More annual reports from Perenti Global Limited:
2023 ReportABN 95 009 211 474
A N N U A L
R E P O R T
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C O N T E N T S
Who we are
Our operating businesses
Where we operate
The year in review
Chairman’s Report
Managing Director & CEO’s Report
Leadership
The Perenti Group Executives
Operational overview
Surface mining
Underground mining
Investments
Financial review
Underlying results
Business and risks
Sustainability Report
Board of Directors
Corporate directory
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We are a global
mining services
company and one
of the world’s only
underground and
surface mining
providers at scale.
This Report is printed on paper that is
manufactured from 100% recycled fibre that
is FSC Mix Certified. Both paper manufacturer
and printer are certified to the ISO 14001
standard.
ABN 95 009 211 474
Who we are
Perenti is a diversified global mining services company headquartered in Australia.
Founded in Kalgoorlie in 1987, the Group is today one of the world’s largest providers
of surface mining, underground mining and mining support services at scale through
a range of specialist operating businesses.
OUR
PURPOSE
To create enduring
value and certainty
OUR
PRINCIPLES
No shortcuts
Never wasteful
Walk in their shoes
Smarter together
Enable tomorrow
OUR
ASPIRATION
To become the
indispensable mining
services company
Our principles
N O
S H O RT- CU T S
NE V E R
WA S TE F U L
WA LK IN
THE IR S H O E S
SM A RTE R
TO G E THE R
E N A B LE
TOMO RROW
We never compromise
our standards. We strive
for the best in everything
we do and continue to
raise the bar in safety,
performance and
transparency every day.
We make every moment
count. We operate as
efficiently as possible.
We plan effectively,
make full use of our
assets and always spend
our money wisely.
To win new clients,
keep existing clients
and to ensure everyone
benefits, we have to
really know them – not
just who they are and
what they’re asking for,
but what really matters
to them.
None of us is as
smart as all of us. By
valuing our diversity,
working together,
sharing knowledge
and supporting each
other, we’re capable of
exceptional things.
We actively embrace
change, enabling
new technologies
and smarter ways of
working, so the mine
of tomorrow is safer,
more productive and
more reliable than ever
before.
ABN 95 009 211 474
Perenti – Annual Report 2020
1
G R O U P P E R F O R M A N C E OV E R V I E W
Our operating businesses
We provide a range of services to
miners throughout Australia and Africa.
In Australia, we are a leading provider
of drilling services, specialising in
exploration, drill and blast, grade
control and geotechnical services. In
Africa, we have a strong reputation
for delivering surface mining and
exploration services for clients across
a range of commodities and mining
jurisdictions.
We are a leading global hard-rock
underground mining services company
operating across three continents. Our
businesses are synonymous with the
delivery of high-quality underground
mining services and we specialise in
rapid high-speed mine development,
production, diamond drilling, vertical
development, design planning and
scheduling, and equipment supply and
maintenance.
Our diverse network of investment
businesses provides critical services
throughout the mining and oil and
gas value chains. We are a leading
supplier of equipment and parts,
assaying services and supply and
logistics solutions to companies
operating in the mining industry while
also providing equipment, parts and
services to companies operating in the
oil and gas industry.
Where we operate
4
11
Current operations and offices
CO N T I N E N T S
CO U N T R I E S
2
Perenti – Annual Report 2020
ABN 95 009 211 474
G R O U P P E R F O R M A N C E OV E R V I E W
The year in review
R E V E N U E
E B I T ( A )
U N D E R LY I N G N PAT ( A )
$2.04B
$212M
$110M
up 4% on the back of new projects,
partially offset by contract
cessations
reduced by 2.5% due to increased
depreciation. Q4 impacted by
COVID-19 and other business
challenges
reduced by 14% due to EBIT
reduction, increased interest and
increase in the effective tax rate from
normalisation of taxation expense
C A S H CO N V E R S I O N
ROAC E
96%
16.6%
up from 89% in FY19. Quality
cash backed earnings with a high
conversion rate of EBITDA into cash
maintained ROACE of over 16%
with continued focus on capital
discipline
F U L L Y E A R D I V I D E N D
P E R S H A R E
7.0 cents
including a 3.5 cents interim
dividend and a 3.5 cents final
dividend, both fully franked
T R I F R
4.9
E M P L OY E E S
G L O B A L P RO J E C T S
7,700
55+
Total Recordable Injury Frequency
Rate up from 4.5 in FY19
people working in 11 countries
across four continents
providing value for our clients
globally across a range of
commodities
O P E R AT I O N A L H I G H L I G H T S
DELIVERING CERTAINTY
COVID-19 RESPONSE
STRATEGIC GROWTH
Robust operational and financial
performance in a turbulent year
Continuity of global operations
while safeguarding our people
and business during the
pandemic
Expansion into the key mining
markets of Botswana and
Canada
ABN 95 009 211 474
Perenti – Annual Report 2020
3
C H A I R M A N ’ S R E P O R T
Managing adversity to safeguard
our people and business
COVID-19 travel restrictions. During
these crew rotations, Perenti was
also able to support the repatriation
of almost 50 individuals, who were
not employees of Perenti, to their
home countries. Importantly, we have
looked to the future by continuing to
invest in the business and our people
during this unprecedented period.
Perenti delivered record revenue of
$2.04 billion in the 2020 financial
year, up from $1.97 billion in the prior
12-month period. The breadth of our
diverse revenue base in conjunction
with our disciplined approach to capital
management ensured we were able to
deliver a strong underlying net profit
after tax of $110 million, despite the
challenges that the Group faced during
the year. Importantly, the Group’s strong
liquidity position was further enhanced in
the year as a result of our focus on cash
conversion and capital discipline, and an
increase to our available undrawn debt
facilities, ensuring Perenti is well placed to
withstand the ongoing global economic
challenges from COVID-19 while also
providing the Company with greater
flexibility to fund growth opportunities.
In addition to COVID-19, Perenti has
been confronted with challenges in
the 2020 financial year that the team
has navigated with compassion and
conviction. In November 2019, a
terrorist attack occurred near the
Boungou project in Burkina Faso.
This senseless attack resulted in the tragic
loss of 19 Perenti employees and a further
26 were injured. Our thoughts are with
the injured employees, and the families,
friends and work colleagues of those who
tragically lost their lives with the Company
providing them the best possible care
and support. As a result of this attack, and
ongoing security challenges in the region,
Perenti exited the Boungou and Bissa
projects in Burkina Faso.
In June 2020, a heavy vehicle incident
occurred at AngloGold Ashanti’s (AGA)
Obuasi Gold Mine in Ghana which
resulted in the tragic fatality of an
Underground Mining Alliance (UMA)
employee, Justice Sarkodie. UMA – an
incorporated joint venture between
Perenti’s subsidiary, African Underground
Mining Services (AUMS), and Rocksure
International, a Ghanaian contracting
company – has supported Justice's family,
local community and colleagues. AGA and
UMA have undertaken an investigation
into the cause of the fatality in
conjunction with the Ghanaian authorities.
Learnings from this tragic event will
be applied to UMA and implemented
across Perenti where applicable.
Operationally, a key highlight was
our ability to continue to leverage scale
and synergies from the Barminco
acquisition. We have built on the success
of this business within the Perenti Group
with the geographic expansion of our
service offerings, including into Canada,
I A N CO C H R A N E
C H A I R M A N
On behalf of the Board of Perenti, I am
pleased to present to you an overview
of the Group’s performance for the
year ended 30 June 2020. Perenti’s
performance in the 2020 financial year
has demonstrated the resolve of this
business to withstand unprecedented
challenges.
The operational and financial results
achieved in the year have demonstrated
the strength of the high-calibre team we
have built across the Group. Under the
leadership of our Managing Director and
CEO Mark Norwell, this team delivered on
a range of considered strategic initiatives
throughout the year and, through the
establishment of an internal COVID-19
taskforce, implemented strong measures
to mitigate and navigate the significant
and multiple risks that the virus has
presented to our people and the business.
I want to thank all of our people for
their commitment and response to the
COVID-19 situation, and in particular
our expatriate workforce, many of
whom elected to stay on or fly back to
site, working away from their families
and friends during both extended and
uncertain periods as the pandemic spread
globally. It is a credit to the COVID-19
taskforce and the team that expatriate
crew changes successfully commenced
in May 2020 and continue across all of
the Company’s international operations
in the midst of flight cancellations and
4
Perenti – Annual Report 2020
ABN 95 009 211 474
C H A I R M A N ’ S R E P O R T
Managing adversity to safeguard our people and business
E A R N I N G S P E R S H A R E
15.7 cents
based on underlying net profit after tax
before amortisation
F U LL Y E A R D I V ID E ND PE R S H A RE
7.0 cents
including a 3.5 cents interim dividend
and a 3.5 cents final dividend, both fully
franked
The Company also reactivated its
Dividend Reinvestment Plan from 21 April
2020 to enhance our cash position and
to provide flexibility to our shareholders.
Pleasingly, with greater clarity as to
Perenti’s operational performance in the
2020 financial year and ongoing strong
liquidity position, the Board resolved in
June 2020 to bring forward the payment
of the cash portion of the interim dividend
of circa $15 million to 23 July 2020.
Furthermore, the directors determined
a final dividend of 3.5 cents per share
bringing the full year dividend to a total
of 7 cents per share fully franked.
Perenti has entered the 2021 financial
year with a strong order book and a
robust pipeline of potential work with
active tenders that, if secured, would
see additional projects commence in
the second half of the year and the full
value of those opportunities realised
in the 2022 financial year. The Group
also has a strong liquidity position
that ensures Perenti is well placed
to withstand the ongoing economic
challenges COVID-19 may present and
provides the Company with greater
flexibility to fund growth opportunities.
I look forward to the year ahead with
optimism as to what can be achieved.
I A N CO C H R A N E
C H A I R M A N
where the team is providing underground
mining services for Barrick Gold at the
Hemlo mine in north western Ontario,
and in Botswana, where we successfully
commenced an $800 million
underground mining services contract
at the Zone 5 Mine for Khoemacau.
In addition, our Surface Industry Sector
Group (ISG) secured more than
$550 million in contract extensions and
new work under new management
disciplines during the 2020 financial year,
including a flagship $235 million contract
at the new Sanbrado Gold Project for
West African Resources Limited. Managing
Director and CEO Mark Norwell provides
further details on our operational
achievements and strategy in his report.
It is a testament to the executive team
that Perenti successfully navigated the
unexpected and unparalleled challenges
presented during the 2020 financial
year, delivering robust financial results,
preserving cash and shareholder value
in extremely difficult circumstances,
and ensuring Perenti is well placed
for growth. As a result, the Board has
reached a strong consensus that the
executive team’s performance exceeded
expectations. Further details are
provided in the Remuneration Report.
At a Board level, I was delighted to
welcome Andrea Hall as a Non-Executive
Director. Andrea has brought extensive
directorship experience to Perenti that
aligns with the Company’s strategy to
provide shareholders with balanced
representation, diversity and skillsets to
underpin a long-term strategic vision.
Her strong understanding of external
audit processes, key audit risk,
accounting and disclosure issues,
financial statements, financial and
non-financial risks and the resources
sector has already been invaluable.
I would also like to thank Keith Gordon
for his contribution to the Board. Keith,
who was appointed to the Board
as a representative of the former
Barminco shareholders, departed in
line with the terms of his appointment
in August and we wish him all the
best with his future endeavours.
The refreshed Board is focused on
strengthening the Group’s organisational
health under the Group 2025 strategy.
This includes a stronger focus on
environmental, social and corporate
governance (ESG) measures. I am
proud that this Annual Report contains
our inaugural Sustainability Report,
a step towards Perenti’s long-term
intention to enhance its reporting and
performance in this area as we seek to
drive additional ESG initiatives across
the Group. In addition, Perenti has
made tangible improvements to its
governance and audit controls, such as
implementing a new code of conduct
and policies around whistleblowing and
establishing an internal audit function.
Finally, I would like to extend my gratitude
to Perenti’s shareholders. I recognise that
the important steps taken as a part of our
prudent approach to cash management
in response to the COVID-19 pandemic
and subsequent global financial events
affected shareholders. This included the
decision in March 2020 to defer payment
of the Company’s interim dividend of
3.5 cents per share until 20 October 2020.
ABN 95 009 211 474
Perenti – Annual Report 2020
5
M A N A G I N G D I R EC TO R A N D C H I E F E X EC U T I V E O F F I C E R ’ S R E P O R T
Delivering certainty today and
positioning for growth
FY20 highlights and achievements
Future objectives
∞ Delivering robust operational
and financial performance in a
turbulent year
∞ Continue to navigate COVID-19 with
a focus on the health and wellbeing
of our people, operational continuity,
and value for our customers
∞ Resilience and commitment of our
∞ Winning work through extending
workforce in dealing with significant
adversity
current contracts and securing new
projects
∞ Expansion into the key geographical
mining markets of Canada and
Botswana
∞
Invest in growing our people
capability across the business and
develop our culture
∞
Focus on transforming AMS delivered
stronger performance in H2
∞ Continue the AMS transformation
M A R K N O RW E L L
M A N AG I N G D I R EC TO R A N D
C H I EF E X ECU T I V E O FFI C ER
∞ Strengthened balance sheet with
a focus on capital and liquidity
management to safeguard the business
∞ Enhance our Environment, Social
and Governance (ESG) performance
and reporting
I was honoured to lead Perenti as
Managing Director and CEO through
the Company’s first year under its new
brand and identity. Our commitment
to deliver on the clear initiatives set out
in the 2025 Group strategy during a
challenging year has further established
Perenti’s standing as a global mining
services provider that creates enduring
value and certainty.
Perenti’s robust operational and financial
performance, in what was a turbulent year
with a number of significant challenges,
reflects the commitment, resilience and
capability of our people demonstrates
the financial strength of the business.
In particular, the COVID-19 pandemic
presented unprecedented economic
challenges for companies around the
world in the second half of the 2020
financial year and I am proud with how
our people responded during such an
uncertain period. I would like to thank
all our people particularly our expatriate
staff, those working on site away from
their homes and local employees for their
dedication and commitment as well as
their families and friends for their support
during this uncertain time.
We established a COVID-19 taskforce
to proactively identify and manage the
challenges presented by the pandemic,
with a focus on protecting our people,
working closely with our key stakeholders
to ensure operational continuity and
preparing the business for future scenarios
that may result from COVID-19.
We put in place additional hygiene and
social distancing measures across our
offices and operations and worked hard
to rotate our expatriate workforce with
replacement crews using charter flights.
These measures helped ensure the impact
of COVID-19 at Perenti was isolated
across our projects during the 2020
financial year. The taskforce remains in
place as we navigate the ongoing issues
stemming from COVID-19 including those
which continue to impact crew changes
for our expatriate workforce.
In addition to the challenges presented
by COVID-19, it is with great sadness
I note that two devastating incidents
took place during the 2020 financial
year. Firstly, there was an unprecedented
terrorist attack near the Boungou project
in Burkina Faso in November 2019, which
resulted in the tragic loss of 19 Perenti
employees and a further 26 were injured.
As a consequence, Perenti exited the
Boungou and Bissa projects in Burkina
Faso. Secondly, a heavy vehicle incident
occurred at AngloGold Ashanti’s Obuasi
Gold Mine in Ghana in June 2020, which
resulted in the fatality of an Underground
Mining Alliance (UMA) employee, Justice
Sarkodie. UMA is an incorporated joint
venture between AUMS, and Rocksure
International, a Ghanaian contracting
company. We worked closely with all
stakeholders in conducting a thorough
investigation into this incident. Our
thoughts continue to be with all
employees impacted by these events, and
their families, friends and work colleagues.
behaviours which will define how
individually and collectively we will
achieve our desired strategic outcomes
to create long-term value for our
clients, shareholders, employees and
communities in which we operate.
The 2025 Group strategy has five pillars –
operational excellence, strategic growth,
organisational health, technology driven
future, and financial capacity –
with key initiatives identified under each
pillar. Significant progress was achieved
against those initiatives during the 2020
financial year.
O P E R AT I O N A L E XC E L L E N C E
Positive progress has been made
in transforming our surface mining
business in Africa, AMS, although further
improvement is needed in the coming
years. Some of the achievements during
the year included:
∞ Appointing a new leadership team
to focus on operational and financial
disciplines
∞ Addressing legacy contracts
∞ Reducing overheads
∞ Targeting and winning new work that
fits within the Company’s investment
criteria and capital discipline, and
∞ A continued focus on portfolio
rationalisation and asset intensity
within the region, including the
redeployment and sale of idle fleet.
2 02 5 G RO U P S T R AT E GY
The 2020 financial year was our first
full year working under the 2025 Group
strategy, which was established in March
2019 to ensure clarity for our workforce
on our future, and the principles and
These initiatives helped drive a stronger
performance from AMS during the second
half of FY20 compared to the first half,
despite the challenges presented by
COVID-19. A highlight was the award of a
$235 million, five-year contract for open
6
Perenti – Annual Report 2020
ABN 95 009 211 474
M A N A G I N G D I R EC TO R A N D C H I E F E X EC U T I V E O F F I C E R ’ S R E P O R T
Delivering certainty today and positioning for growth
pit mining services at the Sanbrado Gold
Project in Burkina Faso. This contract,
awarded under our new investment
criteria, was a significant achievement
and represents the positive progress
we are making in building on the suite
of projects which AMS operates in the
region. In addition to our initiatives to
transform AMS, during the second half
of FY20 we commenced an in-depth
strategic review of AMS to consider
options for this business with the review
to be concluded in early FY21.
Safety is a paramount focus for the
Group and nothing is more important
to us than ensuring our employees
finish their work safely every day. The
incidents that occurred during the 2020
financial year are a reminder to all of
us to continually raise the bar in safety
and ensure that it is always central to
everything we do. Our focus has been to
do all we can to stop such tragic events
happening again – this included exiting
the Boungou and Bissa projects in Burkina
Faso due to ongoing security challenges
in the region and continuing to drive
safety improvements across the Group,
including implementing findings from
the Obuasi investigation.
In the year, safety improvement initiatives
included the introduction of a Group-wide
Health, Safety and Environment (HSE)
Management System in June 2020, which
will be a key foundation block for building
improved safety performance across
the Company. The plan, which includes
12 Group-wide Critical Risk Standards,
has been developed collaboratively with
input from all our Industry Sector Groups
(Surface, Underground, and Investments)
and provides a systematic approach to
assist in sustained improvements in HSE
performance for all our businesses.
In the 2020 financial year our Total
Recordable Injury Frequency Rate (TRIFR)
was 4.9, a slight increase on FY19, and our
All Injury Frequency Rate (AIFR) was 26.2
an improvement against the FY19 figure
of 27.0. In future years we will report our
safety performance using AIFR as this
aligns with industry best practice and will
ensure our focus is on reducing all injuries,
not just recordable injuries.
Another key initiative under our
operational excellence pillar has been
pursuing organic growth opportunities.
Despite the challenging global economic
environment, Perenti has a robust tender
pipeline for the Group’s Underground and
Surface ISGs. This $8.8 billion pipeline
includes a number of highly prospective
active tenders that, if secured, would see
additional projects commence in the
second half of FY21 and the full value of
those opportunities realised in FY22.
In addition, Perenti has continued to
focus on capital discipline, which
encompasses how we deploy capital
and the return we can generate. This is
embedded as a core element in how we
assess our performance at projects and
new opportunities.
$2,045M
Revenue
1,725M
1,970M
2,045M
2018
2019
2020
$212M
Underlying EBIT(A)
S T R AT E G I C G ROW T H
188M188M
217M
212M
During the year we consolidated on the
Perenti rebrand following the Barminco
acquisition in the financial year prior,
maintaining our strong business brands
of Ausdrill, Barminco, AMS, AUMS, BTP,
Logistics Direct, MinAnalytical, Supply
Direct, and Well Control Solutions.
Our strategic growth has been focused
on building on our existing brands and
capabilities, having greater diversification
to manage risk, and delivering long-term
value and certainty to shareholders.
2018
2019
2020
2018 and 2019 figures are proforma underlying figures
which include 100% of Barminco and AUMS for a full
12 months and exclude amortisation and any non-
underlying items.
INVESTOR QUESTION
Earlier this year you were
considering the acquisition of
Downer Mining. Is this an option
that you will be pursuing in FY21?
We were considering a potential
acquisition of Downer Mining however
this was subject to strategic alignment and
the opportunity delivering value for our
shareholders. This process was suspended
due to market uncertainty following the
onset of COVID-19. A potential acquisition
of this type has strategic merit and
Perenti maintains a watching brief on
opportunities that add long-term value for
our shareholders.
ABN 95 009 211 474
Perenti – Annual Report 2020
7
M A N A G I N G D I R EC TO R A N D C H I E F E X EC U T I V E O F F I C E R ’ S R E P O R T
Delivering certainty today and positioning for growth
Specifically, our regional expansion has
been focused on optimising capital and
management time towards more stable
mining jurisdictions. In the year, we have
made significant progress in this area with
our Underground ISG starting work for
Barrick in Canada and for Khoemacau
in Botswana – both are highly attractive
mining jurisdictions that provide
significant growth opportunities in
stable operating environments.
In the year we have continued to assess
opportunities to expand our surface
mining capabilities that can be used to
enter new jurisdictions. This has included
considering select strategic opportunities
that align with investment criteria, are
value accretive, and complementary to
our existing capabilities which would
deliver value for Perenti shareholders.
For example, during the year Perenti
considered a potential acquisition of
Downer EDI’s mining services division,
Downer Mining. Perenti suspended
participation in the sale process in March
2020 due to the impact of uncertain and
volatile market conditions on structuring
and funding a transaction. A potential
acquisition of this type has strategic merit,
and Perenti will maintain a watching brief
for opportunities that add long-term value
for our shareholders.
O RG A N I S AT I O N A L H E A LT H
A key focus for the Group has been
to further embed our principles –
No shortcuts, Never wasteful, Walk
in their shoes, Smarter together and
Enable tomorrow – these principles
will enable us to continue to deliver
on our purpose of creating enduring
value and certainty.
Our principles underpin the way we work
and guide our behaviours and actions to
enhance our culture across the business.
Investing in our people is a strategic
priority as we look to grow our capability
by attracting, developing and retaining
great people. While this will continue to
be a key focus for the business, we are
already implementing a number of
successful initiatives. For example, our
front line leadership training was rolled
out to 73 employees across Perenti
during the year and we had 128
apprentices working across the Group.
Our commitment to upskilling our
employees for the long-term health
of our business was recognised with
Barminco being named as ‘Australia’s
Large Employer of the Year 2019’ at the
National Australian Training Awards.
The Group has an enviable reputation for
investing in the communities we work in.
Since commencing operations in Africa
30 years ago we have trained more than
25,000 local people to be part of our
operations. The state-of-the-art training
centre recently built by Barminco in
Maun, Botswana, where we plan to train
500 local people to be an integral part of
our operations at the Zone 5 mine, is an
excellent example of our commitment to
training local citizens and leaving a lasting
legacy in the communities we operate in.
As mentioned in the Chairman’s
report, the Board has been focused on
significantly enhancing our governance
and audit systems. Operationally, a
core component of this has been to
improve and unify the systems being
used by different businesses within the
Group and greater controls, such as the
establishment of a dedicated internal audit
function. Another important piece of work
has been to define our commitment and
approach to managing and disclosing
ESG-related issues for the Group. This
is further articulated in our dedicated
Sustainability Report which is part of this
year’s Annual Report and supports our
drive towards enhanced performance and
reporting in this area. To ensure this is a
strategic focus it is one of the objectives
under our 2025 Group strategy and we
will be appointing a Group Manager of
Sustainability in the near future.
In terms of specific appointments in the
year, we welcomed our second female
board member, Andrea Hall, and our first
female to the Perenti Group Executive
team, Vivienne Powe. In addition to
Andrea’s appointment, which Ian has
commented on, Vivienne has brought a
strong track record of creating
shareholder value in global mining and
oil and gas companies. She has significant
experience leading operations, feasibility
studies, greenfield and brownfield
development projects, corporate
functions and joint ventures in complex
business environments across a wide
range of commodities, and has brought
strong leadership to our COVID-19
taskforce.
Perenti is targeting ways to ensure the
long-term organisational health of our
business by promoting gender diversity
to broaden our prospective talent pool
and strengthen our brand in the wider
community. Additionally, Perenti’s
sponsorship of the Hockeyroos and the
West Coast Eagles AFLW team, through
our Ausdrill and Barminco businesses
respectively, are critical programs that
help us to promote what we do to a
gender diverse audience. For example,
Perenti has supported a number of
Hockeyroos with career opportunities
while training this year, which is a
win-win for both organisations and is
just one small demonstration of the
environmental, social and corporate
governance initiatives being delivered
across the Group.
T E C H N O L O GY D R I V E N F U T U R E
Perenti made significant strides in
cementing itself as a global mining
services industry leader in technological
capabilities. During the year, we
completed what we believe to be a world
first, with Barminco successfully operating
a loader working underground from its
head office in Perth at a client’s mine site
more than 750 kilometres away in the
Goldfields.
The 2020 financial year also heralded
another significant technology milestone,
as Ausdrill rolled out a semi-autonomous
smart surface drill rig to service its
Middlemount operations in Queensland,
with plans to leverage the potential of
the autonomous drills to improve drilling
efficiencies, safety and operational
performance on site. Additionally, in
Queensland, Barminco has started trialling
autonomous load haul dump vehicles
which will operate into FY21.
8
Perenti – Annual Report 2020
ABN 95 009 211 474
M A N A G I N G D I R EC TO R A N D C H I E F E X EC U T I V E O F F I C E R ’ S R E P O R T
Delivering certainty today and positioning for growth
The business synergies and knowledge
sharing established as part of the Perenti
rebrand has enabled the Group to begin
to integrate these technologies across
our ISGs. This will be an initiative we seek
to further advance in the year ahead,
pivoting us for a bright future in the
increasingly technology-centric global
mining services space.
F I N A N C I A L C A PA B I L I T Y
A clear set of initiatives, the right people,
and adherence to the principles that drive
this business are essential in delivering
on our 2025 Group strategy. However,
having the financial capacity to withstand
challenges and target growth underpins
that strategy. The importance of a strong
balance sheet was made clear in the
2020 financial year, where Perenti’s focus
on capital and liquidity management
enabled the Company to withstand the
challenges presented by COVID-19.
For example, in June 2020 we secured
additional undrawn debt funding capacity
on improved credit and covenant terms,
further enhancing our liquidity position
to finish the 2020 financial year with
approximately $604 million in cash and
undrawn credit facilities. The additional
funding is not expected to be utilised –
it was established to ensure Perenti is
well positioned to withstand any ongoing
economic challenges COVID-19 may
present and provide the Company
with greater flexibility to fund growth
opportunities.
Under this pillar we have continued
to focus on increasing cash backed
profits, expanding sources of capital, and
considering opportunities to drive value
from our business portfolio.
Specifically, on the portfolio review,
throughout the year we continued to
assess businesses and assets that best
fit within our strategy and align with our
purpose to create enduring value and
certainty. This included the successful sale
of our Connector Drilling assets in August
2019. We also advised that we were
considering a potential divestment of
our BTP business as part of our portfolio
review, however we did not receive a
binding offer that was acceptable to
Perenti and therefore the sale process
concluded, reflecting our commitment
to capital discipline and only undertaking
transactions on terms that deliver benefit
to our shareholders. BTP continued to
perform well for its clients during FY20
and the Company is focussed on growing
the business as part of the Group’s
Investments ISG.
the assets located at the Boungou site in
Burkina Faso, Power Solutions Africa and
assets and inventory held by BTP.
O U T L O O K
Perenti has entered the 2021 financial year
in a robust financial position and a strong
$5.4 billion order book that underpins
ongoing solid performance. We will
also continue to ramp up key high-quality
underground and surface projects that
commenced in FY20, including the
circa $235 million Sanbrado works, the
$800 million Zone 5 contract and Hemlo.
Despite the upheaval caused by
COVID-19, the tender pipeline for
Perenti’s Underground and Surface ISGs
remains robust. There are a number of
sizeable active tenders that, if secured,
would see additional projects commence
in the second half of FY21 and the full
value of those opportunities realised
in FY22 and beyond. Most of these
opportunities are in existing countries of
operation. As part of our growth strategy
we are also targeting contracts in stable
mining jurisdictions, such as Canada and
Botswana, as we seek to build upon our
regional expansion achieved during FY20.
We will also continue to consider strategic
opportunities should they align with our
investment criteria, are value accretive,
and complementary to our existing
capabilities which would deliver value
for Perenti shareholders.
T H A N K YO U
I would like to conclude by acknowledging
our people for their hard work and
dedication over what has been a
challenging 12-month period. In addition,
I would like to thank the families of our
employees for their support during this
time. Last year I commented that our
people are our business and will help
shape the future of Perenti. The 2020
financial year showed just how resilient
our people are. I am proud of the way
we responded to unprecedented events
such as the Boungou terrorist attack and
the COVID-19 pandemic. And despite
these challenges we still delivered
a very strong set of financial results
which is a testament to our people and
to the strength of our business. I look
forward to what we can achieve in the
2021 financial year as we continue to
deliver on the 2025 Group strategy.
The statutory results include a non-cash
impairment of $59.6 million incorporating
a reassessment of the recoverable value of
M A R K N O RW E L L
M A N AG I N G D I R EC TO R A N D
C H I EF E X ECU T I V E O FFI C ER
O R D E R B O O K
$5.4B
ISG
Country
• Surface
15%
• Underground 82%
• Investments
3%
Commodity
41%
• Australia
• Botswana
15%
• Burkina Faso 13%
• Ghana
11%
• Egypt
• Canada
• Mali
• Senegal
• Tanzania
6%
2%
1%
9%
2%
• Gold
• Copper
• Nickel
• Coal
• Zinc
• Other
69%
16%
5%
5%
3%
2%
P I P E L I N E
$8.8B
ISG
Country
• Surface
32%
• Underground 68%
Commodity
11%
11%
31%
• Australia
• Botswana
• Canada
• USA
10%
• Cote d’Ivoire 10%
• Ghana
7%
• Other
20%
• Gold
• Copper
• Diamonds
• Polymetallic
• Nickel
• Other
64%
23%
5%
3%
2%
3%
ABN 95 009 211 474
Perenti – Annual Report 2020
9
L E A D E R S H I P
The Perenti Group Executive
FROM THE LEF T
Peter Bryant – Chief Financial Officer | Scott Winter – Chief Executive Officer, Surface
Donald James – Chief Executive Officer, Investments | Ben Davis – Chief People Officer
Mark Norwell – Managing Director and Chief Executive Officer | Paul Muller – Chief Executive Officer, Underground
Vivienne Powe – Chief Development Officer | Strati Gregoriadis – Company Secretary and Group General Counsel
*The role of Chief Information Officer is vacant as of 24 August 2020
10
Perenti – Annual Report 2020
ABN 95 009 211 474
M A R K N O RW E L L
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
Mark was appointed as the Managing
Director and CEO of Perenti in September
2018. Mark has more than 20 years’
experience in the mining industry
throughout Australia, New Zealand,
Africa and the Americas.
S CO T T W I N T E R
CHIEF EXECUTIVE OFFICER,
SURFACE
PAU L M U L L E R
CHIEF EXECUTIVE OFFICER,
UNDERGROUND
D O N A L D JA M E S
CHIEF EXECUTIVE OFFICER,
INVESTMENTS
Scott’s experience in mine development
together with his strong hands on
technical and operational background
gives him a keen ability to understand how
to best establish and generate enduring
value from green or brownfield assets.
Paul has more than 20 years'
experience in the mining industry,
working for both mining services
providers and mine owners in
Australia, Asia and Africa.
Donald has held a variety of executive
positions in the Group. He has worked
in a number of executive roles with
listed entities and is known in the
business community for his skill in
business turnaround.
P E T E R B RYA N T
CHIEF FINANCIAL OFFICER
V I V I E N N E P OW E
CHIEF DEVELOPMENT OFFICER
Peter is an experienced CFO with
more than 25 years' experience.
He has served in various executive
roles across the mining, construction
and media sectors.
Vivienne is a senior executive with
a strong track record of creating
shareholder value in global mining
and oil & gas companies.
B E N DAV I S
CHIEF PEOPLE OFFICER
S T R AT I G R E G O R I A D I S
COMPANY SECRETARY
AND GROUP GENERAL COUNSEL
With experience spanning more than
20 years, Ben has held a number of
operational, corporate and executive
functional roles across Australia,
Africa and North America.
Strati is an experienced lawyer who
joined the Group in February 2011.
He’s held executive positions in the
mining industry as well as served as
a lawyer in private legal practice.
ABN 95 009 211 474
Perenti – Annual Report 2020
11
O P E R AT I O N A L OV E R V I E W
Surface mining
FY20 highlights and achievements
Future objectives
∞ Successfully navigating COVID-19
pandemic while continuing to deliver
value for customers
∞ Continued focus on leadership,
culture and systems to improve
safety and operational performance
∞ Ongoing transformation of African
Mining Services beginning to show
improvement
∞ Ongoing adaptation to the COVID-19
pandemic with a focus on value
creation for customers
∞ More than $550M in contract
extensions and new work in Australia
and Africa
∞
Further leveraging Perenti’s footprint
and capitalising on recent expansion
into new markets
∞ Significant investment in Surface ISG
leadership team to set a platform for
future growth
∞ Ongoing reduction in working
capital through asset sales and fleet
optimisation
∞
Focus on fleet technology and
automation to improve safety, quality
and productivity
∞ Continued attraction and assessment
of opportunities to expand our tier-
one surface mining capabilities into
new jurisdictions
O U R S U R FAC E M I N I N G B U S I N E S S E S AT A G L A N C E
AUS D RILL
A FRI C A N M ININ G S E RV I CE S
In Australia, through the Ausdrill business,
the Surface ISG is a leading provider of
drilling services specialising in exploration,
drill and blast, grade control and
geotechnical services. Ausdrill is a leader
in technological capabilities in the drilling
industry and has a reputation for delivering
value and certainty for its customers.
The business operates one of the most
extensive fleets of drilling equipment
and has experience across a range of
commodities throughout the country.
Our African business, African Mining Services
(AMS), is a leading surface mining operator
in Africa. With 30 years of experience, AMS
provides safe and reliable production and
exploration services. We have a strong track
record of delivering successful outcomes
for our clients in a diverse range of mining
jurisdictions across Africa. This is achieved
through our highly trained localised
workforce and the capability, scale and
scope of our mining fleet, which is one of
the largest in Africa.
Perenti’s Surface Industry Sector
Group (ISG) spans Australia and Africa,
providing critical services to miners
across a range of commodities.
The 2020 financial year has been
challenging for Perenti’s Surface ISG.
The unprecedented terrorist attack in
Burkina Faso followed by the impact of
the COVID-19 pandemic tested our
processes and the resilience and
resourcefulness of our people. We are
proud of how the team responded
in the face of such adversity and the
commitment and dedication shown by
our workforce in successfully navigating
these challenges.
AMS has limited numbers of Australian
expats in our operations, due to our
success in training and building a local
workforce, but they, as well as some of
our locally based teams, have dedicated
themselves to working longer rosters
given the border closures and travel
restrictions implemented in response to
COVID-19. We are thankful to our people
for their support during these uncertain
times. Through them the business has
been resilient to the challenge.
A key focus for AMS during the pandemic
has been working closely with our clients
to ensure the safety of our people and
operational continuity. Restrictions
imposed by countries and closed borders
have required substantial logistical
management to move our people safely
in and out of our operations. The success
of these efforts has been a real credit to
the wider Perenti team who have worked
hard, day and night, to navigate this period
with considerable success.
12
Perenti – Annual Report 2020
ABN 95 009 211 474
O P E R AT I O N A L OV E R V I E W
Surface mining
The other significant issue for AMS was
the unprecedented terrorist attack near
the Boungou mine site in Burkina Faso in
November. This senseless attack resulted
in the tragic loss of 19 AMS employees
and a further 26 were injured. This was
a tragedy for the whole Group and has
been felt deeply by all of us. People across
Perenti responded with compassion and
set up a fund to raise money to support
those injured and the families of those
who died.
The attack reflected a significant shift
in the security conditions in the area
and as a consequence in December we
announced our intent to withdraw our
workforce from the Boungou and Bissa
mines in Burkina Faso. We worked closely
with our clients as they transitioned
to new service contracts with other
providers. Following the incident an
independent review was conducted with
a number of recommendations being
implemented as a result.
These challenges occurred against a
backdrop of significant change within
AMS, as we focused on the key strategic
priority to transform the business. Perenti
has invested significantly in its leadership
capability to drive these changes, with a
greater focus around capital discipline and
enhancing project and business returns.
A number of initiatives were introduced
during the year to support this
transformation. Driving operational
efficiencies across our sites, reducing
overheads, selling idle equipment and
obsolete inventory and stock, and
reducing working capital to improve
INVESTOR QUESTION
The performance of AMS has been
an issue for Perenti for some time,
when can we expect to see results
improve and what will be the
outcome of the strategic review?
The transformation of AMS is a strategic
priority for the business and positive
progress has been made in FY20.
A number of initiatives have been
implemented to drive operational and
financial improvements and these have
delivered a stronger performance during
the second half of the 2020 financial
year when compared to the first half,
and despite the challenges presented by
COVID-19. There is still work to do but we
are confident the measures already taken
will ensure in time we deliver the required
returns to our shareholders. We will look
to build on this positive momentum in the
2021 financial year as well as realise the
findings from the strategic review.
our overall returns are all part of our
efforts to ensure AMS continues to have a
successful future in Africa.
In addition, an increased level of rigour
and governance has been placed around
the commercial aspects of tenders. This
has resulted in new or renewed contracts
being negotiated on improved terms
and aligned with business outcomes.
For example, the $235 million contract
with West African Resources at the new
Sanbrado Gold Project in Burkina Faso
was secured during the year with these
new disciplines applied. In the year,
AMS also secured an equipment hire
agreement with E&P for Gold Field’s
Tarkwa site in Ghana and a 12-month
contract extension at Iduapriem in Ghana,
where our operation is run entirely by
Ghanaian nationals. Iduapriem sets the
standard for our projects in sourcing
local African people for our workforce
– something that we are committed to
across all of our operations.
Since our exit from operations at
Bissa, AMS has successfully sold some
equipment and reassigned the remaining
fleet to the Sanbrado and Yanfolila
projects, while we are pursuing options
for the sale of the fleet at Boungou. In
December, we announced the cessation
of our contract with Ghana Manganese
Company (GMC) for work at their Nsuta
mine. The termination of this contract
was not related to our performance and
GMC thanked AMS for its ‘outstanding
services’ provided at the mine. We
remain on positive terms with the client
and are confident that operations will
recommence in FY21.
At the Yanfolila gold mine in Mali, our
improved efficiency in operations
and maintenance has led to increased
production. Similarly, at Mako, in Senegal,
our local leadership worked closely
with the client and as a result we broke
production records this year. We have
been able to optimise the use of our
equipment across three sites in this region.
We have the plant availability, logistical
knowhow and maintenance capability
to manoeuvre equipment around our
operations to suit our clients' short-term
needs.
Part of the transformation process for
AMS has been a reassessment of our
exploration business in Africa. These
are only a small part of AMS’s activities,
and we are looking to a better, more
streamlined model or a possible
divestment of these assets.
The results of our Australian operations
reflect the competitive nature of the
market in both exploration drilling and
drill and blast.
I S G P E R F O R M A N C E
$606M
Revenue
725M
746M
606M
2018
2019
2020
$25M
Underlying EBIT(A)
65M
56M
25M
2018
2019
2020
FY18 and FY19 figures exclude any one-off or non-
underlying items; FY20 figures are underlying and
exclude any one-off or non-underlying items.
P E RC E N TAG E O F G RO U P
30% 10%
Revenue
Underlying EBIT(A)
Underlying EBIT(A)% excludes Group functions.
ABN 95 009 211 474
Perenti – Annual Report 2020
13
O P E R AT I O N A L OV E R V I E W
Surface mining
C A S E S T U D Y
Sanbrado Gold Project
The Sanbrado Gold Project is a low-cost, high-grade
operation located in Burkina Faso, West Africa. In late
2019, AMS was awarded a contract by West African
Resources, to develop the mine infrastructure and
provide open-cut mining services. To ensure that the
mine started-up on time and on schedule, AMS had to
overcome significant challenges including local security
in the region.
Despite these obstacles, the quality efforts of on-site
personnel, coupled with the support of Perenti’s global
network, allowed AMS to enhance the ramp-up schedule
and build a Sanbrado workforce of over 200 employees,
91 per cent of whom are Burkinabe locals. Through our
local recruitment, training and skills-matching programs
we have identified local people with the experience and
aptitude to join AMS, and then supported their training
and development as valued members of our team.
Sanbrado Gold Mine
Burkina Faso, Africa
WH AT “ N E V E R WA S T E F U L”
M E A N S T O M E
As an operations manager,
finding innovative ways to
fully utilise all our assets and
resources efficiently so we can
reduce our costs and minimise
our impact on the environment
is an essential part of what we
do. It means making use of every
material in our operation through
good planning.
JOSEPH ABU BAKA
Operations Manager Ghana –
AMS
A notable structural change within
our Australian operations has been to
bring together our Ausdrill NorthWest,
Ausdrill Limited and Drill Rigs Australia
businesses under a unified Ausdrill brand.
This consolidation ensures streamlined
marketing and reporting, removing the
inefficiencies of operating with multiple
systems and brands across different
markets.
During the year Ausdrill secured more
than $220 million of new or extended
contracts, including executing
a strategy to expand its drilling
operations to the east coast.
After many years of Ausdrill building an
enviable reputation in Western Australia,
we were able to leverage that reputation
to secure a number of new contracts
on mining projects in the east. These
included a new four-year contract with
BHP’s coal division BMA in Queensland’s
Bowen Basin and a three-year contract for
drill and blast work at Middlemount, a joint
venture between Peabody Energy and
Yancoal, also located in Queensland.
Other significant east coast work won in
the year included a three-year contract for
production drilling services with Boggabri
Coal Operations (part of Idemitsu Australia
Resources Group) at its Boggabri mine in
New South Wales.
In Western Australia, strong client
relationships built on the back of solid
operational performances allowed us to
secure a series of extensions to drilling
contracts in the Goldfields and Pilbara.
Our expansion to the east coast has
required investment and has provided
a spearhead for a big technology shift
to autonomous and semi-autonomous
rigs in our drill and blast work. We have
also brought in technical innovations
in exploration to remove manual
sampling and rod handling for some of
our operations. These technologies are
aimed at improving safety, quality and
productivity.
Ausdrill has adopted ground-breaking
technology in other parts of our
operations, such as the use of unmanned
aerial vehicles (UAVs) above blast patterns
to replace some of the arduous tasks
carried out by workers on the ground.
UAVs have also become a valuable
surveillance and safety tool. For example,
a UAV can be used to ensure everyone is
free of a blast zone prior to detonation.
Technology is also making a positive
impact on the deployment of remote
assistive capability. This enables
maintenance troubleshooting remotely,
with a technician or supervisor in Perth
able to monitor a team member on site
in Australia or Africa and help pinpoint
technical problems with equipment.
14
Perenti – Annual Report 2020
ABN 95 009 211 474
Middlemount Coal Mine
Queensland, Australia
O P E R AT I O N A L OV E R V I E W
Surface mining
C A S E S T U D Y
Middlemount drilling automation
Ausdrill is always looking at how technology can improve
safety and productivity to provide increased value for
our clients. Sourcing two new Cat MD6310 drills for the
Middlemount coal mine in central Queensland, where
Ausdrill has a three-year drill and blast contract, represents
a big step in the potential for automation.
The advanced Cat Terrain system is built around a
high precision GPS system allowing for accurate hole
placement, depth and angle. It also feeds back crucial
strata data to assist in accurate placement of explosives
in the hole. Ausdrill plans to leverage the autonomous
potential of the drills to improve drilling efficiencies
and operational performance. The focus on accuracy in
drilling and blasting helps to make every other aspect
of the mining operation smoother, safer and more
productive.
The Auto Sampler
System innovation
developed by
Ausdrill for its grade
control rig has
been nominated for
the BHP Minerals
Australia HSEC Award.
AMS staff support
the Tarkwa wider
community by
distributing essential
COVID-19 PPE
supplies.
Throughout the year, Perenti’s
Surface ISG has kept a strong focus on
safety recording an improved TRIFR of
2.1 down from 4.4 in FY19 and an AIFR of
11.4 down from 12.1 in FY19. To back up
this strong performance a number of
notable safety milestones were achieved,
including; seven years lost-time injury (LTI)
free in Ghana; two million man-hours LTI
free at the Iduapriem project in Ghana;
and two years LTI free at the St Ives mine
in the WA Goldfields. In addition to this
performance, we have also been
shortlisted for a BHP Minerals Australia
HSEC Award for the Auto Sampler System
innovation developed by Ausdrill for its
grade control rigs.
Community investment has also been
an area of focus with AMS providing
medical supplies and equipment in the
fight against COVID-19 and other regional
diseases such as Malaria.
In many cases AMS has been working
with its clients to help fund a doctor
to work within a community to treat
and educate local people. In Australia,
Ausdrill has continued its relationship
with the Hockeyroos while also
supporting a range of local community
initiatives and groups in the regions in
which we operate.
ABN 95 009 211 474
Perenti – Annual Report 2020
15
O P E R AT I O N A L OV E R V I E W
Underground mining
FY20 highlights and achievements
Future objectives
∞ Successfully navigating the
COVID-19 pandemic while
continuing to deliver value for
customers
∞ Significant international growth with
mobilisation of new projects across
three continents
∞
Investment in our people and
recognition as Large Employer of the
Year at the 2019 Australian Training
Awards
∞ Continued focus on leadership,
culture and systems to further
improve safety and operational
performance
∞ Ongoing adaptation to the
COVID-19 pandemic with a focus
on operational continuity and value
creation
∞ Extend existing contracts and
capitalise on expansions into new
markets to win new work
∞ Significant organic growth including
major ramp ups at Obuasi (Ghana)
and Siou (Burkina Faso)
∞
Focus on recruiting and training
to develop the next generation of
underground miners
∞ Community investment including
support of the West Coast Eagles
AFLW team for their inaugural season
∞ Continued investment in our people
capability including focus on diversity
O U R U N D E RG RO U N D M I N I N G B U S I N E S S E S AT A G L A N C E
BA RM IN CO
Barminco is a name synonymous
with the delivery of high-quality
underground mining services. The
business was instrumental in the design
and implementation of high speed
decline development which transformed
underground mining in Australia and is
now the preferred mining method for
most modern underground mines in
Australia and Africa.
A FRI C A N U ND E RG RO U ND
M ININ G S E RV I CE S
AUMS was established 13 years ago
and combines Barminco’s skills
and experience in underground
mining services with the wider
Group’s knowledge, experience
and client network in Africa. In a
short time, AUMS has developed
a market-leading position in Africa
and has a track record of exceeding
productivity targets.
The Underground Industry Sector
Group (ISG) incorporates leading hard
rock underground mining service
providers Barminco and African
Underground Mining Services (AUMS).
FY20 has been a milestone year for
Barminco as we celebrated the 30th
anniversary of a truly ground-breaking
business. Barminco was founded by Peter
Bartlett in Coolgardie in 1989 with just
30 employees and has grown into a
mining services business with more than
4,200 employees operating at 21 mines
in seven countries. We are proud of
our origins, while always looking to the
future as we expand into new territory
and continue to set the standard in
underground mining services around the
world.
Barminco and AUMS offer high speed
jumbo drill development and production
solutions including; drilling, charging and
blasting; loading (including operation
of remotely controlled loaders) and
hauling waste and ore; installation of
ground support; equipment supply and
maintenance; vertical development; mine
design, planning and scheduling; and
diamond drilling.
Uniform systems, processes, equipment,
and skills across all projects are integral
to the delivery of world-class safety,
quality, productivity and cost efficiency
wherever we operate. With a highly skilled
workforce and one of the world’s largest
and most modern, fully mechanised fleets
of underground mining equipment, the
business specialises in rapid mobilisation
and delivery to meet the needs of our
clients. The Underground ISG’s ability
16
Perenti – Annual Report 2020
ABN 95 009 211 474
O P E R AT I O N A L OV E R V I E W
Underground mining
to consistently deliver is reflected in the
length of the relationships it has with
clients, some of which span decades
and have seen both Barminco and
AUMS providing underground services
from the day the first cut is taken in the
development of a mine.
Perenti’s Underground ISG produced
another strong performance in FY20, an
exceptional achievement set against the
challenging backdrop of COVID-19. The
business achieved a series of production
records at African and Australian sites
during the year, underlining the ability
of our high-calibre team to produce
outstanding results during unique
economic circumstances.
The COVID-19 pandemic challenged
the resourcefulness and skills of our
people at all levels. It has required major
changes to rostering at our African sites in
particular and testing times for our people
travelling to work and back home, as well
as extraordinary logistical challenges
to transport our people in and out of
country. We are hugely proud of the
resilience and commitment the team has
shown in responding to the pandemic and
are thankful for the efforts of everyone
involved in supporting the business during
this time.
In addition to the challenges posed
to the business by COVID-19, we are
deeply saddened by the tragic loss of
Justice Sarkodie in June 2020. Justice,
an underground worker in Africa who
worked at the Obuasi operation for the
Underground Mining Alliance (UMA),
a joint venture between AUMS and
Rocksure International, a Ghanaian
contracting company, was involved in
a heavy vehicle incident.
INVESTOR QUESTION
You recently expanded into
Canada, which was part of your
growth strategy. What size do you
believe the opportunity to be in
North America?
Barminco is a global leader of high-
quality underground mining services
and was instrumental in the design and
implementation of decline development
which transformed underground mining.
The company remains at the forefront
of the industry and we believe there
is significant opportunity to utilise this
expertise to further grow the business
in the North American market. We have
held discussions with a number of new
and existing customers on both brown
and greenfield mine development and
estimate the current pipeline to be more
the $1.8 billion.
Since the incident, focus has been on
supporting his family, the local community
and his colleagues. We will keep striving to
improve our workplace practices to make
the business a safe and more secure place
to work. During the course of the year the
Underground ISG recorded an improved
Total Recordable Injury Frequency Rate
(TRIFR) of 6.9 down from the FY19 figure
of 7.2 and an All Injury Frequency Rate
(AIFR) of 37.4.
In line with the Group’s growth strategy,
a key focus for the Underground ISG has
been expansion, with focus on more
stable mining jurisdictions with significant
growth opportunities, such as in southern
Africa and North America. A significant
achievement during the year has been
new contracts and mobilisations across
three continents - in Australia through the
Savannah nickel mine in the Kimberley,
in southern Africa through the Zone 5
copper mine in Botswana, and in North
America through the Hemlo gold mine in
Ontario, Canada, where we commenced
work in early July 2020 following some
delays caused by COVID-19.
In Canada we are leveraging a long-
standing relationship to modernise and
improve the performance of Barrick’s
Hemlo mine to further extend its life,
so the mine can remain a long-term
sustainable operation in the region.
As part of this process, Barminco has
engaged the local First Nations people
to maximise local job creation, training
and other benefits. It is anticipated that
this project will provide a strong platform
for our continued expansion in North
America.
The Zone 5 project in the Kalahari
copper belt in Botswana, where we are
working with Khoemacau Copper on a
five-year contract, is another example of
our expansion into more stable mining
jurisdictions. We see Botswana as a highly
attractive country in which to operate
and this project provides the Group with
a strategic presence in the area to build
upon.
During the year Barminco also
commenced work at the Savannah
project for Panoramic Resources, which
demonstrates our ability to mobilise
quickly. Within four weeks of signing
the contract the Barminco team had
mobilised to site in the East Kimberley,
a considerable achievement given the
amount of planning and logistics required.
The impact of COVID-19 resulted in the
project being suspended, however we
are now returning to the site, albeit with a
reduced scope of work.
I S G P E R F O R M A N C E
$1,300M
Revenue
1,300M
1,081M
870M
2018
2019
2020
$196M
Underlying EBIT(A)
196M
165M
124M
2018
2019
2020
2018 and 2019 figures are proforma underlying figures
which include 100% of Barminco and AUMS for a full
12 months and exclude amortisation and any non-
underlying items.
P E RC E N TAG E O F G RO U P
64% 80%
Revenue
Underlying EBIT(A)
Underlying EBIT(A)% excludes Group functions.
ABN 95 009 211 474
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17
O P E R AT I O N A L OV E R V I E W
Underground mining
We are confident that the strong
customer relationships built on
the back of solid, and in many
cases record breaking, operational
performances will see a number of
contract extensions in both Australia
and Africa in FY21.
Development and production has been
ramped up at the Yaramoko mine in
Burkina Faso by AUMS, where the addition
of the Bagassi South expansion project
has seen record monthly performance.
There have also been major ramp ups
at the Siou mine in Burkina Faso and the
Obuasi mine in Ghana while the Subika
gold mine, also in Ghana, has exceeded its
operational targets. Government approval
for an expansion at the Geita project in
Tanzania could provide potential growth
opportunities at the operation, while
construction has been completed on
the five portals at the Zone 5 project in
Botswana – the most ever constructed on
a Barminco operation.
C A S E S T U D Y
Khoemacau Mine, Zone 5 Starter Project
The Zone 5 Project is a new, large and long-life copper mine in the highly
prospective Kalahari copper belt in Botswana, southern Africa. Barminco’s
extensive underground experience and history on the continent made us the
optimal project partner for Khoemacau to deliver this first major mechanised
underground operation in Botswana. The mine has been the first of our projects
to benefit from our new nearby Maun training centre. This state-of-the-art,
3,400 m2 facility provides expert staff, teaching spaces, software simulators,
virtual reality capabilities and assessment protocols to prepare new staff for mine
site operations. International employees also undergo cultural awareness training,
as well as training in mining standards, Perenti’s code of conduct, safety, quality
and environmental protocols and procedures. The training centre facilitates
a collaborative initiative with Khoemacau to train and develop the people of
Botswana to the highest possible standard to succeed internationals and to
provide future support for growth strategies in southern Africa.
WH AT “ N O S H O R T CU T S ”
M E A N S T O M E
Zone 5 - Copper Mine
Botswana, Africa
Everyone knows the moment
they start thinking about taking
a shortcut because we all
hesitate. We want our people
to stop and think about what
taking a shortcut could mean for
themselves and their families in
that moment of hesitation. The
hesitation is our instinct of self-
protection.
MEL DUGAY
Induction & Safety Trainer –
BARMINCO
INVESTOR QUESTION
COVID-19 appears to have had a more pronounced impact on the
Underground ISG – what impact can be expected heading into the 2021
financial year?
There was some impact on mine site productivity and additional costs to rotate our expat crews
that impacted our Underground ISG during the second half of the 2020 financial year. This has
continued into the 2021 financial year, however we are looking at options to best manage this
and are working closely with our clients to develop solutions. COVID-19 is an ongoing reality.
We will continue to adapt to the impacts of the pandemic and implement solutions that focus
on protecting our people and our business continuity.
18
Perenti – Annual Report 2020
ABN 95 009 211 474
O P E R AT I O N A L OV E R V I E W
Underground mining
A highlight of the year for Barminco
was our recognition as Large
Employer of the Year at the 2019
Australian Training Awards. We are
proud of this award because we
believe the calibre of our people
is the reason for our success as a
leading global underground miner.
C A S E S T U D Y
Large employer of the year
Our focus on training and development
runs throughout the business from our
commitment to providing high-quality
apprenticeship and graduate programs, to
our premier training centres in Hazelmere
and Botswana, and our diverse leadership
programs for leaders.
Our training centres have been especially
successful in reducing our operational
turnover by exposing entry level team
members to simulated underground
conditions before they start their first
swing on site. The development of our
training centre at Maun in Botswana, to
support the Zone 5 project, is another
good example of our ambition to build
local capability by sourcing and training
local people for our African enterprises
wherever possible.
Barminco’s heavy focus on skills and training for our people was recognised when
we were named Australia’s Large Employer of the Year 2019 at the Australian
Training Awards. Our people have always been at the core of our vision for growth
and success, and we believe investing in their training is essential. Key elements
of our training strategy are the Barminco Training Centres at our Hazelmere
head office in Western Australia and on a larger scale at Maun, Botswana. These
facilities replicate what it is like to work underground, using technology to offer
customised virtual reality scenarios for all underground activities. It means new
employees go to sites with a much better understanding of the underground
environment so they are safer and can operate more efficiently. Our focus on
training also includes a successful apprenticeship program that has been running
for more than 20 years and a unique leadership program designed to provide
career progression, a key retention tool to develop and progress our people into
management roles.
In line with the Group’s strategy, we are
continuously looking to improve our
operational efficiencies by cementing
ourselves as a global mining services
industry leader in technological
capabilities. This year, Barminco
conducted a successful pilot of our
Remote Operations Centre that has the
potential to allow us to operate equipment
at our clients’ mine sites anywhere in
the world from our Western Australian
headquarters. In what is believed to
be a world first, Barminco operated a
machine, working underground, from
its head office in Hazelmere at IGO
Limited's Nova mine site in Fraser Range,
almost 750 kilometres away. Although
in its early stages the success of this
pilot program reflects our focus on
improving operational efficiencies.
Barminco has also successfully trialled
an electric vehicle at its underground
operations at Nova. The BELV (battery
electric light vehicle) was put through
its paces and received positive feedback
from our on-site teams. The big
advantage of electric vehicles in
underground mining, other than reduced
running and maintenance costs, is the
lack of emissions, providing a cleaner
environment for our people as well as
better efficiency and sustainability for
our clients.
As with the wider Perenti Group, we
are committed to investing in the
communities we operate in. From
rebuilding and upgrading local schools
and sporting fields to providing
emergency medical supplies during these
recent challenging times we see support
for local communities as vital to our
ongoing sustainable operation in Africa.
In Ghana over the last five years AUMS
has contributed more than $400,000 in
community donations and support. In the
last 12 months at Obuasi, the UMA Joint
Venture has worked together with our
client AngloGold Ashanti to provide much
needed assistance at the local hospital
by purchasing and donating a new ICU
ventilator, which is critical to saving
lives during the COVID-19 pandemic.
In addition, we have procured and
distributed safety equipment such
as sanitisers, gloves and masks for
communities in Burkina Faso to support
local people to tackle the pandemic.
In Australia, Barminco stepped up as a
major sponsor of the West Coast Eagles
women’s team in their first year in the
AFLW. This sponsorship provides us with a
platform to raise awareness of mining to
new audiences as we look to build a more
diverse workforce in the years to come.
ABN 95 009 211 474
Perenti – Annual Report 2020
19
O P E R AT I O N A L OV E R V I E W
Investments
FY20 highlights and achievements
Future objectives
∞ Building capacity in the BTP
workforce to support future growth
∞ Develop BTP field service and labour
hire capacity to provide regional
support to clients
∞ Commissioning of further
∞ Retain and build MinAnalytical’s
PhotonAssay capacity including end-
to-end sampling automation
client base through leverage of the
PhotonAssay technology service
offering
∞ Delivering value for clients despite
∞ Deliver organic growth through
the COVID-19 pandemic
∞
Identified opportunities during the
period to renew Supply Direct client
and supplier partnering
expansion of our Mining Systems
and Solutions offerings to our Supply
Direct client base
∞ Continue to build our internal
competencies and further align the
business with valued multinational
OEM and tier one suppliers
∞
Increase female workforce
participation across the ISG
∞ Continue to invest in our people
capability and diversity
Perenti’s Investments Industry Sector
Group (ISG) is comprised of several
companies that provide a range of
support services to the mining and
oil and gas industries. These include
mining equipment and parts supplier
BTP, assaying services company
MinAnalytical, mining services and
solutions providers Supply Direct
and Logistics Direct, and oil and gas
equipment supplier Well Control
Solutions. The Investments ISG employs
more than 330 people and its network
of client businesses are located across
Australia, Africa, South East Asia, and
Europe.
O U R I N V E S TM E N T S B U S I N E S S E S AT A G L A N C E
B TP
M IN A N A LY TI C A L
S U PPLY D IREC T
LO G I S TI C S D IREC T
BTP is a leading heavy
equipment, maintenance
and refurbishment service
provider to the mining
industry. The business sells
used equipment; rents
a range of heavy mining
equipment; refurbishes
mining equipment,
components, cylinders
and engines; and sells
parts to its clients.
MinAnalytical is an
innovative mineral assaying
laboratory with bases
in Perth and Kalgoorlie,
providing a comprehensive
range of high quality
geochemical analytical
techniques for most
commodities.
Supply Direct provides single
source, customised mining
supply services to mine
operators globally from
heavy equipment, engines,
components, and vehicles
through to everyday parts
and consumables.
Logistics Direct provides
ground, air and sea freight
forwarding services along
with customs brokering
services for mining
companies globally.
WE LL CO NTRO L
SO LU TI O N S
Well Control Solutions is
a well control equipment
supplier providing
equipment, maintenance
services and parts to oil and
gas projects throughout
Australia. The company is
a local agent for top global
OEM brands.
20
Perenti – Annual Report 2020
ABN 95 009 211 474
O P E R AT I O N A L OV E R V I E W
Investments
B T P
The focus for BTP during the year
has been expanding capacity as we
consolidate our position as a leading
provider of equipment, parts and
refurbished components to the mining
industry. Headquartered in Perth, Western
Australia, the company has specialist
facilities, with employees and warehouses
located in the major mining hubs of
Newman in the Pilbara region of Western
Australia, Mackay in Queensland and
Mount Thorley in New South Wales.
In addition to supplying equipment
and parts, and rebuilding equipment
to as-new, BTP is one of the largest
dismantlers of machinery in Australia
and has one of the most sizable rental
fleets of modern, well-maintained mining
equipment. BTP stocks one of the nation’s
largest inventories of parts and equipment
to support client operations with a
focus on minimising machine downtime.
BTP is the largest business in Perenti’s
Investments ISG and has performed well
against the unprecedented economic
circumstances created by COVID-19,
which resulted in clients delaying forward
orders and tier one miners implementing
significant cost saving programs.
Despite these economic challenges,
BTP has continued to leverage its
capability to rebuild equipment, including
completing full rebuilds of several midlife
Cat D10T dozers and back-to-bare chassis
rebuilds on Cat 777F and Cat 785C dump
trucks to further augment our used
equipment sales program.
Availability of good quality, low-hour
heavy equipment has broadly been a
challenge for miners globally over the
past year, and subsequently our focus has
been on rebuilding equipment to provide
cost-effective solutions for our clients.
INVESTOR QUESTIONS
The Investments ISG has largely
flown under the radar - what is the
long-term strategy for this ISG?
We see these businesses as adding value
to Perenti’s Surface and Underground
ISGs. Divestment of the BTP business was
considered during the year, however the
decision was taken to retain the business.
BTP continues to perform well for its
customers and we are now focussed on
growing the business.
This includes working with BTP’s sister
business Supply Direct to procure and
ship suitable equipment from overseas
to Australia to rebuild for the Australian
market.
BTP’s positive relationships with clients
and proven capabilities have resulted
in our preferred supplier status being
extended across a range of products
and with several clients. An example of
this is our track dozer engine rebuild
programs for several tier one mining
organisations. Despite the broader
economic challenges, revenue from
BTP’s parts and equipment rental
business grew in the 2020 financial year.
A key achievement for the business in the
year, and one we are particularly proud
of, is the investment in our workforce to
support future growth. Underinvestment
by the mining services industry in recent
years has resulted in a tight labour market
and staff resourcing has been challenging
particularly for key specialist trades such
as engine re-builders, field service and
component overhaul technicians. BTP
has put great emphasis on training and
developing its people as part of an effort
to position BTP as an employer of choice
in what is a highly competitive field.
An important element of this has been
building BTP’s apprentice program, with
trade apprenticeships increasing to almost
50 during the year. One specific program
that has been successful for BTP enables
light vehicle mechanics to upskill to
heavy diesel fitters and rebuild specialists
through a two-year apprenticeship. This
has allowed us to recruit skilled candidates
from outside of the industry, as well as
people who are keen to remain in city-
based roles rather than working on site.
These measures are helping to secure a
future supply of skilled tradespeople in this
industry, while improving our retention of
skilled employees in a challenging market.
BTP’s workforce was expanded during the
year to ensure we continue delivering for
our clients. We are proud of the way we
have adapted our rosters and processes
to keep operating successfully during the
COVID-19 pandemic. In prioritising our
people and their safety during this period,
we have maintained a flexible approach
to staffing, discovering in the process that
many non-operational positions can be as
productive when they are not physically in
the workplace. We have also broadened
our coverage of services to provide 24/7
availability during the COVID-19 period,
providing more flexibility to our people
and our clients.
I S G P E R F O R M A N C E
$138M
Revenue
143M
138M
129M
2018
2019
2020
$25M
Underlying EBIT(A)
25M
25M
18M
2018
2019
2020
FY18 and FY19 figures exclude any one-off or non-
underlying items; FY20 figures are underlying and
exclude any one-off or non-underlying items.
P E RC E N TAG E O F G RO U P
6%
10%
Revenue
Underlying EBIT(A)
Underlying EBIT(A)% excludes Group functions.
ABN 95 009 211 474
Perenti – Annual Report 2020
21
O P E R AT I O N A L OV E R V I E W
Investments
M I N A N A LY T I C A L
MinAnalytical has led the field with the
world-first PhotonAssay X-ray units,
brought to the market by Chrysos
Corporation. These units are safer,
non-destructive and more sustainable
than traditional fire assay methods, with
significant reduction in turn-around times
for analysing gold samples.
This technology has been described as
the most dramatic step-change in gold
analysis in centuries. The machines are
collectively capable of processing more
than 5,000 samples a day and delivering
results within 12 hours. This, coupled
with the added health and sustainability
elements, offers a real point of difference
for MinAnalytical when compared to our
competitors in this field.
Over the past three years, MinAnalytical
has commissioned and validated two
Chrysos PhotonAssay units in Kalgoorlie
and one in Canning Vale. In addition
to this, the Kalgoorlie units are being
complemented by a fully integrated
sample preparation and automation string
that allows for end-to-end automated
processing, reducing manual handling,
labour and cycle times – all offering
genuine value for our clients.
The target for MinAnalytical is to expand
the number of PhotonAssay units in
operation to five during the coming
year, as we build our client base and
existing clients pursue the value of this
technology-based service offering. Gold
clients are traditionally risk averse and cost
sensitive in what has been a competitive
and largely uniform market. PhotonAssay
technology is showing genuine signs that
it has the potential to change the rules and
the market.
S U P P LY D I R E C T
On the back of globalisation and
technological advances in the mining
sector, the business has recently
consolidated its operations to a
centralised strategic distribution hub
in Johannesburg, South Africa. This
consolidation will make the business
more competitive by improving
efficiency and reducing costs while
maintaining our high level of service
to clients across Africa and beyond.
INVESTOR QUESTION
We understand the Chrysos
PhotonAssay technology in
MinAnalytical is market ready,
how do you view the size of the
opportunity for the Investments
ISG?
PhotonAssay is a non-destructive,
sustainable gold analysis alternative to
conventional fire assaying techniques and
provides a great opportunity for growing
MinAnalytical’s client base. We estimate the
current market potential for PhotonAssay
is +$100M AUD per annum based on the
current size of the Australian gold mining
industry with upside generated from strong
gold prices which we believe are likely to
accelerate mine production and analysis
demand.
Our proactive approach to seeking new
business and developing new markets
has seen significant growth in our market
and client share over the past financial
year, despite the onset of the COVID-19
pandemic and its impact on the activities
of several of our clients.
We are proud of our entrepreneurial
approach and our ability to tailor
equipment and solutions to clients’ needs
in a variety of mining operations, from
exploration to beneficiation. As part of this
approach, we introduced a new business
line, Mining Systems and Solutions (MSS).
This provides purpose-built, high-end
specialist remanufactured and reverse-
engineered equipment, and has provided
a good platform to build on in the 2021
financial year.
C A S E S T U D Y
MinAnalytical Phase 2 PhotonAssay
automation
MinAnalytical was on the first wave of technology
when PhotonAssay changed the game in gold assaying
processes just a few years ago. Now we are excited
to lead the next stage as front-end automation helps
unlock the full value of this technological transformation
in gold sample analysis. We expect a milestone which
has been two-years in the making to be realised early in
the 2021 financial year, when the new robotic capability
goes online in our PhotonAssay units in Kalgoorlie,
dramatically improving the speed and efficiency of the
assaying process.
We collaborated with automated sampling specialists to
make this concept a reality. Automation streamlines the
process from field to laboratory and takes away almost
all manual handling of samples. This means a faster,
more cost-effective system for our clients, improved
safety for our people and much improved integrity of
the ore sample. It will also significantly increase the
capacity of the system, meaning we are able to unlock
the full value of the PhotonAssay technology. When it
is fully operational, we believe our facility will be the
highest volume automated gold laboratory in the world,
with unprecedented productivity, safety, quality and
turnaround time.
22
Perenti – Annual Report 2020
ABN 95 009 211 474
O P E R AT I O N A L OV E R V I E W
Investments
C A S E S T U D Y
Supply Direct Group
Global supply chains have been one of the areas
impacted by the COVID-19 pandemic and the broader
mining industry was not immune to these challenges.
The Supply Direct Group had to call on its 20-plus
years of experience in the global arena when South
Africa went into lockdown in response to the COVID-19
pandemic. The engineering, sales and logistics teams
worked tirelessly from their home offices to find new
opportunities in a contracting market. We identified idle
and surplus equipment that was desperately required
by our clients. These products would traditionally be
supplied by major manufacturers, but they had run
out of stock and could not be replenished as their
production plants were shut down due to government
restriction. With air freight heavily constrained, we
chartered planes and consolidated loads from North
America and Europe to stockpile products at our facility
in Johannesburg to then ship directly to our clients in
Africa and Asia. Underpinning everything we did were
the Perenti strategic pillars of operational excellence and
innovation, ensuring profitable and sustainable growth,
even in the most turbulent times.
S M A R T E R
T O G E T H E R
Since bringing all the different
departments within BTP together,
we have worked to strive for a
common goal. This has proven
that together we are smarter, and
together we can produce results.
K ATRINA LOZENICINS
Inventory Controller –
Purchasing BTP
L O G I S T I C S D I R E C T
W E L L CO N T RO L S O L U T I O N S
Competitive markets, regulatory
requirements and COVID-19 restrictions
have caused challenges across the
mining industry, however Logistics
Direct continued to deliver quality
services across the board for its clients.
Of note, the COVID-19 pandemic led
to a reduction in imports by clients and
associated logistical challenges.
Key operational highlights for the year
included the retention of key client
accounts during these challenging
economic conditions. We also provided
intensive support and specialist
assessment over an eight-month period to
African Mining Services on client-related
affairs, resulting in a positive outcome for
the business.
Focus areas for the 2021 financial
year include an enduring emphasis on
the health and safety of our people,
continuing to adapt and proactively
respond to the challenges presented by
COVID-19, and providing clients with the
high level of service and certainty they
have come to expect from dealing with
Logistics Direct.
Well Control Solutions (WCS) is a supplier
of drilling and completion pressure
control equipment, spare parts, rental
equipment and maintenance services
to oil and gas projects in Australia and
overseas.
WCS is a domestic agent for top global
OEM brands. During the year, WCS
expanded its service offering when it
qualified with Berg Engineering to provide
domestic Blow Out Preventer (BOP)
weld repair services on integrated pressure
control equipment. This accreditation
permits WCS to provide weld services for
repair and re-certification of integrated
BOPs in Australia, rather than having this
work done offshore.
During the second half of the 2020
financial year, a combination of
COVID-19 impacts and negative shifts
in oil demand fundamentals affected
the industry significantly. However, WCS
adapted quickly, retaining key people and
delivering a sound financial performance.
The oil and gas market continues
to present uncertainty, but the WCS
business and management team are well
positioned to navigate these obstacles.
Perenti – Annual Report 2020
23
F I N A N C I A L R E V I E W
Robust performance in a year
of unprecedented challenges
The financial year ended 30 June 2020
was a year of significant challenges,
in particular the global upheaval from
the COVID-19 pandemic. Pleasingly,
the Group delivered robust financial
results in this unprecedented year,
demonstrating the strength and
resilience of the business.
Perenti reported FY20 revenue of
$2.04 billion, up 4 per cent on FY19,
and underlying Net Profit After Tax
(excluding Amortisation) of $110 million,
down 14 per cent on a proforma basis
largely due to tax impacts.
Perenti did incur some one-off items in
the year that impacted the FY20 results.
Although those impacts were not to
the same extent as FY19 – which was
complicated by several one-off events,
in particular the accounting treatment for
the acquisition of Barminco and
50 per cent share of the AUMS Joint
Venture in October 2018 – it does
mean the FY20 statutory results do
not necessarily reflect the underlying
performance of the business.
As such, the Group has presented
underlying results for FY20 and proforma,
underlying results for FY19, which
removes the impact of amortisation and
one-off items, and assumes the Group
had owned Barminco from 1 July 2018,
providing a more accurate like-for-like
comparison. The statutory results are
audited and prepared in accordance with
the relevant accounting standards and
other regulatory requirements.
U N D E R LY I N G R E S U LT S
Revenue
BY ISG
• Underground
• Surface
• Investments
FY20 RECONCILIATION OF STATUTORY TO UNDERLYING RESULTS
$MILLION
Statutory results
Non-cash amortisation of customer related and software intangibles
Statutory results before amortisation
Less non-recurring items below
Non-cash impairment
Transaction and other one-off costs
Foreign exchange loss
Profit on sale of Connector Drilling
Boungou/Bissa project cessation one-off costs
Net tax effect
Minority profits
Underlying results
REVENUE
EBITDA
2,046.1
-
2,046.1
-
-
-
-
(1.5)
-
-
370.4
-
370.4
59.6
8.0
3.3
(2.4)
5.0
-
-
EBIT
99.7
38.6
138.2
59.6
8.0
3.3
(2.4)
5.0
-
-
2,044.6
443.8
211.7
64%
30%
6%
NPAT
27.6
38.6
66.1
59.6
8.0
3.3
(2.4)
5.0
(25.6)
(3.7)
110.3
24
Perenti – Annual Report 2020
ABN 95 009 211 474
F I N A N C I A L R E V I E W
Underlying results
F Y2 0 F I N A N C I A L P E R F O R M A N C E
Revenue growth in FY20 to $2.04 billion
represented the breadth of Perenti’s
diverse revenue base, both across
geographies and segments. In light of
the challenges faced during the year, we
consider the ability to deliver revenue
growth to be a strong result.
Looking more closely at where the
revenue was generated helps to
demonstrate the diversity of the business.
Perenti’s FY20 revenue was generated
from over 55 different projects across
11 countries. The single largest project in
the portfolio contributed seven per cent
of the Group’s revenue for the year and
the top 10 projects collectively 49 per
cent of revenue. Although all projects and
contracts, irrespective of their size, are
extremely important to Perenti, the Group
is not reliant on any one project to deliver
the desired returns to our shareholders.
The Group is largely agnostic to
commodities seeing as we apply similar
mining methods across minerals, with
the exception of underground soft-rock
mining (for example, underground coal
mining). Therefore, our commodity
exposure is an outcome of our strategy to
pursue quality projects with clients where
we can build long-term relationships.
The Group’s surface and underground
mining service offering, including the
people, equipment and processes, can
be applied across commodities and
is transferable. When identifying and
selecting projects and contracts, our
focus is the quality of the client, the quality
of the project, the jurisdiction risk, and the
estimated return on capital employed. We
take particular care to partner with clients
who operate high-quality mines that sit
low on their respective commodity cost
curve to build a long-term and sustainable
earnings stream. In FY20, 68 per cent
of the Group’s revenue was generated
from gold projects, 10 per cent from
nickel projects and the balance from nine
different commodities.
At a segment level, the Surface ISG had
a challenging year. The cessation of the
Nsuta project in Ghana and the Boungou
and Bissa projects in Burkina Faso resulted
in revenue reducing by 19 per cent to
$606 million. The loss of revenue from
those three projects was partially offset
by more than $550 million in contract
extensions and new work secured under
new management disciplines, including
at Tarkwa and Damang in Ghana, and the
Sanbrado project in Burkina Faso. The
Surface ISG represented 30 per cent of
Group revenue for the year, with
30 per cent of its revenue generated from
Australia and the remaining 70 per cent
from Africa.
The Underground ISG continued to deliver
exceptional results. Revenue increased by
20 per cent to $1.3 billion on the back of
a full-year contribution from the Obuasi
project in Ghana, new work commencing
at the $800 million Zone 5 project in
Botswana starting in H2 FY20 and scope
increases at Yaramoko, Siou and Mt Colin.
Underground accounted for 64 per cent
of Group revenue in FY20, up from 55
per cent of proforma revenue in FY19. By
geography, 46 per cent of revenue was
generated from Australia, 19 per cent
from Ghana, and the balance from other
locations. The outlook for Underground
is positive.
The Investments ISG’s performance was
in line with FY19, with a modest reduction
in revenue to $138 million. Investments
contributed six per cent of the Perenti
Group’s revenue in FY20, with BTP
representing 73 per cent of Investments
revenue.
FY20 Group earnings were slightly lower
than FY19, with underlying EBIT(A) of
$212 million compared to proforma FY19
EBIT(A) of $217 million. We consider
this to be a robust result given the
challenges faced by the business in
FY20, demonstrating the resilience of the
business to external market factors.
At an ISG level, the underlying EBIT(A)
of $25 million and EBIT(A) margin of
4.2 per cent contributed by the Surface
ISG for FY20 was lower than FY19 and
below Perenti’s targets. However, the
success of initiatives to transform AMS
and other initiatives implemented by the
new Surface management team did start
to achieve results during the year, as seen
with second half FY20 EBIT(A) up
31 per cent over first half FY20 EBIT(A).
The Surface business overhead costs
were reset in FY20 to better match current
work, but also to ensure the sustainability
of the business model to support business
growth. Our focus on improving Surface
performance will continue until revenue
and earnings margins return to levels
acceptable to management.
The Underground ISG EBIT(A) increased
largely in line with revenue, growing
19 per cent to $196 million, with EBIT(A)
margins maintained above 15 per cent.
This was a strong result when considering
new project ramp-up costs in the year
and productivity impacts of COVID-19
in the fourth quarter, with earnings only
slightly lower than FY19. Underground
represented 80 per cent of overall Group
EBIT(A) (excluding group services).
ABN 95 009 211 474
Perenti – Annual Report 2020
U N D E R LY I N G R E S U LT S
Revenue
BY COUNTRY
• Australia
• Ghana
• Burkina Faso
• Mali
• Tanzania
• Egypt
• Senegal
• Other
BY COMMODIT Y
• Gold
• Nickel
• Zinc
• Iron Ore
• Copper
• Manganese
• Thermal Coal
• Metallurgical Coal
• Other
BY PROJECT
• Top Project
• Top 2 - 10 Projects
• Top 11 - 20 Projects
• All others
44%
19%
14%
7%
5%
4%
4%
3%
68%
10%
5%
4%
3%
2%
2%
1%
5%
7%
42%
22%
29%
25
F I N A N C I A L R E V I E W
Underlying results
Our Investments ISG delivered an EBIT(A)
result in line with FY19, with FY20 EBIT(A)
of $25 million reflecting the modest
reduction in revenue being offset by
margin improvement. The BTP business
is the most significant component of
the Investments ISG, representing
73 per cent of the ISG’s revenue in FY20.
In February 2020, Perenti advised that it
was considering a potential divestment of
BTP as part of its ongoing portfolio review
under the 2025 Group strategy. In June,
we advised that Perenti did not receive an
acceptable binding offer, with COVID-19
impacting the process and commercial
terms presented that did not represent
value for Perenti shareholders. As such,
we formally concluded the sale process,
in line with our disciplined approach to
M&A. The FY20 results demonstrate BTP’s
ongoing performance for its clients and
Perenti is now focused on growing the
business.
Other businesses in the Investments ISG
include Well Control Solutions, whose
exposure to Queensland’s oil and gas
market impacted fourth quarter results.
The cost base has now been addressed
to align with revenues. Supply Direct
and Logistics Direct responded well to
challenges presented by COVID-19 and,
along with MinAnalytical, performed in
line with expectations. The opportunity
presented by MinAnalytical’s PhotonAssay
technology is of particular interest moving
into FY21.
C A S H A N D B A L A N C E S H E E T
The services we offer in the Underground,
Surface and Investment ISGs are capital
intensive. Thus, it is imperative for the
Group that we manage and allocate
capital efficiently. Equally, we must
convert earnings into cash. Therefore, we
will maintain our discipline on efficient
capital and working capital management
and allocation as well as EBITDA cash flow
conversion to further enhance returns to
our shareholders while providing excellent
operational performance for our clients.
The Group’s return on average capital
employed (ROACE), a key metric for
determining our success in capital
allocation, for the year was 16.6 per cent,
based on underlying EBIT(A). As with
the EBIT(A) contributions, the drivers of
the Group ROACE were the delivery of a
very strong result from the Underground
ISG coupled with a solid result from
the Investments ISG, then offset by the
underperformance of the Surface ISG.
A key and ongoing focus for management
is to improve return on capital from our
Surface ISG and inroads are being made
to effect this change.
ROACE for FY20 also reflects the
non-cash impairment of $59.6 million
presented in the statutory accounts,
incorporating a reassessment of the
recoverable value of the assets located at
the Boungou site in Burkina Faso, Power
Solutions Africa and assets and inventory
held by BTP.
Cash flow conversion, which we
measure as the conversion of EBITDA
to cash inflow to the Group, was 96 per
cent for the year, driven by a significant
improvement in second half FY20 from
68 per cent reported in the first half
of FY20 and resulting in stronger cash
flow conversion in FY20 over FY19. The
improved result reflects management’s
continued focus on cash-backed earnings
and working capital management under
the 2025 Group strategy. This involves
ensuring we get paid on time, that
inventory levels are carefully managed,
and that creditors are paid on appropriate
terms. Of note, Perenti was able to
increase cash repatriation from Africa.
We will continue to focus on both the
management of receivables and inventory
levels across the Group, as we still
believe there is room for working capital
improvement.
As a result of our focus on working
capital management, Perenti delivered
a strong cash flow generation before
shareholder returns of $135 million in
FY20, representing a cash flow yield of
16.6 per cent*.
The Group ended FY20 with $328 million
of cash as at 30 June 2020. Perenti’s
cash balance increased throughout
FY20, standing at $244 million on
31 December 2019 and $224 million on
30 June 2019. Debt rose marginally to
$884 million from $873 million on
31 December 2019, largely due to foreign
exchange movements on the US Dollar
denominated Barminco Notes. Perenti
does have a significant US Dollar asset
base that provides a natural hedge to
the debt, with the Australian Dollar value
of Perenti’s asset base increasing with
movements in foreign exchange, to offset
an increase in debt.
Perenti strengthened its balance sheet
position in the year, with net debt (total
debt less cash) reducing to $556 million
and net leverage (net debt to EBITDA)
to 1.3x, from $630 million and 1.4x
respectively on 31 December 2019. Of
note, Perenti has a strong tangible asset
backing – as at 30 June 2020 Perenti had
fixed assets of $0.9 billion, growing to a
total asset position of $1.6 billion after
including cash and working capital.
* Cash flow yield calculated as cash flow before
shareholder return per share divided by the Perenti
share price at market close on 30 June 2020.
U N D E R LY I N G E B I T ( A ) M A RG I N
10.4%
GROUP
10.9%
11.0%
10.4%
2018
2019
2020
4.2%
SURFACE
9.0%
7.6%
2018
2019
4.2%
2020
15.1%
UNDERGROUND
14.2%
15.3%
15.1%
2018
2019
2020
18.2%
INVESTMENTS
17.8%
18.2%
14.2%
2018
2019
2020
2018 and 2019 figures are proforma underlying figures
which include 100% of Barminco and AUMS for a full
12 months and exclude amortisation and any non-
underlying items.
26
Perenti – Annual Report 2020
ABN 95 009 211 474
F I N A N C I A L R E V I E W
Underlying results
This is up from $1.5 billion at 30 June
2019. Perenti’s tangible assets include
a large mobile fleet of 1,400 units
comprising dozers, drills, loaders, trucks,
excavators and other ancillary equipment,
with an average utilisation of 82 per cent
across the core mining fleet in FY20.
Capital and liquidity management was a
primary focus of management under the
2025 Group strategy, in particular with
Perenti seeking to further strengthen
its liquidity position throughout the
COVID-19 period. This includes Perenti
securing additional debt funding by
increasing the size of its revolving
credit facility (RCF) by $130 million,
as announced on 15 June 2020. The
increase was supported by members of
the Group’s existing $400 million RCF,
which matures on 1 July 2023, with new
credit and covenant terms that are either
consistent with, or more favourable, than
those in the existing RCF. Perenti’s liquidity
position ensures the Group is well placed
to withstand the ongoing economic
challenges COVID-19 may present and
provides the Company with greater
flexibility to fund growth opportunities.
O N E- O F F A D J U S TM E N T S
Several one-off adjustments impacted
the results for the year, the net impact of
which was positive $82.8 million on the
statutory net profit after tax. The one-off
adjustments have been fully disclosed in
the financial statements. The following
commentary provides a high-level
explanation of the rationale and drivers
for the adjustments.
Transaction and one-off costs
During FY20, $8 million of one-off
costs were incurred by the Company,
comprising:
∞ non-cash transaction cost
amortisation in relation to the
Barminco acquisition which ended in
August 2019
∞
transaction costs in relation to
potential acquisitions and divestments
reviewed in FY20.
Non-cash impairment
The statutory results include a non-cash
impairment of $59.6 million incorporating
a reassessment of the recoverable value of
the assets located at the Boungou site in
Burkina Faso, Power Solutions Africa and
assets and inventory held by BTP.
Boungou / Bissa project cessation
one-off costs
The Company has normalised for net
$5 million of one-off costs incurred
in relation to the cessation and rapid
demobilisation of the Boungou and Bissa
projects as a result of the terrorist event.
Profit on sale of Connector Drilling
The Company has removed the gain
made on the sale of Connector Drilling
in FY20 of $2.4 million.
Net foreign exchange loss
The Company has adjusted for the net
realised and unrealised foreign exchange
loss of $3.3 million to provide a more
accurate comparison of the underlying
financial results for the year ending
30 June 2020.
Amortisation of intangibles
As a result of the acquisition of
Barminco, the Company booked
intangible assets relating to customer
contracts and relationships, this
intangible asset is amortised effectively
over the term of the contracts to which
it relates. Amortisation in FY20 totalled
$38.6 million.
Taxation benefit
The net tax effect of all the one-off
adjustments noted above being
$25.6 million.
Minority profits
Minority interest adjustment in relation
to the UMA joint venture with Rocksure,
$3.7 million.
ROAC E
16.6%
15.9%
16.9%
16.6%
2018
2019
2020
2018 and 2019 figures are proforma underlying figures
which include 100% of Barminco and AUMS for a full
12 months and exclude amortisation and any non-
underlying items.
N E T L E V E R AG E
1.3x
1.4x
AASB16 Leases
1.3x
1.3x
2018
2019
2020
Net Leverage at 1.3x (1.2x excluding $57.9 million
operating leases recognised as right of use liabilities
as part of AASB16 Leases).
E N A B LE
T O M O RROW
As someone who works
with remote technology for
underground operations, enabling
tomorrow means working with
and advancing technology to help
us work safer and more efficiently.
BRENTON RYKE
Remote Bogger Operator –
Barminco
ABN 95 009 211 474
Perenti – Annual Report 2020
27
F I N A N C I A L R E V I E W
Business and risks
B U S I N E S S A N D S U S TA I N A B I L I T Y
R I S K S
The Group’s operations are diverse with
exposure to multiple geographies and
markets. As a result, its operations are
impacted by both global and local factors
and it is exposed to a range of market,
financial, operational, and socio-political
risks that could have an adverse effect on
the Group’s future financial prospects.
These factors may arise individually,
simultaneously or in combination. Key
risks, including those arising due to
externalities such as the economic, natural
and social operating environments, are
set out below, together with the Group’s
approach to managing those risks.
The risks identified describe certain
factors and trends that have the potential
to have a material adverse impact on
the financial condition and results of
operations. The factors are not necessarily
listed in order of importance and are not
intended as an exhaustive list of all the
risks and uncertainties associated with
the Group’s business. Additional risks
and uncertainties not presently known
to management, or that management
currently consider to be immaterial or
manageable, may adversely affect the
Group’s business.
The Group has a consistent, proactive
approach to risk management across
operations globally aligned with
ISO 31000, as well as the ASX Principles
and Recommendations. The Group’s
commitment to strong governance
extends through to the approach taken to
risk management systems and controls
and the recent establishment of an
internal audit function.
For further information on the Group’s
risk management framework, refer to
our Corporate Governance Statement at
perentigroup.com.
CONTEXT
RISK
MANAGEMENT APPROACH
Communicable disease outbreaks, including COVID-19
Our operations expose us to risks
associated with communicable
disease outbreaks and other public
health emergencies, such as the
recent outbreak of COVID-19.
∞ The outbreak of communicable diseases
∞ The Group’s key priorities on COVID-19 are for the
Company to play its role in limiting the spread of the virus,
protecting the health and safety of its people, delivering
value for its clients and stakeholders, and ensuring the
Group is implementing appropriate strategies and actions
to place the Group in the strongest possible financial
position in this ever-changing environment.
∞ The Group has established a COVID-19 taskforce to
manage the situation, consider potential impacts, and
implement risk mitigation strategies.
∞ The Group works closely with key stakeholders to
ensure operations continue effectively within COVID-19
protocols, including practicing social distancing and
additional hygiene measures. The Group provides clear
guidelines to its employees and contractors on actions to
take to minimise the potential for infection and enforces
the relevant quarantine guidelines in the countries in which
it operates.
∞ The Group undertakes extensive planning to facilitate
the mobility of its international and regional expatriate
workforce as the Company manages international flight
cancellations and COVID-19 travel restrictions.
∞ Capital and liquidity management has been a primary
focus of management under the 2025 Group strategy,
with the Group further strengthening its liquidity position
throughout the COVID-19 period. This includes the Group
securing additional debt funding by increasing the size of
its revolving credit facility by $130 million, as announced
on 15 June 2020.
around the world may lead to interruptions
in operations, closures at mine sites,
inability to source supplies or consumables,
higher volatility in the global capital and
commodity markets, adverse impacts on
investment sentiment and economies, and
lower demand for commodities, which may
materially and adversely affect the Group’s
business, financial condition and results of
operations.
∞ In addition, such outbreaks may result in
lockdowns, quarantines, restrictions on travel
and public transport. The curtailment of all
travel could significantly impair the Group’s
ability to manage its businesses effectively,
respond to emergencies, and continue
operations.
∞ The COVID-19 pandemic has had many of
these impacts and may continue to do so in
the future.
∞ The Group’s business is also dependent on
the continued health and productivity of its
employees and throughout the COVID-19
period the Group has incurred and will
continue to incur additional costs to ensure
it complies with all applicable health and
safety regulations at each location in which it
operates.
∞ There is no guarantee that the Group’s
efforts to address the adverse impacts of
COVID-19 will continue to be effective. It is
possible that governments could shut down
all operating work sites within a particular
jurisdiction, even without a positive case
of COVID-19. A continuation or escalation
of the COVID-19 pandemic could also
materially affect demand for the saleable
material produced at clients’ mines, which
could affect the Group’s overall operations
and operating results.
28
Perenti – Annual Report 2020
ABN 95 009 211 474
F I N A N C I A L R E V I E W
Business and risks
CONTEXT
RISK
Mining industry risks and competition
Level of new mining services contracts and contract renewals
In the mining industry, most
contracts can be terminated
for convenience by the client at
short notice and without penalty,
although this is not a common
occurrence. When contracts are
so terminated the client pays
for all work completed to date,
unused material and, in most cases,
demobilisation from the sites and
redundancies.
∞ Contracts are at risk of termination or non-
renewal due to the client having no further
need for the service, such as when the mine
has reached the end of its planned life, or
the operator ceases production because
changes in the underlying commodity price
or mining costs have rendered continued
production from the mine uneconomic.
∞ Contracts are also at risk of termination or
non-renewal as a result of competition if
the client seeks to use an alternative mining
services provider to provide the service, or
if the client decides to bring the contracted
services in-house.
MANAGEMENT APPROACH
∞ The Group has historically had a strong record of
completing contracts to term and securing contract
extensions.
∞ The Group is selective in the contracts that it enters into
to allow for options to extend where possible to maximise
the contract period and the return on capital.
∞ The Group focuses on ensuring execution of work to a
high standard and improving its operation to increase its
value proposition to clients.
∞ Application of the Group tender work procurement and
approval processes maximises the likelihood of securing
quality work with commensurate returns for the risks
taken.
∞ The Group maintains a work portfolio diversified by
geography, market, activity and client to mitigate the
impact of emerging trends and market volatility.
Production levels at clients’ mines
The Group’s activity levels
and results are dependent on
production levels at clients’ mines.
Mining services provided in relation
to the production phase (including
development and rehabilitation
work) of a mine represent a large
part of revenue. Revenues are
associated with, and influenced,
by long-term decisions of mine
owners to continue producing at
their current levels or to expand
production at new or existing
mines.
New technology
The rate of technological
improvements in the mining
industry is increasing as is the
potential for the introduction of
new competing technologies by
competitors or other third parties,
or the threat that they may do so.
Climate change
The regulation (and associated
pricing) of greenhouse gasses is
increasing globally. As a result,
there is a growing market pressure
for companies to disclose their
measures for identifying and
managing both physical and
transitional climate related risks. The
physical impacts of climate change
pose a potential threat to people,
infrastructure, local communities,
environment and access to key
mining inputs (such as, access to
water).
∞ Mining services revenues are linked to the
volume of materials moved or drilled and
not to the short-term price of the underlying
commodity or short-term fluctuations in the
profitability of the underlying mines.
∞ A downturn in expenditure in the mining
sector typically impacts existing production
projects last, with areas such as exploration
and infrastructure construction services
typically cut first.
∞ The Group derives most revenues from mines which are
already in production. The Group has limited its exposure
to the exploration activities market which has been
volatile as the level of activity is generally linked to market
sentiment surrounding the outlook for commodity prices
and also the ability of smaller junior mining companies to
fund such activities from capital which is often raised in
the equity markets.
∞ The Group focuses on providing services to large
lower-cost producers which are not subject to the same
production risk as higher-cost operations.
∞ The Group must stay current with
∞ To successfully develop and implement new or current
technological trends in the mining industry
in order to remain responsive to the
technological expectations and needs of
clients and maintain its competitiveness.
Acquiring and introducing innovative
solutions and technologies can be time
consuming, costly and complex.
∞ Delays in completing the development and
implementation of technological innovations
could cause revenues to decline and delay
reductions in costs.
∞ Physical climate change effects that have
the potential to impact the Group include
changes in weather patterns, such as
increased temperatures, altered rainfall
patterns, and more frequent or intense
extreme events such as heatwaves, drought,
storms and increased frequency of natural
disasters. These occurrences may cause
damage to infrastructure and assets, major
business disruption and increased energy
costs.
∞ The Group is also at risk of reputational
damage if key external stakeholders perceive
that management are not adequately
responding to the threat of climate change.
∞ The Group may be exposed to liability for
increased costs related to climate-related
risks under its contracts with clients.
technologies on a timely basis, the Group focuses
on understanding clients’ needs and the potential
technological solutions for such needs, identifying
emerging technological trends and responding promptly
to technological changes by competitors.
∞ The Group is focused on becoming a leader in this area.
It is focused on building its technological capability and
intends to work with equipment suppliers and innovation
specialists to adopt and implement new technologies.
The Group’s Environmental Policy provides the corporate
framework for managing environmental risk and monitoring
and reporting against environmental obligations.
∞ Should an incident occur, emergency response plans will
be enacted.
∞ The Group has calculated and disclosed its scope 1 and 2
greenhouse gas emissions and energy usage as part of the
Sustainability Report included in this Annual Report.
∞ The Group is committed to:
∞ identifying strategies for improving energy efficiency and
reducing greenhouse gas emissions across the Group.
∞ accessing climate change related risks and opportunities.
∞ developing a climate change plan, which considers
the Taskforce on Climate-Related Financial Disclosure
recommendations.
The Group limits its exposure to liability for increased costs
relating to climate related risks under its contracts with
clients.
ABN 95 009 211 474
Perenti – Annual Report 2020
29
F I N A N C I A L R E V I E W
Business and risks
CONTEXT
RISK
MANAGEMENT APPROACH
Instability and security risks in some jurisdictions we operate in
Some of the African jurisdictions
within which the Group operates
are subject to heightened business
risks including health risks, political
instability, nationalisation and
localisation policies, war or civil
disturbance, terrorism, abduction,
expropriation, import and export
restrictions, exchange controls,
inflationary economies, currency
risks, legal and taxation risks,
risks related to the restrictions on
repatriation of earnings or proceeds
from liquidated assets of foreign
subsidiaries, workforce instability,
harsh environmental conditions and
remote locations.
Foreign exchange risk
The Group denominates its
consolidated financial statements
in Australian dollars. Broadly
speaking, the Australian operations
are Australian dollar denominated
and the African operations are U.S.
dollar denominated.
Labour costs and availability
Labour represents a significant
portion of operating expenses. In
order to compete for work and to
service clients, the Group needs to
be able to continue to attract and
retain skilled employees.
Industrial Relations
Industrial relations issues may
be faced in connection with
employees and the employees of
suppliers, including strikes, work
stoppages, work slowdowns,
grievances, complaints and claims
of unfair practices or other industrial
or union activity.
Health and safety risk
The Group’s operations are subject
to many hazards inherent in the
mining services industry. Some of its
activities, in particular drill and blast
services and underground mining
services, are by their nature among
the higher risk activities undertaken
at a mine site.
∞ Changes in regulation in overseas
∞ Board approval is required to enter a new jurisdiction.
jurisdictions, including changes in the way
regulations are managed and enforced,
have the potential to impact the Group’s
performance (for example, if the Group is
unable to comply with new legislation, or if
new regulation leads to significantly higher
royalties and taxes).
∞ Specific jurisdictional risks including health
risks, political instability, nationalisation and
localisation policies, war or civil disturbance,
terrorism, abduction could negatively impact
the Group.
∞ The Group is exposed to fluctuations in the
value of the Australian dollar against other
currencies, as the Group’s consolidated
financial results are reported in Australian
dollars.
∞ If the Group generates sales or earnings or has
assets and liabilities in other currencies, the
translation into Australian dollars for financial
reporting purposes can result in a significant
increase or decrease in the amount of those
sales or earnings and net assets.
∞ The Company ensures that it has a comprehensive
understanding of the overseas jurisdiction (including
the social, political and regulatory environment) before
entering it.
∞ Management monitors the Group’s current and potential
geographies, industries, activities and competitors on an
ongoing basis.
∞ The Group employs a Group Manager – Security and
Emergency with regular reporting on security matters.
∞ There is ongoing communication with the businesses
and reporting on operations and developments in all
jurisdictions in which the Group operates.
∞ The Group limits its risks contractually such as requiring
the right to terminate the contract in cases of significant
deterioration in the security environment or where the
Group is unable to obtain competitively priced political risk
insurance in certain jurisdictions.
∞ The Group uses a natural hedge through its U.S. dollar
denominated overseas contracts.
∞ The Group ensures that the net exposure is kept to an
acceptable level by matching foreign denominated
financial assets with financial liabilities and vice versa.
∞ The Group does not engage in any speculative trading
activities.
∞ The Group is exposed to increased labour
costs in markets where the demand for
labour is strong.
∞ The Group’s labour costs are typically protected by
rise and fall mechanisms within client contracts, which
mitigate the impact of rising labour costs.
∞ Changes to labour laws and regulations
∞ In Australia, wage labour costs are typically governed by
may limit productivity and increase costs
of labour. If implemented and enforced,
these types of changes to labour laws and
regulations could adversely impact revenues
and, if costs increase or productivity declines,
operating margins.
agreed enterprise agreements, which set out agreed wage
increases within defined periods of time.
∞ The Group has an apprenticeship program and focuses on
training and development of its employees.
Any such activity could cause production
delays, increased labour costs and adversely
impact the ability to fulfil existing contracts or
win new contracts. As a result, operating results
may be materially adversely affected.
The Group’s workforces are regulated by common law
contract arrangements, awards, enterprise bargaining
agreements, and local national workforce legislation.
The Group liaises with stakeholders regularly to minimise
the impact of any industrial relations activity.
Even though the Group’s commitment to health
and safety is one of its core business objectives,
and there is a focus on improving health and
safety performance including fatality prevention
and reducing the All Injury Frequency Rate
(AIFR), it is possible that the Group may
experience accidents (including fatalities) in the
future, causing the Group’s health and safety
record to deteriorate.
∞ The Group is committed to providing safe and healthy
working conditions for its employees, contractors and
visitors. The Group supports a safety conscious culture and
provides appropriate training, supervision and resources
which promotes and embeds safe operating practices
throughout the Group.
∞ The Group has established HSE management systems
consistent with international standards and is in the
process of developing a Pandemic Plan in conjunction
with leading medical and travel security organisations.
The Group seeks to continually improve its HSE
management systems to eliminate hazards and minimise
health and safety risks. The Group’s Safety and Health
Policy, Health, Safety and Environment Management
System and its Critical Risk Standards and verification
processes provide the corporate framework for managing
health and safety risks.
∞ The Group recognises the importance of leadership
training and development to support a mature culture
which includes specific programs in relation to safety.
30
Perenti – Annual Report 2020
ABN 95 009 211 474
Perenti Global Limited (Perenti)
ABN 95 009 211 474
S U S T A I N A B I L I T Y
R E P O R T
2 0 2 0
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
Our company tagline - Expect More -
captures what sustainability means to
us. At Perenti, we recognise that societal
expectations, and therefore those of
financial markets, governments, clients
and communities, frame the boundaries
in which we and the rest of the mining
industry operates.
For Perenti, demonstrating our genuine
commitment to social, environmental,
ethical and economic matters is essential
if we are to achieve our aspiration to
be the indispensable mining services
company and to fulfil our purpose of
creating enduring value and certainty.
Perenti aims to become a leader in
sustainability and realise value by:
No shortcuts – never compromising our
ethics, health and safety standards and
our commitment to human rights.
Never wasteful – caring for the
environment and actively seeking ways to
reduce our footprint.
Smarter together – working as one team
and focussing on the issues that matter to
our people.
Walk in their shoes – actively listening to
our clients and host communities, seeking
to create local jobs and opportunities that
deliver local benefit.
Enable tomorrow – through living our
principles and integrating sustainability
within our organisation and operations.
Our sustainability framework and
this report are structured around our
principles. They are meaningful to
our employees, actively supported by
our leaders and cover a broad suite of
sustainability issues that are relevant to
the business. Each of the principles are
interconnected and self-supporting,
rather than being standalone. Therefore,
while sustainability areas of focus have
been allocated to a single principle, they
have relevance to each of the other
principles as well.
O U R S U S TA I N A B I L I T Y F R A M E WO R K
NO
SHORTCUTS
NEVER
WASTEFUL
SMARTER
TOGETHER
WALK IN
THEIR SHOES
ENABLE
TOMORROW
Ethics & Governance,
Human Rights,
Health & Safety
Environment
Our
People
Our Clients and
Local Communities
Living our
Principles
We never compromise
our standards and always
respect and protect
human rights.
We care about the
environment and actively
seek ways to reduce our
environmental footprint.
We continue to raise the
bar in safety, performance
and transparency.
Everyone is empowered to
speak-up if something is
not right.
We act when we see a
hazard and always have
each other’s back.
We acknowledge the
urgency to act on climate
change and are committed
to play our part.
We operate as efficiently as
possible, striving to reduce
greenhouse gas emissions,
energy and water use and
waste where possible.
We work together as
one team.
We listen and prioritise our
focus on the issues that
matter to our people.
We value employee
wellbeing, inclusion and
diversity and the benefits
they bring.
We aspire to grow our own
leaders by encouraging
and supporting people
achieve their best.
We are smarter together
and safer together.
We acknowledge and
respect that we are
guests in the communities
we work.
We listen and genuinely
engage with our clients
and local communities
to understand the issues
that matter.
We strive to create local
jobs and where possible
use local goods and
services.
We aim to support
programs that benefit
local people.
We recognise and
celebrate our people that
live our principles.
We actively embrace
change, enabling new
technologies and smarter
ways of working.
We manage both the
urgent and important.
We integrate sustainability
considerations into
business processes and
our operations.
32
Perenti – Annual Report 2020
ABN 95 009 211 474
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
As a recently integrated group of
companies, we are relatively early in
our sustainability journey with this
being our first external sustainability
report. We are committed to improving
our sustainability performance and
disclosure in future years and driving
sustainability initiatives across our
businesses.
S T RU C T U R E A N D S CO P E O F T H E
R E P O R T
This report is for the 2020 financial year
and it covers Perenti and its Industry
Sector Group’s (ISGs):
The intention is to report against
additional performance metrics over the
coming years. Case examples from across
our ISGs and our geographic footprint
are used to illustrate our sustainability
approach in practice.
African Mining Services,
Ausdrill
Barminco,
African Underground
Mining Services
BTP, MinAnalytical,
Supply Direct, Logistics
Direct, Well Control
Solutions
The report is structured around Perenti’s
sustainability framework, with the
associated performance metrics aligned
with the Global Reporting Initiative
(GRI) and other recognised industry and
international reporting standards.
M AT E R I A L I S S U E S
To ensure Perenti’s sustainability
framework and reporting is holistic
and robust, an internal analysis was
undertaken in the 2020 financial year of
our sustainability related risks. Priority
issues were identified through conducting
interviews with relevant functional heads,
review of the Perenti material risk register,
investor information requests, analysis
of client and competitor disclosures and
external expertise.
In future years we plan to undertake
materiality assessments involving internal
and external stakeholders.
S U M M A RY O F O U R P E R F O R M A N C E
No shortcuts
Ethics and governance
Compliance with Code of Conduct
Compliance with Continuous Disclosure
Safety and health
Total Fatalities
Lost Time Injury Frequency Rate (LTIFR)
Total Recordable Injury Frequency Rate (TRIFR)
All Injury Frequency Rate (AIFR)
Fines and Prosecutions
Never wasteful
Environment
Greenhouse gas emissions – scope 1
Greenhouse gas emissions – scope 2
Energy consumed
Total significant environmental incidents
Fines and prosecutions
Smarter together
Our People
Total workforce
Employees by region:
∞ Australia
∞ Africa
∞ United Kingdom
∞ Asia
∞ North America
Total Voluntary Turnover Rate
Females on the Board
Females in senior management
Females in the workforce
Local participation in international workforce
Metric
2020
2019
# breaches
# breaches
0
0
1
0
#
# incidents per million hrs worked
# incidents per million hrs worked
# incidents per million hrs worked
#
1
0.3 (0.30)
4.9
26.2
0
0
0.3 (0.25)
4.5
27.0
0
tonnes CO2-e
tonnes CO2-e
gigajoules
#
#
#
%
%
%
%
%
%
# / %
%
%
%
6,456
5,546
125,424
0
0
0
0
7,729
8,270
37.1
62.7
<1.0
0
<1.0
14.7
2 / 29
16.2
8.6
88.2
32.4
65.8
<1.0
1.8
0
20.3
1 / 14
11.1
7.4
90.0
ABN 95 009 211 474
Perenti – Annual Report 2020
33
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
N O S H O R T C U T S
Ethics and governance
Perenti is committed to the highest
standards of corporate governance.
The Board has established a governance
framework consistent with the ASX
Corporate Governance Council’s Governance
Principles and Recommendations. We value
integrity, ethical behaviour, accountability,
transparency, and respect for others.
We believe that these are essential for the
long-term performance and sustainability
of the business and to protect and
enhance the interests of shareholders and
other stakeholders. The Group Executive
and Senior Management have key
performance indicators that include the
health and wellbeing of our people as well
as embedding the Perenti principles that
underpin workplace behaviour.
Code of Conduct
Perenti’s commitment to good corporate
governance and responsible business
practice is outlined within our Code of
Conduct, which was approved by the
Board in January 2020. The code, which
is underpinned by our principles, sets out
the standards of behaviour expected of
our directors, employees, consultants,
contractors and suppliers. The standards
of behaviour are further detailed in
our Code of Conduct booklet which is
provided to all employees and is made
available on the Company’s intranet and
website.
In FY21 a revised training module covering
the Code of Conduct is to be launched
for all employees with expectations that
refresher training is completed a minimum
of every two years.
Supporting a culture that ‘Speaks Up’
Individuals are encouraged to report
without reprisal any concerns about
wrongdoing and unethical practices.
Our Speak Up Policy, approved by the
Board in December 2019, sets out the
expectations that all employees have
a responsibility to help detect, prevent
and report immediately instances of
misconduct. Individuals have several
options available to them to disclose
concerns anonymously and confidentially
including an independently managed
ethics line called ‘FairCall'. In the 2020
financial year no material breaches of the
Code of Conduct were reported.
Anti-bribery and anti-corruption
Honesty and integrity are integral to
our principles and the way we conduct
business. In January 2020, the Board
approved the Anti-Bribery and Anti-
Corruption Policy and Standard, which
among other things, explicitly prohibits
political donations and facilitation
payments regardless if it is legal in a
country to do so and requires employees
to declare offers of gifts and hospitality.
Our anti-bribery and anti-corruption
standards and expectations are addressed
in our employee induction program, with
associated provisions included within
Group supplier agreements and master
goods and service contracts. Employees
are encouraged to raise any concerns with
their manager or through our FairCall
service.
In FY21 we will:
in compliance with our continuous
disclosure obligations. In January
2020, the Board approved our Market
Disclosure and Communication Policy.
Our Disclosure Committee is chaired by
the Group General Counsel and provides
updates to the Board as required.
In the last financial year, we made
123 announcements and disclosures via
the ASX with no breaches of continuous
disclosure.
Industry association membership
Perenti, or its operating businesses, is
a member of peak industry bodies and
organisations including:
∞ Australia-Africa Minerals & Energy
Group (AAMEG)
∞ Association of Mining and Exploration
Companies (AMEC)
∞ Chamber of Minerals and Energy of
Western Australia (CMEWA)
Deliver tailored anti-corruption
and anti-bribery training to high
risk roles across the Group.
∞ Gold Industry Group
∞ Ghana Chamber of Mines.
These organisations provide Perenti
with the opportunity to network as
well as to influence sustainability policies
and standards across the industry.
Membership of these organisations
is signed off by the responsible
Chief Executive Officer of the ISG
with engagement consistent with our
Code of Conduct.
WA LK I N
T H E I R S H O E S
We work for a range of clients that
have varying needs. For me, walk in
their shoes means understanding
what problems our clients have and
how we can apply innovation or
technology to solve those problems
providing them with a solution that
best meets their needs.
CLINT RICET TI
Innovation and Technology Manager –
Ausdrill
Cyber and information security
We recognise that the potential for
cyber-attack and loss, misuse or release
of critical information is a real risk for the
organisation. Perenti’s Chief Information
Officer has overall responsibility for
information management and cyber
security including the communication of
progress on related controls to the Board.
We have a dedicated work program
and budget for cyber and information
security, with employees receiving regular
communications on what they should
do to manage potential threats. In FY20
we engaged a third party to undertake a
security assessment of critical business-
related information against relevant
external standards to help inform priority
areas for investment.
In FY21 we will:
Finalise an information
management security framework
and a three-year cybersecurity
plan
Develop and roll-out a data
protection standard for the Group
Undertake a cybersecurity
incident training response
exercise.
In FY21, we will be customising the Speak
Up Policy and Speak Up Standard for all
overseas jurisdictions in which Perenti
operates.
Timely and transparent disclosures
We are committed to providing our
shareholders and the market with full and
timely information about our activities
34
Perenti – Annual Report 2020
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
Human rights and modern slavery
Respect for human rights is an important
baseline expectation for all businesses.
We acknowledge that the nature of the
mining industry means companies in the
sector are particularly exposed to human
rights related risks. We are committed to
always respecting and protecting human
rights, including those relating to just,
safe and fair conditions of work; right to
health; right to life and security of person;
and freedom of association, freedom
from slavery, forced and child labour. The
expectations of our employees relating to
human rights are set out within our Code
of Conduct.
Security
Perenti is committed to ensuring that we
are prepared to prevent, respond and
recover from security risks which may
impact our people, the environment,
assets, business operations or reputation
consistent with the Voluntary Principles
on Security and Human Rights.
The Group has adopted an intelligence
led (acquired and predictive) risk-based
approach to security planning and
management. This approach includes
undertaking an assessment of security
related risks prior to entering a new
country as part of the contract tender
review process. In FY20, Group and
Operational level Security Management
Standards and a suite of supporting
guidelines and tools were developed and
implemented across the Group.
Following the tragic security incident that
occurred close to the Boungou mine site
in Burkina Faso on 6 November 2019,
and as discussed in the Chairman’s and
Managing Director’s reports (pages 4
and 6), Perenti ceased operations in
Burkina Faso’s higher risk locations.
Modern slavery
In line with the Modern Slavery Act 2018
(Commonwealth) requirements, Perenti
will be submitting to the Minister for
Home Affairs a ‘modern slavery statement’
that will set out our actions to assess and
address modern slavery risks in our global
operations and supply chains.
Our future focus
In FY21 we will:
Publicly disclose our policy
commitment to human rights
including publishing our Modern
Slavery Statement online
Identify significant human rights
related risks across the business
Further strengthen the
security, emergency, and crisis
management capability for the
Group through the development/
review of ISG Emergency
Management Plans and the roll
out of associated training
Ensure human rights related
provisions within contracts and
service agreements are applied
consistently across the Group.
Safety and health
At Perenti, the health and safety of our
people is central to everything we do. We
believe that every person should be able
to work and go home safe and healthy,
and that no one should be harmed in
any way while undertaking work for the
Group. Our five-year strategic plan for
health and safety further defines the areas
of focus including: management system
implementation and assurance; critical
risk management; developing a leader-led
culture for safety; health and wellness,
and; health, safety and environment data
systems and reporting.
Health, Safety and Environment (HSE)
Management System
Launched in June 2020, Perenti’s HSE
Management System was developed
collaboratively with all areas of the
business. While each operating business
has its own underlying systems and
processes, our overarching management
system provides a consistent approach
to managing health and safety across
the Group. The management system is
comprised of 14 elements as shown in the
figure below. Our African Underground
Mining Services, Barminco, Ausdrill,
BTP, MinAnalytical and WCS safety
management systems are certified to
recognised Australian or international
standards.
In FY21, we commit to the following
actions to support the implementation of
the HSE Management System across the
Group:
∞ Establishment and commencement of
the implementation of an assurance
framework
∞ Development of a safety leadership
program structured to support the
culture and behaviours critical to
achieving our safety related goals.
Critical Risk Management Program
Critical risks are where there is the
potential for loss of life or a life-changing
injury to occur. A critical risk management
approach focuses on the controls that
are most critical to prevent fatal and
catastrophic events. In the financial year
2020, we launched the Perenti Critical
Risk Management Program which is
consistent with recognised international
and industry approaches including the
International Council of Mining and Metals
(ICMM) guidance. Comprised of 12 Critical
Risk Standards, the program consists of
three levels of verification (systems, field,
operator) to ensure its effective
implementation.
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Perenti – Annual Report 2020
35
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
In FY21, we will improve the tools for
frontline and senior leaders as well as
operator and maintenance personnel to
verify the presence and effectiveness
of critical controls.
Tailings management
Perenti does not design, build, maintain
or operate tailings dams for our clients.
We recognise the potentially significant
risk tailings storage facilities pose to the
safety and health of people, infrastructure,
and the environment, if not effectively
managed and governed. We are also
aware of the current and emerging
leading practice standards and initiatives
on tailings, such as those defined by the
ICMM.
Mental health
We recognise the importance of the
mental health and wellbeing for our
workforce, the industry and the broader
community.
Perenti supports the proactive
management of mental wellbeing
through:
∞ Providing our people access to an
Employee Assistance Programs (EAP)
which offers professional coaching,
advice and support on managing their
own wellbeing
∞ Organising mental health awareness
campaigns and events at operations
∞ Engaging with the ‘Working from
Home; Working Alone’ program,
which has been designed to address
the specific challenges of working
remotely or alone during COVID-19
∞ Conducting mental health risk
assessments of our businesses and
their operations.
COVID-19
Like most organisations throughout the
world, the COVID-19 pandemic continues
to affect the way we operate at Perenti.
Early on Perenti recognised this risk and
formed a COVID-19 taskforce focused
on supporting employee health and
wellbeing, workforce planning and people
logistics, operational management and
commercial resilience. We also continue
to partner with our clients and support
providers to ensure the health and
wellbeing of our people is being carefully
managed. Other initiatives we have
deployed to help minimise the threat and
impacts of COVID-19 include:
∞ Engaging our EAP provider to ensure
additional assistance is available for
those on rostered work
∞ Delivering targeted training for leaders
and awareness programs for the
workforce
∞ Establishing a dashboard to track,
report and communicate complete
case figures across all areas of Perenti
so that leaders and employees can
make informed decisions
∞ Regular employee briefings by senior
leaders.
Our safety performance
Tragically, and as referred to in the
Chairman’s and Managing Director’s
Reports on pages 4 and 6, one of our
extended Perenti family members, Justice
Sarkodie, lost his life during a workplace
incident at the Obuasi mine in Ghana on
10 June 2020. He is survived by his wife
and four children. We are devastated by
this incident. Any life-changing event
or loss of life is one too many, with the
number of people being killed in the
mining industry globally remaining at
similar levels for nearly two decades.
This must change, and Perenti is
committed to being part of the solution
to ensure every person goes home safely
every day. Within our strategy, Perenti
is addressing this primarily through our
focus on leadership and culture and
implementing our Critical Risk Standards
and Critical Risk Monitoring program.
The Total Recordable Injury Frequency
Rate (TRIFR) increased during the past
financial year from 4.5 injuries per million
hours worked in FY19 to 4.9 in FY20. This
is a disappointing result against a target
TRIFR of 4.1 and reinforces Perenti’s drive
to progressing our safety improvement
strategy. The Lost Time Injury Frequency
Rate (LTIFR) also increased from 0.25 per
million hours worked in FY19 to 0.30 in
FY20. Comparing regions, in FY20 the
Australia region TRIFR was 10.3, and Africa
2.9. The LTIFR for the Australia region was
0.2 and Africa region was 0.4. The All
Injury Frequency Rate (AIFR) improved
from 27.0 per million hours worked in
FY19 to 26.2 in FY20.
C A S E S T U D Y
COVID-19 – ''Act like you have it''
As a member of the BTP Western Australian
Operations COVID-19 response team,
Danny Greening volunteered to share his insights
and experiences from working in Africa when the
Ebola pandemic hit the continent. A memorable
part of Danny’s safety share across all BTP
workshops was for everyone to “act like you
have it” to help prevent the spread of the virus.
This message combined with our focus on
personal hygiene had an immediate and positive
impact on the workplace to help support our
COIVD-19 response.
36
Perenti – Annual Report 2020
ABN 95 009 211 474
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
Perenti recognises that the existing
lagging indicators for performance tell
a limited aspect of the performance
profile and risk not having visibility
over all aspects of injury performance.
Consequently, from FY21 onwards we
are changing our internal measures to
report not only on TRIFR but will also have
targets for and report against the All Injury
Frequency Rate (AIFR) which is a measure
of all occupational injuries. This will enable
increased visibility over the rates of injuries
to employees, improved understanding of
the causes of all injuries and importantly
provide greater focus on learning lessons
and implementing controls to prevent
reoccurrence.
In FY21 we commit to:
Establishing targets for All Injury
Frequency Rates
Developing appropriate lead
indicators to measure across the
business.
We care about the environment and
actively seek ways to reduce our
environmental impact, including through
investing in new technologies that
enable us to operate more efficiently and
generate lower emissions and waste.
Similar to the Group-wide approach
we have taken for health and safety
over the past financial year, in FY21 we
intend to develop an overarching plan for
environmental management. This work
will enable us to more holistically progress
our focus on issues such as climate
change, water and waste management
and enable us to develop clear and
appropriate commitments in these areas.
Environment Management System
As detailed on page 35 of this report,
Perenti has an overarching HSE
Management System which is aligned
with the requirements of ISO 14001.
Each ISG implements its own
management system which is aligned
with the Group approach. Further, our
Ausdrill and Barminco business have
systems certified to ISO 14001.
N E V E R WA S T E F U L
Environment
In FY21 we will:
Perenti believes that the responsible
management of the environment is not
only essential for the longevity of our
industry, but more importantly it is also
the right thing to do for current and future
generations.
Develop an overarching Group-
wide plan for the environment
that identifies priority actions
to continuously improve our
environmental performance.
Climate change
Climate change is one of the most
significant challenges facing the world
today, and as a mining services provider
we acknowledge that we have an
important role to play. While mining
will be required to supply the minerals
and metals critical for the low carbon
technologies, we also recognise that
the sector needs to decarbonise over
time. Financial year 2020 marks our first
disclosure of Scope 1 and 2 greenhouse
gas emissions and energy usage for sites
where we have operational control, as
defined under Australian legislation.
These sites are typically those that Perenti
either owns or leases and includes our
offices and workshops that are located
outside of our client’s mining leases. Our
scope 1 greenhouse emissions are largely
attributed to diesel use, while our scope 2
greenhouse gas emissions are attributable
to purchased electricity.
In managing our climate-related risks
and opportunities, in FY21 we will:
Include climate change as an
agenda item for discussion in
senior executive leadership
meetings and workshops
Identify options to improve energy
efficiency and reduce greenhouse
gas emissions within the business
Assess climate change related
risks and opportunities over
different time horizons.
C A S E S T U D Y
Ausdrill’s automatic sampling drill rig –
towards eliminating manual handling risks
Ausdrill has developed and built a specialist auto
sampler system for its iconic Rock Commander drill rig.
In collaboration with our client BHP, the innovative
system is in full-time operation at one of BHP’s sites in
the Pilbara. Used in combination with a partner’s
auto-tagging and locating technology, the machine
enables a drill sample to be collected and bagged
without manual handling. It allows a safer, more
productive grade control outcome for the client.
In recognition, the technological innovation was
recently announced as a finalist for the BHP Minerals
Australia HSEC award in the safety category.
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Sustainability Report
C A S E S T U D Y
Electric vehicle trial success at IGO Limited’s
Nova mine
Barminco has undertaken a successful trial of an electric vehicle at
the Nova underground project for IGO Limited in the WA Goldfields.
Safescape’s Bortana BELV (battery electric light vehicle) is designed
specifically for underground use, and its capabilities impressed both
companies. Replacing diesel vehicles with electric vehicles introduces
improvements to safety, environment and efficiency when operating
underground. Electric vehicles produce zero emissions (including
greenhouse gases) and less heat, providing a safer and cleaner
environment for our underground operators. It seems fitting that IGO
Limited’s Nova mine is one of the leading producers of high-quality
battery grade nickel that will be used to create sustainable solutions such
as the BELV in the future. We are proud to be involved in this innovative
project and look forward to supporting the next developments for
electric vehicles in underground mining.
Water
S M A R T E R T O G E T H E R
Inclusion and Diversity
Water is a critical input for all mining
operations as well as a valued resource
for other water users in the regions in
which Perenti operates. Access to and
monitoring of water use is typically
provided by Perenti’s clients.
In recognition of water being a shared
and precious resource, in FY21 we will:
Undertake an assessment of water
risk across all Perenti operations
to identify areas of high-water risk
For high water risk sites identify
opportunities for water savings.
Environmental Incidents
Environmental incidents are classified
on a scale of one to five with four and
five resulting in serious impact to the
environment and regulatory action.
Over the past two years we have not
had any level four or five incidents.
In FY21 we will see a
significant people focused
agenda as we invest in
growing our capability
across the business.
Our People
Our people are the core of our business
and we recognise that our performance
and success is attributed to every member
of our team. Over the past 12 months the
organisation has embraced the Perenti
principles as the guiding behaviours for
all of our actions. We remain committed
to making improvements with a focus
on standardising expectations and
programs across the Group that leverage
leading practice within and external
to the business. In FY21 we will see a
significant people focused agenda as we
invest in growing our capability across
the business. This focus includes the
introduction of a company-wide People
Information and Data Management
System.
Our Workforce
We employ more than 7,700 people
on four continents across the globe,
with 63 per cent and 37 per cent of the
workforce being based in Africa and
Australia respectively. The remainder of
the workforce (<1 per cent) are based
in the United Kingdom and North
America. Further, almost 90 per cent
of the workforce outside of Australia is
comprised of local employees.
Of our Australian workforce, greater than
70 per cent are covered by collective
agreements. Perenti’s operations in Africa
provide employment through Collective
Agreements or Common Law Agreements
which are validated in accordance with
the relevant labour conditions and
market data.
We recognise that a diverse, inclusive and
talented workforce is key to our aspiration
of becoming the indispensable mining
services company. We are committed
to developing a workplace culture
where people with diverse backgrounds,
experiences and perspectives are
respected and valued for their unique
contributions.
Some highlights during the past financial
year which demonstrate our commitment
to enhancing workplace inclusiveness and
diversity include:
∞ Revising our Inclusion and Diversity
Policy to better align the associated
Ausdrill and Barminco policies under a
standard Perenti policy
∞
Improved female representation on
the Board (14 per cent to 29 per cent),
and in senior management roles
(11 per cent to 16 per cent) which
included the appointment of a female
to the Perenti Group Executive.
∞ Ongoing sponsorships as part of our
commitment to increase awareness
among women and girls that mining
is an attractive and rewarding career
path and to increase the opportunities
for, and the number of, women
participating in the industry.
∞ Celebrated the eighth year of our
Ausdrill subsidiary’s partnership with
Australia’s national women’s hockey
team, the Hockeyroos, which included
a work experience program for their
players.
∞ Partnered with the West Coast Eagles
inaugural women’s AFLW team
through our Barminco business.
38
Perenti – Annual Report 2020
ABN 95 009 211 474
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
Looking forward, in FY21 we
commit to:
Publish and support the
implementation of a Paid Parental
Leave Policy
Roll out a Flexible Work Practice
Standard across the Group.
underground jobs in induction and
training environments. In recognition of
the Underground ISG’s focus on upskilling
employees Barminco was named
Australia's Large Employer of the Year
in the 2019 Australian Training Awards
(see page 19).
In FY21 we will:
Some examples of this commitment
include:
∞ Delivery of cultural awareness training
to all employees mobilising to our
new project Zone 5 in Botswana. This
training provides employees with an
insight into the significance of certain
local customs and behaviours and
supports their integration with the
national workforce
∞ Barminco’s Indigenous Engagement
Plan that articulates the various
levels of support we offer Aboriginal
communities in Western Australia and
Queensland, including employment
opportunities, training and
apprenticeships
∞ Continued funding of the Dandjoo
Darbalung program, an initiative
championed by Barminco along with
IGO Limited and AngloGold Ashanti,
that seeks to support Aboriginal
students in succeeding with tertiary
and undergraduate studies across all
five universities in Western Australia.
Roll out a bespoke leadership
development program across the
Group
Launch the leader’s essential
portal which is a technology
enabled platform that gives our
global leadership team access
to both industry leading and
Perenti specific leadership tools,
frameworks and support
Expand our leadership pipeline
assessment process to focus on
identification of high potential
employees and their unique
development opportunities.
Cultural Engagement
Remuneration
Perenti is committed to respecting the
cultures, customs and norms of the
communities and countries we operate
in. We will continue to seek opportunities
to strengthen our relationships with first
nations and traditional custodians of the
lands we operate on, to better understand
and embrace their culture, norms and
practices.
In FY20 the Remuneration Committee
evolved to the People and Remuneration
Committee, with a revised charter to
incorporate inclusion and diversity,
leadership programs, succession planning,
and culture. This change recognised the
importance, commitment, and interest
of the committee to understand a wider
range of people related matters.
Leadership and capability development
During the last financial year, a thorough
review and assessment of our leadership
talent pipeline was undertaken, which
resulted in clear succession plans for
executive and business critical roles. We
also continued our focus on developing
leaders for the future with an expanded
rollout of the frontline leadership
development program across the Group
with 73 employees completing the
program in the year.
This builds on the enviable training
and development record Perenti has
in Africa having trained more than
25,000 local citizens through our AMS,
AUMS and Barminco businesses in our
30-year history, investing millions of
dollars to upskill local workforces in the
communities we operate in.
Perenti is leveraging technology in the
development of our workforce. Using
virtual reality and our state-of-the-art
underground mine simulators in Western
Australia and Botswana, we are able to
recreate life-like scenarios for different
C A S E S T U D Y
Implementing an innovative, chemical free
metal assay process
Traditional fire assay processes for the analysis of gold and
other precious metals have largely remained unchanged
for hundreds of years. These processes require the use
and disposal of lead, a potentially harmful material for
people and the environment. Perenti’s MinAnalytical
business has partnered with Chrysos Corporation to install
innovative PhotonAssay technology at our laboratories
in Perth and Kalgoorlie. This technology enables gold
samples to be processed free of chemicals and other
toxic agents, eliminating exposure risks for technicians
and the environment. In addition to the health, safety and
environmental benefits of the PhotonAssay technology,
deploying this technology has improved laboratory
productivity, sample integrity and throughput rates.
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Perenti – Annual Report 2020
39
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
Perenti is committed to providing
competitive remuneration to attract,
retain and reward our people for their
performance, their commitment to our
principles and contribution towards
our strategic growth plan. Following
the Barminco acquisition in FY19, a
comprehensive review of Perenti’s
remuneration framework was undertaken.
The review identified inconsistent
remuneration practices across the
business that did not align to a ‘pay for
performance’ culture or position the
company for future growth.
Since the implementation of the review
outcomes, we have continued to mature
our remuneration practices, to ensure we
remain market competitive, attract and
retain diverse talent, pay for performance,
and have practices that are aligned to
shareholder expectations. For example,
we now undertake an annual gender pay
gap review, the outcomes of which are
reported to the People and Remuneration
Committee of the Board. We have also
taken steps to reduce any potential bias
in setting remuneration by developing a
framework that guides objective decision
making by leaders.
In our African workforce, employees are
remunerated based on classifications
which are directly linked to verified
skill, knowledge and experience.
Rates offered are over and above the
minimum requirement set out by
the countries labour laws. There are
annual remuneration reviews to ensure
remuneration is appropriate for the
performance and role performed.
In FY21 we commit to disclosing our:
Local spend (goods & services
Community donations and
investments.
WA L K I N T H E I R S H O E S
Our local communities
Other examples of community projects
we supported across the Group over the
past financial year are as follows.
Operating in 11 countries, we are
committed to establishing and
maintaining lasting and positive
relationships with the communities we
work in. We respect that we are guests
in these communities and we actively
seek to understand and celebrate local
cultures and customs. Perenti strives to
purchase local goods and services and
employ local people, with almost 90 per
cent of the workforce outside of Australia
being comprised of local employees. The
state-of-the-art training centre recently
built by Barminco in Maun, Botswana,
where we plan to train 500 local people
to be an integral part of our operations, is
another example of our commitment to
training local citizens and leaving a lasting
legacy in the communities we operate in.
We also collaborate with each community
to identify appropriate organisations to
support. For example, In Ghana over the
last five years AUMS has contributed more
than $400,000 in community donations
and support.
Surface Mining
The AMS team at the Mako Mine in
Senegal support a number of community
focused projects and initiatives including
Women’s Day Celebrations, community
sporting tournaments and theatrical
groups.
Following a large storm that caused
significant damage to local villages in the
Yanfolila area in Mali, the team also funded
local builders and labourers to reroof
houses and remove scrap roofing material
that was scattered throughout the villages.
Underground Mining
At Obuasi, UMA, the joint venture between
AUMS and Ghanaian contracting company
Rocksure International, together with our
client AngloGold Ashanti, purchased and
donated to the local hospital a new ICU
ventilator, which is critical to saving lives
during the COVID-19 pandemic. AUMS
also procured and distributed safety
C A S E S T U D Y
BTP apprentices
BTP is doing its part to boost the level of skilled workers
in the industry with a successful heavy diesel upgrade
program for apprentices.
Under the scheme, qualified light vehicle (LV) mechanics
are taken on for a two-year apprenticeship to fully
equip themselves with the skills to thrive as heavy duty
mechanics in the mining industry. The upgrade program
had a significant boost in the 2020 financial year, with
a dedicated coordinator helping double the number of
participants from seven on 30 June 2019 to 14 on 30 June
2020, among a group of almost 50 apprentices in total.
Another five LV apprentices were due to begin early in the
2021 financial year. The program has a strong retention
rate, partly because of the diverse range of opportunities
it provides trainees to work across the industry in
rebuilding engines, transmissions and components in
our offices or in the field. BTP is pleased with the quality
of the apprentices in the scheme and looks forward to
seeing them remain with the Group and emerge as our
future leaders.
40
Perenti – Annual Report 2020
ABN 95 009 211 474
S U S TA I N A B I L I T Y A P P R O A C H
Sustainability Report
equipment such as sanitisers, gloves and
masks for communities in Burkina Faso
to support local people to tackle the
pandemic.
Investments
The Investments business continue
to support a number of community
organisations and initiatives in the regions
they operate including:
∞ BTP raised funds and participated in
the charity Ride for Youth (Western
Australia) to support programs
focused on youth suicide and
promoting mental wellbeing
∞ BTP sponsored the 2019 Mackay
Relay for Life, benefitting the Cancer
Council of Queensland, which in total
raised over $44,000
∞ Well Control Solutions sponsored
21 special needs and disadvantaged
children in Queensland within
the Closeburn and Golden Valley
communities
∞ Supply Direct sponsored a number of
local initiatives focused on supporting
communities impacted by COVID-19.
E N A B LE
T O M O RROW
Understanding that resources
are precious and limited, hence
the need to plan effectively
and operate efficiently without
excess misuse and wastage.
STEPHANIE LAW
QC Chemist –
MinAnalytical
AUMS staff support the Burkina Faso community by distributing essential COVID-19 PPE supplies.
Ausdrill has continued its relationship with the Hockeyroos while also supporting a range of local
community initiatives and groups in the regions in which we operate.
Barminco stepped up as a major sponsor of the West Coast Eagles women’s team in their first year in the AFLW.
Perenti – Annual Report 2020
41
L E A D E R S H I P
Board of Directors
I A N CO C H R A N E
C H A I R M A N
M A R K N O RW E L L
M A N A G I N G D I R EC TO R
A N D C H I E F E X EC U T I V E O F F I C E R
A L E X A N D R A AT K I N S
N O N - E X EC U T I V E D I R EC TO R
RO B E R T CO L E
N O N - E X EC U T I V E D I R EC TO R
A N D R E A H A L L
N O N - E X EC U T I V E D I R EC TO R
M A R K H I N E
N O N - E X EC U T I V E D I R EC TO R
T E R R E N C E S T R A P P
N O N - E X EC U T I V E D I R EC TO R
42
Perenti – Annual Report 2020
ABN 95 009 211 474
Corporate directory
D I R E C T O R S
Ian Howard Cochrane
Chairman
Mark Alexander John Norwell
Managing Director and Chief Executive Officer
Terrence John Strapp
Robert James Cole
Alexandra Clare Atkins
Mark Andrew Hine
Andrea Hall
S E C R E TA RY
Efstratios Vassilios Gregoriadis
C H I E F F I N A N C I A L O F F I C E R
Peter John Bryant
P R I N C I PA L R E G I S T E R E D O F F I C E I N AU S T R A L I A
Level 2, 202 Pier Street
Perth Western Australia 6000
Australia
S H A R E R E G I S T E R
Link Market Services Limited
Level 12, QV1 Building, 250 St Georges Terrace
Perth Western Australia 6000
AU D I T O R
PwC
Level 15, 125 St Georges Terrace
Perth Western Australia 6000
S O L I C I T O R S
Johnson Winter & Slattery
Level 4, 167 St Georges Terrace
Perth Western Australia 6000
S T O C K E XC H A N G E L I S T I N G S
Perenti Global Limited shares are listed on the Australian Stock Exchange.
ASX CODE: PRN
Perenti Global Limited’s subsidiary USD notes are listed on the Singapore Exchange (SGX).
O T H E R I N F O R M AT I O N
Perenti Global Limited
ABN 95 009 211 474
Incorporated and domiciled in Australia, is a publicly listed company limited by shares.
W E B S I T E
perentigroup.com
ABN 95 009 211 474
Perenti – Annual Report 2020
43
C O N T E N T S
Directors’ report
Auditor’s independence declaration
Corporate governance statement
Financial statements
Consolidated statement of profit or loss
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report to the members
Shareholder information
Financials table
45
69
70
71
72
73
74
75
76
149
150
158
160
F I N A N C I A L
R E P O R T
3 0 J U N E 2 0 2 0
44
These financial statements are consolidated financial statements for Perenti Global Limited and its
subsidiaries. A list of major subsidiaries is included in note 14. The financial statements are presented in the
Australian currency.
The financial statements were authorised for issue by the directors on 24 August 2020. The directors have
the power to amend and reissue the financial statements.
All press releases, financial reports and other information are available on our website: perentigroup.com.
ABN 95 009 211 474
Perenti – Annual Report 2020
Directors’ report
Your directors present their report on the consolidated entity (the “Group”) consisting of Perenti Global Limited (the “Company”)
and the entities it controlled at the end of, or during, the year ended 30 June 2020.
D I R E C T O R S A N D CO M PA N Y S E C R E TA RY
The following persons were directors of the Company during the financial year and up to the date of this report (unless indicated
otherwise):
Ian Howard Cochrane (Chairman)
Mark Alexander John Norwell (Managing Director and Chief Executive Officer)
Terrence John Strapp
Mark Andrew Hine
Alexandra Clare Atkins
Robert James Cole
Andrea Hall (appointed 15 December 2019)
Keith Douglas Gordon (resigned 1 September 2019)
The Company Secretary is Efstratios Gregoriadis.
Mr Gregoriadis B.A., L.L.B., M.B.A joined the Company in February 2011 in the position of Group General Counsel / Company Secretary.
Prior to joining the Company Mr Gregoriadis held the role of Group General Counsel / Company Secretary at Macmahon Holdings
Limited, and has held various other positions as a lawyer in private legal practice.
D I V I D E N D S - P E R E N T I G L O B A L L I M I T E D
Dividends paid/payable to members during the financial year were as follows:
Final ordinary fully franked dividend for the year ended 30 June 2019 of 3.5 cents (2018: 1.5 cents and
2.0 cents special dividend) per fully paid ordinary share paid on 23 October (18 October 2018).
Interim ordinary fully franked dividend for the year ended 30 June 2020 of 3.5 cents (2019: 3.5 cents)
per fully paid share payable on 25 March 2020 (27 March 2019).*
20
$’000
19
$’000
24,019
18,629
24,024
48,043
23,973
42,602
* On the 25 March 2020 Perenti deferred the payment of this dividend. On 21 April 2020 the Group reactivated its Dividend Reinvestment Plan (DRP) providing the
opportunity for the shareholders to reinvest the 2020 interim dividend into shares in Perenti. The reactivation was part of the Group’s response to the COVID-19 pandemic
and its capital management policies. The payment of a portion of the cash dividend was made in July 2020.
On 24 August 2020, the directors determined a final ordinary dividend of 3.5 cents per share for the year ended 30 June 2020
(2019: 3.5 cents).
P R I N C I PA L AC T I V I T I E S A N D R E V I E W O F O P E R AT I O N S
Information on the principal activities, operations and financial position of the Group and its business strategies and prospects is set out
in the operating and financial review on pages 2 to 30 of this annual report.
S I G N I F I C A N T C H A N G E S I N T H E S TAT E O F A F FA I R S
There were no significant changes in the state of affairs of the consolidated entity during the financial year ended 30 June 2020.
ABN 95 009 211 474
Perenti – Annual Report 2020
45
FINANCIAL REPORT Directors’ report
E V E N T S S I N C E T H E E N D O F T H E F I N A N C I A L Y E A R
On 24 August 2020, the directors determined the payment of a final ordinary dividend of $24,553,000 (3.5 cents per fully paid share
dividend to be paid on 3 November 2020 out of retained profits at the date of the dividend payment. The financial effect of this
transaction has not been brought to account at 30 June 2020.
There are no other matters or circumstances that have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the consolidated entity in
subsequent financial years.
L I K E LY D E V E L O PM E N T S A N D E X P E C T E D R E S U LT S O F O P E R AT I O N S
Additional comments on expected results of certain operations of the Group are included in this annual report in the operating and
financial review on pages 2 to 30.
E N V I RO N M E N TA L R E G U L AT I O N
The Group is not subject to any significant environmental regulations but is committed to reducing the impact of its operations on
the environment. Our clients have obligations under environmental regulations. The Group complies with its contractual obligations
in this regard.
46
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Directors’ report
I N F O R M AT I O N O N D I R E C T O R S
The following information is current as at the date of this report.
Mr Ian Howard Cochrane
BCom, LLB.
Non-executive Chairman.
Age 66.
Experience and expertise
Mr Ian Howard Cochrane was appointed as a non-executive director and Deputy Chair on
23 November 2015. Subsequently, on 5 December 2017, Mr Cochrane was appointed as
Chair of the Board.
Mr Cochrane holds degrees in Commerce and Law. He was educated in South Africa and
immigrated to Australia in 1986. He practised law, specialising in Mergers and Acquisitions,
in national law firms Corrs Chambers Westgarth and Mallesons Stephen Jaques until 2006
when he established (with Mr Michael Lishman) the boutique law firm, Cochrane Lishman,
which was eventually acquired by the global law firm Clifford Chance in early 2011.
Mr Cochrane has had a long association with Perenti having provided the legal services
when the Company first floated in 1994. He was regularly voted by his peers as being one
of the leading M&A lawyers in Australia and retired from the practise of law in December
2013. He has not provided legal services to Perenti or any other entities since then.
Other current directorships
Non-executive director of Dacian Gold Limited from 2016.
Former directorships in last 3 years
None.
Special responsibilities
Chairman of the Board.
Member of the Audit and Risk Committee.
Member of the People and Remuneration Committee.
Interests in shares and options
1,086,203 ordinary shares.
Mr Mark Alexander John Norwell
BE(Hons), MBA, MAICD
Managing Director and Chief
Executive Officer. Age 44.
Experience and expertise
Mr Mark Norwell was appointed as Managing Director and Chief Executive Officer on
17 September 2018.
Mr Norwell is a highly experienced mining services executive. He was the Executive
General Manager-Strategy & Growth at Thiess Pty Ltd, and a member of Thiess’ executive
leadership team until June 2018. Over a 20-year career in the mining services sector, he
has held senior roles with Leighton Contractors, HWE Mining and Macmahon Holdings.
Mr Norwell holds a Bachelor of Civil Engineering (Hons) degree from the University
of Western Australia and an MBA from the University of New South Wales. He is also a
member of the Australian Institute of Company Directors.
Other current directorships
None.
Former directorships in last 3 years
None.
Special responsibilities
Managing Director and Chief Executive Officer.
Interests in shares and options
50,000 ordinary shares.
1,217,269 LTI rights over ordinary shares, issued.
112,058 STI rights over ordinary shares issued.
Up to a maximum of 68,566 STI rights over ordinary shares granted, not yet issued at
30 June 2020.
ABN 95 009 211 474
Perenti – Annual Report 2020
47
FINANCIAL REPORT Directors’ report
I N F O R M AT I O N O N D I R E C T O R S (CO N T I N U E D)
Mr Terrence John Strapp
CPA, SF Fin., MAICD.
Experience and expertise
Mr Terrence Strapp was appointed as a non executive director on 21 July 2005.
Mr Strapp has extensive experience in banking, finance and corporate risk management and
has been actively involved in the mining industry for over 30 years. He is a Certified Practising
Accountant (CPA), a Senior Fellow of the Financial Services Institute of Australasia and a
member of the Australian Institute of Company Directors.
Non-executive director. Age 76.
Other current directorships
None.
Former directorships in last 3 years
Non-executive director of GR Engineering Limited from 2011 to 2018.
Special responsibilities
Chairman of the Audit and Risk Committee until 1 October 2019.
Member of the Audit and Risk Committee.
Interests in shares and options
579,375 ordinary shares.
Mr Mark Andrew Hine
MAICD, MAusIMM.
Non-executive director. Age 62.
Experience and expertise
Mr Mark Hine was appointed as a non-executive director on 24 February 2015.
Mr Hine is a mining engineer. He graduated from the Western Australia School of Mines and
is a member of the Australian Institute of Company Directors and the Australian Institute
of Mining and Metallurgy. He has extensive mining experience with over 25 years of senior
management roles in both surface and underground mining operations.
Mr Hine is currently the Chief Operating Officer at Griffin Mining Ltd, having previously held
senior positions in the mining industry as Chief Operating Officer at Focus Minerals Ltd,
Chief Operating Officer at Golden West Resources Ltd, Executive General Manager Mining
at Macmahon Contractors Pty Ltd, Chief Executive Officer at Queensland Industrial Minerals
Ltd, General Manager at Consolidated Rutile Ltd and General Manager Pasminco, Broken Hill /
Elura Mines.
Other current directorships
None.
Former directorships in last 3 years
None.
Special responsibilities
Chairman of the People and Remuneration Committee
Interests in shares and options
121,771 ordinary shares.
48
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Directors’ report
I N F O R M AT I O N O N D I R E C T O R S (CO N T I N U E D)
Ms Alexandra Clare Atkins
BE (Mineral Exploration & Mining
Geology) Hon BE(Mining)
MBA (Finance) FIEAust CPEng
EngExec NER APEC Engineer
IntPE(Aus) FAusIMM(CP) GAICD
Non-executive director. Age 52.
Experience and expertise
Ms Alex Atkins was appointed as a non-executive director on 14 July 2018.
Ms Atkins is also a non-executive director of International Women in Mining (based in London)
and a former director of The Australasian Institute of Mining and Metallurgy. Alex has over
25 years’ multi-disciplinary, multi-commodity experience through the full mining value chain
across Australia and Papua New Guinea in roles that find, design and run mines, regulate
mines and in the Big4’s.
Ms Atkins’s mine operations roles include: Geologist for Australian Consolidated Minerals
(Wirralie & Pajingo); Mining Engineer for Mt Isa Mines Ltd (Newlands); Underground Miner/
Airleg Miner for Plutonic Resources (Mt Morgans); Underground Miner, Mining Engineer/
Deputy Mine Manager and Geotechnical Engineer for Placer Dome Asia Pacific (Porgera
JV, Kidston & Osborne); and Mining Engineer for Murchison United (Renison). Alex’s career
then pivoted to professional services and regulation, including: Senior Mining Engineer for
AMC Consultants; District Inspector of Mines for the WA Department of Mines & Petroleum;
Principal Mining Consultant for Optiro & Alternate Futures; Chief Advisor at Sustainability;
Risk Manager at Deloitte; COO at PETRA Data Science; and MD & Principal at Alex Atkins &
Associates, which is focused on conformance (board assurance of technical and operational
risk, mine approvals and compliance) and performance (digital transformation of mining).
Ms Atkins holds two Bachelor of Engineering Degrees, from the University of Queensland
and WA School of Mines, qualifying her as a Mining Engineer, Geotechnical Engineer and
Geologist. She holds First Class Mine Manager’s Certificates for Western Australia and
Queensland and has an MBA (Finance) from the Australian Institute of Business. Alex is a
Graduate Member of the Australian Institute of Company Directors, Chartered Professional
Fellow of The AusIMM and Engineers Australia. She was one of 2018’s 100 Global Influential
Women In Mining (WIMUK) and was inducted into the Western Australia Women’s Hall of
Fame in 2019.
Other current directorships
None.
Former directorships in last 3 years
None.
Special responsibilities
Member of the People and Remuneration Committee.
Interests in shares and options
32,300 ordinary shares.
ABN 95 009 211 474
Perenti – Annual Report 2020
49
FINANCIAL REPORT Directors’ report
I N F O R M AT I O N O N D I R E C T O R S (CO N T I N U E D)
Mr Robert James Cole
BSc, LLB (Hons)
Experience and expertise
Mr Robert Cole was appointed as a non-executive director on 14 July 2018.
Mr Cole has 35 years’ experience in the energy and resources industry. He is a former executive
director on the board of Woodside Petroleum Limited and a former managing director of
Beach Energy Limited. He is also a former Chairman of the Australian Petroleum Production
and Exploration Association. Prior to joining the oil and gas industry, Rob was a partner in the
law firm now known as King & Wood Mallesons.
Mr Cole is currently Chairman of Synergy and Chairman of the Western Australian Land
Information Authority (Landgate).
Non-executive director and
Deputy Chairman. Age 58.
Mr Cole holds Bachelor of Science and Bachelor of Laws degrees from the Australian National
University in Canberra and is also a graduate of the Harvard Business School Advanced
Management Program.
Ms Andrea Hall
FCA, GAICD, BCom
Non-executive director. Age 53.
Other current directorships
Non-executive director of Iluka Resources Ltd since March 2018.
Former directorships in last 3 years
None.
Special responsibilities
Member of the People and Remuneration Committee.
Member of the Audit and Risk Committee.
Chair of the Audit and Risk Committee from 1 October 2019 to 17 June 2020.
Deputy Chair of the Board from 17 June 2020.
Interests in shares and options
60,000 ordinary shares.
Experience and expertise
Ms Andrea Hall was appointed as a non-executive director on 15 December 2019.
Ms Hall is a Chartered Accountant with more than 30 years’ experience in the financial services
industry in roles involved in internal audit, risk management, corporate and operational
governance, external audit, financial management and strategic planning. Ms Hall commenced
her career at KPMG in 1987, before retiring from the firm in 2012 as a Partner in Charge of the
Perth Internal Audit, Risk and Control Services division within KPMG’s Risk Consulting area.
Ms Hall currently serves as a non-executive director on the boards of several listed and non-
listed entities, including Evolution Mining, the Fremantle Dockers, Pioneer Credit, and the
Insurance Commission of Western Australia.
Ms Hall holds a Bachelor of Commerce degree from the University of Western Australia and is
also a Fellow of Chartered Accountants Australia New Zealand. She served on the WA Council
for Chartered Accountants Australia New Zealand for seven years until 2011, the last year as the
Chair. Ms Hall has also completed a Masters in Applied Finance (Corporate Finance).
Other current directorships
Non-executive director of Evolution Mining Limited since October 2017.
Non-executive director of Pioneer Credit Limited since November 2016.
Former directorships in last 3 years
Non-executive director of Automotive Holdings Group Limited from May 2018 to
September 2019.
Non-executive director of Tap Oil Limited from October 2016 to February 2018.
Special responsibilities
Member of the Audit and Risk Committee since 15 December 2019.
Chair of the Audit and Risk Committee from 17 June 2020.
Interests in ordinary shares
52,000 ordinary shares.
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I N F O R M AT I O N O N D I R E C T O R S (CO N T I N U E D)
Mr Keith Douglas Gordon
Experience and expertise
Non-executive director. Age 57.
Mr Keith Gordon was appointed as a non-executive director on 1 November 2018* until he
resigned 1 September 2019.
Mr Gordon was the former non-executive chairman of Barminco and is an experienced
company director and public company CEO with a broad business perspective built through
extensive experience across sectors including mining services, mining, retail, manufacturing,
chemicals, energy and agriculture. He holds a Bachelor of Science (Agric) Hons and MBA from
the University of Western Australia.
Mr Gordon is currently a director of Red Emu Advisory Pty Ltd. Previously, he was the Managing
Director and CEO of Emeco Holdings and a senior executive at Wesfarmers Limited.
Mr Gordon resigned from his position as non-executive director of the Company on
1 September 2019.
Other current directorships
None.
Former directorships in last 3 years
None.
Special responsibilities
Member of the Audit and Risk Committee until 1 September 2019.
Interests in shares and options
None.
* Pursuant to the Barminco acquisition in October 2018, Mr Gordon was appointed as a representative
of certain Barminco vendors and was therefore not considered to be an independent director. As part of
the terms of his appointment, Mr Gordon agreed that he will resign from the office of director on
1 September 2019 unless otherwise agreed by the Board at that time. Per ASX announcement on
15 August 2019, Mr Gordon resigned with effect from 1 September 2019.
M E E T I N G S O F D I R E C T O R S
The numbers of meetings of the Company’s board of directors and of each board committee held during the year ended 30 June
2020 and the numbers of meetings attended by each director were:
FULL MEETINGS
OF DIRECTORS
MEETINGS OF COMMIT TEES
AUDIT & RISK
REMUNERATION
Ian Howard Cochrane
Robert James Cole
Mark Andrew Hine
Terrence John Strapp
Alexandra Clare Atkins
Mark Alexander Norwell
Andrea Hall
Keith Douglas Gordon
A B
23 23
21 23
22 23
22 23
22 23
23 23
17 17
2 2
A B
4 4
4 4
* *
4 4
* *
* *
2 2
1 1
A B
4 4
4 4
4 4
* *
4 4
* *
* *
* *
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
* = Not a member of the relevant committee
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REMUNE RAT ION REPORT
Dear Shareholders,
On behalf of the Board, I am pleased to present Perenti Global Limited’s (Perenti or Group) Remuneration Report for the financial year
to 30 June 2020.
The Board and Committee were pleased with the voting outcomes and the feedback following the significant changes to the
remuneration framework that were introduced in FY19. This included a 99.6% vote ‘for’ the Remuneration Report at the FY19
Annual General Meeting (AGM). For FY20, there here have been no changes to the remuneration framework.
The past financial year has presented a number of unforeseen challenges for Perenti. On 6 November 2019, there was a tragic
terrorist incident in Burkina Faso which resulted in 19 fatalities from our African Mining Services (AMS) business. In early 2020 the
COVID-19 global pandemic impacted several of our sites for a limited period including Egypt, India, Burkina Faso and to a smaller
extent Australian sites.
The Board is thankful of the manner in which the Perenti Group Executive responded to these challenging events. The response to
these events has been outstanding and arguably industry leading, which in turn has preserved significant shareholder value. In addition,
it is important to note that there were no COVID-19 related redundancies during the year, Australian international workers were
redeployed within the Australian business and, while some businesses within the Group were eligible for Job Keeper, this was
not accessed.
Given the challenging circumstances experienced in FY20, the Board has taken a balanced approach in applying the Remuneration
Framework to reward, retain and engage our executives to deliver on Perenti’s strategic vision and plan, while reflecting business
performance and shareholder experience.
Short Term Remuneration (STI) Outcomes
The Short-Term Incentive (STI) Scorecard is designed to provide a balanced assessment of the performance of the executive,
incorporating financial, safety and other non-financial elements which are important to the Company’s performance and culture.
The Board has reviewed the FY20 scorecard outcomes in line with the remuneration framework principles and aligned remuneration
outcomes to business performance and stakeholder experience.
Due to the tragic fatality of our Underground Mining Alliance (UMA) employee, Justice Sarkodie, the work-related fatality gateway for
the safety metrics were not met, which removed 10% of the FY20 STI opportunity.
Notwithstanding the nature and degree of unforeseen events, the Group performed relatively strongly. This is evidenced by the Board
having determined to pay a fully franked final dividend of 3.5 cents in November in addition to the deferred interim dividend that was
paid in July. The ability to pay the dividend was on the back of positive and prudent cash preservation measures taken throughout the
year and particularly during the last quarter impacted by COVID-19. To align shareholder returns with remuneration outcomes, the
cash conversion metric is 10% of the scorecard and the business delivered a record 96% conversion rate.
However, the overall Group Financial NPAT metric did not meet the threshold performance requirements set at the beginning of the
financial year. This removed up to 60% of the FY20 STI opportunity, including the 10% cash conversion metric. The board however,
resolved to approve the application of the cash conversion metric. The quantum of the cash conversion metric applied to the FY20
scorecard for the KMP was $262,625.
Upon reflection the Board did not see the merit in applying a NPAT gateway to the cash conversion metric and the FY21 scorecard
has removed this gateway. It should be noted that the Board set an objective to better align pay for performance of management
with shareholder value. The recognition of the cash conversion metric as a standalone metric is one such example of aligning the
remuneration structure.
The scorecard outcomes resulted in a range of STI awards being between 29% to 36% of the Executive KMP maximum STI
opportunities. These awards will be delivered consistent with the remuneration framework approach of 2/3 paid in cash and
1/3 paid as STI Rights deferred for 12 months.
Long Term Incentive (LTI) Remuneration Outcomes
There was no LTI due to vest in FY20. The first Perenti LTI award will be tested for performance for the period to 30 June 2021.
Board Remuneration Outcomes
Fee levels for the Board roles are reviewed annually with the support of the independent external remuneration consultants. Their
remuneration recommendation provided in May 2019 confirmed the practice of providing for separate Committee Member fees as
opposed to the Board Member fee only approach. As such, Perenti has adopted a separate Committee Member fee of $11,000 per
annum as aligned to market peers. The annual Board Member fee has remained unchanged at $114,975.
The review also confirmed that market data supported an increase of $3,575 for both Committee Chair fees to $20,000 per annum,
as well as an increase in the Board Chair fee by $49,800 to $225,000 per annum. The Board Chair fee is all-inclusive of Committee
responsibilities.
Summary
The Board are confident that the decisions made regarding executive remuneration have enabled the right balance between engaging
and retaining executives, aligning to our stakeholder’s experience and reflecting company performance in FY20. Perenti continues to
build on the foundations of our impressive history to Enable Tomorrow.
We thank you for your support and we look forward to welcoming you to our AGM.
Mark Hine
Chairperson, People and Remuneration Committee
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RE MUNE RATION REPORT (CONTINUED)
1. Introduction
The Directors present the Perenti FY20 Remuneration Report, outlining key aspects of our remuneration principles, framework,
and remuneration awarded this year.
The Remuneration Report is structured as follows:
1.
Introduction
2. KMP for FY20
3. Remuneration Strategy and Principles
4. Executive KMP Remuneration Framework
5. Outcomes in FY20
6. Remuneration Governance
7. Contractual Arrangements with Executive KMP
8. Non-executive Director Remuneration
9. Additional Statutory Information
2. KMP for FY20
The tables below confirms all the KMP covered by the FY20 Remuneration Report:
Non-executive Directors (NEDs)
Chairman
Audit and Risk Committee – Member
People and Remuneration Committee – Member
Term
Full year
Non-executive Director
Audit and Risk Committee – Chair
Audit and Risk Committee – Member
Full year
Part year (until 1 October 2019)
Part year (from 1 October 2019)
Non-executive Director
People and Remuneration Committee – Chair
Full year
Non-executive Director
Audit and Risk Committee – Member
Audit and Risk Committee – Chair
People and Remuneration Committee – Member
Deputy Chair of the Board
Full year
Part year (until 1 October 2019)
Part year (from 1 October 2019 to 17 June 2020)
Full year
Part year (from 17 June 2020)
Ian Cochrane
Terence Strapp
Mark Hine
Robert Cole
Alexandra Atkins
Non-executive Director
People and Remuneration Committee – Member
Full year
Andrea Hall
Non-executive Director
Audit and Risk Committee – Member
Audit and Risk Committee – Chair
Part year (appointed on 15 December 2019)
Part year (from 15 December 2019 to 17 June 2020)
Part year (from 17 June 2020)
Executive Key Management Personnel (KMP)
Mark Norwell
Managing Director (MD)
Peter Bryant
Chief Financial Officer (CFO)
Paul Muller
Chief Executive Officer – Underground Mining
Scott Winter
Chief Executive Officer – Surface Mining
Term
Full year
Full year
Full year
Part year (considered a KMP from 22 July 2019 when
he joined Perenti)
Former KMP
Keith Gordon
Non-executive Director
Audit and Risk Committee – Member
Term
Part year (resigned on 1 September 2019)
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REMUNE RAT ION REPORT (CONTINUED)
3. Remuneration Strategy and Principles
We have outlined below Perenti’s remuneration strategy and principles, which guide the setting of the Company’s remuneration
framework.
Perenti’s remuneration framework aims to enable the achievement of the Company’s business objectives, and reward Executive KMP where its
company strategy is achieved. To achieve the Company’s business objectives, the framework is guided by the following principles in the table below.
Remuneration Strategy
↓
Remuneration Principles
↓
Attract and
Retain
Shareholder
Alignment
Pay-For-
Performance
Market Competitive
Simple and
Transparent
Enable Perenti to
attract, motivate and
retain talented and high
performing employees
that can execute and
deliver its business
objectives.
Align remuneration
with the shareholder
experience and long-
term value generation.
Linking remuneration
to the performance of
the Company and the
individual.
Provide remuneration
which is competitive,
relative to the market it
is operating within.
Can be easily explained
and understood by
internal and external
stakeholders.
↓
Perenti’s FY20 Executive Remuneration Framework
Total Fixed Remuneration
(TFR)
Short-term Incentive
(STI)
Long-term Incentive
(LTI)
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RE MUNE RATION REPORT (CONTINUED)
4. FY20 Executive KMP Remuneration Framework
The remuneration packages of Executive KMP are comprised of fixed remuneration and ‘at-risk’ remuneration (i.e. variable
remuneration).
a. Remuneration mix
The remuneration mix for Perenti’s Executive KMP at maximum opportunity levels for FY20 are displayed below.
Managing Director
Other Executive KMP
• TFR
• STI
• LTI
31%
31%
38%
• TFR
• STI
• LTI
39%
32%
29%
b. Executive KMP remuneration components
Total Fixed Remuneration (TFR)
DESCRIPTION
APPROACH
A competitive level of TFR is offered to attract and retain high quality and experienced Executive KMP. TFR comprises
of all fixed remuneration including statutory superannuation/pension contributions.
TFR is reviewed annually and on promotion to ensure that it is competitive. The Company targets the median of the
relevant market. The relevant market peer group will take into consideration one or more of the following:
Peer mining services companies; and/or
•
• Companies with market capitalisation and/or annual revenue in a range comparable to Perenti.
FY20 ONE-OFF
ADJUSTMENTS
To ensure Perenti’s TFR levels are market competitive, through the 2019 Remuneration Review process adjustment
to Executive KMP included:
• MD TFR increased from $800,000 to $925,000, an increase in 15.6%;
• CFO TFR increased from $532,000 to $550,000, an increase of 3.4%;
• CEO – Underground Mining TFR increased from $775,000 to $810,000, an increase of 4.5% and
• CEO – Surface Mining TFR increased from $650,000 to $675,000, an increase of 3.8%.
Short-term Incentive (STI)
DESCRIPTION
Executive KMP are eligible to participate in the annual STI plan, which comprises a portion of their variable
remuneration and is subject to performance measures. The STI performance measures focus on a mix of financial and
non-financial measures, which are assessed at a Company and individual level via the use of a balanced scorecard.
Achievement of each STI performance measure is on a continuum from threshold through to target, through to
stretch. Threshold performance achievement provides for 25% of maximum STI opportunity, target achievement
paying at 50% of maximum STI opportunity, and stretch achievement paying at 100% of maximum STI opportunity.
PERFORMANCE
PERIOD
MA XIMUM STI
OPPORTUNIT Y
Financial year
MD: 100% of TFR.
Other Executive KMP: CFO – 70% of TFR, CEO Underground Mining– 100% of TFR and CEO Surface Mining– 75% of TFR
The MD’s opportunity for FY20 was increased from the FY19 period maximum STI opportunity of 80% of TFR to
ensure it remains competitive with peer roles externally. From a benchmarking exercise undertaken, the MD’s
maximum STI opportunity at 80% was below market, relative to the size and complexity of Perenti’s operations
following the organisational restructure. As such, an increase has been provided to align the MD closer to the median
of the role’s peers, with the maximum only paid where stretch achievement of performance measures are met.
STI AWARD
DELIVERY
Two thirds are delivered in cash and one third is delivered in STI Rights at the end of the performance period. The STI
Rights vest 12 months after their grant date.
Any STI Rights that are provided to the Managing Director are subject to shareholder approval as per ASX Listing Rule 10.14
ALLOCATION
METHODOLOGY
(STI RIGHTS ONLY)
The deferred STI Rights will be allocated on a face value basis. This is calculated as the STI Rights opportunity ($)
divided by the 10-day volume weighted average price (VWAP) of the Company’s shares up to and including the end
of the performance period, being 30 June 2020.
GATEWAYS
A gateway of no work-related fatality in the Group is required for the total recordable injury frequency rate (TRIFR)
and the % of ‘above the line’ actions from Serious Potential Incident (SPI) investigations metrics for their portion of
the STI to be awarded.
A Group profit gateway was also set at the beginning of the year for the cash conversion metric. However, this
gateway was removed upon review of the increased criticality of cash management due to the COVID-19 pandemic
and the outstanding performance of Management in this regard in FY20. The Board does not intend to apply a Group
profit gateway to cash conversion in future years.
PERFORMANCE
MEASURES
The measures used for the STI differ between the Operational focus KMP and the CFO as a Functional focused
role. This is to appropriately align the performance of each participant in their role with the overall success of the
Company.
Each individual’s STI scorecard comprises of a mix of financial and non-financial measures, assessed either at a
Company or an individual level. All measures have a threshold, target and stretch level of achievement.
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RE MUNERATION REPORT ( CONTI NUED )
b. Executive KMP remuneration components (continued)
FY20 STI scorecard for the Managing Director, CEO - Underground Mining and CEO - Surface Mining
MEASURE
WEIGHTING FURTHER DETAIL
TOTAL RECORDABLE
INJURY FREQUENCY
RATE (TRIFR)
5%
A TRIFR metric ensures a strong safety culture is enforced. This measure aims to ensure
there is a substantial improvement in safety outcomes, compared to the prior year.
% OF ‘ABOVE THE
LINE’ ACTIONS
FROM SERIOUS
POTENTIAL
INCIDENT (SPI)
INVESTIGATIONS
In addition, this component is subject to a ‘fatality’ gateway. Where a work-related
fatality occurs during the performance period, no payment will be made under this
component.
5%
This is a leading safety metric, to reinforce the importance of employee safety at the
Company.
An above the line action refers to engineering, substitution, or elimination control
actions under the safety hierarchy of control.
In addition, this component is subject to a ‘fatality’ gateway. Where a work-related
fatality occurs during the performance period, no payment will be made under this
component.
EMBEDDING THE
PERENTI STRATEGY
AND PRINCIPLES
10%
A people focused metric to ensure a strong culture is developed and embedded. This
measure aims to ensure that the Company creates a culture aligned with our 2025
Strategy and the five Perenti Principles.
GROUP NET PROFIT
AFTER TA X (NPAT)
50%
The use of NPAT ensures that the majority of the individual’s STI is aligned to the
Company’s financial performance. It aims to build a pay-for-performance culture and
ensure executive accountability for the Company’s performance.
EBITDA CASH
CONVERSION
WORK IN HAND
RATIO TO FY21
BUDGET REVENUE
INDIVIDUAL KEY
PERFORMANCE
INDICATORS (KPI)
– KEY INITIATIVES
DELIVERED
10%
The percentage of EBITDA converted to cash.
15%
This component measures the portion contractually remaining on executed contracts
to support a growth pipeline.
A qualitative assessment will be made on the quality of the contract terms as well as
the quantitative assessment.
5%
Key initiatives agreed between MD and the Board, or each respective CEO and the MD,
as individual KPI and metrics.
FY20 STI scorecard for the CFO
MEASURE
WEIGHTING FURTHER DETAIL
TOTAL RECORDABLE
INJURY FREQUENCY
RATE (TRIFR)
5%
A TRIFR metric ensures a strong safety culture is enforced. This measure aims to ensure
there is a substantial improvement in safety outcomes, compared to the prior year.
% OF ‘ABOVE THE
LINE’ ACTIONS
FROM SERIOUS
POTENTIAL
INCIDENT (SPI)
INVESTIGATIONS
In addition, this component is subject to a ‘fatality’ gateway. Where a work-related
fatality occurs during the performance period, no payment will be made under this
component.
5%
This is a leading safety metric, to reinforce the importance of employee safety at the
Company.
An above the line action refers to engineering, substitution, or elimination control
actions under the safety hierarchy of control.
In addition, this component is subject to a ‘fatality’ gateway. Where a work-related
fatality occurs during the performance period, no payment will be made under this
component.
EMBEDDING THE
PERENTI STRATEGY
AND PRINCIPLES
10%
A People focused metric to ensure a strong culture is implemented and embedded.
This measure aims to ensure that the Company creates a culture aligned with our 2025
Strategy and the five Perenti Principles.
GROUP NET PROFIT
AFTER TA X (NPAT)
50%
The use of NPAT ensures that the majority of the individual’s STI is aligned to the
Company’s financial performance. It aims to build a pay-for-performance culture and
ensure executive accountability for the Company’s performance.
EBITDA CASH
CONVERSION
10%
The percentage of EBITDA converted to cash.
DELIVERING THE
BUSINESS PL AN
15%
This component supports the CFO with delivering their FY20 plan which includes
specific Finance function initiatives that support Company growth and performance.
INDIVIDUAL KPI –
KEY INITIATIVES
DELIVERED
5%
Key initiatives agreed between MD and the CFO as individual KPI and metrics.
The Board retains absolute discretion with respect to the targets and outcomes assessed under the STI plan.
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RE MUNE RATION REPORT (CONTINUED)
b. Executive KMP remuneration components (continued)
CESSATION OF
EMPLOYMENT
Typically, if employment ceases before the end of the performance period, the KMP foregoes any STI award for the
current performance period which they would have otherwise been entitled.
STI Rights that have been awarded will become unrestricted in the usual course unless the participant is deemed
to be a bad leaver as defined by the Plan Rules.
Notwithstanding the above, the Board retains absolute discretion to treat STI awards and vesting as it sees fit on
cessation of employment.
MALUS/CL AWBACK
In circumstances of fraud, dishonesty or gross misconduct by the participant, or breach of duties or obligations by
the participant, the Board has the ability to:
•
•
lapse all unvested STI awards (malus); and
require the individual to repay a portion of any STI awards which have vested (clawback).
Long-term Incentive (LTI)
DESCRIPTION
The Company continues the current LTI plan that was introduced in FY19. Under this scheme annual grants will be
made to eligible employees (including all Executive KMP) as part of their variable remuneration and are subject to
performance measures.
PERFORMANCE
PERIOD
Three (3) years, commencing on 1 July, with the exception of the FY19 LTI grant which commenced on
1 November 2018 and ends on 30 June 2021.
MA XIMUM LTI
OPPORTUNIT Y
MD: 120% of TFR
Other Executive KMP: CFO – 75% of TFR, CEO Underground Mining – 75% of TFR, CEO Surface Mining – 75% of TFR.
LTI DELIVERY
The LTI will be wholly delivered in Performance Rights.
Any Performance Rights that are provided to the Managing Director are subject to shareholder approval as per ASX
Listing Rule 10.14
ALLOCATION
METHODOLOGY
The LTI will be granted on a face value basis. This is calculated as the LTI opportunity ($) divided by the 10 day
volume weighted average price (VWAP) of the company’s shares prior to the commencement date of the
performance period.
PERFORMANCE
MEASURES
Relative Total Shareholder Return (TSR) (50%)
The vesting metrics are as follows:
TSR GROWTH AS AGAINST THE TSR BENCHMARK
% OF PERFORMANCE RIGHTS THAT WILL VEST
Below Median
Median
Median to 75th percentile
0%
50%
Straight-line vesting between
50% and 100%
75th percentile and above
100%
The peer group for the relative TSR measure includes AJ Lucas Group Limited; Austin Engineering Limited, Boart
Longyear Limited, CIMIC Group Limited, Decmil Group Limited, Downer EDI Limited, Emeco Holdings Limited, GR
Engineering Services Limited, Imdex Limited, Lycopodium Limited, MACA Limited, Macmahon Holdings Limited,
Monadelphous Group Limited, NRW Holdings Limited, SRG Global Limited and Swick Mining Services Limited.
Return on average capital employed (ROACE) (50%)
The vesting metrics are as follows (noting that EBIT will be normalised to exclude non-recurring items):
ROACE PERFORMANCE OVER PERFORMANCE PERIOD
% OF PERFORMANCE RIGHTS THAT WILL VEST
Less than 14.5% ROACE over
Performance Period.
14.5% ROACE over Performance Period.
Between 14.5% and 19% ROACE
over Performance Period.
Greater than 19% ROACE over
Performance Period.
0%
30%
Straight-line vesting between
30% and 100%
100%
The Board retains absolute discretion with respect to the targets and outcomes assessed under the LTI plan.
CESSATION OF
EMPLOYMENT
Typically, if employment ceases before the end of any LTI performance periods, the Executive KMP foregoes any
Performance Rights for the performance periods which they would have otherwise been entitled.
Notwithstanding the above, the Board retains absolute discretion to treat LTI awards and vesting as it sees fit on
cessation of employment.
MALUS/CL AWBACK
In circumstances of fraud, dishonesty or gross misconduct by the participant, or breach of duties or obligations by
the participant, the Board has the ability to:
•
•
lapse all unvested LTI awards (malus); and
require the individual to repay a portion of any LTI awards which have vested (clawback). This may occur via a
sale of shares allocated under the LTI plan.
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REMUNE RAT ION REPORT (CONTINUED)
5. Outcomes in FY20
a. Company performance
The Company is conscious of the need to link remuneration to performance. The table below sets out a summary of
information which provides details of performance measures used for the Executive KMP including NPAT and TRIFR, which are
all measures used in the STI or LTI plan.
Over the last 5 years, the complexity and size and reach of the Company’s operations has significantly increased, particularly
driven by the FY19 acquisition of Barminco.
Table 1: Company Performance FY16 – FY20
Sales revenue
Underlying EBIT (A) ^
20
19
18
17
16
$000
$000
$000
$000
$000
2,046,058
1,638,392
866,281
762,566
743,003
211,708
180,707
86,823
68,872
73,192
Operating profit before income tax *
107,146
268,554
74,079
44,622
26,578
Profit after tax from continued operations attributable to
equity holders
27,555
182,281
59,349
Net profit after tax attributable to equity holders
23,837
181,326
61,050
30,951
31,201
0.72
1.84
1.83
1.16
1.84
1.83
1.84
1.84
48,043
42,602
19,855
6,246
3.5
3.5
4.9
30.0
29.8
4.5
16.9
16.6
3.5
10.1
9.8
6.0
20,512
58,150
0.39
0.72
-
6.6
6.4
6.6
Share price at start of year ($ per share)
Share price at end of year ($ per share)
Dividends paid / payable**
Basic earnings (cents per share) from continuing operations
Diluted earnings (cents per share) from continuing operations
Total recordable Injury Frequency Rate (TRIFR)
^ Non IFRS Measure
* Does not include impairment expense
** Includes Dividend Reinvestment Plan (DRP)
b. FY20 STI outcomes
The table below outlines the actual STI outcomes for the Executive KMP in FY20.
Table 2: FY20 remuneration outcomes for the Executive KMP
EXECUTIVE KMP
Mark Norwell (MD)
Peter Bryant (CFO)
Paul Muller (CEO Underground)
Scott Winter (CEO Surface)
MA XIMUM STI
$
% OF MA XIMUM STI
VESTED
% OF MA XIMUM STI
FORFEITED
STI CASH
$
DEFERRED STI RIGHTS
$
$925,000
$385,000
$810,000
$506,250
29%
36%
29%
29%
71%
64%
71%
71%
$178,820
$93,042
$156,588
$97,868
$89,410
$46,521
$78,294
$48,934
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b. FY20 STI outcomes (continued)
Table 3: FY20 STI scorecard outcomes for the Executive KMP
The table below describes the FY20 STI scorecard outcomes for the Executive KMP on the continuum from
Threshold to Stretch
WEIGHTING -
MD AND CEO’S
WEIGHTING
– CFO
THRESHOLD
TARGET
STRETCH
FURTHER DETAIL
PERFORMANCE
MEASURE
TRIFR
% of ‘above the line’ actions
from HPI investigations
5%
5%
5%
5%
Embedding the Perenti
Strategy and Principles
10%
10%
Group NPAT
50%
50%
EBITDA Cash Conversion
Work in hand ratio
10%
15%
Delivering the business plan
0%
10%
0%
15%
Individual Key Performance
Indicators
5%
5%
FY20 Outcome
c. FY20 LTI outcomes
Fatality gateway was not met.
Fatality gateway was not met.
Achieved stretch performance including
developing behaviours to support the
Perenti Strategy and Principles.
Did not meet threshold. Normalised
$110.3M NPAT achieved against a $142.8M
target.
Achieved 96% being above the
95% stretch target.
Achieved slightly above threshold with a
1.74 ratio against a 2.05 Group target.
Achieved between target and stretch
performance.
Achieved stretch performance.
Executives successfully managed
considerable external factors and
continued to deliver 2025 business
strategy.
No LTI was due to vest in FY20. The Performance Rights issued through the FY19 LTIP will vest following their Performance
Period ending 30 June 2021.
ABN 95 009 211 474
Perenti – Annual Report 2020
59
FINANCIAL REPORT Directors’ report
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Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT
Directors’ report
RE MUNE RATION REPORT (CONTINUED)
6. Remuneration Governance
The Board has oversight of the remuneration practices at Perenti, and is largely guided by the People and Remuneration
Committee. The People and Remuneration Committee is made up of independent Non-executive Directors.
Board
Approves the overall Executive KMP remuneration framework, Executive KMP
remuneration levels and Non-executive Director remuneration, having regard to the
People and Remuneration Committee’s recommendations.
External Stakeholder Engagement
Consultation with proxy advisors and
institutional investors to ensure external
feedback is received.
People and Remuneration Committee
The Committee reviews and determines our remuneration framework annually to
ensure it remains aligned to business needs and meets our remuneration principles.
Management
Provides the People and Remuneration Committee with the required information to
assist with remuneration decisions and recommendations. Communicates with external
remuneration consultants to ensure the People and Remuneration Committee has all
the necessary information.
External Remuneration Consultants
From time to time, the People and
Remuneration Committee may engage
external remuneration consultants to
inform its views. KPMG-3dc are engaged
as the remuneration advisor to the People
and Remuneration Committee.
KPMG-3dc continued to be engaged by the People and Remuneration Committee as external remuneration advisors. However,
were not required to provide any remuneration recommendations during FY20 as the recommendations on Board member fees
provided in FY19 were utilised in FY20.
7. Contractual Arrangements with Executive KMP
Remuneration and other terms of employment for Executive KMP are formalised in service agreements.
Table 5 –Current KMP employment contracts
NAME
Mark Norwell (MD)
Peter Bryant (CFO)
NOTICE PERIOD
TFR
DURATION OF SERVICE
AGREEMENT
BY EXECUTIVE
BY COMPANY
SEVERANCE PAYMENT
ENTITLEMENT
$925,000
$550,000
Ongoing
6 months
6 months
No entitlement
Ongoing
3 months
3 months
No entitlement
Paul Muller (CEO Underground Mining)
$810,000
Ongoing
3 months
3 months
No entitlement
Scott Winter (CEO Surface Mining)
$675,000
Ongoing
3 months
3 months
No entitlement
8. Non-executive Director Remuneration
a. Non-executive Director fees
Non-executive Directors’ fees are set at a level which enables the attraction and retention of experienced and skilled Board
members to ensure an effective oversight role over the Company’s operations. Fee levels aim to reflect the demands which are
made on, and the responsibilities of, the Directors.
Non-executive Directors’ fees are reviewed annually by the Board to ensure fee levels are appropriate and in-line with
the market. Following an external market review provided by KPMG 3dc of companies comparable to Perenti, a separate
Committee Member fee was introduced and the fees for the Board and Committee Chairs were increased from 1 January
2020. The current Perenti Board fees are as follow:
POSITION
Board Chair **
Board Members
Committee Chair
Committee Members
FY20 FEES*
FY19 FEES*
$225,000
$175,200
$114,975
$20,000
$11,000
$114,975
$16,425
N/A
* All fees are inclusive of Superannuation. An individual NED may seek Australian Tax Office approval to be exempt from Superannuation payment as per relevant
legislation.
** The Board Chair’s fee is inclusive of all Board and Committee responsibilities.
ABN 95 009 211 474
Perenti – Annual Report 2020
61
FINANCIAL REPORT Directors’ report
REMUNE RAT ION REPORT (CONTINUED)
b. Statutory disclosure of FY20 Non-executive Director remuneration
Table 6 – FY20 Non-executive Director remuneration
YEAR
BASE FEE
EXECUTIVE
CHAIRMAN *
AUDIT AND RISK
COMMIT TEE
REMUNERATION
COMMIT TEE
SUPERANNUATION
9.5%
TOTAL
I H COCHRANE CHAIR [1]
T J STRAPP [2]
M A HINE
R J COLE [3]
A C ATKINS
A HALL [4]
K D GORDON [5]
D J ARGENT [6]
TOTAL
NON-EXECUTIVE DIRECTORS
Notes
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
182,740
160,000
105,000
105,000
105,000
105,000
105,000
101,029
105,000
101,029
56,875
-
17,904
70,000
-
3,977
677,519
646,035
-
33,479
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,479
-
-
10,023
15,000
-
11,632
-
-
-
5,420
-
-
-
-
-
-
-
-
-
16,632
15,000
5,023
-
5,023
-
-
-
-
-
-
-
17,360
200,100
18,380
211,859
10,927
125,950
11,400
131,400
11,555
133,187
11,400
131,400
11,557
133,212
9,598
110,627
10,452
120,475
9,598
5,918
-
1,701
6,650
-
378
110,627
68,213
-
19,605
76,650
-
4,355
27,075
15,000
26,678
15,000
69,470
800,742
67,404
776,918
[1] Mr Cochrane served as Executive Chairman in the interim period between Mr Sayers resignation as Managing Director on 3 July 2018 and Mr Norwell
commencing as Managing Director on 17 September 2018.
[2] Mr T Strapp was the Chairman of the Audit and Risk Committee until 01 October 2019 and remained a Committee member until the end of the year.
[3] Mr Cole was appointed Chair of the Audit and Risk Committee on 01 October 2019 and served as Chairman until 17 June 2020. Prior to this Mr Cole was a
member of the Audit and Risk Committee during the year.
[4] Ms Hall served on the Audit and Risk Committee from her appointment as a director on 15 December 2019 for the year. Ms Hall was appointed as Audit and Risk
Committee Chair on 17 June 2020.
[5] Pursuant to the Barminco acquisition in October 2018, Mr Gordon was appointed as a representative of certain Barminco vendors and is therefore not considered
to be an independent director. Mr Gordon resigned from the office of director on 1 September 2019.
[6] D J Argent resigned 13 July 2018.
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Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Directors’ report
RE MUNE RATION REPORT (CONTINUED)
9. Additional Statutory Information
This section provides details of any additional statutory disclosures that have not been included in the previous sections of the
Remuneration Report. There has been no alterations to the terms and conditions of the prior year Rights grants during the
financial year.
a. Executive KMP equity awards
Reconciliation of rights held by KMP
The table below shows a reconciliation of rights held by each KMP from the beginning to the end of 30 June 2020.
NAME & GRANT DATES
INSTRUMENT
M Norwell
HOLDING
AT 01 JULY
2019
RIGHTS
ISSUED IN
FY20
NUMBER % NUMBER %
VESTED
FORFEITED
HOLDING
AT 30 JUNE
2020
VESTING DATE
FAIR VALUE
PER RIGHT
AT GRANT
DATE
28 February 2019
Performance Right - TSR
324,543
28 February 2019
Performance Right - ROACE
324,544
28 November 2019 Performance Right - TSR
28 November 2019 Performance Right - ROACE
24 October 2019
Short Term Incentive Rights
-
-
-
284,091
284,091
112,058
P Bryant
28 February 2019
Performance Right - TSR
134,888
28 February 2019
Performance Right - ROACE
134,889
28 November 2019 Performance Right - TSR
28 November 2019 Performance Right - ROACE
24 October 2019
Short Term Incentive Rights
118,075
118,076
61,530
P Muller
28 February 2019
Performance Right - TSR
196,501
28 February 2019
Performance Right - ROACE
196,501
28 February 2019
Retention Right
524,003
28 November 2019 Performance Right - TSR
28 November 2019 Performance Right - ROACE
S Winter
28 November 2019 Performance Right - TSR
28 November 2019 Performance Right - ROACE
172,008
172,008
144,265
144,265
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0% 324,543 30 June 2021
0% 324,544 30 June 2021
0% 284,091 30 June 2022
0% 284,091 30 June 2022
$1.22
$1.60
$1.33
$1.78
0% 112,058 24 October 2020
$1.88
0% 134,888 30 June 2021
0% 134,889 30 June 2021
0% 118,075 30 June 2022
0% 118,076 30 June 2022
$1.22
$1.60
$1.33
$1.78
0% 25,638 24 October 2020
$1.88
0% 196,501 30 June 2021
0% 196,501 30 June 2021
$1.22
$1.60
0% 524,003 31 October 2020
$1.64
0% 172,008 30 June 2022
0% 172,008 30 June 2022
0% 144,265 30 June 2022
0% 144,265 30 June 2022
$1.33
$1.78
$1.33
$1.78
201,809 STI Rights to be granted to current KMP’s post 30 June 2020 have not been included in the above table.
Terms and conditions of the share-based payment arrangements
The terms and conditions of each grant of rights affecting remuneration in the current or a future reporting period are as
follows:
GRANT DATE
VESTING AND
EXERCISE DATE
EXPIRY DATE
FAIR VALUE PER RIGHT
AT GRANT DATE
TSR/ROACE PERFORMANCE
ACHIEVED
% VESTED
28-February-2019
30-June-2021
30-June-2021
28-February-2019
30-June-2021
30-June-2021
$1.60
$1.22
28-February-2019
31-October-2020
31-October-2020
$1.64
28-November-2019
30-June-2022
30-June-2022
28-November-2019
30-June-2022
30-June-2022
$1.33
$1.78
to be determined
to be determined
to be determined
to be determined
to be determined
0%
0%
0%
0%
0%
Details of rights over ordinary shares in the Company provided as remuneration to key management personnel of the Group
are set out above. On vesting, each right is convertible into one ordinary share of Perenti Global Limited. Further information
on the rights is set out in note 20 to the financial statements.
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63
FINANCIAL REPORT Directors’ report
REMUNE RAT ION REPORT (CONTINUED)
b. Shareholdings of KMP
The number of ordinary shares in Perenti held directly, indirectly or beneficially by each individual (including shares held in the
name of the spouse, superannuation fund, nominee and/or other controlled entities) as at 30 June 2020 are shown in Table 7
below.
Table 7 – Shareholdings
NAME
DIRECTORS
IC Cochrane
TJ Strapp
MA Hine
RJ Cole
AC Atkins
A Hall
EXECUTIVE
MA Norwell
P Bryant *
P Muller *
S Winter
BAL ANCE AT
START OF YEAR
RECEIVED DURING THE
YEAR ON EXERCISE OF
OPTIONS
RECEIVED ON VESTING
OF RIGHTS
PURCHASE OF
SHARES
DRP SHARES
BAL ANCE AT END
OF YEAR
OTHER CHANGES DURING THE YEAR
1,031,130
550,000
110,211
20,000
-
-
-
142,063
147,120
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55,073
1,086,203
29,375
579,375
11,560
40,000
32,300
52,000
50,000
-
-
6,500
-
-
-
-
-
121,771
60,000
32,300
52,000
50,000
7,587
149,650
-
-
147,120
6,500
* Shares released from escrow 30 Aug 2019
None of the shares above are held nominally by the directors or any of the other key management personnel.
c. Prohibition on hedging of Perenti shares and unvested equity awards
The Company’s Securities Trading Policy imposes trading restrictions on all employees of the Company and its related
companies with “inside information” or with respect to derivative products and on trading securities during trading prohibition
periods.
d. Loans to KMP
Loans to key management personnel were made on normal terms and conditions. The loans on acquisition of the Barminco
group are repayable by 22 October 2022. Interest was payable at the rate of 4.80% and 5.20% on loans advanced. Outstanding
balances are unsecured and are repayable in cash.
Loans to key management personnel
Beginning of the period
Loans on acquisition of Barminco
Loan repayments made
Interest charged
Interest received
End of period
20
$
190,409
19
$
-
-
192,550
(2,327)
9,867
(10,437)
(2,141)
5,581
(5,581)
187,512
190,409
64
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Directors’ report
RE MUNE RATION REPORT (CONTINUED)
e. Other transactions with entities associated with KMP
A director, I H Cochrane, is a non-executive director of Dacian Gold Limited. Dacian Gold has been provided with mining
services by Perenti Global Limited. These services have been provided on arm’s length commercial terms and conditions.
Mr Cochrane is not party to any contract negotiations for either party.
A director, Robert Cole, was a director of Iluka Resources Limited and is currently Chairman of Synergy. A number of Australian
Perenti Limited subsidiaries have been provided with electricity services from Synergy. In the prior year, Iluka Resources Limited
entered into a drilling services contract with a Perenti Global Limited subsidiary, Ausdrill Pty Ltd. All contracts and services are
based on normal commercial terms and conditions and Mr Cole is not party to any contract negotiations for either party.
A director, Andrea Hall, is a non-executive director of Evolution Mining Limited. Evolution Mining has been provided with
mining services and mineral analysis services by a Perenti Global Limited subsidiary. All contracts and services are based on
normal commercial terms and conditions and Ms Hall is not party to any contract negotiations for either party
Aggregate amounts of each of the above types of other transactions with entities associated with key management personnel
of Perenti Global Limited:
(i) Amounts recognised as revenue
Drilling and mining services*
(ii) Amounts recognised as expense
Rental of office buildings
Electricity services*
(iii) Amounts recognised as assets and liabilities
At the end of the reporting period, the following aggregate amounts were recognised in relation to
the above transactions:
Receivables
Payables
20
$
19
$
3,233,476
1,535,764
-
-
261,381
614,166
6,792
18,785
-
-
* The balance includes amounts from the date Ms Hall was appointed director on 15 December 2019. The prior year balance includes amounts from the date
Mr Cole was appointed director on 14 July 2018.
f. Voting of shareholders at last year’s annual general meeting
99.57% of the votes were in favor of the 2019 Annual Remuneration Report.
This Remuneration Report was approved by the Board on 24 August 2020 and has been signed in accordance with a resolution
of the Directors made pursuant to section 298(2) of the Corporations Act 2001 (Cth).
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Perenti – Annual Report 2020
65
FINANCIAL REPORT Directors’ report
S H A R E S U N D E R O P T I O N A N D R I G H T S
Unissued ordinary shares of Perenti Global Limited under option at the date of this report are as follows:
DATE OPTIONS GRANTED
EXPIRY DATE
ISSUE PRICE OF SHARES
NUMBER UNDER OPTION
23 December 2015
20 April 2018
20 April 2018
23 December 2020
21 November 2021
12 June 2022
$0.17
$1.19
$1.55
800,005
266,667
133,334
1,200,006
No option holder has any right under the options to participate in any other share issue of the Company or any other Group entity.
Unissued ordinary shares of Perenti Global Limited under rights at the date of this report are as follows:
DATE RIGHTS GRANTED
28 February 2019
28 February 2019
28 February 2019
10 June 2019
10 June 2019
24 October 2019
28 November 2019
28 November 2019
EXPIRY DATE
30 June 2021
30 June 2021
31 October 2020
30 June 2021
30 June 2021
30 June 2021
30 June 2022
30 June 2022
FAIR VALUE PER RIGHT
$1.60
$1.22
$1.64
$1.23
$0.82
$1.88
$1.78
$1.33
NUMBER
1,015,294
1,015,300
939,825
1,124,445
1,124,461
284,527
2,070,098
2,070,084
9,644,034
SH ARE S I SSUED ON THE EXERCISE OF OPTIONS
The following ordinary shares of Perenti Global Limited were issued during the year ended 30 June 2020 on the exercise of options
granted under the Employee Option Plan. No further shares have been issued since that date. No amounts are unpaid on any of the
shares.
DATE SHARES ISSUED
5 July 2019
29 August 2019
5 September 2019
9 September 2019
12 September 2019
10 October 2019
9 December 2019
28 December 2019
29 December 2019
30 December 2019
31 December 2019
3 March 2020
9 April 2020
14 April 2020
16 April 2020
19 April 2020
11 May 2020
10 June 2020
17 June 2020
ISSUE PRICE OF SHARES
NUMBER OF SHARES ISSUED
$1.85
$1.88
$2.09
$2.23
$2.20
$2.16
$1.93
$1.65
$1.65
$1.65
$1.65
$1.38
$0.57
$0.64
$0.87
$0.87
$1.07
$1.53
$1.40
60,360
166,666
133,333
133,333
61,378
61,280
60,638
308,659
29,808
327,889
327,889
29,118
66,668
324,261
33,334
26,640
66,668
66,667
33,334
2,317,923
66
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Directors’ report
INDE MNIFI CATION
Under the Company’s constitution and subject to section 199A of the Corporations Act 2001, the Company indemnifies each of the
directors, the company secretary and every other person who is an officer of the Company and its wholly-owned subsidiaries against:
•
any liability incurred as an officer of the Company (as the case may be) by that person to any person other than the Company or a
related body corporate of the Company, unless that liability arises out of conduct involving a lack of good faith or is a liability for a
pecuniary penalty order under certain provisions of the Corporations Act 2001; and
•
costs and expenses incurred in defending civil or criminal proceedings subject to certain conditions.
The above indemnity is a continuing indemnity and applies in respect of all acts done by a person while an officer of the Company or
its wholly-owned subsidiaries even though the person is not an officer at the time the claim is made.
The Company has entered into a Deed of Indemnity, Access and Insurance (“Deed”) with each current and former officer of the
Company and its subsidiaries, including each director and company secretary and persons who previously held those roles. Under
each Deed, to the extent permitted by law and to the extent and in the amount that the officer is not indemnified under any other
indemnity, including an indemnity contained in any insurance policy, the Company indemnifies the relevant officer against all liabilities
of any kind (including liabilities for legal expenses) incurred by the officer arising out of:
•
•
the discharge of his or her duties as an officer of the Company or a subsidiary of the Company, or as an officer of any corporation
in which the Company holds securities (“Related Corporation”) where the officer is representing the interests of the Company in
relation to the Related Corporation; and
the conduct of the business of the Company or a subsidiary of the Company, or a Related Corporation where the officer is
representing the interests of the Company in relation to that Related Corporation.
No amount has been paid under any of these indemnities during the financial year under review.
INSURANCE OF OFFICER S
During the financial year, the Company has paid a premium in respect of insuring the directors and officers of the Company and the
Group. The insurance contract prohibits disclosure of the premium or the nature of liabilities insured against under the policy.
PROCEE DINGS ON BEHALF OF T HE CO MPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
NO N-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise
and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor (PwC) for audit and non-audit services provided during the year are set out in
note 20 to the financial statements.
The Board of directors have considered the position and, in accordance with advice received from the Audit and Risk Committee, is
satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor did not compromise the
auditor independence requirements of the Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the impartiality and
objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
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Perenti – Annual Report 2020
67
FINANCIAL REPORT Directors’ report
NON-AUDI T SERVICES (CONTINUED)
During the year, the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, it’s related
practices and non-related audit firms:
Other assurance services
PricewaterhouseCoopers firm:
Advisory and accounting consulting services
Non PricewaterhouseCoopers firms:
Advisory and accounting consulting services
Total remuneration for other assurance services
Taxation services
PricewaterhouseCoopers firm:
Taxation services
Non PricewaterhouseCoopers firms:
Taxation services
Total remuneration for taxation services
Total remuneration for non-audit services
20
$
19
$
1,257,748
1,590,063
677,134
56,037
1,934,882
1,646,100
964,726
738,086
350,513
1,315,239
11,546
749,632
3,250,121
2,395,732
AUDIT OR’S INDEPENDENCE DECL ARATION
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 69.
RO UNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the directors’
report. Amounts in the directors’ report have been rounded off in accordance with the instrument to the nearest thousand dollars, or in
certain cases, to the nearest dollar.
This report is made in accordance with a resolution of directors.
Mark Alexander John Norwell
Managing Director and Chief Executive Officer
Perth
24 August 2020
68
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Perenti Global Limited for the year ended 30 June 2020, I declare that
to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Perenti Global Limited and the entities it controlled during the period.
Craig Heatley
Partner
PricewaterhouseCoopers
Perth
24 August 2020
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
ABN 95 009 211 474
Perenti – Annual Report 2020
69
FINANCIAL REPORT
Corporate governance statement
Perenti and the Board are committed to achieving the highest standards of corporate governance and business conduct.
The Company has reviewed its corporate governance framework and practices against the Corporate Governance Principles and
Recommendations (4th edition) published by the ASX Corporate Governance Council.
The 2020 Corporate Governance Statement is dated 30 June 2020 and was approved by the Board on 24 August 2020. The 2020
Corporate Governance Statement sets out the key aspects of the Company’s corporate governance framework and main governance
practices for the year ended 30 June 2020. The 2020 Corporate Governance Statement can be viewed at perentigroup.com.
Board Members
Non-Executive Chairman
Ian Cochrane
Managing Director and CEO
Mark Norwell
Non-Executive Director
Terrence Strapp
Non-Executive Director
Mark Hine
Non-Executive Director
Alexandra Atkins
Non-Executive Director
Robert Cole
Non-Executive Director
Andrea Hall
Board Committees
Audit & Risk Committee
People & Remuneration Committee
Charters
Board Charter
Audit & Risk Committee Charter
People & Remuneration Committee Charter
Corporate Governance Policies
Market Disclosure and
Communication Policy
Anti-Bribery and Anti-Corruption
Policy and Standard
Securities Trading Policy
Code of Conduct Policy and
Booklet
Environmental Policy
Risk and Opportunity
Management Policy
Inclusion and Diversity Policy
Speak-Up Policy (Global) and
Speak-Up Standard (Australia)
Safety and Health Policy
Privacy Policy
Quality Policy
VO LUNTARY TAX TRANSPARENCY CODE
The Company has chosen to provide additional disclosure of tax information as recommended by the Board of Taxation’s
Voluntary Tax Transparency Code (“TTC”). The Company is currently classified as a ‘large business’ for the purposes of the TTC
(i.e. The Company’s aggregated Australian turnover exceeds A$500 million) and has chosen to disclose the following tax information
in this Annual Report:
PA RT A
• A reconciliation of accounting profit to tax expense. This information is disclosed in note 5(b) to the Consolidated Financial
Statements in this Annual Report;
•
Identification of material temporary and permanent differences. This information is disclosed in notes 5(b), 5(c), 5(d) and 7(c) to the
Consolidated Financial Statements in this Annual Report; and
• Accounting effective company tax rates for Australian and global operations. This information is disclosed in note 5(e) to the
Consolidated Financial Statements in this Annual Report.
PA RT B
• Part B will be disclosed in a taxes paid report.
70
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Consolidated statement of profit or loss
Revenue from continuing operations
Other income
Materials expense
Labour costs
Rental and hire expense
Depreciation expense
Amortisation expense
Finance costs
Finance income
Other expenses from ordinary activities
Impairment of assets
Share of net profit of joint ventures accounted for using the equity method
Profit before income tax
Income tax (expense)/benefit
Profit for the year
Profit is attributable to:
Equity holders of Perenti Global Limited
Non-controlling interests
Profit for the year
Notes
2
4(a)
4(b)
4(b)
4(b)
4(b)
4(b)
4(b)
5
20
$’000
19
$’000
2,046,058
1,638,392
12,125
208,124
(651,013)
(598,787)
(759,570)
(556,288)
(19,114)
(24,907)
(232,141)
(164,829)
(38,564)
(53,605)
1,471
(29,062)
(55,382)
3,143
(198,501)
(162,559)
(59,608)
(113,635)
-
10,709
47,538
154,919
(19,983)
27,555
27,362
182,281
23,837
3,718
27,555
181,326
955
182,281
Earnings per share for profit attributable to the ordinary equity holders of the Company:
Basic earnings per share
Diluted earnings per share
21
21
3.5
3.5
30.0
29.8
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
ABN 95 009 211 474
Perenti – Annual Report 2020
71
FINANCIAL REPORT Consolidated statement of comprehensive income
Profit for the year
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss
Exchange losses on translation of foreign operations
Exchange (losses)/gains on translation of foreign operations - non-controlling interest
Items that will not be reclassified to profit or loss
Gain on revaluation of land and buildings, net of tax
Gain on revaluation of FVOCI financial assets, net of tax
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year is attributable to:
Equity holders of Perenti Global Limited
Non-controlling interests
Total comprehensive income for the year
Notes
8(b)
8(b)
8(b)
20
$’000
19
$’000
27,555
182,281
(11,240)
(64)
(4,216)
21
229
6,542
(4,533)
490
3,341
(364)
23,022
181,917
19,368
180,941
3,654
23,022
976
181,917
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
72
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Consolidated statement of financial position
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Assets classified as held for sale
Current tax receivables
Total current assets
Non-current assets
Receivables
Financial assets at fair value through other comprehensive income
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax liabilities
Employee benefit obligations
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred tax liabilities
Employee benefit obligations
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Other reserves
Retained earnings
Capital and reserves attributable to owners of Perenti Global Limited
Non-controlling interests
Total equity
Notes
20
$’000
19
$’000
6(a)
6(b)
7(a)
7(b)
6(b)
6(c)
7(c)
7(d)
7(e)
7(f)
6(d)
6(e)
7(d)
7(g)
6(e)
7(d)
7(f)
7(g)
8(a)
8(b)
8(c)
327,491
369,309
250,379
-
6,190
223,524
399,354
251,110
13,626
10,902
953,369
898,516
830
23,632
2,038
17,581
818,096
887,666
110,739
705,156
131,072
-
743,569
117,396
1,789,525
1,768,250
2,742,894
2,666,766
261,095
268,525
7,148
29,482
14,351
71,902
25,762
-
18,578
65,043
383,978
377,908
775,091
72,136
110,131
1,804
731,681
-
143,948
1,617
959,162
877,246
1,343,140
1,255,154
1,399,754
1,411,612
1,135,323
1,126,769
(11,104)
(10,835)
270,039
293,836
1,394,258
1,409,770
5,496
1,842
1,399,754
1,411,612
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
ABN 95 009 211 474
Perenti – Annual Report 2020
73
FINANCIAL REPORT TOTAL
EQUIT Y
$’000
774,751
(7,527)
767,224
182,281
(364)
-
-
-
955
21
866
866
-
-
-
-
64
258,393
2,213
(42,602)
Consolidated statement of changes in equity
AT TRIBUTABLE TO OWNERS OF PERENTI GLOBAL LIMITED
Notes
CONTRIBUTED
EQUIT Y
$’000
OTHER RESERVES
$’000
RETAINED
EARNINGS
$’000
NON-
CONTROLLING
INTERESTS
$’000
TOTAL
$’000
Balance at 1 July 2018
624,571
(12,459)
162,639
774,751
Change in accounting policy on
adoption of AASB 15
-
-
(7,527)
(7,527)
Restated total equity at 1 July 2018
624,571
(12,459)
155,112
767,224
Profit for the year
Other comprehensive (loss)/income
Total comprehensive income/(loss) for
the year
Transactions with owners in their
capacity as owners:
-
-
-
Contributions of equity, net of
transaction costs and tax
Non-controlling interests on
acquisition of subsidiary
Shares issued on conversion of
employee share options
243,537
-
-
-
8(b)
268
(204)
-
181,326
181,326
(385)
-
(385)
(385)
181,326
180,941
976
181,917
243,537
-
243,537
Issue of ordinary shares as
consideration for a business
combination, net of transaction costs
and tax
Employee share options/rights -
value of employee services
8(b)
Dividends paid
258,393
-
2,213
-
-
-
(42,602)
(42,602)
-
-
-
-
-
-
64
258,393
2,213
Balance at 30 June 2019
1,126,769
(10,835)
293,836
1,409,770
1,842
1,411,612
502,198
2,009
(42,602)
461,605
866
462,471
Balance at 1 July 2019
1,126,769
(10,835)
293,836
1,409,770
1,842
1,411,612
Profit for the year
Other comprehensive loss
Total comprehensive income/(loss) for
the year
-
-
-
-
23,837
23,837
(4,469)
-
(4,469)
3,718
(64)
27,555
(4,533)
(4,469)
23,837
19,368
3,654
23,022
Transactions with owners in their
capacity as owners:
Transfer of gain on disposal of equity
investments at fair value through other
comprehensive income to retained
earnings
Issue of ordinary shares as part of
dividend reinvestment plan, net of
transaction costs and tax
Shares issued on conversion of
employee share options
Deferred tax movement on capital
raising costs
8(b)
8(a)
Dividends paid/payable
12(b)
Employee share options/rights - value
of employee services
8(b)
8(a), 8(b)
285
-
(409)
409
-
8,849
(580)
-
-
8,554
-
(98)
-
-
-
-
-
8,849
187
(580)
(48,043)
(48,043)
4,707
4,200
-
4,707
(47,634)
(34,880)
-
-
-
-
-
-
-
-
8,849
187
(580)
(48,043)
4,707
(34,880)
Balance at 30 June 2020
1,135,323
(11,104)
270,039
1,394,258
5,496
1,399,754
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
74
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Consolidated statement of cash flows
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Interest received
Interest and other costs of finance paid
Income taxes paid
Management fee received from joint ventures
Net cash inflow from operating activities
Cash flows from investing activities
Payments for purchase of subsidiaries
Payments for property, plant and equipment
Payments for intangibles
Proceeds from sale of property, plant and equipment
Payments for assets at FVOCI
Proceeds from sale of assets at FVOCI
Proceeds from sale of assets held for sale
Cash acquired on acquisition of subsidiary
Minority interest on start-up of joint venture
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares, net of transaction costs
Proceeds from secured borrowings
Repayment of unsecured borrowings
Repayment of secured borrowings
Proceeds from unsecured borrowings
Repayment of lease liabilities
Notes
20
$’000
19
$’000
2,178,904
1,683,000
(1,752,117)
(1,385,320)
426,787
297,680
1,471
(53,605)
(68,114)
-
3,143
(61,035)
(33,432)
556
9(a)
306,539
206,912
13
7(c)
-
(17,205)
(235,704)
(206,013)
13
(150)
45,619
-
3,268
16,000
-
-
(55)
11,170
(809)
-
1,565
100,544
866
(170,967)
(109,937)
-
242,338
284,985
232,362
(9,256)
(421,293)
(251,872)
8,731
(33,809)
(24,019)
-
(25,240)
(15,762)
5,072
(21,677)
(42,602)
8,421
(13,141)
110,332
83,834
223,524
137,258
(6,365)
2,432
Dividends paid to Company’s shareholders
12(b)
Proceeds from Cross Currency Interest Rate Swaps close-out
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
6(a)
327,491
223,524
Non-cash investing and financing activities (refer note 9(b))
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
ABN 95 009 211 474
Perenti – Annual Report 2020
75
FINANCIAL REPORT Notes to the consolidated financial statements
How numbers are calculated
1
2
3
4
5
6
7
8
9
Risk
10
11
12
Segment information
Revenue
Individually significant items
Other income and expense items
Income tax expense/(benefit)
Financial assets and financial liabilities
Non-financial assets and liabilities
Equity
Cash flow information
Critical accounting estimates and judgements
Financial risk management
Capital management
Group structure
13
14
Business combination
Interests in other entities
Unrecognised items
15
16
17
Contingencies
Commitments
Events since the end of the financial year
Other disclosure
18
19
20
21
22
23
24
25
26
Related party transactions
Share-based payments
Remuneration of auditors
Earnings per share
Assets pledged as security
Deed of cross guarantee
Parent entity financial information
Summary of significant accounting policies
Changes in accounting policies
Page
78
83
84
86
88
90
97
108
111
113
114
114
119
120
121
122
123
124
124
125
126
127
129
131
132
133
133
136
138
147
76
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
H OW N U M B E R S A R E C A L C U L AT E D
This section provides additional information about those individual line items in the financial statements that the directors consider
most relevant in the context of the operations of the entity, including:
(a) accounting policies that are relevant for an understanding of the items recognised in the financial statements. These cover situations where
the accounting standards either allow a choice or do not deal with a particular type of transaction
(b) analysis and subtotals, including segment information
(c) information about estimates and judgements made in relation to particular items.
1
2
3
4
5
6
7
8
9
Segment information
Revenue
Individually significant items
Other income and expense items
Income tax expense/(benefit)
Financial assets and financial liabilities
Non-financial assets and liabilities
Equity
Cash flow information
78
83
84
86
88
90
97
108
111
ABN 95 009 211 474
Perenti – Annual Report 2020
77
FINANCIAL REPORT Notes to the consolidated financial statements
1 S E G M E N T I N F O R M AT I O N
a. Description of segments
Management has determined the operating segments based on the internal reports reviewed by the Managing Director that
are used to make strategic decisions. The Managing Director assesses the performance of the operating segments based on
Revenue and EBIT.
The operating segments are identified by the Managing Director based on the nature of the services provided. The Managing
Director considers the business from a geographic perspective, similarity of the services provided and the nature of risks and
returns associated with each business.
Reportable segments are:
Surface Mining:
The provision of surface mining services including drilling and blasting, in-pit grade control, exploration drilling and
earthmoving in Australia and Africa.
Underground Mining:
The provision of underground mining services in Australia, Africa, India and Canada.
Investments:
Operating segments which do not meet the aggregation criteria for the current segments. This includes the provision of mining
supplies, products and services including equipment hire, equipment parts and sales and mineral analysis.
Group Functions:
This segment includes Group central functions including treasury, accounting, human resources, information technology,
business development, procurement, financing and administration.
Intersegment eliminations:
Represents transactions which are eliminated on consolidation.
Interest income and expenditure are not allocated to segments, as this type of activity is driven by the central treasury function,
which manages the cash position of the group.
EBIT (A)
EBIT (A) is defined as earnings before finance costs, finance income, income tax expense or benefit and amortisation of
intangible assets.
78
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
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ABN 95 009 211 474
Perenti – Annual Report 2020
79
FINANCIAL REPORT
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ABN 95 009 211 474
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1
80
FINANCIAL REPORT
Notes to the consolidated financial statements
1 . S E G M E N T I N F O R M AT I O N (CO N T I N U E D)
c. Other segment information
(i) Segment revenue
Sales between segments are carried out at arm’s length and are eliminated on consolidation. The revenue from external parties
reported to the Managing Director is measured in a manner consistent with that in the consolidated income statement.
Total revenue by geographical location is as follows:
30 JUNE 2020
30 JUNE 2019
TOTAL SEGMENT
REVENUE
INTER-
SEGMENT
REVENUE
REVENUE FROM
EXTERNAL
CUSTOMERS
TOTAL SEGMENT
REVENUE
INTER-
SEGMENT
REVENUE
REVENUE FROM
EXTERNAL
CUSTOMERS
$’000
$’000
$’000
$’000
$’000
$’000
Surface Mining
Australia
Ghana
Mali
Burkina Faso
Senegal
Other foreign countries
Underground Mining
Australia
Ghana
Burkina Faso
Tanzania
Egypt
Botswana
India
Canada
Investments
Australia
Africa
Other foreign countries
183,911
132,402
152,951
66,179
73,947
1,384
602,743
250,630
213,773
99,439
84,831
25,964
19,189
3,227
(2,176)
(625)
181,735
212,795
131,777
212,978
(3,541)
(365)
-
-
-
-
-
-
-
-
-
-
-
-
152,951
159,396
66,179
73,947
1,384
101,181
60,839
2,916
602,743
250,630
355,415
115,594
213,773
109,403
99,439
84,831
25,964
19,189
3,227
95,572
58,218
-
12,954
-
-
-
-
-
-
-
-
-
-
-
-
-
127,256
(4,750)
122,506
135,125
25,585
5,264
(11,879)
(3,187)
13,706
2,077
22,387
5,232
(3,369)
(10,292)
(4,046)
209,254
212,613
159,396
101,181
60,839
2,916
355,415
115,594
109,403
95,572
58,218
-
12,954
-
131,756
12,095
1,186
Total segment revenue
2,068,675
(22,617)
2,046,058
1,660,005
(21,613)
1,638,392
ABN 95 009 211 474
Perenti – Annual Report 2020
81
FINANCIAL REPORT Notes to the consolidated financial statements
1 . S E G M E N T I N F O R M AT I O N (CO N T I N U E D)
(ii) Segment assets
Segment assets are measured in the same way as in the financial statements. These assets are allocated based on the
operations of the segment and the physical location of the asset.
Total of non-current assets other than deferred tax assets, broken down by location of the assets, is shown in the table below.
Surface Mining
Australia
Ghana
Burkina Faso
Mali
Senegal
Other foreign countries
Underground Mining
Australia
Ghana
Burkina Faso
Mali
Tanzania
Egypt
India
Botswana
Investments
Australia
Africa
Other foreign countries
Group Functions
Australia
Other foreign countries
Total non-current segment assets
20
19
NON-CURRENT
SEGMENT ASSETS
NON-CURRENT
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ASSETS
$’000
$’000
105,210
97,629
135,717
174,418
78,764
64,937
60,090
-
80,529
73,587
60,600
135
470,271
481,604
169,434
226,298
20,136
86,777
17,591
-
40,576
179,231
220,082
20,797
110,208
14,206
294
-
115,940
84,728
485
16
118
-
65,729
52,689
481
-
1,658,452
1,650,855
82
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
2 . R E V E N U E
The Group derives the following types of revenue:
Sales revenue
Contract mining services
Equipment rental
Sale of goods
a. Revenue recognition
Notes
2(a)(i)
2(a)(ii)
2(a)(iii)
20
$’000
19
$’000
1,940,936
1,548,345
60,595
44,527
58,859
33,188
2,046,058
1,638,392
Revenue is recognised for the major business activities using the methods outlined below.
(i) Contract mining services
Contracts for services includes contract mining (both underground and surface mining), drill and blast, in-pit grade control,
exploration drilling, earthmoving, rental of equipment and mineral assays and analysis. The performance obligation is fulfilled
over time as the Group enhances mining assets which the customer controls and for which the Group has a right to payment
for performance to date and as such revenue is recognised over time. Revenue is recognised monthly based on units of
production at agreed contract rates that is aligned with the stand-alone selling prices for each performance obligation. Majority
of the Group’s revenue is paid one month in arrears and therefore gives rise to an accrued revenue. The total transaction price
for contract services may include variable consideration.
(ii) Equipment rental
Revenue is recorded overtime as the customer simultaneously receives and consumes the benefits, the entity has an
enforceable right to payment and as such the performance obligation is fulfilled overtime.
(iii) Sale of goods
Revenue is recorded at a point in time when control has been transferred to the customer, generally being when the goods
have been despatched to a customer pursuant to the sales order.
See note 25(e) for the recognition and measurement of revenue. Amounts disclosed as revenue are net of returns, trade
allowances, duties and other taxes paid. Refer note 6(b) for accrued revenue.
b.
Revenue recognised in relation to contract liabilities
The Group recognised revenue from the amortisation of deferred revenue liabilities relating to mining services contracts as
follows:
Revenue recognised in relation to contract liabilities
20
$’000
2,978
19
$’000
2,404
ABN 95 009 211 474
Perenti – Annual Report 2020
83
FINANCIAL REPORT Notes to the consolidated financial statements
3 . I N D I V I D UA L LY S I G N I F I C A N T I T E M S
The Group has identified a number of items which are material due to the significance of their nature and/or amount. These are
listed separately here to provide a better understanding of the financial performance of the Group.
Impairment of property, plant and equipment
Impairment of inventory
Impairment other
Net income tax benefit - impairment, transactional and other
Step acquisition gain on ASL’s existing 50% share of AUMS
Foreign currency translation reserves derecognised on step acquisition of AUMS
a. Impairment of assets
Notes
13
13
20
$’000
(40,597)
(19,011)
-
11,815
-
-
19
$’000
(49,320)
(54,416)
(9,899)
60,632
180,248
18,163
(47,793)
145,408
For the year ended 30 June 2020, the Group assessed whether there were any indicators of impairment. The Company’s
market capitalisation prior to the COVID-19 pandemic had been above its net assets at different points in time. As the global
markets responded to COVID-19, the share price decreased and as a result at 30 June 2020 the Groups market capitalisation
was below its net assets. Based on the thorough and systematic impairment analysis conducted, management considered this
factor amongst other impairment indicators at 30 June 2020.
Assets are firstly considered individually to determine whether there is any impairment related to specific assets due to factors
such as technical obsolescence, declining market value, physical condition or saleability within a reasonable timeframe. For the
year ended 30 June 2020, this resulted in $34,271,000 of impairments in the Surface Mining Africa ISG which largely relates to
property, plant and equipment and Inventory on the Boungou mine site in Burkina Faso which the Group exited in November
2019 due to heightening security concerns. The impairment reflects the likely recoverable value for the assets factoring in their
specific location and associated security risk.
The Group then proceeded to consider the profitability of the individual Cash Generating Units (CGUs) against their budgets.
Where a business was performing below its forecast or had high underutilisation of PPE, management considered that there
was an impairment indicator and performed an impairment assessment for those CGUs. This was the case for the Surface
Mining - Australia, Surface Mining - Africa and BTP Group CGUs. For these CGUs, management has made estimates associated
with the recoverable amount of the relevant CGU to determine whether there was any impairment or reversal of previous
impairment in relation to its carrying value. Determining a CGUs recoverable amount was completed via the following
methods:
(a) for certain CGUs, the recoverability of its assets is completed via a fair value less costs of disposal methodology (FVLCD);
and
(b) for certain CGUs, the recoverability of its assets is completed via a value in use methodology (VIU).
The recoverable amount of a CGU is calculated as the higher of its FVLCD or its VIU. The Company has sourced an external
valuation where a fair value less costs of disposal has been used. In the instances where this has been adopted, the valuation
technique and fair value hierarchy is noted below.
The recoverable amount of a CGU determined by a VIU calculation requires the use of assumptions. Cash flow projections
are calculated using budgeted EBITDA, changes in working capital and capital expenditure to determine a “free cash flow”
estimate. These projections are based on actual operating results, a Board approved business plan and subsequent financial
forecasts prepared by management. Future cash flows are extrapolated by applying growth rates for each segment and
terminal growth rates not exceeding 3%. This methodology is consistently applied in reporting periods.
For the CGUs which had impairment triggers at 30 June 2020, the recoverable amount was assessed either by a FVLCD or a
VIU method. The assessments resulted in an impairment charge of $25,337,000 for the year ended 30 June 2020. There was
no reversal of previous impairments recorded. Please see the table below for the information on which method was applied to
each CGU and a comparison between 30 June 2020 and 30 June 2019.
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FINANCIAL REPORT Notes to the consolidated financial statements
3 . I N D I V I D UA L LY S I G N I F I C A N T I T E M S (CO N T I N U E D)
a. Impairment of assets (continued)
Summary of the impairment taken, and method used to assess the impairment
A summary of the Company’s assessment of any indicators of impairment testing for material CGUs, the valuation method
used and impairment expense/(reversal) is as follows:
TRIGGER FOR IMPAIRMENT
TESTING
VALUATION METHOD
USED
IMPAIRMENT EXPENSE/
(REVERSAL) OF PPE
CGU
BTP Group (BTP)
Surface Mining Africa (formerly Contract Mining
Services Africa (CMSA))
Surface Mining Australia (formerly Kalgoorlie /
Synegex)
Energy Drilling Australia (EDA)
Underground Mining (Australasia / Africa)
Others
20
19
Y
Y
Y
N
N
N
N
Y
Y
Y
N
N
20
VIU
FVLCD
VIU
-
-
-
19
-
VIU
VIU
FVLCD
N/A
N/A
20
$25.3m
19
-
$34.3m
$16.9m
-
-
-
-
-
$31.2m
N/A
N/A
The impairments recorded within the financial statements at 30 June 2020 are not directly related to the COVID-19
global pandemic.
Key assumptions used for value in use calculations
For certain CGUs the recoverability of its assets is determined using a VIU methodology. The calculation of VIU for the CGUs is
most sensitive to the following assumptions:
(a) EBITDA/sales margins
(b) Discount rates and growth rates used to extrapolate cash flows beyond the forecast period.
EBITDA margin
The calculations used cash flow projections based on the forecast for the 2021 to 2025 financial years. Financial years from
2021 to 2025 for the BTP Group (impairment recorded) and Surface Mining - Australia (no impairment recorded) incorporate
an estimate of the EBITDA margins which have not been disclosed as they are commercially sensitive in nature. The 2021
forecast was determined as a result of a comprehensive exercise where the operational division evaluated each individual
contract and project.
Working capital has been adjusted, in particular inventory levels, to return to and reflect what would be considered a normal
operating level to support the underlying business.
Growth rate estimates and discount rates
Future cash flows are extrapolated by applying growth rates for each segment and appropriate discount rates to the CGU.
A 1% growth rate for 2022 to 2025 has been utilised and additionally a terminal value was calculated after 5 years incorporating
a perpetual growth rate of 2.5%.
Weighted average cost of capital post-tax discount rates in the range of 10.0% and 10.8% were used in discounting the
projected cashflows for the BTP group and Surface Mining - Australia. The present value of the cash flows is sensitive to
the EBITDA, growth rate and discount rates used. A higher discount rate or lower EBITDA growth rate will result in a lower
recoverable value.
There are circumstances where changes to the assumptions above could impact on the recoverable amount and therefore
could increase a recorded impairment or in fact mean a future impairment could occur in a CGU where an impairment has not
been recorded.
BTP Group
This CGU is included in the Investments operating segment. At 30 June 2020, based on the impairment testing performed, an
impairment expense of $25,337,000 has been recognised at the CGU level. Of this impairment expense, $14,382,000 related to
property, plant and equipment and $10,955,000 related to inventory. At 30 June 2019, this CGU had no triggers for impairment.
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FINANCIAL REPORT Notes to the consolidated financial statements
3 . I N D I V I D UA L LY S I G N I F I C A N T I T E M S (CO N T I N U E D)
a. Impairment of assets (continued)
Significant estimate: Impact of possible changes in key assumptions
Management have considered various reasonably possible sensitivities over the value-in-use models for the BTP Group CGU
and Surface Mining - Australia CGU at 30 June 2020. The table below shows the impact of different reasonably possible
outcomes if there was a change in the assumptions used in the value in use models.
ASSUMPTION
Growth rate
(decrease reduces value)
Discount rate
(decrease increases value)
% CHANGE
+1.0%
-1.0%
-1.0%
+1.0%
BTP GROUP IMPAIRMENT
CHANGE (A$)
SURFACE MINING -
AUSTRALIA IMPAIRMENT
(A$)*
+$2,500,000
-$2,500,000
+$17,200,000
-$13,300,000
-
-
-
-$320,000
*
the value shown is the impairment which would be recorded in the model if the assumption changed by the % included in the % change column.
The above sensitivities have been performed with all other assumptions in the model remaining the same as the original model.
Key assumptions used for Fair Value less Costs of Disposal
Surface Mining - Africa
This CGU is included in the Surface Mining operating segment. At 30 June 2020, a FVLCD methodology was adopted
combining Level 1, Level 2, and predominately Level 3 inputs in the fair value. The directors assessed the fair value, taking
into account the independent valuation obtained and determined the assets’ fair value within a range of reasonable fair value
estimates. Based on the impairment testing performed no impairment expense has been recognised at the CGU level at 30
June 2020. At 30 June 2019 a VIU methodology was adopted and an impairment expense of $16,936,000 was recorded to
Property, plant and equipment and other assets.
b. Net income tax benefit
In the current year a net income tax benefit of $11,815,000 was recorded relating to the following items: $16,248,000 deferred
tax benefits relating to the above impairments recorded along with an offsetting $4,433,000 in relation to the finalisation of the
tax cost allocation from the acquisition of the Barminco Group.
In the prior year ended 30 June 2019 a net income tax benefit of $60,632,000 was recorded relating to the following items:
previously unrecognised deferred tax assets for the carry forward of unused tax losses and tax credits $43,156,000, uplift in
the tax carrying value of depreciating assets upon the acquisition of the Barminco Group $8,733,000, tax effect of impairment,
transaction costs and other amounting to $36,036,000, offset by uncertain tax positions in Africa of $27,293,000.
4 O T H E R I N CO M E A N D E X P E N S E I T E M S
This note provides a breakdown of the items included in “other income” and an analysis of expenses by nature.
a. Other income
Step acquisition gain on ASL’s existing 50% share of AUMS
Foreign currency translation reserve derecognised on step acquisition of AUMS
Insurance proceeds
Foreign exchange gains (net)
Management fee received
Gain on disposal of non-current assets
Profit on disposal of assets held for sale
Other
Total other income
20
$’000
-
-
-
-
-
6,096
2,374
3,655
19
$’000
180,248
18,163
1,259
971
556
3,918
-
3,009
12,125
208,124
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FINANCIAL REPORT Notes to the consolidated financial statements
4 O T H E R I N CO M E A N D E X P E N S E I T E M S (CO N T I N U E D)
b. Breakdown of expenses by nature
Depreciation expense
Plant and equipment depreciation
Right-of-use asset depreciation
Buildings depreciation
Total depreciation expense
Amortisation expense
Customer relationships intangibles amortisation
Software amortisation
Total amortisation expense
Rental and hire expenses
Rental expense relating to operating leases for equipment
Rental expense relating to operating leases for properties
Total rental and hire expenses
Finance costs
Interest paid
Lease contracts interest
Hire purchase interest
Amortised borrowing cost
Derivative fair value and settlement
Other finance costs
Total finance costs
Other expenses from ordinary activities
Staffing, safety and training
Consultants
Travel and accommodation
Freight
IT and communications
Insurance
Property related expenses
Duties and taxes
Foreign exchange loss (net)
All other expenses
Total other expenses from ordinary activities
Impairment of assets
Impairment of property, plant and equipment
Impairment of inventory
Impairment other
Total impairment of assets
20
$’000
19
$’000
Notes
196,324
34,869
948
163,108
-
1,721
232,141
164,829
38,103
461
38,564
17,083
2,031
19,114
47,598
5,053
-
943
-
11
28,770
292
29,062
16,846
8,061
24,907
41,688
-
2,374
5,617
5,703
-
53,605
55,382
31,941
13,837
30,768
32,552
16,304
16,600
10,192
10,434
3,316
32,557
198,501
40,597
19,011
-
24,502
23,410
22,105
19,181
14,114
13,751
9,961
6,861
-
28,674
162,559
49,320
54,416
9,899
59,608
113,635
3
3
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87
FINANCIAL REPORT Notes to the consolidated financial statements
5 . I N CO M E TA X E X P E N S E /(B E N E F I T )
This note provides an analysis of the Group’s income tax expense/(benefit), shows what tax amounts are recognised directly in
equity and how the tax expense/(benefit) is affected by non-assessable and non-deductible items. It also explains significant
estimates made in relation to the Group’s tax position.
a. Income tax expense/(benefit)
Current tax on profits for the year
Deferred tax
Reduction in the tax carrying value of depreciating assets upon acquisition of
Barminco group
Adjustments for current tax of prior periods
Income tax expense/(benefit) is attributable to:
Profit for the year
Deferred income tax expense/(benefit) included in income tax expense comprises:
Increase in deferred tax assets
(Decrease)/increase in deferred tax liabilities
Notes
20
$’000
63,425
(48,206)
4,433
331
19
$’000
42,409
(70,247)
-
476
19,983
(27,362)
19,983
(27,362)
7(f)(i)
7(f)(ii)
(24,494)
(23,712)
(48,206)
(97,694)
27,447
(70,247)
b. Numerical reconciliation of accounting profit to income tax expense/(benefit)
Profit for the year before income tax expense
Tax at the Australian tax rate of 30% (Jun 2019 - 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Notes
Share of net (profit) of joint ventures
Share-based payments
Other foreign permanent differences
Withholding tax
Other assessable/non-deductible items
20
$’000
47,538
14,261
-
1,412
140
9,371
10,953
19
$’000
154,919
46,476
(3,213)
664
2,037
7,470
4,350
Step acquisition gain on ALS’s existing 50% share of AUMS
-
(59,523)
Difference in overseas tax rates
Under provision in prior years
Current year tax losses not recognised
Prior year unrecognised deferred tax assets now recognised
Effect of currency translation on tax base
Deferred tax (realised)/recognised on undistributed profits for foreign subsidiaries and
joint ventures
Uplift in the tax carrying value of depreciating assets upon acquisition of Barminco group
Movement in uncertain tax positions in Africa
7(f)(ii)
Income tax expense/(benefit)
(4,649)
331
2,486
(333)
(2,533)
(7,880)
4,433
(8,009)
19,983
(4,195)
476
1,417
(44,822)
(2,462)
5,007
(8,337)
27,293
(27,362)
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FINANCIAL REPORT Notes to the consolidated financial statements
5 . I N CO M E TA X E X P E N S E /(B E N E F I T ) (CO N T I N U E D)
c. Amounts recognised directly in equity
20
$’000
19
$’000
Notes
Aggregate current and deferred tax arising in the reporting period and not recognised in
net profit or loss or other comprehensive income but directly debited or credited to equity:
Deferred tax - debited directly to equity
7(f)(i)
714
1,188
d. Unused tax losses and unrecognised temporary differences
(i) Tax losses for which deferred tax assets have not been recognised:
Unused tax losses for which no deferred tax asset has been recognised
Unrecognised deferred tax assets relating to the above temporary differences
20
$’000
205,541
61,662
19
$’000
1,388
416
(ii) Temporary differences relating to investments in subsidiaries for which deferred tax liabilities have not been recognised:
Undistributed earnings
Unrecognised deferred tax liabilities relating to the above unused tax losses
20
$’000
204,776
20,775
19
$’000
121,941
11,546
Perenti Global Limited has undistributed earnings of $204,776,000 (2019: $121,941,000) in some of its African subsidiaries
which, if paid out as dividends, would attract dividend withholding tax in Africa. An assessable temporary difference exists,
but no deferred tax liability has been recognised as the parent entity is able to control the timing of distributions from the
subsidiary.
e. Effective tax rates for the year ended 30 June 2020 for Australian and Global operations in terms of the Board of
Taxation’s Voluntary Tax Transparency Code:
(i) Australian operations
The accounting effective company tax rate for the year ended 30 June 2020 is 23.9% (30 June 2019: (111.0%)). This effective
tax rate is lower than the Australian company tax rate due to the impact of functional currencies, items of income/expenditure
which are not assessable/deductible and transfer pricing adjustments. The effective tax rate excluding the impact of these
items is 30.0% (30 June 2019: 30.0%).
(ii) Global operations
The accounting effective company tax rate for the year ended 30 June 2020 is 42.0% (30 June 2019: (17.7%)). This effective
tax rate is higher than the Australian company tax rate due to the impact of different company tax rates in other countries,
functional currencies, items of income/expenditure which are not assessable/deductible, the derecognition of uncertain tax
positions in Africa and transfer pricing adjustments. The effective tax rate excluding the impact of these items is 30.0%
(30 June 2019: 29.3%).
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89
FINANCIAL REPORT Notes to the consolidated financial statements
6 . F I N A N C I A L A S S E T S A N D F I N A N C I A L L I A B I L I T I E S
This note provides information about the Group’s financial instruments, including:
•
•
•
•
an overview of all financial instruments held by the Group
specific information about each type of financial instrument
accounting policies
information about determining the fair value of the instruments, including judgements and estimation uncertainty involved.
The Group holds the following financial instruments:
Notes
ASSETS AT
FVOCI
$’000
FINANCIAL ASSETS
AT AMORTISED
COST
$’000
TOTAL
$’000
Financial assets
2020
Cash and cash equivalents
Trade and other receivables*
Financial assets FVOCI
2019
Cash and cash equivalents
Trade and other receivables*
Financial assets FVOCI
* Excluding prepayments
Financial liabilities
2020
Trade and other payables
Borrowings
Lease liabilities
2019
Trade and other payables
Borrowings
6(a)
6(b)
6(c)
6(a)
6(b)
6(c)
-
-
327,491
327,491
351,325
351,325
23,632
23,632
-
23,632
678,816
702,448
-
-
17,581
17,581
223,524
386,782
-
610,306
223,524
386,782
17,581
627,887
Notes
LIABILITIES AT
AMORTISED COST
$’000
TOTAL
$’000
6(d)
6(e)
7(d)
6(d)
6(e)
261,095
261,095
782,239
782,239
101,618
101,618
1,144,952
1,144,952
268,525
757,443
268,525
757,443
1,025,968
1,025,968
The Group’s exposure to various risks associated with financial instruments is discussed in note 11. The maximum exposure to
credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.
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FINANCIAL REPORT
Notes to the consolidated financial statements
6 F I N A N C I A L A S S E T S A N D F I N A N C I A L L I A B I L I T I E S (CO N T I N U E D)
a. Cash and cash equivalents
Current assets
Cash at bank and in hand
(i) Reconciliation to cash at the end of the year
20
$’000
19
$’000
327,491
223,524
The above figures reconcile to the amount of cash shown in the consolidated statement of cash flows at the end of the
financial year as follows:
Balance as above
Balances per consolidated statement of cash flows
b. Trade and other receivables
327,491
327,491
223,524
223,524
CURRENT
$’000
NON-CURRENT
$’000
20
TOTAL
$’000
CURRENT
$’000
NON-CURRENT
$’000
Trade receivables (i)
174,232
Provision for impairment and
expected credit losses (see note
11(b))
Accrued revenue
Net GST / VAT receivables
Other receivables (ii)
Prepayments
(11,172)
163,060
157,441
19,091
11,733
17,984
369,309
-
-
-
-
-
-
830
830
174,232
195,363
(11,172)
(10,827)
163,060
157,441
19,091
11,733
18,814
184,536
164,064
17,517
19,618
13,619
370,139
399,354
-
-
-
-
-
1,047
991
2,038
19
TOTAL
$’000
195,363
(10,827)
184,536
164,064
17,517
20,665
14,610
401,392
(i) Classification as trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
Loans and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. If collection of the amounts is expected in one year or less they are classified as current assets. If not, they are
presented as non-current assets. Trade receivables are generally due for settlement not more than 90 days from the date of
recognition and therefore are all classified as current. The Group’s impairment loss allowance and other accounting policies for
trade and other receivables are outlined in notes 11(b) and 25(l) respectively.
(ii) Other receivables
This amount includes operating expense rebates and other receivables. If collection of other receivables is expected in one
year or less they are classified as current assets.
(iii) Foreign exchange and interest rate risk
Information about the Group’s exposure to foreign currency risk and interest rate risk in relation to trade and other receivables
is provided in note 11(a).
(iv) Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to be the same as their fair value. For the
non-current receivables, the fair values are also not significantly different to their carrying amounts.
(v) Impairment and risk exposure
Prepayments of $nil (30 June 2019: $8,210,000) and other non-current receivables of $nil (30 June 2019: $1,689,000) were
impaired during the year, refer note 3. Information about the impairment of trade and other receivables, their credit quality and
the Group’s exposure to credit risk, foreign currency risk and interest rate risk can be found in note 11(a) and 11(b).
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FINANCIAL REPORT Notes to the consolidated financial statements
6 . F I N A N C I A L A S S E T S A N D F I N A N C I A L L I A B I L I T I E S (CO N T I N U E D)
c. Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include the following classes of financial assets:
Non-current assets
Listed securities
Equity securities
Unlisted securities
Equity securities
20
$’000
19
$’000
5,157
5,971
18,475
23,632
11,610
17,581
Refer note 25(o)(ii) for the accounting policy.
(i) Classification of financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (FVOCI) comprise:
Equity securities which are not held for trading, and which the group has irrevocably elected at initial recognition to recognise
in this category. These are strategic investments and the group considers this classification to be more relevant.
On disposal of these equity investments, any related balance within the fair value reserve is transferred to retained earnings.
(ii) Amounts recognised in other comprehensive income
During the year, the following gains were recognised in other comprehensive income.
Gains recognised in other comprehensive income
Notes
8(b)
20
$’000
9,170
19
$’000
4,773
(iii) Non-current assets pledged as security
Refer to note 22 for information on non-current assets pledged as security by the Group.
(iv) Fair value, impairment and risk exposure
All of the financial assets at fair value through other comprehensive income (FVOCI) are denominated in either Australian
Dollars, British Pound or Canadian Dollars. For an analysis of the sensitivity of the assets to price and interest rate risk refer to
note 11(a).
d. Trade and other payables
Current liabilities
Trade payables
Accrued expenses
Payroll accruals
Net GST / VAT payables
Contract liabilities
Dividends payable
Other creditors and accruals
20
$’000
19
$’000
126,812
130,734
86,246
26,774
2,949
2,181
15,174
959
92,037
25,236
10,003
5,115
-
5,400
261,095
268,525
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-term
nature.
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FINANCIAL REPORT Notes to the consolidated financial statements
6 F I N A N C I A L A S S E T S A N D F I N A N C I A L L I A B I L I T I E S (CO N T I N U E D)
d. Trade and other payables (continued)
(i) Contract liabilities
Movements in contract liabilities for liabilities relating to revenue contracts are as follows:
Opening balance
Adjustment on adoption of AASB 15
Revenue recognised
Exchange differences
Closing balance
e.
Borrowings
20
$’000
5,115
-
(2,978)
44
2,181
CURRENT
$’000
NON-CURRENT
$’000
20
TOTAL
$’000
CURRENT
$’000
NON-CURRENT
$’000
19
$’000
-
7,527
(2,404)
(8)
5,115
19
TOTAL
$’000
Secured (i)
USD notes
Bank loans
Prepaid borrowing costs
Other loans
HP liabilities
-
-
-
7,148
-
506,297
506,297
251,981
251,981
(2,472)
16,580
-
(2,472)
23,728
-
Total secured borrowings
7,148
772,386
779,534
Unsecured (ii)
Loan from minority interest
HP liabilities
Insurance premium funding
Total unsecured borrowings
-
-
-
-
2,705
2,705
-
-
-
-
25,236
526
2,705
2,705
25,762
2,660
28,422
Total borrowings
7,148
775,091
782,239
25,762
731,681
757,443
(i) Secured borrowings
At 30 June 2020, the Group had the following facilities that were not drawn at balance date:
Total unutilised facilities
USD notes
20
$’000
19
$’000
344,853
158,343
On 26 April 2017 Barminco issued 6.625% Senior Secured Notes due for repayment 15 May 2022 with a US$350 million
principal amount. The notes were issued by Barminco Finance Pty Ltd and are secured and have been guaranteed by Barminco
Holdings Pty Limited, Barminco Finance Pty Limited, Barminco Limited, Barminco AUMS Holdings Pty Limited, Barminco India
Investments Pty Limited and Barminco India Holdings Pty Limited.The interest on the high yield bond is payable semi-annually
on 15 May and 15 November. The High Yield Bonds are quoted on the Singapore Stock Exchange.
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93
-
-
-
-
-
-
-
497,386
497,386
225,119
225,119
(2,032)
(2,032)
-
-
8,548
8,548
729,021
729,021
2,660
-
-
2,660
25,236
526
FINANCIAL REPORT Notes to the consolidated financial statements
6 F I N A N C I A L A S S E T S A N D F I N A N C I A L L I A B I L I T I E S (CO N T I N U E D)
e. Borrowings (continued)
(i) Secured borrowings (continued)
Bank loans
In April 2019, Perenti Global Limited refinanced its A$300 million revolving credit facilities and subsequently increased the
facilities by additional A$100 million in December 2019. The dual currency facilities mature on 1 July 2023 and are provided
by a number of leading lending institutions in the Australian banking market. In June 2020, a A$130 million multi currency
syndicated facility agreement was entered into by the Group. The facility matures on 12 May 2022. As at 30 June 2020, the
Group’s total facility limit is A$530 million and approximately 48% of this facility was drawn down.
Other loans
Other loans include asset financing arrangements with various financiers which are secured by the specific assets financed.
Lease liabilities
HP liabilities included in borrowings until 30 June 2019 were reclassified to lease liabilities in the process of adopting AASB 16
Leases from 1 July 2019, refer to note 26 and note 7(d) for further detail. Lease liabilities may be secured by the specific assets
under lease.
(ii) Unsecured borrowings
Loan from minority interest - unsecured
The loan relates to Underground Mining Alliance Limited, refer note 14 and note 18.
Covenants on financing facilities
The Group’s financing facilities contain undertakings including an obligation to comply with certain financial covenants.
All banking covenants have been complied with at reporting date and the Group has significant headroom available under
all covenants.
Refinancing requirements
Where existing facilities approach maturity, the Group will seek to renegotiate with existing and new financers to extend the
maturity date of those facilities. The Group’s earnings profile, credit rating, state of the economy, conditions in financial markets
and other factors may influence the outcome of those negotiations.
Credit ratings
The Group currently has a credit rating of Ba2 (Outlook Stable) from Moody’s and a credit rating of BB (Outlook Stable) from
Standard & Poor’s. Where a credit rating is reduced or placed on negative watch, customers and suppliers may be less willing to
contract with the Group. Banks and other lending institutions may demand more stringent terms (including increased pricing)
on debt facilities to reflect the higher credit risk profile.
(iii) Fair value
For the majority of the borrowings, the fair values are not materially different to their carrying amounts, since the interest
payable on those borrowings is either close to current market rates or the borrowings are of a short-term nature. Material
differences are identified only for the following borrowings:
20
19
CARRYING
AMOUNT
$’000
FAIR VALUE
DISCOUNT RATE
$’000
%
CARRYING
AMOUNT
$’000
FAIR VALUE
DISCOUNT RATE
$’000
%
On-balance sheet
Non-traded financial liabilities
USD notes
506,297
503,858
6.98
497,386
516,542
5.45
The fair values of non-current borrowings are based on discounted cash flows using the rates disclosed in the table above.
(iv) Risk exposures
Information about the Group’s exposure to interest rate and foreign currency changes is provided in note 11(a).
94
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FINANCIAL REPORT
Notes to the consolidated financial statements
6 F I N A N C I A L A S S E T S A N D F I N A N C I A L L I A B I L I T I E S (CO N T I N U E D)
f. Recognised fair value measurements
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
recognised and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs
used in determining fair value, the Group has classified its financial instruments into the three levels prescribed under the
accounting standards. An explanation of each level follows below.
AT 30 JUNE 2020
Financial assets
Financial assets FVOCI
Australian listed equity securities
Australian unlisted equity securities
CAD listed equity securities
GBP listed equity securities
Total financial assets
AT 30 JUNE 2019
Financial assets
Financial assets FVOCI
Australian listed equity securities
Australian unlisted equity securities
CAD listed equity securities
GBP listed equity securities
Total financial assets
LEVEL 1
$’000
LEVEL 2
$’000
LEVEL 3
$’000
TOTAL
$’000
4,365
-
533
259
5,157
-
-
-
-
-
-
18,475
-
-
4,365
18,475
533
259
18,475
23,632
LEVEL 1
$’000
LEVEL 2
$’000
LEVEL 3
$’000
TOTAL
$’000
5,059
-
463
449
5,971
-
-
-
-
-
-
11,610
-
-
11,610
5,059
11,610
463
449
17,581
There were no transfers between levels 1 and 2 for recurring fair value measurements during the year. For transfers into and out
of level 3 measurements see (iii) on page 96.
The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting
period.
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95
FINANCIAL REPORT Notes to the consolidated financial statements
6 F I N A N C I A L A S S E T S A N D F I N A N C I A L L I A B I L I T I E S (CO N T I N U E D)
f. Recognised fair value measurements (continued)
(i) Fair value hierarchy (continued)
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives and equity securities)
is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by
the Group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as
possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument
is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
This is the case for unlisted equity securities.
(ii) Valuation techniques used to determine fair values (level 1)
Specific valuation techniques used to value financial instruments include:
• the use of quoted market prices or dealer quotes for similar instruments
(iii) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the period ended 30 June 2020:
Consolidated entity
Opening balance 1 July 2019
Gains recognised in other comprehensive income
Transfers between levels
Closing balance 30 June 2020
(iv) Valuation inputs and relationships to fair value
UNLISTED EQUIT Y
SECURITIES
$’000
TOTAL
$’000
11,610
11,610
7,125
(260)
7,125
(260)
18,475
18,475
Changes in the fair value of unlisted equity securities are analysed at least each reporting period by discussion with the Chief
Financial Officer and valuation team in the Group finance department. As part of this discussion the team presents a report that
explains the reason for any fair value movements based on recent transactions and financial information.
96
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ABN 95 009 211 474
FINANCIAL REPORT
Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S
This note provides information about the Group’s non-financial assets and liabilities, including:
•
specific information about each type of non-financial asset and non-financial liability
- inventories (note 7(a))
- assets classified as held for sale (note 7(b))
- property, plant and equipment (note 7(c))
- leases (note 7(d))
- intangible assets (note 7(e))
- deferred tax balances (note 7(f))
- employee benefit obligations (note 7(g))
accounting policies
information about determining the fair value of the assets and liabilities, including judgements and estimation uncertainty
involved.
•
•
a. Inventories
Work in progress
Finished goods
Consumables and store items
(i) Assigning costs to inventories
20
$’000
19,575
18,007
212,797
250,379
19
$’000
18,064
15,322
217,724
251,110
The costs of individual items of inventory are determined using weighted average costs. See note 25(m) for the Group’s other
accounting policies for inventories.
(ii) Amounts recognised in profit or loss
Write-downs of inventories to net realisable value amounted to $19,271,000 (2019: $56,109,000). These were recognised as
an expense during the year ended 30 June 2020, $19,011,000 (2019:$54,416,000) was included within impairment of assets
expense, refer to note 3 for detail, and $260,000 (2019:$1,693,000) which was in the ordinary course of business, was included
in materials expense in the consolidated statement of profit or loss.
b. Assets held for sale
Current assets
Property, plant and equipment
Inventories
20
$’000
-
-
-
19
$’000
9,866
3,760
13,626
In prior year, as announced to the ASX on 10 April 2019 the Group had entered into a binding agreement with Pentium Hydro
Pty Ltd and Vysarn Limited to sell the Company’s hydrological drilling assets which historically operated as “Connector Drilling”
for cash consideration of $16 million. The Assets Sale Agreement included various waterwell drilling assets and associated
inventory associated with the Group’s waterwell business
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97
FINANCIAL REPORT Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
c. Property, plant and equipment
Non-current
At 1 July 2018
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2019
Opening net book amount
Exchange differences
Acquisition of subsidiary
Additions
Transfers
Depreciation charge
Disposals
Impairment loss
Transfers between classes
Transfers to assets held for sale
Closing net book amount
At 30 June 2019
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2020
Opening net book amount
Adjustment for change in accounting policy (AASB 16)(i)
Restated opening net book amount
Year ended 30 June 2020
Restated opening net book amount (i)
Exchange differences
Additions
Disposals
Depreciation charge
Impairment loss
Transfer from leased assets
Closing net book amount
At 30 June 2020
Cost or fair value
Accumulated depreciation and impairment
Net book amount
(i) Leased assets
L AND AND
BUILDINGS
PL ANT AND
EQUIPMENT
$’000
$’000
PL ANT AND
EQUIPMENT
UNDER FINANCE
$’000
TOTAL
$’000
61,489
(2,881)
58,608
58,608
866
1,001
88
-
(1,721)
-
-
(498)
-
1,353,925
(748,186)
605,739
605,739
13,130
183,310
205,908
(3,926)
(150,104)
(7,301)
(49,320)
498
(9,866)
-
-
-
1,415,414
(751,067)
664,347
-
280
53,961
17
-
(13,004)
-
-
-
-
664,347
14,276
238,272
206,013
(3,926)
(164,829)
(7,301)
(49,320)
-
(9,866)
887,666
58,344
788,068
41,254
60,378
(2,034)
58,344
1,707,063
(918,995)
788,068
86,102
(44,848)
41,254
1,853,543
(965,877)
887,666
58,344
788,068
-
-
58,344
788,068
58,344
788,068
(849)
588
-
(948)
-
-
57,135
61,369
(4,234)
57,135
6,181
234,492
(38,309)
(196,324)
(40,597)
7,450
760,961
1,679,961
(919,000)
760,961
41,254
(41,254)
-
-
-
-
-
-
-
-
-
-
-
-
887,666
(41,254)
846,412
846,412
5,332
235,080
(38,309)
(197,272)
(40,597)
7,450
818,096
1,741,330
(923,234)
818,096
As at 30 June 2019, plant and equipment under finance included the following amounts where the Group was a lessee under
finance leases (HP liabilities), refer to note 6(e) and note 7(d) for further details:
Plant and equipment under finance
Cost
Accumulated depreciation
Net book amount
20
$’000
-
-
-
19
$’000
86,102
(44,848)
41,254
From 1 July 2019 leased assets are presented as a separate line item in the consolidated statement of financial position.
Refer to note 26 for details about the changes in accounting policy.
98
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FINANCIAL REPORT
Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
c. Property, plant and equipment (continued)
(ii) Non-current assets pledged as security
Refer to note 22 for information on non-current assets pledged as security by the Group.
(iii) Carrying amounts that would have been recognised if land and buildings were stated at cost
If freehold land and buildings were stated on the historical cost basis, the amounts would be as follows:
Buildings
Cost
Accumulated depreciation
Net book amount
20
$’000
41,003
(16,744)
24,259
19
$’000
40,761
(16,648)
24,113
(iv) Revaluation, depreciation methods and useful lives
Land is not depreciated. Depreciation on major plant and equipment and components is calculated on machine hours worked
over their estimated useful life. Depreciation on other assets is calculated using the straight-line method to allocate their cost
or revalued amounts, net of their residual values, over their estimated useful lives, as follows:
• Buildings
• Plant and equipment
• Power station assets
5 - 25 years
2 - 15 years
3 - 20 years
See note 25(q) for the other accounting policies relevant to property, plant and equipment.
v. Impairment expense
Impairment expense of $26,215,000 (30 June 2019: $11,083,000) related to individual assets and $14,382,000 (30 June 2019:
$32,237,000) related to assets tested at the cash generating unit level for property, plant and equipment. Refer to note 3 for
details.
vi. Significant estimates - valuations of land and buildings
Information about the valuation of land and buildings is provided in note 7(h).
d. Leases
(i) Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets *
Properties
Equipment
Motor Vehicles
Lease liabilities
Current
Non-current
20
$’000
26,067
84,640
32
110,739
29,482
72,136
101,618
19
$’000
-
-
-
-
-
-
-
*
In the previous year, the Group only recognised lease assets and lease liabilities in relation to leases that were classified as ‘finance leases’ under AASB 117 Leases.
The assets were presented in property, plant and equipment and the liabilities as part of the Group’s borrowings. For adjustments recognised on adoption of
AASB 16 Leases on 1 July 2019, please refer to note 26.
Additions to the right-of-use assets during the 2020 financial year were $62,773,000.
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99
FINANCIAL REPORT Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
d. Leases (continued)
(ii) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Properties
Equipment
Motor Vehicles
Interest expense (included in finance cost)
Expense relating to short-term leases (included in rental and hire expenses)
Expense relating to leases of low-value assets that are not shown above as short-term
leases (included in rental and hire expenses)
Expense relating to variable lease payments not included in lease liabilities
(included in rental and hire expenses)
The total cash outflow for leases in 2020 was $33,809,000.
Notes
20
$’000
7,899
26,752
218
4(b)
34,869
4(b)
4(b)
4(b)
6,238
1,221
202
17
19
$’000
-
-
-
-
-
-
-
-
(iii) The group’s leasing activities and how these are accounted for
The group leases various offices, warehouses, equipment and vehicles across various countries. Rental contracts are made for
fixed periods of up to 25 years, but may have extension options as described in note (v) on the next page.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
Until the 30 June 2019 financial year, leases of property, plant and equipment were classified as either finance leases or
operating leases, see note 25(h) for details. From 1 July 2019, leases are recognised as a right-of-use asset and a corresponding
liability at the date at which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
•
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not
included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect,
the lease liability is reassessed and adjusted against the right-of-use asset. Lease payments to be made under reasonably
certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
100
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FINANCIAL REPORT Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
d.
Leases (continued)
(iii) The group’s leasing activities and how these are accounted for (continued)
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was received;
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by Perenti Global
Limited, which does not have recent third party financing, and
• makes adjustments specific to the lease, eg term, country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability;
any lease payments made at or before the commencement date less any lease incentives received;
any initial direct costs, and
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line
basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying
asset’s useful life. While the Group revalues its land and buildings that are presented within property, plant and equipment, it
has chosen not to do so for the right-of-use buildings held by the Group.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value
assets comprise IT equipment and small items of office furniture and some small accommodation units.
(iv) Variable lease payments
Some equipment leases contain variable payment terms that are linked to units of use of the particular asset. Often these will
include a minimum usage charge each month which is considered the fixed element, and then items over and above the
minimum is considered the variable element. Variable lease payments that depend on units of use are recognised in profit or
loss in the period in which the condition that triggers those payments occurs.
(v) Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the Group. These
are used to maximise operational flexibility in terms of managing the assets used in the Group’s operations. The majority of
extension and termination options held are exercisable only by the Group and not by the respective lessor.
Critical judgements in determining the lease term
In determining the lease term, management 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).
For leases of warehouses, offices and equipment, the following factors are normally the most relevant:
•
•
If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or not
terminate).
If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain
to extend (or not terminate).
• Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption
required to replace the leased asset.
As at 30 June 2020, potential future cash outflows of $12,690,000 (undiscounted) have not been included in the lease liability
because it is not reasonably certain that the leases will be extended (or not terminated).
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise
(or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in
circumstances occurs, which affects this assessment, and that is within the control of the lessee. During the current financial
year, the financial effect of revising lease terms to reflect the effect of exercising extension and termination options was an
increase in recognised lease liabilities and right-of-use assets was $nil.
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101
FINANCIAL REPORT Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
e. Intangible assets
Year ended 30 June 2019
Opening net book amount
Acquisition of subsidiary
Additions
Exchange differences
Amortisation charge
Closing net book amount
At 30 June 2019
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2020
Opening net book amount
Additions
Exchange differences
Amortisation charge
Closing net book amount
At 30 June 2020
Cost
Accumulated amortisation and impairment
Net book amount
(i) Amortisation methods and useful lives
GOODWILL
SOFTWARE
$’000
$’000
CUSTOMER
REL ATED
INTANGIBLES
$’000
TOTAL
$’000
-
-
-
-
449,769
1,349
321,458
772,576
-
-
-
449,769
449,769
-
449,769
55
-
(292)
1,112
2,487
(1,375)
1,112
GOODWILL
SOFTWARE
$’000
$’000
-
-
(28,770)
292,688
321,458
(28,770)
292,688
CUSTOMER
REL ATED
INTANGIBLES
$’000
55
-
(29,062)
743,569
773,714
(30,145)
743,569
TOTAL
$’000
449,769
1,112
292,688
743,569
-
-
-
449,769
449,769
-
449,769
151
-
(461)
802
2,638
(1,836)
802
-
-
(38,103)
254,585
321,458
(66,873)
254,585
151
-
(38,564)
705,156
773,865
(68,709)
705,156
The Group amortises intangible assets with a limited useful life using the straight-line method over the following periods:
Software
5-6 years
•
• Customer related intangibles 2-13 years
See note 26(r) for the other accounting policies relevant to intangible assets, and note 26(j) for the Group’s policy regarding
impairments.
(ii) Customer contracts
The customer contracts were acquired as part of a business combination. They are recognised at their fair value at the date of
acquisition and are subsequently amortised on a straight-line based on the timing of projected cash flows of the contracts over
their estimated useful lives.
(iii) Impairment tests for goodwill
Goodwill is monitored by management at the level of operating segment identified in note 1 which carries it. The goodwill is
allocated to the Underground Segment.
(iv) Key assumptions used for value-in-use calculations
The Group tests whether goodwill has suffered any impairment on an annual basis. Following this review at 30 June 2020 no
impairment was recorded. For the reporting period ended 30 June 2020, the recoverable amount of the cash generating units
(CGUs) making up the Underground segment was determined based on value-in-use calculations which require the use of
assumptions. At 30 June 2019, the recoverable amount had been determined based on fair value less costs of disposal, with
reference to the purchase price of the acquired interest. At that point there were no indicators to suggest that the fair value had
significantly changed since the acquisition.
The 30 June 2020 calculations use cash flow projections based on financial budgets approved by management covering a
five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. These
growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates.
The calculations used cash flow projections based on the forecast for the 2021 to 2025 financial years.
102
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FINANCIAL REPORT
Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
e. Intangible assets (continued)
Financial years from 2021 to 2025 for the Underground Mining CGU incorporate an estimated annual EBITDA margin which
have not been disclosed as they are commercially sensitive in nature. The 2021 budget forecast was determined as a result of a
comprehensive exercise where the operational divisions evaluate each individual contract and project. Additionally, a terminal
value was calculated after 5 years incorporating a perpetual growth rate of 2.5%.
Weighted average cost of capital post-tax discount rates in the range of 10.0% and 10.8% were used in discounting projected
cash flows for Australia and a range of 11.1% and 12.0% for Africa. The present value of cash flows is sensitive to the growth and
discount rates used. A higher discount rate or lower EBITDA growth rate will result in a lower recoverable value.
(v) Significant estimate: Impact of possible changes in key assumptions
Management have considered various reasonably possible sensitivities over the value-in-use model for the Underground
Mining CGU at 30 June 2020 when testing goodwill for impairment. The table below shows the impact of different reasonably
possible outcomes if there was a change in the assumptions used in the value in use model used for this impairment testing.
ASSUMPTION
Growth rate
(decrease reduces value)
Discount rate
(decrease increases value)
% CHANGE
+1.0%
-1.0%
-1.0%
+1.0%
UNDERGROUND MINING
IMPAIRMENT (A$)
-
-
-
-$38,444,000
The above sensitivities have been performed with all other assumptions in the model remaining the same as the original model.
f. Deferred tax balances
(i) Deferred tax assets
The balance comprises temporary differences attributable to:
Notes
Employee benefits
Accruals
Provision for obsolete stock
Doubtful debts
Depreciation
Other
Inventory
Borrowing and business expenses
Unrealised foreign exchange
Current/prior year tax losses recognised
Financial assets at fair value through other comprehensive income
R&D tax offset recognised
Total deferred tax assets
Set off deferred tax liabilities pursuant to set-off provisions
7(f)(ii)
Net deferred tax assets
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than 12 months
20
$’000
22,660
3,308
1,166
2,613
12,484
42,231
2,239
7,843
8,860
109,528
-
4,999
133,469
19
$’000
19,810
4,055
2,632
2,656
16,526
45,679
2,489
4,293
5,392
88,728
340
4,999
106,241
175,700
151,920
(44,628)
131,072
66,564
109,136
175,700
(34,524)
117,396
55,571
96,349
151,920
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103
FINANCIAL REPORT Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
f. Deferred tax balances (continued)
(i) Deferred tax assets (continued)
EMPLOYEE
BENEFITS
$’000
DEPRECIATION
ACCRUALS
$’000
$’000
DOUBTFUL
DEBTS
$’000
At 1 July 2018
11,352
29,611
1,339
3,658
INVENTORY
$’000
2,395
TA X LOSSES
/OFFSETS
$’000
OTHER
TOTAL
$’000
$’000
-
7,059
55,414
Credited/(charged) to
profit or loss
8,458
(13,085)
2,716
(1,002)
94
93,727
6,786
97,694
Charged directly to equity
-
-
-
-
-
-
(1,188)
(1,188)
At 30 June 2019
19,810
16,526
4,055
2,656
2,489
93,727
12,657
151,920
Credited/(charged) to
profit or loss
2,850
(4,042)
Charged directly to equity
-
-
(747)
-
(43)
-
(250)
20,800
5,926
24,494
-
-
(714)
(714)
At 30 June 2020
22,660
12,484
3,308
2,613
2,239
114,527
17,869
175,700
(ii) Deferred tax liabilities
The balance comprises temporary differences attributable to:
Notes
Foreign entities distributable profits
Depreciation
Intangibles - customer relationships
Revaluation of land and buildings
Other
Receivables
Prepayments
Financial assets at fair value through profit or loss
Uncertain tax positions in Africa
Total deferred tax liabilities
Adjustment of deferred tax liabilities pursuant to set-off provisions
7(f)(i)
Net deferred tax liabilities
Deferred tax liabilities expected to be settled within 12 months
Deferred tax liabilities expected to be settled after more than 12 months
20
$’000
6,318
25,968
76,375
9,207
19
$’000
14,199
23,712
88,164
9,174
117,868
135,249
22
297
2,288
34,284
36,891
154,759
(44,628)
110,131
32,183
122,576
154,759
22
908
-
42,293
43,223
178,472
(34,524)
143,948
13,938
164,534
178,472
The Group is subject to income taxes in many jurisdictions around the world. Significant judgement is required in determining
the provision for income taxes on a worldwide basis. There are some transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is uncertain. The Company recognises liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from amounts provided, such differences will impact the current and deferred tax provisions in the period
in which such outcome is obtained. In addition, the Company regularly assesses the recognition and recoverability of deferred
tax assets. This requires judgements about the application of income tax legislation in jurisdictions in which Perenti operates.
Changes in circumstances may alter expectations and affect the carrying amount of deferred tax assets. The carrying amount
of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
104
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FINANCIAL REPORT
Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
f. Deferred tax balances (continued)
(ii) Deferred tax liabilities (continued)
FOREIGN
ENTITIES
DISTRIBUTABLE
PROFITS
$’000
At 1 July 2018
9,191
-
9,330
25,702
-
INTANGIBLES
CUSTOMER
REL ATIONSHIP
REVALUATION
OF L AND &
BUILDINGS
DEPRECIATION
UNCERTAIN TA X
POSITIONS IN
AFRICA
OTHER
TOTAL
$’000
$’000
$’000
$’000
$’000
589
$’000
44,812
Charged/(credited) to profit
or loss
Charged/(credited) directly
to equity
Charged/(credited) from
acquisition of subsidiary
At 30 June 2019
14,199
5,008
(8,273)
-
(1,990)
27,293
5,409
27,447
-
-
-
(156)
96,437
88,164
-
9,174
-
-
23,712
-
-
(156)
15,000
42,293
(5,068)
106,369
930
178,472
Charged/(credited) to profit
or loss
(7,881)
(11,789)
33
2,256
(8,009)
1,677
(23,713)
At 30 June 2020
6,318
76,375
9,207
25,968
34,284
2,607
154,759
g. Employee benefit obligations
Leave obligations
(i) Leave obligations
20
TOTAL
$’000
NON-
CURRENT
$’000
1,804
73,706
19
TOTAL
$’000
NON-
CURRENT
$’000
1,617
66,660
CURRENT
$’000
65,043
CURRENT
$’000
71,902
Leave obligations cover the Group’s liabilities for long service leave and annual leave obligation, refer to note 25(w).
The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service leave
where employees have completed the required period of service and also those where employees are entitled to pro-rata
payments in certain circumstances. The total amount of the current provision of $71,902,000 (2019: $65,043,000) is presented
as current, since the Group does not have an unconditional right to defer settlement for any of these obligations. However,
based on past experience, the Group does not expect all employees to take the full amount of accrued leave or require
payment within the next 12 months.
The following amounts reflect leave that is not expected to be taken or paid within the next 12 months.
Current leave obligations expected to be settled after 12 months
20
$’000
19
$’000
38,386
28,919
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105
FINANCIAL REPORT
Notes to the consolidated financial statements
h. Recognised fair value measurements
(i) Fair value hierarchy
This note explains the judgements and estimates made in determining the fair values of the non-financial assets that are
recognised and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs
used in determining fair value, the Group has classified its non-financial assets into the three levels prescribed under the
accounting standards. An explanation of each level is provided in note 6(f) and 7(h)(ii)-(v).
At 30 June 2020
Assets
Land and buildings
Office buildings
Industrial sites
Total non-financial assets
At 30 June 2019
Assets
Land and buildings
Office buildings
Industrial sites
Total non-financial assets
LEVEL 1
$’000
LEVEL 2
$’000
LEVEL 3
$’000
TOTAL
$’000
-
-
-
-
-
-
-
-
-
-
-
-
5,674
51,461
57,135
5,674
51,461
57,135
7,512
50,832
58,344
7,512
50,832
58,344
There were no transfers between any levels for recurring fair value measurements during the current or prior period.
(ii) Valuation techniques used to determine level 3 fair values
The Group obtains independent valuations for its freehold land and buildings (classified within property, plant and equipment)
at least every three years, see note 7(h)(v) for details.
At the end of each reporting period, the directors update their assessment of the fair value of each property, taking into
account the most recent independent valuations. The directors determine a property’s value within a range of reasonable fair
value estimates.
The best evidence of fair value is current prices in an active market for similar properties. Where such information is not
available, the directors consider information from a variety of sources including:
•
•
capitalised income projections based on a property’s estimated net market income, and a capitalisation rate derived from
an analysis of market evidence.
current prices in an active market for properties of a different nature or recent prices of similar properties in less active
markets, adjusted to reflect those differences.
(iii) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the periods ended 30 June 2019 and 30 June 2020 for recurring
fair value measurements:
Consolidated entity
Opening balance 1 July 2018
Acquisitions
Acquisition of subsidiary
Depreciation and impairment
Transfers between classes
Gains recognised in other comprehensive income
Closing balance 30 June 2019
Acquisitions
Depreciation and impairment
Transfers between classes
Gains/(losses) recognised in other comprehensive income
Closing balance 30 June 2020
OFFICE
BUILDINGS
$’000
7,695
-
-
(699)
(653)
1,169
7,512
-
(800)
-
(1,038)
5,674
INDUSTRIAL
SITES
$’000
50,912
88
1,001
(1,280)
155
(44)
50,832
588
(1,343)
-
1,386
51,463
TOTAL
$’000
58,607
88
1,001
(1,979)
(498)
1,125
58,344
588
(2,143)
-
348
57,137
106
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT
The higher the
capitalisation rate, the
lower the fair value
The higher the market
rate, the higher the fair
value
The higher the rate per
square metre, the higher
the fair value
Notes to the consolidated financial statements
7 N O N - F I N A N C I A L A S S E T S A N D L I A B I L I T I E S (CO N T I N U E D)
h. Recognised fair value measurements (continued)
(iv) Valuation inputs and relationships to fair value
The following table summarises the quantitative information about the significant unobservable inputs used in level 3 fair value
measurements.
DESCRIPTION
FAIR VALUE AT
VALUATION
TECHNIQUE
UNOBSERVABLE
INPUTS*
RANGE OF INPUTS (PROBABILIT Y-
WEIGHTED AVERAGE)
REL ATIONSHIP OF
UNOBSERVABLE INPUTS TO
FAIR VALUE
30 JUNE
2020
$’000
30 JUNE
2019
$’000
2020
2019
Industrial Sites
- Australia
Income
capitalisation
Capitalisation
rate
7.25-11.75%
(7.77%)
7.25-11.75%
(7.77%)
37,716
38,160
Market rental
value per (m2)
$18-104 per m2
($48)
$18-104 per m2
($48)
Industrial Sites
- Ghana
13,742
12,672
Office
Buildings -
Ghana
5,677
7,512
Direct
comparison
m2
Direct
comparison
m2
Selection of
industrial sites
with similar
approximate utility
Selection of
industrial sites
with similar
approximate utility
$24-1,284 per
m2 ($335)
$24-1,284
per m2 ($335)
$1,850 per m2
($1,850)
$1,850 per m2
($1,850)
The higher the rate per
square metre, the higher
the fair value
* There were no significant inter-relationships between unobservable inputs that materially affect fair values.
(v) Valuation processes
The Group engages external, independent and qualified valuers to determine the fair value of the Group’s land and buildings
every three years. The fair values of the industrial sites properties have been determined by members of the Australian Property
Institute, and the Ghana Institute of Surveyors in the prior year excluding acquisitions.
The main level 3 inputs used by the Group are derived and evaluated as follows:
•
Industrial sites - discount rates, terminal yields, expected vacancy rates and values per square metre are estimated by
members of the Australian Property Institute, and the Ghana Institute of Surveyors based on comparable transactions and
industry data;
• Historical cost for recently completed buildings.
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Perenti – Annual Report 2020
107
FINANCIAL REPORT Notes to the consolidated financial statements
8 E Q U I T Y
a. Contributed equity
Fully paid ordinary shares
701,528,401
685,706,153
1,135,323
1,126,769
20
SHARES
19
SHARES
20
$’000
19
$’000
(i) Movements in ordinary share capital:
Details
Opening balance 1 July 2019
Dividend reinvestment plan issues
Exercise of options under the Employee Option Plan
Contribution of equity, net of transaction costs and tax
Balance 30 June 2020
(ii) Ordinary shares
NUMBER
OF SHARES
(THOUSANDS)
TOTAL
$’000
685,706,153
1,126,769
8(a)(iii)
13,504,325
8,849
2,317,923
-
285
(580)
701,528,401
1,135,323
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to
the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and on a
poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
(iii) Dividend reinvestment plan
The Company has a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their
dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash. The Board has determined
that following a previous suspension of the dividend reinvestment plan, this would be reactivated with effect 25 March 2020,
with an updated scheme booklet taking effect from 21 April 2020. For further information please see note 12(b).
(iv) Options
Information relating to the Ausdrill Limited Employee Option Plan, including details of options issued, exercised and forfeited
during the financial year and options outstanding at the end of the financial year, is set out in note 19.
(v) Rights
Information relating to the Perenti Global Limited Incentive Rights Plan, including details of rights issued, vested and forfeited
during the financial year and rights outstanding at the end of the financial year, is set out in note 19.
108
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FINANCIAL REPORT
Notes to the consolidated financial statements
8 E Q U I T Y (CO N T I N U E D)
b. Other reserves
The following table shows a breakdown of the balance sheet line item ‘other reserves’ and the movements in these reserves
during the year. A description of the nature and purpose of each reserve is provided below:
REVALUATION
SURPLUS
Notes
$’000
AVAIL ABLE-
FOR-SALE
FINANCIAL
ASSETS
$’000
FINANCIAL
ASSETS AT
FVOCI
$’000
SHARE- BASED
PAYMENTS
TRANSACTIONS
WITH NCI
FOREIGN
CURRENCY
TRANSL ATION
TOTAL
$’000
$’000
$’000
$’000
Balance at 1 July 2018
23,961
(3,095)
-
6,446
(2,664)
(37,107)
(12,459)
Reclassification on adoption of
AASB 9
Revaluation - gross
Deferred tax
Foreign currency translation
reserves derecognised on step
acquisition of AUMS
Currency translation differences
Other comprehensive income
Transactions with owners in
their capacity as owners
Share-based payments
expense
19
Shares issued on conversion
of employee share options
At 30 June 2019
-
-
-
-
490
490
-
-
24,451
REVALUATION
SURPLUS
Balance at 1 July 2019
24,451
Notes
$’000
Revaluation - gross
6(c)
Transfer of gain on disposal
of equity investments at FVOCI
to retained earnings
Deferred tax
Currency translation differences
Other comprehensive income
Transactions with owners in
their capacity as owners
Share-based payments
expense
19
Shares issued on conversion
of employee share options
-
-
-
229
229
-
-
At 30 June 2020
24,680
(i) Nature and purpose of other reserves
Revaluation surplus - property, plant and equipment
3,095
(3,095)
-
-
-
-
4,773
(1,432)
-
-
3,095
246
-
-
-
-
-
-
-
-
-
-
-
2,213
(204)
-
-
-
-
-
-
-
-
-
-
(1,018)
-
4,773
(2,450)
(18,163)
(18,163)
14,965
15,455
(4,216)
(385)
-
-
2,213
(204)
246
8,455
(2,664)
(41,323)
(10,835)
AVAIL ABLE-
FOR-SALE
FINANCIAL
ASSETS
$’000
FINANCIAL
ASSETS AT
FVOCI
$’000
SHARE- BASED
PAYMENTS
TRANSACTIONS
WITH NCI
FOREIGN
CURRENCY
TRANSL ATION
TOTAL
$’000
$’000
$’000
$’000
-
-
-
-
-
-
-
-
-
246
8,455
(2,664)
(41,323)
(10,835)
9,170
(409)
(2,628)
-
6,133
-
-
-
-
-
-
-
4,707
(98)
-
-
-
-
-
-
-
-
9,170
-
2,499
(409)
(129)
(13,739)
(13,510)
(11,240)
(4,878)
-
-
4,707
(98)
6,379
13,064
(2,664)
(52,563)
(11,104)
The property, plant and equipment revaluation surplus is used to record increments and decrements on the revaluation of
non-current assets. In the event of a sale of an asset, any balance in the reserve in relation to the asset is transferred to retained
earnings. See accounting policy note 25(p) for details.
Financial assets at FVOCI
The Group has elected to recognise changes in the fair value of certain investments in equity securities in OCI, as explained
in note 6(c). These changes are accumulated within the FVOCI reserve within equity. The group transfers amounts from this
reserve to retained earnings when the relevant equity securities are derecognised.
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109
FINANCIAL REPORT
Notes to the consolidated financial statements
8 E Q U I T Y (CO N T I N U E D)
b. Other reserves (continued)
(i) Nature and purpose of other reserves (continued)
Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options and rights issued to employees that are
expensed in the statement of comprehensive income each year and conversion of options/rights.
Transactions with non-controlling interests (NCI)
This reserve is used to record the differences described in note 25(b)(iv) which may arise as a result of transactions with non-
controlling interests that do not result in a loss of control.
Foreign currency translation
Exchange differences arising on translation of the foreign controlled entities are recognised in other comprehensive income
and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net
investment is disposed of.
The Group’s share of exchange differences arising on translation of foreign joint ventures are recognised in other
comprehensive income and are accumulated in this reserve.
c. Retained earnings
Movements in retained profits were as follows:
Balance 1 July
Notes
20
$’000
19
$’000
293,836
162,639
Adoption of new accounting standard
6(d), 25(a)
-
(7,527)
Reclassification of gain on disposal of equity instruments at fair value through other
comprehensive income, net of tax
Dividends paid /payable
Net profit for the year
Balance 30 June
12(b)
409
(48,043)
23,837
270,039
(42,602)
181,326
293,836
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Perenti – Annual Report 2020
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FINANCIAL REPORT Notes to the consolidated financial statements
9 C A S H F L OW I N F O R M AT I O N
a. Reconciliation of profit after income tax to net cash inflow from operating activities
Profit for the year
Depreciation expense
Amortisation expense
Impairment of assets
Impairment of inventory
Impairment of other
Gain on sale of non-current assets
Gain on disposal of assets held for sale
Net exchange differences
Trade receivable provisions and bad debts
Share of profits of joint ventures
Non-cash employee benefits expense - share-based payments
Borrowing costs
Derivative fair value and settlement
Step acquisition gain on ASL’s existing 50% share of AUMS
Foreign currency translation reserve derecognised on step acquisition of AUMS
Change in operating assets and liabilities:
(Increase)/decrease in trade debtors
(Increase)/decrease in inventories
(Increase)/decrease in deferred tax assets
(Increase)/decrease in other operating assets
(Decrease)/increase in trade creditors
(Decrease)/increase in provision for income taxes payable
(Decrease)/increase in deferred tax liabilities
(Decrease)/increase in other provisions
Net cash inflow from operating activities
b. Non-cash investing and financing activities
Notes
20
$’000
19
$’000
27,555
182,281
232,141
164,829
38,564
40,597
19,011
-
(6,096)
(2,762)
(207)
269
-
4,707
943
-
-
-
31,090
(9,918)
(13,413)
(4,597)
(24,896)
(304)
(31,635)
5,490
29,062
49,320
54,416
9,899
(3,918)
-
(495)
(50)
(10,709)
2,213
4,768
5,703
(180,248)
(18,163)
(28,184)
(4,774)
(69,247)
12,187
458
4,204
8,304
(4,944)
306,539
206,912
Acquisition of plant and equipment by means of finance leases or hire purchases
Recognition of Right-of-use assets
Issue of shares for Barminco acquisition
Issue of shares under Dividend Reinvestment Plan
-
105,065
13
-
13
-
(258,393)
(8,850)
-
96,215
(258,380)
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111
FINANCIAL REPORT Notes to the consolidated financial statements
9 C A S H F L OW I N F O R M AT I O N (CO N T I N U E D)
c. Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt.
Net debt
Cash and cash equivalents
Borrowings/Lease liability - repayable within one year
Borrowings/Lease liability - repayable after one year
Net debt
Cash and cash equivalents
Gross debt
Net debt
20
$’000
19
$’000
327,491
223,524
(36,630)
(25,762)
(847,227)
(731,681)
(556,366)
(533,919)
327,491
223,524
(883,857)
(757,443)
(556,366)
(533,919)
Net debt as at 1 July 2019
223,524
(24,133)
(733,310)
(533,919)
CASH
$’000
LEASES
$’000
BORROWINGS
$’000
TOTAL
$’000
Recognised on adoption of AASB 16 Leases
Cash flows
Foreign exchange adjustments
Other non-cash movements
Net debt as at 30 June 2020
-
110,332
(6,365)
(46,484)
33,809
(516)
-
(64,294)
-
(32,588)
(15,397)
(944)
(46,484)
111,553
(22,278)
(65,238)
327,491
(101,618)
(782,239)
(556,366)
112
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
R I S K
This section of the notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial
position and performance.
10
11
12
Critical accounting estimates and judgements
Financial risk management
Capital management
114
114
119
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Perenti – Annual Report 2020
113
FINANCIAL REPORT Notes to the consolidated financial statements
10 C R I T I C A L ACCO U N T I N G E S T I M AT E S A N D J U D G E M E N T S
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual
results. Management also needs to exercise judgement in applying the Group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are
more likely to be materially adjusted due to estimates and assumptions turning out to be incorrect. Detailed information about
each of these estimates and judgements is included in notes 2 to 26 together with information about the basis of calculation for
each affected line item in the financial statements. In addition, this note also explains where there have been actual adjustments
this year as a result of an error and of changes to previous estimates.
Significant estimates and judgements
• Recognition of revenue - note 2 and note 25(e)
•
•
•
•
•
•
•
Impairment of assets - note 3
Estimated fair value of financial assets at fair value through other comprehensive income - note 6(c)
Estimation uncertainties and judgements made in relation to lease accounting - note 7(d)
Estimation of fair values of land and buildings - note 7(h)
Estimation of useful life of property, plant and equipment - note 7(c)
Estimated goodwill impairment - note 7(e)
Estimated useful life of intangible assets - note 7(e)
• Recognition of deferred tax asset for carried forward tax losses - note 7(f)
•
Share based payments - determining the achievement of non market based conditions - note 19
• Uncertain tax positions in Africa - note 7(f)
• Determination of lease term - note 7(d)
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the
circumstances.
11 F I N A N C I A L R I S K M A N AG E M E N T
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance.
Current year profit and loss information has been included where relevant to add further context.
Risk
Exposure arising from
Measurement
Management
Market risk - foreign exchange
Future commercial transactions
Cash flow forecasting
Natural hedge
Recognised financial assets and
liabilities not denominated in AUD
Sensitivity analysis
Market risk - interest rate
Long-term borrowings at variable rates Sensitivity analysis
Review on continuous basis
Market risk - security prices
Investments in equity securities
Sensitivity analysis
Portfolio diversification
Credit risk
Cash and cash equivalents, trade
receivables,
Derivative financial instruments and
debt instruments, investments and
contract assets
Aging analysis
Credit rating
Liquidity risk
Borrowings and other liabilities
Rolling cash flow forecasts
Diversification of bank deposits,
credit limits, retention of title
over goods sold, letters of
credit
Availability of committed credit
lines and borrowing facilities
The Group’s key management personnel report to the Audit and Risk Committee and Board regularly on the progress and
objectives of the risks and the associated corporate governance policy objectives.
The Group’s financial risk management is carried out by a central treasury department (Group treasury) under policies approved
by the Board of directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s
operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas,
such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial
instruments, and investment of excess liquidity.
114
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FINANCIAL REPORT Notes to the consolidated financial statements
11 F I N A N C I A L R I S K M A N AG E M E N T (CO N T I N U E D)
a. Market risk
In respect of other monetary assets and liabilities held in currencies other than the AUD, the Group ensures that the net
exposure is kept to an acceptable level by matching foreign denominated financial assets with matching financial liabilities
and vice versa.
(i) Foreign exchange risk
Exposure
The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars, was as follows:
USD
$’000
GHS
$’000
GBP
$’000
EUR
$’000
INR
$’000
EGP
$’000
TZS
$’000
30 JUNE 2020
Cash
13,549
15,798
Trade and other assets
29,628
10,091
-
-
454
2,610
43
1,131
14,353
4,683
35
Other non-current
receivables
Financial assets FVOCI
-
-
-
-
1,645
56,178
259
-
Trade payables
(22,190)
(7,094)
(1,561)
(20,816)
Borrowings
(9,554)
-
-
(56,178)
-
-
-
-
-
-
-
-
30 JUNE 2019
Cash
15,893
7,824
Trade and other assets
24,200
1,142
-
-
6,169
5,016
228
2,513
19,179
3,380
1,568
Other non-current
receivables
3,742
Financial assets FVOCI
-
-
-
-
60,120
449
-
Trade payables
(21,801)
(7,650)
(53)
(33,546)
Borrowings
(10,910)
-
-
(60,120)
-
-
-
-
-
-
-
-
ZAR
$’000
35
-
-
-
BWP
$’000
275
XOF
$’000
-
-
10,017
-
-
-
-
(54)
(1,584)
(690)
-
-
-
-
-
-
-
(170)
-
-
-
-
-
-
-
XOF
$’000
-
481
-
-
(117)
-
-
-
-
(10)
-
-
-
-
-
-
USD
$’000
GHS
$’000
GBP
$’000
EUR
$’000
INR
$’000
EGP
$’000
TZS
$’000
ZAR
$’000
BWP
$’000
Amounts recognised in profit or loss and other comprehensive income
During the year, the following foreign exchange related amounts were recognised in profit or loss and other comprehensive
income:
Amounts recognised in profit or loss
Net foreign exchange (loss)/gain included in other income/other expenses
Total net foreign exchange (loss)/gain recognised in profit or loss before income tax for the year
20
$’000
(3,316)
(3,316)
19
$’000
971
971
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FINANCIAL REPORT Notes to the consolidated financial statements
11 F I N A N C I A L R I S K M A N AG E M E N T (CO N T I N U E D)
a. Market risk (continued)
(i) Foreign exchange risk (continued)
Sensitivity analysis
A 10 percent strengthening of the Australian dollar against the following currencies at 30 June would have increased
(decreased) pre-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular
interest rates, remain constant. The analysis is performed on the same basis for 2019.
30 June 2020
USD
GHS
GBP
EUR
TZS
INR
XOF
30 June 2019
USD
GHS
GBP
EUR
TZS
XOF
INR
EGP
PROFIT OR (LOSS)
A$’000
(1,039)
(1,709)
(16)
546
(102)
(751)
(848)
(3,919)
(1,011)
(120)
(36)
760
(228)
(33)
(763)
(163)
(1,594)
A 10 percent weakening of the Australian dollar against the above currencies at 30 June would have had the equal but opposite
effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. The Group’s
exposure to other foreign exchange movements is not material.
(ii) Price risk
Exposure
The Group’s exposure to equity securities price risk arises from investments held by the Group and classified in the balance
sheet as at fair value through other comprehensive income (FVOCI).
22% (2019: 34%) of the Group’s investments in equity securities are publicly traded on the Australian Securities Exchange,
the London Stock Exchange and the Canadian Stock Exchange.
Sensitivity analysis
The table below summarises the impact of an increase/(decrease) of the financial assets FVOCI on the Group’s equity for the
year after tax. The analysis is based on the assumption that the FVOCI financial assets had increased by 10% or decreased by
10% with all other variables held constant.
FVOCI - increase 10%
FVOCI - decrease 10%
IMPACT ON OTHER COMPONENTS
OF EQUIT Y
20
$’000
1,654
(1,654)
19
$’000
1,231
(1,231)
Other components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value
through other comprehensive income.
116
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FINANCIAL REPORT Notes to the consolidated financial statements
11 F I N A N C I A L R I S K M A N AG E M E N T (CO N T I N U E D)
a. Market risk (continued)
(ii) Price risk (continued)
Amounts recognised in profit or loss and other comprehensive income
The amounts recognised in other comprehensive income in relation to the various investments held by the Group are
disclosed in note 6(c).
b. Credit risk
(i) Risk management
Credit risk is managed on a Group basis. Credit risk is the risk of financial loss to the Group if a customer or counterparty to a
financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers
and investment securities. Credit risk also arises from cash and cash equivalents. The Group limits its exposure to credit risk
from cash and cash equivalents by only investing in counterparties that have an acceptable credit rating.
(ii) Trade receivable provisions
Individual receivables which are known to be uncollectible are written off by reducing the carrying amount directly. The other
receivables are assessed collectively for expected credit losses.
Receivables for which an impairment/expected credit loss provision was recognised are written off against the provision when
there is no expectation of recovering additional cash.
The creation and release of the provision for impaired and expected credit loss receivables has been included in other
expenses in the consolidated statement of profit or loss.
As at 30 June 2020, current trade receivables of $174,232,000 (2019: $195,363,000) were assessed for expected credit losses.
Of this $102,470,000 (2019: $93,166,000 )were past due. The amount of the provision for impaired and expected credit loss
receivables was $11,172,000 (2019: $10,827,000).
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected credit
loss allowance for trade receivables and accrued revenue.
Expected credit losses are based on a review of payment profiles over 12 months, historical credit loss experience in this
period and financial information affecting the ability of the customers to settle the receivable. Historical loss rates are adjusted
to reflect balances receivable or otherwise provided for. Accrued revenue relates to unbilled completed services and has
substantially the same characteristics as the trade receivables for the same type of contracts. The historical loss rates are
adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers
to settle the receivables. The Group has identified that the external credit ratings and default rates are the most relevant factors
in understanding whether a client will be able to settle the receivable and therefore these have been considered and applied to
the receivables to arrive at an expected credit loss. Following this review a provision of $948K has been recorded for expected
credit losses and has been included within the provision for doubtful debts balance at 30 June 2020.
The aging of these receivables greater than 90 days past due is as follows:
3 to 6 months
Over 6 months
20
$’000
7,425
41,721
49,146
19
$’000
7,735
15,552
23,287
Of the above trade receivables over 90 days $10,136,000 has already been provided for in the financial statements and of the
remaining amounts the Group has received various other cash amounts after year end.
Movements in the provision for impairment and expected credit losses of trade receivables that are assessed collectively are
as follows:
At 1 July
Provision (reversed)/recognised during the year
Receivables written off during the year as uncollectible
Unused amounts reversed (including currency impact)
Expected credit loss provision recognised (including currency impact)
$’000
10,827
(831)
228
-
948
$’000
11,421
(654)
(55)
115
-
At 30 June
11,172
10,827
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117
FINANCIAL REPORT Notes to the consolidated financial statements
11 F I N A N C I A L R I S K M A N AG E M E N T (CO N T I N U E D)
c. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages
liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets
and liabilities. Due to the dynamic nature of the underlying businesses, the Group aims at maintaining flexibility in funding by
keeping committed credit lines available with a variety of counterparties.
(i) Financing arrangements
The Group had access to the following undrawn debt facilities at the end of the reporting period:
Total unutilised facilities
(ii) Maturities of financial liabilities
20
$’000
19
$’000
344,853
158,343
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the
reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash
flows.
CONTRACTUAL MATURITIES OF FINANCIAL
LIABILITIES
LESS THAN
6 MONTHS
6 - 12
MONTHS
BETWEEN
1 AND 2 YEARS
BETWEEN
2 AND 5 YEARS
OVER
5 YEARS
TOTAL
CONTRACTUAL
CASH FLOWS
CARRYING
AMOUNT
LIABILITIES
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Group - at 30 June 2020
Trade payables
Borrowings
Lease liabilities
Total
Group - at 30 June 2019
Trade payables
Borrowings
Total
261,092
-
-
-
20,948
20,149
547,307
265,680
-
-
261,092
261,092
854,084
782,238
16,229
14,071
29,911
59,756
3,710
123,677
101,618
298,269
34,220
577,218
325,436
3,710
1,238,853
1,144,948
268,524
28,709
297,233
-
30,989
30,989
-
41,345
41,345
-
761,121
761,121
-
-
-
268,524
268,524
862,164
757,443
1,130,688
1,025,967
Details about the financial guarantee contracts are provided in note 24. The amounts disclosed in the table are the maximum
amounts allocated to the earliest period in which the guarantee could be called. The parent entity does not expect these
payments to eventuate.
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FINANCIAL REPORT Notes to the consolidated financial statements
1 2 C A P I TA L M A N AG E M E N T
a. Risk management
The Group’s objectives when managing its capital are to safeguard its ability to continue as a going concern, so it can continue
to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
Consistently with others in the industry, the Group monitors capital on the basis of the gearing ratio. The ratio is calculated as
net debt divided by total capital. Net debt is calculated as total borrowings, as shown in the statement of financial position, less
cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the statement of financial position plus net debt.
The gearing ratios at 30 June 2020 and 30 June 2019 were as follows:
Borrowings
Lease liabilities
Less: cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
See note 6(e) for information on financial covenants on borrowings.
b. Dividends
(i) Ordinary shares
Final ordinary fully franked dividend for the year ended 30 June 2019 of 3.5 cents (2018: 1.5 cents
and 2.0 cents special dividend) per fully paid ordinary share paid on 23 October (18 October 2018).
Interim ordinary fully franked dividend for the year ended 30 June 2020 of 3.5 cents (2019: 3.5 cents)
per fully paid share payable on 25 March 2020 (27 March 2019).
Total dividends provided for or paid
Dividends paid in cash or satisfied by the issue of shares under the dividend reinvestment plan
during the years ended 30 June 2020 and 2019 were as follows:
Paid in cash
Payable 6(d)
Issue of shares under Dividend re-investment plan
Total dividends provided for or paid
20
$’000
782,239
101,618
(327,491)
556,366
19
$’000
723,659
33,784
(223,524)
533,919
1,399,754
1,411,612
1,956,120
1,945,531
28%
27%
20
$’000
19
$’000
24,019
18,629
24,024
48,043
23,973
42,602
24,019
15,174
8,850
48,043
42,602
-
-
42,602
On the 25 March 2020 Perenti deferred the payment of this dividend. On 21 April 2020 the Group reactivated its Dividend
Reinvestment Plan (DRP) providing the opportunity for the shareholders to reinvest the 2020 interim dividend into shares in
Perenti. The reactivation was part of the Group’s response to the COVID-19 pandemic and its capital management policies.
The payment of a portion of the cash dividend was made in July 2020. The Board reserves the right to deactivate this plan as
they see fit under the DRP plan rules.
(ii) Dividends not recognised at the end of the reporting period
In addition to the above dividends, since year end the directors determined a final dividend of
3.5 cents per fully paid ordinary share (2019: 3.5 cents). The amount is expected to be paid on
3 November 2020 out of retained profits at the date of the dividend payment, but not recognised as
a liability at year end, is
20
$’000
24,553
19
$’000
24,000
(iii) Franked dividends
Franking credits available for subsequent reporting periods based on a tax rate of 30% (2019 - 30%)
10,476
31,065
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted for
franking credits and debits that will arise from the settlement of liabilities or receivables for income tax and dividends after the
end of the year.
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119
FINANCIAL REPORT Notes to the consolidated financial statements
G RO U P S T RU C T U R E
This section provides information which will help users understand how the Group structure affects the financial position and
performance of the Group as a whole. In particular, there is information about:
•
•
•
changes to the structure that occurred during the year as a result of business combinations and the disposal of discontinued oper-
ations;
transactions with non-controlling interests; and
interests in joint operations.
A list of significant subsidiaries is provided in note 14. This note also discloses details about the Group’s equity accounted investments.
13
14
Business combination
Interests in other entities
121
122
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Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
1 3 B U S I N E S S CO M B I N AT I O N
In the prior year on 31 October 2018 the Company acquired Barminco Holdings Pty Limited (Barminco), a specialist underground
hard-rock mining contractor with operations predominantly in Australia as well as in Africa and India. The acquisition of Barminco
increased the Group’s ownership of the AUMS entities from 50% to 100%. Details of this business combination were disclosed in
the Group’s annual financial statements for the year ended 30 June 2019.
There were no business combinations in the year ended 30 June 2020.
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121
FINANCIAL REPORT Notes to the consolidated financial statements
1 4 I N T E R E S T S I N O T H E R E N T I T I E S
The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries in
accordance with the accounting policy described in note 25(b):
NAME OF ENTIT Y
COUNTRY OF
INCORPORATION
CL ASS OF SHARES
EQUIT Y HOLDING
20
%
19
%
African Mining Services Burkina Faso Sarl
African Mining Services (Ghana) Pty Ltd *
African Mining Services Guinee Sarl
African Mining Services Mali Sarl
African Mining Services Senegal Suarl
African Mining Services Cote D’Ivoire Sarl
African Mining Services Ghana Ltd
Ausdrill (Ghana) Pty Ltd
ACN 103534087 Pty Ltd *
Perenti Group Services Pty Ltd *
Perenti International Pty Ltd *
Ausdrill Pty Ltd *
Perenti Properties Pty Ltd *
Perenti Finance Pty Ltd *
AMCG Ltd
Ausdrill Tanzania Limited
Perenti Utilities Pty Ltd *
Perenti Holdings Pty Ltd
BTP Equipment Pty Ltd *
BTP Parts Pty Ltd *
Connector Drilling Pty Ltd *
Drill Rigs Australia Pty Ltd *
Energy Drilling Australia Pty Ltd *
Golden Plains Pty Ltd *
Logistics Direct Ltd
MinAnalytical Holdings Pty Ltd *
MinAnalytical Laboratory Services Australia Pty Ltd *
Ausdrill AMS UK Ltd
Barminco Mining Services Botswana Pty Ltd
Mining Technology and Supplies Ltd
Barminco Mining Services Canada Limited
Power Solutions Africa Suarl
Barminco Holdings Pty Ltd
Barminco Limited
Barminco Finance Pty Ltd
Supply Direct Pty Ltd *
Supply Direct South Africa Pty Ltd *
Synegex Holdings Pty Ltd *
Barminco South Africa Pty Ltd
Barholdco (EIS) Pty Ltd
Barminco Egypt LLC
West African Mining Services Ltd
Barminco Egypt Underground Mining Services SAE
Investment Commercial
SLR Australia Pty Ltd
Barminco India Holdings Pty Ltd
Barminco India Investments Pty Ltd
Barminco AUMS Holding Pty Ltd
Barminco Indian Underground MIning Services LLP
African Underground Mining Services Limited
African Underground Mining Services Ltd Mali Sarl
African Underground Mining Services Burkina Faso Sarl
AUMS (T) Ltd
Technology Driven Mining Pty Ltd
Underground Mining Alliance Ltd
Burkina Faso
Australia
Guinea
Mali
Senegal
Cote d’Ivoire
Ghana
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ghana
Tanzania
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ghana
Australia
Australia
UK
Botswana
Ghana
Canada
Senegal
Australia
Australia
Australia
Australia
Australia
Australia
South Africa
Australia
Egypt
Ghana
Egypt
Australia
Australia
Australia
Australia
India
Ghana
Mali
Burkina Faso
Tanzania
Australia
Ghana
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
70
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
70
* These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with ASIC Corporations (Wholly-owned Companies)
Instrument 2016/785. For further information refer to note 23.
Underground Mining Alliance (UMA) is a 70/30 operation between AUMS and Rocksure International, a Ghanaian Mining contractor and has been included in
subsidiaries above.
122
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FINANCIAL REPORT Notes to the consolidated financial statements
U N R E CO G N I S E D I T E M S
This section of the notes provides information about items that are not recognised in the financial statements as they do not yet satisfy
the recognition criteria.
In addition to the items and transactions disclosed below, there are also:
(a) Unrecognised tax amounts – see note 5
(b) Non-cash investing and financing transactions – see note 9(b).
15
16
17
Contingencies
Commitments
Events since the end of the financial year
124
124
125
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123
FINANCIAL REPORT Notes to the consolidated financial statements
1 5 CO N T I N G E N C I E S
a. Contingent liabilities
In the course of its normal business, the Group occasionally receives claims arising from its operating activities. In the opinion
of the directors, all such matters are covered by insurance or, if not covered, are without merit or are of such a kind or involve
such amounts that would not have a material adverse effect on the operating results or financial position of the Group if settled
unfavourably.
For information about guarantees given by entities within the Group, including the parent entity, please refer to note 24.
b. Contingent assets
The Group lodged a claim in relation to a matter which at the date of this report is unresolved and is subject to litigation.
The directors are confident that a favourable outcome will be achieved. However, the contingent asset has not been
recognised as a receivable at 30 June 2020 as receipt of this amount is dependent on the outcome of the litigation.
16 CO M M I TM E N T S
a. Capital commitments
Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
Property, plant and equipment
Payable:
Within one year
20
$’000
19
$’000
57,528
76,200
The capital commitments are to be funded from cash and available finance facilities.
b. Non-cancellable operating leases
The Group leases various offices, warehouses and equipment under non-cancellable lease contracts expiring within one
to 17 years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are
renegotiated.
From 1 July 2019, the Group has recognised right-of-use assets from these leases, except for short-term and low-value leases,
see note 7(d) and note 26 for further information.
Commitments for minimum lease payments in relation to non-cancellable operating leases are
payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
c. Finance leases
20
$’000
-
-
-
-
19
$’000
11,985
33,311
1,650
46,946
The Group leases various plant and equipment with carrying amount of $nil (2019: $48,840,000) under finance leases expiring
within one to three years.
From 1 July 2019, the Group has reclassified finance leases (HP liabilities) to lease liabilities, see note 7(d) and note 26 for
further information.
Commitments in relation to finance leases payable are as follows:
Within one year
Later than two years but no later than five years
Minimum lease payments
Future finance charges
Recognised as liability
Representing lease liabilities
Current
Non-current
20
$’000
-
-
-
-
-
-
-
-
19
$’000
26,645
8,819
35,464
(1,680)
33,784
25,236
8,548
33,784
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ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
17 E V E N T S S I N C E T H E E N D O F T H E F I N A N C I A L Y E A R
On 24 August 2020, the directors determined the payment of a final ordinary dividend of $24,553,000 (3.5 cents per fully paid
share) to be paid on 3 November 2020 out of retained profits at 30 June 2020. The financial effect of this transaction has not been
brought to account at 30 June 2020.
There are no other matters or circumstances that have arisen since the end of the financial year which significantly affected or
may significantly affect the operations of the Consolidated entity, the results of those operations, or the state of affairs of the
Consolidated entity in subsequent financial years.
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125
FINANCIAL REPORT Notes to the consolidated financial statements
O T H E R D I S C L O S U R E
This section of the notes includes other information that must be disclosed to comply with the accounting standards and other
pronouncements, but that is not immediately related to individual line items in the financial statements.
18
19
20
21
22
23
24
25
26
Related party transactions
Share-based payments
Remuneration of auditors
Earnings per share
Assets pledged as security
Deed of cross guarantee
Parent entity financial information
Summary of significant accounting policies
Changes in accounting policies
127
129
131
132
133
133
136
138
147
126
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
1 8 R E L AT E D PA R T Y T R A N S AC T I O N S
a. Parent entities
The ultimate parent entity of the Group is Perenti Global Limited.
b. Subsidiaries
Interests in subsidiaries are set out in note 14.
c. Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Share-based payments
Detailed remuneration disclosures are provided in the remuneration report on pages 52 to 65.
d. Transactions with other related parties
The following transactions occurred with related parties:
Sales of goods and services
Joint ventures
Entities related to key management personnel
Management fee received / receivable
Joint ventures
Purchase of goods and services
20
$
19
$
4,172,627
5,439,523
153,481
48,519
247,247
38,618
-
1,366,368
1,886,958
899,260
6,261,585
7,991,016
20
$
-
19
$
2,567,618
3,233,476
1,535,764
-
418,393
Other property related expenses-electricity
261,381
614,166
(i) Purchases from entities associated with key management personnel
The Group acquired the following goods and services from entities that are associated with members of the Group
key management personnel:
• provision of exploration drilling services
• mining services
•
electricity services
For detailed disclosures please refer to the remuneration report on page 52.
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FINANCIAL REPORT Notes to the consolidated financial statements
1 8 R E L AT E D PA R T Y T R A N S AC T I O N S (CO N T I N U E D)
e. Outstanding balances arising from sales / purchases of goods and services
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Current receivables (sales of goods and services)
Entities related to key management personnel
Current payables (purchases of goods and services)
Other property related expenses-electricity
f. Loans to related parties
Loans to key management personnel
Balance at 1 July
Loans on acquisition of Barminco
Loans repayments made
Interest charged
Interest received
End of period
Loans from associates
Balance at 1 July
Loan from minority interest
Impact of foreign exchange
End of period
g. Terms and conditions
20
$
6,792
(18,785)
20
$
190,409
19
$
-
-
19
$
-
-
192,550
(2,327)
9,867
(10,437)
(2,141)
5,581
(5,581)
187,512
190,409
2,659,753
-
-
2,659,753
45,502
-
2,705,255
2,659,753
All transactions were made on normal commercial terms and conditions. The loans to key management personnel on
acquisition of the Barminco group are repayable by 22 October 2022. Interest was payable at the rate of 4.80% and 5.37% on
loans advanced. Outstanding balances are unsecured and are repayable in cash.
128
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ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
19 S H A R E- B A S E D PAYM E N T S
a.
Employee Option Plan
The Employee Option Plan is designed to provide long-term incentives for senior managers to deliver long-term shareholder
returns. Under the plan, participants are granted options which only vest if certain performance conditions are met.
Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate in the plan or to
receive any guaranteed benefits.
The amount of options that will vest depends on Perenti Global Limited’s total shareholders return (TSR), including share
price growth, dividends and capital returns, ranking with a peer group of selected companies that are listed on the ASX over a
period of time. Once vested, the options remain exercisable for a period of between 3.6 years and 5 years from their issue date.
Options are granted under the plan for nil consideration.
Options granted for nil consideration and settled in shares under the plan carry no dividend or voting rights.
Set out below are summaries of options granted under the plan:
AVERAGE EXERCISE PRICE
PER SHARE OPTION
NUMBER OF
OPTIONS
AVERAGE EXERCISE PRICE
PER SHARE OPTION
20
As at 1 July
Granted during the year
Exercised during the year
Forfeited during the year
As at 30 June
Vested and exercisable at 30 June
$0.00
$0.17
$0.17
$0.27
3,733,354
-
(2,466,680)
(66,668)
1,200,006
881,488
$0.17
$0.25
$0.54
$0.17
The weighted average share price at the date of exercise of options during the year ended 30 June 2020 was $1.55
(2019: $1.35).
No options expired unexercised during the periods covered by the above tables.
Share options outstanding at the end of the year have the following expiry date and exercise prices.
19
NUMBER OF
OPTIONS
7,766,682
500,000
(3,333,323)
(1,200,005)
3,733,354
1,033,328
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
SHARE OPTIONS
30 JUNE 2020
SHARE OPTIONS
30 JUNE 2019
23/12/2015
20/04/2018
01/04/2019
20/04/2018
23/12/2020
21/11/2021
23/12/2019
12/06/2022
$0.17
$1.19
$0.17
$1.55
800,005
266,667
-
133,334
1,200,006
Weighted average remaining contractual life of options outstanding at end of period
0.85 years
There were no options granted during the year ended 30 June 2020 (2019: 500,000).
b. Rights Plan
3,166,686
266,667
166,667
133,334
3,733,354
1.60 years
The Board has established a new Incentive Rights Plan for eligible employees holding senior executive and senior management roles
with a focus on delivering outcomes that create value for shareholders. The plan allows for three different types of incentive rights;
retention rights, performance rights and short-term incentive rights. Retention rights and performance rights were granted during the
year and are treated as in substance options and are accounted for as share based payments. Participation under the plan is at the
Board’s discretion and no individual has a contractual right to participate in the plan or receive any guaranteed benefits. Rights granted
for nil consideration under the plan carry no dividend or voting rights.
Retention rights
Each retention right issued under the plan converts into one ordinary share of Perenti Global Limited on exercise. The retention
rights granted will vest on 31 October 2020; vesting is conditional on continued employment. Retention rights are not subject to
performance hurdles.
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FINANCIAL REPORT Notes to the consolidated financial statements
19 S H A R E- B A S E D PAYM E N T S (CO N T I N U E D)
b. Rights Plan (continued)
Performance rights
Each performance right issued under the plan converts into one ordinary share of Perenti Global Limited on exercise.
Performance rights vest and become exercisable when the applicable performance, service or other vesting conditions
specified at the time of grant are satisfied within a predetermined performance period.
The performance period for the rights granted during the period will run from 1 July 2019 until 30 June 2022. In addition to
continued service, the Board has set the following performance criteria for rights granted:
•
•
50% of the performance rights will vest if the total shareholder return (TSR) vesting condition is met; and
50% of the performance rights will vest if the return on average capital employed (ROACE) vesting condition is met
Set out below is a summary of rights granted under the above plans.
As at 1 July
Granted during the year
Forfeited during the year
As at 30 June
20
NUMBER OF
RIGHTS
5,661,178
19
NUMBER OF
RIGHTS
-
4,839,040
5,661,178
(856,185)
-
9,644,034
5,661,178
There were 4,554,513 performance rights, 284,527 Short Term Incentive Rights and nil retention rights granted during the year
ended 30 June 2020 (30 June 2019: 4,721,353 performance rights and 939,825 retention rights granted during the year ended
30 June 2019 and nil Short Term Incentive Rights).
Weighted average remaining contractual life of rights outstanding at the end of the year 1.36 years (30 June 2019: 1.89 years).
Weighted fair value of rights granted during the year $1.57 (30 June 2019: $1.28).
Valuation model inputs used to determine the fair value of rights at the grant date included:
RIGHT
GRANT DATE
VESTING DATE
Performance - ROACE
28 Feb 2019
30 Jun 2021
Performance - TSR
28 Feb 2019
30 Jun 2021
Retention
28 Feb 2019
31 Oct 2020
Performance - ROACE
10 Jun 2019
30 Jun 2021
Performance - TSR
10 Jun 2019
30 Jun 2021
Performance - ROACE
28 Nov 2019
30 June 2022
Performance - TSR
28 Nov 2019
30 June 2022
Short Term Incentive Plan
24 Oct 2019
24 Oct 2020
SHARE PRICE
GRANT DATE
EXPECTED
VOL ATILIT Y
DIVIDEND
YIELD
RISK-FREE
INTEREST RATE
FAIR VALUE
GRANT DATE
$1.74
$1.74
$1.74
$1.33
$1.33
$1.95
$1.95
$1.84
54.92%
54.92%
54.92%
52.07%
52.07%
46.00%
46.00%
-
3.74%
3.74%
3.74%
3.74%
3.74%
3.60%
3.60%
3.74%
1.67%
1.67%
1.67%
1.07%
1.07%
0.66%
0.66%
-
$1.60
$1.22
$1.64
$1.23
$0.82
$1.78
$1.33
$1.88
c. Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as a part of employee benefit expense
were as follows:
For further information on the above options and rights, refer the Remuneration Report on pages 52 to 65.
Options issued under employee option plan
Rights issued under employee rights plan
20
$’000
165
4,542
4,707
19
$’000
319
1,894
2,213
The total amount to be expensed for share based payments is determined by reference to the fair value at grant date, which includes
any market performance conditions and the impact of any non-vesting conditions but excludes the impact of any service and non-
market performance vesting conditions. Non-market vesting conditions are included in assumptions about the number of options or
rights that are expected to vest. The total expense is recognised over the vesting period. At the end of each reporting period, the Group
revises its estimate of the number of equity instruments expected to vest based on non-market vesting conditions. The impact of the
revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimates,
with a corresponding adjustment to the share-based payments reserve.
Significant judgement is required in determining the achievement of non-market conditions.
130
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ABN 95 009 211 474
FINANCIAL REPORT Notes to the consolidated financial statements
2 0 R E M U N E R AT I O N O F AU D I T O R S
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices
and non-related audit firms:
a. PricewaterhouseCoopers Australia
(i) Audit and other assurance services
Audit and review of financial statements
(ii) Taxation services
Tax compliance services
(iii) Other services
Advisory and accounting consulting services
Total remuneration of PricewaterhouseCoopers Australia
b. Network firms of PricewaterhouseCoopers Australia
(i) Audit and other assurance services
Audit and other assurance services
(ii) Taxation services
Tax compliance services
(iii) Other services
Advisory and accounting consulting services
Total remuneration of network firms of PricewaterhouseCoopers Australia
Total remuneration of PricewaterhouseCoopers firms
c. Non PricewaterhouseCoopers audit firms
(i) Audit and other assurance services
Audit and review of financial statements
(ii) Taxation services
Tax compliance services
(iii) Other services
Advisory and accounting consulting services
Total remuneration of non PricewaterhouseCoopers firms
20
$
19
$
897,872
736,226
688,392
548,345
1,215,091
1,552,275
2,801,355
2,836,846
782,269
376,935
276,334
189,741
42,657
37,788
1,101,260
604,464
3,902,615
3,441,310
131,900
150,143
350,513
11,546
677,134
1,159,547
56,037
217,726
It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where
PricewaterhouseCoopers expertise and experience with the Group are important. These assignments are principally tax advice and due
diligence reporting on acquisitions, or where PricewaterhouseCoopers is awarded assignments on a competitive basis.
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131
FINANCIAL REPORT
Notes to the consolidated financial statements
21 E A R N I N G S P E R S H A R E
a. Basic earnings per share
Profit for the year attributable to the ordinary equity holders of the Company
b. Diluted earnings per share
20
CENTS
3.5
19
CENTS
30.0
Profit for the year attributable to the ordinary equity holders of the Company
3.5
29.8
c. Reconciliation of earnings used in calculating earnings per share
Profit for the year attributable to the ordinary equity holders of the Company
23,837
181,326
d. Weighted average number of shares used as denominator
20
$’000
19
$’000
20
19
NUMBER
NUMBER
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
689,198,530
605,817,725
Adjustments for calculation of diluted earnings per share:
Effect of share options on issue
Effect of share rights on issue
760,273
3,015,922
503,386
20,546
Weighted average number of ordinary and potential ordinary shares used as the denominator in
calculating diluted earnings per share
690,462,189
608,854,193
e. Information on the classification of securities
(i) Options
Options granted to employees are considered to be potential ordinary shares and have been included in the determination of diluted
earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings
per share. Details relating to the options are set out in note 19.
(ii) Rights
Rights granted to employees are considered to be potential ordinary shares and have been included in the determination of diluted
earnings per share to the extent to which they are dilutive. The rights have not been included in the determination of basic earnings per
share. Details relating to the options are set out in note 19.
132
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FINANCIAL REPORT Notes to the consolidated financial statements
2 2 A S S E T S P L E D G E D A S S E C U R I T Y
The carrying amounts of assets pledged as security for current and non-current borrowings are:
Current
Floating charge
Cash and cash equivalents
Receivables
Inventory
Total current assets pledged as security
Non-current
Floating charge
Plant and equipment
Freehold land and buildings
Receivables
Investment
Total non-current assets pledged as security
Total assets pledged as security
20
$’000
19
$’000
284,467
360,424
213,292
858,183
223,524
399,354
254,871
877,749
699,290
57,042
21,233
111,278
888,843
790,347
58,344
1,047
17,581
867,319
1,747,026
1,745,068
Restrictions and covenants imposed under leasing agreements over right-of-use assets are disclosed in note 7(d).
2 3 D E E D O F C RO S S G UA R A N T E E
Perenti Global Limited and the entities noted below are parties to a deed of cross guarantee under which each company
guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the requirement
to prepare a financial report and a directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
The closed group consists of Perenti Global Limited and the following entities:
ACN 103534087 Pty Ltd;
African Mining Services (Ghana) Pty Ltd;
Perenti International Pty Ltd;
Perenti Group Services Pty Ltd;
Perenti Finance Pty Ltd;
Ausdrill Pty Ltd;
Perenti Properties Pty Ltd;
Perenti Utilities Pty Ltd;
BTP Parts Pty Ltd;
BTP Equipment Pty Ltd;
Connector Drilling Pty Ltd;
Drill Rigs Australia Pty Ltd;
Energy Drilling Australia Pty Ltd;
Golden Plains Pty Ltd;
MinAnalytical Holdings Pty Ltd;
MinAnalytical Laboratory Services Australia Pty Ltd;
Supply Direct Pty Ltd;
Supply Direct South Africa Pty Ltd; and
Synegex Holdings Pty Ltd.
a. Consolidated statement of profit or loss, consolidated statement of comprehensive income and summary of
movements in consolidated retained earnings
The above companies represent a ‘closed group’ for the purposes of the instrument, and as there are no other parties to the
deed of cross guarantee that are controlled by Perenti Global Limited, they also represent the ‘extended closed group.
Set out over page 134 is a consolidated statement of profit or loss, a consolidated statement of comprehensive income and a
summary of movements in consolidated retained earnings for the closed group.
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133
FINANCIAL REPORT Notes to the consolidated financial statements
2 3 D E E D O F C RO S S G UA R A N T E E (CO N T I N U E D)
a. Consolidated statement of profit or loss, consolidated statement of comprehensive income and summary of
movements in consolidated retained earnings (continued)
Consolidated statement of profit or loss
Sales revenue
Other income
Materials expense
Labour costs
Rental and hire expense
Depreciation expense
Management fee income
Finance costs
Finance income
Other expenses from ordinary activities
Share of net profits of joint ventures accounted for using the equity method
Impairment of assets
Profit before income tax
Income tax benefit
Profit for the year
Consolidated statement of comprehensive income
Other comprehensive income
Profit for the year
Items that may be reclassified to profit or loss
20
$’000
19
$’000
338,116
550,993
63,319
206,735
(114,287)
(224,303)
(154,252)
(199,319)
(7,063)
(36,180)
4,468
(14,558)
14,113
(49,697)
41,696
(25,337)
60,338
5,030
65,368
(15,798)
(47,457)
5,644
(23,999)
5,423
(74,022)
38,062
(71,461)
150,498
72,583
220,470
65,368
223,081
Exchange differences on translation of foreign operations
(723)
(5,952)
Items that will not be reclassified to profit or loss
Gain on revaluation of financial assets FVOCI, net of tax
Other comprehensive (loss) for the year, net of tax
Total comprehensive income for the year
Summary of movements in consolidated retained earnings
Retained earnings at the beginning of the financial year
Profit for the year
Retained earnings transfer
Dividends paid
Retained earnings at the end of the financial year
6,133
5,410
3,341
(2,611)
70,778
220,470
253,162
72,683
65,368
223,081
(307)
(48,043)
271,180
-
(42,602)
253,162
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FINANCIAL REPORT Notes to the consolidated financial statements
2 3 D E E D O F C RO S S G UA R A N T E E (CO N T I N U E D)
b. Consolidated statement of financial position
Set out below is the consolidated statement of financial position as at 30 June of the closed group.
Current assets
Cash and cash equivalents
Trade receivables
Inventories
Assets classified as held for sale
Current tax receivables
Total current assets
Non-current assets
Investments in other Group companies
Receivables
Financial assets at fair value through other comprehensive income
Joint ventures accounted for using the equity method
Property, plant and equipment
Deferred tax assets
Right-of-use assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Employee benefit obligations
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Employee benefit obligations
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
20
$’000
58,590
147,027
59,898
-
6,871
19
$’000
58,458
307,295
66,696
13,626
8,551
272,386
454,626
666,667
168,444
23,632
365,289
216,378
121,596
44,158
511,848
126,023
17,581
332,479
213,893
106,240
-
1,606,164
1,308,064
1,878,550
1,762,690
65,438
8,843
7,161
17,589
99,031
62,647
529
12,329
15,004
90,509
295,654
225,790
78,384
845
374,883
473,914
78,321
836
304,947
395,456
1,404,636
1,367,234
1,135,323
1,126,769
(867)
270,180
(12,697)
253,162
1,404,636
1,367,234
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135
FINANCIAL REPORT Notes to the consolidated financial statements
2 4 PA R E N T E N T I T Y F I N A N C I A L I N F O R M AT I O N
a. Summary financial information
The individual financial statements for the parent entity, Perenti Global Limited, show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Asset revaluation reserve
Share-based payments reserve
Pre-2015 reserve
Accumulated losses - 2015 reserve
Retained earnings
Total equity
Profit/(loss) for the period
Total comprehensive income/(loss)
20
$’000
19
$’000
45,562
51,955
895,349
890,253
940,911
942,208
38,160
15,188
53,348
21,087
6,580
27,667
1,135,323
1,126,769
909
13,064
-
(183,177)
(78,556)
909
8,454
42,446
(183,177)
(80,860)
887,563
914,541
7,902
7,902
(45,533)
(45,533)
The financial information for the parent entity has been prepared in accordance with the accounting policies below.
b. Guarantees entered into by the parent entity
The parent entity has not entered into any guarantees during the year (2019: nil).
However, there are cross guarantees given by Perenti Global Limited as described in note 23. Deficiencies exist in some of
these companies.
c. Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019. For information about guarantees
given by the parent entity, please see (b) above.
d. Contractual commitments for the acquisition of property, plant or equipment
As at 30 June 2020, the parent entity had contractual commitments for the acquisition of property, plant and equipment
totalling $7,356,000 (30 June 2019: $426,000). These commitments are not recognised as liabilities as the relevant assets have
not yet been received.
e.
Pre-2015 Reserve
Each reserve of the parent entity has the same nature and purpose as described for the consolidated Group (in note 8(b)).
In addition, the parent entity on 30 June 2016 and 30 June 2015 established separate reserves for the purpose of paying
future dividends. The reserves are referred to as the “Pre-2015 reserve” and the “Accumulated losses - 2015 reserve”. On the
date of establishment, the “Pre-2015 reserve” had an amount of $114,273,000 transferred to it from retained earnings and the
“Accumulated losses - 2015 reserve” had an amount of ($183,177,000) transferred to it from retained earnings.
136
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FINANCIAL REPORT Notes to the consolidated financial statements
2 4 PA R E N T E N T I T Y F I N A N C I A L I N F O R M AT I O N (CO N T I N U E D)
f. Parent entity financial information
The financial information for the parent entity, Perenti Global Limited has been prepared on the same basis as the consolidated
financial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Perenti
Global Limited. Dividends received from associates are recognised in the parent entity’s profit or loss when its right to receive
the dividend is established.
(ii) Tax consolidation legislation
Perenti Global Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Perenti Global Limited, and the controlled entities in the tax consolidated group account for their own current
and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a
stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Perenti Global Limited also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in
the tax consolidated Group.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Perenti
Global Limited for any current tax payable assumed and are compensated by Perenti Global Limited for any current tax
receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Perenti Global
Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised
in the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of
interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts
receivable from or payable to other entities in the Group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
(iii) Financial guarantees
Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no compensation,
the fair values of those guarantees are accounted for as contributions and recognised as part of the cost of the investment.
(iv) Share-based payments
The grant by the Company of options and rights over its equity instruments to the employees of subsidiary undertakings in the
Group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured
by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary
undertakings, with a corresponding credit to equity.
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137
FINANCIAL REPORT Notes to the consolidated financial statements
2 5 S U M M A RY O F S I G N I F I C A N T ACCO U N T I N G P O L I C I E S
This note provides a list of all significant accounting policies adopted in the preparation of these consolidated financial statements.
These policies have been consistently applied to all the periods presented, unless otherwise stated. The financial statements are for
the consolidated entity consisting of Perenti Global Limited and its subsidiaries.
a. Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, and
Interpretations issued by the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations
Act 2001. Perenti Global Limited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of Perenti Global Limited and its subsidiaries also comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) New or amended Accounting Standards and Interpretations adopted by the Group
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
• AASB 16 Leases
• AASB 2017-6 Amendments to Australian Accounting Standards - Prepayment Features with Negative Compensation
• AASB 2017-7 Amendments to Australian Accounting Standards - Long-term Interests in Associates and Joint Ventures
• AASB 2019-1 Amendments to Australian Accounting Standards - Annual Improvements 2015-2017 Cycle
• AASB 2019-2 Amendments to Australian Accounting Standards - Plan Amendment, Curtailment or Settlement
•
Interpretation 23 Uncertainty over Income Tax Treatments.
The group had to change its accounting policies as a result of adopting AASB 16. The group elected to adopt the new rules
retrospectively but recognised the cumulative effect of initially applying the new standard on 1 July 2019. This is disclosed in
note 26. The other amendments listed above did not have any impact on the amounts recognised in prior periods and are not
expected to significantly affect the current or future periods.
(iii) Impact of standards issued but not yet applied by the entity
Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2020
reporting period and have not been early adopted by the Group. The Group is assessing impact of the new standards, however
does not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future
transactions.
(iv) Historical cost convention
These financial statements have been prepared on a historical cost basis except for the following:
•
•
•
certain classes of property, plant and equipment measured at fair value,
assets held for sale are measured at the lower of carrying amount and fair value less costs to sell, and
certain financial assets and liabilities (including derivative instruments) measured at fair value through profit or loss.
b. Principles of consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity where
the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for all business combinations by the Group (refer to note 25(i)).
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit
or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of financial position respectively.
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b. Principles of consolidation (continued)
(ii) Joint arrangements
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint ventures.
The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint
arrangement. Perenti Global Limited has only joint ventures.
Joint ventures
Interests in joint ventures are accounted for using the equity method (see (iii) below), after initially being recognised at cost in
the consolidated statement of financial position.
(iii) Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise
the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements
in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from joint
ventures are recognised as a reduction in the carrying amount of the investment.
Where the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any
other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest
in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency
with the policies adopted by the Group.
The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described
in 25(j).
(iv) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling
and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the
adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity
attributable to owners of Perenti Global Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured
to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for
the purposes of subsequently accounting for the retained interest as a joint venture or financial asset. In addition, any amounts
previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group has directly
disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income
are reclassified to profit or loss.
If the ownership interest in a joint venture is reduced, but joint control or significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.
c. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Managing Director.
d.
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollar ($), which is Perenti Global Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit
or loss. They are deferred in equity if they are attributable to part of the net investment in a foreign operation.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of
the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at
fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on
non-monetary assets such as equities classified as at fair value through other comprehensive income are recognised in other
comprehensive income.
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d.
Foreign currency translation (continued)
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:
•
•
assets and liabilities for each statement of financial position presented are translated at the closing rate at end of the
reporting period
income and expenses for each income statement and statement of comprehensive income are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the transactions), and
•
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings
and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income.
When a foreign operation is sold or any borrowings forming part of the net investment are repaid, exchange differences are
reclassified to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
e. Revenue recognition
The Group recognises revenue when the Group satisfies performance obligations by transferring a promised good or service
to a customer. An asset is transferred when or as the customer obtains control of that asset. The concept of control under
the new standard replaces the previous requirements to consider when the ‘risks and rewards’ pass to the customer as the
trigger point to recognise revenue. For variable consideration, revenue was previously recognised when it was probable that
work performed will result in revenue, whereas under the new standard, revenue is recognised when it is highly probable that a
significant reversal of revenue will not occur.
Contract assets and liabilities
AASB 15 uses the terms ‘contract asset’ and ‘contract liability’ to describe what is commonly known as ‘accrued revenue’
and ‘deferred revenue’. Accrued revenue represents receivables for unbilled completed services where the Group’s right to
consideration is unconditional subject to only the passage of time. Deferred revenue arises where payment is received prior to
work being performed and is allocated to the performance obligations within the contract and recognised as revenue over the
course of the contract.
Variable consideration
The new standard provides new requirements for variable considerations such as claims, variations and contract modifications.
Where consideration in respect of a contract is variable, the expected value of revenue is only recognised when the uncertainty
associated with the variable consideration is subsequently resolved. The estimate is based on all available information including
historic performance.
Contract fulfilment costs
Costs generally incurred prior to the commencement of a contract may arise due to mobilisation/site setup costs as these
costs are incurred to fulfil a contract. Where these costs are expected to be recovered, they are capitalised and amortised
over the contract consistent with the transfer of service to the customer. Where the costs, or a portion of these costs, are
reimbursed by the customer, the amount received is recognised as deferred revenue.
Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services
to the customer and payment by the customer exceeds one year and/or which contain other material financing components.
Therefore, the Group does not adjust any of the transaction prices for the time value of money or other financing components.
Warranties and defect periods
Contracts for sale of goods and services may include defect and warranty periods following completion of the sale or project.
These obligations are not deemed to be separate performance obligations and therefore are estimated and included in the
total costs of the contracts. Where required, amounts are recognised in accordance with AASB 137 Provisions, Contingent
Liabilities and Contingent Assets.
Other income
Dividends
Dividends are received from financial assets measured at fair value through other comprehensive income (FVOCI). Dividends
are recognised as other income in profit or loss when the right to receive payment is established. This applies even if they are
paid out of pre-acquisition profits, unless the dividend clearly represents a recovery of part of the cost of an investment. In this
case, the dividend is recognised in OCI if it relates to an investment measured at FVOCI.
Rental income
Rental income is recognised on either a straight-line or machine hours basis over the term of the operating lease.
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f.
Interest income
Interest income from financial assets at FVPL is included in the net fair value gains/(losses) on these assets. Interest income on
financial assets at amortised cost and financial assets at FVOCI calculated using the effective interest method is recognised in
profit or loss as part of other income.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except
for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is
applied to the net carrying amount of the financial asset (after deduction of the loss allowance).
Interest income is presented as finance income where it is earned from financial assets that are held for cash management
purposes, see note 6(a). Any other interest income is included in other income.
g. Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences between the tax base of assets and liabilities and their carrying amount in the financial statements, and to unused
tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company and its subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by the end of the statement of financial position date and are
expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in foreign operations where the Company is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities
and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Perenti Global Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set-
off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly
in equity, respectively.
(i) Investment allowances and similar tax incentives
Companies within the Group may be entitled to claim special tax deductions for investments in qualifying assets or in
relation to qualifying expenditure (e.g. the Research and Development Tax Incentive regime in Australia or other investment
allowances). The Group accounts for such allowances as tax credits, which means that the allowance reduces income tax
payable and current tax expense. A deferred tax asset is recognised for unclaimed tax credits that are carried forward as
deferred tax assets.
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h. Leases
As explained in note 25(a) above, the Group has changed its accounting policy for leases where the Group is the lessee.
The new policy is described in note and the impact of the change in note 26.
Until 30 June 2019 leases of property, plant and equipment where the group, as lessee, had substantially all the risks and
rewards of ownership were classified as finance leases. Finance leases were capitalised at the lease’s inception at the fair value
of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net
of finance charges, were included in other short-term and long-term payables. Each lease payment was allocated between
the liability and finance cost. The finance cost was charged to profit or loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired
under finance leases was depreciated over the asset’s useful life, or over the shorter of the asset’s useful life and the lease term
if there is no reasonable certainty that the group will obtain ownership at the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership were not transferred to the group as lessee were
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) were
charged to profit or loss on a straight-line basis over the period of the lease.
Lease income from operating leases where the group is a lessor is recognised in income on a straight-line basis over the lease
term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and
recognised as expense over the lease term on the same basis as lease income. The respective leased assets are included in the
balance sheet based on their nature. The group did not need to make any adjustments to the accounting for assets held as
lessor as a result of adopting the new leasing standard.
i. Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
•
•
•
•
•
fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
equity interests issued by the Group
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in
the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate
share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
•
•
•
consideration transferred
amount of any non-controlling interest in the acquired entity, and
acquisition date fair value of any previous equity interest in the acquired entity.
Over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of
the net identifiable assets of the subsidiary acquired, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at
which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such
remeasurements are recognised in profit or loss.
Under the acquisition method, the Group has up to 12 months post the acquisition date to finalise the fair values of identifiable
assets and liabilities.
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j.
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are
largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets,
other than goodwill that suffered an impairment, are reviewed for possible reversal of the impairment at each reporting period.
See note 3 and note 7(e).
k. Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.
l. Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for
impairment and loss allowance. See note 6(b) for further information about the Group’s accounting for trade receivables and
note 11(b) for a description of the Group’s impairment policies.
m. Inventories
Consumables and store items, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost
comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of
weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
n. Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at
the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising
from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under
insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but
not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of
the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified
as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue
to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented
separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented
separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose
of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately in the consolidated statement of profit or loss.
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o. Investments and other financial assets
Classification
The Group classifies its investments in the following categories:
•
•
loans and receivables measured at amortised cost, and
financial assets at fair value through other comprehensive income (FVOCI).
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus transaction costs that are directly attributable
to the acquisition of the financial asset. The Group subsequently measures all equity investments at fair value. Where the
group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from
such investments continue to be recognised in profit or loss as other income when the group’s right to receive payments is
established.
Loans and receivables are carried at amortised cost using the effective interest method.
Details on how the fair value of financial instruments is determined are disclosed in note 6(f).
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling
the receivable. They are included in current assets, except for those with maturities greater than 12 months after statement
of financial position date which are classified as non-current assets. Loans and receivables are included in trade and other
receivables (note 6(b)).
(ii) Financial assets at fair value through other comprehensive income (FVOCI)
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present
fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses
to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised
in profit or loss as other income when the Group’s right to receive payments is established. Impairment losses (and reversal of
impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
Financial assets - recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade date, being the date on which the Group commits
to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets
have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at
FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade
receivables, the group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables, refer to note 11 for further detail.
p. Property, plant and equipment
The Group’s accounting policy for land and buildings is explained in note 7(c). All other plant and equipment is stated at
historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are
incurred.
Increases in the carrying amounts arising on revaluation of land and buildings are credited, net of tax, in other comprehensive
income and accumulated in reserves in shareholders’ equity. To the extent that the increase reverses a decrease previously
recognised in profit or loss, the increase is first recognised in profit or loss. Decreases that reverse previous increases of the
same asset are first recognised in other comprehensive income to the extent of the remaining surplus attributable to the asset;
all other decreases are charged to profit or loss. Each year, the difference between depreciation based on the revalued carrying
amount of the asset charged to profit or loss and depreciation based on the asset’s original cost, net of tax, is reclassified from
the property, plant and equipment revaluation surplus to retained earnings.
The depreciation methods and periods used by the Group are disclosed in note 7(c).
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
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 (note 25(j)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These gains or losses are included
in profit or loss. When revalued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect
of those assets to retained earnings.
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q. Maintenance and repairs
Maintenance, repair costs and minor renewals are charged as expenses as incurred. Significant costs incurred in overhauling
plant and equipment are capitalised and depreciated over the remaining useful life of the asset or the component in
accordance with note 26(p).
r.
Intangible assets
(i) Goodwill
Goodwill is measured as described in note 26(i). Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill is not amortised, but it is tested for impairment annually, or more frequently if events or changes in circumstances
indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal
of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arose, identified according to operating segments (note 1).
(ii) Customer related intangibles
Customer related intangibles acquired in a business combination are recognised at fair value at the acquisition date. They have
a finite useful life and are subsequently carried at cost less accumulated amortisation and impairment losses. Customer related
intangibles are amortised over the life of contract.
(iii) IT development and software
Costs associated with maintaining software programmes are recognised as an expense as incurred. Development costs that
are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are
recognised as intangible assets where the following criteria are met:
it is technically feasible to complete the software so that it will be available for use
•
• management intends to complete the software and use or sell it
•
•
•
there is an ability to use or sell the software
it can be demonstrated how the software will generate probable future economic benefits
adequate technical, financial and other resources to complete the development and to use or sell the software are
available, and
the expenditure attributable to the software during its development can be reliably measured.
•
Directly attributable costs that are capitalised as part of the software include employee costs and an appropriate portion of
relevant overheads.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for
use. Amortisation is calculated using the straight-line method over estimated useful lives.
(iv) Research and development
Expenditure on research activities, undertaken with the prospect of obtaining new scientific or technical knowledge and
understanding, is recognised in the income statement as an expense when it is incurred.
Expenditure on development activities, being the application of research findings or other knowledge to a plan or design for
the production of new or substantially improved products or services before the start of commercial production or use, is
capitalised if the product or service is technically and commercially feasible and adequate resources are available to complete
development. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct
labour and an appropriate proportion of overheads. Other development expenditure is recognised in the income statement as
an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation. Amortisation is
calculated using the straight-line method to allocate the cost over the period of the expected benefit.
s. Trade and other payables
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 45 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. They are recognised initially
at their fair value and subsequently measured at amortised cost using the effective interest method.
t.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised
over the period of the facility to which it relates.
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t. Borrowings (continued)
Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognised in other income and other expenses.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for
at least 12 months after the reporting period.
u. Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to
complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
v. Provisions
Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to
any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the statement of financial position date. The discount rate used to determine the present value reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
w. Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related service are recognised in
respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the end of
the period in which the employees render the related service. They are therefore measured as the present value of expected
future payments to be made in respect of services provided by employees up to the end of the reporting period using the
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and period of service. Expected future payments are discounted using market yields at the end of the reporting
period of high quality corporate bonds with terms and currencies that match, as closely as possible, the estimated future cash
outflows. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit
or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to
defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to
occur.
(iii) Share-based payments
Equity settled share-based compensation benefits are provided to employees via the Ausdrill Limited Employee Option Plan, an
employee share scheme and Perenti Global Limited Incentive Rights Plan. Information relating to these schemes is set out in
note 19. Equity settled share-based payments are measured at the fair value of the equity instruments at grant date.
The fair value at grant date is independently determined using a Monte Carlo simulation or an amended Black Scholes Merton
methodology valuation model.
The fair value at the grant date of the equity settled share-based payments is expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity.
At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest based
on non-market vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimates, with a corresponding adjustment to the share-based payments
reserve.
x. Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the
proceeds. Incremental costs directly attributable to the issue of new shares for the acquisition of a business are not included in
the cost of the acquisition as part of the purchase consideration.
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FINANCIAL REPORT Notes to the consolidated financial statements
2 5 S U M M A RY O F S I G N I F I C A N T ACCO U N T I N G P O L I C I E S (CO N T I N U E D)
y. Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
z. Earnings per share
(i) Basic earnings per share
Basic earnings per share, see note 21, 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 outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share, see note 21, 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.
aa. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the taxation authority. In this case, it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable
from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
ab. Rounding of amounts
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to the ‘rounding off’ of amounts in this report and the accompanying financial report.
Amounts in this report and the accompanying financial report have been rounded off to the nearest thousand dollars, or in
certain cases, to the nearest dollar.
2 6 C H A N G E S I N ACCO U N T I N G P O L I C I E S
This note explains the impact of the adoption of AASB 16 Leases on the Group’s financial statements.
As indicated in note 25(a) above, the Group has adopted AASB 16 Leases retrospectively from 1 July 2019, but has not restated
comparatives for the 2019 reporting period, as permitted under the specific transition provisions in the standard.
The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet
on 1 July 2019. The new accounting policies are disclosed in note 7(d).
On adoption of AASB 16, the Group recognised lease liabilities in relation to leases which had previously been classified as
‘operating leases’ under the principles of AASB 117 Leases. These liabilities were measured at the present value of the remaining
lease payments, discounted using the lessee’s incremental borrowing rate as of 1 July 2019. The weighted average lessee’s
incremental borrowing rate applied to the lease liabilities on 1 July 2019 was 7.06%.
For leases previously classified as finance leases and HP liabilities the entity recognised the carrying amount of the lease asset
and lease liability immediately before transition as the carrying amount of the right-of-use asset and the lease liability at the date
of initial application. The measurement principles of AASB 16 are only applied after that date. No remeasurements to the lease
liabilities were recognised as adjustments to the related right-of-use assets immediately after the date of initial application.
(i) Practical expedients applied
In applying AASB 16 for the first time, the Group has used the following practical expedients permitted by the standard:
•
•
•
•
•
•
•
•
right-of-use assets have been recognised equal to the net present value of the lease liabilities, adjusted for the amount of any
prepaid or accrued lease payment
the Group has chosen not to separate contracts into lease and non lease components
the use of a single discount rate to a portfolio of leases with reasonably similar characteristics
reliance on previous assessments on whether leases are onerous
the accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term leases
the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
the use of hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.
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FINANCIAL REPORT Notes to the consolidated financial statements
2 6 C H A N G E S I N ACCO U N T I N G P O L I C I E S (CO N T I N U E D)
(i) Practical expedients applied (continued)
The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for
contracts entered into before the transition date the Group relied on its assessment made applying AASB 117 and Interpretation 4
Determining whether an Arrangement contains a Lease.
(ii) Measurement of lease liabilities
A reconciliation of operating lease commitments disclosed at 30 June 2019 to additional lease liabilities as at 1 July 2019 is
provided in the table below:
Operating lease commitments disclosed as at 30 June 2019 under AASB 17
(Less): short-term leases not recognised as a liability
(Less): low-value leases not recognised as a liability
(Less): contracts reassessed as lease contracts (undiscounted)
(Less): committed leases not commenced (undiscounted)
Add: cost of reasonably certain extensions (undiscounted)
Effect of discounting on payments included in the calculation of the lease liability (excluding finance lease balance)
Contracts commenced 1st July 2019 (discounted)
Existing finance lease liabilities recognised as at 30 June 2019
Lease liability recognised as at 1 July 2019
Of which are:
Current lease liabilities
Non-current lease liabilities
20
$’000
46,946
(654)
(369)
(987)
(9,305)
19,037
54,668
(11,430)
3,246
24,133
70,617
26,356
44,261
70,617
(iii) Measurement of right-of-use assets
The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rules had always been
applied. Other right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments relating to that lease recognised in the consolidated statement of financial position as at 30 June 2019.
(iv) Adjustments recognised in the consolidated statement of financial position on 1 July 2019
The recognised right-of-use assets relate to the following types of assets:
Properties
Equipment
Motor Vehicles
Total right-of-use assets
30 JUNE 2020
1 JULY 2019
$’000
$’000
26,067
84,639
32
110,738
28,030
59,794
242
88,066
The change in accounting policy affected the following items in the consolidated statement of financial position on 1 July 2019:
• property, plant and equipment - decrease by $41.2 million
right-of-use assets - increase by $88.1 million
•
• hire purchase liabilities - decreased by $26.2 million
•
• prepayments - decrease by $0.3 million
lease liabilities - increase by $70.6 million
There was no impact on retained earnings on 1 July 2019.
(v) Lessor accounting
The Group did not need to make any adjustments to the accounting for assets held as lessor under operating leases as a result of
the adoption of AASB 16 Leases.
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FINANCIAL REPORT Directors’ declaration
In the directors’ opinion:
(a) the financial statements and notes set out on pages 71 to 148 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for the
financial year ended on that date, and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable,
and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed Group identified
in note 23 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee described in note 23.
Note 25(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Mark Alexander John Norwell
Managing Director and Chief Executive Officer
Director
Perth
24 August 2020
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FINANCIAL REPORT Independent auditor’s report to the members
Independent auditor’s report
To the members of Perenti Global Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Perenti Global Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2020 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
the consolidated statement of financial position as at 30 June 2020
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of profit or loss for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include a summary of significant
accounting policies
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
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 and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
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FINANCIAL REPORT
Independent auditor’s report to the members
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
Audit scope
Key audit matters
(cid:120) Amongst other relevant topics,
we communicated the following
k ey audit matters to the Audit
and Risk Committee:
(cid:16)(cid:16) Valuation of Goodwill
(cid:16)(cid:16) Valuation of non-current
assets (excluding Goodwill)
(cid:16)(cid:16) Calculation of current and
deferred tax balances
(cid:120)
These are further described in
the Key audit matters section of
our report.
(cid:120)
For the purpose of our audit
we used overall Group
materiality of $5.3 million,
which represents
approximately 5% of the
Group’s profit before tax, after
adjusting for impairment
(“adjusted PBT”).
(cid:120) We applied this threshold,
together with qualitative
considerations, to determine
the scope of our audit and the
nature, timing and extent of
our audit procedures and to
evaluate the effect of
misstatements on the financial
report as a whole.
(cid:120) We chose Group profit before
tax because, in our view, it is
the benchmark against which
the performance of the Group
is most commonly measured.
We also adjusted for
impairment as it represents an
unusual or infrequently
occurring item impacting
(cid:120) Our audit focused on where
the Group made subjective
judgements; for example,
significant accounting
estimates involving
assumptions and inherently
uncertain future events.
(cid:120)
(cid:120)
In establishing the overall
approach to the Group audit,
we determined the type of
work that needed to be
performed by the group
engagement team and by
component auditors in Africa
operating under instruction.
The group engagement team
performed audit procedures on
the financial information of
Perenti Group Services,
Perenti International, Perenti
Finance, Ausdrill, BTP Parts,
BTP Equipment, and
Barminco, Barminco Finance
businesses because these were
financially significant or
contained financially
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Independent auditor’s report to the members
profit and loss.
significant balances.
(cid:120) We utilised a 5% threshold
based on our professional
judgement, noting it is within
the range of commonly
acceptable thresholds.
(cid:120)
Component auditors
performed audit procedures on
the financial information of
AMS (African Mining Services)
Burk ina Faso, Mali, Ghana and
Senegal, AUMS (African
Underground Mining Services)
Burk ina Faso, Ghana and
Tanzania, Underground
Mining Alliance, Barminco
Mining Services Botswana and
Barminco Egypt Underground
Mining Services.
(cid:120)
The Group engagement team
and component auditors
actively communicated
throughout the year through
discussions, written
instructions and reporting.
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. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Valuation of Goodwill
(Refer to note 7(e))
Our audit procedures, amongst others, included the
following:
At 30 June 2020, the Group has $449.8m of goodwill
recognised on the statement of financial position.
Under Australian Accounting Standards, the Group is
required to test the goodwill annually for impairment.
The Group has performed an impairment test as at 30
June 2020 to assess the recoverable amount through
‘value in use’ (VIU), using a discounted cashflow model.
Significant judgement is required by the Group to
estimate the k ey assumptions in the model to
determine the recoverable amount of the goodwill and
the amount of any impairment. The most significant
areas of judgment relate to:
(cid:120)
(cid:120)
The level at which the Goodwill is assessed
cash flow forecasts, including the terminal
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Assessing whether the Group’s identification of the
group of CGUs was consistent with the level at
which goodwill is allocated, based on our
k nowledge of the operations and internal
monitoring and reporting.
Considering if the impairment model used to
estimate the recoverable amount of the Goodwill
was consistent with the requirements of Australian
Accounting Standards.
Assessing the Group's forecast future cash flows
over the relevant period and evaluating whether
the forecasts were consistent with the approved
budget.
Assessing the Group's ability to forecast future
cash flows for the business by comparing historical
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Key audit matter
How our audit addressed the key audit matter
(cid:120)
(cid:120)
value forecast;
short-term and future growth rates in revenue
and EBITDA margin; and
the discount rate used to discount the
estimated cash flows rate adopted in the
model
(cid:120)
budgets with reported actual results.
Assessing whether the terminal growth rate used
in the model was consistent with the long term
average growth rates of the industry sector in
which the Group operates.
(cid:120) With the assistance of PwC valuations experts,
This was a k ey audit matter given the level of
judgement required by the Group in determining the
assumptions used to perform the impairment testing
and the significance of Goodwill to the Statement of
Financial Position.
Valuation of non-current assets (excluding
Goodwill)
(Refer to note 3)
As required by Australian Accounting Standards, the
Group performed an assessment of impairment of non-
current assets (excluding Goodwill).
The assessment first focussed on considering whether
any specific assets were impaired due to factors such as
technical obsolescence, declining market value,
physical condition or saleability within a reasonable
timeframe.
This exercise resulted in an impairment of $34.3
million relating to specific assets within the Surface
Mining Africa CGU.
The Group then considered whether there were any
overall indicators of impairment in any of its cash
generating units (CGU).
The Group performed an inpairment assessment where
a CGU was performing below its forecast cash flows,
had high underutilisation of property, plant and
equipment, or other economic and market conditions
existed that indicated the asset value may not be
recoverable, or the Group considered that there was
another impairment indicator.
(cid:120)
(cid:120)
evaluating the appropriateness of the discount rate
by assessing the reasonableness of the relevant
inputs to the calculation against industry and
mark et factors.
Agreeing the mathematical accuracy, on a sample
basis, of the impairment models calculations.
Evaluating the adequacy of the disclosures made in
note 7(e), including those regarding the k ey
assumptions and sensitivities to changes in such
assumptions, in light of the requirements of
Australian Accounting Standards.
Our audit procedures included, amongst others, the
following:
(cid:120) We assessed the Group’s evaluation of impairment
indicators.
For the Surface Mining Australia and BTP Group
CGUs, we:
(cid:120)
(cid:120)
(cid:120)
Considered if the discounted cash flow models
used to estimate the recoverable amount of these
CGUs on a VIU basis (‘the impairment models’)
were consistent with Australian Accounting
Standards requirements.
Compared the forecast cash flows used in the
impairment models to the most recent budgets and
business plans approved by the Board.
Considered whether the forecast cash flows in the
impairment models were reasonable and based
upon supportable assumptions, by:
o Comparing the forecast cash flows to actual
cash flows for previous years to assess the
accuracy of the Group’s forecasting.
o Considering future revenue growth in
comparison to historical trends, contracted
work and historical pipeline conversion success.
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Key audit matter
How our audit addressed the key audit matter
Management concluded indicators of possible
impairment existed in the Surface Mining Australia,
BTP Group and Surface Mining Africa CGUs.
The Group used value in use (VIU) methodology to
assess the recoverable amount for the Surface Mining
Australia and BTP Group CGUs. The assessment
resulted in an impairment of $25.3m million for the
BTP Group CGU and no impairment for the Surface
Mining Australia CGU.
The Group engaged an external valuer to assist in
assessing the recoverable amount of the Surface Mining
Africa CGU using a fair value less cost of disposal
(FVLCoD) methodology. The FVLCoD assessment
indicated no further impairments in this CGU.
The Group also considered whether any reversal of
prior period impairment was necessary at 30 June
2020 and concluded it was not.
The assessment of impairment was a k ey audit matter
because of the significant judgement involved in
considering the existence of impairment indicators,
estimating the recoverable amount of the assets and the
material impact on the financial report.
o Assessing whether the terminal growth rate
used in the models was consistent with the long
term average growth rates of the industry sector
in which the Group operates.
o With the assistance of PwC Valuations experts,
assessing the Group’s discount rate
calculations, including having regard to the
inputs utilised in the Group’s weighted average
cost of capital.
Agreed the mathematical accuracy, on a sample
basis, of the impairment models calculations.
Considered the method of allocating the BTP
Group impairment across assets within the CGU.
Considered whether the Surface Mining Australia
model indicated a reversal of previously booked
impairment.
Considered the adequacy of the disclosures made
in note 3 of the financial statements, including k ey
assumptions and sensitivities to changes in such
assumptions, in light of the requirements of
Australian Accounting Standards.
(cid:120)
(cid:120)
(cid:120)
(cid:120)
For the Surface Mining Africa CGU, we:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Examined the external valuation report obtained
by the Group to assist their estimation of the
recoverable value.
Considered the potential impact of current
economic factors and conditions on the conclusion
of the external valuation
Assessed the competency, qualifications,
experience and objectivity of the Group’s external
valuer, which included considering their
experience and qualifications in assessing similar
types of assets.
Considered the completeness of the assets included
in the external valuation report.
(cid:120) Utilised PwC valuations experts to consider the
methodologies and k ey assumptions adopted by
the external valuer.
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Key audit matter
How our audit addressed the key audit matter
Calculation of current and deferred tax
balances
(Refer to note 7(f))
The calculation of taxation balances was a k ey audit
matter because the Group operates in several
jurisdictions with different laws, regulations and
authorities resulting in complex tax calculations and
judgements.
In particular, judgement is required in assessing the
recoverability of the $109.5 million of tax losses
recognised as assets at 30 June 2020 and the
appropriateness of $34.3 million of provisions for
uncertain tax positions across Africa.
Our procedures included, amongst others:
(cid:120)
(cid:120)
Assessing with the support of PwC tax specialists
the rationale on which current tax was calculated
and deferred tax assets and liabilities were
recognised.
Assessing whether deferred tax assets had been
appropriately recognised in the financial report as
at 30 June 2020 based on the extent to which they
can be recovered by forecast taxable profits
including performing the following:
o Obtaining calculations of forecast taxable
income for the next five years and
agreeing these to the latest Board
approved budget and forecast.
o Comparing the latest Board approved
budget to historical performance to assess
the consistency and accuracy of the
Group’s approach to budgeting.
o Assessing the Group’s key assumptions in
the cash flow budget and taxable income
forecasts.
o Evaluating whether the cash flows in the
taxable income forecasts had been
appropriately adjusted for the differences
between accounting profits, as presented
in the approved Board budget and
forecast, to taxable profits.
(cid:120) We also considered the assumptions made by the
Group in mak ing judgemental tax provisions for
uncertain tax positions. We utilised the expertise
of a PwC tax specialist who liaised directly with
local PwC tax specialists in the relevant territories.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2020, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
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In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed 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.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 52 to 65 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the remuneration report of Perenti Global Limited for the year ended 30 June 2020
complies with section 300A of the Corporations Act 2001.
156
Perenti – Annual Report 2020
ABN 95 009 211 474
FINANCIAL REPORT
Independent auditor’s report to the members
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.
PricewaterhouseCoopers
Craig Heatley
Partner
Perth
24 August 2020
ABN 95 009 211 474
Perenti – Annual Report 2020
157
FINANCIAL REPORT
Shareholder information
A. DI ST RIBUTION OF EQUIT Y S ECURITIES
Analysis of numbers of equity security holders by size of holding as at 23 July 2020:
HOLDING
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
NUMBER OF
HOLDERS
2,679
2,486
1,034
1,661
196
ORDINARY SHARES
SHARES
% OF SHARES ON ISSUE
1,018,322
6,723,658
7,853,980
46,669,864
639,262,577
There were 1,479 holders of less than a marketable parcel of 160,208 ordinary shares as at 23 July 2020.
8,056
701,528,401
B . EQ UIT Y SE CURIT Y HOLDERS
The names of the twenty largest holders of quoted equity securities as at 23 July 2020 are listed below:
NAME
1. HSBC Custody Nominees (Australia) Limited
2. J P Morgan Nominees Australia Pty Limited
3. Citicorp Nominees Pty Limited
4. National Nominees LImited
5. Bremerton Pty Limited
5. Nebraska Pty Limited
6. National Nominees LImited
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