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 agreement 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 agreement.
79
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
6.4
RELEVANCE OF TAX CONSOLIDATION TO THE GROUP CONTINUED
Nature of Tax Funding Arrangements and Tax Sharing Agreements
Entities within the tax consolidated group have entered into a tax funding and a tax sharing agreement with the
head entity. Under the terms of the tax funding agreement, 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.
Upon entering the tax consolidated group on 31 March 2023, the OFI entities formally entered into deeds of
adherence to become parties to the tax sharing and tax funding agreements with NRW Holdings Limited.
6.5
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.
6.6
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 2023, NRW has estimated
carry forward tax losses of $13.4 million 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.
2017-18
2018-19
2019-20
2020-21
2021-22(1)
$’000
$’000
$’000
$’000
$’000
Total Income
676,658
1,087,568
2,011,916
2,235,779
2,390,037
Taxable / Net Income
Tax Payable
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
12
Nil
(1) Not yet disclosed by the ATO under the Report of Entity Tax Information regime online.
80
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
6.6
TAX POLICY, STRATEGY AND GOVERNANCE CONTINUED
Relationships with Tax Authorities
NRW is committed to open and transparent dealings with the ATO and other relevant tax authorities. NRW’s
approach to engagement with these authorities is to be compliant with tax laws to ensure its statutory obligations
are met.
NRW is considered to be a significant global entity and is included in the ATO's Justified Trust review program.
NRW’s last assurance review under this regime was finalised in June 2022. 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 laws and administrative guidance.
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, and to the ATO and other revenue authorities through annual Country by Country Reporting.
81
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
7 OTHER NOTES
7.1
SUBSIDIARIES
Information about the composition of the Group at the end of the reporting period is as follows:
Entity
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) <
Indigenous Mining & Exploration Company Pty Ltd
(ACN 114 493 579) <
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
82
Principal Activities
Country of
Incorporation
Ownership Interest
2023
Holding Company
Australia
-
2022
-
Mining Equipment
Solutions
Australia
100%
100%
Drill & Blast
Australia
100%
100%
Dormant
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%
Investment Shell
Australia
100%
100%
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
Australia
100%
100%
Mining
Papua New
Guinea
100%
100%
82
NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
7.1
SUBSIDIARIES CONTINUED
Entity
Principal Activities
Country of
Incorporation
NRW Guinea SARL
Dormant
Guinea
The Trustee for NRW Holdings Employee Share Trust
(ABN 85 324 493 658)
Primero Group Limited
(ACN 149 964 045)
PGX Ops Pty Ltd
(ACN 645 420 542)
Primero Group Americas Inc
Primero USA Inc
Overflow Industrial Unit Trust
(ABN 99 227 134 227)
OFI Group Holdings Pty Ltd
(ACN 613 144 513)
Overflow Industrial Pty Ltd
(ACN 009 367 257)
Ownership Interest
2023
100%
100%
2022
100%
100%
Dormant
Australia
MET
MET
MET
MET
MET
MET
MET
Australia
100%
100%
Australia
Canada
USA
Australia
100%
100%
100%
100%
Australia
100%
Australia
100%
100%
100%
100%
-
-
-
< Entered into ASIC Corporations instrument 98/1418 Deed of Cross Guarantee with NRW Holdings Limited.
NRW Holdings Limited and its wholly owned subsidiaries incorporated in Australia, form the Tax Consolidated
Group.
Deed of Cross Guarantee
Pursuant to ASIC Corporations (Amendment and Repeal) Instrument 2016/914, the wholly owned subsidiaries
listed within this note 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.
83
83
NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
7.1
SUBSIDIARIES CONTINUED
The consolidated statement of comprehensive income of the entities party to the Deed of Cross Guarantee 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 (loss) in associate
Net finance costs
Profit before income tax
Income tax expense
Profit for the year
2023
$’000
2,087,186
940
(533,741)
(661,080)
(400,741)
(198,706)
(116,442)
(40,805)
(495)
(15,932)
120,184
(33,472)
86,712
2022
$’000
1,832,621
17,186
(490,009)
(622,274)
(317,407)
(164,038)
(112,578)
(21,678)
(482)
(11,801)
109,540
(30,957)
78,583
OTHER COMPREHENSIVE INCOME
Total comprehensive income for the year
86,712
78,583
The consolidated statement of financial position of the entities party to the Deed of Cross Guarantee is:
Consolidated
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Lease receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Investment in listed equities
Investments in subsidiaries and associates
Intangibles
Goodwill
Total non-current assets
Total assets
2023
$’000
179,831
279,929
-
91,925
17,949
569,634
444,836
39,468
9,964
161,361
21,225
85,036
2022
$’000
180,249
341,562
180
64,590
16,195
602,776
379,563
37,873
9,049
103,892
17,990
85,036
761,890
1,331,524
633,403
1,236,179
84
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
7.1
SUBSIDIARIES CONTINUED
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
Consolidated
2023
$’000
2022
$’000
304,763
73,409
12,749
54,629
445,550
272,095
69,228
5,264
63,417
410,004
169,697
145,002
32,654
8,414
85,639
296,404
741,954
589,570
383,413
16,992
189,165
589,570
39,500
16,116
56,019
256,637
666,641
569,538
383,413
13,871
172,254
569,538
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
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.
85
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
7.2
UNINCORPORATED JOINT OPERATIONS
The Group has significant balances in the following jointly controlled operations:
Name of Operation
Principal Activity
Country of
Operation
Group Interest
2023
2022
BGC Contracting Pty Ltd & Laing O’Rourke Australia
Construction Pty Ltd
NorthLink WA Roads
Australia
50%
50%
South-West Gateway Alliance
Intelligent Freeways Alliance
Bunbury Outer Ring Road
Australia
40%
40%
Smart Freeways
Australia
46.5%
46.5%
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.
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.
7.3
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
There are no transactions and balances with key management personnel and their related parties.
86
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
7.4
PARENT ENTITY INFORMATION
As at, and throughout, the financial year ended 30 June 2023, 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
Share based payment reserve
Retained earnings
Total equity
Financial Performance
Profit for the year
Total comprehensive income
Parent
Parent
2023
$’000
175,917
279,188
455,105
15,797
29,718
45,515
409,590
383,416
17,426
8,748
409,590
2023
$’000
58,340
58,340
Guarantees Entered into by the Parent in Relation to the Debts of its Subsidiaries
Asset finance
Total
Parent
2023
$’000
218,181
218,181
2022
$’000
207,172
271,121
478,293
16,819
43,543
60,362
417,931
383,416
14,304
20,211
417,931
2022
$’000
43,615
43,615
2022
$’000
178,454
178,454
87
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial StatementsNRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
CONTINUED
7.5
AUDITORS REMUNERATION
AUDIT SERVICES
Auditors of the Company:
Deloitte Touche Tohmatsu
OTHER SERVICES
Industry specific compliance audits
Assurance services related to business acquisitions
Non-audit services
Total
Consolidated
2023
$
2022
$
639,000
599,000
38,500
-
177,075
854,575
44,500
-
13,419
656,919
7.6
EVENTS AFTER THE REPORTING PERIOD
The Directors have declared a fully franked dividend for the current financial year of 8.0 cents per share, payable
in October 2023.
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
significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs
of the consolidated entity in subsequent years.
88
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NRW HOLDINGS ANNUAL REPORT 2023 | Notes to the Financial Statements
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
Shareholder Informati on
The shareholder information set out below was applicable as at 24 July 2023. NRW's contributed equity
comprises 449,854,464 fully paid ordinary shares.
Distribution of Shareholdings
Range
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Subtotal
Shares held in escrow
Unmarketable parcels
Fully Paid
Ordinary Shares
390,815,162
40,949,842
9,425,417
7,322,679
1,341,364
449,854,464
1,393,511
17,417
%
86.88
9.10
2.10
1.63
0.29
100.00
0.31
0.00
NRW’s 20 Largest Shareholders
No of Holders
189
1,483
1,239
2,677
2,895
8,483
1
517
%
2.23
17.48
14.61
31.56
34.12
100.00
0.01
6.09
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
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
JULIAN ALEXANDER PEMBERTON
BNP PARIBAS NOMS PTY LTD
MR DAVID RONALDSON
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
UBS NOMINEES PTY LTD
JEFFRESS NOMINEES PTY LTD
GABRIELLA NOMINEES PTY LTD
MR PETER HOWELLS
MS LESLEY ANN JEFFRESS
NETWEALTH INVESTMENTS LIMITED
MR STEVEN SCHALIT & MS CANDICE SCHALIT
SCHALIT SUPER PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
MR STEVEN SCHALIT
119,592,281
68,530,724
67,975,908
28,690,072
8,555,947
8,422,886
8,020,392
7,064,080
5,203,573
3,862,840
2,365,565
2,233,920
2,221,713
2,053,355
1,969,000
1,851,555
1,602,125
1,462,068
1,386,733
1,351,627
26.58
15.23
15.11
6.38
1.90
1.87
1.78
1.57
1.16
0.86
0.53
0.50
0.49
0.46
0.44
0.41
0.36
0.33
0.31
0.29
Substantial holders of 5% or more of fully paid ordinary shares
As at the date of this report, the names of the substantial holders in the Company who have notified the
Company in accordance with Section 671B of the Corporations Act 2001 are set out below:
Name
Vanguard Group
Voting Rights
No. of Shares
23,256,528
Ownership %
5.17
Every shareholder present in person or represented by a proxy or other representative, shall have one vote for
each share held by them.
89
89
NRW HOLDINGS ANNUAL REPORT 2023 | Shareholder InformationNRW HOLDINGS ANNUAL REPORT 2023 | 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 2023, 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:
• Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance for
the year then ended; and
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We
are independent of the Group in accordance with the 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.
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.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
90
NRW HOLDINGS ANNUAL REPORT 2023 | Independent Auditor’s Report
INDEPENDENT AUDITOR’S REPORT
CONTINUED
KKeeyy AAuuddiitt MMaatttteerr
RReevveennuuee rreeccooggnniittiioonn
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
•
As disclosed in Note 2.2, the Group’s revenues
from construction contracts are recognised by
KKeeyy AAuuddiitt MMaatttteerr
reference to the stage of completion of the
RReevveennuuee rreeccooggnniittiioonn
contract activity.
Revenue is recognised by management after
As disclosed in Note 2.2, the Group’s revenues
assessing all factors relevant to each contract,
from construction contracts are recognised by
including:
• Determination of stage of completion and
reference to the stage of completion of the
contract activity.
measurement of progress towards
Revenue is recognised by management after
satisfaction of performance obligations;
•
assessing all factors relevant to each contract,
Estimation of total contract revenue and
including:
costs including the estimation of cost
• Determination of stage of completion and
contingencies;
• Determination of contractual entitlement
measurement of progress towards
satisfaction of performance obligations;
and assessment of the probability of
Estimation of total contract revenue and
customer approval of changes in scope
costs including the estimation of cost
and/or price; and
•
contingencies;
Estimation of the project completion date.
• Determination of contractual entitlement
and assessment of the probability of
The Group recognises in contract assets and
customer approval of changes in scope
contract liabilities progressive measurement of
and/or price; and
the goods and services transferred and valuation
•
Estimation of the project completion date.
of work completed as well as amounts invoiced
to customers. The recognition of these amounts
The Group recognises in contract assets and
is based on management’s assessment of the
contract liabilities progressive measurement of
expected amounts recoverable from the
the goods and services transferred and valuation
customer.
of work completed as well as amounts invoiced
to customers. The recognition of these amounts
NRW have submitted contract variations and
is based on management’s assessment of the
claims on certain projects which requires
expected amounts recoverable from the
management to exercise judgement in
customer.
determining the amount of revenue to be
recognised in relation to these items.
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.
Other Information
•
Our procedures included, but were not limited to:
•
Our procedures included, but were not limited to:
•
Evaluating management’s processes and controls in respect of the
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
recognition of contract revenue. As part of this process we tested
key controls including:
The review process conducted at the tendering phase; and
-
The preparation, review and authorisation of monthly valuation
-
Evaluating management’s processes and controls in respect of the
reports for contracts which includes forecasts costs to
recognition of contract revenue. As part of this process we tested
completion and unapproved variations.
key controls including:
• Obtaining an understanding of the contract terms and conditions to
-
The review process conducted at the tendering phase; and
The preparation, review and authorisation of monthly valuation
-
evaluate whether these were reflected in management’s estimate of
reports for contracts which includes forecasts costs to
forecast costs and revenue;
completion and unapproved variations.
Testing a sample of costs incurred to date and agreeing these to
supporting documentation;
• Obtaining an understanding of the contract terms and conditions to
•
Reconciling costs incurred for a sample of projects between general
evaluate whether these were reflected in management’s estimate of
ledger records and contract valuation reports;
• Assessing the forecast costs to complete through challenge of
forecast costs and revenue;
•
Testing a sample of costs incurred to date and agreeing these to
project managers and finance personnel in relation to margins,
supporting documentation;
status of relationships with customers and level of contingencies;
Reconciling costs incurred for a sample of projects between general
Evaluating significant exposures such as liquidated damages for late
ledger records and contract valuation reports;
delivery of contract works and the probability of recovery of
• Assessing the forecast costs to complete through challenge of
outstanding amounts by reference to:
project managers and finance personnel in relation to margins,
Testing contractual entitlement for changes, variations and
-
status of relationships with customers and level of contingencies;
claims recognised within contract revenue by reference to the
Evaluating significant exposures such as liquidated damages for late
underlying contract;
delivery of contract works and the probability of recovery of
Evaluating the status of contract negotiations through review of
-
outstanding amounts by reference to:
correspondence, minutes and discussions; and
Testing contractual entitlement for changes, variations and
-
Testing historical recoveries against previous estimates made.
-
claims recognised within contract revenue by reference to the
underlying contract;
We also assessed the appropriateness of the disclosures in relation to
-
Evaluating the status of contract negotiations through review of
revenue recognition included in Notes 1.9 and 2.2 to the financial
correspondence, minutes and discussions; and
statements.
Testing historical recoveries against previous estimates made.
-
•
•
•
We also assessed the appropriateness of the disclosures in relation to
revenue recognition included in Notes 1.9 and 2.2 to the financial
statements.
The directors are responsible for the other information. The other information comprises the Directors’ Report and
Corporate Governance & Risk Management, which we obtained prior to the date of this auditor’s report, and also
includes the following information which will be included in the Group’s annual report (but does not include the
Other Information
financial report and our auditor’s report thereon): Chairman’s Message, CEO Review of Operations, CFO Financial
Report, and Sustainability Report, which is expected to be made available to us after that date.
The directors are responsible for the other information. The other information comprises the Directors’ Report and
Corporate Governance & Risk Management, which we obtained prior to the date of this auditor’s report, and also
Our opinion on the financial report does not cover the other information and we do not and will not express any form
includes the following information which will be included in the Group’s annual report (but does not include the
of assurance conclusion thereon.
financial report and our auditor’s report thereon): Chairman’s Message, CEO Review of Operations, CFO Financial
Report, and Sustainability Report, which is expected to be made available to us after that date.
In connection with our audit of the financial report, our responsibility is to read the other information identified above
and, in doing so, consider whether the other information is materially inconsistent with the financial report or our
Our opinion on the financial report does not cover the other information and we do not and will not express any form
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
of assurance conclusion thereon.
performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there
is a material misstatement of this other information, we are required to report that fact. We have nothing to report in
In connection with our audit of the financial report, our responsibility is to read the other information identified above
this regard.
and, in doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there
is a material misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
91
NRW HOLDINGS ANNUAL REPORT 2023 | Independent Auditor’s Report
INDEPENDENT AUDITOR’S REPORT
CONTINUED
When we read the Chairman’s Message, CEO Review of Operations, CFO Financial Report, and Sustainability Report, if
we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors
and use our professional judgement to determine the appropriate action.
Responsibilities of the Directors for the Financial Report
When we read the Chairman’s Message, CEO Review of Operations, CFO Financial Report, and Sustainability Report, if
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
and use our professional judgement to determine the appropriate action.
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.
Responsibilities of the Directors for the Financial Report
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view
alternative but to do so.
and is free from material misstatement, whether due to fraud or error.
involve collusion, forgery,
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
Auditor’s Responsibilities for the Audit of the Financial Report
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
alternative but to do so.
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
Auditor’s Responsibilities for the Audit of the Financial Report
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
the economic decisions of users taken on the basis of this financial report.
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
maintain professional scepticism throughout the audit. We also:
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
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design
the economic decisions of users taken on the basis of this financial report.
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
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
intentional omissions,
than for one resulting from error, as fraud may
maintain professional scepticism throughout the audit. We also:
misrepresentations, or the override of internal control.
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
Group’s internal control.
than for one resulting from error, as fraud may
intentional omissions,
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
misrepresentations, or the override of internal control.
related disclosures made by the directors.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
Group’s internal control.
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
related disclosures made by the directors.
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group’s to
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
cease to continue as a going concern.
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
whether the financial report represents the underlying transactions and events in a manner that achieves fair
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
presentation.
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group’s to
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
cease to continue as a going concern.
within the Group to express an opinion on the financial report. We are responsible for the direction, supervision
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
and performance of the Group’s audit. We remain solely responsible for our audit opinion.
whether the financial report represents the underlying transactions and events in a manner that achieves fair
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
presentation.
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
• 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.
involve collusion, forgery,
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.
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INDEPENDENT AUDITOR’S REPORT
CONTINUED
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.
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
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
From the matters communicated with the directors, we determine those matters that were of most significance in the
communication.
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
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
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
Opinion on the Remuneration Report
communication.
We have audited the Remuneration Report included in pages 18 to 31 of the Directors’ Report for the year ended 30
June 2023..
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
In our opinion, the Remuneration Report of NRW Holdings Limited, for the year ended 30 June 2023, complies with
Opinion on the Remuneration Report
section 300A of the Corporations Act 2001.
We have audited the Remuneration Report included in pages 18 to 31 of the Directors’ Report for the year ended 30
Responsibilities
June 2023..
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
In our opinion, the Remuneration Report of NRW Holdings Limited, for the year ended 30 June 2023, complies with
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
section 300A of the Corporations Act 2001.
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
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.
DELOITTE TOUCHE TOHMATSU
DD KK AAnnddrreewwss
DELOITTE TOUCHE TOHMATSU
Partner
Chartered Accountants
Perth, 16 August 2023
DD KK AAnnddrreewwss
Partner
Chartered Accountants
Perth, 16 August 2023
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NRW HOLDINGS ANNUAL REPORT 2023 | Independent Auditor’s Report
APPENDIX 4E
APPENDIX 4E
Appendix 4E
RESULTS FOR ANNOUNCEMENT TO THE MARKET
For the Year Ended 30 June 2023
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 2023
Year Ended
30 June 2022(1)
12.7%
(5.1%)
(5.1%)
$’000
$’000
2,667,064
2,367,430
85,635
85,635
90,205
90,205
6 April 2023
7 April 2022
Record date to determine entitlements to dividend
23 March 2023
22 March 2022
Interim dividend payable per security (cents)
Franked amount of dividend per security (cents)
Unfranked amount of dividend per security (cents)
FINAL DIVIDEND
Date dividend is payable
8.5
-
8.5
5.5
5.5
-
11 October 2023
12 October 2022
Record date to determine entitlements to dividend
22 September 2023
23 September 2022
Final dividend payable per security (cents)
Franked amount of dividend per security (cents)
RATIOS AND OTHER MEASURES
8.0
8.0
7.0
7.0
Net tangible asset backing per ordinary security
$0.88
$0.85
(1) Restated to reflect prior period adjustment – refer to note 1.9.
Commentary on the Results for the Year
A commentary on the results for the year is contained in the statutory financial report dated 16 August 2023.
Status of Accounts
This statutory financial report is based on audited accounts.
NRW Holdings Limited - ACN 118 300 217
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NRW HOLDINGS ANNUAL REPORT 2023 | Appendix 4E