2021
ANNUAL
REPORT
FOR THE YEAR ENDED
30 JUNE 2021
ABN: 81 104 662 259
Making the
complex simple
SRG Global is an engineering-led specialist asset services, mining
services and construction group built to solve complex problems
across the entire asset lifecycle.
Contents
Operating Segments
Chairman’s Report
Managing Director’s Report
Directors’ Report
Auditor’s Independence Declaration
Directors’ Declaration
Independent Auditor’s Report
Financial Statements
Notes to the Financial Statements
Shareholder Information
Corporate Directory
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SRG Global Model
Operating Segments
WHO WE ARE
We’re a global engineering-
led specialist asset services,
mining services and
construction group
OPERATING
MODEL
End-to-end solutions
across the entire asset
lifecycle
OUR VISION
The most sought-after
specialist asset services,
mining services and
construction business
ASSET
SERVICES
Sustaining complex
infrastructure
Annuity Earnings
MINING
SERVICES
Comprehensive
ground solutions
Annuity Earnings
CONSTRUCTION
Constructing
complex
infrastructure
Project Based Earnings
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SRG GLOBAL 2021 ANNUAL REPORT
SRG GLOBAL 2021 ANNUAL REPORT
3
Making the maintenance,
restoration & access of
critical assets easier
SRG Global’s Asset Services Segment had both the highest growth
and earnings within the Group in FY21 with a significant number of
term contract wins during the year.
What we do
We bring the engineering know-how, the skilled
workforce and the access solutions to make
sustaining buildings, structures and industrial
plant easier.
We not only come up with smart solutions to your
asset maintenance and repair challenges, we also
do the work – diagnosing, protecting, cleaning,
repairing, strengthening and monitoring buildings,
structures and industrial plant.
This means asset owners only have to deal with
just one contractor, which significantly reduces
the time and complexity of the task. SRG Global
is a contractor with the diverse technical know-
how, the workforce and all the access equipment
needed to sustain or extend the life of any critical
asset.
Key clients
SPECIALIST MAINTENANCE
Fixed Plant Maintenance
O Mechanical, electrical, plumbing, shutdowns
Industrial Services
O Industrial cleaning, paint & blast, non-
destructive testing, insulation and lagging
Refractory
O Installation of refractory, gunning and
casting of refractory products, installation of
refractory anchors
Remediation
O Protective coatings, waterproofing, concrete
repair and strengthening
ACCESS SOLUTIONS
Access Solutions
O Scaffold hire, scaffold installation, rope access,
material hoists
Key projects
Multi-disciplinary works
Woodside, WA
Yara
Pilbara, WA
South 32
Worsley, WA
Specialist Infrastructure
Maintenance
Transpower, New Zealand
ASSET SERVICES
Sustaining complex infrastructure
SPECIALIST
MAINTENANCE
Highly skilled specialist
maintenance services focusing
on refractory, oil and gas,
industrial assets and transport
and marine infrastructure
ACCESS
SOLUTIONS
Comprehensive structural
and technical access solutions
targeting the mining and
resources, oil and gas, offshore
marine and industrial locations
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SRG GLOBAL 2021 ANNUAL REPORT
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Bringing our full
resources to daily
mining challenges
SRG Global’s Mining Services Segment focused on innovation and
technology during FY21, offering continued value to our existing tier
one client base.
What we do
SRG Global is the only drill and blast contractor
that can also offer an integrated range of
complementary technical services to significantly
improve safety and productivity on a mine site.
Working in the iron ore, gold and precious metals
mining sectors across Australia, SRG Global
brings a uniquely adaptive approach to drilling
and blasting, driven by our engineering heritage.
We are flexible in how we work, execute drilling
programs with precision and respond confidently
to challenges that arise in the open pit each day.
It is part of who we are to continually investigate
safer and more innovative ways of working,
and to re-engineer our machines to optimise
performance for each customer’s mine site and
minimise handling and risks to personnel.
Key clients
PRODUCTION DRILL & BLAST
Drill & Blast
O Production drilling, pre-split drilling, blasting
services, explosives supply and management,
drill and equipment hire
Specialist Drilling
O Reverse circulation grade control, high reach
drilling, geotech specialist drilling, horizontal
depressurisation (dewatering) drilling
SPECIALIST GEOTECH
Geotech Services & Applications
O Rope access services, geotech investigation,
geotech instrument installation, rock
scaling and geotech remediation, rockfall
protection systems, rockfall mesh installation,
shotcreting, rock bolt drilling and installation,
crest pins and soil nails, crusher pocket wall
support, depressurisation, ground support
product manufacture and supply
Key projects
Drill & Blast works
Northern Star
Goldfields, WA
Provision of Geotech
services for over 23 Years
at KCGM Superpit, WA
Drill & Blast and Geotech
Evolution Mining
Mount Rawdon, QLD
Technology & Innovation
MINING SERVICES
Comprehensive ground solutions
PRODUCTION
DRILL & BLAST
Integrated range of
complementary production
drill & blast services working
across multiple commodities
including gold, precious metals
and iron ore
SPECIALIST
GEOTECH
Highly technical specialist
ground and slope stabilisation
services for all mining services
applications
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SRG GLOBAL 2021 ANNUAL REPORT
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Taking the complexity
out of construction
SRG Global’s Specialist Construction Segment delivered solid results
in FY21 across key areas of specialist civil and engineering, facades
and structure packages.
What we do
SRG Global’s construction team solve problems
around how to construct both more efficiently
and cost effectively, providing specialist technical
expertise, innovative technology and equipment
and a highly skilled workforce.
SRG Global’s construction team provide specialist
engineering, post-tensioning and construction
services for complex structures in key markets
including dams, bridges, windfarms and tanks
as well as specialist facade and structural
construction with repeat, tier one clients.
Decades of experience across all kinds of iconic
infrastructure has allowed us to develop the
innovative techniques and specialised tools
needed to make any infrastructure project less
complex.
Key clients
CIVIL & ENGINEERING
Dam Construction & Strengthening
O Ground anchors, anchor monitoring, temporary
access solutions, slipform construction
Bridge Construction
O Incremental launching, cable stays, segmental,
balanced cantilever, cast insitu post-tensioning
Silo & Tank Construction
O Slipform construction, post-tensioning services
Wind Farm Construction
O Foundation construction, foundation anchors
SPECIALIST BUILDING
Facade Design & Construction
O Curtain wall facade design & certification and
facade installation
Building Structure Packages
O Post-tensioning engineering,
structural construction
Key projects
Wanneroo & Ocean Reef
Interchange, WA
D&C Tank Construction
Merredin, WA
Structure Package
Elizabeth Quay, WA
Shindagha Bridge
Dubai, UAE
CONSTRUCTION
Constructing complex infrastructure
CIVIL &
ENGINEERING
Specialist engineering, post-
tensioning and construction
services for complex structures
in key markets including dams,
bridges, windfarms and tanks
SPECIALIST
BUILDING
Specialist monumental facade
and structural construction
services with repeat, tier one
clients
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SRG GLOBAL 2021 ANNUAL REPORT
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Chairman’s Report
Chairman’s Report
Chairman’s
Report
A year of
delivery and
achievement at
SRG Global
It is my pleasure to present the 2021 SRG Global Limited Annual Report.
During the 2021 financial year we have taken significant steps forward in the
strategic direction of the company and positioned SRG Global for long term
sustainable growth moving forward. The Board is extremely pleased with
the way our people have responded to every challenge and opportunity in
delivering an exceptional outcome for our shareholders in what continued
to be unprecedented times in FY21.
The world continued to present a
challenging operating environment for
companies in FY21.
Despite these challenges, the SRG
Global business has taken significant
steps forward in delivering on our
strategic priorities. This is a testament
to the strength and professionalism
of our people and the clear long-term
strategy that we have in place.
The Board and I would like to sincerely
thank all our people for the way they
continue to come together to navigate
through this dynamic environment.
Importantly, this has been done whilst
being true to our core beliefs – live for
the challenge, smarter together, never
give up and have each other’s backs.
DELIVERING AGAINST A CLEAR
STRATEGY
During the year SRG Global has taken
significant steps forward in executing
our strategy to transition the business
towards recurring / annuity earning
streams.
This provides a strong foundation and
further growth avenues to leverage
our capability and operational
footprint, enabling us to continue to
maximise our diverse offering with
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our core and growing blue-chip client
base.
Ultimately this translates to greater
stability and certainty for shareholders
throughout changing economic
conditions. It also provides a more
balanced portfolio of recurring /
annuity earnings versus project-based
earnings.
The successful execution of this
strategy ensures that SRG Global
will continue to be disciplined and
selective in choosing the right project-
based opportunities that match
our specialist skills and commercial
framework.
The transformation towards recurring
/ annuity earnings has provided
an excellent foundation which has
enabled us to deliver sustainable and
consistent returns for our shareholders
not only for FY21 but also into the
future.
SRG Global is in the strongest position
it has been in my tenure with the
Company. This is due to the high
level of annuity-based earnings, large
pipeline of opportunities and strong
and stable Board, Executive and
Management.
BOARD & GOVERNANCE
I thank the Board members for their
respective contributions over the last
twelve months and I am particularly
pleased with the way that the Board
and Executive are working together.
We consider the current mix of
experience and skills of the Board to
be appropriate and will continue to
review this on a regular basis moving
forward.
OUR FUTURE
As this year has highlighted, the SRG
Global business is incredibly resilient
and well positioned to take further
significant steps forward over the next
few years as we continue to deliver
against our strategy in a disciplined
and measured way.
In closing, I would like to thank all our
shareholders for their ongoing support
and am both confident and excited for
what the future holds at SRG Global.
Peter McMorrow
Non-Executive Chairman
WHAT WE STAND FOR
Live for the challenge
We live to solve problems and have the courage to challenge the status quo
and what’s considered possible.
Smarter together
Individually, we’re all pretty smart but when we pool our resources and work
together as one, we’re capable of taking on the world.
Never give up
We’re doers. We are resilient and relentlessly pursue excellence in everything
we do. 100% accountability, zero excuses.
Have each other’s backs
We’re stronger as one team. We look out for each other and keep each other
out of harm’s way.
SRG GLOBAL 2021 ANNUAL REPORT
11
SRG GLOBAL 2021 ANNUAL REPORT Managing Director’s Report
Managing Director’s Report
Managing Director’s
Report
Turning our vision into
reality through a clear
strategy and great
people
The 2021 financial year has been a transformational year for SRG Global in
delivering to strategy and ultimately delivering for shareholders. I could
not be more proud of our people and how they continue to come together
as “one business, one team” and deliver in a way that is core to SRG Global
– we live for the challenge, are smarter together, never give up and have
each other’s backs. We are now very well positioned for the future and
ultimately becoming the company that I know we can be.
The Company has experienced
minimal financial impact of labour and
COVID-19 challenges in FY21 due to the
specialist nature of our business and
the diversity of our service offering,
sectors and geographic spread.
The Company has started the new
financial year (FY22) with record Work
in Hand of $1b and is well positioned
for long term sustainable growth with
two thirds annuity-style earnings and
positive exposure to broader macro-
economic growth drivers across the
asset services, industrial and mining
sectors and government stimulus
programs in the infrastructure and
construction sectors.
RECORD WORK IN HAND
OUR PEOPLE
I would like to thank each and every
one of our people for coming together
as “one business, one team” to deliver
a terrific result in FY21 both financially
and against our long-term strategy.
This year continues to highlight how
important our people are to the
success of SRG Global as we strive to
be the most sought-after specialist
asset services, mining services and
construction business.
We continue to engage with the local
communities in which we operate
through a number of programs and
initiatives. A key highlight has been
the establishment of a JV company
(Bugarrba) with members of the Njamal
people to deliver scaffolding services
and pursue sustainable employment
opportunities for Aboriginal people
in the Pilbara. This is the first JV of
its kind for scaffolding services and
we are excited about the near term
opportunities for this business.
ZERO HARM
Zero Harm is a journey that never ends
and I often refer to it as the glass ball in
the business that you can never drop.
This year saw us continue to invest in
a number of initiatives to drive safety
within our business. This has included
the rollout of a number of safety
leadership and training programs
as well as the introduction of some
key technology and equipment
enhancements throughout the
business.
Pleasingly, our TRIFR improved by
31% during the year. That noted, I will
never be satisfied until it is zero and we
will relentlessly pursue Zero Harm in
everything we do.
DELIVERING OUR STRATEGY
SRG Global continues to take
significant steps forward in the
execution of our strategy. We have
delivered a strong result in FY21
underpinned by new contract wins,
strong operating cashflows and
continued margin improvement
through delivering for our blue-chip
client base.
I am particularly pleased that we
have continued to transition the
business towards annuity earnings
whilst winning a number of new
term contracts in FY21. We have also
managed operational startup and
contract execution exceptionally well
throughout this period.
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“The Asset Services
Segment delivered
step change growth in
FY21”
Auckland Harbour Bridge, New Zealand
OPERATIONAL REVIEW
Asset Services
For FY21 the Asset Services Segment
delivered revenue of $186.9m (2020:
$151.9m) and EBITDA of $22.0m (2020:
$18.6m).
The Asset Service Segment delivered
step change growth in FY21 with
numerous long-term contract awards
secured in the business over the last
twelve months.
Pleasingly the majority of these
contract wins were secured with key
repeat clients which is strong indication
of SRG Global’s track record of
operational delivery.
Examples of these include the
following:
O 8 year maintenance contract
with the New Zealand Transport
Authority for the Auckland Harbour
Bridge maintenance program;
O 5 year maintenance contract with
Methanex;
O 5 year access contract with Liberty
Onesteel;
O 5 year access / maintenance
contract with Yara;
O 8 year maintenance contract with
South32; and
O 2 year maintenance contract with
Meridian Energy.
Importantly, these contract wins are
across a diverse range of sectors
including transport, chemical, steel,
renewables and mining.
In addition to the above, in February
2021, SRG Global secured a 5 year,
$150m contract with FMG for access
and electrical maintenance services
across their mine, rail and port
infrastructure. This was a landmark
achievement for our company and a
huge endorsement of SRG Global and
our transformational strategy.
Our success is based on a number of
factors including our self-performing
capability, strong relationships and a
track record of delivering for clients
in conjunction with our innovative
approach.
We continue to focus on innovation,
technology and data analytics as a
market differentiator across our service
offerings. This is an important aspect of
how we continue to win new work and
as such we will continue to embrace
new technology and insight to drive
improvement and efficiency in our
customers operations.
SRG GLOBAL 2021 ANNUAL REPORT
13
SRG GLOBAL 2021 ANNUAL REPORT Managing Director’s Report
Mining Services
For FY21 the Mining Services Segment delivered revenue of $90.9m (2020: $71.7m) and EBITDA of $20.0m (2020: $13.9m).
Mining Services has experienced another very strong year in FY21. This improvement in EBITDA reflects the excellent asset utilisation
in excess of 90%, continued capital investment for growth and sustaining capital combined with the quality of the commodities in
which we operate, being gold and iron ore.
A key part of the SRG Global value proposition is a focus on innovation and technology solutions including remote operated drill
rigs, high precision GPS and bespoke real time data analytics to drive operational efficiency for our clients. This has included the
development of Orbix, our in-house software focused operational data analytics intelligence, which is fully integrated into our clients’
data systems, driving best practice decision making for SRG Global and our clients.
The Geotech business had a strategic shift to focus on the mining sector. This decision has underpinned its strong contribution in the
financial year and has additional growth opportunities to expand our offering with the existing client base.
The overall Mining Services business has a strong pipeline of growth opportunities with further growth expected both with key
clients / sites and new clients in quality commodities.
Importantly, all services provided by SRG Global are executed under production based long term contracts.
Managing Director’s Report
Merredin Water Tank, WA
Construction
For FY21 the Construction Segment
delivered revenue of $291.7m (2020:
$327.6m) and EBITDA of $19.0m (2020:
-$27.2m).
The Construction Segment delivered
a much improved result for FY21 as we
exited non-core businesses such as
Structures Victoria and Building Post-
Tensioning in the Middle East.
The Civil business in Australia had
another strong year with a key focus
on our specialist capability in bridges,
tanks and dams. In these specialist
areas, we are the partner of choice and
we will continue to be both disciplined
and selective in combination with
utilising our Collaborative Contracting
Model and approach.
Importantly, this business has a positive
exposure to an ever-growing pipeline
of opportunities through Government
stimulus programs particularly in the
transport and water sectors.
market. The division has a high level
of secured work and a very positive
pipeline of opportunities.
Internationally, SRG Global scaled
back operations for the near term due
to COVID-19, however is targeting
medium term opportunities in the dam,
bridge and tank space with selective
key partners.
Structures West performed strongly in
the FY21 year with a key focus on the
landmark Elizabeth Quay and Capital
Square development projects. There
is a further strong pipeline of WA
opportunities with Structures West well
positioned as the market leader in the
structural construction space.
The Specialist Facades business
performed strongly nationally in
FY21 and continues to leverage key
relationships and specialist engineering
skills to differentiate ourselves from the
FINANCIAL STRENGTH
SRG Global is in a very strong liquidity
position with available funds of $88.2m
and access to an additional $27.7m of
undrawn equipment finance facilities.
The Company generated strong
operating cashflows before interest
and tax of $60.2m during the year
and continued its disciplined focus on
capital management. This contributed
to the strong cash performance despite
continued working capital investment
in new contracts including FMG, South
32 (Access and Refractory works) as
well as a number of civil and building
projects in FY21.
In the last 12 months, SRG Global
invested $17.3m in capital expenditure
SRG GLOBAL 2021 ANNUAL REPORT
15
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SRG GLOBAL 2021 ANNUAL REPORT
Thunderbox Mine Site, WA
Managing Director’s Report
Managing Director’s Report
OPPORTUNITY PIPELINE
employees for the way they have
contributed to our success over the last
year. I am sure this will continue in FY22
as we live for the challenge, are smarter
together, never give up and have each
other’s backs.
Finally, I would like to thank our
shareholders for their continued
support.
David Macgeorge
Managing Director
Strategic Horizons
Anderson Point, Pilbara WA
and made net debt repayments of
$2.6m, reflecting our prudent capital
management with a continued focus on
minimising Company gearing levels.
As a result of the above, the cash
position improved significantly from
net debt of $8.4m in FY20 to net cash
of $12.2m by the end of FY21.
The Board has also resolved to pay a
final dividend of 1.0 cent per share fully
franked, bringing the full year dividend
to 2.0 cents per share.
WELL POSITIONED FOR LONG-
TERM SUSTAINABLE GROWTH
SRG Global is very well positioned
for sustainable growth in FY22 and
beyond.
The Company has work in hand of $1b
as at 30 June 2021 and has a strong
pipeline of further opportunities in
excess of $6b, with positive exposure
to Government backed Infrastructure
investment, high quality commodities,
diverse industries and a tier one client
base.
Importantly, we will continue to deliver
against our strategic priorities which
are underpinned by an earnings profile
of two thirds annuity / recurring in
nature and one third project-based.
The execution of our strategy is only
possible because of the collective
efforts of our people and I would like to
once again thank all 2,300 SRG Global
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SRG GLOBAL 2021 ANNUAL REPORT
Gladstone, Qld
SRG GLOBAL 2021 ANNUAL REPORT
17
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report (CONTINUED)
The Directors present their report on the consolidated entity consisting of SRG Global Limited (the ‘Company’ or ‘SRG
Global’) and the entities it controlled (the ‘Group’) at the end of, or during the year ended 30 June 2021.
COMPANY SECRETARIES
Name
Roger Lee
Paul Hegarty
Roger Lee
Chief Financial Officer & Company Secretary
Full Financial Year
Resigned 21 August 2020
Roger was appointed CFO & Company Secretary for SRG Global in September 2018. Prior to this, Roger held the role of CFO
& Company Secretary for SRG Limited since July 2014 and brings over twenty five years’ experience in senior and executive
management in Australia. Roger is a qualified CPA and is a graduate of the University of Western Australia in Commerce,
majoring in Finance and Accounting.
DIRECTORS’ SHAREHOLDINGS
The following table sets out each Directors’ relevant interest in shares, debentures and rights or options in shares or
debentures of the Company as at the date of this report.
Name
P McMorrow
D Macgeorge
P Brecht
M Atkins
MEETINGS OF DIRECTORS
Fully Paid Ordinary Shares
Number
Performance Rights
Number
12,335,727
6,571,389
2,150,541
1,000,000
Nil
1,400,000
Nil
Nil
The number of meetings of SRG Global’s Board of Directors and each Board Committee held during the year ended 30 June
2021 and the number of meetings attended by each Director was:
Board of Directors
meetings
Name
P McMorrow
D Macgeorge
P Brecht
M Atkins
Eligible
9
9
9
9
Attended
9
9
9
9
Meetings of committees
Audit Committee
Eligible
3
-
-
3
Attended
3
-
-
3
Remuneration & Nomination
Attended
2
-
2
-
Eligible
2
-
2
-
DIRECTORS
The names and details of the Company’s Directors in office during the financial year and until the date of this report are set
out below. Directors were in office for the entire period unless otherwise stated.
Name
Peter McMorrow
David Macgeorge
Peter Brecht
Michael Atkins
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Full Financial Year
Full Financial Year
Full Financial Year
Full Financial Year
EXPERIENCE, QUALIFICATIONS AND
RESPONSIBILITIES
Peter McMorrow
Non-Executive Chairman
Peter McMorrow joined the Board of SRG Global as Deputy
Chairman in September 2018 and was appointed Chairman
on 26 November 2019. Prior to this, Peter was a Director
of SRG Limited (‘SRG’) from 2010 and moved into the role
of Chairman in July 2014. He is also a member of the SRG
Global Audit Committee and Remuneration & Nomination
Committee.
Peter has over forty years’ project and executive experience
and is a respected leader in the infrastructure and resources
industries. Encompassing a wide variety of large and complex
infrastructure projects both overseas and within Australia,
his industry knowledge extends to all facets of engineering,
project identification, winning and delivery as well as
management of dynamic, profitable and long lasting business
operations.
Prior to joining SRG, Peter was Managing Director of Leighton
Contractors from 2004 to 2010. Under his guidance, Leighton
Contractors expanded considerably with turnover increasing
to over $5 billion and the workforce increasing fourfold to
approximately 10,000 employees. Peter is currently a Board
Member for Valmec Limited.
Peter is an advocate for health and safety and brings a strong
zero harm vision to both SRG Global and the industry in which
it operates.
David Macgeorge
Managing Director
David Macgeorge was appointed Managing Director of SRG
Global in September 2018. Prior to this, David held the role of
Managing Director for SRG Limited since May 2014.
David has extensive senior executive experience in
contracting, logistics, infrastructure and mining service
industries and has a strong record of leading business
transformations, driving value creation and growth through
a unique understanding of strategy, customer focus and
shareholder returns.
Prior to joining SRG, David held senior executive roles with BIS
Industries, Cleanaway and CHEP (a subsidiary of Brambles).
He also provided consultancy to Leighton Contractors.
David holds a Bachelor of Business and has completed the
Senior Executive Management program at INSEAD Business
School in France.
Peter Brecht
Non-Executive Director
Peter Brecht joined the Board of SRG Global in September
2018. Prior to this, he had been a Non-Executive Director for
SRG Limited since September 2014. Peter is the Chairman of
the SRG Global Remuneration & Nomination Committee.
Peter has more than thirty five years’ experience in the
construction industry, previously serving as the Managing
Director - Construction Australia for Lendlease, CEO
of Bilfinger Berger Australia and Managing Director of
Abigroup.
Peter is a Board member of Fulton Hogan Limited. He has
been a Member of the Australian Institute of Company
Directors since 2000.
Michael Atkins
Non-Executive Director
Michael joined the SRG Global Board as a Non-Executive
Director in September 2018 and is Chairman of the SRG
Global Audit Committee. Prior to this, Michael was Non-
Executive Director on the Board of SRG Limited from 2014 to
2018.
Michael was a founding partner of a national Australian
Chartered Accounting practice from 1979 to 1987 and was a
Fellow of the Institute of Chartered Accountants in Australia.
Since 1987 he has been both an executive and non-executive
director of numerous publicly listed companies with
operations in Australia, USA, South East Asia and Africa.
Michael is a Senior Advisor - Corporate Finance at
Canaccord Genuity (Australia) Limited and is currently Non-
Executive Chairman of Australian listed companies Legend
Mining Limited and Castle Minerals Ltd. Michael was non-
executive Chairman of Azumah Resources Limited until his
resignation in December 2019.
Michael is a Fellow of the Australian Institute of Company
Directors.
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FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Directors’ Report
Directors’ Report
Directors’ Report (CONTINUED)
Directors’ Report (CONTINUED)
PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought on behalf of the
Company, nor have any applications been made in respect of
the Company under Section 237 of the Corporations Act 2001.
CORPORATE GOVERNANCE
The Board is committed to achieving the highest standards
of corporate governance. The Board reviews and improves
its policies and procedures to ensure they are effective for
the Group and fulfill the expectations of stakeholders. The
Board’s Corporate Governance Statement can be located on
the Company’s website via the following URL: http://www.
srgglobal.com.au/who-we-are/corporate-governance/.
DIVIDENDS
The Board has declared the following dividends in relation to
the 2021 financial year:
• A final, fully franked $4.458m dividend (1.0 cent per share)
on 24 August 2021. The Record Date for this dividend is 9
September 2021 with payment to be made on 21 October
2021.
• An interim, fully franked $4.458m (1.0 cent per share)
dividend on 23 February 2021. This dividend was paid on 28
April 2021.
The total fully franked dividends declared by the Company
in relation to the 2021 financial year is $8.916m (2.0 cents
per share).
REMUNERATION REPORT (AUDITED)
1. OVERVIEW
The directors of SRG Global Limited present the Remuneration Report (the ‘Report’) for the Company and its controlled
entities for the year ended 30 June 2021. This Report forms part of the Directors’ Report and has been audited in accordance
with section 300A of the Corporations Act 2001. The Report details the remuneration arrangements for the Company’s key
management personnel (‘KMP’):
• Non-executive directors
• Executive directors and senior executives (collectively the ‘Executives’).
KMP are those persons who, directly or indirectly, have authority and responsibility for planning, directing and controlling the
major activities of the Group and the Company.
The table below outlines the KMP of the Company and their movements during the year ended 30 June 2021.
Name
Non-executive directors
P McMorrow
P Brecht
M Atkins
Executive directors
D Macgeorge
Executives
R Lee
N Combe
J Thomas
D Williamson
P Dawson
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Managing Director
Term as KMP
Full financial year
Full financial year
Full financial year
Full financial year
Full financial year
Chief Financial Officer / Company Secretary
Executive General Manager - Construction & Engineering
Full financial year
Executive General Manager - Mining & Chair of Zero Harm Full financial year
Full financial year
Executive General Manager - Asset Services
Full financial year
Executive General Manager - Building
PRINCIPAL ACTIVITIES
During the financial period, the principal continuing activities
of the Group consisted of delivering a suite of engineering-led
specialist asset services, mining services and construction
services across the entire asset lifecycle.
SIGNIFICANT CHANGES IN STATES OF AFFAIRS
There have been no significant changes in the state of affairs
of the Group.
OVERVIEW AND FINANCIAL RESULTS
Information on the operations and financial position of the
Group and its business strategies is set out in the Managing
Director’s Report on pages 12 to 17.
MATTERS SUBSEQUENT TO THE END OF
FINANCIAL YEAR
No matter or circumstance has arisen since 30 June
2021, other than the dividend referred to below, that
has significantly affected, or may significantly affect the
consolidated entity’s operations, the results of those
operations, or the consolidated entity’s state of affairs in
future financial years.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS IN OPERATIONS
Information on likely developments in the operations of the
Group and the expected results of operations has not been
included in this report as the Directors believe it would likely
result in unreasonable prejudice to the Group.
ENVIRONMENTAL REGULATIONS
The operations of the Group are subject to environmental
regulation under Country, State, and Territory legislation.
The Directors are not aware of any breaches of environmental
regulations during the year or as at the date of this report.
The Company has met all its reporting requirements under
the relevant legislation during the year and continually aims to
improve its environmental performance.
The Company does not currently meet the thresholds of the
National Greenhouse and Energy Reporting Act 2007 and is
therefore not currently subject to its reporting requirements.
20
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FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Directors’ Report
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Directors’ Report (CONTINUED)
2. EXECUTIVE REMUNERATION FRAMEWORK
meeting those targets. The Company’s STI objectives are to:
3. HOW REMUNERATION IS GOVERNED
• Motivate senior executives to achieve the short-term
annual objectives linked to Company success and
shareholder value creation
• Create a strong link between performance and reward
• Share Company success with the executives that
contribute to it
• Create a component of the employment cost that is
responsive to short and medium term changes in the
circumstances of the Company
Short-term incentives currently take the form of a cash
bonus. The key STI measures for the Company in the 2021
financial year consist of a number of targets tied to the
performance on SRG Global’s major contracts - namely
safety performance, financial performance, scheduling
performance, and customer satisfaction. The STI is currently
a discretionary ‘bonus’ arrangement and its quantum
is determined by the Remuneration and Nomination
Committee.
The Remuneration and Nomination Committee is responsible
for determining the achievement of targets and assessing as
to whether a bonus amount is paid. The committee also has
the discretion to adjust short-term incentives downwards or
make no payments in response to unexpected or unintended
circumstances and where market issues dictate such a
decision. Any STI payments to KMP during the 2021 financial
year were based on achieving strategic and / or business
objectives.
2.3.3. Long-term incentives (LTI’s)
The LTI offered to the Executives forms a key part of their
remuneration and assists to align their interest with the
long-term interest of shareholders. The purpose of the LTI
is to reward the Executives for attaining results over a long
measurable period and for staying with the organisation.
The LTI is a share based plan consisting of Performance
Rights and / or Options (collectively “Rights and Options”)
which have pre-determined vesting conditions. The LTI was
approved by Shareholders at the Annual General Meeting on
27 November 2018.
Under the LTI, Rights and Options may be offered to
eligible persons as determined by the Board and are an
entitlement to receive ordinary shares in the Company.
Subject to satisfaction by eligible persons of specific criteria
set by the Board, the Rights and Options are granted at no
cost. Upon vesting of the Rights and Options, shares will
be automatically issued or transferred to the participant
unless the Company is in a “Blackout Period” (as defined in
the Company’s Securities Trading Policy) or the Company
determines in good faith that the issue or transfer of
shares may breach the insider trading provisions of the
Corporations Act or the Securities Trading Policy, in which
case, the Company will issue or transfer the shares as soon
as reasonably practical thereafter.
The LTI scheme is designed to create a strong link between
the Company’s performance and the KMPs’ performance.
2.1 Executive remuneration policy
The Company’s remuneration policy ensures that executives
are rewarded fairly and responsibly in accordance with the
market, having regard to the following:
• Remuneration levels are set at a level that ensures the
Company can attract and retain qualified, experienced,
and high-quality executives
• Fixed remuneration is structured at a level that reflects the
executives’ duties and responsibilities
• Remuneration packages are structured to encourage
improved performance and to align the employee’s
interests with the short-term and long-term objectives of
the Company
• The Company benchmarks remuneration packages at
least annually to ensure competitive positioning within the
market
• Short-term incentives are designed to incentivise individual
contributions to achieving results.
2.2 Executive remuneration framework
The Company rewards executives with a level and
mix of remuneration appropriate to their positions,
responsibilities and performance, in a manner that aligns
with the Company’s strategy. Executives receive fixed
remuneration and variable remuneration (as applicable),
consisting of short and long term incentive opportunities.
Executive remuneration levels are reviewed annually by the
Remuneration and Nomination Committee with reference to
the remuneration framework, guiding principles and market
movements.
2.3 Elements of Remuneration
2.3.1. Fixed remuneration
Executive fixed remuneration is competitively structured
and comprises the fixed component of the remuneration
package. The fixed component may include cash,
superannuation, and non-financial benefits to comprise
the employee’s total employee cost. Non-financial benefits
generally consist of items to enable the effective discharge
of the executive’s duties and may include the provision of
motor vehicles, mobile phones and notebooks.
Fixed remuneration is designed to reward the Executive for:
• The scope of the executive’s role;
• The executive’s skills, experience and qualifications; and
• Individual performance.
2.3.2. Short-term incentives (STI’s)
The Company has implemented a short-term incentive
plan during the 2021 financial year. Executives had the
opportunity to earn a discretionary annual incentive award,
delivered in the form of cash.
The objective of a variable STI remuneration is to link the
achievement of the Company’s operational targets with
the remuneration received by the executives charged with
22
3.1 Remuneration and Nomination Committee
The objective of the Remuneration and Nomination
Committee is to make recommendations on policies,
strategies, and structures on compensation arrangements
for directors and Executives. The committee is charged with
the development and review of the Company’s remuneration
framework which:
• Recommends remuneration levels for directors and
Executives
• Proposes non-executive director fees
• Establishes incentive plans which apply to executives
• Devises key performance indicators to align remuneration
and incentives to performance and achievement
• Formulates identification of talent, development, retention,
and succession planning strategies for key executives
Fixed remuneration is reviewed annually by the
Remuneration and Nomination Committee and
benchmarked against a number of indicators and
market data.
Refer to the Corporate Governance Statement on the
Company’s website for further information on the role of the
Nomination and Remuneration Committee.
3.2 Remuneration consultants
During the year ended 30 June 2021, the Company did not
engage the services of a remuneration consultant in respect
of its remuneration matters. The Company reserves the right
to engage with a remuneration consultant to provide market
analysis and benchmarking guidelines.
3.3 Voting and comments made at the
Company’s last Annual General Meeting
The Company received 96.03% of ‘yes’ votes on its
Remuneration Report for the financial year ended 30 June
2020. The Company received no specific feedback on its
Remuneration Report at the Annual General Meeting.
3.4 Securities trading policy
The Company’s Securities Trading Policy applies to all
non-executive directors and executives. The Securities
Trading Policy prohibits KMP from dealing in the Company’s
securities while in possession of non-publicly available
information relevant to the Company.
The Company’s Securities Trading Policy is available on the
Corporate Governance section of the Company’s website.
23
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Directors’ Report
Directors’ Report
Directors’ Report (CONTINUED)
Directors’ Report (CONTINUED)
3.5 Executive employment / service agreements
7. DETAILS OF REMUNERATION
4. OVERVIEW OF NON-EXECUTIVE DIRECTOR REMUNERATION
E Gullotti(3)
Each KMP has entered into an employment contract with the Company. All KMP are entitled to receive payment in lieu of
notice of any accrued statutory entitlement (i.e. annual and long service leave) on cessation of their employment. In addition,
all KMP are entitled to participate in the STIP and LTIP that has been disclosed in Note 2.3 of the remuneration report.
The following table outlines the contractual terms of the employment contracts:
Component
Fixed Remuneration
Contract Term
Notice Period
Annual Leave
Managing Director
$926,500
Ongoing
6 months
20 days per annum
Senior Executives
Range between $432,306 and $572,250
Ongoing
1-6 months
20-30 days per annum
The Board seeks to set aggregate fees paid to a level which reflects the responsibilities and demands made on non-executive
directors and provides the ability to attract and retain directors of the highest calibre, whilst incurring a cost which is
acceptable to shareholders.
The Remuneration and Nomination Committee reviews non-executive directors’ remuneration annually against comparable
companies. The Remuneration and Nomination Committee may also consider advice from external advisors if deemed
necessary.
Non-executive director fees are determined within an aggregate non-executive director fee pool limit of $900,000 per
annum. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst non-executive directors is evaluated by the Remuneration and Nomination Committee annually.
The remuneration of non-executive directors for the year ended 30 June 2021 is detailed in section 7.2 of this report.
5.
SHARE-BASED COMPENSATION
Performance Rights
Performance Rights may be granted under the Company Performance Rights Plan. The plan is designed to align the interest
of employees to shareholders in the Company and for staff retention purposes. The terms of the plan are disclosed in note
29 to the financial statements
There were no performance rights issued during 2021 financial year. There are also no unissued ordinary shares of the
Company under option at the date of this report.
6. OVERVIEW OF COMPANY PERFORMANCE
The table below sets out information about the Group’s earnings and movements in shareholder wealth for the past five
years up to and including the current financial year. The following information relates to SRG Global Limited (SRG Global) for
the comparative periods.
Profit / (loss) for the year attributable to owners ($’000)
Share price at end of the year (cents)
Basic EPS (cents)
Total dividends (cents per share)
2017
10,874
0.60
5.4
4.00
2018
13,623
0.71
6.4
4.50
2019
9,839
0.50
2.3
1.5
2020
(29,403)
0.21
(6.7)
1.0
2021
12,053
0.51
2.7
2.0
24
7.1 Executive KMP remuneration for the years ended 30 June 2021 and 30 June 2020
Short-term benefits
Financial
Year
Cash
salary and
fees
$
Short-term
incentives(1)
$
Non-
monetary
benefits(2)
$
Post-
employment
Super-
annuation
Long-term
benefits
Long service
leave
Share based
payments
Performance
rights
Total
remuneration
Performance
related
Executive Directors
D Macgeorge
2021
2020
2021
2020
888,385
812,401
-
700,110
681,126
-
-
-
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020 4,043,253
536,084 300,496
-
493,539
522,945 200,000
537,401
-
217,300
407,486
-
385,623
309,375
488,380
150,000
392,946
175,000
531,510
-
379,851
-
-
-
341,382
3,374,790 1,883,297
150,000
Senior Executives
R Lee
N Combe
J Thomas
D Williamson
P Dawson(4)
G Edmonds(5)
Total
Executive KMP
$
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,694
21,003
-
6,250
25,000
25,000
25,000
25,000
25,000
35,720
25,000
25,000
25,000
17,708
-
12,917
146,694
168,598
23,714
-
-
6,768
28,443
-
-
-
19,801
-
-
-
23,331
-
-
-
95,289
6,768
50,236
14,463
-
-
21,530
6,198
-
-
-
-
17,941
5,165
(124,044)
38,496
-
-
(34,337)
64,322
1,665,155
847,867
-
713,128
911,553
524,738
747,945
562,401
669,587
421,343
840,696
573,111
630,797
436,055
-
354,299
5,465,733
4,432,942
%
44
2
-
-
35
1
27
-
32
-
39
27
8
9
-
-
34
5
(1.) Short-term incentives relate to discretionary cash bonuses.
(2.) Non-monetary benefits relate to the provision of motor vehicles and motor vehicle related expenses.
(3.) Resigned on 2 October 2019. Cash salary and fees includes annual leave cashed out during the 2020 year of $49,529.
(4.) Appointed on 11 October 2019. The negative amount of share based payments is due to performance rights lasped during the year that
were previously expensed.
(5.) Appointed on 20 March 2019 and ceased on 15 April 2020.
7.2 Non-executive remuneration for the years ended 30 June 2021 and 30 June 2020
Financial Year
Short-term benefits
Cash salary and fees
Post-employment
Superannuation
Total Remuneration
P McMorrow
P Brecht
M Atkins
P Wade(1)
J Derwin(2)
Total Non-Executive KMP
(1.) Resigned on 26 November 2019.
(2) Resigned on 3 April 2020.
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
$
170,000
157,458
115,068
110,089
115,068
113,630
-
68,218
-
101,308
400,136
550,703
$
-
-
10,932
10,335
10,932
10,795
-
-
-
8,323
21,864
29,453
$
170,000
157,458
126,000
120,424
126,000
124,425
-
68,218
-
109,631
422,000
580,156
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FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Directors’ Report
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Directors’ Report (CONTINUED)
7.3 Shareholdings of KMP
INDEMNITY AND INSURANCE OF DIRECTORS AND OFFICERS
The number of shares in the Company held directly or indirectly during the financial year by each director and KMP of
the Group, including their related parties, are set out below. There were no shares granted during the reporting period as
compensation.
Balance as at
30 June 2020
Received on
exercise of rights
Purchased
Net change other
Non-Executive Directors
P McMorrow
P Brecht
M Atkins
Executive Directors
D Macgeorge
Senior Executives
R Lee
N Combe
J Thomas
D Williamson
P Dawson
11,835,727
1,900,541
1,000,000
6,071,389
3,503,451
1,099,933
739,123
10,000
5,691,945
-
-
-
-
-
-
-
-
-
500,000
250,000
-
500,000
150,000
-
-
42,000
-
-
-
-
-
-
-
-
-
-
Balance as at
30 June 2021
12,335,727
2,150,541
1,000,000
6,571,389
3,653,451
1,099,933
739,123
52,000
5,691,945
The number of performance rights held directly or indirectly during the financial year by each director and KMP of the Group
are set out below.
Executive Directors
D Macgeorge
Senior Executives
R Lee
D Williamson
P Dawson
Balance as at
30 June 2020
Granted in
the year
Lapsed in
the year
Net change
other
Balance as at
30 June 2021
1,400,000
600,000
500,000
1,400,000
-
-
-
-
-
-
-
(700,000)
-
-
-
-
1,400,000
600,000
500,000
700,000
No other KMP’s have been granted performance rights in the current financial year except as disclosed above.
7.4 Other transactions with KMP
The following transactions occurred and were outstanding at reporting date in relation to transactions with related parties:
• Properties from which the Group’s operations are performed
are rented from Portovenere Investments Pty Ltd, a company
related to Paul Dawson
End of Audited Remuneration Report
Transactions
Receivables
Payables
2021
$
(39,824)
2021
$
-
2021
$
(6,884)
The Company has indemnified the Directors and Executives of the Company 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 Company paid a premium in respect of a contract to insure the Directors and Executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of liability and the amount of the premium.
INDEMNITY AND INSURANCE OF AUDITORS
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in Note 7 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in Note 7 to the financial statements do not compromise the
external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of
the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in Financials / Directors’ Reports) Instrument 2016/191,
dated 24 March 2016, and in accordance with that Corporations Instrument, amounts in this report have been rounded off to
the nearest thousand dollars, unless otherwise stated.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on
page 28.
This directors’ report is made in accordance with a resolution of directors, pursuant to Section 298(2)(a) of the Corporations
Act 2001.
Peter McMorrow
Non-Executive Chairman
24 August 2021
26
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FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Auditor’s Independence Declaration
Directors’ Declaration
Auditor’s Independence Declaration
Directors’ Declaration
SRG GLOBAL LIMITED ABN 81 104 662 259
AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
The financial statements, comprising the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of financial position, consolidated statement of cash flows, consolidated
statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001
and:
(a)
(b)
comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
give a true and fair view of the Group’s financial position as at 30 June 2021 and of the performance
for the year ended on that date of the Group.
2.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
3. At the date of this declaration there are reasonable grounds to believe that the members of the extended
closed group identified in note 25 will be able to meet any obligations or liabilities to which they are, or may
become, subject by virtue of the Deed of Cross Guarantee described in note 25.
4. Note 1 to the financial statements confirms that the financial statements also comply with International
Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board.
5.
The directors have been given the declarations required by Section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of
the directors by:
Peter McMorrow
Non-Executive Chairman
24 August 2021
28
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FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Independent Auditor’s Report
Independent Auditor’s Report
Independent Auditor’s Report
Independent Auditor’s Report (CONTINUED)
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Independent Auditor’s Report
Independent Auditor’s Report (CONTINUED)
Independent Auditor’s Report (CONTINUED)
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FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Financial Statements
Consolidated Statement of Profit or Loss and other
Comprehensive Income
Revenue
Other income
Construction, servicing and contract costs
Employee benefits expense
Other expenses
Equity accounted investment results
Depreciation expense
Amortisation expense
Impairment expense
Finance expenses
Profit / (loss) before income tax
Income tax (expense) / benefit
Net profit / (loss) for the period
Other comprehensive income
Exchange differences arising on translation of foreign operations
Fair value movement of cash flow hedging
Total comprehensive income for the year, net of tax
Earnings per share attributable to members of the parent entity
Basic earnings / (loss) per share (cents per share)
Diluted earnings / (loss) per share (cents per share)
Note
2021
$’000
2020
$’000
2
3
4
4
13
3
5
9
9
569,541
1,119
551,168
2,414
(277,368)
(226,942)
(19,292)
(6)
(21,922)
(4,013)
-
(2,499)
18,618
(6,565)
12,053
(293,724)
(207,463)
(35,346)
(6)
(19,119)
(5,082)
(24,761)
(2,962)
(34,881)
5,194
(29,687)
(41)
209
284
-
12,221
(29,403)
2021
2020
2.7
2.7
(6.7)
(6.7)
The above statement should be read in conjunction with the notes to the financial statements.
34
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FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Consolidated Statement of Financial Position
AS AT YEAR ENDED 30 JUNE 2021
Consolidated Statement of Financial Changes in Equity
Financial Statements
Financial Statements
Current Assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Other current assets
Derivative financial instrument asset
Equity accounted investments
Total current assets
Non-current assets
Property, plant and equipment
Right of use assets
Intangible assets
Contract assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Right of use liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Right of use liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings / (Accumulated losses)
Total Equity
Note
2021
$’000
2020
$’000
Share
capital
$’000
Reverse
acquisition
reserve
$’000
Total
issued
capital
$’000
Retained
earnings
$’000
Share
based
payments
reserve
$’000
Asset
revaluation
reserve
$’000
Foreign
currency
translation
reserve
$’000
Hedging
Reserve
$’000
Total
equity
$’000
23
10
10
11
25(c)
12
15
13
10
17
14
10
16
15
18
16
15
18
19
20
46,236
86,501
55,726
14,868
2,799
342
121
206,593
81,542
20,339
104,587
1,869
27,999
236,336
28,106
87,450
41,275
15,568
4,092
86
139
176,716
79,255
25,972
107,250
-
33,668
246,145
442,929
422,861
106,484
20,571
15,347
8,253
503
26,087
177,245
18,640
13,096
7,147
38,883
88,609
15,886
12,714
8,412
2,477
24,516
152,614
23,857
18,324
6,638
48,819
216,128
201,433
226,801
221,428
218,096
8,149
556
226,801
218,096
8,141
(4,809)
221,428
Balance at 1 July 2019
304,376 (88,480)
215,896
28,628
8,235
682
(713)
- 252,728
Loss for the year
Other comprehensive income
Total comprehensive income
-
-
-
Transactions with owners in
their capacities as owners
Issue of ordinary shares, net
of transaction costs
Share based payments
Dividends paid
Transfer to retained earnings
2,200
-
-
-
-
-
-
-
-
-
-
-
-
-
(29,687)
-
(29,687)
2,200
-
-
-
-
-
(4,432)
682
-
-
-
-
335
-
-
-
-
-
-
-
-
(682)
Balance at 30 June 2020
306,576
(88,480)
218,096
(4,809)
8,570
Balance at 1 July 2020
306,576
(88,480) 218,096
(4,809)
8,570
Profit /(Loss) for the year
Other comprehensive income
Total comprehensive income
Transactions with owners in
their capacities as owners
Issue of ordinary shares, net
of transaction costs
Share based payments
Dividends paid
Transfer to retained earnings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 30 June 2021
306,576
(88,480) 218,096
12,053
-
12,053
-
-
(6,688)
-
556
-
-
-
-
(160)
-
-
8,410
-
-
-
-
-
-
-
-
-
-
The above statement should be read in conjunction with the notes to the financial statements.
-
284
284
-
-
-
-
(429)
-
-
-
-
-
-
-
-
(29,687)
284
(29,403)
2,200
335
(4,432)
-
221,428
(429)
- 221,428
-
(41)
(41)
-
12,053
209
209
168
12,221
-
-
-
-
-
-
-
-
-
(160)
(6,688)
-
(470)
209 226,801
The above statement should be read in conjunction with the notes to the financial statements.
36
37
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Financial Statements
Notes to the Financial Statements
Note
2021
$’000
2020
$’000
Receipts from customers
Interest received
Payments to suppliers and employees
Interest paid
Income tax paid
Cash inflow from operating activities
23(a)
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payment of software development costs
Cash (outflow) / inflow from investing activities
Proceeds from borrowings
Repayment of borrowings
Payment of dividends
Cash (outflow) / inflow from financing activities
618,218
555,792
9
92
(558,065)
(546,485)
(2,508)
(2,483)
55,171
(18,086)
2,184
(1,416)
(3,055)
(566)
5,778
(20,561)
4,029
-
(17,318)
(16,532)
23,831
(34,598)
(8,918)
(19,685)
28,028
(45,286)
(2,202)
(19,460)
Net cash increase / (decrease) in cash and cash equivalents held
18,168
(30,214)
Effect of exchange rates on cash and cash equivalent holdings
Cash and cash equivalents at beginning of financial year
(38)
28,106
40
58,280
Cash and cash equivalents at end of financial year
23
46,236
28,106
The above statement should be read in conjunction with the notes to the financial statements.
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
General information
SRG Global Limited (the Company) is a for-profit public company listed on the Australian Securities Exchange Limited (ASX)
and is incorporated in Australia. The Company is primarily involved in engineering, mining, maintenance and construction
contracting.
The consolidated financial statements of the Company comprise the Company and its controlled entities (‘Consolidated
Group’ or ‘Group’) and the Consolidated Entity’s interest in associates and joint arrangements. The separate financial
statements of the parent entity, SRG Global Limited, have not been presented within this financial report as permitted by the
Corporations Act 2001.
The consolidated financial statements were authorised for issue by the Board of Directors on the date of signing the
accompanying Directors’ Declaration.
Basis of preparation
These financial statements are general purpose financial statements and have been prepared in accordance with applicable
Australian Accounting Standards, Australian Accounting Interpretations, and other authoritative pronouncements of the
Australian Accounting Standards Board (AASB), and the Corporations Act 2001. The consolidated financial statements also
comply with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).
Any new, revised or amended Accounting Standards and Interpretations that have been issued but not yet mandatory have
not been early adopted. Details of these new, revised or amended Accounting Standards and Interpretations that have been
issued but not yet mandatory are set out in Note 1(u).
Historical Cost Convention
The financial statements have been prepared on an accruals basis with the exception of cash flow information, and are based
on historical costs, modified where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities.
Presentation
The consolidated financial statements are presented in Australian dollars, which is the Company’s functional and presentation
currency. All values presented in the financial statements have been rounded to the nearest thousand dollars (‘$000) unless
otherwise stated, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191.
Comparative Information
The comparative balances for the year ending 30 June 2021 relating to a number of joint arrangements the Group
have entered into have been restated to proportionately consolidate the financial position and profit or loss and other
comprehensive income of these arrangements in accordance with AASB 11 Joint Arrangements. Previously, the Group had
been applying the equity accounting method in recognising these arrangements.
The change arises because of a reassessment of the joint arrangements to determine if joint control is present.
As a result of the change to the comparatives:
• No change to the profit for the year ended 30 June 2020.
• No change to the net asset position.
• Revenue for the year ended 30 June 2020 has increased by $31.211 million with a corresponding increase in Construction
and servicing costs of $28.426 million.
• Share of net profits of joint ventures accounted for using the equity method has decreased by $2.785 million.
•
Investments accounted for using the equity method of $4.478 million has been reclassified into Trade and Other
Receivables as at 30 June 2020.
• Cashflow from operating activities for the year ending 30 June 2020 has decreased by $1.681 million with a
corresponding increase in Cashflow from investing activities.
The effect of the change was not considered to be material with respect to AASB108: Accounting Policies, Changes in
Accounting Estimates and Errors.
Foreign currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment
in which that entity operates. As at the reporting date, the assets and liabilities of overseas subsidiaries are translated into
Australian dollars using the exchange rates at the reporting date and the income statements are translated at the average
exchange rates for the year. Retained profits are translated at the exchange rates prevailing at the date of the transaction.
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date
of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
38
39
FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items
measured at fair value are reported at the exchange rate at the date when the fair values were determined.
Exchange differences arising on the translation of foreign operations are transferred directly to the Group’s foreign currency
translation reserve in the statement of financial position. These differences are recognised in the statement of profit or loss
and other comprehensive income, in the period when the operation is disposed.
Key accounting estimates and judgements
In applying Australian Accounting Standards, management is required to make judgements, estimates and form assumptions
that affect the application of accounting policies and reported amounts presented herein. On an ongoing basis, management
evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the consolidated group.
The following key estimates and judgements were relevant to the Group for the financial year:
- Estimation of allowance for expected credit losses on financial assets and liabilities (Note 31(e))
- Assessment and impairment of intangible assets (Note 13)
- Employee long-term entitlements (Note 18)
- Recovery of deferred tax assets (Note 17)
- Determination of variable consideration on revenue (Note 1(b))
Accounting policies
This note provides all significant accounting policies adopted in the preparation of these consolidated financial statements.
These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Principles of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) controlled by the Company. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power to direct the activities of the entity.
The consolidated financial statements are prepared by consolidating the financial statements of all entities within the
Group as defined in AASB 10 Consolidated Financial Statements. The consolidated financial statements include the
information and results of each subsidiary from the date on which the Company obtains control and until such time
as the Company ceases to control such entity. The acquisition method of accounting is used to account for business
combinations by the Group.
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Equity method of accounting
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to
recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s
share of movements in other comprehensive income of the investee in other comprehensive income. Investments in
associates are carried in the statement of financial position at cost plus post-acquisition changes in the Group’s share
of net assets of the associates. Dividends received or receivable from associates reduce the carrying amount of the
investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the associate,
including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of
the Group’s interest in the entity with adjustments made to the ‘Investments accounted for using the equity method’
and ‘Share of profit of equity accounted investees’ accounts. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
Accounting policies of the equity-accounted investees have been changed where necessary to ensure consistency with
the policies adopted by the Group. The carrying amount of equity-accounted investments is tested for impairment in
accordance with the policy described in note 1(p).
Changes in ownership interests
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is
remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes
the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint
venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of
that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained,
only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to
profit or loss where appropriate.
(b) Revenue
The Group operates two main revenue streams throughout various geographical locations – Construction and Services.
Construction Revenue
In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses
and profits and losses resulting from intra-Group transactions have been eliminated. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with the policies adopted by the Group.
The Group derives revenue from construction of buildings and civil projects globally. The construction of each project is
generally taken as one performance obligation. Where contracts are entered with several performance obligations, the
total transaction price is allocated to each performance obligation based on stand-alone selling prices.
Associates
Associates are entities over which the Group has significant influence but not control or joint control. Significant
influence is presumed to exist when the Group owns between 20% and 50% of the voting power of another entity.
Investments in associates are accounted for using the equity method, after initially being recognised at cost.
Joint arrangements
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint
ventures depending on the contractual rights and obligations each investor has, rather than the legal structure of the
joint arrangement. The Group has assessed the nature of its joint arrangements and determined to have both joint
operations and joint ventures.
-
-
Joint operations - The Group recognises its direct right, and its share of, jointly held assets, liabilities, revenues
and expenses of joint operations. These have been incorporated in the financial statements under the
appropriate headings. Details of joint operations are set out in Note 25(b).
Joint ventures - Interests in joint ventures are accounted for using the equity method, after initially being
recognised at cost. Details of joint ventures are set out in Note 25(c).
As per normal practice, the transaction price of a project is fixed at the start containing bonus and penalty elements
based on performance construction criteria known as variable consideration.
The performance obligation is fulfilled over time and as such revenue is recognised over time. As work is performed on
the assets being constructed, they are controlled by the customer and have no alternative use for the Group.
Revenue earned is recognised on the measured input of each process based on resources consumed per appraisals that
are agreed with the customer on a regular basis.
Services Revenue
Maintenance and other services are performed by the Group for a variety of industries. Contracts entered into can
cover services which may involve various different processes or servicing of related assets. Where these processes and
activities are highly interrelated, and the Group provides a significant service of integration for these activities, they are
taken as one performance obligation.
The transaction price is allocated across each performance obligation based on contracted prices. Variable
consideration may be included in the transaction price.
The performance obligation is fulfilled over time as the Group enhances the assets which the customer controls, for
which the Group has no alternative use and has a right to payment for performance to date.
Revenue is recognised in the accounting period in which services are rendered. Customers are in general invoiced for
an amount that is calculated based on agreed contract terms in accordance with stand-alone selling prices for each
performance obligation.
40
41
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Variable Consideration
(e) Goods and services tax (GST)
Contracts may include performance bonuses or penalties assessed against the timeliness or cost effectiveness of work
completed or other performance related KPIs. Revenue recognition of variable consideration is only satisfied when
there are no uncertainties to its entitlement, this is known as the “constraint” requirements.
The Group assess the constraint requirements on a periodic basis when estimating the variable consideration to be
included in the transaction price. The estimate is based on all available information including historic performance.
Where modifications to contracts are made, the transaction price is updated to reflect these. Where the modification
price is not confirmed, an estimate is made of the amount of revenue to recognise whilst also considering the constraint
requirement.
(c) Finance costs
Finance costs are recognised as expenses in the period in which they are incurred, except where they are directly
attributable to the acquisition, construction or production of an asset. The capitalisation rate used to determine the
amount of finance costs to be capitalised is the weighted average interest rate on the Group’s borrowings outstanding
during the period.
(d)
Income tax
The Group is subject to income taxes in Australia and other jurisdictions around the world in which the entities within
the Group operates.
Income tax expense (income)
The income tax expense (income) on profit or loss for the year comprises current and deferred tax expense (income).
Current income tax expense (income) is the tax payable (receivable) on the taxable income for the period, using tax
rates enacted at the reporting date, and any adjustments to tax payable in respect of previous years. Deferred income
tax expense (income) reflects movements in deferred tax assets and liabilities attributable to temporary differences
between the tax base of assets and liabilities and their carrying amounts in the financial statements, as well as unused
tax losses.
Current and deferred tax expense (income) are recognised in profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax expense
(income) are also recognised in other comprehensive income or directly in equity respectively. Where current tax or
deferred tax expense (income) arises from the initial accounting for a business combination, the tax effect is included in
the accounting for the business combination
Deferred tax assets (liabilities)
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where the
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Where temporary differences exist in relation to investments, subsidiaries, branches, associates and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are
offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
The head entity and the controlled entities in the tax consolidated group continue to account for their own current and
deferred tax amounts. In addition to its own current and deferred tax amounts, the head entity also recognised current
tax liabilities (assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from
controlled entities in the tax consolidated group.
Members of the Group have entered into a tax funding agreement. Under the funding agreement, the allocation of tax
within the Group is based on a group allocation. The tax funding agreement requires payments to/from the head entity
to be recognised via an inter-company receivable (payable) which is at call.
Revenue, expenses and assets are recognised net of the amount of GST, except:
-
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the
cost of acquisition of the asset, or as an expense; or
for receivables and payables which are recognised inclusive of GST.
-
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST receivable from, or payable to, the taxation
authority.
(f) Earnings per share
Basic earnings per share
Basic earnings per share is determined by dividing the profit attributable to equity holders of the Group, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the reporting period, adjusted for bonus elements in ordinary shares issued during the period.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financial costs associated with dilutive potential ordinary shares and
the weighted average number of shares outstanding plus the weighted average number of ordinary shares that would
be issued on the conversion of all potential ordinary shares into ordinary shares.
(g) Fair value of assets and liabilities
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly (i.e.
unforced) transaction between market participants at the measurement date. It assumes that the transaction will take
place either in the principal market or in the absence of a principal market, in the most advantageous market.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
-
-
-
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market date (unobservable inputs).
(h) Cash and cash equivalents
Cash and cash equivalents are measured and carried at amortised cost. Cash and cash equivalents include cash
on hand, deposits held at call with financial institutions, other short-term highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank
overdrafts with original maturities of three months or less.
(i) Trade and other receivables
Trade and other receivables are initially recognised at transaction price and subsequently measured and carried at
amortised cost. Collectability of trade receivables is made on an ongoing basis and when there is objective evidence
that the Group will not be able to collect the receivable, allowances for credit losses are recognised. These losses are
recognised in the income statement. The simplified approach is used.
(j)
Inventories
Inventories are measured at the lower of cost and net realisable value.
Cost
Cost includes direct materials, direct labour, other direct variable costs and allocation production overheads necessary
to bring inventories to their present location and condition, based on normal operating capacity of the production
facilities. The cost of manufacturing inventories and work-in-progress are assigned to inventories using the weighted
average cost method. Costs arising from exceptional wastage are expensed as incurred.
42
43
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net realisable value
(m) Trade and other payables
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
Allowances are recorded for inventory considered to be excess or obsolete.
(k) Property, plant and equipment
Land is measured at cost. Buildings and all other property, plant and equipment are measured at cost less accumulated
depreciation and impairment losses. Costs include expenditures that are directly attributable to the acquisition of
the asset and may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign
currency purchases of property, plant and equipment.
Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that the future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognised when replaced. All other repairs and maintenance costs are charged to profit or loss during the reporting
period in which they are incurred.
Depreciation
Land is not depreciated. Depreciation of major mining equipment is calculated on machine hours worked over their
estimated useful life. Leasehold improvements and leased assets are depreciated over the shorter of the lease terms or
their useful lives. Items in the course of construction or not yet in service are not depreciated. Depreciation on the other
assets are recognised in profit or loss on a straight-line basis over the estimated useful life of the asset.
The following useful lives are used in the calculation of depreciation:
-
-
-
-
Buildings and leasehold improvements 3 – 50 years
Office and computer equipment
3 – 10
years
Motor vehicles
Plant and rental equipment
3 – 8
years
3-40
years
The depreciation methods, assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end
of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Gains and losses on disposals are calculated as the difference
between the net disposal proceeds and the asset’s carrying amount and are included in the statement of profit or loss
and other comprehensive income in the year that the item is derecognised. Any revaluation reserve relating to sold
assets is transferred to retained earnings.
(l)
Intangibles
Goodwill
Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business
combination exceeds the fair value attributed to the interest in the net fair value of identifiable assets, liabilities and
contingent liabilities at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill is not amortised but is assessed annually for impairment or more frequently if the facts or circumstances indicate
a potential impairment and is carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating
units for the purpose of impairment assessment. Information about impairment assessment of intangibles is set out in
Note 13. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Customer Relationships
Customer relationships are acquired as part of the business combination. They are recognised at their fair value at the
date of acquisition and are subsequently amortised on a straight-line based on the timing of projected cash flows of the
contracts over their estimated useful lives.
Trade creditors and other payables are non-interest bearing and are initially recognised at fair value and subsequently
carried at amortised cost. They represent liabilities for goods and services provided to the Group prior to the end of the
financial year that remained unpaid and arise when the Group becomes obliged to make future payments in respect of
the purchase of these goods and services. Settlement of these liabilities are in line with normal commercial terms.
(n)
Interest bearing liabilities
All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. Subsequently,
interest bearing liabilities are then stated at amortised cost with any difference between cost and redemption value
being recognised in the statement of profit and loss over the period of the borrowings on an effective interest basis.
All interest bearing liabilities are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
(o) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation that can be estimated reliably
as a result of past event, for which it is probable that an outflow of economic benefits will result and be required to
settle the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee Benefits
The provision for employee entitlements to wages, salaries and annual and long service leave represents the amount
which the Group has a present obligation to pay resulting from employees’ services provided up to the reporting date.
-
-
Short-term Employee Benefits - Employee benefits expected to be settled within 12 months are measured at
their nominal values using the remuneration rate expected to apply at the time of settlement.
Long-term Employee Benefits - Employee benefits which are not expected to settle within 12 months are
measured at the present value of the estimated future cash flows to be made of those benefits. Information
about long-term employee benefits measurement is set out in Note 18(b).
Onerous Contracts
A provision for onerous contracts is recognised when the expected benefits to be derived from a contract are less than
the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of
the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
(p) Financial instruments
Financial instruments are recognised when the Group becomes a party to the contractual provisions to the instrument.
Financial instruments for the Group include cash and cash equivalents, trade and other receivables, trade and other
payables, interest-bearing financial liabilities and equity investments not held for trading. The initial recognition and
classification of subsequent measurement are set out within the relevant accounting policy.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument
has been impaired. Impairment losses are recognised in the statement of profit or loss. Impairment loss is measured as
the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding
future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks
and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either
discharged, cancelled or expired.
The difference between the carrying value of the financial liability extinguished or transferred to another party and the
fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or
loss.
(q) Share capital
Ordinary share capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Incremental costs
directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
44
45
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Dividends
A provision for dividends is not recognised as a liability unless the dividends are declared on or before the reporting
date.
(r) Equity-settled compensation
Share-based compensation benefits are provided to employees in the form of options and performance rights in
exchange for the rendering of services under an employee share plan. The cost of equity-settled transactions is
recognised as an expense with a corresponding increase in equity over the vesting period.
(s) Government grants
The Group applies AASB 136 to determine whether a right-of-use asset is impaired and accounts for any identified
impairment loss as described in the ‘Property, Plant and Equipment” policy.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the
right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that
triggers those payments occurs and are included in the line “Other Expenses” in profit or loss.
(u) Derivative Financial Instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match
them with the costs that they are intended to compensate.
Cash flow hedges
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose
of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the
period in which they become receivable.
(t) Leases
The Group leases various offices, warehouses, equipment and cars. Lease contracts are typically made for fixed periods
of 3 to 10 years but may have extension options. Lease terms are negotiated on an individual basis and contain a wide
range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not
be used as security for borrowing purposes.
The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in
which it is the lessee, except for short-term leases (defined as leases with a term of 12 months or less) and leases of low
value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis
over the term of the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date using the Group’s incremental borrowing rate. Lease payments included in the measurement of
the lease liability comprise:
-
-
-
-
-
Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at
commencement date;
The amount expected to be payable by the lessee under residual value guarantees;
The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate
the lease
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect these payments.
The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset)
whenever:
-
-
-
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which case the liability is remeasured by discounting the revised
lease payments using a revised discount rate.
The lease payments change due to changes in an index or a change in expected payment under a guaranteed
residual value, in which case the lease liability is remeasured by discounting the revised lease payments using an
unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which
case a revised discount rate is used).
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective date of the modification.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at
or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment loss.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a
lease transfers ownership of the underlying asset of the cost of the right-of-use asset reflects that the Group expects to
exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The
depreciation starts at the commencement date of the lease.
Cash flow hedges are used to cover the consolidated group’s exposure to variability in cash flows that are attributable
to particular risks associated with a recognised asset or liability or a firm commitment which could affect profit or
loss. The effective portion of the gain or loss on the hedging instrument is recognised in other comprehensive income
through the cash flow hedges reserve in equity, whilst the ineffective portion is recognised in profit or loss. Amounts
taken to equity are transferred out of equity and included in the measurement of the hedged transaction when the
forecast transaction occurs.
Cash flow hedges are tested for effectiveness on a regular basis both retrospectively and prospectively to ensure that
each hedge is highly effective and continues to be designated as a cash flow hedge. If the forecast transaction is no
longer expected to occur, the amounts recognised in equity are transferred to profit or loss.
(v) New Accounting Standards and Interpretations Adopted
The Group has adopted all of the new and amended Accounting Standards and Interpretations issued by the AASB
that are relevant to the Group and effective for the current annual reporting period. The adoption of the standards and
interpretations has no material impact on the financial report.
(w) New Accounting Standards and Interpretations Issued but not yet Effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2021. The
Group’s assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant
to the Group, are set out below.
The following new or amended Accounting Standards and Interpretations are not expected to have a significant impact
on the Group’s consolidated financial statements:
•
•
•
•
•
•
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-
current
AASB 2020-3 Amendments to Australian Accounting Standards: Business Combinations
AASB 2020-3 Amendments to Australian Accounting Standards: Financial Instruments
AASB 2020-3 Amendments to Australian Accounting Standards: Property, Plant and Equipment
AASB 2020-3 Amendments to Australian Accounting Standards: Provisions, Contingent Liabilities and Contingent
Assets
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of
Accounting Estimates
46
47
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 2. REVENUE
Revenue from contracts with customers is disaggregated by major service lines and is in line with the Group’s reportable
segments (See Note 28).
NOTE 5.
INCOME TAX EXPENSE
This note provides all analysis of the Group’s income tax expense:
Construction revenue
Services revenue
NOTE 3. OTHER INCOME / FINANCE EXPENSES
Other income
Property rental income
Freight and other income
Finance Expenses
Interest on right of use liabilities
Other finance expenses
NOTE 4. DEPRECIATION AND AMORTISATION
Depreciation
Buildings and leasehold improvements
Office and computer equipment
Motor vehicles
Plant and rental equipment
Right of use assets
Total depreciation expense
Amortisation
Customer relationships
Depreciation and amortisation rates are set out in Note 1(k), 1(l) and 1(t).
2021
$’000
2020
$’000
291,741
277,800
569,541
327,585
223,583
551,168
2021
$’000
2020
$’000
264
855
1,119
778
1,721
2,499
68
2,346
2,414
986
1,976
2,962
2021
$’000
2020
$’000
319
1,051
3,004
9,117
13,491
8,431
21,922
280
629
2,045
7,675
10,629
8,490
19,119
4,013
5,082
(a)
Income tax expense
Current tax expense
Deferred tax expense / (benefit) (see Note 17)
(Over) / under provision in respect to prior year
Income tax benefit
(b) Numerical reconciliation of income tax benefit to prima facie tax payable
Profit for the year
Tax at the Australian rate of 30% (2020 - 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
-
-
-
-
-
Increase in income tax expense due to non-tax deductible items
Non-deductible losses on overseas entities
Derecognition of capital tax losses
Difference in overseas tax rate
Sundry items
Amount (over) / under provided in prior year
Income tax expense / (benefit) attributable to entity
(c) Amounts recognised directly in equity
2021
$’000
799
5,892
(126)
6,565
18,618
5,585
287
45
-
774
-
(126)
6,565
2020
$’000
2,182
(5,509)
(1,867)
(5,194)
(34,881)
(10,464)
6,526
241
366
12
(8)
(1,867)
(5,194)
Aggregate current and deferred tax arising in the financial year and not recognised in the net profit or loss but directly
credited (debited) to equity is as follows:
Share based payments
2021
$’000
-
2020
$’000
-
NOTE 6. KEY MANAGEMENT PERSONNEL COMPENSATION
The remuneration disclosures of directors and other members of KMP during the year are provided in Section 7 of the
Remuneration Report designated as audited and forming part of the Directors’ Report.
Short-term employee benefits
Long service leave
Post-employment benefits
Share-based payments
2021
$
2020
$
5,658,223
4,743,957
95,289
168,558
(34,337)
6,768
198,051
64,322
5,887,733
5,013,098
48
49
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 7. AUDITORS’ REMUNERATION
During the year, the following fees were paid or payable for services provided by the auditors of the parent entity, its related
practices and non-related audit firms:
Remuneration of the auditor of the parent entity(1)
Audit or review of the financial statements
Non-assurance related services
- tax compliance
Remuneration of parent entity auditor’s network firms(1)
Audit or review of the financial statements
Remuneration of other auditors of subsidiaries
Audit or review of the financial statements
Non-assurance related services
- tax compliance
- other advisory services
(1) The auditor of the parent entity is BDO Audit (WA) Pty Ltd (2020: BDO Audit (WA) Pty Ltd).
2021
$
2020
$
302,500
290,000
-
302,500
10,270
300,270
78,313
78,313
76,522
76,522
13,785
28,017
3,628
-
17,413
4,759
2,350
35,126
NOTE 8. CAPITAL MANAGEMENT
(a) Risk Management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-
term shareholder value and ensure that the Group can fund its operations and continue as a going concern. The Group’s
debt and capital include ordinary share capital and financial liabilities, supported by financial assets. The Group is not
subject to any externally imposed capital requirements, except for Corporations Act 2001 Chapter 6 in relation to take
over provisions and ASX listing rules Chapter 7 on 15% placement capacity on new equity raising.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
Net cash / (debt)
Net cash / (debt) is calculated as the total secured borrowings less cash and cash equivalents.
(b) Dividends
Distributions paid
The amounts paid, provided or recommended by way of dividend by the parent entity
are:
-
-
-
-
Final fully franked ordinary dividend for the year ended 30/06/2019 of
0.5 cents per share paid on 21/10/2019 franked at the
tax rate of 30%
Interim fully franked ordinary dividend for the year ended 30/06/2020 of
0.5 cents per share paid on 30/07/2020 franked at the
tax rate of 30%
Final fully franked ordinary dividend for the year ended 30/06/2020 of 0.5 cents
per share paid on 21/10/2020 franked at the tax rate of 30%
Interim fully franked ordinary dividend for the year ended 30/06/2021 of 1.0 cent
per share paid on 28/04/2021 franked at the tax rate of 30%
Dividends declared after 30 June 2021
(i)
The Directors have resolved to declare a final fully franked ordinary dividend of
1.0 cent per share payable on 21/10/2021, franked at the tax rate of 30%.
Franking account balance
(ii)
Balance of franking account at year end adjusted for franking credits arising
from payment of provision for income tax, dividends recognised as receivables
and franking debits arising from payment of dividends and franking credits that
may be prevented from distribution in subsequent financial years.
Subsequent to year end, the franking account would be reduced by the proposed
dividend as follows:
-
-
Dividend declared post year end
Dividend paid post year end
2021
$’000
12,249
2020
$’000
(8,465)
2021
$’000
2020
$’000
-
-
2,230
4,458
2,202
2,230
-
-
6,688
4,432
4,458
4,458
-
-
16,936
18,456
(1,911)
-
15,025
(955)
(955)
16,546
50
51
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 9. EARNINGS PER SHARE
NOTE 11. INVENTORIES
Profit / (Loss) attributable to members of the parent entity
WANOS used in the calculation of basic EPS (shares)
WANOS used in the calculation of diluted EPS (shares)
Earnings per share
Basic (cents per share)
Diluted (cents per share)
NOTE 10. TRADE AND OTHER RECEIVABLES
Trade receivables(a)
Other receivables(b)
ECL allowance
Net balance sheet position for ongoing construction contracts:
Contract assets(c)
Contract liabilities(c)
(a) Trade receivables
2021
2020
12,053
(29,687)
445,796,415 444,399,625
450,096,415 450,099,625
2.7
2.7
(6.7)
(6.7)
2021
$’000
90,400
1,569
(5,468)
86,501
57,595
(20,571)
37,024
123,525
2020
$’000
94,853
1,792
(9,195)
87,450
41,275
(15,886)
25,389
112,838
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. Collection of the amounts is expected within one year or less and therefore have been classified as current
assets.
(b) Other receivables
These amounts generally arise from transactions outside the usual operating activities of the Group. Collateral is not
normally obtained.
(c) Contract assets and contract liabilities
Contract assets are balances due from customers as work is performed and therefore a contract asset is recognised
over the period in which the performance obligation is fulfilled. This represents the entity’s right to consideration
for the goods and services transferred to date. Amounts are generally reclassified to trade receivables when these
have been certified or invoiced to a customer. Contract liabilities arise when payment is received prior to work being
performed.
(d) Risk exposure
Raw materials and stores at cost
Finished goods
Work in progress and materials on site
2021
$’000
5,185
5,351
4,332
14,868
2020
$’000
5,250
5,915
4,403
15,568
Provision for obsolete stock was included in this amount of $nil (2020: $53,202).
NOTE 12. PROPERTY, PLANT AND EQUIPMENT
Year Ended 30 June 2021
Opening net book amount
Additions
Disposals
Depreciation charge
Foreign exchange differences
Building &
Leasehold
Improvements
Office &
Computer
Equipment
Motor
Vehicles
Plant &
Rental
Equipment
Capital
Work in
Progress
Total
$’000
$’000
$’000
$’000
$’000
$’000
2,576
2,348
10,559
384
(387)
(319)
6
205
(29)
4,301
(599)
(1,051)
(3,004)
(3)
(11)
60,715
13,646
(1,108)
(9,117)
(22)
1,172
79,255
68
18,604
(345)
(2,796)
-
-
(13,491)
(30)
Land
$’000
1,885
-
(328)
-
-
Closing net book amount
1,557
2,260
1,470
11,246
64,114
895
81,542
As at 30 June 2021
Cost
Accumulated depreciation
Accumulated impairment
Net book amount
1,557
-
-
4,375
(2,115)
-
6,952
23,741
127,204
895
164,724
(5,482)
(12,495)
(63,090)
-
-
-
-
-
(83,182)
-
1,557
2,260
1,470
11,246
64,114
895
81,542
Year Ended 30 June 2020
Opening net book amount
Additions
Disposals
Depreciation charge
Foreign exchange differences
Land
$’000
2,788
-
(903)
-
-
Building &
Leasehold
Improvements
Office &
Computer
Equipment
Motor
Vehicles
Plant &
Rental
Equipment
Capital
Work in
Progress
Total
$’000
$’000
$’000
$’000
$’000
$’000
1,865
1,185
(197)
(280)
3
1,129
1,882
(42)
7,639
4,941
51
(630)
(2,045)
8
(27)
55,593
14,892
(1,923)
(7,674)
(172)
60,716
2,439
(295)
(972)
-
-
71,453
22,605
(3,986)
(10,629)
(188)
1,172
79,255
Information about the Group’s exposure to credit risk, foreign currency risk and interest rate risk can be found in Note 31.
Closing net book amount
1,885
2,576
2,347
10,559
As at 30 June 2020
Cost
Accumulated depreciation
Accumulated impairment
Net book amount
1,885
-
-
4,415
(1,839)
-
6,918
21,447
127,975
1,172
163,812
(4,570)
(10,888)
(67,260)
-
-
-
-
-
(84,557)
-
1,885
2,576
2,348
10,559
60,715
1,172
79,255
52
53
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 13. INTANGIBLES
NOTE 13. INTANGIBLES (CONTINUED)
Year ended 30 June 2020
Opening net book amount
Impairment charge
Amortisation charge
Foreign exchange differences
Closing net book amount
As at 30 June 2020
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2021
Opening net book amount
Additions
Impairment charge
Amortisation charge
Foreign exchange differences
Closing net book amount
As at 30 June 2021
Cost
Accumulated amortisation and impairment
Net book amount
Goodwill
$’000
Customer
Relationships
$’000
Software
$’000
Total
$’000
114,990
(24,761)
-
(343)
89,886
114,655
(24,769)
89,886
22,566
-
(5,082)
(120)
17,364
29,160
(11,796)
17,364
89,886
17,364
-
-
-
(59)
89,827
-
-
(4,013)
(7)
13,344
-
-
-
-
-
-
-
-
-
1,416
-
-
-
137,556
(24,761)
(5,082)
(463)
107,250
143,815
(36,565)
107,250
107,250
1,416
-
(4,013)
(66)
1,416
104,587
114,596
(24,769)
89,827
29,153
(15,809)
13,344
1,416
-
1,416
145,165
(40,578)
104,587
Impairment disclosures of non-financial assets
At the end of each reporting period, the Group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount
of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying
value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Goodwill is allocated to cash-generating units which are based on the Group’s reporting segments:
Allocation of intangible assets to Cash-Generating Unit (CGU) groups
30 June 2021
30 June 2020
Asset Services
$’000
Mining Services
$’000
Construction
$’000
43,542
47,195
1,178
1,178
58,451
58,877
Total
$’000
103,171
107,250
The recoverable amount of a CGU is determined based on value-in-use calculations which require the use of assumptions.
These calculations use discounted cash flow projections based on financial budgets approved by management covering a
three year period.
The discount rate used is the Group’s weighted average cost of capital.
The same growth rate is applied across all CGU’s and reflect the long-term average growth rate and management’s outlook
on growth.
Significant estimate: Key assumptions used for value-in-use calculations
Asset Services
Mining Services
Construction
Long-term growth rate
Pre-tax discount rate
2021
%
2.00%
2.00%
2.00%
2020
%
2.00%
2.00%
2.00%
2021
%
12.29%
12.29%
12.29%
2020
%
13.89%
13.89%
13.89%
Sensitivity
Management believe that any reasonably possible change in the key assumptions on which the recoverable amount based in
all the CGU’s would not cause the remaining carrying amount to exceed its recoverable amount.
Impairment expense
The Group performs its impairment test on an annual basis. The Group considers the relationship between its market
capitalisation and its book value, among other factors when reviewing indicators of impairment. As a result of the
impairment testing process, no impairment is recognised for the year ended 30 June 2021 (2020: impairment in the
Construction Segment of $24,761,000).
NOTE 14. TRADE AND OTHER PAYABLES
Current
Trade payables
Other payables and accrued expenses
Information about the Group’s exposure to currency and liquidity risks is included in Note 31.
2021
$’000
2020
$’000
63,231
43,253
106,484
54,558
34,051
88,609
54
55
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 15. LEASES
The recognised right of use liabilities are as follows:
Current right of use liability
Non-current right of use liability
Total right of use liabilities
The recognised right of use assets relate to the following types of assets:
Properties
Equipment and vehicles
Total right of use assets
Extension Options
2021
$’000
8,253
13,096
21,349
2020
$’000
8,412
18,324
26,736
19,852
487
20,339
24,955
1,017
25,972
Certain leases contain extension options exercisable by the Group. These extension options are exercisable only by the
Group and not by the lessors. The Group assesses, at lease commencement, whether it is reasonably certain to exercise
the extension options, and where it is reasonably certain, the extension period has been included in the lease liability. The
Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant change in
circumstances within its control.
NOTE 16. BORROWINGS
Current
Secured borrowings - Term facility
Secured borrowings - Asset financing
Other borrowings - Insurance premium funding
Non-current
Secured borrowings - Term facility
Secured borrowings - Asset Financing
The carrying amount of non-current assets pledged as first security are:
Plant, motor vehicles and equipment over which hire purchase contracts apply
3,000
10,941
1,406
15,347
5,250
13,390
18,640
500
10,461
1,753
12,714
8,250
15,607
23,857
31,916
31,916
31,134
31,134
(a) Hire purchase finance
Hire purchase liabilities are effectively secured as the rights to the leased assets recognised in the financial statements
revert to the lessor in the event of default.
(b) Fair value
The fair value of borrowings is not materially different from the carrying value since interest payable on these
borrowings are either close to current market rates or the borrowings are of a short term nature.
56
NOTE 17. DEFERRED TAX BALANCES
(a) Deferred tax assets
The balance comprises temporary differences attributed to:
Property, plant and equipment
Provisions
Share based payments
Payables
Tax losses
Other
Total deferred tax assets
(b) Deferred tax liabilities
The balance comprises temporary differences attributed to:
Property Plant and Equipment
Debtors retention
Intangible assets
Accrued revenue
Prepayments
Other
Total deferred tax liabilities
Net deferred tax assets/(liabilities)
2021
$’000
2020
$’000
-
9,551
55
1,219
22,810
2,345
35,980
3,142
871
3,968
-
-
-
7,981
27,999
3,798
8,915
-
1,414
24,380
1,598
40,105
-
1,179
4,387
799
37
35
6,437
33,668
Opening
Balance
$’000
Recognised in
Profit or Loss
$’000
(Over)/Under
Previous Years
$’000
Foreign exchange
differences
$’000
Closing
Balance
$’000
2021
Deferred tax assets /
(liabilities) in relation to:
Property, plant and equipment
Provisions
Share based payments
Intangibles
Debt retention
Prepayments
Payables
Tax losses
Accrued Revenue
Other
2020
Deferred tax assets /
(liabilities) in relation to:
Property, plant and equipment
Provisions
Share based payments
Intangibles
Debt retention
Prepayments
Payables
Tax losses
Accrued revenue
Other
3,798
8,915
-
(4,387)
(1,179)
(37)
1,414
24,380
(799)
1,563
33,668
8,006
5,796
-
(6,786)
(1,108)
(39)
804
19,461
(799)
1,842
27,177
(5,679)
(526)
54
443
308
37
(195)
(1,177)
-
843
(5,892)
(4,735)
1,891
-
2,018
(71)
2
610
5,866
-
(72)
5,509
(1,322)
1,223
1
-
-
-
-
(366)
747
(15)
268
527
1,228
-
381
-
-
-
(947)
-
(207)
982
61
(61)
-
(24)
-
-
-
(27)
52
(46)
(45)
(3,142)
9,551
55
(3,968)
(871)
-
1,219
22,810
-
2,345
27,999
3,798
8,915
-
(4,387)
(1,179)
(37)
1,414
24,380
(799)
1,563
33,668
57
2021
$’000
2020
$’000
(c) Reconciliations
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 17. DEFERRED TAX BALANCES (CONTINUED)
Significant judgment: recoverability of deferred tax assets
The deferred tax assets include an amount of $22,810,000 which relates to carried-forward tax losses. The group has concluded
that the deferred assets will be recoverable using the estimated future taxable income based on the approved business plans and
budgets. The losses can be carried forward indefinitely and have no expiry date.
NOTE 19. ISSUED CAPITAL
Share capital
Ordinary shares fully paid
2021
2020
Shares
445,796,415
$’000
Shares
218,096 445,796,415
$’000
218,096
NOTE 18. PROVISIONS
Current
Employee benefit provisions(a)
Lease provisions(c)
Other
Non-current
Employee benefit provisions(b)
Lease provisions(c)
Other
(a) Employee benefit provisions
2021
$’000
2020
$’000
20,606
1,604
3,877
26,087
3,394
2,223
1,530
7,147
17,388
1,982
5,146
24,516
1,769
3,519
1,350
6,638
The employee benefit provisions cover the Group’s liability for long service leave and annual leave.
The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long
service where employees have completed the required period of service and also those where employees are entitled
to pro-rata payments in certain circumstances. The entire amount of the current provision of $20,606,000 (2020:
$17,388,000) is presented as current, since the group does not have an unconditional right to defer settlement for
any of these obligations. However, based on past experience, the Group does not expect all employees to take the full
amount of accrued leave or require payment within the next 12 months.
(b) Significant estimate: Provision for long-term employee benefits
In determining the employee entitlements relating to long service leave, consideration is given to employee wage
increases and the probability that the employee may satisfy any vesting requirements. Those cash flows are discounted
using market yields on Government bonds with terms to maturity that match the expected timing of cash flows
attributable to employee benefits.
(c) Lease provisions
$3,381,000 (2020: 5,113,000) of the liability is assumed as part of the business combination in a prior period for the fair
valuation of GCS’ lease agreements due to the leases’ terms being unfavourable relative to market terms. The market
value of rentals for these properties are lower than the rental terms agreed by GCS to lease the properties and therefore
a liability is recognised.
$446,000 (2020: 388,000) of onerous lease provisions assumed as part of the business combination in the prior period
for discount provided for a sub-lease, as the unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it.
Balance as at 1 July 2019
Shares issued in relation to payments of contingent consideration
Balance as at 30 June 2020
Balance as at 30 June 2021
(a) Ordinary shares
Number of
shares
Total
$‘000
440,415,099
5,381,316
445,796,415
215,896
2,200
218,096
445,796,415
218,096
Fully paid ordinary shares carry one vote per share and entitle the holder to participate in dividends and the proceeds
on winding up of the Company in proportion to the number of shares held. Ordinary shares have no par value and the
Company does not have a limit on the amount of authorised capital.
(b) Options
No new options were issued in the current financial year.
(c) Performance rights
There were no performance rights issued in the current financial year. In the prior financial year, 5,700,000
performance rights were issued. See Note 29 for further discussions on share based payments.
NOTE 20. RESERVES
Nature and purpose of reserves
(a) Share based payment reserve
The share based payment reserve is used to recognise the value of the vesting of equity-settled share based payments
provided to employees, including key management personnel, as part of their remuneration.
(b) Asset revaluation surplus
The asset revaluation surplus includes the net revaluation increments and decrements arising from the revaluation of
non-current assets in accordance with Australian Accounting Standards.
(c) Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on the translation of foreign operations
with functional currencies other than those of the presentation currency of these financial statements. Refer to
accounting policy Note 1.
(d) Reverse acquisition reserve
As a result of reverse acquisition accounting, a new equity account is created as a component of equity. This account
called ‘Reverse acquisition reserve’ is similar in nature to share capital. The Reverse acquisition reserve is not available
for distribution. This equity account represents a net adjustment for the replacement of the legal parent’s (SRG Global)
equity with that of the deemed acquirer (SRG Limited).
(e) Hedging Reserve - cash flow hedges
The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is
determined to be an effective hedge.
58
59
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 21. COMMITMENTS
NOTE 23. CASH AND CASH EQUIVALENTS (CONTINUED)
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
- Plant and equipment
Total capital commitments
2021
$’000
2020
$’000
1,102
1,102
755
755
(b) Non-cash financing and investing activities
Right of use assets recognised under AASB 16
(c) Reconciliation of liabilities arising from financing activities
NOTE 22. CONTINGENT ASSETS AND LIABILITIES
Certain claims arising out of construction and services contracts have been made by controlled entities in the ordinary course
of business. These claims are confidential in nature and may involve adjudication, arbitration or litigation. In accordance with
Australian Accounting Standards, due to the uncertainty in relation to the quantum and timing of the resolution of these
claims, no amounts have been recognised in the financial statements in relation to these matters.
The Group’s bank guarantees and bond facilities’ limits and drawdowns are disclosed in Note 30.
NOTE 23. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
(a) Reconciliation of profit / (loss) for the year to net cash from operating activities
Profit / (loss) for the year
Depreciation and amortisation
Share based payments
Earnings from equity accounted investment
(Gain) / loss on disposal of property, plant and equipment
Unrealised foreign exchange
Impairment expense
Changes in assets
-
-
-
-
-
(Increase) / decrease in trade and other receivables
(Increase) / decrease in contract assets
(Increase) / decrease in inventories
(Increase) / decrease in other assets
(Increase) / decrease in deferred tax assets
Changes in liabilities
-
-
-
-
(Decrease) / increase in trade and other payables
(Decrease) / increase in contract liabilities
(Decrease) / increase in provisions
(Decrease) / increase in tax liability
2021
$’000
46,236
46,236
2021
$’000
12,053
25,935
(160)
6
(174)
374
-
948
(16,319)
652
1,292
5,669
20,104
4,685
2,080
(1,974)
2020
$’000
28,106
28,106
2020
$’000
(29,687)
24,201
335
6
(1,700)
566
24,761
(16,855)
6,187
(2,727)
(103)
(6,491)
3,210
294
3,050
731
Cash inflow from operating activities
55,171
5,778
2021
$’000
2020
$’000
2,797
31,792
Opening
Balance
$’000
Net
Financing
Cash Flows
$’000
New / Extended
Leases
$’000
10,498
26,073
26,736
63,307
24,739
21,363
31,792
77,894
(847)
(1,736)
(8,184)
(10,767)
(14,241)
4,710
(7,727)
(17,258)
-
-
2,797
2,797
-
-
2,671
2,671
Closing
Balance
$’000
9,651
24,337
21,349
55,337
10,498
26,073
26,736
63,307
2021
Borrowings
Asset financing liabilities
Lease liabilities
2020
Borrowings
Asset financing liabilities
Lease liabilities (brought in at 1 July)
NOTE 24. PARENT ENTITY FINANCIAL INFORMATION
The table represents the legal parent entity, which is SRG Global Limited.
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Profit reserve
Accumulated losses
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
2021
$’000
2020
$’000
14,364
119,176
133,540
35,039
11,275
46,314
6,600
125,857
132,457
30,903
11,692
42,595
87,226
89,862
158,010
17,470
56,623
(144,877)
87,226
158,010
17,162
46,794
(132,104)
89,862
3,857
-
3,857
46,794
-
46,794
With the exception of matters noted in Notes 21 and 22, there were no contingent liabilities, guarantees or capital
commitments of the parent entity not otherwise disclosed in these financial statements.
60
61
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 25. PARTICULARS RELATING TO CONTROLLED ENTITIES
(a) Group accounts include a consolidation of the following:
Country of
Incorporation
Australia
Entity
SRG Global Limited(1)
Controlled companies
CASC Contracting Pty Ltd
SRG Global Assets Pty Ltd(1)
SRG Global CASC Pty Ltd(1)
SRG Global Facades (NSW) Pty Ltd(1)
SRG Global Facades (QLD) Pty Ltd(1)
SRG Global Facades (VIC) Pty Ltd(1)
SRG Global Facades (WA) Pty Ltd(1)
SRG Global Facades (Western) Pty Ltd(1)
SRG Global Facades Pty Ltd(1)
SRG Global Industrial Services Pty Ltd(1)
SRG Global Integrated Services Pty Ltd(1)
SRG Global Investments Pty Ltd(1)
SRG Global Structures (VIC) Pty Ltd(1)
SRG Global Structures (WA) Pty Ltd(1)
Red Ore Drill and Blast Pty Ltd
Structural Systems Middle East LLC(2)
NASA Structural Systems LLC(2)
SRG Contractors US, Inc.
SRG Employee Share Trust
SRG Global (Australia) Limited(1)
SRG Global Building (Northern) Pty Ltd(1)
SRG Global Building (Southern) Pty Ltd(1)
SRG Global Building (Western) Pty Ltd(1)
SRG Global Civil Pty Ltd(1)
SRG Global Corporate (Australia) Pty Ltd(1)
SRG Global International Holdings Pty Ltd(1)
SRG Global IP Pty Ltd(1)
SRG Global Mining (Australia) Pty Ltd(1)
SRG Global Products Pty Ltd(1)
SRG Global Services (Australia) Pty Ltd(1)
SRG Global Services (Western) Pty Ltd(1)
SRG Hong Kong Limited
SRG International Holdings Pte. Ltd.
SRG Global Group (NZ) Ltd
SRG Global (NZ) Ltd
SRG Global Asset Services (NZ) Ltd
SRG Global Remediation Services (NZ) Ltd
SRG Global Refractory Services (NZ) Ltd
SRG Global Asset Services (Taranaki) Ltd
Total Bridge Services Limited
Bugarrba PJV Pty Ltd
SRG Global Contracting Pty Ltd(1)
GCS Hire Pty Ltd
GCS Personnel Services Pty Ltd
GCS Secured Pty Ltd
GCS Summit Pty Ltd
Gallery Facades (SA) Pty Ltd
Paragon Glass Pty Ltd
Paragon Glass (VIC) Pty Ltd
Meridian Concrete Australia Pty Ltd
Structural Systems (Bridge Maintenance) Pty Ltd
Structural Systems (Construction) Pty Ltd
Rock Engineering (Aust) Pty Ltd
Rock International Mining & Civil Pty Ltd
Total Fire Protection Pty Ltd
SRG Global (Structures) Pty Ltd
SRG South Africa (Pty) Ltd
Structural Rock Group Canada Limited
The following entities are in the process of deregisteration
SRG Contractors Doha LLC(2)
SRG Contractors Muscat LLC(2)
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
UAE
UAE
USA
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Hong Kong
Singapore
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
South Africa
Canada
Principal Activity
Corporate Services
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Asset Services
Construction
Construction
Construction
Dormant
Construction
Construction
Construction
Trust
Corporate Services
Construction
Construction
Construction
Construction
Corporate Services
Dormant
Construction
Mining Services
Construction
Asset Services
Asset Services
Construction
Construction
Asset Services
Asset Services
Asset Services
Asset Services
Asset Services
Asset Services
Asset Services
Asset Services
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Deregistered
Ownership Interest Held by
the Group
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
49%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
49%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
49%
49%
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
49%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
49%
49%
(1) Controlled entities subject to ASIC Corporation (Wholly-owned Companies) Instrument 2016/785.
(2) In accordance with current foreign ownership restrictions in the United Arab Emirates (UAE), these entities have a 51% participation by UAE
Nationals. This participation incurs a fixed fee and has no right to the profits or liability for the debts of the entity.
62
Qatar
Oman
Dormant
Dormant
NOTE 25. PARTICULARS RELATING TO CONTROLLED ENTITIES (CONTINUED)
Pursuant to ASIC Corporation (Wholly-owned Companies) Instrument 2016/785, relief has been granted to these controlled entities of
SRG Global Limited from the Corporations Act 2001 requirements for preparation, audit and publication of accounts. As a condition
of the ASIC Corporation (Wholly-owned Companies) Instrument 2016/785, SRG Global Limited and the controlled entities should
become parties to a Deed of Cross Guarantee, also known as “The Closed Group”. The effect of the deed is that SRG Global Limited
has guaranteed to pay any deficiency in the event of winding up of these controlled entities. The controlled entities have also given a
similar guarantee in the event that SRG Global Limited is wound up. The deed was made on 21 June 2019. A revocation deed was also
made on 21 June 2019 for parties that were in the previous Deed of Cross Guarantee prior to the GCS and SRG merger.
The following are the consolidated totals for the Closed Group relieved under the deed:
Financial information in relation to:
Statement of profit or loss and other comprehensive income:
Profit / (Loss) before income tax
Income tax (expense) / benefit
Profit / (Loss) for the year
Other comprehensive income
Total comprehensive income / (loss) for the year
Statement of financial position:
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Other current assets
Derivative financial instrument asset
Equity accounted investments
Total current assets
Non-current assets
Property, plant and equipment
Right of use assets
Intangible assets
Non-current contract assets
Deferred tax assets
Related party loan receivables
Investments
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Right of use liabilities
Current tax liabilities
Provisions
Derivative financial instrument liability
Total current liabilities
Non-current liabilities
Borrowings
Right of use liabilities
Provisions
Related party loan payables
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
2021
$’000
2020
$’000
20,717
(6,755)
13,962
-
13,962
(28,425)
5,948
(22,477)
-
(22,477)
37,468
73,004
52,782
14,003
2,624
342
-
180,223
73,752
17,720
87,716
1,869
27,337
18,639
36,658
263,691
443,914
98,891
18,378
15,189
7,289
125
24,168
-
164,040
18,348
11,407
7,147
-
36,902
200,942
242,972
218,096
8,617
16,259
242,972
20,210
68,109
36,411
14,583
3,432
86
4,478
147,309
70,605
23,891
99,047
-
33,475
19,938
36,657
283,613
430,922
80,694
14,702
12,563
7,448
1,265
22,308
-
138,980
23,405
17,153
6,638
-
47,196
186,176
244,746
218,096
8,581
18,069
244,746
63
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 25. PARTICULARS RELATING TO CONTROLLED ENTITIES (CONTINUED)
NOTE 27. EVENTS SUBSEQUENT TO REPORTING DATE
(b) Joint operations
The Company’s subsidiary, TBS Farnsworth, has a 50% share of Total Bridge Services, a joint operation with WSP New
Zealand Ltd and Fulton Hogan Ltd. The principal activity of which is maintaining the Auckland Harbour Bridge.
The Company’s subsidiary, SRG Global Civil Pty Ltd, has a 50% share of an unincorporated joint operation with
Georgiou Group Pty Ltd. The principal activitiy of which is upgrading the New England Highway - Bolivia Hill Upgrade
in New South Wales.
The Company’s subsidiary, SRG Global Civil Pty Ltd, has a 50% share of an unincorporated joint operation with WBHO
Infrastructure Pty Ltd. The principal activity of which is constructing a grade-separated interchange at Wanneroo Road
and Ocean Reef Road.
The Company’s subsidiary, SRG Global Integrated Services Pty Ltd, has a 49% share of Bugarrba PJV Pty Ltd, a joint
operation with Walganbung Services Group Pty Ltd. The principal activity of which is for the provision of asset services
on the land and for the benefit of the Njamal Traditional Owners.
(c) Joint ventures
Set out below are the joint ventures of the Group as at 30 June 2021.
Place of
business
% of ownership
interest
Measurement
method
Traylor SRG, LLC(a)
United States
50% Equity Method
(a) Incorporated Joint Venture in United States.
Carrying
amount
2021
$’000
121
Carrying
amount
2020
$’000
139
NOTE 26. RELATED PARTY INFORMATION
(a) Subsidiaries
Interest in subsidiaries are set out in Note 25.
(b) Key Management Personnel compensation
Key Management Personnel compensation is disclosed in Note 6.
In addition during the financial year, the following type of transactions have also been entered into with key
management personnel of the Group.
(c) Transactions with related parties
Sales of goods and services to entities controlled by key management personnel
2021
$
-
Purchase of goods and services from entities controlled by key management personnel
39,824
2020
$
287,120
28,682
(d) Outstanding balances arising from sales / purchases of goods and services with related parties as at reporting date
Current receivables (sales of goods and services)
Current payables (purchases of goods and services)
2021
$
-
6,884
2020
$
6,180
-
In prior year, no provisions have been raised in relation to any outstanding balances, and no expense has been
recognised in respect of bad or doubtful debts due from related parties.
On 24 August 2021 the Company declared a final fully franked dividend of 1.0 cents per share. The record date of the
dividend is 9 September 2021 and the payment is scheduled for 21 October 2021.
Other than the matters described above, no other matter or circumstance has arisen since 30 June 2021 that has significantly
affected, or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in
future financial years.
NOTE 28. SEGMENT RESULTS
Description of segments
Management has determined that strategic decision making is facilitated and enhanced by evaluation of operations on the
customer segments of Asset Services, Mining Services and Construction. For each of the strategic operating segments, the
Managing Director reviews internal management reports on a regular basis.
The Group is managed primarily on the basis of product category and service offerings as the diversification of the Group’s
operations have inherently different risk profiles and performance assessment criteria. Operating segments are therefore
determined on the same basis.
The following summary describes the operation in each of the Group’s reportable segments:
Asset Services segment
Our operations in the Asset Services segment consist of supplying integrated services to customers across the entire
asset life cycle. Services provided span multiple sectors including oil and gas, energy, major infrastructure, offshore,
mining, power generation, water treatment plants, commissioning, decommissioning, shutdowns, and civil works.
Contracts vary in length from short to long term.
Mining Services segment
The Mining Services segment services mining clients and provides comprehensive ground solutions including
production drilling, ground and slope stabilisation, design engineering and monitoring services. Contracts vary in length
from short to long term.
Construction segment
Our operations in the Construction segment consist of supplying integrated products and services to customers
involved in the construction of complex infrastructure. These typically include bridges, dams, office towers, high rise
apartments, shopping centres, hotels, car parks, recreational buildings, and hospitals. Contracts are typically medium to
long term.
64
65
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 28. SEGMENT RESULTS (CONTINUED)
The Managing Director assesses the performance of the operating segments based on a measure of adjusted EBITDA. This
measurement excludes certain non-recurring expenditures which are of an isolated nature such as equity settled share based
payments and corporate activities pertaining to the overall Group including the treasury function which manages the cash
and funding arrangements of the Group. During the financial year, no customer has contributed more than 10% of the total
revenue for the Group.
Segment information provided to the Managing Director for the year ended 30 June 2021 is as follows:
Segment revenues and results
30 June 2021
Construction revenue
Services revenue
Revenue from external customers
EBITDA
Depreciation
Amortisation
Finance costs
Equity accounted investment results
Profit before income tax
Income tax expense
Profit after income tax
30 June 2020
Construction revenue
Services revenue
Revenue from external customers
EBITDA
Depreciation
Amortisation
Finance costs
Equity accounted investment results
Profit before income tax
Income tax benefit
Profit after income tax
Asset
Services
$’000
Mining
Services
$’000
Construction
Corporate
$’000
$’000
-
186,944
186,944
22,028
(6,983)
(3,587)
(479)
-
10,979
-
151,870
151,870
18,638
(5,623)
(3,593)
(482)
-
8,940
-
90,856
90,856
20,029
(6,663)
-
(471)
-
12,895
-
71,713
71,713
13,898
(5,420)
-
(591)
-
7,887
291,741
-
291,741
18,943
(6,353)
(426)
(493)
(6)
11,665
327,585
-
327,585
(27,262)
(6,533)
(1,489)
(578)
139
-
-
-
(13,942)
(1,923)
-
(1,056)
-
(16,921)
-
-
-
(13,131)
(1,543)
-
(1,311)
-
(35,723)
(15,985)
Total
$’000
291,741
277,800
569,541
47,058
(21,922)
(4,013)
(2,499)
(6)
18,618
(6,565)
12,053
327,585
223,583
551,168
(7,857)
(19,119)
(5,082)
(2,962)
139
(34,881)
5,194
(29,687)
NOTE 28. SEGMENT RESULTS (CONTINUED)
Segment assets and liabilities
30 June 2021
Segment assets
Segment liabilities
30 June 2020
Segment assets
Segment liabilities
Asset Services Mining Services
$’000
$’000
Construction
$’000
Corporate
$’000
149,108
57,900
127,594
50,653
50,199
29,051
189,646
109,621
48,920
29,544
189,748
93,125
53,976
19,556
56,599
28,111
Total
$’000
442,929
216,128
422,861
201,433
Revenue from external customers
Australia
International
Group
2021
$’000
507,457
2020
$’000
479,413
2021
$’000
62,084
2020
$’000
71,755
2021
$’000
569,541
2020
$’000
551,168
NOTE 29. SHARE BASED PAYMENTS
The SRG Global Performance Rights Plan (the “Plan”) was approved by shareholders at the AGM held on 27 November 2018
and provides for the issue of performance rights to assist in the recruitment, retention and motivation of eligible persons of
the Company. Under the Plan, the Board may issue eligible persons with performance rights to acquire shares in the future.
The vesting of all performance rights is subject to performance hurdles and service conditions being met. A 24-month
escrow period restricting the conversion of the performance rights to fully paid ordinary shares has been imposed at the
discretion of the board of directors. Vested performance rights expire on 30 June 2025.
On 26 November 2019, a total of 5,700,000 performance rights (convertible into one ordinary share per right) were
approved to be issued subject to the terms of the Plan. Of the approved amount, only 4,250,000 were granted with the
remainder 1,450,000 yet to be granted. During the current financial year no new performance rights were issued or granted;
1,400,000 performance rights have lapsed. The performance rights are subject to the satisfaction of performance hurdles
which are based on achieving agreed profit targets and an increase in the earnings per share and shareholder return targets.
The performance rights are also subject to a continuous service requirement.
The following share-based payment arrangements were in existence during the current year:
Performance rights series Number Grant date
26-Nov-19
Tranche 1a
26-Nov-19
Tranche 1b
26-Nov-19
Tranche 1c
26-Nov-19
Tranche 1d
26-Nov-19
Tranche 2a
725,000
725,000
725,000
725,000
700,000
Tranche 2b
700,000
26-Nov-19
Tranche 2c
Tranche 2d
700,000
700,000
26-Nov-19
26-Nov-19
Expiry date
30-Jun-25
Black-Scholes
30-Jun-25 Monte Carlo Simulation
N/A
30-Jun-25
N/A
30-Jun-25
Black-Scholes
Lapsed in
current year
Lapsed in
current year
30-Jun-25
30-Jun-25
Black-Scholes
Black-Scholes
Black-Scholes
Method of valuation Fair value at grant date (AUD)
0.325
0.048
N/A
N/A
0.359
0.342
0.325
0.309
66
67
The valuation was performed using the Black-Scholes model for Rights that are subject to non-market conditions and
for Rights that are subject to an Absolute Shareholder Return (ASR), the Monte Carlo Simulation model was utilised. The
following assumptions were utilised:
Input
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of performance rights (years)
Rights exercise price (A$)
Discount for lack of marketability (%)
Value
5%
45%
0.74% - 0.88%
0.59 - 3.59 years
-
0% - 10%
No performance rights were exercised during the year.
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 30. FINANCING ARRANGEMENTS
The consolidated Group has access to the following lines of credit:
Total facilities available
Bank overdraft (1)
Hire purchase facility (1)
Other facilities (1)
Bank guarantee facility (1)
Surety bond facility(2)
Facilities used at the end of the reporting period:
Bank overdrafts (1)
Hire purchase facility (1)
Other facilities (1)
Bank guarantee facility (1)
Surety bond facility (2)
Facilities not used at the end of the reporting period:
Bank overdrafts (1)
Hire purchase facility (1)
Other facilities (1)
Bank guarantee facilities (1)
Surety bond facility(2)
2021
$’000
2020
$’000
1,500
50,000
52,158
20,000
125,663
249,321
-
22,329
11,945
10,717
71,135
116,126
1,500
27,671
40,213
9,283
54,528
133,195
1,500
40,000
53,003
20,000
178,402
292,905
-
26,067
10,503
14,550
70,543
121,663
1,500
13,933
42,500
5,450
107,859
171,242
(1) Multi-option facility
As at reporting date, the Group has used $44,991,000 of its multi-option facility limit of $123,658,000. The multi-option facility
is a comprehensive borrowing facility which includes bank overdraft, hire purchase, letter of credit, corporate credit card and
bank guarantees.
(2) Surety bonds
The Group has a $125,663,000 insurance bond facility with various parties (30 June 2020: $178,402,000). This
facility has been utilised to provide security in connection with certain projects. The amount of insurance bonds
issued under this facility as at 30 June 2021 is $71,135,000 (30 June 2020: $70,543,000).
NOTE 31. FINANCIAL INSTRUMENTS
Significant accounting and risk management policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset and
financial liability are disclosed in Note 1 to the financial statements.
Treasury risk management
The Group’s activities expose it to a variety of financial risk, market risk (including currency risk, interest rate risk and other
price risk), credit risk and liquidity risk. Management, consisting of senior executives of the Group meet on a regular basis
to analyse risk exposure, and to evaluate treasury management strategies in the context of the most recent economic
conditions and forecasts. Risk management is carried out by the Board of Directors, who evaluate and agree upon risk
management policies and objectives.
The Group uses different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate and aging analysis for credit risk.
(a) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group
manages liquidity risk by maintaining adequate reserves, banking facilities and by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group’s financial
arrangements are disclosed in Note 30. Maturity of the Group’s financial liabilities are as follows:
2021
Borrowings
Hire purchase liabilities
Lease liabilities
Trade and other payables
2020
Borrowings
Hire purchase liabilities
Lease liabilities
Trade and other payables
(b) Price risk
1 year or less
1 - 2 years
2 - 5 years
$’000
$’000
$’000
More than
5 years
$’000
Total cash
flow
$’000
Carrying
amount
$’000
4,406
9,238
8,513
63,231
85,388
2,253
10,461
8,412
88,609
109,735
5,424
8,493
9,174
-
-
8,351
4,956
-
23,091
13,307
8,537
7,738
7,046
-
-
8,412
11,864
-
23,321
20,276
-
-
-
-
-
-
-
-
-
-
9,830
26,082
22,643
63,231
121,786
10,790
26,611
27,322
88,609
153,332
9,656
24,331
21,349
63,231
118,567
10,503
26,068
26,736
88,609
151,916
The Group is exposed to commodity price risk through its consumption of steel its operations use for post-tensioning,
and to a lesser degree in the mining services business. The Group monitors forward steel prices and endeavours to lock
in agreed prices on a project by project basis prior to formalising bid prices wherever possible. As at 30 June 2021, the
Group held no financial instruments that could vary according to changes in the price of steel (2020: Nil).
68
69
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 31. FINANCIAL INSTRUMENTS (CONTINUED)
(c) Foreign exchange risk
NOTE 31. FINANCIAL INSTRUMENTS (CONTINUED)
(d)
Interest rate risk
Foreign currency risk is the risk that the value of a financial commitment, a recognised asset or liability will fluctuate
due to changes in foreign currency rates. The Group is exposed to foreign exchange risk in abroad projects executed
by local subsidiaries. In managing exposure to foreign exchange risk, the group has entered into a number of forward
foreign exchange contracts. At 30 June 2021, the fair value of these contracts was $342,000 (2020: $86,000).
There is a natural hedge in place to the extent project costs are materially of the same foreign currency.
The major exchange rates relevant to the Group are as follows:
Average year ended
30/06/2021
As at
30/06/2021
Average year ended
30/06/2020
As at
30/06/2020
AUD$ / USD$
AUD$ / AED$
AUD$ / CNH$
AUD$ / NZD$
0.75
2.74
4.94
1.07
0.75
2.76
4.85
1.07
0.67
2.46
4.72
1.05
0.69
2.53
4.86
1.07
The Group’s exposure to material foreign exchange risk at reporting date was as follows, based on carrying amounts in
AUD$’000:
2021
Cash and cash equivalents
Trade and other receivables
Trade and other payables
2020
Cash and cash equivalents
Trade and other receivables
Trade and other payables
USD$
$’000
1,887
1,541
(501)
2,927
USD$
$’000
496
1,800
(1,056)
1,240
AED$
$’000
2,289
2,953
CNH$
$’000
-
-
NZD$
$’000
6,447
9,003
Total
$’000
10,623
13,497
(799)
(9,200)
(6,240)
(16,740)
4,443
(9,200)
9,210
7,380
AED$
$’000
2,192
5,299
(1,909)
5,582
CNH$
$’000
-
-
NZD$
$’000
5,516
7,743
Total
$’000
8,204
14,842
(2,143)
(2,143)
(5,117)
(10,225)
8,142
12,821
Based on the carrying amounts exposed to foreign currencies, had the Australian dollar weakened by 5%/strengthened
by 5% against these foreign currencies with all other variables held constant, the Group’s profit or loss would have been
$359,180 lower/$396,989 higher (2020: $630,489 lower/$696,856 higher). The percentage change is the expected
overall volatility of the significant currencies, which is based on management’s assessment of reasonable possible
fluctuations taking into consideration movements over the last financial year and the spot rate at each reporting date.
.
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long term debt
obligations that have floating interest rates. The Group has a mixture of variable and fixed interest rate financial
instruments to manage its interest cost.
The Group’s exposure to interest rate risk, effective weighted average interest rate, contractual settlement terms of a
fixed period of maturity as well as management’s expectation of settlement period for financial instruments are set
out below.
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Derivative
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Derivative
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
Weighted
Average
Interest
Rate
Floating
Interest
Rate
Fixed Interest Rate Maturing Within
1 year
or less
Over 1 year
to 5 years
More than
5 years
Non-interest
bearing
%
$’000
$’000
$’000
$’000
$’000
Total
$’000
0.10%
46,236
-
-
-
-
-
46,236
-
-
-
-
-
-
-
-
-
-
-
3.32%
3.15%
(10,252)
(10,345)
(13,390)
-
(8,253)
(13,096)
(10,252)
(18,598)
(26,486)
-
-
-
-
-
-
-
-
-
86,501
342
46,236
86,501
342
86,843
133,079
(63,231)
(63,231)
-
-
(33,987)
(21,349)
(63,231)
(118,567)
Weighted
Average
Interest
Rate
Floating
Interest
Rate
Fixed Interest Rate Maturing Within
1 year
or less
Over 1 year
to 5 years
More than
5 years
Non-interest
bearing
%
$’000
$’000
$’000
$’000
$’000
Total
$’000
0.25%
28,106
-
-
-
-
-
28,106
-
-
-
-
-
-
-
-
-
-
3.47%
3.20%
(8,750)
(12,214)
(15,606)
-
(8,412)
(18,324)
(8,750)
(20,626)
(33,930)
-
-
-
-
-
-
-
-
-
87,450
86
28,106
87,450
86
87,536
115,642
(88,609)
(88,609)
-
-
(36,570)
(26,736)
(88,609)
(151,915)
As at 30 June 2021 a sensitivity analysis has not been disclosed in relation to the floating interest deposits for the Group, as
the net results of a reasonable possible change in interest rates have been determined to be immaterial to the statement of
profit or loss and other comprehensive income.
70
71
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Shareholder Information
NOTE 31. FINANCIAL INSTRUMENTS (CONTINUED)
(e) Credit risk
NOTE 31. FINANCIAL INSTRUMENTS (CONTINUED)
(f) Fair value
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations. The Group is exposed to credit risk from its operating activities (primarily trade receivables)
and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions
and other financial instruments.
As a result of the diverse range of services and geographical spread covered by the Group, the Group does not have
a concentration of credit risk to any one customer. Whilst the Group does have a broad risk to lead contractors in the
construction industry generally, this is managed on a ‘customer by customer’ basis, taking into account ratings from
credit agencies, trade references and payment history where there is a pre-existing relationship with that entity. The
compliance with credit limits by customers is regularly monitored by management. The credit risk on liquid funds and
derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by
international credit-rating agencies.
The Group has established a loss allowance of trade receivables at an amount equal to lifetime expected credit losses
(ECL). The ECL’s on trade receivables are estimated using a provision matrix based on historical credit loss experience
and any available forward-looking estimates as at reporting date.
Set out below is the information about the credit risk exposure at 30 June 2021 on the Group’s trade receivables for
which lifetime expected credit losses are recognised:
30 June 2021
Trade and other receivables and
contract assets ($,000)
ECL allowance
30 June 2020
Trade and other recievables and
contract assets ($,000)
Aging
Current
118,449
<31 Days
31-60 Days
61-90 Days
19,020
4,124
7,971
Total
149,564
(31)
(90)
(352)
(4,995)
(5,468)
118,260
8,869
3,251
7,629
137,939
ECL allowance
(99)
(14)
(1,453)
(7,629)
(9,195)
The reconciliation in ECL allowance is as follows:
Movement in ECL allowance provided for receivables
Opening loss allowance - calculated under AASB 9
Net movement of expected credit loss
Receivables written off during the period as uncollectable
Closing balance as at 30 June 2021
2021
$’000
(9,195)
1,893
1,834
(5,468)
2020
$’000
(3,524)
(6,271)
600
(9,195)
Net fair values of financial assets and liabilities are determined by the Group on the following basis:
Monetary financial assets and financial liabilities not readily traded in an organised financial market are determined
by valuing them at the present value of contractual future cash flows or amounts due from customers (reduced for
expected credit losses) or due to suppliers. Cash flows are discounted using standard valuation techniques at the
applicable market yield having regard to the timing of cash flows. With the exception of the fair value differences
arising on the Group’s fixed interest rate financial liabilities, as discussed in the analysis of interest rate risk above, the
carrying amounts of all financial instruments disclosed above are at their approximate net fair values.
AASB 9 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy:
(i)
(ii)
quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (Level 2)
(iii)
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3)
The following table presents the Group’s financial assets and liabilities measured and recognised at fair value.
2021
Financial assets
Derivative
Financial liabilities
Provisions
2020
Financial assets
Derivative
Financial liabilities
Provisions
Level 1
$’000
Level 2
$’000
342
-
342
-
-
Level 1
$’000
Level 2
$’000
86
-
86
-
-
-
Level 3
$’000
-
(2,235)
(2,235)
Level 3
$’000
-
(3,217)
(3,217)
Total
$’000
342
(2,235)
(1,893)
Total
$’000
86
(3,217)
(3,131)
There were no transfers between levels during the period. The Group’s policy is to recognise transfers into and out of
fair value hierarchy levels as at the end of the reporting period.
72
73
FOR THE YEAR ENDED 30 JUNE 2021FOR THE YEAR ENDED 30 JUNE 2021SRG GLOBAL 2021 ANNUAL REPORTSRG GLOBAL 2021 ANNUAL REPORT
Shareholder Information
Corporate Directory
Corporate Directory
Additional ASX Information
This additional ASX information is required to be included in this Annual Report by ASX under Listing Rule 4.10. This information is
not provided elsewhere in this report and is applicable as at 19 August 2021.
Ordinary share capital
SRG Global Limited’s issued share capital is comprised of 445,796,415 fully paid ordinary shares, held by 3,722 individual
shareholders. At any meeting of shareholders fully paid ordinary shares carry one vote per share and the rights to dividends.
Distribution of shareholders and their holdings
Number of holders
Ordinary shares
Size of holding
1 to
1,000
339
1,001, to
5,000
932
5,001 to
10,000
579
10,001 to
100,000
1,544
100,001 to
(MAX)
328
Total
3,722
97,658
2,669,179
4,573,925
53,111,503
385,344,150
445,796,415
There were 307 holders with less than a marketable parcel of fully paid ordinary shares.
Substantial holders
The number of shares held by substantial holders, as disclosed in substantial shareholding notices provided to the Company are set
out below:
Shareholder
Perennial Value Management Limited
Mitsubishi UFG Financial Group, Inc
Twenty largest shareholders
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
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