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Douglas Dynamics About Us
PWR is a global designer, manufacturer and
supplier of technically advanced high performance
cooling solutions, investing in research and
development to provide solutions to our customers
using advanced cooling technology. We adopt a
flexible manufacturing approach and take pride in
supporting our customers through a truly unique
system of technical partnership.
About this Report
PWR’s 2022 Annual Report presents an integrated
view of PWR’s social, environmental, operating
and financial performance for the year ended
30 June 2022. The report describes how we create
value through our business activities, focusing
on what matters most to our many stakeholders
and our business. It covers our performance
and our future plans to address the challenges
that come with growth as well as the challenges
of a changing climate and the part we play in
addressing these challenges.
This Annual Report is provided for the benefit
of all PWR’s stakeholders.
Corporate Governance Statement
PWR’s Corporate Governance Statement discloses
the extent to which PWR has complied with the
ASX Corporate Governance Council’s Corporate
Governance Principles & Recommendations (4th
edition). This Statement is available at www.pwr.com.
au/investors/corporate-governance.
About PWR
PWR Holdings Limited (ABN 85 105 326 850) (PWR)
is a company limited by shares, is incorporated and
domiciled in Australia and is listed on the Australian
Stock Exchange (ASX:PWH).
PWR is the parent company of the PWR
consolidated group of companies. Unless otherwise
stated in this report, all references to PWR, the
Group, the Company, we, us and our, refer to PWR
Holdings Limited and its controlled entities as
a whole.
References to 2022, the financial year or FY are
to the year ended 30 June 2022 unless stated
otherwise. All dollar figures are expressed in
Australian currency unless otherwise stated.
An electronic version of this report is available
www.pwr.com.au/investors/reports.
In consideration of the environmental footprint
associated with the production of the Annual
Report, printed copies of the Annual Report will be
posted only to shareholders who have requested
a printed copy.
Annual General Meeting
Friday, 4 November 2022 at PWR’s manufacturing
facility at Ormeau, Queensland, Australia.
Contents
Performance Snapshot .............................................................................................................................................................. 2
FY22 Performance Snapshot ..................................................................................................................................................................................................2
How We Create Sustainable Value ....................................................................................................................................................................................... 3
What we do and How we Create Sustainable Value .....................................................................................................................................................3
Chairman’s Review .........................................................................................................................................................................................................................4
Managing Director’s Review ....................................................................................................................................................................................................5
Operating and Financial Review .............................................................................................................................................................................................8
Delivering Value .........................................................................................................................................................................10
Customer and Stakeholder Relationships ...................................................................................................................................................................... 10
People, Culture and Safety.......................................................................................................................................................................................................14
Investing in Emerging Technology and New Industries .........................................................................................................................................20
Intellectual Capital ......................................................................................................................................................................................................................22
Developing a Sustainability Framework ..........................................................................................................................................................................25
Leadership and Governance ...................................................................................................................................................28
Directors ............................................................................................................................................................................................................................................28
Executives ........................................................................................................................................................................................................................................29
Our Corporate Governance and Risk Management Practices ...........................................................................................................................30
Directors’ Report ........................................................................................................................................................................34
Directors’ Report ..........................................................................................................................................................................................................................34
Lead Auditors Independence Declaration Under Section 307C of the Corporations Act 2001 .....................................................38
Remuneration Report ................................................................................................................................................................................................................39
Financial Statements ................................................................................................................................................................ 59
Consolidated Statement of Profit or Loss and Other Comprehensive Income .........................................................................................59
Consolidated Statement of Financial Position ............................................................................................................................................................ 60
Consolidated Statement of Changes in Equity ............................................................................................................................................................61
Consolidated Statement of Cash Flows ..........................................................................................................................................................................62
Notes to the Consolidated Financial Statements .......................................................................................................................................................63
Directors’ Declaration ................................................................................................................................................................................................................96
Independent Auditor’s Report to the Members of PWR Holdings Limited ................................................................................................ 97
Additional Information............................................................................................................................................................ 101
ASX Additional Information .................................................................................................................................................................................................. 101
Corporate Directory .................................................................................................................................................................................................................103
Annual Report 2022
1
PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE Performance Snapshot
FY22
Performance
Snapshot
Achievements
REVENUE
$101.1m 27.6%
EBITDA
$35.7m 23.4%
NPAT
$20.8m 24.1%
EARNINGS PER SHARE
20.8c 24.0%
DIVIDENDS PER SHARE
12.0c 36.4%
HEADCOUNT
451 24.2%
ADMITTED TO S&P ASX300
NADCAP ACCREDITATION
Challenges
Covid-19 and employee absences
Supply chain challenges
Competition for talent in current
labour market
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PWR Holdings Limited
How We Create Sustainable Value
What we do and How we
Create Sustainable Value
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Vision
The Global Leader in Cooling
Technology Inspired by
Engineering Excellence
Purpose
Through passionate people and
innovative solutions we lead the
way in advanced cooling system
design and supply, to exceed the
expectations of our global partners
across diverse industries
Goals
Growth
Profitability
Excellence
Engineer the
Solution
Plan, Procure
& Schedule
Invest in
R&D and
Emerging
Technology
What we do
Manufacture
the
Solution
Rigorous Quality
Control & Testing
Inputs
Outcomes
Customers and Stakeholders
Our customers, shareholders, suppliers and regulators
Customers and Stakeholders
Delivering value through true partnerships, problem solving
and transparent communication
People and Culture
The passion, experience, capability and diversity of
our employees
People and Culture
Safe, high performing team with outstanding industry experience
and a can-do attitude to meet our customers’ expectations
Emerging Technology and New Industries
Investing in R&D and learning and development
Emerging Technology and New Industries
Leveraging existing technology to new industries and
continuous innovation and learning to remain an industry leader
Intellectual Capital
Our technology, systems, processes and know-how
Intellectual Capital
Industry leading capability that delivers high quality and
bespoke solutions to our customers
Developing a Sustainability Framework
A long term view of what PWR can do to support our
planet, our customers and our business
Developing a Sustainability Framework
A strategy that aligns with the long-term sustainability
aims of both PWR and our customers
Annual Report 2022
3
PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Chairman’s Review
Growth | Profitability | Excellence
Teresa Handicott
Chairman
optimisation of our current ERP system and assessment
of a number of global human resource management
systems with selection to be made in FY23.
Last year we made a significant step forward with the
achievement of AS9100 certification (Rev D) to support
our growth into the aerospace and defence industry.
This year we have added to our capabilities by achieving
Nadcap® Accreditations for our chemical processing
and heat treating applications. The accreditation follows
recent site audits of both chemical processing and heat
treating applications and sets PWR up extremely well
to support the targeted growth in our aerospace and
defence business.
COVID-19 continued to have an impact on PWR’s
business during FY22, with the challenge of managing
unplanned staff absences and disruptions to our supply
chain. Kees and the PWR team remained focused
and as always, passionate about delivering returns to
shareholders. Their efforts and focus were guided by
PWR’s strategic objectives of growth, profitability and
excellence and a risk culture that saw us proactively
manage employee absences and supply chain
constraints caused by COVID-19.
The Board recognises that what has been achieved
in FY22 in the face of these challenges called for
extraordinary efforts from the entire workforce and the
Board is deeply grateful to each and every member of the
PWR team for the way they were able to remain focused
on our customers to deliver innovative and high-quality
products, using our advanced technology while also
looking after their team mates and isolating and wearing
masks when required.
Looking ahead, we are focused on delivering growth,
profitability and excellence and putting plans in place
now to support PWR’s future.
On behalf of your Board, I would like to thank all
shareholders for their continued support of PWR.
I am delighted to present to you
PWR’s 2022 annual report in what
has been a record year for PWR.
PWR delivered a record result for the 2022 financial year,
with Net Profit After Tax (NPAT) of $20.8m up 24.1% on
the prior period (FY21: $16.8m). The Group continued to
deliver on its growth objective through implementation
of its strategy, ongoing capital investment and research
and development programs while still producing a strong
return on equity at 27% (FY21: 26%).
Cash flows were impacted by the decision to increase
inventories of raw materials in response to global supply
chain challenges, including the impact of the war in
Ukraine on global aluminium supplies. The decision to
increase inventories of raw materials has resulted in an
EBITDA to operating cash conversion ratio of 66% (FY21:
108%). The Group retains a strong cash balance at 30
June 2022 of $21.5m (FY21: $19.9m) and remains debt
free, with access to its $10m multicurrency and $7.5m
equipment finance facilities to support future operational
requirements, if required.
Considering these results and balance sheet position,
the Board has declared a fully franked final dividend
of 8.50 cents per share, taking the full year dividend to
12.00 cents per share, an increase of 36.4% on last year’s
full year dividend (FY21: 8.80 cents per share).
During the year, we continued to invest in our people and
their development with the commencement of a front
line leadership program, focusing initially on participants’
understanding their own behavioural leadership styles
and their impact on those they lead and work with. We
also invested in leading edge technology and equipment
to support our new PWR North America aerospace and
defence machine shop which is scheduled to open in
September 2022. To ensure a solid foundation for our
growth plans, we have also invested in our systems and
processes with the commencement of a review and
4
PWR Holdings Limited
Managing Director’s Review
Powering Ahead
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Kees Weel
Founder & Managing Director
PWR has performed strongly during the 2022 financial year despite the
ongoing impacts of COVID-19 and the global supply chain challenges.
PWR has delivered solid revenue and profit growth across all major market sectors, in particular emerging technologies.
We have maintained a strong balance sheet and are well prepared to deliver on opportunities in the next few years.
Financial Highlights
Revenue
NPAT
Ordinary DPS
Cash on Hand
EBITDA to operating cash conversion
Employee Headcount
FY22
$101.1m
$20.8m
FY21
$79.2m
$16.8m
12.00 cps
8.80 cps
$21.5m
$19.9m
66%
451
108%
363
Change
27.6%
24.1%
36.4%
8.3%
(42.5%)
24.2%
Cashflow
The EBITDA to cash conversion ratio was impacted by a deliberate decision to increase the amount of raw material
inventory in response to global supply chain challenges. Our EBITDA to cash conversion ratio was 66%.
The cash balance has increased from $19.9m at 30 June 2021 to $21.5m at 30 June 2022. We believe we have achieved
a balanced outcome for all stakeholders and expected future business requirements by declaring a fully franked final
dividend of 8.50 cents per share.
Revenue
Group revenue grew strongly in FY22 with solid growth across all key market sectors including motorsports, automotive
aftermarket, automotive OEM (Original Equipment Manufacturers) and aerospace and defence. Revenue also grew
across all major geographic markets with the strongest growth in Europe which grew an impressive 35.9% due to growth
in automotive OEM and emerging technologies.
Annual Report 2022
5
PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Managing Director’s Review
Powering Ahead
continued
Favourable foreign currency movements during FY22 accounted for a 1.8% increase in revenue.
Revenue by
Customer Market
FY22
Ad-
vanced
Cooling
$'000
Emerging
Tech-
nologies1
$'000
Total
$'000
FY21
Growth
Ad-
vanced
Cooling
$'000
Emerging
Tech-
nologies1
$'000
%
Total
$'000
%
$'000
%
23%
65%
6%
56%
Motorsports
47,476
7,809
55,285
55% 42,813
2,267
45,080
57% 10,205
Automotive OEM
18,007
3,462
21,469
21% 11,732
1,254
12,986
16% 8,483
Automotive Aftermarket 15,485
360
15,845
16% 14,867
12
14,879
19%
966
Aerospace & Defence
–
7,130
7,130
Other
671
672
1,343
7%
1%
–
4,574
4,574
6% 2,556
1,113
576
1,689
2%
(346)
(20%)
81,639
19,433
101,072
100% 70,525
8,683
79,208
100% 21,864
28%
Emerging technologies which includes revenue from aerospace and defence, and revenue from other market sectors
generated from cold plate, micro matrix and additive manufacturing, grew 124% and now represents 19% of total revenue.
FY22 Sales Market Analysis ($’000)
(FY21 Comparatives)
Sales to third parties by currency (‘000)
$7,130
7%
(FY21 - $4,574 6%)
$1,343
1%
(FY21 - $1,689 2%)
$55,285
55%%
(FY21 - $45,080 57%)
$15,845
16%
(FY21 - $14,879 19%)
$21,469
21%
(FY21 - $12,986 16%)
Motorsports
Automotive OEM
Automotive Aftermarket
Aerospace and Defence
Other
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
35.0%
12.2%
14.2%
AUD
GBP
USD
FY18
FY19
FY20
FY21
FY22
Conversion of source currency to Australian dollars based
on average exchange rate for each year
1
6
Emerging Technologies includes revenue from Aerospace and Defence across all technologies, and revenue from other market sectors generated by
cold plate, micro matrix and additive manufacturing
PWR Holdings Limited
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PWR Australia and Europe
PWR Performance Products (based in Australia) and
PWR Europe continue to supply most motorsport
categories with cooling technology. In FY22 the supply of
cooling technology to automotive OEM and the supply
of emerging technologies to existing and new customer
markets have been significant growth drivers for the
business.
PWR C&R
PWR C&R (based in the USA) has successfully delivered
automotive OEM and emerging technology programs,
including solid growth in the automotive aftermarket.
PWR C&R is well placed to further develop these market
sectors, supported by investment in new factory capacity
and expanded equipment capacity and capability.
Centres of Excellence
PWR has 2 manufacturing hubs able to service customers
globally.
A key aspect of our corporate strategy is having Centres
of Excellence for the different aspects of our business
including manufacturing operations, engineering,
design, testing, research and development and corporate
services. These will ensure appropriately located and
resourced specialised teams collectively focus on
delivering the best outcomes for the Group.
Technology Developments
PWR deploys advanced technologies into our
manufacturing processes to ensure we remain at the
forefront of manufacturing capability and complexity
for both existing customers as well as potential new
customers and industries.
During FY22, these technologies of cold plates, micro
matrix and additive manufacturing have been further
developed and commercialised. Our application of these
technologies continues to expand as current and potential
customers embrace the benefits, including customers in
the aerospace and defence, electric and hybrid vehicle
and alternative energy sectors.
The Future
Visibility of our growth potential for the next 5 to 10 years
has never been better and this allows us to invest with
confidence.
To support growth in FY22, PWR increased the
headcount from 363 to 451. PWR expects continued
growth in FY23 and beyond and expects further increase
to headcount, together with a focus on increased
productivity and efficiency.
We continue to review the organisational structure
and employee development to ensure this aligns with
expected operational requirements.
The PWR Team go beyond what is expected of them on
a regular basis and I thank them for the dedication and
commitment which is so often demonstrated.
Thank you to shareholders, customers and staff for your
continued support and I am looking forward to working
with the PWR Team this year with the objective of making
FY23 another record year on all fronts.
Annual Report 2022
7
PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
How We Create Sustainable Value
Operating and
Financial Review
Summary of financial results
Revenue
EBITDA1
EBITDA1 margin
Net profit after tax (NPAT)
Operating cash flow (excluding interest and tax)
Basic and diluted earnings per share
FY22
A$’000
101,072
35,747
35.4%
20,843
33,522
FY21
A$’000
Change
%
79,208
28,963
36.6%
16,797
31,368
27.6%
23.4%
24.1%
(25.0%)
24.0%
20.79 cents
16.77 cents
1.
Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) is a non-IFRS term which has not been subject to audit or review but has been
determined using information presented in the annual financial report.
EBITDA Reconciliation
A reconciliation of EBITDA1 to the reported profit before tax in the consolidated statement of profit or loss and other
comprehensive income is as follows:
Profit for the period before tax
Add : net finance costs / (income)
Add : depreciation & amortisation
EBITDA1
FY22
A$’000
FY21
A$’000
28,492
22,547
30
7,225
35,747
677
5,739
28,963
1.
Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) is a non-IFRS term which has not been subject to audit or review but has been
determined using information presented in the annual financial report.
Revenue
The Group achieved overall revenue growth of 27.6% compared to the prior corresponding period. Organic revenue
increased by 25.8% plus favourable exchange rate movements of 1.8%.
The above growth was primarily driven by third party sales out of the United Kingdom, Australia, and the
United States of America, where sales grew 35.9%, 34.1% and 17.9% respectively.
Exchange rate movements saw the GBP being (4.6%) weaker at 30 June 2022 and the US dollar being 8.3% stronger
compared to the prior period. Average rates during the financial year saw the GBP 1.6% stronger and the US dollar 2.8%
stronger than the prior period.
The net impact of exchange rate movements had a favourable impact on revenue for the year of $1.46m (FY21:
unfavourable $3.40m).
EBITDA
Assisted by the positive impact on revenue of foreign exchange rate movements, EBITDA in FY22 compared to the prior
corresponding period was stronger mainly due to:
– Solid revenue growth across the motorsports, OEM, aerospace and defence, and automotive aftermarket sectors;
– Production costs control; and
– Administration and overhead costs control.
Net profit after tax
Net profit after tax of the Group for the year ended 30 June 2022 was $20.84 million (FY21: $16.80 million).
Operating cash flow
The Group cash conversion rate was impacted by the decision to increase inventories of raw materials in response to global
supply chain challenges, including the impact of the war in Ukraine on global aluminium supplies. FY22 operating cash
flow (excluding interest and tax) was $23.52 million, a conversion of 66% from EBITDA.
8
PWR Holdings Limited
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Foreign currency
The Group is exposed to movements in foreign exchange rates, with consolidated revenue generated in various currencies
(using average exchange rates through the reporting period) as outlined below:
British pounds (GBP)
US dollars (USD)
Australian dollars (AUD)
FY22
FY21
58.0%
28.6%
13.4%
53.8%
31.2%
15.0%
Balance sheet management
The balance sheet remains strong with cash of $21.5 million (FY21: $19.9 million).
Working capital utilisation has increased from 65 days at 30 June 2021 to 130 days at 30 June 2022 due largely to the
increase in raw material inventory in response to global supply chain challenges.
Capital expenditure for the year was $5.0 million (FY21: $10.4 million). The capital expenditure was lower than the prior
corresponding period due to the timing of purchase orders being placed and extended equipment delivery times. Our
strong balance sheet can support ongoing expected capital expenditure for potential future growth opportunities whilst
still having access to available and unused financing facilities.
With the solid working capital position, expected future capital investment requirements and the expected contribution
of EBITDA to operating cash flows, the Board has declared a final 2022 dividend of 8.50 cents per share bringing the total
dividend paid to 12.00 cents per share.
Review of operating segments
The Group has two operating segments, PWR Performance Products which comprises its Australian and European
operations, and PWR C&R which comprises its USA operations. The performance of the operating segments are outlined
below:
PWR Performance
Products
PWR C&R
Total
2022
$’000
2021
$’000
2022
$’000
2021
$’000
2022
$’000
2021
$’000
External revenues
73,143
54,936
27,929
24,272
101,072
79,208
Inter-segment revenues
3,916
3,098
3,621
1,788
7,537
4,886
Segment revenue
Segment EBITDA1
77,059
58,034
31,550
26,060
108,609
84,094
28,538
22,724
7,384
6,158
35,922
28,882
Depreciation and amortisation
(5,776)
(4,391)
(1,449)
(1,348)
(7,225)
(5,739)
Segment profit/(loss) before interest
and tax
Capital expenditure
22,762
3,003
18,333
9,350
5,935
2,020
4,810
1,015
28,697
5,023
23,143
10,365
1 Segment EBITDA is the segment’s profit from operations before interest, taxation, depreciation and amortisation.
The carrying value of goodwill and trademarks is assessed on an ongoing basis to ensure these are not impaired. This
assessment has been performed at 30 June 2022 and using currently available information has resulted in the current
values continuing to be recognised.
Review of principal businesses
During the year ended 30 June 2022, in addition to the items outlined above, the Group:
– Enhanced our micro matrix and cold plate technology product offerings;
–
–
Increased supplies into new industries including aerospace and defence; and
Increased employee headcount to expand capacity to deliver on new and potential contracts.
Significant changes in the state of affairs
Other than as outlined in the operating and financial review, there were no significant changes in the state of affairs of the
Group during the year.
Annual Report 2022
9
PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Delivering Value
Customer and Stakeholder
Relationships
We create value through focusing on what matters most to the many
stakeholders of our business. The quality of the relationships we develop
with our many stakeholders directly impacts the success of PWR.
01
Our Employees
Providing opportunities to our employees so
they can be the best they can be and are proud
to be part of the PWR team
Giving shareholders and investors an opportunity to
visit our Ormeau facility providing valuable insight
into the significant investments made by the
company to support the adoption of latest advanced
technologies and manufacturing capabilities
Our Shareholders
02
PWR’s
Stakeholders
03
Our Customers
PWR is an extension of our customer base.
We share their wins, or perhaps their losses
but we are certainly there to support them
when they need us the most
Relying on exceptional partners in PWR’s
supply chain to deliver world class service
Our Suppliers
04
Building Trust and Respect
Genuine relationships built on trust and respect
underpins the successful achievements of PWR, while
providing the foundation for successful growth in the
future. At the forefront our success in delivering value is:
– Customer Service
– Responsiveness
– Product Range
– Quality
– Knowledge
– Capability
Our staff are Passionate
PWR’s engagement between customer and staff is
unrivalled with a can-do attitude and an approach to take
on tasks and challenges like they were our own, to provide
innovative solutions and solve complex challenges to
serve the best interests of our customers. PWR’s true
value is provided through industry leading products
and services with highly differentiated features and
benefits compared to any potential competitor offer. Our
willingness to engage in new developments and push
boundaries of current capability is without peer, and one
of the defining characteristics of a relationship with PWR.
10
PWR Holdings Limited
We Provide our Customers with Around-the-
Clock Service
A global presence through Australia, Europe and
North America, with highly dedicated staff provides
our customer base with around the clock service, and
our project engagement is one of true partnership with
a shared goal to succeed in producing the best final
product or solution. Our feedback from our key customer
base is consistently that of partnership, where PWR is
recognised and acknowledged as an integral part of
our customer’s own team in the way that we work.
01
Employee Engagement
Bringing Our Employees and Customers
Together
PWR is fortunate to be able to call some of the world’s
leading companies and race teams our customers, and
this provides our staff a tremendous source of pride
in the work they do, and for the applications that their
work serves. PWR is extremely proud of its company
uniform, but it has long been a tradition that PWR staff are
encouraged on a Friday to wear shirts that represent our
customer base. Fridays will see staff wearing motorsport
team shirts from Formula 1, Moto GP, NASCAR, WRC and
Supercars to name just a few, as well as representation of
other prestige marques from the automotive industry.
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This tradition serves as a constant reminder of the
importance in the role PWR plays in supporting this
customer’s base, and that our staff are an extension of
our customer’s own teams with each playing a critical
role in the success of delivering a high quality and high
performing end product or solution.
Our customers are appreciative of this demonstration
of our partnership and are supportive with initiatives,
supplying discounts and access to their branded
merchandise to PWR staff, because all parties benefit
from the increased engagement this delivers.
Employee Opportunities
It is also a tradition within PWR that each year the
company takes a select group of high performing staff
from the prior year to Albert Park in Melbourne for the
Formula One Grand Prix where they have the opportunity
to see some of the results of their hard work in the
products PWR supplies to Formula 1. It’s a great team
building experience and a further point of connection
to the dedicated work completed to have access to see
and appreciate the importance of the products and
services they are responsible for delivering. This is also
an opportunity to hear firsthand from the teams the
positive influence PWR makes to a reliable and efficient
race car. PWR was very pleased to be able to return to the
Melbourne Grand Prix in 2022 and share this experience
with deserving staff.
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Delivering Value
Customer and Stakeholder Relationships
continued
Myles Jackman
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0302
Shareholder Engagement
PWR is always keen to show our shareholders
what we do
Our 2021 AGM provided a great opportunity for PWR to
invite shareholders to our Ormeau facility and to be able
to share examples of our latest product developments,
as well as tour the factory providing valuable insight into
the significant investments made by the company to
support the adoption of latest advanced technologies
and manufacturing capabilities.
Events such as these are highly successful, with very
positive feedback received by all in attendance and
attendees impressed by the scale and presentation of the
facility. This platform provides an ideal opportunity for
effective communication to our shareholders engaging
with PWR tour hosts and staff to better understand
PWR’s business, products and services that support
the opportunities ahead.
Overwhelming feedback was received from our AGM
regarding our staff’s knowledge and passion for PWR,
our products and our customers. The open forum created
by hosting events such as this delivers positive results
for shareholders and staff alike with the ability for all to
engage in discussion around common points of interest
behind PWR. This is certainly a platform that PWR plans
to retain and grow in the future.
03
Customer Engagement
PWR is an extension of our customer base when it comes
to collaborating with them to design and manufacture the
very best thermal solution for their application, however
the extent of our commitment does not end there.
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CASE STUDY: Going Above and Beyond
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Supplier Engagement
We share our customer’s wins, or perhaps their
losses but we are certainly there to support them
when they need us the most if they strike trouble
with unforeseen circumstances and assistance
is needed.
Such a situation arose earlier this year, where one
of our customer teams had a systems issue and
needed to quickly move to new heat exchangers
to solve the problem. This required a very quick
PWR reaction to design, manufacture and deliver
new cooling system components in a matter
of weeks. This requires commitment across
the entire team at PWR, through all the critical
departmental steps delivering high quality output
at a rate that most companies would believe
unachievable but is the fundamental ingredient
in delivering success in Formula 1.
When needed, our commitment does not
end at our dispatch dock, and as we did earlier
this year we had one of PWR’s Engineers from
our Specialty Build department fly to Saudi
Arabia with critically important assemblies
to have available for race day. This is a level of
commitment and customer service that is not
only appreciated by our customer but provides
yet another opportunity for engagement
of PWR staff with our customers and allows
trusted relationships to be formed when we are
always working to a common goal together. This
provides our customers what they need with
a high level of service while providing our staff
with opportunities and experiences that can’t
be replicated anywhere else. We are grateful to
the Haas F1 Team for hosting our Engineer, Blake
Evans over the Saudi Arabian Grand Prix weekend
as a thank you for his personal effort to get their
parts to them in the shortest time possible.
PWR is proudly a highly vertically integrated business
taking control of most processes to deliver our products
and services. However we still have a very important
supply chain with integral partners we forge long lasting
relationships with to deliver to the high quality and service
expectations of PWR and our customers. Just as PWR is
considered a critical link in our customer’s supply chain,
PWR relies on exceptional partners in our own supply
chain to deliver world class service.
CASE STUDY: Thermasys Tubing
A demonstration of our supplier partnerships
is our relationship with Thermasys Tubing
in Germany, whom we needed to call on to
support production of a very short lead time
tubing request to meet customer demand. Our
request required not only prioritized scheduling
of production within Thermasys but required
external negotiation with the supporting
aluminum strip supplier.
With the dedication and commitment of key
suppliers such as Thermasys, we were able to
reduce a 12 week production lead time to 4 weeks
to deliver against PWR’s project timeline and
against our customer objective. These actions
to explore all opportunity to deliver against
customer expectations is what is required in a
high performance supply chain, and the value
this brings to PWR is well recognized. PWR took
action to acknowledge the extraordinary efforts
of the staff at Thermasys Tubing and arranged
some PWR gift bags to be delivered and shared
amongst Thermasys staff as appreciation for their
support and a demonstration of PWR’s valued
partnership with them as a supplier.
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Delivering Value
People, Culture and Safety
We support Schools and Apprentices
with Development Opportunities
Our Apprenticeship and School Work Experience
Programs are very important components in our strategy
of building future talent for PWR. During the year we had
17 work experience students spend time on a placement
at PWR, where they were exposed to a number of our
production areas in a structured and supervised program.
We signed up 21 new apprentices during the year,
resulting in a total of 42 apprenticeships running by the
end of June 2022 and during the year we were pleased
to see 3 apprentices complete their training and transition
to fully qualified tradespeople.
Our People
At the heart of PWR is its people. We
believe in them, support their health,
safety and wellbeing and ensure
they have access to learning and
development opportunities.
We encourage a workplace that is diverse, empowered
and demonstrates good decision making and one which
fosters innovation and high productivity.
We take a particular interest in recruiting apprentices,
offering work experience to high school students and
investing in them to build a capable and committed
workforce to maintain PWR’s exceptional quality
workmanship and customer service.
Growth in a challenging employment market
The market presented challenges over the year globally,
with low candidate availability and high recruitment
demand. The unemployment rate remained low in
Australia, USA and UK, falling in mid 2022 to the lowest
level since August 1974 for both Australia and the UK
and staying at a comparatively low rate in the USA.
Ongoing labour shortages were exacerbated by reduced
hours worked as staff were forced to take leave due to
illness, potentially attributed to higher rates of flu and
COVID-19. Despite these challenges, globally, PWR grew
employee numbers by 24% over the year, continuing our
progressive growth over the last 5 years.
Employee Numbers
500
400
300
200
100
0
June 2018 June 2019 June 2020 June 2021
June 2022
Australia
North America
Europe
88
Expanded our team to employ
an additional 88 people globally
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Gareth Edwards and Jake Nicholson
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CASE STUDY: Demi Cross
Demi joined PWR in February 2021, having done
various roles in retail and warehousing since
leaving school in 2017. She was keen to start a
career and having an interest in 4WD off roading
and working on her Toyota Hilux, PWR was a
great fit for her. In early 2022 Demi secured a
place as a PWR Apprentice Welder in our
Fabrication area and since then has gone from
strength to strength.
Demi Cross
“ When I came to PWR I wasn’t sure what I
wanted to do, then I saw Kaz (a female who
was in fabrication) working and I knew I wanted
to learn welding, so I managed to get onto
the Apprenticeship program. It is really fun,
challenging sometimes but I really enjoy it.
PWR is good if you’re a girl; the guys here are
great, it’s a respectable workplace. The GM of
Production said I was the fastest to complete
the welding training which made me happy and
proud, and it’s good to beat the boys! As well as
that what they teach you here is next level, so
long term I want to continue my career on the
welding training program with PWR.”
Achievements
21 New apprentices signed up
3 Apprentices completed and transitioned
17 Work experience students
to fully qualified tradespeople
spent time at PWR
Investing in Leadership Development
This year saw the development of a PWR specific frontline
leadership training program, aimed at further developing
leadership skills. This includes the use of a DiSC profile
to set the foundation by helping individuals to better
understand themselves. (DiSC is an acronym that stands
for the 4 main personality profiles described in the DiSC
model: (D)ominance, (i)nfluence, (S)teadiness and
(C)onscientiousness). Individual feedback sessions have
been conducted for those who completed the DiSC
profile and over the coming year we are rolling out a series
of supporting short, targeted sessions covering key topics,
followed by a session on applying each of the learnings.
Graduate Engineer Program
PWR’s graduate engineering programme provides
an opportunity for recent engineering graduates to
expand on their university studies. Offered as a 2-year
programme, they will benefit from the insight and support
of experienced engineers and production team members
who have worked on innovative and leading-edge
product development in the motorsport, automotive,
aerospace and defence industries. Their guidance
will help the journey to transition from an engineering
graduate into an experienced professional.
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Delivering Value
People, Culture and Safety
continued
CASE STUDY: Chris Hopgood ,
Graduate Engineer Programme
Chris joined PWR in May 2021 as he was
approaching the end of a dual Bachelor of
Mechanical and Aerospace Engineering/
Bachelor of Science degree at the University of
Queensland. He has a keen interest in aerospace
engineering as well as a passion for automotive
engineering, having worked on the 2 year
restoration of a 1969 Ford Mustang Mach 1 with
his father. PWR is the perfect place to develop
his career with exposure to his engineering fields
of interest. In January 2022 Chris took up a place
on the PWR Graduate Engineer Program.
International Secondments
During the year we developed an International
Secondment Program to give a small, selected number
of employees an opportunity to work at a PWR
manufacturing site in another country for 1 to 2 years, with
PWR supporting the visa application and contributing to
relocation, accommodation and motor vehicle costs.
CASE STUDY: Blake Evans,
International Secondment Programme
Blake joined PWR in November 2018 when he
was in the third year of a Mechanical Engineering
Degree at Griffith University. With a keen
interest in and passion for motorsport, PWR was
the ideal place for him to develop his career. He
worked his way through our Specialty Build area,
quickly establishing himself as a conscientious
team member, producing high quality work.
Blake graduated in 2020 and is now an Engineer
in Specialty Build.
Chris Hopgood
“ The PWR Graduate Engineer Program
gives me great exposure to a wide variety of
manufacturing and technical developments.
For example, the application of computational
fluid dynamics studied at university has been
great to see in action at PWR. This provided
that essential link between theory and its
practical counterpart.
This year I have been focussing on the practical
side, including spending time in Micro Matrix
developing Formula 1 components and in my
second year I will get exposure to the Wind
Tunnel, simulation, design and then aerospace.
The program really gives me a bit of everything,
helping me towards my goal of working in an
aerospace design area, such as engine cooling.”
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Blake Evans
“The opportunity for a 2 year secondment to
PWR North America is a unique and awesome
chance to take what I have learnt here and apply
it there. At the same time, I will be able to learn
from our North America Team when I am there
and bring back my learnings to PWR Australia.
With the USA having 3 Grand Prix next year,
along with Canada and Mexico this is a great
time to be going there. I am also keen to
experience the USA culture and sport such as
NFL, Hockey, Baseball and of course as much
motorsport as I can get to see.
Overall, this will give me an extra perspective
and help me work towards my goal of becoming
a Formula 1 Project Engineer for PWR, a goal
which was further cemented when I was selected
to hand deliver PWR units to the Haas F1 team in
Saudi Arabia earlier this year.”
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PWR DNA and Code of Conduct
The PWR DNA defines us and is a key consideration in all decisions we make and interactions we have with our people.
It is embedded in our Employee Handbook, new employee Induction Program and employee reward and recognition
programs. It is also at the core of our annual Performance and Development Review process.
RESPECT
PASSION
TEAMWORK
We turn up to work on time
We are polite and courteous
We are solutions focused – we
take customers problems and
make them our own
We work together
We talk to each other
We respect the PWR uniform
and take pride in our personal
appearance
We look out for our team-mates
We have a positive ‘can do’
attitude
We chip in when one of the
team is under pressure
We take pride in what
we do
We solve problems
together
Our Code of Conduct ensures that PWR consistently
achieves the highest standards of business conduct
possible, including but not limited to:
–
–
–
–
–
–
the creation of sustainable value for shareholders
and other stakeholders;
compliance with the law;
respect for local cultures;
a healthy and safe workplace;
responsible environmental management; and
integrity, fairness and respect in its interaction
with others.
Employee Health, Safety and Wellbeing
COVID-19
The COVID-19 pandemic remained with us throughout
the year and we continued our COVID safe practices.
We ran a campaign during the year to facilitate
employee’s understanding of ways to minimise the risk
of getting COVID through information sessions run be
a specialist medical professional and offering COVID
vaccinations on site. We continue to maintain strong
personal hygiene and social distancing measures at all
sites and all staff have access to free COVID testing.
Safety
We realised a reduction in our Lost Time Injury
Frequency Rate for FY2022 to 1.2 (FY2021: 5.9)
We saw a decrease in our Lost Time Injury Frequency
Rate, (LTIFR) down to 1.2 by the end of the year. However,
the focus remains on ensuring a safe workplace for all
staff. We have undertaken work to clearly identify and
understand our Critical Safety Risks and define what
constitutes a High Potential Incident to continue our
journey in ensuring the safety of all people whenever they
are at work, further supported by the recent appointment
of a HSEQ Manager. There have been no fatalities, fines
or prosecutions arising from safety related breaches
across the group.
Wellbeing
Weely’s Diner at PWR Ormeau continues to be a real
point of difference, providing breakfast, morning tea
and a cooked lunch for every employee, every day, free
of charge. A well fed and hydrated workforce is happier
and more productive. Furthermore, taking a planned and
proper break from the work area helps our staff to refresh
and interact with others – especially those from other
teams or departments, where they exchange ideas and
return to work rejuvenated.
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Delivering Value
People, Culture and Safety
continued
Achievements
Offered COVID vaccination and booster
vaccination appointments on site
Reduced the Group’s LTIFR to 1.2
(FY21: 5.9)
Critical Safety Risks identified
Work Health and Safety Committee met
on a regular basis
Served over 220,000 free meals to our 320
employees at our Ormeau manufacturing
site in Queensland
Weely’s Diner
This year we welcomed a new Head Chef to Weely’s Diner – Ben Zeme as well as a new Chef – Karl Begon. Both are
experienced and qualified in their field; Ben came to us with 30 years’ experience and Karl has 26 years’ experience
in a variety of hotels and restaurants. Together with their Kitchen Hand they have continued to impress the PWR staff
at Ormeau with freshly prepared morning tea and cooked lunches every day, including favourites such as chocolate
brownies, barbecued ribs, homemade pies along with salad options and fresh fruit for those wishing to take a lighter option.
Karl Begon and Ben Zeme
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Diversity and Inclusion
The Groups objectives for diversity and how we performed in FY 2022 are set out below:
Number of women on Board of Directors
Number of women in Executive Management over the next 3 years
3 year targets to increase female representation:
PWR Australia
PWR North America
PWR Europe
FY2022
Actual
FY2023
FY2024
FY2025
1
1
16%
17%
17%
1
2
19%
19%
10%
2
2
22%
22%
12%
2
3
23%
23%
15%
Work has already commenced in Australia on the development of links with Griffith University (Gold Coast and Brisbane)
and Trinity College Beenleigh to establish Women in Engineering Programs and Trade based work experience programs
for females. Similar initiatives will be encouraged in North America and Europe.
CASE STUDY: Anastasia Tsompanellis, Production Supervisor
Anastasia joined PWR in November 2021 after
11 successful years’ in Retail Management. She
commenced as a Manufacturing Production
Assistant and quickly showed how her previous
experience could be valuable for PWR. In
February 2022 she was appointed as PWR’s
first female Production Supervisor, running the
Auxiliary Trans Coolers section.
“I am loving it, loving every part of the role and
learning more about PWR every day. I am proud
to work for a market leader and it is really nice
to be part of a company that is so respected in
the industry. In the future I would like to take my
career with PWR as far as I possibly can, ideally
into Production Management.”
Anastasia Tsompanellis
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Delivering Value
Investing in
Emerging
Technology and
New Industries
At PWR, we provide leading edge
cooling solutions to our customers in
many industries and we leverage our
knowledge, skills and capabilities to
provide products to new industries
for our cooling solutions, such as the
aerospace and defence industry.
Our unique point of difference however is the way we stay
ahead of the curve in the emerging technology space.
Emerging technologies create real opportunity for PWR
and its customers and are used by PWR and its customers
to tackle climate change by working with customers
to develop lower emission cooling solutions to stem
additional damage to our planet.
Thermally efficient heat exchangers are a key driving force
in many processes requiring a chemical reaction. The use
case can be for carbon capture from the atmosphere,
where CO2 is entrapped within special coatings on a heat
exchanger surface, where it is later stored underground
or used for product use. Additional use cases require heat
exchangers to be used in conjunction with a catalyst to
aid in the production of green fuels, as an alternative to
fossil fuels.
Other opportunities for PWR exist across the sustainable
mobility platforms, with the race to electrified flight
certification heating up. PWR technology transfers well
to these platforms due to the requirements for highly
efficient and light weight cooling systems, to offset the
additional mass of the battery systems required.
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CASE STUDY: Emerging Technology
Customer - Electroflight – World’s
Fastest All-Electric Aircraft
https://www.electro-flight.com/news/
partnering-with-rolls-royce-and-electroflight-
to-create-the-battery-for-worlds-fastest-all-
electric-aircraft
Recently PWR worked with UK based
company, Electroflight, to assist in managing
the thermal requirements of their all-electric
aircraft. The objective of the joint venture
between Electroflight and Rolls Royce aimed
to create the world’s fastest all-electric aircraft,
as a demonstration of battery and drivetrain
technology for sustainable flight.
Early in 2022 the ‘Spirit of Innovation’ aircraft
achieved separate record speeds, with the final
record set at 387.4 mph (623kph) crediting
the platform as the world’s fastest all-electric
vehicle.
PWR provided battery cooling and drivetrain
cooling solutions for this one-of-a-kind aircraft
and we are proud to be part of a world record
flight. In addition to the speed record, the
Electroflight team subjected the battery system,
including PWR parts, to the rigorous DO-160G
shock and vibration testing, allowing another
benchmark, as the first aerospace battery
propulsion system to successfully complete the
DO-160G testing in the UK.
The image above shows the aircraft in pre-flight
condition being prepared by the electrification
engineers, with cowlings removed, and a clear
image of some of the PWR componentry
attached to the air intake ducting.
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Delivering Value
Intellectual Capital
To be an industry leader in the
field of Thermal Management
systems across multiple high value
market sectors requires substantial
investment in people, advanced
manufacturing technology, capability,
quality control and testing systems
to deliver customised solutions to
exacting standards.
To stay ahead we must always innovate and never be
satisfied to be standing still even when business is
strong. Our operational management aims to attract
and retain talented staff, minimise waste and improve
efficiencies, while our strategic management anticipates
customer needs and industry trends to ensure PWR is
well positioned to deliver on customer expectations and
market opportunities in advance of their materialisation.
PWR is committed to investing in its own success to
build capability and capacity to support all of our market
sectors to deliver solutions exceeding our customers’
expectations.
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CASE STUDY 1: Systems and
Accreditations
PWR has recently been successful in achieving
accreditation to the National Aerospace and
Defence Contractors Accreditation Program.
With the introduction of NADCAP and the
further improvements made to our Quality
Management System (QMS), this is driving
a more system centric approach to internal
business processes within PWR. Both AS9100D
and NADCAP require internal processes to
be robust, effective, and aligned to how the
business performs internal processes and the
effectiveness of the controls put in place. A
quality system needs to work for the business
and help drive the right culture expected in
the demanding global industry sectors PWR
chooses to do business.
The introduction of NADCAP only raises
this expectation further. Being a NADCAP-
recognised supplier means our customers
can reduce or replace costly individual audits
that would otherwise be required by their own
Quality Departments.
Large aerospace and defence contractors
historically would have sent individual personnel
out to audit suppliers, but NADCAP certification
is a high-level third-party accreditation program
to validate those successful in achieving
endorsement as a trusted company to the
primes of the Aerospace and Defence market
sectors. PWR have taken this challenge head
on, expanding the Management team and
internal structure through the introduction
of the Operational Excellence department
ensuring governance of structures, systems
and processes that underpin PWR’s product
development and ensuring that there are
robust and well communicated end to end
processes that result in PWR providing quality
results to customers.
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CASE STUDY 2: PWR Technology and depth of capability
Ruggedized Liquid Cold Plates and Bipolar
HFC Plates - PWR have a state-of-the-art
vacuum brazing furnace rated to 1,300°C and
suitable for aluminium brazing at class 1, together
with higher melting point superalloys rated at class
2. PWR manufacture ruggedized liquid cooling
plates and brazed chassis for Aerospace, Defence,
Electrification, Hydrogen and Motorsport
markets. These components are used in a variety
of end applications such as radar systems,
autonomous vehicles, energy storage systems
and power electronics cooling applications.
Complete Cooling Modules - PWR have the
capability to partner with our customers early
in the project to design, simulate, develop and
manufacture complete sub module cooling
systems including heat exchangers, composite
mount systems, fluid transfer, fans and pressure
and thermostatic valves. On completion of cooler
assemblies and modules, PWR can also work with
our customers to conduct certification testing of
bespoke assemblies to meet requirements.
Custom Heat
Exchangers - In
parallel with more
generic rectangular
shapes, PWR
specialises in custom
geometry air to liquid
cooling assemblies.
These radiators, oil
coolers, intercoolers
and battery coolers
can be fully profiled geometries to fit difficult duct
geometry and can also have non-planar surfaces,
to allow larger surface areas in confined spaces.
Constructions can be tube and fin or bar
and plate (B&P).
Bar and Plate Assemblies - PWR produce
durable B&P assemblies and cooling packs for
land, air and sea applications. B&P assemblies
are the industry standard for applications in
Aerospace and Defence, due to their robustness
in harsh environments involving vibration, shock
and extended thermal cycle.
Micro Matrix Heat
Exchangers - MMX
heat exchangers are
extremely efficient,
compact and light
weight solutions,
constructed from an
array of hollow micro
tubes, similar to
hypodermic needles
and ranging in sizes
from 0.3mm diameter to 1mm diameter. These
thin wall tubes provide exceptional surface area in
a compact package to maximize heat transfer in
liquid/liquid, liquid/air or liquid/phase change
material applications.
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Delivering Value
Intellectual Capital
continued
CASE STUDY 2: PWR Technology and depth of capability continued
Additive Manufacturing - PWR have high
temperature SLA and aluminium powder DMLS
additive manufacturing machines in house,
together with specific technical agreements
to produce world leading aluminium heat
exchangers using disruptive additive methods.
PWR is investing in skilled staff and equipment
to ensure we are on the cutting edge of this
technology as we find opportunities to exploit the
manufacturing advantages where appropriate to
use additive technology, or merge its application
with other technologies to provide the very best
total solution.
Thermal Testing - PWR have an in-house
wind tunnel thermal calorimeter and cold plate
test rig. These are used to test prototype and
production intent heat exchangers and cold
plates to help create thermal matrix information
used for verification processes, creation of CFD
information and use in PWR transient simulation
models to develop optimum solutions.
CT Scanning - PWR have a large-scale industrial
CT scanner at our Australian facility with a working
envelope that can accept a part height of 2.2m
and a measurement/scanning envelope of 1.2m
high x 0.8m diameter. This Xylon machine is
capable of both X-Ray and CT generated 3D
models and is used for process development,
product verification and 3rd party use generating
unrivalled visual and dimensional inspection tools.
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Delivering Value
Developing a Sustainability
Framework
Sustainability for our shareholders, our employees and our customers
is at the heart of PWR’s business strategy.
We are committed to creating long term value for all of
our stakeholders through our 3 strategic objectives of
Growth, Profitability and Excellence. To better articulate
our approach to sustainability, we will focus on developing
a Sustainability Framework to ensure:
– Our approach to sustainability is embedded into
our strategy
– We have a governance framework to monitor our
performance
– Our risk management approach involves scenario
planning, stress testing and stakeholder feedback
within the context of our risk appetite
– We set realistic and measurable targets to track
our performance and progress
While we have focused on various aspects of
sustainability at PWR, we realise that our work would
benefit from a properly articulated sustainability
framework that caters for all corners of our business.
Our work to date includes:
– Developing sustainable and capable people by
investing in them to build a safe workforce that is
engaged, high performing and proud to be part of
PWR – see page 14 for how we create value through
our focus on people, culture and safety
– Working every day to strengthen our corporate
governance and responsible business culture
supported by our Code of Conduct and Ethical
Conduct Policy. This year we have updated the
Charter for our Audit and Risk Committee and
tasked it with oversight of the development and
implementation of our sustainability framework.
Our updated charter for our Audit, Risk and
Sustainability Committee can be found on
our website.
– Listening and talking to our stakeholders about their
expectations and what we are doing to both identify
and mitigate long term sustainability risks. See
page 12 for how we deliver value through customer
and stakeholder relationships
– Working with our customer base to manufacture
efficient and less carbon intense thermal cooling
solutions and leveraging emerging technologies and
investing in research and development to enhance our
performance and stay at the forefront of our customer
expectations. See pages 20 to 24 for our we create
value by working with our customers on less carbon
intense cooling solutions and investing in research
and development
–
Integrating and advocating good sustainability
practices in PWR’s global operations. We take every
opportunity we can to recycle from our raw material
to our coffee cups!
– Driving value through sustainable value chain
management practices. This year we undertook
comprehensive risk assessments on our supply chain
and developed and implemented our Ethical Sourcing
and Modern Slavery Policy
Climate Change Risk
PWR is committed to playing its part in
developing low emissions technology to support
our customers and help to build a sustainable
world for the next generation
Against the backdrop of a rapidly changing and
challenging landscape both generally and in
manufacturing, PWR is already leveraging opportunities
in our value chain to address climate change risks but
we have some way to go in understanding our current
footprint and our focus in FY2023 is to do just that.
PWR is committed to reducing its carbon emissions.
We are conscious of the threat of climate change to
our stakeholders and our business. During FY2023 we
will assess materiality and also look at financial impact
aligned with the recommendations from the Task Force
on Climate Related Financial Disclosures with the
overarching objective of understanding our baseline so
we have a foundation on which to build realistic targets.
We are committed to both articulating our sustainability
strategy further but also understanding our baseline
and setting realistic and measurable targets to meet and
report against. We know that this is a rapidly changing
topic and each year we will review and revise our approach
to sustainability and climate change to ensure it keeps
pace with the expectations of our stakeholders. We need
to ensure we get our data right for our current emissions
and will need to invest in information systems to track our
emissions and targets.
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Delivering Value
Developing a Sustainability Framework
continued
PWR has turned its mind this year to its supply chain and the broad categories that we will need to assess for sustainability
commencing in FY23 are summarised below:
Raw Material Inputs
Manufacturing & Operations
Customer Products
Raw materials used to manufacture our
cooling solutions
– How are raw materials transported
to our manufacturing facilities?
– What is the amount of non-
renewable materials that are used
in manufacturing our products?
– What chemicals are used?
– What amount of raw materials are
recycled or recyclable?
The manufacturing process that turns
raw material into our cooling solutions
and the activities that support product
development including:
– Operation of our manufacturing
–
facilities
Transport of products to our
customers
– Business travel
– Management of waste from our
manufacturing facilities
The water we use
The energy we use
–
–
– Our greenhouse gas intensity
– Our impact on air quality
– Waste water and what we do
with it
– Our use of ‘green-rated’
investments
The products we manufacture, how
they are used and what happens to
them at the end of their lifecycle:
–
– Greenhouse gas emission
intensity of our products
The recyclable content of
our products
The amount of renewable
materials used in our products
The amount of restricted
substance content in our products
–
–
– Our energy consumption
– Our contribution to the
sustainability targets adopted
by our customers
CASE STUDY: Supporting Formula 1’s Sustainability Strategy
PWR has for a very long time been
extremely proud of its involvement
in supplying the worlds best
heat exchangers to Formula 1
as the pinnacle of Motorsport
and technological innovation in
automotive applications. We are
now very proud to be supporting
Formula 1 and the FIA in their
Sustainability Strategy with a target
to be a net zero carbon sport by
2030. PWR is working with all teams
and power unit manufacturers,
providing recyclable primary
heat exchangers and supporting
thermal management systems
for the current hybrid power units
which are widely recognised as
the most efficient in the world,
and our work will intensify through
next generation power unit
developments making further
improvements in efficiency
through to 2030 and beyond.
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PWR Holdings Limited
As stated by Chase Carey, CEO of Formula 1 “Leveraging the immense
talent, passion and drive for innovation held by all members of the
F1 community, we hope to make significant positive impact on the
environment and communities in which we operate”. PWR is supporting
Formula 1 in pioneering for the automotive industry to deliver the world’s
first net-zero carbon hybrid power unit, with a vision to drive down
carbon emissions across the globe from the flow down effects of this
technology into the automotive sector.
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Financial Year
Environmental Management
Although the PWR Group is not subject to any significant
environmental regulations, the Group manages
environmental aspects and impacts through its ISO 14001
compliant management system.
The Group is focussed on environmental management by:
–
ensuring exhaust gases generated in the
manufacturing process are removed via activated
compounds prior to being released into the
environment
recycling raw materials, cardboard and office materials
–
– disposal of wastes and hazardous materials in
accordance with government regulations.
Aluminium Recycling
At PWR, aluminium is used almost exclusively in the
production of our high-performance cooling solutions.
This material is abundant, easy to fabricate and one of the
most widely recycled materials. During the 2021-2022
financial year we recycled 211 tonnes of aluminium.
Sustainable Investing
PWR has invested $5.0m in an Environmental, Social and
Governance Term Deposit and will continue to assess
sustainable investment opportunities.
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Leadership and Governance
Directors
Teresa Handicott
Independent Chairman,
Non-Executive Director
A N
Kees Weel
Managing Director and
Chief Executive Officer
Jeffrey Forbes
Independent,
Non-Executive Director
A N
Teresa is a former corporate lawyer,
with over 30 years experience in
mergers and acquisitions, capital
markets and corporate governance.
She was a partner of national law
firm Corrs Chambers Westgarth for
22 years, serving as a member of its
National Board for 7 years including
4 years as National Chairman.
Teresa is a director of ASX listed
company Downer EDI Limited and
of Peak Services Holdings Pty Ltd, a
subsidiary of The Local Government
Association of Queensland (LGAQ),
which is responsible for the LGAQ’s
commercial operations.
Teresa is State President of the
Queensland Council of the Australian
Institute of Company Directors (AICD)
and a member of the AICD’s National
Law Committee. She is a Member of
Chief Executive Women (CEW), is a
Senior Fellow of Finsia and a Fellow
of the AICD.
Teresa was previously a Member
of the Queensland University of
Technology Council, the Takeovers
Panel, Associate Member of
the Australian Competition and
Consumer Commission (ACCC),
member of the Finsia Queensland
Regional Council, Director of CS
Energy Limited, Principal Law Lecturer
for the Securities Institute of Australia
(now Finsia) and tutor in Corporate
Governance for the AICD Directors
Course.
Kees Weel is the founder of PWR and
has been awarded the 2021 Australian
Performance Automotive Industry
“Australian of the Year”. From the
humble beginnings of hand making his
first copper and brass radiator in 1982
to a visionary leader of PWR, Kees has
lead PWR on an extraordinary journey
that has cemented PWR’s reputation
globally for quality and innovative
cooling products and unparalleled
customer service.
It was Kees’ inspiration to begin
manufacturing radiators that quickly
led to a ready-made customer base
that required superior quality and
capability from radiators. With an ever
growing business and in-demand
product, in 2006 Kees started
building, what is today, PWR’s state
of the art manufacturing facility at
Ormeau. Kees’s uniquely Australian
approach to business is his greatest
strength, where no challenge is too big
and an ethos that everything can be
made with time, money and hard work.
Following its listing on the ASX,
Kees has continued to oversee the
extraordinary growth of PWR while still
maintaining its commitment to quality
and customer service and that ‘family
feel’ amongst employees.
Kees’ continues to develop PWR’s
business capabilities and leads his high
performance team to be innovative,
listen to the customer and always have
a can do attitude. Printed in supersized
letters on the wall at the Ormeau
manufacturing facility is Kees’ motto:
Most people see things as they are and
say why. We dream of things that never
were and say why not?
Jeff has over 30 years’ experience
in senior finance and management
roles with extensive mergers and
acquisitions, equity and capital
markets and project development
experience.
As an executive Jeff worked at
Cardno Limited, an engineering and
environment consultancy company
as CFO, Executive Director and
Company Secretary before leaving in
2013 to commence Non-Executive
Director roles. Prior to joining Cardno,
Jeff was Chief Financial Officer and
Executive Director at Highlands
Pacific Limited, a PNG-based mining
and exploration company. He has
significant experience in capital
raisings and debt financing. During his
career, Jeff has worked for numerous
major companies including Rio Tinto,
BHP and CSR and has previously
held senior finance roles in the
resources sector.
Jeff is a Non-Executive Director of
Cardno Limited and Ventia Services
Group Limited. Jeff is also Chairman
of Herron Todd White Australia and
Herron Todd White Consolidated.
Jeff holds a Bachelor of commerce
from the University of Newcastle and
is a Graduate of the Australian Institute
of Company Directors.
Key
A
Audit and Risk Committee (Audit, Risk and Sustainability Committee from 1 July 2022) Nomination and Remuneration Committee
Committee Chair
N
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PWR Holdings Limited
Executives
Roland Dane
Independent,
Non-Executive Director
A N
Matthew Bryson
Chief Operating Officer (COO) from July
2020, Chief Technical and Commercial
Officer (CTCO) from July 2021
Martin McIver
Chief Financial Officer
(CFO)
Roland has extensive automotive
business experience in the UK,
Asia and Australia. Roland was the
founder of, and remains the principle
shareholder in, Park Lane (UK) a
vehicle acquisition business in the
UK founded some 35 years ago. He
is the former Managing Director
of the successful Triple Eight Race
Engineering team, winning 9 out of the
last 15 V8 Supercar championships.
Roland is a director of Racing
Together Limited, a charitable
organisation promoting opportunities
in motor sports for young indigenous
Australians. He is a member of the
FIA Touring Car Commission and
a member of the Safety and Risk
Committee of Motorsports Australia.
Matthew completed his Mechanical
Engineering Trade as a special class
Fitter and Machinist/Toolmaker
concurrently studying Mechanical
Engineering, before working as a
mechanical design engineer, and then
applying both engineering and trade
skillsets to the motorsport industry.
Matthew joined PWR in 2000 as a
design and manufacturing engineer
contributing to PWR’s formative
years across product and production
engineering responsibilities. This
role progressed to the position of
Engineering Manager at PWR, as a
position held for 15 years, working
closely with PWR’s customers to grow
the business, and overseeing the
continued development of PWR’s
product and advanced manufacturing
capabilities. Matthew held the position
of COO from July 2020 before
commencing his current position
of Chief Technical and Commercial
Officer at PWR from July 2021.
Martin McIver is responsible for
finance, treasury, human resources,
information technology, and
procurement. Martin was previously
the CFO at WorkPac with 7 years’
service and is currently Chairman
at Tlou Energy Ltd (ASX:TOU).
Earlier he held the position of
Director in Corporate Finance with
PricewaterhouseCoopers with a focus
on mergers and acquisitions.
Martin has a Bachelor of Business
from QUT and is a MBA graduate
from the American Graduate School
of International Management
(Thunderbird).
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Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Leadership and Governance
Our Corporate Governance
and Risk Management Practices
PWR’s 2022 Corporate Governance statement of the Group is available through the Group website and is also released to
the ASX as part of our annual reporting.
The Corporate Governance statement adopted by the Board reflects the Board’s endorsement and adoption of the
recommendations contained in the ASX Corporate Governance Council’s Principles and Recommendations.
Risk management is fundamental to maximising the value of our business and informing PWR’s strategic direction.
We believe that effective risk management enables us to identify priorities, allocate resources, demonstrate due diligence
in discharging legal and regulatory obligations, and meet the standards and expectations of our stakeholders.
PWR’s risk management approach is a structured process to identify potential threats to the success of the business, and
defines the risk appetite and strategy for eliminating or minimising the impact of these risks.
We particularly focus on strategic and material risks and PWR is committed to ensuring that risk management is
regarded as an essential element in our management processes with linkages to every aspect of our business including
development of existing business, expansion into new markets, relationships with major customers and suppliers and our
treasury and capital management activities.
See below for summary of our material risks and how we manage them:
Protecting the health, safety and wellbeing of our people
PWR’s DNA calls out
respect. Respect for our
employees and respect
for each other. We strive
to ensure that a culture of
respect promotes a safe
workplace so that everyone
goes home safe every
day. We also believe that
providing our employees
with health and wellbeing
opportunities supports a
happier, healthier, more
productive workforce and
workplace
–
–
–
–
–
–
–
We have identified and regularly talk about our critical safety risks
We investigate the root cause of all incidents, identify key learnings and talk about them in
our toolbox talks
We are continuously improving our working environments to make them safer and more
productive for our people
We have set up an Employee Assistance Program to help employees deal with life’s
challenges by giving them and their families free access to professionals who can provide
them with strategies to minimise stress and manage their mental health
Weely’s diner provides quality food, free of charge to our Australian employees for
breakfast, morning tea, lunch and dinner with healthy selections available
We have facilitated employees’ knowledge of and access to COVID-19 information from
qualified medical professionals and have provided access to onsite vaccination facilities
For FY23, our Corporate Scorecard requires safety leadership and visibility as a key
performance indicator to measure safety leadership activity in the business
Managing the challenges that come with rapid growth
PWR has worked hard
to get where we are and
have grown our business
year on year but with this
comes challenge. The
challenge of managing
and communicating with
a larger, wider-spread
workforce, more workload,
the need for more factory
space, better and more
streamlined systems and
processes, more customers
and new advances in
technology, to name a few
30
PWR Holdings Limited
– First and foremost we need to stay focused on our people at all times, no matter how
demanding our business growth becomes - because our people are responsible for driving
our growth. We have invested in a highly capable human resource area to provide the extra
support and focus required
– We have focused on developing high performing leaders, targeting managers and
supervisors for our in-house front line leadership program where a self-assessment of one’s
own behavioural preferences is the first step in the journey
– Recruiting for growth has been a challenge during the reporting period with the availability
of workers the lowest it has been in a long time
– Competition for workers has also increased significantly and retaining our workforce is a
key focus
– With growth comes change and maintaining open channels of communication with our
people is essential. We are committed to ensuring each and every employee understands
our vision and purpose and their role in helping to deliver them. We are rolling out monthly
team talks with consistent, transparent messages and giving employees an opportunity to
ask questions
– We are focused on ensuring we have robust systems and processes that facilitate
knowledge transfer for the production of our many products. When everyone follows a
well-tested set of steps, we reduce the likelihood of mistakes, delays and duplicated effort
– We have made progress this year to extract value from our current Enterprise Resource
Planning system and have commenced the search for a Human Resource Management
System that will support the business for many years to come
Protecting our intellectual property and managing cyber security risks
Second only to our people
is PWR’s intellectual
property and that of our
customers.
– We regularly undertake independent external reviews of our IT and potential cyber security
exposures and have implemented all recommendations arising from these reviews
– We have strict confidentiality procedures in place when developing new technology and
manufacturing proceses
– We operate restricted areas within our manufacturing sites and do not permit phones or
cameras on the factory floor
Talent identification, recruitment and retention
Our ability to identify,
attract and retain key talent
and develop capabilities is
fundamental to delivering
our strategic objectives .
– We focus on enhancing our offerings to employees and potential employees to distinguish
ourselves in the market through targeted and effective approaches to talent and
recruitment management
– We focus on succession planning and we identify key talent and provide them with
experience and growth through time in critical roles and identify relevant external training
for their skills development
– We continue to improve our long-term workforce planning and talent management
program across PWR
– We invest in our leaders to support their skills in leading and managing their teams and
have developed a tailored front line leadership program to develop our supervisors and
managers and equip them with the skills to lead their teams effectively
Diversifying our business
Our objective is to
leverage our research and
development and success
in providing cooling
solutions to motorsport into
other industries where we
can use our know-how and
add value.
– We keep our strategy front of mind as it informs the decisions we make about leveraging
our existing cooling solutions into new industries
– We regularly evaluate our strategic objectives
– We have a dedicated advanced technology team focused on building a pipeline of
opportunities
– We strategically invest in leading edge manufacturing technology
– We invested in securing AS9100 accreditation (aerospace and defence quality standard)
and have also received National Aerospace and Defense Contractors Accreditation
Program (NADCAP) accreditation (thermal and chemical management).
This year we will focus on securing accreditation for the Defence Industry Security Program
–
Maintaining our leading edge through innovation and advanced technology
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– We are continuously investing in research and development. This year we invested
$9,777,059 on R&D activities
– We adopt quality control approaches in everything we do and use advanced technology
to problem solve for our customers
– We introduced capability for serialisation of products including full traceability of
components and raw materials used in the production process back to raw material source
– We attend trade shows and keep up to date with the latest advances in technology
– We will spend FY23 understanding our baseline and developing our sustainability
framework and incorporating the recommendations from the Task Force on Climate
Related Financial Disclosures
– We will set realistic and measurable targets to meet and report against
– We will continuously review and revise our approach to sustainability and climate change
to ensure it keeps pace with the expectations of our stakeholders
– We will put systems in place to ensure we get our data right for our current emissions and
to track our emissions and future targets
Technology and innovation
are advancing at a rapid
pace and we pride
ourselves at being at the
forefront of technology
advances in the field of
cooling however it requires
continued investment and
focus and falling behind is
not an option.
Sustainability Risk
PWR is committed to
playing its part in building a
more sustainable world for
the future generations. How
we go about this requires
focus and investment and
close contact with our many
stakeholders. We believe
that PWR can play its part
in the transition towards a
sustainable society through
the use of emerging
technology and innovative
product development to
support our customers’
climate change targets
Annual Report 2022
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PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE
Financial
Report
FY22
For the year ended 30 June 2022
32
PWR Holdings Limited
Contents
Directors’ Report ........................................................................................................................................................................34
Directors’ Report ..........................................................................................................................................................................................................................34
Lead Auditors Independence Declaration Under Section 307C of the Corporations Act 2001 .....................................................38
Remuneration Report ................................................................................................................................................................................................................39
Financial Statements ................................................................................................................................................................ 59
Consolidated Statement of Profit or Loss and Other Comprehensive Income .........................................................................................59
Consolidated Statement of Financial Position ............................................................................................................................................................ 60
Consolidated Statement of Changes in Equity ............................................................................................................................................................61
Consolidated Statement of Cash Flows ..........................................................................................................................................................................62
Notes to the Consolidated Financial Statements .......................................................................................................................................................63
Section A About this Report ...........................................................................................................................................................................................63
Section B Business Performance ..................................................................................................................................................................................64
Section C Operating Assets and Liabilities ..............................................................................................................................................................68
Section D Employee Benefits .......................................................................................................................................................................................... 74
Section E Taxation ................................................................................................................................................................................................................. 76
Section F Capital Structure and Borrowings .......................................................................................................................................................... 78
Section G Group Structure ................................................................................................................................................................................................81
Section H Other Information ............................................................................................................................................................................................84
Section I Significant Accounting Policies .............................................................................................................................................................. 90
Directors’ Declaration ................................................................................................................................................................................................................96
Independent Auditor’s Report to the Members of PWR Holdings Limited ................................................................................................ 97
Additional Information............................................................................................................................................................ 101
ASX Additional Information .................................................................................................................................................................................................. 101
Corporate Directory .................................................................................................................................................................................................................103
33
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUE Directors’ Report
Directors’ Report
For the year ended 30 June 2022
The Directors present their report together with the financial report of PWR Holdings Limited (the “Company”) and its
controlled entities (the “Group”) for the year ended 30 June 2022 (“reporting period”) and the auditor’s report thereon.
The report is prepared in accordance with the requirements of the Corporations Act, with the following information forming
part of the report:
– Operating and financial review on pages 4 to 9 and pages 25 to 31
– Director biographical information on pages 28 to 29 and Company Secretary biographical information on page 34
– Auditors Independence Declaration on page 38
– Remuneration report on pages 39 to 58
– Note H1 Financial risk management objectives and policies on page 84
– Note I10 Share capital on page 93
– Note H3 Auditor’s remuneration on page 89
– Note D3 Employee share based payments on page 75
– Directors’ declaration on page 96
–
– Corporate directory (inside back cover).
Shareholder information on pages 101 to 102
1. DIRECTORS
As at the date of this report, the Directors in office were:
Teresa Handicott
Kees Weel
Jeffrey Forbes
Roland Dane
Appointed 1 October 2015
Appointed 30 June 2003
Appointed 7 August 2015
Appointed 1 March 2017
You can find information about our Directors’ qualifications, experience, special responsibilities and other directorships on
page 28 and 29.
2. COMPANY SECRETARY
Lisa Dalton (B.App.Sc., M.App.Sc., LLB (Hons), FAICD, FCSA, FCIS)
Lisa Dalton was appointed as PWR’s company secretary on 7 August 2015 and remains the company secretary at the date
of this report.
Lisa is an accomplished lawyer, governance professional, senior executive and leader with over 25 years’ experience in the
mining, energy, construction, manufacturing, medical, agricultural and infrastructure sectors.
Lisa is currently Chairman of Second Skin Pty Ltd, a non-executive director of Healthia Limited and Company Secretary
of both PWR Holdings Limited and Jameson Resources Limited. Lisa is also an independent member of the Audit and Risk
Committee of the Queensland Department of Justice and Attorney General and the Queensland Department of Regional
Development, Manufacturing and Water. Lisa is also the Deputy Chair of the Advisory Council of Marist College Ashgrove.
34
PWR Holdings Limited Directors’ Report
For the year ended 30 June 2022
3. DIRECTORS’ MEETINGS
Our Chairman sets the agenda for Board meetings, with the Managing Director and the Company Secretary. The meetings
typically include:
Strategy discussion
– Minutes of the previous meeting
– Matters arising
–
– MD’s report
– Chief Financial Officer report
– Production report
– Operational excellence report
– People report
– Health and Safety report
– Board Committee Chair reports
– Continuous disclosure checkpoint
–
Share trading checkpoint
Closed sessions with Directors and as required, a closed session with Non-Executive Directors only are held periodically
throughout the year.
Our Board also receives periodic reports on operational and other important business matters including regulatory updates,
market research and investor relations activities.
The number of Directors’ meetings (including meetings of committees of Directors) and number of meetings attended by
each of the Directors of the Company during the financial year are:
Director
Attended
Held
Attended
Held
Attended
Held
Board Meetings
Audit and
Risk Committee Meetings
Nomination and Remuneration
Committee Meetings
Teresa Handicott
Jeffrey Forbes
Roland Dane
Kees Weel
10
10
10
10
10
10
10
10
4
4
4
-
4
4
4
-
4
4
4
-
4
4
4
-
4. PRINCIPAL ACTIVITIES
The Company’s registered office and principal place of business is 103 Lahrs Road, Ormeau, Queensland 4208.
The principal activities of the Group during the year were the design, prototyping, production, testing, validation and sales
of advanced cooling products and solutions to the motorsports, automotive original equipment manufacturing (“OEM”),
aerospace and defence, and automotive aftermarket sectors for domestic and international markets.
The Group has manufacturing and distribution facilities in Australia and the USA and distribution facilities in the UK from
which our European customers are serviced.
Other than items outlined in the Operating and Financial review, there were no significant changes in the nature of the
activities of the Group during the year.
35
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Directors’ Report
For the year ended 30 June 2022
5. DIVIDENDS
Dividends paid or declared by the Company to members since the end of the previous financial year were:
Declared and paid during the year
Final 2021 ordinary
Interim 2022 ordinary
Total amount
Cents per
share
Total amount
$
Date of payment
6.00
3.50
6,010,786 24 September 2021
3,510,367
25 March 2022
9,521,153
Declared after end of year
The following dividend was declared by the Directors since the end of the financial year:
Final 2022 ordinary dividend
Total amount
Cents per
share
Total amount
$
Date of payment
8.50
8,525,164
23 September 2022
8,525,164
The financial effect of the dividends declared after the end of the year have not been brought to account in the consolidated
financial statements for the year end 30 June 2022 and will be recognised in subsequent financial reports. There is no
dividend re-investment plan in operation.
6. LIKELY DEVELOPMENTS
The Group will continue its strategy of increasing profitability and market share within existing categories and markets and
pursue opportunities with emerging technologies in existing and new markets and categories during the next financial year.
Further information about likely developments in the operations of the Group and the expected results of those operations
in future financial years has not been included in this report because disclosure of the information would be likely to result in
unreasonable prejudice to the Group.
7. EVENTS SUBSEQUENT TO REPORTING DATE
The Board declared a fully franked final 2022 ordinary dividend of 8.50 cents per share. The financial effect of this dividend
has not been brought to account in the consolidated financial statements for the year ended 30 June 2022.
Other than the matter noted above, there has not arisen in the interval between the end of the financial year and the date
of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the
Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the
Group, in future financial years.
8. ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 issued by the Australian Securities and
Investment Commission, relating to the “rounding off” of amounts in the Directors’ Report. Amounts in the Directors’ Report
have been rounded off in accordance with that Instrument to the nearest thousand dollars unless otherwise stated.
9. ENVIRONMENTAL REGULATIONS
The Group is not subject to any significant environmental regulations.
10. INDEMNIFICATION AND INSURANCE OF OFFICERS
The Group has indemnified the Directors and Executives for costs incurred, in their capacity as a Director or Executive, for
which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Group paid insurance premiums in respect of a contract to insure the Directors and Executives
of the Group against a liability to the extent permitted by the Corporations Act 2001. The insurance contract prohibits
disclosure of the nature of liability and the amount of the premium.
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Directors’ ReportPWR Holdings Limited Directors’ Report
For the year ended 30 June 2022
11. PROCEEDINGS ON BEHALF OF THE COMPANY
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.
12. NON-AUDIT SERVICES
During the year KPMG, the Group’s auditor, has not performed any services other than the audit and review of the financial
statements.
13. LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 38 and forms part of the directors’ report for the financial year
ended 30 June 2022.
14. DIRECTORS’ INTERESTS
Details of the Directors’ interests in the securities of the Company are disclosed in the remuneration report.
This report is made with a resolution of the directors:
_________________________________
__________________________________
Teresa Handicott
Chairman
Brisbane
18th August 2022
Kees Weel
Managing Director
Brisbane
18th August 2022
37
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT
Lead Auditors Independence Declaration Under Section
307C of the Corporations Act 2001
for the year ending 30 June 2022
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of PWR Holdings Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of PWR Holdings Limited
for the financial year ended 30 June 2022 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Tracey Barker
Partner
Brisbane
18 August 2022
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
38
38
Directors’ ReportPWR Holdings Limited Remuneration Report
For the year ended 30 June 2022
1. LETTER FROM CHAIRMAN OF THE NOMINATION AND REMUNERATION COMMITTEE
Dear Shareholders,
On behalf of the Board, I’m pleased to present the Remuneration Report for the year ended 30 June 2022.
This report seeks to describe, in a simple and transparent way, our approach to remunerating our Board and Executive key
management personnel (Executives) and the key principles that underpin our Pay for Performance Framework, as well as
remuneration for our Non-Executive Directors.
Strong Results While Dealing with the Pandemic
At the end of FY2021 we were all optimistic that the worst of the pandemic was behind us. This wasn’t to be the case and
COVID-19 continued to impact our staff and our ability to travel and meet our customers face to face throughout FY2022.
PWR Holdings Limited (the “Company”) and its controlled entities (the “Group”) acted decisively and after extensive
facilitation and consultation with our staff introduced a requirement that staff and visitors be fully vaccinated to enter the
Group’s Ormeau site. This gave us confidence to continue with our growth trajectory and recommence visits to customers
both domestically and internationally. We have been able to deliver a record profit of $20.843m, and also managed to
keep our staff safe and employed, a tremendous effort by each and every one of our employees who worked with us and
supported the business in taking this step.
Total Fixed Remuneration Outcomes – Moderate Outcomes Reflecting Strong Performance
As shareholders will know, the Group did not award any bonuses to the Managing Director (MD) or Executives in FY2021
and also did not award salary increases to those roles given the uncertainty relevant to the pandemic. With respect to the
annual salary reviews conducted at the end of FY2022 for salaries moving into FY2023, the Board appointed an independent
remuneration consultant to provide advice on remuneration benchmarking for the Executives. The outcome of that
exercise is described on page 49, section 10.1.
Short Term Incentive Program (STIP) Outcomes
The intent of the STIP is to focus our Executives on what they can influence in the performance year. For the STIP to be
activated for Executives, they must meet a STIP Gate established by the Board. If the STIP Gate is met, this unlocks the STIP
amount for Executives and forms the basis of a stretch target. This is a key feature of the STI Plan that assists the Board in
aligning the creation of shareholder value with actual company performance. The STIP Gate is a financial measure linked
to budgeted NPAT for the Group. Provided the STIP gate is met or exceeded, the Corporate Scorecard is assessed against
new sector revenue growth, safety, staff retention and product quality. The more the STIP Gate is exceeded, the more of the
Corporate Scorecard is unlocked. Executives’s performance is also assessed against personal KPIs tailored to their role.
As outlined in more detail on page 46, the Company exceeded the gate for the STIP and accordingly Executives did earn cash
bonuses for FY22 under the STIP. The quantum of their bonuses was based on assessment of the Corporate Scorecard as well
as personal KPIs which are further explained on page 47. The Board believes this was appropriate given the significant effort
and contribution they made during the reporting period for which I and my fellow directors sincerely thank them.
Long Term Incentive Program (LTIP) Outcomes
Performance of long-term incentive rights granted in the FY2019 year were assessed for the end of FY2021. Both the TSR
and EPS performance hurdles for the 3 year performance period were exceeded, resulting in 100% vesting of long-term
incentives in September 2021.
At the end of June 2021, following a 3 year performance period:
–
–
the Company ranked at the 90th percentile for Total Shareholder Return (TSR) for the performance period for the FY2019
performance rights (1 July 2018 to 30 June 2021) when compared to the benchmark group of ASX 300, excluding the
Energy sector (oil, gas and coal)
the Group’s EPS hurdle for the FY2019 performance rights was measured by the growth in EPS from FY2019 (base year)
to the end of the third year of the Performance Period (FY2021). The EPS growth rate was 52.5%, a compound growth rate
of 15.1% over that period
As a result, 100% of the FY2019 performance rights vested on 1 September 2021 and provided the Executives an equivalent
number of the Company shares to the rights granted as remuneration.
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Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
Changes to Directors’ Fees from 1 July 2022
We also appointed an independent remuneration consultant to benchmark the fees for the Chairman and Non-Executive
Directors, the first external review since listing in 2015. The review highlighted that that our directors’ fees, in particular for our
Chairman, have fallen below market peers. To ensure that the Group remains able to attract and retain directors of appropriate
skill and experience, we resolved to make an increase of 12% in directors fees and a 14% increase in the Chairman’s fees to
bring them more into line with market. Further details can be found on page 53.
Looking Forward
The Board has confidence in the integrity of the Pay for Performance Framework and believes it incorporates the necessary
flexibility to continue to balance rewarding our Executives for performance and recognising the interests of shareholders,
however the Board has decided to appoint an independent Remuneration Consultant in FY2023 to assist with a review of
our incentive plan structures to ensure we continue to appropriately incentivise Executives to deliver shareholder value.
Our Corporate Scorecard for FY2023 will continue to focus our Executives and people they lead on our business priorities
including implementing controls to keep our people safe and well, growing our aerospace and defence business, maintaining
exceptional product quality and improving productivity.
In what continues to be an extraordinary time, I wish to thank our shareholders for their continued support.
Sincerely,
Sincerely,
_________________________________
Teresa Handicott
Chairman, NRC
40
Directors’ ReportPWR Holdings Limited
Remuneration Report
For the year ended 30 June 2022
2. INTRODUCTION AND SCOPE OF REPORT
This report details the remuneration framework and outcomes for Key Management Personnel (KMP) of PWR Holdings
Limited (the “Company”) and its controlled entities (the “Group”) for for the year ended 30 June 2022. This report forms part
of the Directors’ Report for this period.
The information provided in the Remuneration Report has been audited as required by section 308(3C) of the Corporations
Act 2001.
The following personnel were classified as KMP during FY2022:
Executives
Kees Weel, Managing Director
Matthew Bryson, Chief Operating Officer (from July 2020), Chief Technical and Commercial Officer (from July 2021)
Martin McIver, Chief Financial Officer
Non-Executive Directors
Teresa Handicott (Independent Chairman and Non-Executive Director), appointed Non-Executive Director on 1 October
2015 and Chairman on 19 October 2017
Jeffrey Forbes (Independent, Non-Executive Director), appointed 7 August 2015
Roland Dane (Independent, Non-Executive Director), appointed 1 March 2017
3. REMUNERATION GOVERNANCE
The Board is accountable for establishing the remuneration policies and framework for the Group and ensuring remuneration
of the Managing Director and Executives is fair and reasonable and aligned with the interests of shareholders. Outlined below
is the Board’s framework for remuneration governance:
Board
Nomination and
Remuneration
Committee (NRC)
The Board is responsible for setting remuneration policy and determining Non-Executive Director,
Managing Director and Executive remuneration. In addition, the Board is responsible for approving all
key performance indicators and performance hurdles set under the Executive variable remuneration
framework, being the Short Term Incentive Plan (STIP) and the Long Term Incentive Plan (LTIP). The
Board delegates responsibility to the Nomination and Remuneration Committee for reviewing and
making recommendations to the Board on these matters. The Board retains full discretion to decrease
or increase outcomes to ensure that they are fair and reasonable. The Board had regular contact with
each of the Executives during the year.
The NRC makes recommendations to the Board regarding all aspects of Executive remuneration.
This includes making recommendations in relation to the targets to be included in the STIP (both
the financial and other non-financial) and in relation to setting performance hurdles that attach to
Performance Rights under the LTIP. The Group’s Managing Director provides updates and makes
recommendations to the NRC on these matters in relation to his direct reports throughout the
year. To inform the Board and NRC, and to assist with their decision-making processes, additional
information and data is sought from management and remuneration consultants, as required.
Remuneration Consultants were appointed to provide advice on Non-Executive Director (NED)
remuneration and remuneration for the Managing Director and Executives for FY2023. The NRC
Charter sets out further information regarding the Committee’s objectives and role.
Managing Director Our Managing Director makes recommendations to the NRC regarding Executives and how the Pay
for Performance Policy and framework applies to all our employees.
Responsibility for
determining NED
remuneration
The Board is responsible for assessing Non-Executive Director fees, assisted by the NRC.
Shareholders approve the total aggregate fee limit (AFL) for Non-Executive Director remuneration.
The AFL approved by shareholders is currently $750,000 per annum. Reviews of Non-Executive
Director and Committee Member fees are carried out periodically with assistance of independent
benchmarking reports and/or consultants.
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Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
3. REMUNERATION GOVERNANCE (continued)
Remuneration
Consultants
Godfrey Remuneration Group Pty Limited (GRG) provided advice during FY2022 on remuneration
of Non-Executive Directors. Payments made to Godfreys for these services is set out below. Note this
does not include remuneration benchmarking for Executives which was undertaken in July 2022 and
relates to FY2023.
The Nomination and Remuneration Committed, chaired by the Chairman of the Company,
engaged GRG to undertake the Non-Executive Directors’ remuneration review. The engagement
was governed by a documented set of protocols to be followed by GRG, the Nomination and
Remuneration Committee and the Board, including the process to be undertaken by GRG to develop
and communicate the recommendations.
These protocols were implemented to ensure that GRG would be able to prepare the
recommendations free from undue influence by the Non-Executive Directors.
The Board:
–
is satisfied that the remuneration recommendations were made by GRG free from undue
influence by the Non-Executive Directors
– undertook its own thorough inquiries and review of the processes and procedures followed by
GRG during their engagement
is satisfied that the remuneration recommendations were made free from undue influence.
–
Description of Services
Fees for work undertaken in relation
to providing benchmarking and
recommendations regarding
Non-Executive Director remuneration.
Fees (excluding GST)
$13,000
4. REMUNERATION PRINCIPLES
The guiding principles governing the Group’s Pay for Performance Policy and how we implement them are summarised in the
table below:
Guiding Principles
Attract and Retain
Pay Executives for
Performance that
Delivers Value to
Shareholders
How we meet these principles
Remuneration will incorporate
external market reference
to maintain market
competitiveness
We periodically undertake remuneration benchmarking using
independent renumeration consultants to maintain market
competitiveness and ensure our reward supports the Group in
both attracting and retaining key talent.
Make clear the line of sight
between performance and
reward to ensure that superior
performance is recognised
and rewarded, with a view to
driving long-term growth and
shareholder value
We set key performance indicators that have a stretch target
component, evidenced by improvement over and above actual
results achieved from the prior year or specifically linked to
achievement of an outcome linked to our strategic objectives.
We also ensure our reward outcomes are aligned to
performance by providing a significant part of Executive’s
“at risk” remuneration on both financial and non-financial
measures.
We align short term and long term performance measures
to our strategy and vision. This includes a focus on the Group
being a safe place to work, ensuring our reputation for quality
products is maintained, achieving key strategic priorities, and
achieving leading Total Shareholder Returns.
42
Directors’ ReportPWR Holdings Limited Remuneration Report
For the year ended 30 June 2022
4. REMUNERATION PRINCIPLES (continued)
Guiding Principles
Promote Internal
Fairness and Equity
Always Consider the
Group’s Capacity to
Pay
Build Trust by
Promoting
Transparency
Provide fair, consistent, and
internally equitable reward
to appropriately compensate
employees for their
contributions and performance
outcomes
Manage the balance between
reward funding and Company
performance / financial
outcomes
Ensure a level of transparency
and clarity in reward design and
governance processes
How we meet these principles
The Group’s DNA is at the centre of how we work together to
deliver on our goals.
Internal equity is achieved partly through external
benchmarking and internally moderating performance
assessments across the business.
The Board maintains ultimate discretion under the Group’s
incentive plans to make awards or not and all awards are
subject to consideration of the Company’s ability to pay.
We attempt to report in a transparent manner on the link
between reward and performance under our incentive
schemes and outline the governance process to give
confidence to our shareholders.
5. REMUNERATION STRUCTURE
The Executives Total Remuneration is made up of the following 3 components:
Component
What it is
How does it link to strategy and performance?
Total Fixed
Remuneration (TFR)
Short Term Incentive
(STI)
Long Term Incentive
(LTI)
TFR consists of base salary
and statutory superannuation
contributions.
The STI Plan (STIP) is an annual
cash bonus that involves
linking specific financial and
non-financial targets with the
opportunity to earn incentives
based on a percentage of TFR.
The LTI Plan (LTIP) is designed
to link long-term executive
performance with ongoing
creation of shareholder value,
through performance rights
which convert to shares,
subject to the satisfaction
of long term performance
conditions.
Provides competitive ongoing remuneration in recognition of
accountabilities for their role.
Ensures total remuneration is competitive.
Rewards delivery of strategic KPIs through the Corporate
Scorecard.
Enables individual performance to be rewarded based on
personal KPIs specific to the role.
Rewards delivery of strategic objectives and longer term
growth and sustained shareholder value.
Provides greater alignment between shareholder and
participant outcomes.
43
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
6. REMUNERATION MIX
Remuneration mix for the Executives refers to the proportion of Total Remuneration that is made up of each component
of remuneration as outlined in contracts of employment and not actual remuneration received during the year.
Figure 1 Targeted and Maximum Remuneration Mix
21.5%
MD Targeted
Remuneration
57%
21.5%
25%
25%
MD Maximum
Remuneration
50%
TFR
STI
LTI
TFR
STI
LTI
15.5%
19%
15.5%
Executive
Targeted
Remuneration
69%
Executive
Maximum
Remuneration
19%
62%
TFR
STI
LTI
TFR
STI
LTI
44
Directors’ ReportPWR Holdings Limited Remuneration Report
For the year ended 30 June 2022
7. LINK BETWEEN THE GROUP PERFORMANCE, REMUNERATION OUTCOMES AND
SHAREHOLDER VALUE
The Board’s objective when determining remuneration for the Executives is that remuneration outcomes should be linked
to the performance of the Group. Given the longer term component of remuneration, reporting on performance for FY2022
together with performance over prior years provides shareholders with important context.
Table 1 The Group’s Historical Performance below summarises and compares the Group’s performance in recent financial
years.
Table 1 The Group’s Historical Performance
Key indicators
Units
Note
2022
2021
2020
2019
2018
2017
EBITDA
Net profit after tax
Ordinary dividend
per share
Special dividend per
share
Change in share price
year-on-year
Earnings per share
Total Shareholder
Return Ranking1
$’000
$’000
cents
cents
$
cents
$35,747
$28,963
$23,430
$21,763
$16,336
$14,727
$20,843
$16,797
$13,049
$14,206
$11,001
$9,280
12.00
8.80
5.90
8.50
7.30
5.60
-
-
-
3.00
-
-
B5
($0.77)
$2.60
20.79
86th
16.77
98th
$0.37
13.04
90th
$1.41
14.21
70th
$0.36
11.00
($0.43)
9.28
percentile
percentile
percentile
percentile
percentile
n/a
n/a
1
Compares the Company’s TSR to the S&P/ASX 300 excluding companies operating in the Energy sector (oil, gas and coal) and those that have de-
listed over a 3 year performance period ending on 30 June for the relevant financial year
Figure 2 The Company’s Total Shareholder Return (3 years to 30 June 2022) compares PWR to the ASX 300, excluding
Energy sector (oil, gas and coal) over the 3 year performance period, ranking PWR at the 86th percentile.
Figure 2 The Company’s Total Shareholder Return (3 years to 30 June 2022)
45
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
7. LINK BETWEEN THE GROUP PERFORMANCE, REMUNERATION OUTCOMES AND
SHAREHOLDER VALUE (continued)
Figure 3 The Group’s EPS growth to 30 June 2022, shows a year on year increase in the Group’s Earnings per Share which
equates to a 3 year growth rate of 46.3% and a 3 year compound annual growth rate of 13.5%.
Figure 3 The Group’s 3 year growth in EPS to 30 Jun 2022
Earnings per Share
25.00
20.00
15.00
10.00
5.00
0.00
13.04
16.77
20.79
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
FY20
FY21
FY22
Earnings per Share (cents) - LHS
3 Yr Compound Annual Growth Rate (%) - RHS
8. EXECUTIVE SHORT TERM INCENTIVE REMUNERATION OUTCOMES
8.1. STIP Gate
The STIP operates with a NPAT gate to activate the plan. The gate was exceeded, opening the STIP to up to 100% of maximum
scores. An increasing amount of STIP is available depending on by how much the STIP gate is exceeded.
8.2. Corporate Scorecard
At the beginning of the reporting period, the Board established Company KPIs which together formed the Corporate
Scorecard and which are largely non-financial KPIs. Subject to the STIP gate being met or exceeded the Corporate Scorecard
accounts for up to 60% of the maximum potential cash bonus payable to the Executives. Corporate KPIs on the Company
Scorecard align interest and performance at a Group level and to be achieved require strategic thinking, collaboration, and
business wide leadership which ultimately improves both short and long term shareholder value.
46
Directors’ ReportPWR Holdings Limited
Remuneration Report
For the year ended 30 June 2022
8. EXECUTIVE SHORT TERM INCENTIVE REMUNERATION OUTCOMES (continued)
Outcomes of the FY2022 Corporate Scorecard are outlined below:
Figure 4 Corporate Scorecard Outcomes FY2022
KPI
Weighting
Description
Measure
Diversification
and Growth
Safety
Performance
Critical
Safety Risk
Management
Production
Accuracy
Product
Quality
Voluntary
Employee
Turnover
15% target
20% stretch
Rolling
12 month
turnover
of Group’s
employees
20%
10%
10%
Emerging
Technologies
revenue growth
Long term
injury
frequency
rate (LTIFR)
Critical
safety risk
management
15% target
20% stretch
Remakes
and reworks
as a % of
manufactured
product
<7% (target)
<5% (stretch)
15% target
20% stretch
Warranty
claims and
customer
returns as
% of total
dispatched
items
<1% (target)
<0.5%
(stretch)
4%
0.1%
Critical
Safety Risks
identified and
workforce
educated on
high potential
reporting and
monitoring
Risks
identified and
education
ongoing
30% (target)
20% (stretch)
Emerging
Technologies
revenue of
$16.67m
LTIFR < 3
Result
>30%
$19.4m
1.2
Status
Not
Achieved
Achieved
Achieved
Partially
achieved
Stretch
achieved
Stretch
achieved
8.3. Personal Scorecards
Up to 40% of the STI for the Executives is payable on meeting personal KPIs aligned to achieving key business outcomes
identified in the Group’s strategic plan. Outcomes for personal KPIs for the Executives are set out below:
Table 2 Executive Personal KPI Outcomes
Executives
Personal KPI
–
–
Kees Weel
(Managing
Director)
Matthew Bryson
(Chief Technical
and Commercial
Officer)
Martin McIver
(Chief Financial
Officer)
Percent-
age of KPI
outcomes
achieved
Weighting
40%
80%
Targets related to succession planning, expansion of the PWR C&R
capacity and demonstration of the Group DNA
Targets related to sales engineering capacity, business critical
processes and procedures across the Group, and demonstration of
the Group DNA
40%
60%
–
Targets related to Group wide procurement function, ERP
selection and demonstration of the Group DNA
40%
80%
47
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
8. EXECUTIVE SHORT TERM INCENTIVE REMUNERATION OUTCOMES (continued)
8.4. FY2022 STIP Awards
Table 3 Executive FY2022 STIP Awards
Executives
Kees Weel (Managing Director)
Matthew Bryson (Chief Technical and Commercial Officer)
Martin McIver (Chief Financial Officer)
1. Cash bonuses earned in FY2022 are paid in September 2022
2. KPIs that were not achieved attract no cash payment
Maximum
Potential
STIP (% TFR)
Actual Bonus
included in FY22
remuneration ($)1
Actual Bonus
Earned
in FY22
(as % TFR)2
50%
30%
30%
$207,744
$78,147
$79,643
38%
20%
23%
9. LTIP PERFORMANCE OUTCOMES AND FY2022 AWARDS
The following table sets out LTIP performance outcomes for the 3 year period ended 30 June 2021. Performance Rights
vested in September 2021, were exercised in November 2021 and the Company shares issued to participants
Table 4 LTIP Performance Outcomes for the 3 year period ended 30 June 2021
Performance measure
EPS growth
From 1 July 2018 to 30 June 2021
Relative Total Shareholder Return
Outcome
% of LTI attaching
to performance
measure payable
52.5%
100%
Relative to S&P/ASX 300 excluding companies operating in the Energy sector
(oil, gas and coal) and those that have de-listed since 1 July 2018 over a 3 year
performance period ending on 30 June 2021
98th percentile
100%
The following table sets out LTIP performance outcomes for the 3 year period ended 30 June 2022. Performance Rights
vest in September 2022 and following exercise, the Company shares will be issued to participants, subject to participants
remaining employed at vesting.
Table 5 LITIP Performance Outcomes for the 3 year period ended 30 June 2022
Performance measure
EPS growth
From 1 July 2019 to 30 June 2022
Relative Total Shareholder Return
Outcome
% of LTI attaching
to performance
measure payable
46.3%
100%
Relative to S&P/ASX 300 excluding companies operating in the Energy sector
(oil, gas and coal) and those that have de-listed since 1 July 2019 over a 3 year
performance period ending on 30 June 2022
86th percentile
100%
48
Directors’ ReportPWR Holdings Limited Remuneration Report
For the year ended 30 June 2022
9. LTIP PERFORMANCE OUTCOMES AND FY2022 AWARDS (continued)
The following table sets out details of performance rights held by and granted to Executives
Table 6 Performance Rights held by and granted to Executives for the period ended 30 June 2022
Name
Kees Weel1
Matthew Bryson
Martin McIver
Balance at
1 July 2021
Granted
during the
year
Vested
during the
year
Forfeited
during the
year
Balance
30 June 2022
$ value of
rights at
grant date
-
82,259
-
-
17,188
15,690
-
(31,417)
-
-
-
-
-
68,030
15,690
-
$381,621
$136,974
1. Kees Weel, subject to shareholder approval is entitled to participate in the LTIP but chooses not to given his significant shareholding
The table below sets out the percentage performance achieved and percentage vested against the LTIP for performance
rights currently on issue to Executives
Table 7 Performance and vesting of Performance Rights held by and granted to Executives per year
Plan Year
FY20 LTIP
FY21 LTIP
FY22 LTIP
Grant date
Vesting date1
Value of rights
at grant date
EPS target
achieved
TSR target
achieved
Vesting Date
19/09/19
01/09/22
$89,021
100 %
100 %
07/06/21
01/09/23
$142,549
01/10/21
01/09/24
$287,025
To be determined
To be determined
Vest on
01/09/22
1. Subject to Board approval of performance hurdles and service conditions being met
10. SUMMARY OF REMUNERATION COMPONENTS AND HOW THEY OPERATE
10.1. Total Fixed Remuneration
Total Fixed Remuneration is set with reference to the median of the Group’s peers and is a function of size and complexity
of the role, individual responsibilities, experience, skills and market remuneration levels. This consists of cash salary, salary
sacrifice items, employer superannuation, annual leave provisions and any fringe benefits tax charges related to employee
benefits. The opportunity to salary sacrifice benefits on a tax-compliant basis is available.
The Board determines an appropriate level of fixed remuneration for the Executives following recommendations from the
NRC. The NRC has the delegated authority from the Board to engage independent remuneration consultants as it sees fit.
Fixed remuneration is reviewed annually following performance reviews at the end of the financial year and considers the
Executive’s role and accountabilities, relevant market benchmarks and attraction, retention and motivation of Executives in
the context of the overall market.
With respect to the annual salary reviews conducted at the end of FY2022 for salaries moving into FY2023, the Board
appointed Godfrey Remuneration Group to benchmark Executive Total Fixed Remuneration during July 2022 and took on
board GRG’s advice when determining remuneration for the Executives for FY2023. The outcome of that exercise was:
– Managing Director - In recognition of Mr Weel’s established tenure in the role of MD, performing at a high level and
leading the Company through significant growth (in revenue, profit and share price), and in consideration of his
remuneration relative to market peers, his Total Fixed Remuneration (TFR) was increased effective 1 July 2022 to
$653,000 per annum, representing a 19% increase on the prior year and which remains below benchmark and will require
continued focus. His Short Term Incentive (STI) opportunity remained at 50% of TFR. Mr Weel elects not to participate in
the Long Term Incentive Program (LTIP) given his significant shareholding in the Company, however the Board seeks to
drive long-term shareholder wealth and will review the LTIP in the coming months to consider the MD’s participation.
– Chief Technical and Commercial Officer – Based on a review of market peers, Mr Bryson’s TFR has been set at $405,000
per annum from 1 July 2022, a 5% increase on the prior year.
– Chief Financial Officer – Similarly, based on a review of market peers, Mr McIver’s TFR has been set at $380,000 per
annum from 1 July 2022, an 8% increase on the prior year.
49
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
10. SUMMARY OF REMUNERATION COMPONENTS AND HOW THEY OPERATE (continued)
10.2. Short Term Incentives
The Managing Director and Executives are eligible to participate in the Group’s Short-Term Incentive Plan.
Executive Participants Managing Director, Chief Technical and Commercial Officer and Chief Financial Officer
How is it paid
Annual cash bonus subject to achievement of corporate and personal KPIs
STIP Gate
The STIP gate is a minimum profit gateway based on the Group’s budgeted profit target which
must be met for the STIP to be activated for Executives. The amount by which the gate is
exceeded then determines the maximum that can be attributed to each KPI on the Corporate
Scorecard.
Corporate Scorecard
(60% weighting)
The Board establishes company KPIs that form the Corporate Scorecard on an annual basis.
These are determined by assessing key drivers that are required to deliver on our strategic
objectives and require the Executives to work as a team to achieve.
Personal KPIs (40%
weighting)
At the beginning of the performance period, the Board establishes personal KPIs for the
Managing Director and the Managing Director recommends personal KPIs for the other
Executives for Board approval. Personal KPIs represent 40% of the maximum potential cash
bonus payable to the Executives and for payment to be made against these KPIs, the STIP gate
must have been met. If the STIP gate is not met, irrespective of whether the KPIs have been
achieved, they attract no cash payment.
Target
Managing Director – 37.5% TFR
Executives – 22.5% TFR
Maximum
Managing Director – 50% TFR
Executives – 30% TFR
Potential Outcome
of STIP
Not met
STIP not activated for Executives
No STI Award
Company Scorecard Weighting
Maximum 45%
Personal KPIs and PWR DNA -
Weighting Maximum 40%
STIP Gate
Met
Company Scorecard Weighting
between 45% and 60%
Personal KPIs and PWR DNA -
Weighting Maximum 40%
Exceeded
STI Award
Corporate up to
75% of maximum
Personal up to
100% of maximum
STI Award
Corporate up to
100% of maximum
Personal up to
100% of maximum
50
Directors’ ReportPWR Holdings Limited Remuneration Report
For the year ended 30 June 2022
10. SUMMARY OF REMUNERATION COMPONENTS AND HOW THEY OPERATE (continued)
10.3. Long Term Incentives
The Managing Director and the Executives are eligible to participate in the Group’s Long-Term Incentive Plan.
The LTIP is an equity-based incentive designed to provide participants with the incentive to deliver growth in shareholder
value.
Executive participants Managing Director, Chief Technical and Commercial Officer and Chief Financial Officer
How is it paid?
Performance Rights.
Executives are invited by the Board to apply for performance rights (“Rights”) on an annual basis
under the LTIP as part of their Total Remuneration.
How many Rights are
granted?
The number of Rights granted to each Executive is calculated by dividing the % of TFR eligibility
by the Company volume weighted average share price for the trading days of the June prior to
the commencement of the performance period.
Managing Director – 50% of TFR (note that the MD although eligible, subject to shareholder
approval to participate in the LTIP, elects not to do so given his significant shareholding). The
Board is currently considering restructuring the LTIP to allow for the MD to participate where
resultant awards are able to be paid in cash. A recommendation will be put to shareholders at
the 2022 AGM for consideration.
Performance period
3 years.
Executives – 30% of TFR
Rights convert to ordinary shares in the Company on a 1 for 1 basis at the end of the 3 year
performance period depending on the extent to which performance hurdles are achieved and
service conditions met.
Performance hurdles
The performance hurdles for Rights granted prior to FY2021 are:
– 50% of the rights will vest upon the achievement of Total Shareholder Return (TSR) ranking
criteria relative to the TSR of constituents of the S&P/ASX300, excluding Energy sector (oil,
gas and coal). TSR is calculated by an independent third party, comparing the TSR percentile
rank that the Company holds relative to the benchmark group for the relevant 3 year
performance period:
TSR Ranking (TSR)
TSR is 50% or less
Vesting outcome
Nil vesting
TSR is more than 50% but less than 75%
Pro rata vesting
TSR is 75% or more
100% vesting
– 50% of the rights will vest upon achievement of growth in EPS. Vesting is determined by
the growth in EPS from the financial year immediately prior to the start of the Performance
Period (base year) to the end of the third year of the Performance Period, measured against
specific EPS targets outlined below:
Earnings Per Share (EPS)
EPS growth rate of <4%
EPS growth rate of ≥4% to ≤12%
EPS growth rate of >12%
Vesting outcome
Nil vesting
Pro rata vesting
100% vesting
While the TSR hurdle remains the same, the EPS hurdle for the Rights granted from FY2021
onwards is different to that attached to Rights granted prior to that. For Rights granted
from FY2021 onwards:
51
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
10. SUMMARY OF REMUNERATION COMPONENTS AND HOW THEY OPERATE (continued)
– 50% of the rights will vest based on compound growth in annual EPS relative to a target set
by the Board. Vesting is determined by the compound annual growth rate in EPS over the 3
year Performance Period measured against specific EPS targets:
Earnings Per Share (EPS)
Vesting outcome
Compound annual growth rate of EPS <4%
Nil vesting
Compound annual growth rate of EPS ≥4% to ≤10% Pro rata vesting
Compound annual growth rate of EPS >10%
100% vesting
Service Condition
Participants must remain continually employed with the Company until the date of vesting.
Vesting
Rights that do not vest at the end of the 3 year period lapse, unless the Board in its discretion
determines otherwise. Upon cessation of employment prior to the vesting date, Rights will be
forfeited and lapse unless the Board in its discretion determines otherwise. Rights do not entitle
holders to dividends that are declared during the vesting period.
Why relative TSR and
Compound EPS?
The Board believes that these hurdles represent an appropriate balance between internal
performance and external benchmarking. EPS is a relevant indicator of increase in shareholder
value and the EPS hurdles provide a line of sight to encourage performance. Relative TSR is
aligned with the Group’s growth strategy.
Restrictions
Executives are prohibited from entering into transactions or arrangements which operate to
transfer or limit the economic risk of any Rights held under the LTIP while they are subject to
performance hurdles or otherwise unvested.
11. CONTRACT DURATION AND TERMINATION REQUIREMENTS
The Company has contracts of employment with no fixed tenure requirements with the Executives. The notice period for
each is outlined in the table below. Termination with notice may be initiated by either party. The contracts contain customary
clauses dealing with immediate termination for gross misconduct, confidentiality, and post-employment restraint of trade
provisions.
Table 8 Executive Notice Periods
Name
Kees Weel
Matthew Bryson
Martin McIver
Position
Managing Director
Notice Period
6 months
Chief Technical and Commercial Officer
6 months
Chief Financial Officer
3 months
12. REMUNERATION OF NON-EXECUTIVE DIRECTORS
12.1. NED Remuneration Policy
Non-Executive Directors receive remuneration for undertaking their role. They do not participate in the Group’s incentive
plans nor receive any variable remuneration. Non-Executive Directors are not entitled to retirement payments.
The objective of the Non-Executive Director remuneration policy is to:
– provide a clear fee arrangement that avoids potential conflicts of interest associated with performance incentives
–
– obtain independent external remuneration advice when required.
remunerate Directors at market rates for their commitment and responsibilities, and
The Aggregate Fee Limit (AFL), in place since listing in 2015, is $750,000 per annum (inclusive of superannuation
contributions). The Board determines the distribution of Non-Executive Director fees within the approved AFL.
52
Directors’ ReportPWR Holdings Limited Remuneration Report
For the year ended 30 June 2022
12. REMUNERATION OF NON-EXECUTIVE DIRECTORS (continued)
12.2. Review of Non-Executive Director Remuneration Policy and Non-Executive Director
Remuneration
The Board appointed Godfrey Remuneration Group to review the Non-Executive Director Remuneration Policy and to
benchmark NED Remuneration for the period commencing 1 July 2022. Following the independent review, the Non-
Executive Director Remuneration Policy was amended as follows:
–
–
–
The Main Board Package (MBP) for Non-Executive Directors should be positioned around P50 (50th percentile) of
market practices, with the variation in the clustering reflecting differences in contributions to committees i.e., those
contributing higher workloads will fall above P50, and those contributing the least, just below P50.
The MBP of the Chairman will be paid as a multiple of the Non-Executive Director MBP derived from the market analysis.
The Chairman will not receive committee fees in addition to a Board fee.
The purpose of Non-Executive Director remuneration is to recognise the work undertaken by Board members for their
work as Non-Executive Directors. Extra work undertaken by a Non-Executive Director outside of the normal scope of
NED duties should be remunerated at an agreed upon rate based on the amount of work undertaken in addition to their
MBP.
– Board Committee Chairs receive a fee of $20,000 per annum, however the Board Chairman does not receive committee
fees, regardless of participation level.
12.3. NED Remuneration
The following table sets out the Main Board Package for the Chairman and Non-Executive Directors throughout the
reporting period and the new MBP from 1 July 2022.
Table 9 Non-Executive Main Board Package
Role
Chairman
Non-Executive Director and Chairman Audit and Risk Committee
Non-Executive Director
MBP during
Reporting
Period
MBP from
1 July 2022
$170,7761
$195,000
$115,5252
$130,000
$95,000
$110,000
1.
Included $10,000 per annum for taking on role of Chairman of Nomination and Remuneration Committee during FY2022
2.
Included $10,000 per annum for taking on role of Chairman of Audit and Risk Committee during FY2022
53
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
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54
Directors’ ReportPWR Holdings Limited
Remuneration Report
For the year ended 30 June 2022
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(
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT
Remuneration Report
For the year ended 30 June 2022
14. SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
The movement during the year in the number of ordinary shares in PWR Holdings Limited held, directly, indirectly or
beneficially, by each member of the Key Management Personnel, including their related parties, is as follows:
Table 11 Shareholdings of KMP
Name
Non-Executive Directors
Teresa Handicott
Jeff Forbes
Roland Dane
Executives
Kees Weel(i)
Matthew Bryson(ii)
Martin McIver
Shareholdings of KMP
Opening
Balance
1 July 2021
Shares
acquired
during the
year
Shares
disposed of
during the
year
Closing
Balance
30 June 2022
Other
39,500
20,000
60,885
1,000
-
2,844
20,307,788
-
-
-
-
-
3,388,639
31,417
(150,000)
-
1,200
-
-
-
-
40,500
20,000
6 3 ,7 29
- 20,307,788
–
-
3,270,056
1,200
(i)
61,385 shares held personally by Kees Weel; 20,246,403 shares held by entities controlled by Kees Weel (10,000,000 shares held by Wagon Weel Pty
Ltd as trustee for the Wagon Weel Trust). At 30 June 2022 Kees Weel is a director of the trustee and beneficiary of the trust; 10,246,403 shares held
by KPW Property Holdings Pty Ltd as trustee for the KPW Holdings Trust. At 30 June 2022 Kees Weel is a director of the trustee and beneficiary of
the trust.
(ii) 31,417 shares acquired by Matthew Bryson on vesting of FY2019 performance rights
15. VOTING AND COMMENTS MADE AT THE COMPANY’S FY2021 ANNUAL GENERAL MEETING
The Company received 99.63% ‘for’ votes on its remuneration report for FY2021. The Company did not receive any specific
feedback or comments at the FY2021 AGM on its remuneration report.
16. EQUITY INSTRUMENTS
16.1. Performance rights over equity instruments
Details of performance rights over ordinary shares in the Company that were granted as remuneration to Executives during
the reporting period are included Table 10 KMP Statutory Remuneration Table on page 55.
There were no alterations to the terms and conditions of performance rights granted as remuneration to Executives since
their grant date.
56
Directors’ ReportPWR Holdings Limited Remuneration Report
For the year ended 30 June 2022
16. EQUITY INSTRUMENTS (continued)
116,272 performance rights vested during the reporting period. Total Performance Rights on issue at 30 June 2022 are as
follows:
Table 12 Rights Over Equity Instruments Granted as Remuneration
Fair Value per Right
at Grant Date
Executive
Description of
Rights
Number
of Rights
granted
TSR
Component
$
EPS
Component
$
Grant
Date
Vesting
Date
Expiry
Date
Matthew Bryson
Chief Technical and
Commercial Officer
FY20 LTIP
FY21 LTIP
FY22 LTIP
23,243
27,599
17,188
3.17
4.33
8.15
4.49
6.00
9.31
19/09/19
07/06/21
01/10/21
01/09/22
01/09/23
01/09/24
01/03/23
01/03/24
01/03/25
Martin McIver
Chief Financial
Officer
Total on Issue to
Executive
Total on Issue to
Non KMP
Total on issue at
30 June 2022
Total Vested during
the reporting period
Total Forfeited due to
resignation
FY22 LTIP
15,690
8.15
9.31
01/10/21
01/09/24
01/03/25
83,720
189,618
273,338
116,272
-
The movement during the reporting period, by number of rights over ordinary shares in PWR Holdings Ltd held, directly,
indirectly or beneficially by each key management person, including their related parties, is as follows:
Table 13 Executive Performance Rights Over Equity Instruments
Rights
Held 1 July
2021
Granted as
compensation
Exercised
Lapsed
Forfeited
Held 30
June 2022
Vested
during year
Vested and
exercisable
at 30 June
2022
Matthew Bryson
82,259
Martin McIver
-
17,188
15,690
(31,417)
-
-
-
-
-
68,030
15,690
31,417
-
-
-
The forfeited Rights represent those Rights that did not vest due to failure to meet service conditions.
During the reporting period, the following shares were issued on the exercise of Rights previously granted as compensation:
Table 14 Rights That Vested to Executive During the Reporting Period
Executive
Matthew Bryson
Matin McIver
Number of
shares
Amount paid
per share ($)
31,417
-
-
-
57
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEDIRECTORS’ REPORT Remuneration Report
For the year ended 30 June 2022
16. EQUITY INSTRUMENTS (continued)
The value of Rights over ordinary shares in the Company granted and exercised by each Executive during the reporting
period is detailed below.
Table 15 Value of Rights That Vested to Executive during the Reporting Period
Name
Matthew Bryson
Martin McIver
Granted in
year
$(a)
Value of rights
exercised
in year
$(b)
$150,051
$262,990
$136,974
–
(a)
(b)
The total value of rights granted in the year is the fair value of the rights calculated at grant date. This amount is allocated to remuneration over the
vesting period.
The value of rights exercised during the year is the market price based on the previous 5 days VWAP at vesting date after deducting the price paid to
exercise the right.
16.2. Key management personnel transactions
KMP, or their related parties, may hold positions in other entities that result in them having control, or joint control, over the financial or
operating policies of those entities.
These entities may transact with the Group. The terms and conditions of the transactions with KMP and their related parties were
no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-key
management personnel related entities on an arm’s length basis.
From time to time, directors of the Group, or their related entities, may purchase goods from the Group. These purchases are on the
same terms and conditions as those entered into by other Group employees or customers and are not material.
This report is made with a resolution of the directors:
_________________________________
__________________________________
Teresa Handicott
Chairman
Brisbane
18th August 2022
Kees Weel
Managing Director
Brisbane
18th August 2022
58
Directors’ ReportPWR Holdings Limited
Financial Statements
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2022
Revenue
Other income
Raw materials and consumables expenses
Employee expenses
Occupancy expenses
Other expenses
Profit before depreciation, net finance costs and income tax
Depreciation and amortisation
Total depreciation and amortisation expense
Finance income
Finance costs
Net finance (costs)/income
Profit before income tax
Income tax expense
Profit for the year attributable to equity holders of the parent
Other comprehensive income
Items that are or may be reclassified to profit or loss:
Exchange differences on translating foreign operations
Total comprehensive income for the year
Note
B2
B2
B3
B3
C5
B4
B1
E1
2022
$’000
101,072
1,590
2021
$’000
79,208
2,760
(20,851)
(18,013)
(38,897)
(30,932)
(750)
(6,417)
35,747
(7,225)
(7,225)
172
(202)
(30)
28,492
(7,649)
20,843
(562)
(3,498)
28,963
(5,739)
(5,739)
24
(701)
(677)
22,547
(5,750)
16,797
624
21,467
(528)
16,269
Basic and diluted earnings per share
B5
20.79 cents
16.77 cents
The accompanying notes are an integral part of these financial statements.
59
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Consolidated Statement of Financial Position
At 30 June 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Deferred Income
Contract liabilities
Employee benefits
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Deferred Income
Contract liabilities
Employee benefits
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
The accompanying notes are an integral part of these financial statements.
60
Note
2022
$’000
2021
$’000
C1
C2
C3
C4
C5
C6
E2
C7
F1
F2
C8
D1
E2
F1
F2
C8
D1
E2
21,499
13,813
12,746
2,847
50,905
32,594
15,027
–
47,621
98,526
7,532
1,903
469
907
3,324
218
263
19,857
9,341
6,489
1,646
37,333
34,280
14,915
770
49,965
87,298
5,333
1,789
443
901
2,626
2,001
173
14,616
13,266
4,839
1,219
440
348
667
7,513
22,129
76,397
6,667
1,746
1,351
306
–
10,070
23,336
63,962
F3
26,484
26,223
864
49,049
76,397
12
37,727
63,962
Financial StatementsPWR Holdings Limited Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Note
Balance at 1 July 2021
Total comprehensive income for the year
Profit for the year
Other comprehensive income
Total comprehensive income
Transactions with owners, recorded directly in equity
Employee share-based payments
Dividends paid
Total transactions with owners
D3
F4
–
–
–
261
–
261
Balance at 30 June 2022
26,484
Issued
Capital
$’000
26,223
Foreign
currency
translation
reserve
$’000
Share based
payments
reserve
Retained
earnings
$’000
Total
equity
$’000
(615)
627
37,727
63,962
–
624
624
–
–
–
9
–
–
–
228
–
228
855
20,843
20,843
–
624
20,843
21,467
–
(9,521)
(9,521)
489
(9,521)
(9,032)
49,049
76,397
Balance at 1 July 2020
26,071
(87)
524
27,742
54,250
Total comprehensive income for the year
Profit for the year
Other comprehensive income
Total comprehensive income
Transactions with owners, recorded directly in equity
Employee share-based payments
Dividends paid
Total transactions with owners
D3
F4
–
–
–
152
–
152
–
(528)
(528)
–
–
–
Balance at 30 June 2021
26,223
(615)
The accompanying notes are an integral part of these financial statements.
–
–
–
103
–
103
627
16,797
16,797
–
(528)
16,797
16,269
–
(6,812)
(6,812)
255
(6,812)
(6,557)
37,727
63,962
61
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Cash flows from operating activities
Cash receipts from customers
Government COVID-19 grants received
Cash paid to suppliers and employees
Cash generated from operating activities
Interest paid
Income tax paid
Note
2022
$’000
2021
$’000
95,534
70
80,111
1,980
(72,082)
(50,723)
23,522
31,368
(9)
(6,472)
(340)
(4,619)
Net cash from operating activities
C1
17,041
26,409
Cash flows from investing activities
Government grant income received
Interest received
Proceeds from sale of property, plant and equipment
1,083
20
70
55
24
4
Payments for property, plant and equipment
C5
(5,023)
(10,365)
Net cash used in investing activities
Cash flows from financing activities
Dividends paid
Proceeds from borrowings/(repayment of borrowings)
F1
Payment of lease liabilities
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at 1 July
Effect of exchange rate fluctuations on cash held
(3,850)
(10,282)
(9,521)
–
(2,016)
(6,812)
(8,585)
(1,819)
(11,537)
(17,216)
1,654
(1,089)
19,857
20,805
(12)
141
Cash and cash equivalents at 30 June
C1
21,499
19,857
The accompanying notes are an integral part of these financial statements.
62
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION A ABOUT THIS REPORT
A1 Reporting entity
PWR Holdings Limited (the “Company”) is a Company domiciled in Australia.
The consolidated financial statements of the Company as at and for the year ended 30 June 2022 comprise the Company
and its subsidiaries (together referred to as the “Group” and individually as “Group Entities”).
The Group is involved in the design, engineering, testing, production, validation and sale of customised cooling products
and solutions to the motorsports, automotive original equipment manufacturing, aerospace and defence, and automotive
aftermarket sectors for domestic and international markets.
The Company’s registered office and principal place of business is 103 Lahrs Road, Ormeau, Queensland 4208. The Group
is a for-profit entity for the purposes of preparing these financial statements.
A2 Basis of preparation
(a) Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in accordance
with Australian Accounting Standards (AASB) adopted by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards
(IFRS) adopted by the International Accounting Standards Board (IASB).
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
and in accordance with that instrument, amounts in the Financial Report and Directors’ Report have been rounded off to
the nearest thousand dollars, unless otherwise stated.
The financial statements were approved by the Board of Directors on 18th August 2022.
(b) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.
(c) Use of estimates and judgements
The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
Information about critical judgements, estimates and assumptions in applying accounting policies that have the
most significant effect on the amounts recognised in the consolidated financial statements is included in the note C6
(Intangible assets).
A3 Significant accounting policies
The accounting policies set out in Section I (Significant Accounting Policies) to the consolidated financial statements have
been applied consistently to all periods presented in these consolidated financial statements.
63
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION B BUSINESS PERFORMANCE
B1 Operating segments
The Group has 2 strategic divisions, which are its operating segments. These divisions offer similar products and services,
but are managed separately because they require different technology, apply contrasting marketing strategies and cater to
different markets.
The following summary describes the operations of each reportable segment.
Operating segments
Operations
PWR Performance Products
PWR C&R
Designing and manufacturing high end motorsports, OEM, aerospace and defence, and
automotive aftermarket products for non-USA markets.
Designing and manufacturing high end motorsports, OEM, aerospace and defence and
automotive aftermarket products primarily for the USA market. The PWR C&R segment
had previously been referred to as PWR North America and C&R with the composition
of this segment remaining the same.
The Group determines its operating segments based on information presented to the Managing Director being the chief
operating decision maker, with operating segments based on the Group’s operating divisions.
Intersegment pricing is determined based on cost plus a margin.
Revenue from sale of
manufactured products
Revenue from services
External revenues
Inter-segment revenues
Segment revenue
Segment EBITDA1
PWR Performance Products
PWR C&R
2022
$’000
2021
$’000
2022
$’000
2021
$’000
Total
2022
$’000
2021
$’000
73,076
54,513
26,604
23,880
99,680
78,393
67
73,143
3,916
77,059
28,538
423
54,936
3,098
58,034
22,724
1,325
27,929
3,621
31,550
7,384
(1,449)
5,935
2,020
392
24,272
1,788
1,392
101,072
7,537
26,060
108,609
6,158
(1,348)
4,810
1,015
35,922
(7,225)
28,697
5,023
815
79,208
4,886
84,094
28,882
(5,739)
23,143
10,365
Depreciation and amortisation
(5,776)
(4,391)
Segment profit/(loss) before interest
and tax
Capital expenditure
22,762
3,003
18,333
9,350
1 Segment EBITDA is the segment’s profit from operations before interest, taxation, depreciation and amortisation.
Reconciliation of reportable segment profit or loss
Revenues
Total revenue for reportable segments
Elimination of inter-segment revenue
Consolidated revenue
Profit before tax
Profit before tax for reportable segments
Elimination of inter-segment loss/(profit)
Net finance (costs)/income
Consolidated profit before tax
64
2022
$’000
2021
$’000
108,609
(7,537)
101,072
84,094
(4,886)
79,208
28,697
23,143
(175)
(30)
81
(677)
28,492
22,547
Financial StatementsPWR Holdings Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION B BUSINESS PERFORMANCE (continued)
Major Customers
3 customers in the PWR Performance Products segment comprise 15% of Group’s revenue for the year ended 30 June 2022
(2021 – 3 customers comprised 19%).
Geographic information
The Group operates manufacturing facilities and/or sales offices in Australia, the UK and the USA, and sells its products to
customers in various countries throughout the world.
Below is an analysis of the Group’s revenue based on the location of the Group’s customers and location of the Group’s
non-current assets.
Australia
USA
UK
Italy
Germany
Other Countries
(i) Excluding deferred tax assets.
B2 Revenue and other income
Revenue from contracts with customers
Sales of goods
Rendering of services
Other income
R&D tax incentive
Profit / (Loss) on sale of assets
Government grants – COVID-19 assistance
Government grants – incentive assistance
2022
2021
Revenue
$’000
Non-current
assets(i)
$’000
Revenue
$’000
Non-current
assets(i)
$’000
11,438
26,067
32,513
11,867
5,901
13,286
35,174
11,295
1,152
-
-
-
10,114
22,199
25,257
11,185
3,271
7,182
37,964
9,957
1,274
-
-
-
101,072
47,621
79,208
49,195
Note
2022
$’000
2021
$’000
99,680
1,392
78,393
815
101,072
79,208
B3
1,540
(20)
70
-
1,590
732
(22)
1,980
70
2,760
65
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION B BUSINESS PERFORMANCE (continued)
Customer Revenue by Market Sector
Motorsports
Automotive Aftermarket
Automotive OEM
Emerging Technologies1
Industrial and Other
47,476
15,485
18,007
19,433
671
42,813
14,867
11,732
8,683
1,113
101,072
79,208
1
Emerging Technology includes revenue from Aerospace and Defence across all technologies, and revenue from other market sectors generated by
cold plate, micro matrix and additive manufacturing.
The Group recognised $905,000 (2021: $450,000) in customer revenue from satisfying performance obligation for contract
liabilities (refer Note C8).
B3 Expenses and Income
Changes in inventories of finished goods and work in progress
The expenses are adjusted for changes in the inventories of finished goods and work in progress as outlined below:
Raw materials and consumables
expenses
Employee expenses
2022
Finished
goods and
work in
progress
movement
$’000
Net
expense
$’000
Gross
Expense
$’000
2021
Finished
goods and
work in
progress
movement
$’000
396
549
945
(20,851)
(17,779)
(38,897)
(30,932)
(59,748)
(48,711)
(234)
-
(234)
Gross
Expense
$’000
(21,247)
(39,446)
(60,693)
Net
expense
$’000
(18,013)
(30,932)
(48,945)
COVID-19 Assistance
During the year, the Group received Government assistance for COVID-19 in Australia through the JobMaker programme
and the United States Paycheck Protection Program.
JobKeeper assistance
JobMaker assistance
Paycheck Protection Program
Total before tax assistance
2022
$’000
-
38
32
70
2021
$’000
1,980
-
-
1,980
Research and Development
The Group recognised $9,777,059 (2021: $8,515,807) as an expense in relation to its research and development activities.
This is included in employee expenses, raw materials, consumables and other expenses in the income statement.
66
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
B4 Finance income and finance costs
Interest income
Gain/(loss) on derivatives
Finance income
Interest expense
Gain/(loss) on derivatives
Finance costs
Net finance income/(costs)
B5 Earnings per share
Profit attributable to equity holders
2022
$’000
2021
$’000
20
152
172
(202)
-
(202)
(30)
24
-
24
(340)
(361)
(701)
(677)
2022
$’000
20,843
2021
$’000
16,797
Weighted average number of ordinary shares
Note
2022
2021
Issued ordinary shares at 1 July
Effect of shares issued during the year
Weighted average number of ordinary shares at 30 June
100,179,774 100,087,694
F3
76,771
76,230
100,256,545 100,163,924
Basic and diluted earnings per share
20.79 cents
16.77 cents
The impact of the performance rights issued by the Group during the year and in prior years was not material to the
calculation of the Group’s diluted earnings per share.
67
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION C OPERATING ASSETS AND LIABILITIES
C1 Cash and cash equivalents
Bank balances
Environmental, Social and Governance Term Deposit
Cash and cash equivalents in the statement of cash flows
Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Research & development tax credit
(Gain)/loss on derivatives
Share based remuneration
(Profit)/Loss on sale of property, plant and equipment
Changes in:
Trade and other receivables
Inventories
Trade and other payables
Other assets
Employee benefits
Other
Tax balances
Net cash from operating activities
C2 Trade and other receivables
Trade receivables
Trade receivables due from related parties (refer Note H2)
2022
$’000
16,499
5,000
21,499
2021
$’000
19,857
-
19,857
20,843
16,797
7,225
(1,540)
(225)
489
20
(4,472)
(6,257)
2,199
(1,201)
740
(2,563)
1,783
17,041
13,813
-
13,813
5,739
(732)
563
255
22
(2,409)
39
563
1,266
621
1,266
(115)
26,409
9,335
6
9,341
Provisioning for trade receivables has been assessed considering known factors consistent with prior reporting periods,
resulting in a bad debt provision of $133,370 (2021: nil).
68
Financial StatementsPWR Holdings Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION C OPERATING ASSETS AND LIABILITIES (continued)
C3 Inventories
Raw materials
Work in progress
Finished goods
Consumables
Allowance for inventory obsolescence
2022
$’000
6,039
1,050
6,533
137
(1,013)
12,746
2021
$’000
3,062
672
3,626
115
(986)
6,489
The cost of inventories sold and recognised as an expense during the year end 30 June 2022 was $20,850,798
(2021: $18,012,544).
C4 Other assets
Prepayments
Other assets
C5 Property, plant and equipment
Plant and equipment – at cost
Accumulated depreciation
Motor vehicles – at cost
Accumulated depreciation
Land and buildings – at cost
Accumulated amortisation
Under construction
2,125
722
2,847
829
817
1,646
46,377
42,188
(20,766)
(16,362)
25,611
25,826
385
(340)
45
11,689
(5,564)
6,125
813
377
(313)
64
11,590
(3,674)
7,916
474
32,594
34,280
69
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION C OPERATING ASSETS AND LIABILITIES (continued)
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:
2022
Cost
Land and
buildings
$’000
Plant and
equipment
$’000
Motor
vehicles
$’000
Under
construction
$’000
Total
$’000
Opening balance
11,590
42,188
377
Additions
Transfers
Disposals
Effect of movements in exchange rates
-
-
-
99
82
4,634
(1,383)
856
-
-
-
8
Closing balance
11,689
46,377
385
474
4,941
(4,634)
-
32
813
-
-
-
-
-
813
54,629
5,023
-
(1,383)
995
59,264
20,349
(1,287)
7,225
383
26,670
32,594
3,674
-
1,890
-
5,564
6,125
16,362
(1,287)
5,317
374
20,766
25,611
313
-
18
9
340
45
Land and
buildings
$’000
Plant and
equipment
$’000
Motor
vehicles
$’000
Under
construction
$’000
Total
$’000
10,752
1,053
-
-
(215)
11,590
1,824
-
1,867
(17)
3,674
7,916
29,324
279
13,351
(52)
(714)
42,188
12,809
(26)
3,858
(279)
16,362
25,826
351
36
-
-
(10)
377
309
-
14
(10)
313
64
3,811
10,049
(13,351)
-
(35)
474
-
-
-
-
-
474
44,238
11,417
-
(52)
(974)
54,629
14,942
(26)
5,739
(306)
20,349
34,280
Accumulated depreciation
Opening balance
Disposals
Depreciation
Effect of movements in exchange rates
Closing balance
Net carrying amount
2021
Cost
Opening balance
Additions
Transfers
Disposals
Effect of movements in exchange rates
Closing balance
Accumulated depreciation
Opening balance
Disposals
Depreciation
Effect of movements in exchange rates
Closing balance
Net carrying amount
The land and buildings balances comprise right-of-use assets with carrying value of $6,124,583 (2021: $7,915,607).
70
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION C OPERATING ASSETS AND LIABILITIES (continued)
Right-of-use assets
The Group leases its office and factory facilities where leases typically run for between 5 years and 10 years. The property
leases include extension options exercisable by the Group between 3 and 6 months before the expiry of the non-cancellable
contract period. Where practicable, the Group seeks to include extension options in new leases to provide operational
flexibility and certainty. Extension options held are exercisable only by the Group and not by the lessors.
The Group assesses at the lease commencement dates whether it is reasonably certain to exercise the extension options.
The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant
changes in circumstances within its control.
Right-of-use assets relate to leased properties that do not meet the definition of investment property and are presented
as property, plant and equipment and included in land and buildings.
2022
Right of Use Lease Assets:
Balance at beginning of year
Additions to right-of-use assets
Amortisation charge for the year
Effect of movements in exchange rates
Balance at end of year
2021
Right of Use Lease Assets:
Balance at beginning of year
Additions to right-of-use assets
Amortisation charge for the year
Effect of movements in exchange rates
Balance at end of year
Amounts recognised in Profit or Loss
Deemed interest charge for the year
Amortisation charge for the year
Expenses relating to short term leases
Land and
Buildings
$’000
7,916
-
(1,890)
99
6,125
Land and
Buildings
$’000
8,928
1,053
(1,850)
(215)
7,916
2021
$’000
229
1,850
8
2,087
71
2022
$’000
193
1,890
12
2,095
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION C OPERATING ASSETS AND LIABILITIES (continued)
C6 Intangible assets
2022
Cost
Accumulated amortisation
2021
Cost
Accumulated amortisation
Reconciliations
2022
Carrying amount at beginning of year
Effect of movements in exchange rates
Balance at the end of the year
2021
Carrying amount at beginning of year
Effect of movements in exchange rates
Balance at the end of the year
Goodwill
$’000
Trademarks
$’000
Total
$’000
4,042
10,985
15,027
-
-
-
4,042
10,985
15,027
3,930
10,985
14,915
-
-
-
3,930
10,985
14,915
3,930
10,985
14,915
112
-
112
4,042
10,985
15,027
4,049
(119)
3,930
10,985
15,034
-
10,985
(119)
14,915
Impairment
For impairment testing, goodwill and trademarks are allocated to the Group’s cash generating units (CGUs) as follows:
PWR Performance Products
PWR C&R
2022
$’000
2,111
8,432
2021
$’000
2,122
8,432
10,543
10,554
2022
$’000
1,931
2,553
4,484
2021
$’000
1,808
2,553
4,361
Goodwill
Trademarks
72
Financial StatementsPWR Holdings Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION C OPERATING ASSETS AND LIABILITIES (continued)
Impairment
For impairment testing, the recoverable amount of each CGU was based on its value in use, determined by discounting the
future cash flows to be generated from the continuing use of each CGU. The carrying amount of each CGU was determined
to be less than its recoverable amount and accordingly, no impairment loss was recognised.
Value in use is calculated based on the present value of the cash flow projections over a 5 year period and include a terminal
value at the end of year 5. The cash flow projections over the 5 year period are based on the Group’s budget for 2023 and
growth over the forecast periods based on the Group’s business plans and management’s assessment of the impacts of
underlying economic conditions, past performance and other factors on each CGU’s financial performance.
The cashflow projections for each CGU include management’s estimates of the expected growth from the Group’s
involvement in OEM programs as a cooling assembly supplier, growth in aerospace and defence, as well as growth into the
automotive aftermarket.
The long-term growth rate used in calculating the terminal value is based on long term inflation estimates for the country and
industry in which each CGU operates.
The cash flows are discounted to their present value using a pre-tax discount rate based on a weighted average cost of capital
adjusted for country and industry specific risks associated with each CGU.
Management have considered sensitivities to the recoverable amount. No reasonable possible change in the assumptions
would result in an impairment of the assets in either CGU.
Key assumptions used in the estimation of value in use over the 5 year period including the terminal value were:
PWR Performance Products
Discount rate – pre tax
Terminal value growth rate
Revenue – compound annual growth rate
Average EBITDA margin
PWR C&R
Discount rate – pre tax
Terminal value growth rate
Revenue – compound annual growth rate
Average EBITDA margin
2022
%
2021
%
12.2%
2.0%
5.0%
32.2%
10.4%
2.0%
10.0%
18.4%
12.0%
2.0%
4.4%
37.4%
11.6%
2.0%
8.1%
15.8%
73
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION C OPERATING ASSETS AND LIABILITIES (continued)
C7 Trade and other payables
Trade and other payables are carried at amortised cost.
Trade payables
Other payables
2022
$’000
2,885
4,647
7,532
2021
$’000
1,335
3,998
5,333
C8 Contract liabilities
The contract liabilities primarily relate to the advance consideration received from customers for performance obligations, for
which revenue is recognised over time
The amount of revenue recognised from performance obligations satisfied in 2022 was $905,000 (2021: $450,000).
Less than one year
Between one and 2 years
Between 2 and 5 years
Balance at end of year
SECTION D EMPLOYEE BENEFITS
D1 Employee benefits
Current
Annual leave liability
Long service leave liability
Non-current
Long service leave liability
2022
$’000
907
440
-
1,347
2021
$’000
901
901
450
2,252
2022
$’000
2021
$’000
2,478
846
3,324
1,979
647
2,626
348
306
During the year ended 30 June 2022, the Group contributed $2,029,863 (2021: $1,432,382) to defined contribution plans.
These contributions are included in employee expenses in the statement of profit or loss and other comprehensive income.
D2 Key management personnel compensation
Key management personnel compensation comprised the following:
Short-term employee benefits
Termination benefits
Post-employment benefits
Share based payments
Other long-term benefits
74
2022
$’000
1,996
-
100
154
21
2021
$’000
1,606
98
130
109
37
2,271
1,980
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION D EMPLOYEE BENEFITS (continued)
D3 Share based payments
During the year the Board granted performance rights to employees under the terms of the Performance Rights Plan
(the Plan) approved at the Company’s Annual General Meeting on 21 October 2016.
Under the Plan, the Board may issue employees conditional performance rights for no consideration. Subject to the
achievement of vesting conditions, the performance rights entitle the employee to receive ordinary shares in the Company at
no cost.
Vesting of the performance rights approved during the year is subject to meeting a 3 year service condition and achievement
of performance hurdles (based on either an EPS growth target or total shareholder return (TSR) ranking). The performance
period for the rights issued during FY2022 is from 1 July 2021 to 30 June 2024.
Performance rights issued to key management personnel (KMP) and non-key management personnel (Non KMP) during the
year are 50% subject to the EPS performance hurdle and 50% subject to the TSR performance hurdle. At 30 June 2022, all of
these performance rights remain on issue.
The EPS performance hurdle for the performance rights issued after 30 June 2020 is based on the compound annual growth
rate in EPS. The EPS performance hurdle for performance rights issued prior to 30 June 2020 is based on the 3 year growth in
EPS. At 30 June 2022, there were 84,294 performance rights that had been issued in prior years that are subject to the 3 year
growth in EPS performance hurdle.
In accordance with the Group’s accounting policy, the grant date fair values of the rights issued will be recognised as an
expense over the vesting period. An expense of $488,566 (2021: $400,899) was recognised during the year and included in
“employee expenses” in the statement of profit or loss and other comprehensive income.
Measurement of fair values
The fair value of the TSR component of the performance rights has been measured using a Monte Carlo simulation. The fair
value of the EPS component of the performance rights has been measured using the Black Scholes formula. The inputs used
in the measurement of the fair values at grant date of the equity-settled share-based payments were as follows:
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility
Risk free rate
Expected life
Expected dividends
2022
2021
TSR
component
EPS
component
TSR
component
EPS
component
$8.15
$8.49
Nil
40%
0.98%
$9.31
$8.49
Nil
N/A
N/A
2.84 Years
2.84 Years
1.32%
1.32%
$4.33
$6.24
Nil
36%
0.35%
3 Years
1.77%
$6.00
$6.24
Nil
N/A
N/A
3 Years
1.77%
Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price prior to the
grant date.
75
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION D EMPLOYEE BENEFITS (continued)
Reconciliation of the number of outstanding performance rights
2022
2021
KMP
Non KMP
Total
KMP
Non KMP
Total
Opening outstanding balance
Granted during the year
82,259
32,878
225,493
307,752
48,980
81,858
171,536
27,599
175,770
79,587
347,306
107,186
Exercised during the year
(31,417)
(84,855)
(116,272)
(93,633)
(29,864)
(123,497)
Forfeited during the year
-
-
-
(23,243)
-
(23,243)
Closing outstanding balance
83,720
189,618
273,338
82,259
225,493
307,752
Vested and exercisable at 30 June
-
-
-
-
-
-
Reconciliation of share based payment reserve
Opening balance
Employee expenses
Shares issued during the year
Closing balance
SECTION E TAXATION
E1 Income tax expense
Current tax expense
Current period
(Over)/under provision in prior period
Deferred tax expense
Origination and reversal of temporary differences
Total income tax expense
Numerical reconciliation between tax expense and pre-tax accounting profit
Profit for the period
Total income tax expense
Profit excluding income tax
Income tax using the Company’s domestic tax rate of 30%
Tax effect of R&D benefit
Effect of tax rates in foreign jurisdictions
Over provision of tax on Pay Check Program in prior period
Other
76
2022
$’000
2021
$’000
627
489
(261)
855
524
401
(298)
627
2022
$’000
2021
$’000
6,398
(23)
6,375
1,274
7,649
20,843
7,649
28,492
8,548
(462)
(511)
-
74
7,649
5,921
(536)
5,385
365
5,750
16,797
5,750
22,547
6,764
(217)
(392)
(460)
55
5,750
Financial StatementsPWR Holdings Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION E TAXATION (continued)
E2 Tax assets and liabilities
Current tax assets and liabilities
The current tax liability of $218,140 (2021: $2,000,811) represents the amount of income tax payable in respect of current and
prior periods to the relevant tax authority.
Net balance
at 1 July
$’000
Recognised in
profit or loss
$’000
Recognised
through
Equity
$’000
Net
$’000
Deferred tax
assets
$’000
Deferred tax
liabilities
$’000
2022
Property, plant and equipment
Intangible assets
Employee benefits
Accruals
Inventories
Unrealised foreign exchange
Tax losses
Other items
Net tax assets/(liabilities)
2021
(2,136)
(766)
997
52
372
(42)
1,364
929
770
Property, plant and equipment
(1,444)
Intangible assets
Employee benefits
Accruals
Inventories
Unrealised foreign exchange
Tax losses
Other items
Net tax assets/(liabilities)
(747)
784
8
344
(368)
2,293
6
876
(363)
-
275
(4)
209
(15)
(972)
(404)
(1,274)
(692)
(19)
213
44
28
67
(929)
923
(365)
-
-
-
-
-
(163)
-
-
(163)
-
-
-
-
-
259
-
-
259
(2,499)
(766)
1,272
48
581
(220)
392
525
(667)
(2,136)
(766)
997
52
372
(42)
1,364
929
770
-
-
1,272
48
680
-
392
1,058
3,450
-
-
997
52
490
1
1,364
1,337
4,241
(2,499)
(766)
-
-
(99)
(220)
-
(533)
(4,117)
(2,136)
(766)
-
-
(118)
(43)
-
(408)
(3,471)
The Group’s tax losses recognised as a deferred tax asset arise from its US operations. Management considers that based on
the Group’s plans for this business, it is probable that future taxable profits will be generated against which the tax losses can
be recovered.
77
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION F CAPITAL STRUCTURE AND BORROWINGS
F1 Lease liabilities
2022
$’000
2021
$’000
Current
Lease liability
Non-current
Lease liability
Total lease liability
1,903
1,903
4,839
4,839
6,742
Reconciliation of movements in liabilities to cash flows arising from financing activities
Non-cash changes
2021
Opening
Carrying
Value
$’000
Cash
flows
$’000
Foreign
exchange
movements
$’000
Deemed
Interest
movements
$’000
Right-of-use
movements
$’000
Lease liabilities
8,456
(2,016)
Total liabilities from financing
facilities
8,456
(2,016)
109
109
193
193
-
-
2020
Opening
Carrying
Value
$’000
3,585
5,000
9,213
Cash
flows
$’000
(3,585)
(5,000)
(1,819)
Non-cash changes
Foreign
exchange
movements
$’000
Deemed
Interest
movements
$’000
Right-of-use
movements
$’000
-
-
(220)
-
-
229
229
-
-
1,053
8,456
1,053
8,456
17,798
(10,404)
(220)
1,789
1,789
6,667
6,667
8,456
2022
Closing
Carrying
Value
$’000
6,742
6,742
2021
Closing
Carrying
Value
$’000
-
-
Long term borrowings (GBP)
Long term borrowings (AUD)
Lease liabilities
Total liabilities from financing
facilities
78
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION F CAPITAL STRUCTURE AND BORROWINGS (continued)
Finance facilities
The terms and conditions of the Group’s finance facilities were as follows:
Facility
Corporate credit card
Corporate credit card
Finance lease
Multi-currency
facility
2022
2021
Currency
Nominal
interest rate
Maturity
AUD
USD
AUD
Variable
Variable
Variable
2023
-
2023
Facility
limit
$’000
100
100
7,500
AUD
Variable
2023
10,000
Carrying
amount
$’000
-
-
-
-
Facility
limit
$’000
100
100
7,500
10,000
Carrying
amount
$’000
-
-
-
-
Finance facilities are secured by charges over the Group’s assets. Under the terms of the agreements, the Company and
several of its wholly owned subsidiaries jointly and severally guarantee and indemnify the lender in relation to the borrower’s
obligations.
F2 Deferred income
Less than one year
Between one and 5 years
Balance at end of year
Note
I15
2022
$’000
469
1,219
1,688
2021
$’000
443
1,746
2,189
Government grants
Government grants received by the Group for the purchase of equipment have been recognised as deferred income, with the
deferred income amortised over the useful life of the equipment in relation to which the grant was provided.
F3 Capital and reserves
Share capital
Ordinary shares
2022
No. of
shares
$’000
2021
No. of
shares
$’000
Balance at beginning of year
100,179,774
26,223 100,087,694
26,071
Issue of shares on vesting of FY18 performance rights
Issue of shares on vesting of FY19 performance rights
-
116,272
-
261
92,080
-
152
-
Balance at end of year
100,296,046
26,484
100,179,774
26,223
Capital management
The Board aims to maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future
development of the business. The Board of Directors monitors the capital base as well as the level of dividends to ordinary
shareholders. There were no changes in the Group’s approach to capital management during the year.
79
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION F CAPITAL STRUCTURE AND BORROWINGS (continued)
F4 Dividends
Dividends recognised by the Company are:
2022
Interim 2022 ordinary
Final 2021 ordinary
Total amount
2021
Interim 2021 ordinary
Final 2020 ordinary
Total amount
Cents
per share
$
Total
amount
$’000
Franked/
unfranked
Date of
payment
3.50
3,510
Franked
25 March 2022
6.00
6,011
9,521
Franked
24 September
2021
2.80
2,805
Franked
26 March 2021
4.00
4,007
6,812
Franked
25 September
2020
Franked dividends declared or paid during the year were fully franked at the tax rate of 30 percent.
Dividend franking accounts
The 30 percent franking credits by Group entity:
PWR Holdings Limited
PWR IP Pty Ltd
P.W.R Performance Products Pty Ltd
Total franking credits available at 30 June
2022
$’000
1,155
845
3,132
5,132
2021
$’000
943
1,126
2,116
4,185
The ability to utilise the franking credits is dependent upon the ability to declare dividends.
Recognition and measurement
Dividends are recognised as a liability in the period in which they are declared.
The following dividend was declared by the Directors since the end of the financial year:
Final 2022 ordinary dividend
Total amount
Cents
per share
8.50
Total
amount
$’000
8,525
8,525
Date of
payment
23 September 2022
The financial effect of these dividends has not been brought to account in the consolidated financial statements for the year
end 30 June 2022 and will be recognised in subsequent financial reports.
F5 Commitments
At 30 June 2022, the Group had agreed to purchase plant and equipment for $5.0 million (2021: $3.3 million) within
12 months.
80
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION G GROUP STRUCTURE
G1 Parent entity information
As at and throughout the financial year ended 30 June 2022, the parent and ultimate parent entity of the Group was PWR
Holdings Limited.
Statement of profit or loss and other comprehensive income
Profit/(Loss) after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
2022
$’000
9,252
9,252
11
32,330
32,341
189
-
189
2021
$’000
8,188
8,188
77
31,976
32,053
-
-
-
32,152
32,053
26,484
26,223
854
4,814
32,152
627
5,203
32,053
Contingent liabilities
The parent entity is party to a cross guarantee and indemnity in relation to the Group’s borrowing arrangements, refer Note F1.
The parent had no other contingent liabilities at 30 June 2022 or 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in the notes.
G2 Controlled entities
The following entities are subsidiaries of the parent entity, the results of which are included in the consolidated financial
statements of the Group.
PWR Performance Products Pty Ltd
PWR IP Pty Ltd
PWR Europe Limited
C&R Racing Inc
PWR EU B.V.
Ownership interest
Country of
incorporation
Australia
Australia
UK
USA
Netherlands
2022
%
100
100
100
100
100
2021
%
100
100
100
100
100
81
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION G GROUP STRUCTURE (continued)
G3 Deed of cross guarantee
Pursuant to ASIC Corporations (wholly owned companies) Instrument 2016/785, the wholly owned subsidiaries listed below
are relieved from the Corporations Act 2001 requirements for the preparation, audit and lodgement of financial reports, and
Directors’ reports.
It is a condition of the Instrument that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The
effect of the Deed is that the Company guarantees to each creditor, payment in full of any debt in the event of winding up of
any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of
the Act, the Company will only be liable in the event that after 6 months any creditor has not been paid in full. The subsidiaries
have also given similar guarantees in the event that the Company is wound up.
The subsidiaries subject to the Deed are:
PWR Performance Products Pty Ltd
PWR IP Pty Ltd
Both subsidiaries became a party to the Deed on 18 May 2017.
A consolidated statement of comprehensive income and consolidated statement of financial position, comprising the
Company and controlled entities which are a party to the Deed, after eliminating all transactions between parties to the Deed
of Cross Guarantee, is set out below.
Statement of profit or loss and other comprehensive income
Revenue
Other income
Raw materials and consumables used
Employee expenses
Occupancy expenses
Other expenses
Profit before depreciation, net finance costs and income tax
Depreciation and amortisation
Profit before net finance costs and income tax
Finance income
Finance costs
Net finance income/(costs)
Profit before income tax
Income tax expense
Profit for the year attributable to equity holders of the parent
Total comprehensive income for the year
Retained earnings at beginning of year
Transfers to and from reserves
Dividends recognised during the year
Retained earnings at end of year
82
2022
$’000
70,637
1,564
2021
$’000
52,127
2,764
(11,743)
(8,696)
(28,897)
(22,233)
(523)
(3,916)
27,122
(5,628)
21,494
1,593
(1,374)
219
21,713
(5,829)
15,884
15,884
29,848
(92)
(9,521)
36,119
(378)
(2,511)
21,073
(4,290)
16,783
1,580
(1,917)
(337)
16,446
(4,833)
11,613
11,613
25,060
(13)
(6,812)
29,848
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION G GROUP STRUCTURE (continued)
Statement of financial position
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Related party loans
Investments in subsidiaries
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Loans and borrowings
Employee benefits
Deferred income
Tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Loans and borrowings
Deferred income
Deferred tax liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
2022
$’000
2021
$’000
17,481
2,404
8,011
2,443
9,714
7,684
4,172
1,278
30,339
22,848
23,422
11,751
6,535
7,142
3,366
52,216
82,555
3,955
1,287
2,914
1,342
(348)
145
9,295
2,905
1,509
3,785
348
8,547
17,842
64,713
26,484
2,110
36,119
64,713
26,213
11,751
5,990
7,142
3,486
54,582
77,430
2,503
1,209
2,451
1,313
1,003
124
8,603
4,282
2,930
3,947
306
11,465
20,068
57,362
26,223
1,291
29,848
57,362
83
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION H OTHER INFORMATION
H1 Financial risk management
The Group has exposure to the following risks arising from financial instruments:
credit risk
–
–
liquidity risk
– market risk
The note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing risk, and the Group’s management of capital.
Risk management framework
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework.
The Group’s risk management activities are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management activities are reviewed to reflect
changes in market conditions and the Group’s operations. The Group aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base, including the default risk of the
industry and country in which customers operate.
Management assesses each new customer for creditworthiness before the Group’s standard payment and delivery terms and
conditions are offered.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
end of the reporting period was as follows.
Cash and cash equivalents
Trade and other receivables
Note
C1
C2
Carrying amount
2022
$’000
21,499
13,813
35,312
2021
$’000
19,857
9,341
29,198
Cash and cash equivalents
The Group held cash and cash equivalents of $21,498,660 at 30 June 2022 (2021: $19,857,387), which represents its maximum
credit exposure on these assets. The cash and cash equivalents are held with bank and financial institution counterparties,
which are rated A to AA-, based on independent rating agency ratings.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the demographics of the Group’s customer base, including the default risk of the country in
which customers operate, as these factors may have an influence on credit risk.
84
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION H OTHER INFORMATION (continued)
Exposure to credit risk
The maximum exposure to credit risk for trade and other receivables at the end of the reporting period by geographic region
was as follows:
Australia
UK
USA
The ageing of the Group’s trade and other receivables at the end of the reporting date was as follows:
Not past due
Past due 1-30 days
Past due 31-60 days
Past due > 61 days
Provision for bad debt
Carrying amount
2022
$’000
1,312
7,150
5,351
13,813
9,385
3,658
714
189
13,946
(133)
13,813
2021
$’000
2,495
5,152
1,694
9,341
8,363
830
63
85
9,341
-
9,341
Management have assessed the outstanding debtor balances considering known factors including the economic
environment and expected credit losses and have taken up a bad debt provision for $133,370 (2021: nil). Management
believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historic
payment behaviour and analysis of customer credit risk.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.
In addition, the Group maintains the following lines of credit: (refer Note F1)
– A$10,000,000 foreign currency advance facility (multicurrency);
– A$7,500,000 asset finance facility;
– A$100,000 corporate credit card facility; and
– USD$100,000 corporate credit card facility.
85
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION H OTHER INFORMATION (continued)
The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including
estimated interest payments.
2022
Trade and other payables
Right of use liabilities
2021
Trade and other payables
Right of use liabilities
Note
Carrying
amount
$’000
Contractual cash flows
Total
$’000
12 months
$’000
1-5 years
$’000
C7
F1
C7
F1
7,532
6,742
(7,532)
(6,871)
14,274
(14,403)
5,333
8,456
13,789
(5,333)
(8,660)
(13,993)
(7,532)
(1,903)
(9,435)
(5,333)
(1,789)
(7,122)
-
(4,968)
(4,968)
-
(6,871)
(6,871)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.
Currency risk
The Group is exposed to currency risk on its financial assets and liabilities arising from sales, purchases and borrowings that
are denominated in a currency other than the respective functional currencies of Group entities, being the Australian dollar
(AUD), Pound Sterling (GBP) and US dollar (USD). The currencies in which these transactions are denominated are primarily
AUD, GBP and USD.
Under the Group’s financial risk management policies, the Group may use derivative financial instruments to manage its
foreign currency risks. At 30 June 2022, the Group had entered into participating forward contracts to manage its exposure
to sales denominated in GBP. These contracts, which settle monthly until 30 September 2022, have a total notional amount of
£3.1 million (2021: £3.9 million) and have been accounted for at fair value through the profit and loss. The fair value at year end
was a liability of $8,846 (2021: $54,240 liability).
During the year ended 30 June 2022, the Group recognised $73,679 in realised losses (2021: $202,892 gain) and $225,444
in unrealised gains on derivatives (2021: $563,280 loss). This has been included in finance income or costs in the income
statement.
Exposure to currency risk
A summary of quantitative data about the Group’s exposure to currency risk on financial assets and liabilities at year end is as
follows:
30 June 2022
30 June 2021
Note
C2
C7
AUD
$’000
1,592
GBP
£’000
3,847
(1,099)
(311)
USD
$’000
3,838
(794)
AUD
$’000
2,574
(625)
GBP
£’000
2,722
(254)
USD
$’000
1,302
(419)
493
3,536
3,044
1,949
2,468
883
-
3,100
-
-
3,900
-
Trade receivables
Trade payables
Net statement of
financial position
exposure
Notional amount
of foreign currency
derivatives
86
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION H OTHER INFORMATION (continued)
Sensitivity analysis
At 30 June, exchange rates used to translate the above were 0.5676 to the GBP and 0.6886 to the USD (2021: 0.5426 to
the GBP and 0.7512 to the USD). A strengthening (weakening) of the GBP or USD against the AUD at 30 June would have
affected the measurement of financial instruments denominated in a foreign currency and increased or (decreased) equity
and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the
Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in
particular interest rates, remain constant and ignores any impact of forecast sales and purchases. The analysis is performed on
the same basis for 2021, using consistent foreign exchange rate variances, as indicated below.
30 June 2022
GBP (10% movement)
USD (10% movement)
30 June 2021
GBP (10% movement)
USD (10% movement)
Profit or loss (net of tax)
Equity (net of tax)
Strengthening
$’000
Weakening
$’000
Strengthening
$’000
Weakening
$’000
(436)
(309)
(318)
(82)
396
281
289
75
(436)
(309)
(318)
(82)
396
281
289
75
Interest rate risk
At the end of the reporting period the interest rate profile of the Group’s interest-bearing financial instruments as reported to
the management of the Group was as follows:
Fixed rate instruments
Financial assets
Financial liabilities
Variable rate instruments
Financial assets
Financial liabilities
Nominal amount
2022
$’000
5,000
-
5,000
2021
$’000
-
-
-
16,499
19,857
-
-
16,499
19,857
C1
F1
C1
F1
87
Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION H OTHER INFORMATION (continued)
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the beginning of reporting period would have increased or (decreased) equity
and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant.
30 June 2022
Variable rate instruments
Cash flow sensitivity (net)
30 June 2021
Variable rate instruments
Cash flow sensitivity (net)
Profit or loss (net of tax)
Equity (net of tax)
100bp
increase
$’000
100bp
decrease
$’000
100bp
increase
$’000
100bp
decrease
$’000
150
150
139
139
(150)
(150)
(139)
(139)
150
150
139
139
(150)
(150)
(139)
(139)
Fair values
The fair values of the Group’s financial assets and liabilities approximate their carrying amounts recognised in the statement of
financial position.
H2 Related party information
Certain key management personnel, or their related parties, hold positions in other entities that result in them having control,
joint control or significant influence over the financial or operating policies of these entities.
A number of these entities transacted with the Group during the year. The terms and conditions of the transactions with key
management personnel and their related parties were no more favourable than those available, or which might reasonably be
expected to be available, on similar transactions to non-key management personnel related entities on an arm’s length basis.
The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which
they have control, joint control or significant influence were as follows:
Entity
Transaction
Bayswater Road Radiators Pty Ltd (i)
Sales of goods
Triple Eight Race Engineering Pty Ltd (ii)
Sales of goods
Triple Eight Race Engineering Pty Ltd (ii)
Purchases of goods
Transaction values
during the year
Balance outstanding
Receivable/(Payable)
2022
$’000
2021
$’000
N/A
81
(20)
51
5
-
2022
$’000
N/A
-
-
2021
$’000
6
-
-
(i) Bayswater Road Radiators Pty Ltd is no longer an entity associated with Kees Weel, which purchased goods from the Group.
(ii) Triple Eight Race Engineering Pty Ltd is an entity associated with Roland Dane, which purchases goods from and sells goods to the Group.
88
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION H OTHER INFORMATION (continued)
H3 Auditor Remuneration
Audit services
Auditors of the Group – KPMG
Audit and review of financial statements
Accountability GB
2022
$
2021
$
158,900
143,500
Audit and review of financial statements – controlled entities
19,828
15,837
Other services
Auditors of the Group - KPMG
IT Advisory services
-
21,450
H4 Subsequent events
The Board declared a fully franked final ordinary dividend of 8.50 cents per share. The financial effect of the 2022 declared
final dividend has not been brought to account in the consolidated financial statements for the year ended 30 June 2022.
Other than the matter noted above, there has not arisen in the interval since the end of the financial year and the date of this
report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Group, to
affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group in future
financial years.
H5 New accounting standards
Changes in accounting policies -new standards and interpretations adopted
The accounting policies applied in these financial statements are the same as those applied in the Group’s consolidated
financial statements as at and for the year ended 30 June 2021. A number of other new standards are effective from 1 July
2021 but they did not have a material effect on the Group’s financial statements.
New Standards and Interpretations Not Yet Adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2022
reporting and have not been early adopted by the Group.
The most significant of these to the Group are AASB 2020-3 Amendments to Australian Accounting Standards – Annual
Improvements and Other Amendments, and AASB 2020-1 Amendments to Australian Accounting Standards – Classification
of Liabilities as Current or Non-current.
The Group has not yet considered the estimated impact that these Amendments to Australian Accounting Standards will
have on its consolidated financial statements.
89
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Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Income tax
Inventories
SECTION I SIGNIFICANT ACCOUNTING POLICIES
1. Basis of consolidation
2. Foreign currency
3. Revenue
4. Employee benefits
5. Finance income and finance costs
6.
7.
8. Property, plant and equipment
9.
Intangible assets and goodwill
10. Share capital
11. Provisions
12. Leases
13. Financial instruments
14. Fair value measurement
15. Government Grants
1 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it 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 over the entity. The
financial statements of subsidiaries are included in the consolidated financial statements from the date on which control
commences until the date on which control ceases.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated.
2 Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of the Groups’ entities at exchange
rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the
functional currency at the exchange rate at transaction or balance date.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional
currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on
historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
Foreign currency differences are generally recognised in profit or loss.
The consolidated assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition are translated to the functional currency at exchange rates at the reporting date. The income and expenses of
foreign operations are translated to the functional currency (AUD) at exchange rates at the dates of the transactions.
Foreign currency translation differences are recognised in other comprehensive income and presented in the foreign
currency translation reserve in equity.
3 Revenue
Sale of goods
For the sale of manufactured products, revenue is recognised at the point in time that the performance obligation is satisfied
which is generally on shipment of the goods to the customer from the Group’s warehouse.
Rendering of services
For services, including wind tunnel testing and freight, revenue is recognised over time as those services are provided.
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Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION I SIGNIFICANT ACCOUNTING POLICIES (continued)
4 Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount
expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past services
provided by the employee and the obligation can be estimated reliably.
Long-term employee benefits
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefits that employees have
earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value.
Re-measurements are recognised in profit or loss in the period in which they arise.
Share based payment transactions
The grant-date fair value of share-based payment awards granted to employees is recognised as an expense, with a
corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The
amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market
performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the
number of awards that meet the related service and non-market performance conditions at the vesting date.
Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and
when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the
reporting date, then they are discounted.
Defined contribution funds
Obligations for contributions to defined contribution plans are expensed as the related service is provided.
5 Finance income and finance costs
Finance income comprises interest income on funds invested and changes in the fair value of derivative financial instruments
at fair value through profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest
method.
Finance costs comprise interest expense on borrowings and changes in the fair value of derivative financial instruments at fair
value through profit or loss. Interest expense is recognised using the effective interest method.
Foreign currency gains and losses on monetary assets and liabilities are reported on a net basis as either finance income or
finance costs depending on whether foreign currency movements are in a net gain or net loss position.
6 Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current and deferred tax is recognised in
the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, or in other
comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the balance date, and any adjustments to tax payable in respect of previous years. Current tax payable also includes any tax
liability arising from the declaration of dividends.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: initial recognition of goodwill, the initial recognition of assets and liabilities that
affect neither accounting nor taxable profit, and difference relating to investments in subsidiaries to the extent that they will
probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at
the balance sheet date.
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For the year ended 30 June 2022
SECTION I SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
In determining the amount of current and deferred tax the Group considers the impact of uncertain tax positions and whether
additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax
years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies
on estimates and assumptions and may involve a series of judgements about future events. New information may become
available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such as changes to
tax liabilities will impact tax expense in the period that such a determination is made.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend.
Inventories
7
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the
inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.
In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads
based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
8 Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes
the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their
intended use, and the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised
borrowing costs. Cost also may include transfers from other comprehensive income of any gain or loss on qualifying cash flow
hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of
the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment and are recognised net within other income in profit or loss.
Subsequent costs
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure
will flow to the Group. Ongoing repairs and maintenance are expensed as incurred.
Depreciation
Depreciation is calculated to write off the cost of property, plant and equipment less their estimated residual values using
the straight-line and/or diminishing value basis over their estimated useful lives, and is generally recognised in profit or loss.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the
Group will obtain ownership by the end of the lease term.
92
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION I SIGNIFICANT ACCOUNTING POLICIES (continued)
The estimated useful lives are as follows:
Land and buildings
Plant and equipment
Motor vehicles
2022
2021
10-27 years
10-27 years
2-10 years
2-10 years
4-6 years
4-6 years
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
9 Intangible assets and goodwill
Goodwill
Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the
acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. At the acquisition date, any
goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination’s synergies.
Goodwill is not amortised.
Trademarks
Separately acquired trademarks are measured initially at cost of acquisition. Trademarks acquired in a business combination
are recognised at fair value at the acquisition date. Fair value is determined using the relief from royalty method.
The Group’s trademarks are subsequently carried at cost less impairment losses and are not amortised as they are considered
to have an indefinite useful life.
Research and development
Research expenditure is recognised as an expense as incurred. Concessional tax benefits and incentives receivable are
recognised as other income based on an estimate of the eligible research and development expenditure incurred during the
financial year. Costs incurred on development projects are recognised as intangible assets only when it is probable that a
project will, after assessment of its commercial and technical feasibility, be completed and generate future economic benefits
and can be measured reliably.
Impairment of non financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. Goodwill and trademarks with an indefinite life are tested annually for impairment.
An impairment loss is recognised if the carrying amount of an asset or its related cash generating unit (CGU) exceeds its
estimated recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
For impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of other assets
in the CGU on a pro rata basis. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss
is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
10 Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to issue of ordinary shares are recognised
as a deduction from equity, net of any related income tax benefit.
The Company does not have authorised capital or par value in respect of its issued shares. All shares are fully paid. The
holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to 1 vote per share
at meetings of the Company.
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For the year ended 30 June 2022
SECTION I SIGNIFICANT ACCOUNTING POLICIES (continued)
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations, as well as the effective portion of any foreign currency differences arising from hedges of a
net investment in a foreign operation.
Share based payments reserve
The share-based payments reserve comprises the grant-date fair value of share-based payment awards granted to
employees.
11 Provisions
Warranties
A provision for warranties is recognised when the underlying products are sold, based on historical warranty data and a
weighting of possible outcomes against their assumed possibilities.
Provision for warranties relates to products sold during the current and prior financial years. The provision is based on
estimates made from historical warranty data. The Group expects to settle most of the liability over the next year.
12 Leases
Leased assets
The Group, as a lessee, assesses whether a contract is or contains a lease. A contract is, or contains, a lease if the contract
conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
The Group recognises right of use assets and lease liabilities for most leases – i.e. these leases are on-balance sheet. Right
of use assets are presented as Property, Plant and Equipment. However, the Group has elected not to recognise right of use
assets and liabilities for some leases of low value assets.
The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the
lease term.
The Group recognises a right of use asset and lease liability at the lease commencement date. The right of use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right of use asset is subsequently depreciated using the straight-line basis from the commencement date to the end
of the lease term. The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined,
the Group’s incremental borrowing rate. The Group uses its incremental borrowing rate as the discount rate.
The lease liability is measured at amortised cost using the effective interest rate method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to
be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension
option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
Where applicable, the Group has applied some judgement to determine the lease term for some lease contracts which
include renewal options or terminations. The assessment of whether the Group is reasonably certain to exercise such options
impacts the lease term, which affects the amount of lease liabilities and right-of-use assets recognised.
13 Financial instruments
Non-derivative financial instruments
Trade and other receivables are initially recognised as fair value and subsequently measured at amortised cost less
impairment. Trade receivables are due for settlement no more than 30-60 days from the date of recognition.
94
Financial StatementsPWR Holdings Limited Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
SECTION I SIGNIFICANT ACCOUNTING POLICIES (continued)
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other
financial liabilities are recognised initially on the trade date at which the Group becomes a party to the contractual provisions
of the instrument. Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at reporting date.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
The Group classifies non-derivative financial liabilities into the other financial liabilities’ category. Such financial liabilities are
recognised initially at fair value less any directly attributable transaction costs. After initial recognition, these financial liabilities
are measured at amortised cost using the effective interest rate method.
Interest-bearing loans and liabilities are recognised initially at fair value less attributable transaction costs. After initial
recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value
being recognised in the income statement over the period of the borrowings on an effective interest basis.
Derivative financial instruments
The Group may use derivative financial instruments to manage its foreign currency exposures.
Derivatives are recognised initially at fair value. Any directly attributable transaction costs are recognised in profit or loss as
they are incurred. After initial recognition, derivatives are measured at fair value, and changes therein are generally recognised
in profit or loss.
14 Fair value measurements
The consolidated financial statements have been prepared on the historical cost basis except for any derivative financial
instruments which are recognised at fair value.
‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the
Group has access at that date. The fair value of a liability reflects its non-performance risk.
Several of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and
non-financial assets and liabilities.
When one is available, the Group measures the fair value using the quoted price in an active market for that asset or liability.
A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to
provide pricing information on an ongoing basis. When an active market is not available, the Group uses observable market
data as far as possible.
Further information about the methods and assumptions made in determining fair values for measurement and/or disclosure
purposes is included in the following notes:
– Note I13 – financial instruments
– Note D3 – share based payments.
15 Government Grants
Government grants related to assets are initially recognised as deferred income at fair value when received. They are then
recognised in profit or loss as other income on a systematic basis over the useful life of the asset to which the grant relates.
Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the periods
in which the expenses are recognised.
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Annual Report 2022 PERFORMANCE SNAPSHOTADDITIONAL INFORMATIONLEADERSHIP AND GOVERNANCEDIRECTORS’ REPORTFINANCIAL STATEMENTS HOW WE CREATE SUSTAINABLE VALUEDELIVERING VALUEFINANCIAL STATEMENTS Directors’ Declaration
For the year ended 30 June 2022
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of PWR Holdings Limited (the “Company”):
(a)
the consolidated financial statements and notes that are set out on pages 59 to 95 and the Remuneration report on pages 39
to 58, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for the financial year
ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
2.
3.
4.
(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.
There are reasonable grounds to believe that the Company and the group entities identified in Note G2 will be able to meet any
obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company
and those group entities pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive
Officer and Chief Financial Officer for the financial year ended 30 June 2022.
The directors draw attention to Note A2 to the consolidated financial statements, which includes a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of directors.
______________________________
Kees Weel
Director
Brisbane
18th August 2022
96
Financial StatementsPWR Holdings Limited
Independent Auditor’s Report to the
Members of PWR Holdings Limited
For the year ended 30 June 2022
Independent Auditor’s Report
To the shareholders of PWR Holdings Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report
of PWR Holdings Limited (the Company).
In our opinion, the accompanying
Financial Report of the Company is in
accordance with the Corporations Act
2001, including:
•
•
giving a true and fair view of the
Group’s financial position as at 30
June 2022 and of its financial
performance for the year ended on
that date; and
complying with Australian
Accounting Standards and the
Corporations Regulations 2001.
Basis for opinion
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2022;
• Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of
cash flows for the year then ended;
• Notes including a summary of significant accounting
policies; and
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during the
financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on this matter.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
97
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Members of PWR Holdings Limited
For the year ended 30 June 2022
Valuation of goodwill and intangible assets ($15.0m)
Refer to Note C6 to the Financial Report
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s
annual testing of goodwill and intangible
assets for impairment given the size of the
balance (being 15% of total assets).
The Group uses complex value-in-use
models in performing their annual
impairment testing. These models use
forward looking assumptions based on the
Group’s budgeting and business plans, and
a range of other internal and external
sources as inputs to the assumptions.
Significant forward looking assumptions
applied in their value in use modes include
forecast revenue growth, EBIT margin and
discount rates applied on net cash flows.
Complex modelling using forward-looking
assumptions tend to be prone to greater risk
for potential bias, error and inconsistent
application. These conditions necessitate
additional scrutiny by us, in particular to
address the objectivity of sources used for
assumptions, and their consistent
application.
We involved valuation specialists to
supplement our senior audit team members
in assessing this key audit matter.
Our procedures included:
• We considered the appropriateness of the value in
use methods applied by the Group to perform the
annual impairment testing of goodwill and
intangible assets against the requirements of the
accounting standards.
• We, along with our valuation specialists, assessed
the integrity of the value in use models used,
including the accuracy of the underlying
calculation formulas.
• We compared the forecast cash flows contained
in the value in use models to Board approved
budgets and the Group’s business plans.
• We assessed the accuracy of previous Group
budgets to inform our evaluation of forecasts
incorporated in the models.
• We considered the sensitivity of the models by
varying key assumptions, such as forecast
revenue growth, EBIT margin and discount rates,
within a reasonably possible range. We did this to
identify those CGUs at higher risk of impairment
and to focus our further procedures.
• We challenged the Group’s significant forecast
cash flow and growth rate assumptions including
PWR C&R’s ability to convert OEM and emerging
technology opportunities. We compared forecast
growth rates to published analyst reports for
comparable companies, and considered
differences for the Group’s operations. We used
our knowledge of the Group, their past
performance and our understanding of factors
impacting the business and customers in which
the CGUs operate in.
• Working with our valuation specialists, we
independently developed a discount rate range,
considered comparable using publicly available
market data for comparable entities, adjusted by
risk factors specific to the Group, CGUs and the
industry it operates in.
• We assessed the disclosures in the financial
report using our understanding obtained from our
testing and against the requirements of the
accounting standards.
98
98
Financial StatementsPWR Holdings Limited Independent Auditor’s Report to the
Members of PWR Holdings Limited
For the year ended 30 June 2022
Other Information
Other Information is financial and non-financial information in PWR Holding Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion. In connection with our audit of the Financial
Report, our responsibility is to read the Other Information. In doing so, we consider whether the
Other Information is materially inconsistent with the Financial Report or our knowledge obtained in
the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001;
•
•
implementing necessary internal control to enable the preparation of a Financial Report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error; and
assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free 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 Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
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Members of PWR Holdings Limited
For the year ended 30 June 2022
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report
of PWR Holdings Limited for the year
ended 30 June 2022, complies with
Section 300A of the Corporations Act
2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 39 to 58 of the Directors’ report for the year
ended 30 June 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Tracey Barker
Partner
Brisbane
18 August 2022
100
100
Financial StatementsPWR Holdings Limited Additional Information
ASX Additional Information
Shareholder Information at 3 August 2022
DISTRIBUTION OF EQUITY SECURITY HOLDERS
The following table shows the distribution of PWR shareholders by size of shareholding and number of shareholders and
shares at 3 August 2022.
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of
Ordinary
shares
Number of
Security
Holders
857,245
5,226,206
3,889,184
8,363,105
81,960,306
2,124
1,959
530
369
24
100,296,046
5,006
143 shareholders hold less than a marketable parcel of ordinary shares of 60 shares as at 3 August 2022.
TWENTY LARGEST SHAREHOLDERS
The following table sets out the 20 largest shareholders of ordinary shares listed on our shareholder register and the details of
their shareholding as at 3 August 2022.
Name
1
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3 CITICORP NOMINEES PTY LIMITED
4 KPW PROPERTY HOLDINGS PTY LTD
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