Worthington Industries

Annual Report 2012

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ENT

 
 
 
WorleyParsons is a leading provider of professional 
services to the resources & energy sectors and 
complex process industries.

Our services cover the full asset spectrum both in 
size and lifecycle – from the creation of new assets 
to services that sustain and enhance operating 
assets.

OUR VISION

It is 2017 ……..

•  We consistently deliver high quality engineering, consulting, project and Improve services and 

as a result have become a world leader 

•  We have a recognized and valued position with our customers 

• We are an admired employer 

• We have a facilitating organizational structure 

As a consequence of these attributes, we have enjoyed good growth, year-on-year 
for the last five years.

Visit us online 
annualreport.worleyparsons.com

Annual General Meeting

WorleyParsons’ 2012 AGM will be held on Tuesday, 
23 October 2012 commencing at 3.00pm (AEDT) at 
The MacLaurin Hall, The Quadrangle, The University 
of Sydney, Camperdown, Sydney.

Contents
Group Financial Highlights
Chairman’s Review
Global Operations and 
Significant Awards for 2012
Business Summary
CEO’s Report
Board of Directors
Corporate Governance
Directors’ Report
Financial Statements
Shareholder Information
Corporate Information

1
2
6

8
10 
16
18 
32
52  
90
92

GROUP 
FINANCIAL 
HIGHLIGHTS

Five year performance at a glance

$m 

2008 

2009 

2010 

2011 

2012 

% change

Aggregated revenue1 

4,882.4 

6,219.4 

4,967.1 

5,903.5 

7,362.6 

EBIT 

EBIT margin 

Net profit after tax 

Net profit margin 

Cash flow from operations 

Return on equity 

Basic EPS normalized (cents)2  

Basic EPS (cents) 

Dividends (cents) 

520.0 

10.7% 

343.9 

7.0% 

198.8 

24.5% 

153.4 

142.5 

85.5 

605.3 

9.7% 

390.5 

6.3% 

546.4 

25.4% 

172.8 

161.1 

93.0 

427.4 

8.6% 

291.1 

5.9% 

279.6 

16.7% 

127.9 

118.5 

75.5 

539.9 

9.1% 

364.2 

6.2% 

293.8 

19.8% 

159.4 

148.3 

86.0 

537.9 

7.3% 

353.2 

4.8% 

437.5 

18.0% 

152.7 

143.7 

91.0 

24.7

(0.4)

(3.0)

48.9

(4.2)

(3.1)

5.8

1   Aggregated revenue is defined as statutory revenue and other income plus share of revenue from associates less procurement services revenue at nil margin and interest 
income and net gain on revaluation of investments previously accounted for as equity accounted associates. The directors believe the disclosure of revenue attributable 
to associates provides additional information in relation to the financial performance of the Group.

2  Before amortization of intangibles including tax effect of amortization expense.

Aggregated revenue

EBIT

Net profit after tax

Cash flow from operations

m

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,

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08

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08

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08

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08
10

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12

The result was earned on 
aggregated revenue of 
$7,362.6 million, an increase of 
24.7% on the $5,903.5 million 
reported  in 2011.

EBIT for the year was 
$537.9 million, a decrease of 
0.4% on the $539.9 million 
reported in 2011. 

The full year result for 2012 
was $353.2 million, a decrease 
of 3.0% on the $364.2 million 
net profit reported in 2011.

Cash flow from operations 
was $437.5 million, an increase 
of 48.9% on the $293.8 million 
reported in 2011.

Underlying EBIT excluding 
fair value gain on acquisitions 
for the year was $530.3 million, 
an increase of 11.8% on the 
$474.2 million reported in 2011. 

Underlying NPAT excluding 
fair value gain on acquisitions 
for 2012 was $345.6 million, 
an increase of 15.8% on the 
$298.5 million net profit 
reported in 2011.

WorleyParsons Annual Report 2012 

1

 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CHAIRMAN’S
REVIEW

Despite adverse global macroeconomic factors continuing to drive uncertainty 
across key markets, WorleyParsons has delivered another pleasing performance. 
The company’s global expansion continues apace; we now have more than 
40,800 employees across the group, an increase of more than 5,700 people 
over the past year.

Our growth during the year was underpinned by strong capital spending 
by major global customers and strengthening of our global relationships 
with these customers. The ever growing demand for energy is driving 
the unconventional oil and gas sector, where we have seen strong 
growth in oil sands, shale gas and coal seam methane, in Canada, the USA 
and Australia.

Developing markets were also a significant driver of growth as large 
global clients continue to invest in projects in countries where the bulk 
of the world’s undeveloped resources lie. We have established a strong 
foothold in the markets we already service and have entered a number 
of new markets through the transfer of our proven capabilities 

and practices. 

Ron McNeilly
Chairman and  
Non-Executive 
Director

Activity in the chemicals sector has increased. Lower 
gas prices have sparked resurgence in gas monetization 
and petrochemical projects in the USA, while our 
involvement in specialty chemical projects in China 
and Asia continues to increase. Across many of our 
developed markets, we have seen an increase in asset 
restoration and enhancement projects driven in part by 
tighter regulatory regimes.

Performance
The Group reported underlying net profit after tax 
of $346 million, up 16% on our FY2011 result. In the 
current market environment, this is a strong validation 
of the Group’s strategy. It is also pleasing to note that 
the Group’s cash flow position improved significantly 
in the second half of the year. Margin performance was 
however disappointing.

The Board has resolved to pay a final dividend of 51 cents 

per share, up from 50 cents per share last year, taking the 
total dividend for the year to 91 cents per share, up from 86 
cents last year. 

One of the key highlights during the year was the very strong 
performance of the Minerals, Metals & Chemicals customer 
sector, which experienced growth in both project and Improve 
activity particularly in Australia and Canada.

Safety
The safety of our people and of those who work on projects 
we are involved in continues to be a major focus of the 
Board and Management. Notwithstanding this, we are 
disappointed and saddened to report that we had three 
work related employee fatalities this year. These fatalities 
and the growing complexity of our business confirm that 
there is more we need to do in this area, despite the fact 

John Grill  
Chief Executive 
Officer 

that our record is amongst the best in our industry. The Board 
and Management are committed to continue to seek ways to 
improve our safety performance and drive towards our goal 
of zero harm. The Board has formed a Health, Safety and 
Environment committee to further support the achievement of 
this goal.

People 
The business would not be in the strong position it is today 
were it not for our people. One of the major strengths of 
our business is the technical capability and experience of 
our global team and their ability to provide optimal, value 
enhancing solutions for our customers at every stage of the 
project cycle anywhere in the world.

This is borne from a culture of empowering and developing 
our people to succeed at every level, encouraging a culture 
of accountability, innovation and excellence and a desire to 
be the partner of choice for the leaders in our sectors. The 
move to the new Local/Global organizational model has further 
embedded our culture and people capability and we have seen 
significant efforts this year to ensure that our people remain 
our key competitive advantage.

I would like to express the Board’s thanks and indeed 
admiration for the outstanding contribution of WorleyParsons’ 
many people during the year.

Ethics and Corporate Responsibility 
Our customers, suppliers, business partners and shareholders 
expect that our people demonstrate the highest standards 
of ethical conduct in all their business dealings. The Board 
strongly supports these expectations and, in doing so, 
recognizes the importance of our strong ethical culture with 
leadership demonstrated by directors and senior management 
to reinforce this culture across the organization.

The Board regularly monitors management’s response to 
ethical issues which arise in the business and during the 
year has supported and promoted management’s initiatives 
to improve whistle-blower procedures, prevention of bribery 
processes and training and code of conduct training. 

The Board supports the company’s increased focus on 
the corporate responsibility activities of the company and 
its people across the many locations where the company 
operates. This focus will clarify our corporate priorities 
and efforts to assist in making our corporate responsibility 
programs more effective. The new Corporate Responsibility 
section of this Annual Report (see pages 28 to 30) provides 
greater detail on our priorities, performance and examples of 
our activities in the communities in which we work.

Corporate Governance
The Board is confident that a robust governance structure 
is in place and is properly administered. This governance 
structure has been further developed this year with the 
introduction of the Board HSE Committee to assist the Board 
to carry out its responsibilities with respect to health, safety 
and environment. 

In addition to the regular board meetings, directors also test 
the governance structure through regular discussions with 
relevant senior management. This is achieved by visiting 
different operations around the world and discussing business 
issues with our local people, and by requesting and receiving 
the output of risk management reviews and internal audits. 

Board and management changes
Shareholders would most likely be aware that on 6 July this 
year we announced significant changes to the company’s 
leadership, including the appointment of Andrew Wood to 
succeed John Grill as Chief Executive Officer.

John is justifiably regarded as one of Australia’s outstanding 
business leaders. He has been inextricably linked to the 
growth and success of WorleyParsons, having more than 
40 years ago joined the Company that became today’s 
WorleyParsons. John led WorleyParsons growth from a small 
private domestic engineering firm to a publicly listed, global 
leader in the markets in which it operates.

I am personally delighted that John has accepted the 
unanimous invitation of the Board’s non-executive directors to 
re-join the Board in February 2013 and at that time to become 
non-executive Chairman of the Board. I will become Deputy 
Chairman and Lead Independent Director.

It has been a great privilege to lead the Board over the past 
few years, and I am pleased that WorleyParsons will continue 
to benefit from John’s exceptional industry knowledge and 
strong client relationships. 

Andrew Wood’s appointment to succeed John as 
Chief Executive Officer is another major milestone for 
WorleyParsons. Andrew, currently Group Managing Director – 
Finance is a member of the company’s Executive Committee 
and has been intimately involved in the development of the 
company’s strategy in this role. During 18 years’ service with 
WorleyParsons Andrew has gained extensive experience 
throughout the organization: this includes senior leadership 
roles as Managing Director of International Operations and 
subsequently Regional Managing Director for Australia 
and New Zealand. He also managed the transformational 
acquisitions of Parsons E&C Corporation and the Colt Group 
of Companies.

Andrew is the right leader for WorleyParsons at this stage 
of its evolution. He is supported by a very capable senior 
leadership team, and the Board has every faith that the 
Company will continue to prosper under the leadership of 
Andrew and his team.

Andrew’s appointment will take effect at the conclusion of the 
Company’s 2012 Annual General Meeting on 23 October 2012 
and at that time he will also join the WorleyParsons Board.

Conclusion
While this is a time of major transition for the Group’s top 
leadership it remains business as usual for WorleyParsons. 
We have a sound strategy in place and a committed and 
highly experienced senior leadership team which has been 
the key architect of this strategy. I would like to thank the 
senior management team, led superbly by John Grill, for 
their outstanding contribution once again to the growth of 
the Group.

WorleyParsons is in excellent shape and I have complete 
confidence in the long term future of the Group.

Ron McNeilly 

WorleyParsons Annual Report 2012 

3

 
10 YEARS OF GROWTH

It is appropriate to pause and reflect on what we have achieved in the10 years since listing. 
WorleyParsons strives to create value for shareholders in all that we do. Since listing in 
November 2002, we have generated a Total Shareholder Return (“TSR”) of 1830%*. 

Looking to the future, WorleyParsons will endeavour to continue to deliver growth to our 
shareholders through our vision of being the preferred global provider of technical, project and 
operational support services to our customers and using the distinctive WorleyParsons culture 
to create value for them and prosperity for our people and stakeholders.

2003

Aggregate Revenue

$473.8m

2005

Aggregate Revenue

$1,376.2m

2004

Aggregate Revenue

$513.5m

2002

Aggregate Revenue

$437.4m

2006

Aggregate Revenue

$2,459.1m

* TSR has been calculated using WorleyParsons’ share price growth during the period, plus net dividends notionally reinvested on 
ex-dividend date. One-day adjusted closing share prices are used to calculate WorleyParsons’ share price growth.

4  WorleyParsons Annual Report 2012

2009

Aggregate Revenue

$6,219.4m

2011

Aggregate Revenue

$5,903.5m

2008

Aggregate Revenue

$4,882.4m

2010

Aggregate Revenue

$4,967.1m

2012

Aggregate Revenue

$7,362.6m

2007

Aggregate Revenue

$3,525.4m

WorleyParsons Annual Report 2012 

5

 
9

6,14

18

19

2

1

7

8

13

20 15

17

4,5

3

1112

16

10

2

1   

4

5 6

12

13

10

9

2, 7

8,11

15

 8

18 1

7

23

9

21

15

16

10

19

3

14

16

17

12

9

2, 3, 6

13

11,14,16

5

4

20

22

18

3

14

2

4

12

15

1

11

109

8

5, 6 7 13

17

16

SIGNIFICANT 
AWARDS FOR 
2012

United States Anchorage

Fort McMurray
Cold Lake

Kitimat

Grande
Prairie

Burnaby
Victoria

Richland
Vancouver, WA
Bellevue
Portland
Seattle
Sacramento
Los Altos

Azusa

Arcadia
Fountain Valley

Fort St John
Edmonton

Lloydminster
Saskatoon

Canada

Bismarck

Markham
Sarnia

Chicago

Nanticoke

Chicoutimi
Trois-Riviere
Sudbury
Tiverton

Alma

Fermont

Quebec City

Sept-lles

Montreal

Brossard

Farnham

Mississauga

Iselin
Reading
Philadelphia

Tulsa

Dallas

Boston

Oak Ridge
Chattanooga

Blackfalds
Calgary

Billings
Idaho Falls

Denver

Las Vegas

Phoenix
United States

Monrovia

St. John's

Kazakhstan Atyrau

Ulaanbaatar

United Kingdom

Aberdeen

Manchester

Teesside

London

Leeds

Gloucester

Bristol Woking

Czech Republic Plzen

Netherlands Delft

Russia Moscow

Kazakhstan Aksay

Spain Madrid

Bulgaria Sofia

Bulgaria Stara Zagora

Kazakhstan Astana

Kazakhstan Tengiz

Kazakhstan Almaty

Uzbekistan Tashkent

Houston

Bayport

Jacksonville

Local Office

Global Hub

Trinidad & Tobago
Port of Spain

Colombia Bogota

Peru Lima

Chile Coquimbo

Brazil Brasilia

Vina del Mar
Los Andes
Chile Santiago

Brazil Belo Horizonte

Brazil Rio de Janeiro
Brazil Sao Paulo

POWER

LONG TERM PROJECT

American Electric Power

Pacific Gas & Electric

Verve Energy

Bruce Power

Rockport power station air quality 
control

Master service agreement for  
engineering and technical services

Muja / Kwinana Maintenance Alliance 

6300 MW sustaining projects

Ontario Power Generation

Darlington refurbishment

Entergy

LARGE PROJECT

Fossil fuel engineering services

Akkuyu NGS Elektrik Uretim 
Anonim Sirketi

King Abdullah City for Atomic and 
Renewable Energy 

Akkuya nuclear power plant

Nuclear power plant siting 

Kozloduy Nuclear Power Plant

Nuclear power plant stress-tests 

InterRAO UES 

Baltic nuclear power plant 

Saudi Electricity Company

Odebrecht

Skanska 

BHP Billiton

Engineering, operations and 
maintenance contract for Power  
Plant 10

Chaglla hydropower plant

Baixada Fluminense  
thermal power plant 

Yarnima power station phase 1 & 2

LS Cable & System 

Power supply upgrade

Tuas Power

Tembusu utility complex stage 2A 
and 2B

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

HYDROCARBONS

LONG TERM PROJECT

1

2

3

4

5

6

7

8

9

Imperial Oil

Shell 

Chevron

Imperial Oil

ExxonMobil

TransCanada

LARGE PROJECT

SORESCO

PetroEcuador

ExxonMobil

10

Arrow Energy

11

Chinese National Offshore Oil 
Company

12

Hess

13

ExxonMobil 

14

TransCanada

15

Tengizchevroil

16

Chevron

Oman Oil 

MEG Energy

17

18

19

20

6  WorleyParsons Annual Report 2012

Nanticoke refinery Improve contract

Enterprise framework agreement for 
downstream facilities in North America

Umbrella services agreement for 
program management, engineering and 
construction management services

Umbrella services agreement for 
engineering, procurement and 
construction management (EPCM)

ESSO production Malaysia Inc Improve 
contract

Umbrella services agreement for project 
management, engineering design, 
procurement, technical & field services 
support

Moin refinery expansion 

Refineria del Pacifico refining and 
petrochemical complex 

Point Thomson initial production system 
EPCM project

Surat coal bed methane upstream 
development

LNG cold energy air separation unit 

Front end engineering design for Equus 
deepwater gas project

Hebron offshore platform engineering, 
procurement and construction (EPC)

Fabrication and construction of Hardisty 
facility terminal

Future growth program/ wellhead 
pressure management 

Wheatstone LNG integrated project 
management team

Gas plant Block 60

Christina Lake steam assisted gravity 
drainage (SAGD) project

Suncor Energy

Firebag SAGD facility

Kuwait Gulf Oil Company / Saudi 
Arabian Chevron Inc. 

Umbrella services agreement EPCM

Egypt Cairo

Saudi Arabia Al Khobar

Saudi Arabia Yanbu

Iraq Basrah

Kuwait Ahmadi

Bahrain Manama

Qatar Doha

UAE Abu Dhabi

UAE Dubai

Oman Muscat

Oman Sohar

Vietnam Hanoi

India Mumbai

India Hyderabad

China 

Beijing

Tianjin

Shenyang

Nanjing

Shanghai

Chengdu

Kunming

Hong Kong

Shenzhen

Thailand Bangkok

Thailand Sriracha

Kuantan

Kerteh

Malacca

Kuala Lumpur

Vietnam Ho Chi Minh City

Brunei Kuala Belait

Kota Kinabalu

Malaysia

Duri

Miri

Bintulu

Indonesia Balikpapan

Indonesia Jakarta

Nigeria Lagos

Ghana Accra

Angola Luanda

Namibia Windhoek

Kimberley

Polokwane

Pretoria

Secunda

Durban

Cape Town

Port Elizabeth

South Africa 

Port Hedland

Perth

Bunbury

Darwin

Australia

Australia

Adelaide

Footscray

Geelong

Townsville

Mackay

Gladstone

Brisbane

Singleton

Newcastle

Sydney

Wollongong

Melbourne

New Caledonia Noumea

Auckland

Blenheim

New Plymouth

Hastings

Wellington

Christchurch

New Zealand

Kitimat

Grande

Prairie

Burnaby

Victoria

Richland

Vancouver, WA

Bellevue

Portland

Seattle

Sacramento

Los Altos

Azusa

Arcadia

Fountain Valley

Fort McMurray

Cold Lake

Fort St John

Edmonton

Blackfalds

Calgary

Billings

Idaho Falls

Denver

Las Vegas

Phoenix

United States

Monrovia

Lloydminster

Saskatoon

Canada

Markham

Sarnia

Bismarck

Chicago

Nanticoke

Chicoutimi

Trois-Riviere

Sudbury

Tiverton

Alma

Fermont

Quebec City

Sept-lles

Montreal

Brossard

Farnham

Mississauga

Iselin

Reading

Philadelphia

Tulsa

Dallas

Boston

Oak Ridge

Chattanooga

Houston

Bayport

Jacksonville

Local Office

Global Hub

Trinidad & Tobago

Port of Spain

Colombia Bogota

Peru Lima

Chile Coquimbo

Brazil Brasilia

Vina del Mar

Los Andes

Chile Santiago

Brazil Belo Horizonte

Brazil Rio de Janeiro

Brazil Sao Paulo

9

6,14

18

19

2

1

7

8

13

20 15

17

4,5

3

1112

16

10

2

1   

4

5 6

12

13

10

9

2, 7

8,11

15

 8

18 1

7

23

9

21

15

16

10

19

16

17

3

14

12

9

2, 3, 6

13

11,14,16

5

4

20

22

18

3

14

2

4

12

15

1

11

109

8

5, 6 7 13

17

16

United States Anchorage

United Kingdom

Aberdeen
Manchester

Teesside
London

Leeds
Gloucester

St. John's

Bristol Woking

Netherlands Delft

Czech Republic Plzen

Russia Moscow

Kazakhstan Aksay

Kazakhstan Atyrau

Kazakhstan Astana

Kazakhstan Tengiz

Kazakhstan Almaty

Uzbekistan Tashkent

Ulaanbaatar

China 

Beijing
Tianjin

Shenyang

Nanjing

Shanghai

Chengdu

Kunming

Iraq Basrah
Kuwait Ahmadi

Bahrain Manama

UAE Dubai

Oman Muscat

Oman Sohar

Spain Madrid

Bulgaria Sofia
Bulgaria Stara Zagora

Egypt Cairo

Saudi Arabia Al Khobar

Saudi Arabia Yanbu

Qatar Doha

UAE Abu Dhabi

Nigeria Lagos

Ghana Accra

Angola Luanda

Namibia Windhoek

Kimberley

Polokwane
Pretoria
Secunda
Durban

Cape Town

Port Elizabeth

South Africa 

MINERALS, METALS & CHEMICALS

LONG TERM PROJECT

India Mumbai

Vietnam Hanoi

Hong Kong

Shenzhen

India Hyderabad

Thailand Bangkok
Thailand Sriracha

Kuantan
Kerteh
Malacca
Kuala Lumpur

Vietnam Ho Chi Minh City

Malaysia

Duri

Brunei Kuala Belait
Kota Kinabalu
Miri
Bintulu

Indonesia Balikpapan

Indonesia Jakarta

Port Hedland

Perth

Bunbury

Darwin

Australia
Australia

Adelaide

Footscray
Geelong

Townsville
Mackay

Gladstone

Brisbane

Singleton

Newcastle
Sydney
Wollongong

Melbourne

New Caledonia Noumea

Auckland

Blenheim

New Plymouth
Hastings
Wellington

Christchurch

New Zealand

North American engineering partner contract

INFRASTRUCTURE & ENVIRONMENT

EPCM master framework agreement

LONG TERM PROJECT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

BASF

BHP Billiton

BHP Billiton 

BHP Billiton Mitsubishi 
Alliance

Sustaining capital 

Project development group sustaining capital

Rio Tinto Alcan

Weipa bauxite mine engineering services

Fortescue Metal Group

Iron ore sustaining capital services

LARGE PROJECT

Anglo American

Chagres smelter development 

Areva

BASF

Black Iron

JEB Mill upgrade 

Acai / Nanjing super absorbent polymer project 

Shymanivske iron ore development

Bungalow Joint Venture

Bungalow magnetite pre feasibility study

CSBP

Evonik 

Prill plant 2 detailed design

Marco Polo isophorone and isophorone diamine 
EPCM

Eyre Iron

Fusion magnetite definitive feasibility study

First Quantum Minerals

Kansanshi copper smelter 

KCM 

Mongolyn Alt Group 

Lead smelter detail design and project 
management consultancy

Tsagaan Suvarga copper-molybdenum 
concentrator 

Rio Tinto Alcan

North America framework agreement

Sasol

WICET

Xstrata

Orica

Shondoni coal mine EPCM

Wiggens Island coal export terminal stage 1

Askaf definitive feasibility study

Project Trident feasibility studies and design

EBX Group

MMX Serra Azul iron ore EPCM project

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

National Grid Property Holdings

Remediation and liability management 
services

BP

Port of Los Angeles/Long Beach

Rio Tinto Alcan

Chevron

LARGE PROJECT

Water Corporation

Chemtura

Qatar Government

Qatar Government

Huta Marine Works

EMAAR Properties

MPX/CCX

Woodside

Anglo American

Norte Energia S.A.

Remediation management North 
American framework contract

Restoration services framework 
agreement

Master service agreement for risk 
advisory services & catastrophic event 
management

Environmental services panel contract 

Southern seawater desalination plant 
stage 2

Multi-purpose manufacturing facility 

Doha Port development

Lusail Infrastructure, conceptual and 
detailed design

King Abdullah Port
phase 1A & phase 1B

Project management services for  
Jeddah Municipality

La Guajira pit to port development

Browse downstream development

Coal water treatment

Belo Monte hydroelectric plant

Queensland Gas Company

Queensland Curtis LNG project

ExxonMobil

Port Stanvac refinery

Port Metro Vancouver

Intermodal container projects

WorleyParsons Annual Report 2012 

7

 
BUSINESS 
SUMMARY

HYDROCARBONS

MINERALS, METALS & CHEMICALS

Business Summary
WorleyParsons seeks to deliver outstanding value to hydrocarbons 
customers, providing a complete suite of solutions, extending from 
conceptual studies through mega-project execution and to ongoing 
asset management and enhancement programs across the full 
spectrum of upstream and downstream facilities.

Performance Overview
The company continued to strengthen existing and build new 
customer relationships, with a focus on global and national oil and gas 
companies. Growth was experienced in global greenfield and Improve  
markets, with an increasing focus on unconventional natural gas and 
offshore development opportunities. The downstream market is still 
continuing to recover, led by the petrochemicals sector. In the past year, 
WorleyParsons’ has cemented its reputation as a leader in the delivery 
of full field solutions for unconventional oil and gas developments.

Future
The company anticipates further growth in the global greenfield and 
Improve markets, both upstream and downstream despite signs of a 
potential softening in the rate of growth compared to 2012. Capital 
expenditure in oil and gas continues to increase, supported by the 
emergence of the shale, oil and gas developments around the world.

Business Summary
From executing bankable feasibility studies to large integrated 
solutions, WorleyParsons has a proven track record for creating 
innovative solutions for customers in minerals, metals and chemicals 
businesses.

Performance Overview
WorleyParsons has continued to develop long term relationships with 
Tier one customers, resulting in growth in projects and sustaining 
capital works. Business activities have increased across all regions and 
growth industries, including iron ore, coal, copper and the chemicals 
sector, as well as new business areas such as potash and uranium.  

Future
The Company continues to focus on globalizing Minerals, Metals & 
Chemicals through long-term relationships with major customers and 
anticipates this approach to provide growth opportunities across the 
developed and developing worlds, particularly in bulk commodities and 
chemicals.  
WorleyParsons expects to continue to expand in Latin America and 
Africa, largely through taking advantage of opportunities in the coal, 
copper and iron ore sectors and pit to port developments. Continued 
growth in project study work in these regions will provide opportunities 
for pull through to execution of major projects. WorleyParsons’ 
participation in the Chemicals sector is likely to grow as the market 
strengthens, particularly in China, USA and the Middle East.

Aggregated 
Revenue

EBIT

$m

Growth%

$m

Growth%

2012

5,015.1  

24.0

2011

4,043.9  

18.1

2010

3,425.4   

(27.7)

586.5

554.3

501.8

5.8

10.5

EBIT 
Margin

%

11.7

13.7

14.7

Aggregated 
Revenue

EBIT

$m

Growth%

$m

Growth%

2012

895.4   39.1

131.4

  27.9

2011

643.8   14.5

2010

562.5 

(3.5)

102.7

105.8

(2.9)

EBIT 
Margin

%

14.7

16.0

18.8

Aggregated Revenue

Aggregated Revenue

.

m
9
3
4
0
4
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8
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4
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8
3
4
6
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7
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5
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6
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4
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3
1
8
5
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8

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0

7

8

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1
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0
7
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3

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1

8

5

$

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7
3
1
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4
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5
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8
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m

8

.

0

7

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1

.

2

0

7

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m

8

.

9

6

4

$

2010

2011

2012

2010

2010

2011

2011

2012

2012

2010

2010

2011

2011

2012

2012

2010

2010

2011

2011

2012

2012

2010

2011

2012

8  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
POWER

INFRASTRUCTURE & ENVIRONMENT

Business Summary
WorleyParsons offers comprehensive capabilities across the power 
generation, transmission and distribution value chain, from conventional 
and nuclear power generation, integrated networks, through to the 
latest solutions including renewable energy, advanced coal and smart 
grid. We work with our customers on all stages of the asset lifecycle, 
from early planning, full-scope project delivery, facility start-up, through 
to asset management and operations and maintenance.

Business Summary
WorleyParsons’ Infrastructure & Environment business is focused on 
providing integrated enabling services in water, environment, transport, 
ports and marine terminals, geosciences, master planning and restoration 
to mining, energy and power customers across the globe. These 
services are uniquely tailored to support our customers in managing 
the challenges and complexities of both new project developments and 
brownfield facilities.

Performance Overview
WorleyParsons has focused on asset management in the developed 
world as well as working with customers on building new generation 
and networks capacity in the developing world. In the USA, 
Australia and Canada, the Company currently has long-term service 
agreements to deliver a range of support services to customers in 
asset optimization, operation and maintenance, energy efficiency and 
environmental compliance. In developing markets, we are delivering a 
number of projects in nuclear and conventional power generation and 
networks in the Middle East, Latin America, Asia and Africa. Investment 
in resource infrastructure particularly in Australia has delivered growth 
for the resource power business. 

Future
Power generation and networks opportunities across the Asia, Middle 
East, Latin America and Africa are expected to remain. In the USA, 
Canada and Australia, WorleyParsons expects to continue to take 
advantage of significant investment in asset optimization and energy 
efficiency with our innovative Improve and EcoNomics™ solutions.  
The Company expects growth in the nuclear Improve market as a result 
of the post Fukushima safety assessment of existing reactors around 
the world. The resource sector in Australia is providing opportunities 
for captive power generation projects and WorleyParsons anticipates 
further growth in this area as it focuses on supporting resource 
customers in Latin America, Sub Saharan Africa and the Middle East.

Performance Overview
WorleyParsons’ Infrastructure & Environment business performed 
strongly across all sub-sectors evidencing the success of our strategy to 
expand the focus of the business on supporting the resources industry in 
addition to the historical focus on urban infrastructure.  
The Company’s enabling services model positions us at the front-
end Select phase through the delivery of geotechnical, environment 
and social licence, water security and water management services. It 
maximises our opportunities to continue to work with our customers into 
Deliver and Improve implementation phases.

Future
Infrastructure & Environment opportunities are expected to grow 
through the delivery of enabling services to the Hydrocarbons and 
Minerals, Metals & Chemicals sectors. These enabling capabilities include 
environment, water, geosciences, master planning, transport, port and 
marine terminals and restoration. The Company anticipates improved 
performance in the pit to port business through the migration into Latin 
America and Sub Saharan Africa. Expansion of restoration services 
globally is expected to drive growth in decommissioning and remediation 
opportunities in the USA, Canada, Europe and Australia.

Aggregated 
Revenue

EBIT

$m

Growth%

$m

Growth%

2012

581.3  

13.2

2011

513.7  

0.8

2010

509.4 

(6.8)

59.9

65.3

58.2

(8.3)

12.2

EBIT 
Margin

%

10.3

12.7

11.4

Aggregated 
Revenue

EBIT

$m

Growth%

$m

Growth%

2012

870.8

24.0

2011

702.1  

49.4

2010

469.8 

34.2

115.3

101.0

80.5

14.2

25.5

EBIT 
Margin

%

13.2

14.4

17.1

Aggregated Revenue

Aggregated Revenue

.

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1
5
1
0
5
$

,

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8
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4
6
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,

2010

2011

2012

2010

2010

2011

2011

2012

2012

2010

2010

2011

2011

2012

2012

2010

2010

2011

2011

2012

2012

2010

2011

2012

WorleyParsons Annual Report 2012 

9

 
 
 
 
 
 
 
 
 
 
 
CEO’S
REPORT

WorleyParsons has delivered good earnings growth in 2012 on strong 
revenue growth. We continue to see an increase in the volume of projects 
in the unconventional oil and gas market. Our expanding global presence, 
particularly our increasing presence in the developing world, continues to 
create opportunities. We are structurally, financially and strategically well 
positioned for growth.  We continue to build our team to meet the increasing 
demands of our customers.

Iain Ross  
Group Managing Director  
- Development 

Stuart Bradie  
Group Managing Director  
- Operations 

Andrew Wood  
Group Managing Director  
- Finance/CFO 

John Grill  
Chief Executive 
Officer 

David Steele  
Group Managing Director  
- Delivery

Barry Bloch  
Group Managing Director  
- People 

10  WorleyParsons Annual Report 2012

CEO’S

REPORT

Introduction – highlights
It is with a sense of continued confidence in the long-term 
future of the company that I write to you for the final time as 
Chief Executive Officer of WorleyParsons.

I would like to congratulate Andrew Wood on his appointment 
as my successor as Chief Executive Officer.  I have the utmost 
confidence that Andrew and our exceptional leadership team 
have the skills, experience and vision for the future of the 
company necessary to lead the next phase of WorleyParsons’ 
growth.  

Turning to the year just passed, I am delighted that the 
Group has delivered good earnings growth for the year 
despite challenging global macroeconomic conditions and 
significant volatility across the industries we service.  This 
result was underpinned by strong performances by the 
Hydrocarbons and Minerals, Metals & Chemicals customer 
sector groups, particularly in Canada, Australia and the USA. 
We continue to see an increase in the volume of projects in the 
unconventional oil and gas market, especially shale gas in the 
USA, oil sands in Canada and coal seam gas in Australia.  

WorleyParsons’ expanding global presence, particularly the 
increasing footprint in the developing world, continues to 
create opportunities.  This growth is perhaps best reflected 
by the increase in personnel numbers with more than 5,700 
additional people joining WorleyParsons during the year. 

Operating out of 163 offices across 41 countries we now have 
40,800 people, three quarters of whom are based outside 
Australia, a testament to the success of our global expansion 
strategy over many years.  

Our focussed strategy to capitalise on opportunities in the 
developing world continues to deliver on its promise.  The 
developing world continues to provide an excellent pipeline 
of large project opportunities as countries look to tap into 
their extensive undeveloped resources and expand their 
asset bases.

Underlying NPAT increased to $346m, up 16% on the previous 
year (2011: $299m). This was achieved despite an adverse 
exchange rate impact of $14.2 million during the period. 
Importantly, the Group also generated a much improved 
operating cash flow performance.  This outcome is the result 
of improved global cash management processes and systems 
along with strong local commitment and focus on cash 
collection.

Margins were generally lower but particularly in the 
Hydrocarbons and Power customer sector groups. In our 
Hydrocarbons sector, margins were primarily impacted by 
a small number of underperforming contracts.  These were 
finalized or provided for during the second half. The Power 

sector margins were impacted by continuing softness and 
competition in the USA market and low margin procurement 
activity in Brazil.  

Following the significant restructure of the business last year, 
it is pleasing to report that our new ‘local/global’ business 
model is being extremely well received by our clients and our 
people.  At its roots, the ‘local/global’ business model depends 
on the principles of empowerment, collaboration and putting 
the customer at the centre of everything we do. 

We seek to constantly improve our global capabilities while 
retaining the personal and entrepreneurial culture which has 
been the hallmark of the company’s success over many years. 
We have sought to achieve this by simplifying our systems and 
business processes, removing overlap across our operations 
and geographic locations, and developing mutually beneficial 
customer relationships at both a global and local level. 

The tangible benefits of this approach are already being seen. 
Our large multinational customers are increasingly looking 
to contract on a global basis, usually in the form of global 
services agreements.  These agreements provide a steady flow 
of work over a number of years and are often expanded to 
incorporate additional service requirements, thereby improving 
our earnings outlook.

We are growing as a result of winning larger and more 
complex contracts many of which we execute through 
close collaboration with key strategic partners and we are 
constantly striving to carry out these projects more efficiently 
and sustainably. This growth is clearly reflected in our financial 
performance with the majority of our revenue for the 2012 
financial year being earned from our tier one customers. 
Despite the significant uncertainty in global markets, 
particularly in terms of the volatility in commodity prices, we 
remain optimistic that opportunities will continue to emerge 
for WorleyParsons.

Safety performance
With great sadness we report three work related employee 
fatalities this year. Two drivers, one in the Middle East and 
one in Kazakhstan, died in road incidents and an employee in 
Brazil died as a result of a bacterial infection. These deaths are 
tragedies for their families, friends and colleagues and further 
drives us as we continue to work tirelessly toward our goal of 
zero harm. 

Travel remains one of the most hazardous activities for our 
people. During the period, we continued our group-wide focus 
on road safety and to underpin that commitment became a 
signatory to the UN Decade of Action for Road Safety. 

Barry Bloch  

Group Managing Director  

- People 

WorleyParsons Annual Report 2012  11

 
CEO’s Report continued

The TRCFR (Total Recordable Case Frequency Rate) for our 
employees for the 2012 financial year was 0.12 (compared 
with 0.11 last financial year) and the LWCFR (Lost Workday 
Case Frequency Rate) was 0.03 (the same as for FY2011). 
We therefore continue to strengthen our focus on the 
safe performance of our work, particularly in our field and 
construction activities. 

WorleyParsons Europe was awarded a Gold Award by RoSPA 
and we received a silver award for our HSE system on the 
Black Point Power Station Gas Supply Project. WorleyParsons 
received an award from Kuwait Oil Company for 14 million 
hours worked without a lost workday case.

WorleyParsons uses the United States Occupational Safety and 
Health Administration reporting protocol.

People 
During the year, we began to see the fruits of a number of 
streams of work that have been implemented in recent years 
to further improve our people leadership and capability.  For 
example, we now have in place the first ever global diversity 
and inclusion policy and have established a group-wide 
diversity and inclusion council. We have undertaken significant 
new diversity activities focused primarily on both gender and 
cultural diversity. 

We have developed globally and strategically focused 
leadership development programs and re-aligned our talent 
management and succession planning processes to ensure we 
continue to deliver against measureable goals. 

We continue to move a significant number of our people 
internationally and have finalized a global suite of mobility 
policies and processes to enhance the mobility experience for 
our people while improving our cost efficiency. 

We continued to see significant recruitment activity and have 
successfully focused on improving the speed and volume of 
recruitment while retaining our unequivocal focus on quality 
control. We further aligned our remuneration practices across 
the Group to ensure that we continue to achieve both market 
competitiveness and internal equity. 

Underpinning all of this, we have significantly reinforced the 
operational capabilities of our People group this year. We have 
a way to go to further improve our position in this area but it is 
gratifying to see results beginning to emerge. 

Financial performance 
The results, after excluding fair value gains on acquisition of 
associates, were:

•  Aggregated revenue of $7,363 million; up 25%

•  NPAT of $346 million; up 16% and in line with guidance

•  EBIT of $530 million; up 12% 

•  EBIT margin of 7.2%; down from 8% in 2011

•  Effective tax rate of 24.1%; down from 26.8% in 2011

The underlying results improved in the second half with 
NPAT up 28% on that delivered in the first half.  However, 
EBIT margin fell from 7.3% in the first half to 7.1% in the 
second half.

These results were negatively impacted by exchange rate 
movements in the year to 30 June 2012 compared to FY2011.  
The net profit translation impact of this rate movement is 
approximately $14.2 million.

Operating cash flow for the period was $438 million, compared 
to $294 million in the previous year. Tax paid in the year was 
$114.1 million (FY2011: $99.1 million). The Group invested 
$106.3 million in the business in FY2012 (FY2011: $105.8 
million) for acquisitions, property, plant and equipment and 
computer software.

The Group’s gearing ratio at 30 June 2012 (calculated on a net 
debt to net debt + equity basis) was 19.9%, an improvement 
from the previous year’s ratio of 21.5%. Interest cover (EBITDA 
to total interest expense) remained high at 12.4 times 
(FY2011: 12.0 times). The Group’s cash position at 30 June 
2012 was $247.3 million (FY2011: $171.2 million). The Group 
has available committed debt facilities of $1,444.6 million 
(FY2011: $1,277.3 million). The committed debt facilities 
have an average maturity of 3.8 years (FY2011: 4.6 years), 
with $138.9 million (9.6%) maturing within one year, $736.1 
million (51.0%) between one and four years and $569.6 million 
(39.4%) beyond four years. Facility utilization at 30 June 2012 
was 51.2% (FY2011: 53.2%). In addition, the Group has bank 
guarantees and letter of credit facilities of $787.3 million with 
utilization of 66.3% on these facilities at 30 June 2012.

The effective tax rate for the Group for the year ended 30 
June 2012 was 24.1% (FY2011: effective rate of 26.8%) which 
was lower due to a refund received upon finalization of the 
restructure of our Canadian businesses. The contribution from 
associates represented 7.8% of the Group’s net profit for the 
year (FY2011: 8.6%). 

12  WorleyParsons Annual Report 2012

Segment performance

Hydrocarbons
The Hydrocarbons business reported aggregated revenue 
of $5,015 million, an increase of 24% from the previous 
corresponding period. Hydrocarbons’ contribution to the 
group’s aggregated revenue was 68%. Segment EBIT was 
$587 million with a reported segment margin of 12% (FY2011: 
EBIT $554 million; margin 14%). We experienced continued 
underperformance on a few projects during the second 
half, although these projects have now been finalized or 
provided for.

Demand for oil and gas continues to grow resulting in an 
increasing level of capital expenditure in major upstream 
developments throughout the year. There are clear signs 
that the petrochemicals sector, underpinned by a significant 
availability of low cost natural gas in the USA, will grow.  

We experienced ongoing growth in Improve markets 
globally, together with a higher level of spending in onshore 
unconventional, LNG and offshore markets. In the USA, lower 
gas prices have spurred investment in new or resurgent 
sectors with a wave of gas monetization and petrochemical 
projects coming to market. Our major customers have 
expanded into unconventional gas markets and are seeking 
services from global companies like WorleyParsons. During 
the year we won a number of projects in shale gas in the USA, 
tight gas in the Middle East and coal seam gas in Australia, as 
well as in Canadian oil sands.

Notably, during the year our Canadian construction business, 
WorleyParsonsCord, was awarded a contract by MEG Energy 
Corp. for module construction services for its Christina Lake 
Steam Assisted Gravity Drainage (SAGD) project expansion 
and a contract to provide construction services at Suncor 
Energy’s Firebag SAGD facility in Fort McMurray, Alberta.  Both 
awards followed on from the completion of engineering and 
procurement contracts by WorleyParsons.

Outlook for Hydrocarbons
Capital expenditure in oil and gas continues to increase, 
supported by the emergence of unconventional oil and gas 
developments around the world. We anticipate further growth 
in the global greenfield and Improve markets, both upstream 
and downstream despite signs of a potential softening in the 
rate of growth compared to 2012.

The continued expansion of our global and multi-
regional relationships with key customers, along with our 
comprehensive range of services, gives us confidence in our 
ability to continue to grow. 

We expect margins and earnings in the Hydrocarbons customer 
sector to improve in FY2013.

Power 
The Power business reported aggregated revenue of $581 
million, an increase of 13% on the previous corresponding 
period. Power’s contribution to the group’s aggregated 
revenue was 8%. Segment EBIT was $60 million with a 
reported segment margin of 10% (FY2011: EBIT $65 million; 
margin 13%). This fall in earnings is contrary to our previous 
guidance for this customer sector. While the power markets 
outside the USA remained robust, Power sector margins were 
impacted by continuing softness and competition in the USA 
market as well as lower margin procurement activity in Brazil.

Investment in global power infrastructure is expected to 
grow based on the continuing increase in demand for power 
in developing economies and on the need for the developed 
world to improve and replace existing assets. Transmission 
networks are being seen as enabling assets with intelligent 
and smart grids driving investment.

We expect to continue to capitalize on investment in asset 
management and optimization, energy efficiency and 
alternative energy solutions in the developed world and new 
build opportunities across all fuel types in the developing 
world. We have expanded our service base in the USA, Canada 
and Australia and continue to pursue joint ventures with 
strategic partners to further enhance our offering. 

The nuclear sector continues to offer growth opportunities 
in new build reactors in the developing world and in 
Improve opportunities as a result of tightening regulatory 
environments following the Fukushima disaster in Japan.

Outlook for Power
We anticipate growth in new build power generation and 
networks opportunities across Asia, the Middle East, Latin 
America and Africa. The resource sector in Australia is 
providing opportunities for power generation projects.  In the 
USA, Canada and Australia, we expect to continue to take 
advantage of investment in asset optimization and energy 
efficiency with our innovative Improve and EcoNomics™ 
solutions. 

Growth in the Nuclear Improve market is likely to continue, 
while resource power opportunities are expected to deliver 
further growth in Australia, Latin America, Sub Saharan Africa 
and the Middle East.

We expect an improvement in earnings in the Power customer 
sector in FY2013. 

WorleyParsons Annual Report 2012  13

 
CEO’s Report continued

Segment performance (continued)

Minerals, Metals & Chemicals
WorleyParsons’ Minerals, Metals & Chemicals business reported 
a 39% increase in aggregated revenue to $895 million. 
Minerals, Metals & Chemicals’ contribution to the group’s 
aggregated revenue was 12%. Segment EBIT was $131 million 
with a reported segment margin of 15% (FY2011: EBIT $103 
million; margin 16 %). 

Infrastructure & Environment
The Infrastructure & Environment business delivered 
aggregated revenue for the year of $871 million, an increase 
of 24% from the $702 million reported in 2011. Infrastructure 
& Environment’s contribution to the group’s aggregated 
revenue was 12%. Segment EBIT was $115 million with a 
margin of 13% (FY2011: EBIT $101 million; margin 14%).

We continued to strengthen our relationship with major global 
companies and as a result have experienced growth in both 
project and Improve activity, particularly in Australia and 
Canada. During the year, we secured major iron ore, coal, base 
metals and chemicals contracts with companies including BHP 
Billiton, Rio Tinto, Vale, Anglo American and BASF.

We continue to expand our presence in coal, copper and iron 
ore in both developed and developing countries, and have also 
experienced growth in new industries such as potash, uranium 
and chemicals.

The global chemicals industry provides a strong opportunity 
for WorleyParsons to expand the business and we have 
renamed the customer sector group Minerals, Metals & 
Chemicals to reflect our increased focus on these markets.

We also continue to focus on generating growth through 
strategic partnerships. The recently established Cegertec 
WorleyParsons joint venture in Quebec, Canada has created 
a key capability centre for aluminium that will support 
growth in major projects and Improve, not only in Quebec but 
globally. During the year, we increased our ownership of ARA 
WorleyParsons in Chile to 94%. 

Outlook for Minerals, Metals & Chemicals
Uncertainty in the market is expected to continue in the 
immediate future both in terms of resource demand from 
prime markets such as China and the supply development 
intentions of our major resource clients.  We continue to 
focus on globalizing Minerals, Metals & Chemicals through 
long term relationships with our major customers. We 
expect this approach to provide growth opportunities across 
the developed and developing worlds, particularly in bulk 
commodities and chemicals. 

We look to continue to expand in Latin America and Africa, 
largely taking advantage of opportunities in the coal, copper 
and iron ore sectors and pit to port developments. Continued 
growth in project study work in these regions will also 
provide opportunities for pull through to execution of major 
projects. Meanwhile, our participation in the Chemicals sector 
is expected to grow as the market strengthens, particularly in 
China, USA and the Middle East. 

The Infrastructure & Environment business has experienced 
significant growth across all sub-sectors during the year 
evidencing the success of our strategy to expand the focus of 
the business on supporting the resources industry in addition 
to the historical focus on urban infrastructure.  

The Water business has shifted from a municipal to an industry 
focus, with over 70% of revenue now being generated from 
the mining, energy and power sectors. We are increasingly 
being recognised for our leadership in the environment sector, 
having been selected to join a panel of experts to support 
Chevron and other key hydrocarbons customers.  

Our Master Planning business is engaged across multiple 
continents in the design, delivery and management of major 
industrial estates.  We continue to grow our project portfolio 
in servicing global port operators around the world such as 
Dubai Ports and China Harbours.  We have also experienced 
considerable growth in the Restoration business, delivering 
site remediation, decommissioning, response and recovery 
services via several long-term master service framework 
agreements with global customers.

The business has seen strong growth in the developing 
regions of Latin America and Sub Saharan Africa. The 
acquisitions of KV3 in South Africa, CNEC in Brazil and 
increased ownership of ARA WorleyParsons in Chile have 
considerably enhanced our capabilities in these regions and 
provide a strong platform from which to expand.

Outlook for Infrastructure & Environment
Infrastructure & Environment opportunities are expected 
to grow through the delivery of enabling services to the 
Hydrocarbons and Minerals, Metals & Chemicals customer 
sector groups. These enabling capabilities include 
environment, water, geosciences, master planning, transport, 
port and marine terminals and restoration. 

We anticipate improved performance in the pit to port sector 
through the migration of our capability into Latin America and 
Sub Saharan Africa while expansion of our Restoration services 
globally is expected to drive growth in decommissioning and 
remediation opportunities in the USA, Canada, Europe and 
Australia.

We expect improved earnings in the Minerals, Metals & 
Chemicals customer sector in FY2013.

We expect improved earnings in the Infrastructure & 
Environment customer sector in FY2013.

14  WorleyParsons Annual Report 2012

Summary
During the year, we continued to develop the Group’s delivery 
platform by extending our global workforce, enhancing 
our comprehensive service offering, strengthening client 
relationships and expanding into new markets. 

I am delighted to be able to hand over to my successor a 
business that is in good shape. I have every confidence in 
Andrew Wood and the Executive and CEO’s committees to 
continue to lead the group through its next growth phase.  

Outlook for the group 
Subject to the markets for our services remaining strong, 
we expect to achieve good growth in FY2013 compared to 
FY2012 underlying earnings.

We have a clear growth strategy in place focused on improving 
margins and developing our skill set and geographic footprint 
across our four customer sectors. This will be achieved through 
organic growth as well as by taking advantage of acquisition 
opportunities that provide value for shareholders.   

We are confident that our medium and long term prospects 
remain positive based on our competitive position, our 
diversified operations and strong financial capacity.

John Grill 
Chief Executive Officer

WorleyParsons Annual Report 2012  15

 
BOARD OF 
DIRECTORS

John Grill
Chief Executive Officer

Ron McNeilly
Chairman and  
Non-Executive Director

JB McNeil
Non-Executive Director

John M Green
Non-Executive Director

Wang Xiao Bin 
Non-Executive Director

16  WorleyParsons Annual Report 2012

Larry Benke 
Non-Executive Director

Christopher Haynes, OBE
Non-Executive Director

Catherine Livingstone, AO
Non-Executive Director

Erich Fraunschiel
Non-Executive Director

Peter Janu
Company Secretary & 
General Counsel Corporate

WorleyParsons Annual Report 2012  17

 
Corporate Governance

INTRODUCTION
The Board of Directors of WorleyParsons Limited (Board) strives to 
ensure that WorleyParsons Limited (Company) and the entities it 
controls (Group) meet high standards of safety, performance and 
governance. The Group recognizes that it has responsibilities to its 
shareholders, customers, personnel and suppliers as well as to the 
communities in which it operates.

The Board has ultimate authority and oversight of the Group and 
regards corporate governance as a critical element in the drive to 
improve the Group’s performance and achieve the Group’s vision 
of being the preferred global provider of technical, project and 
operational support services. Accordingly, the Board has adopted 
appropriate charters, codes and policies and established a number 
of Committees to discharge its duties.

The Corporate Governance page in the Investor Relations section of 
the Group’s website (www.worleyparsons.com) contains most of the 

charters, codes and policies which are referred to in this statement. 
These documents are periodically reviewed and enhanced where 
necessary to take account of changes in the law and governance 
practises.

The Group’s governance systems meet the requirements of the 
Corporations Act 2001 (the Act), the Listing Rules of the Australian 
Securities Exchange (ASX Listing Rules and ASX respectively) and 
each of the recommendations set out in the Corporate Governance 
Principles and Recommendations with 2010 Amendments 
(2nd Edition) released in June 2010 by the ASX Corporate 
Governance Council (ASX Recommendations).

As required by the ASX Listing Rules, this statement discloses 
the extent to which the Company has followed the ASX 
Recommendations during the reporting period comprising the 
year ended 30 June 2012 (Reporting Period).

The following table indicates where specific ASX Recommendations are dealt with in this statement:

PRINCIPles AND ReCOmmeNDATIONs 

Principle 1: lay solid foundations for management and oversight
1.1 

 Companies should establish the functions reserved to the board and those delegated to senior executives and  
disclose those functions. 

1.2  Companies should disclose the process for evaluating the performance of senior executives. 

1.3  Companies should provide the information indicated in the Guide to reporting on Principle 1. 

Principle 2: structure the board to add value
2.1  A majority of the board should be independent directors. 

2.2  The chair should be an independent director. 

2.3  The roles of chair and chief executive officer should not be exercised by the same individual. 

2.4 

 The board should establish a nomination committee (according to the commentary set out in the  
ASX Recommendations, it should consist of a minimum of three members, the majority being independent  
and have an independent chair). 

2.5 

 Companies should disclose the process for evaluating the performance of the board, its committees and  
individual directors. 

2.6  Companies should provide the information indicated in the Guide to reporting on Principle 2. 

seCTION

2.1

1.7

1.7, 2.1

1.1, 1.2, 1.4

1.1, 1.2, 1.4

1.1, 1.2

1.3, 2.3

1.7

1.2, 1.3, 1.4, 
1.6, 1.7, 2.3

Principle 3: Promote ethical and responsible decision making
3.1  Companies should establish a code of conduct and disclose the code or a summary of the code as to:

•	

•	

	the	practices	necessary	to	maintain	confidence	in	the	company’s	integrity;

	the	practices	necessary	to	take	into	account	their	legal	obligations	and	the	reasonable	expectations	of	their	 
stakeholders;	and

•	

	the	responsibility	and	accountability	of	individuals	for	reporting	and	investigating	reports	of	unethical	practices.	

1.5,	2.4,	3.1

3.2 

3.3 

3.4 

 Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy.  
The policy should include requirements for the board to establish measurable objectives for achieving gender diversity  
and for the board to assess annually both the objectives and progress in achieving them. 

 Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by  
the board in accordance with the diversity policy and progress towards achieving them. 

 Companies should disclose in each annual report the proportion of women employees in the whole organization,  
women in senior executive positions and women on the board. 

3.8

3.8

3.8

3.5  Companies should provide the information indicated in the Guide to reporting on Principle 3. 

3.1, 3.2

18  WorleyParsons Annual Report 2012

 
 
 
	
	
	
PRINCIPles AND ReCOmmeNDATIONs 

Principle 4: safeguard integrity in financial reporting
4.1  The board should establish an audit committee. 

4.2  The audit committee should be structured so that it:

•	

•	

•	

•	

	consists	of	only	non‑executive	directors;

	consists	of	a	majority	of	independent	directors;

	is	chaired	by	an	independent	chair	who	is	not	chair	of	the	board;	and

	has	at	least	three	members.	

4.3  The audit committee should have a formal charter. 

4.4  Companies should provide the information indicated in the Guide to reporting on Principle 4. 

Principle 5: make timely and balanced disclosure
5.1 

 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure  
requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies  
or a summary of those policies. 

5.2  Companies should provide the information indicated in the Guide to reporting on Principle 5. 

Principle 6: Respect the rights of shareholders
6.1 

 Companies should design a communications policy for promoting effective communication with shareholders and  
encouraging their participation at general meetings and disclose their policy or a summary of the policy. 

6.2  Companies should provide the information indicated in the Guide to reporting on Principle 6. 

seCTION

2.3

2.3

2.3

2.3

2.4, 3.5

3.5

3.6

3.6

Principle 7: Recognize and manage risk
7.1 

 Companies should establish policies for the oversight and management of material business risks and disclose  
a summary of those policies. 

2.3, 3.3, 3.4

7.2 

7.3 

 The board should require management to design and implement the risk management and internal control system to  
manage the company’s material business risks and report to it on whether those risks are being managed effectively.  
The board should disclose that management has reported to it as to the effectiveness of the company’s management  
of its material business risks. 

 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and  
the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the  
Corporations Act is founded on a sound system of risk management and internal control and that the system is  
operating effectively in all material respects in relation to financial reporting risks. 

7.4  Companies should provide the information indicated in the Guide to reporting on Principle 7. 

Principle 8: Remunerate fairly and responsibly
8.1  The board should establish a remuneration committee. 

8.2  The remuneration committee should be structured so that it:

•	

•	

•	

	consists	of	a	majority	of	independent	directors;

	is	chaired	by	an	independent	chair;	and

	has	at	least	three	members.	

8.3	

	Companies	should	clearly	distinguish	the	structure	of	non‑executive	directors’	remuneration	from	that	of	 
executive directors and senior executives. 

3.3

3.3

3.3

2.3

2.3

3.7

8.4  Companies should provide the information indicated in the Guide to reporting on Principle 8. 

2.3, 3.2

The Group recognizes that responsible, sustainable corporate performance is essential to the long term success of its business and desirable 
to all of its stakeholders. The Group’s Corporate Responsibility Statement can be found on page 28 of the Annual Report.

WorleyParsons Annual Report 2012  19

 
	
	
	
	
	
	
	
Corporate Governance continued

PART 1 – COmPOsITION AND GOVeRNANCe POlICIes OF 
THe BOARD
Relevant policies and charters 

–  Board Charter 

(see www.worleyparsons.com)

1.1 COmPOsITION PRINCIPles
The Board’s composition is determined in accordance with the 
following principles, the Company’s Constitution and relevant 
governance requirements:

•	

•	

•	

•	

•	

•	

	the	Board	should	comprise	at	least	three	members	and	maintain	
a	majority	of	independent	and/or	non‑executive	directors;

	the	positions	of	Chairman	and	Chief	Executive	Officer	(CEO)	must	
be	held	by	separate	persons;

	the	Chairman	must	always	be	a	non‑executive	director;

	the	Board	should	comprise	directors	with	an	appropriate	range	
and	mix	of	skills,	experience,	expertise	and	diversity;

	the	performance	of	the	Board	and	its	members	should	be	
reviewed	annually	and	objectively;	and

	all	directors	(except	the	CEO)	must	submit	themselves	for	
re‑election	at	regular	intervals,	and	at	least	every	three	years.

1.2 memBeRsHIP
The membership of the Board complies with the composition 
principles outlined above. The directors of the Company during the 
Reporting Period were:

NAme 

Ron	McNeilly	

Larry	Benke	

POsITION

Non‑Executive	Director

Non‑Executive	Director

Erich	Fraunschiel	

Non‑Executive	Director

John	M	Green	

John	Grill	

Eric	Gwee	

Christopher	Haynes,	OBE	

Non‑Executive	Director

Chief	Executive	Officer	and 
Executive Director

Non‑Executive	Director 
(until	25	October	2011)

Non‑Executive	Director 
(from 1 January 2012)

Catherine	Livingstone,	AO	

Non‑Executive	Director

JB	McNeil	

Wang	Xiao	Bin	

William Hall 

Non‑Executive	Director

Non‑Executive	Director 
(from 1 December 2011)

Alternate Director to Larry Benke 
(until	25	October	2011)

Details of each director’s qualifications, special responsibilities, skills, 
expertise and experience (including the period of office held by each 
director) are contained in the profiles included on pages 34 and 35 in 
the Directors’ Report.

During the Reporting Period:

•	

•	

•	

•	

	Mr	Gwee	retired	as	a	director	on	25	October	2011;

	Mr	Hall	retired	as	an	alternate	director	to	Larry	Benke	on	
25	October	2011;

	Ms	Wang	was	appointed	as	a	director	on	1	December	2011;

	Dr	Haynes	was	appointed	as	a	director	on	1	January	2012;	and

20  WorleyParsons Annual Report 2012

•	

	all	other	directors	served	as	directors	for	the	entire	Reporting	
Period.

1.3 APPOINTmeNT, INDUCTION AND TRAINING
The Board’s Nominations Committee sets and reviews the criteria for 
new director appointments having regard to the overall composition 
of the Board.

In considering the nominations and appointments of directors, the 
Board seeks to ensure that its membership is such that each director:

•	

•	

•	

•	

	is	a	person	of	integrity	who	will	observe	the	Group’s	Code	of	
Conduct;

	has	sufficient	abilities	and	time	available	to	perform	their	role	
effectively;

	brings	an	independent	and	questioning	mind	to	their	role;

	enhances	the	breadth	and	depth	of	skills	and	knowledge	of	the	
Board	as	a	whole;	and

•	

	enhances	the	experience	and	diversity	of	the	Board	as	a	whole.

While recognizing that each director will not necessarily have 
experience in each of the following areas, the Board seeks to 
ensure that its membership includes directors with experience in 
engineering, relevant customer sectors, general management and 
finance. In addition, the Board is seeking ways in which it can further 
its diversity.

Each	non‑executive	director	receives	a	letter	formalizing	their	
appointment and that letter outlines the key terms and conditions of 
their appointment. Executive directors each have a written position 
description and a service contract.

Director induction processes are incorporated into the Board program. 
Directors are encouraged, and are given the opportunity, to broaden 
their knowledge of the Group’s business by visiting offices in 
different locations and to remain abreast of developments impacting 
the business.

1.4 DIReCTOR INDePeNDeNCe
The Board recognizes that, while various principles and factors 
are relevant in determining independence, true independence is a 
matter of judgment having regard to the particular circumstances. 
Accordingly, when the Board exercises its judgment in determining 
independence, it has regard to relationships between a director and 
the Group or between a director and third parties that may 
compromise the director’s independence.

The Nominations Committee monitors and undertakes an annual 
assessment	of	each	non‑executive	director’s	independence.	
This assessment applies the ASX Recommendations, the Act and 
current corporate governance practise and adopts the definition 
of independence set out in the ASX Recommendations. Further, the 
Nominations Committee has regard to the materiality and type of 
interest (e.g. as shareholder, advisor, supplier or customer).

In addition, at each Board meeting, the Board reviews each 
non‑executive	director’s	independence.	This	maintains	the	integrity	
of the Board’s ongoing assessment as to the independence of each 
non‑executive	director.

The Board recognizes that the accounting standards provide a 
useful guide as to what is or is not material in a quantitative sense. 
The accounting standards define materiality as an interest of more 

 
	
 
 
	
than 10% of the relevant base (whether revenue, equity or 
expenses). Any interests between 5% and 10% of the base are 
treated as potentially material, depending on the circumstances. 
Any interests below 5% are treated as being immaterial. However, 
the Board also applies a qualitative assessment to seek to ensure 
that a solely quantitative approach does not result in inappropriate 
decisions. The Board considers whether there are any circumstances 
which may affect the director’s interest and could, or could 
reasonably be perceived to, materially interfere with the director’s 
ability to act in the Company’s best interests.

The Board has considered the positions and relationships of each 
of	the	eight	non‑executive	directors	and	has	formed	the	view	that	
seven	of	the	eight	non‑executive	directors	in	office	at	the	conclusion	
of the Reporting Period are independent. The Board is of the opinion 
that therefore a majority of the Board is independent of the Group’s 
management and is free of any interest that may affect its free and 
unfettered judgment.

Mr Fraunschiel, the Chairman of the Company’s Audit and Risk 
Committee, is a director of Woodside Petroleum Limited (Woodside), 
which is a customer of the Group. Dr Haynes, the Chairman of the 
Company’s Health, Safety and Environment Committee, is also a 
director of Woodside. Further, while Mr Gwee was a director of the 
Company, he was also a director of Singapore Power Limited 
(Singapore Power), which is a customer of one of the Company’s 
Singaporean subsidiaries, WorleyParsons (DRPL) Pte Limited.

The Board considers each of Mr Fraunschiel and Dr Haynes to be 
independent, and Mr Gwee to have been independent, after applying 
the principles stated above, given the percentage of total revenue 
and total gross margin the Group earned both from Woodside and 
Singapore Power was less than the 5% threshold stated above 
during the Reporting Period.

In the Board’s opinion, the judgment of each of Mr Fraunschiel and 
Dr Haynes is not impaired or conflicted even though they are 
directors of Woodside. The Board also notes that as a practical 
matter, both of those directors exercise independent judgment in the 
best interests of the Company without direction from Woodside and 
neither of them receives any remuneration other than directors’ fees 
from either the Company or Woodside.

Further, in the Board’s opinion, the judgment of Mr Gwee was not 
impaired or conflicted while he was a director of the Company even 
though he was a director of Singapore Power. Similarly, the Board 
also notes that as a practical matter, Mr Gwee exercised independent 
judgment in the best interests of the Company without direction 
from Singapore Power and he did not receive any remuneration other 
than directors’ fees from either the Company or Singapore Power 
during that time.

Mr Benke is not regarded as independent given that he was 
appointed	a	non‑executive	director	on	the	day	after	resigning	as	an	
executive of the Group on 30 June 2010.

1.5 NOTIFICATION OF INTeResTs AND TReATmeNT OF 
CONFlICTs
Directors are required to notify the Chairman of any contracts, offices 
(including other directorships) held, interests in other companies or 
transactions which might involve a real or potential conflict and at 
each Board meeting directors declare any conflicts or changes to 

their independence. In the event of such a conflict, the Board acts 
appropriately and takes minutes of its actions. The Board Charter 
sets out the process that the Company applies if a conflict arises for 
one or more of its directors. In particular, a director who has a conflict 
with respect to a matter will not, without the Chairman’s approval, 
receive relevant Board papers, be present during any discussion or 
vote on that matter.

Neither Mr Fraunschiel nor Dr Haynes has received any relevant 
Board papers, been present during any discussion nor voted on any 
matter concerning Woodside. In addition, for the period of time while 
he was a director of the Company, Mr Gwee did not receive any 
relevant Board papers, nor was he present during any discussion 
and nor did he vote on any matter concerning Singapore Power.

1.6 INDePeNDeNT ADVICe
Each director is entitled to take independent professional advice at 
the Company’s expense, with the prior approval of the Chairman.

1.7 PeRFORmANCe ReVIeW
The Group encourages excellence from all its personnel and the 
directors recognize that the performance of all personnel, including 
directors, is enhanced by a structured performance review process.

Review of Board performance

The Nominations Committee oversees the conduct of a review of 
Board performance, policies and practice every 12 months.

The review includes:

•	

•	

	comparing	performance	against	agreed	relevant	criteria;	and

	examining	the	Board’s	effectiveness	and	composition.

The relevant criteria against which the performance of the Board is 
assessed include the following:

•	

•	

•	

•	

	monitoring	of	business	performance;

	regulatory	compliance;

	strategy	formulation;	and

	succession	planning.

In addition, informal reviews are conducted as necessary and any 
director may suggest that the Board conduct an additional formal 
review earlier than the regular annual review.

From time to time, the Board engages external consultants to 
undertake an independent review of the Board and individual 
directors’ performance and effectiveness.

A Board and Board Committee evaluation took place during the 
Reporting Period in accordance with this process. This evaluation 
was conducted by the Chairman in the form of individual interviews 
with	each	non‑executive	director.	The	interviews	covered	matters	
such as their individual contribution, Board and Board Committee 
performance and the functioning of the Board and Board Committee 
processes.	The	outcomes	of	the	one‑on‑one	interviews	were	
discussed with the Board which also had further discussions 
concerning Board and Board Committee performance.

In addition, the Nominations Committee evaluates the performance 
of individual directors as those directors become eligible for election 
and	re‑election.

WorleyParsons Annual Report 2012  21

 
Corporate Governance continued

Review of the performance of senior management

The	Board	establishes	performance	criteria	for	the	CEO	and	conducts	
a	performance	review	of	the	CEO	at	least	annually.	The	Board	is	
advised on these matters by the Nominations Committee.

In	turn,	the	CEO	conducts	annual	performance	reviews	of	senior	
executives, which inform senior executives’ remuneration packages, 
and reports on their performance to the Remuneration Committee.

Each	senior	executive,	including	the	CEO,	has	a	written	position	
description and a service contract.

The	relevant	criteria	against	which	the	performance	of	the	CEO	and	
the senior executives is assessed include:

•	

•	

	financial	criteria	relevant	to	the	individual’s	responsibilities	and	
influence;	and

	personal	performance	indicators	referable	to	achieving	the	
objectives of their role.

The	performance	and	remuneration	of	the	CEO	and	the	senior	
executives were reviewed in this manner during the Reporting 
Period.

PART 2 – OPeRATION AND ResPONsIBIlITIes OF THe BOARD 
AND BOARD COmmITTees
Relevant policies and charters 
(see www.worleyparsons.com) 

–  Board Charter 
– 

 Audit and Risk Committee 
Charter
 Nominations Committee 
Charter
 Remuneration Committee 
Charter
 Health, Safety and 
Environment Committee 
Charter
 Continuous Disclosure Policy

– 

– 

– 

– 

2.1 BOARD ResPONsIBIlITIes AND DeleGATION TO 
seNIOR mANAGemeNT
The Board’s responsibilities and those matters delegated to senior 
executives are set out in the Board Charter.

The Board is responsible for approving the Group’s strategic direction 
and objectives. It monitors all aspects of the Group’s performance. 
The Board works with senior executives to formulate strategic 
direction, to set goals, budgets, plans and policies and to identify 
and mitigate risk.

Directors’ deliberations in Board meetings and the application of the 
Group’s policies facilitate the Board’s critical and objective review of 
management’s performance and enable the Board to align senior 
executives’ activities with shareholder expectations.

The	Board	has	given	the	CEO	a	written	delegation	to	manage	the	
Group’s operations and it states that he must exercise his delegation 
always wholly for the benefit of the Company and in accordance 
with	the	Group’s	Code	of	Conduct	and	other	Group	policies.	The	CEO	
has given a written delegation to his direct reports and similarly, 
his direct reports must exercise their delegation always wholly for 
the benefit of the Company and in accordance with the Group’s Code 
of	Conduct	and	other	Group	policies.	This	gives	the	CEO	and	his	
management team a framework within which to drive the Group’s 
strategic direction and meet the goals determined by the Board.

2.2 BOARD meeTINGs
The Board meets in person at least six times a year, with additional 
meetings and briefings held as required, usually by telephone. 
Senior executives are invited to attend Board meetings on a regular 
basis, even if they are not Board members. This provides a direct 
line of communication between the directors and management. 
Non‑executive	directors	also	meet	at	least	six	times	a	year	without	
management. Details of the Board and Committee meetings held 
during the Reporting Period and attendances at those meetings are 
set out below:

BOARD 

AUDIT AND RISK 
COMMITTEE 

NOMINATIONS 
COMMITTEE 

REMUNERATION 
COMMITTEE

meeTINGs 
HelD 
WHIle A 
DIReCTOR 

NUmBeR 
ATTeNDeD 

meeTINGs 
HelD 
WHIle A 
memBeR 

NUmBeR 
ATTeNDeD 

meeTINGs 
HelD 
WHIle A 
memBeR 

NUmBeR 
ATTeNDeD 

meeTINGs 
HelD 
WHIle A 
memBeR 

NUmBeR 
ATTeNDeD

6 

6 

6 

6 

6 

2 

3	

6	

6 

4 

6 

5 

6 

6 

6

2 

3	

5	

6 

4 

6 

6 

6	

6 

4 

5	

6 

4 

6 

6 

6 

6 

2 

3	

6	

6 

4 

6 

6

6

6 

2 

3

5

6 

4

6 

6 

2 

4 

6

6

2

4

DIReCTOR 

Ron McNeilly 

Larry Benke 

Erich Fraunschiel 

John M Green 

John Grill 

Eric Gwee 

Christopher	Haynes,	OBE	

Catherine	Livingstone,	AO	

JB McNeil 

Wang Xiao Bin 

22  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
	
	
Details of the qualifications of the members of the Audit and Risk 
Committee are set out in the Directors’ Report on pages 34 and 35. 
Details of the Audit and Risk Committee meetings held and 
attendances at those meetings are set out in this statement on 
page 22.

The Audit and Risk Committee is responsible for establishing 
procedures for the selection and nomination to the Board of the 
external auditor. Those procedures involve obtaining detailed 
written submissions from the proposed external auditor, including a 
detailed resumé for the proposed senior audit engagement partner. 
The Committee then interviews that partner and seeks references 
from third parties as to their suitability before making any 
recommendation to the Board in that regard.

The Committee is also responsible for establishing procedures for the 
rotation of the external audit engagement partner. The Committee 
monitors that partner during their period of appointment and may 
recommend to the Board that that partner rotate earlier than is 
required by law if the Committee is of the view that this is 
appropriate in all the circumstances.

The Committee, on behalf of the Board, also monitors the integrity of 
the external audit function by not permitting:

•	

•	

	the	partner	managing	the	audit	for	the	external	auditor	to	serve	
for	more	than	five	consecutive	years;	and/or

	the	external	auditor	to	be	retained	for	non‑audit	work	where	such	
retainer may detract, or be perceived to detract, from the auditor’s 
independence or impartiality.

Fees	paid	to	the	external	auditor	for	non‑audit	work	are	disclosed	in	
the financial statements.

Nominations Committee

The Nominations Committee assists and advises the Board on 
matters relating to Board composition and performance, including 
director	independence,	and	the	CEO’s	appointment,	performance	
review and remuneration. The Committee reviews, assesses and 
advises the Board in relation to the necessary and desirable 
competencies of directors. It also oversees director selection and 
appointment.

All	non‑executive	directors	are	members	of	the	Nominations	
Committee.

In addition to the above meetings, five special purpose meetings of 
standing Board Committees were held during the Reporting Period. 
The Board also met informally during the Reporting Period by way of 
a Board briefing on eight occasions. The Audit and Risk Committee 
met informally during the year by way of an Audit and Risk 
Committee briefing on one occasion.

All	non‑executive	directors	who	are	not	members	of	the	standing	
Board Committees are invited to, and generally attend, the standing 
Board Committee meetings.

2.3 BOARD COmmITTees
The Board has established four standing Committees to ensure 
that it is well equipped to discharge its responsibilities and to assist 
the Board in carrying out its responsibilities: the Audit and Risk 
Committee;	the	Nominations	Committee;	the	Remuneration	
Committee;	and	the	Health,	Safety	and	Environment	Committee.	
Each of the Committees has a formal charter in place.

Each Committee is comprised of:

•	

•	

	a	non‑executive	director	as	Chairman;

	only	non‑executive	directors,	the	majority	of	whom	are	
independent;	and

•	

	at	least	three	members.

Senior executives may attend Committee meetings upon invitation 
from the relevant Chairman.

Audit and Risk Committee

The Audit and Risk Committee assists the Board in overseeing 
the integrity of the Group’s financial reporting, risk management 
framework and internal controls. The Committee has an important 
role in supervising and monitoring the progress of both the Internal 
Audit and Risk Management functions. In addition, it manages the 
Group’s relationship with the external auditor, including the auditor’s 
appointment, removal and evaluation and approval of the auditor’s 
engagement terms, fees and audit plan.

The Audit and Risk Committee also reviews and makes 
recommendations on the strategic direction, objectives and 
effectiveness of the Group’s financial and operational risk 
management processes. This includes considering the effectiveness 
of risk management processes, compliance and internal control 
systems.

The Chairman of the Committee is an independent director who is not 
the Chairman of the Board. The following directors were members of 
the Audit and Risk Committee during the Reporting Period:

NAme 

DURATION

Erich Fraunschiel (Chairman) 

Whole Reporting Period

Catherine	Livingstone,	AO	

JB McNeil 

Wang Xiao Bin 

Whole	Reporting	Period

Whole Reporting Period

From 1 December 2011

WorleyParsons Annual Report 2012  23

 
Corporate Governance continued

NAme 

DURATION

Ron McNeilly (Chairman) 

Larry Benke 

Erich Fraunschiel 

John M Green 

Eric	Gwee	

Christopher	Haynes,	OBE	

Catherine	Livingstone,	AO	

JB McNeil 

Wang Xiao Bin 

Whole Reporting Period

Whole Reporting Period

Whole Reporting Period

Whole Reporting Period

Until	25	October	2011

From	1	January	2012

Whole	Reporting	Period

Whole Reporting Period

responsible for ensuring that the Group has and observes coherent 
remuneration policies and practises which enable it to:

•	

•	

•	

	attract	and	retain	executives,	directors	and	other	personnel	who	
will	create	value	for	shareholders;

	generate	sustained	business	performance;	and

	support	the	Group’s	objectives,	goals	and	values.

Further details on the operation of the Committee are set out in the 
Remuneration Report at page 40 of the Annual Report.

The following directors were members of the Remuneration 
Committee during the Reporting Period:

From 1 December 2011

NAme 

Details of the Nominations Committee meetings held and 
attendances at those meetings are set out in this statement 
on page 22.

The Nominations Committee and the Board consider the composition 
of the Board at least twice annually: when assessing the Board’s 
performance	and	when	considering	director	election	and	re‑election.	
In addition, it also considers Board composition before appointing any 
new director.

In	considering	whether	the	Board	will	support	the	re‑election	of	
incumbent directors, the Nominations Committee considers the skills, 
experience, expertise, diversity and contribution made to the Board 
by the incumbent director and the contribution that the director is 
likely	to	make	if	re‑elected.	If	the	incumbent	director	has	already	
served as a director for at least three terms, the Nominations 
Committee will consider the desirability for Board renewal and 
Board composition at that time and the incumbent director’s skills, 
experience, expertise, diversity and contribution.

Following this assessment, the Nominations Committee will make a 
recommendation to the Board as to whether or not the Board should 
support	the	re‑election	of	the	incumbent	director.

When considering appointing new directors, the Nominations 
Committee assesses the range of skills, experience, expertise, 
diversity and other attributes from which the Board would benefit 
and the extent to which current directors possess such attributes. 
This assessment allows the Nominations Committee to provide 
the Board with a recommendation concerning the attributes for a 
new director, such that they balance those of existing directors. 
The Board considers the Nominations Committee’s recommendation 
and determines the attributes for which it is searching.

Candidates are assessed through interviews, meetings and 
background and reference checks (which may be conducted both by 
external consultants and by directors) as appropriate. Following this 
assessment, the Nominations Committee will make a 
recommendation to the Board concerning the proposed appointment.

If the Board decides to continue the process, as a final step, all 
directors will meet with the proposed director. The Board will then 
make its final decision with regard to the appointment.

John M Green (Chairman) 

Eric	Gwee	

JB	McNeil	

Ron McNeilly 

DURATION

Whole Reporting Period

Until	25	October	2011

From	26	October	2011

Whole Reporting Period

Details of the Remuneration Committee meetings held and 
attendances at those meetings are set out in this statement on 
page 22.

Health, Safety and Environment Committee

During the Reporting Period, the Board established a Health, Safety 
and Environment Committee of the Board.

That Committee assists the Board to fulfil its responsibility to 
oversee health, safety and environmental matters arising out of the 
Group’s activities.

It is responsible for making recommendations to the Board regarding:

•	

•	

•	

	the	effectiveness	of	the	resources	and	processes	that	the	Group	
uses to manage health, safety and environmental risks and to 
comply	with	health,	safety	and	environmental	laws;

	the	Group’s	and	management’s	respective	performance	with	
respect	to	health,	safety	and	environment;	and

	the	identity	of	independent	third	parties	to	be	appointed	to	verify	
the effectiveness of the Group’s resources, process and 
performance with respect to health, safety and environment, 
along with the scope of their role and how frequently verification 
will be undertaken.

Dr Haynes, Mr McNeilly and Mr Benke are members of the Health, 
Safety and Environment Committee. Dr Haynes has been appointed 
Chairman of the Committee. 

Meetings of the Committee will begin in the year ending 30 June 
2013.

2.4 OTHeR COmmITTees
In addition to the Board Committees, a number of additional 
Committees assist the Board in monitoring and overseeing the 
Group’s Code of Conduct and policies that reinforce the Board’s 
commitment to corporate governance, strong ethical standards 
and integrity.

Remuneration Committee

Disclosure Committee

The Remuneration Committee assists and advises the Board on 
matters relating to Board remuneration, and the performance and 
remuneration	of	the	CEO’s	direct	reports.	The	Committee	is	

The Continuous Disclosure Policy establishes a Disclosure Committee. 
The role of the Disclosure Committee is to consider matters which 
are potentially material and price sensitive and to determine whether 
those matters are required to be disclosed to the market.

24  WorleyParsons Annual Report 2012

The	Disclosure	Committee	comprises	the	CEO	or	the	Chief	Financial	
Officer	(CFO),	the	Company	Secretary	and	at	least	one	non‑executive	
director. The Board will consider major disclosure matters such as 
results, profit guidance and major acquisitions.

Ethics Committee

The role of the Ethics Committee is to:

•	

•	

•	

	assess,	develop,	implement	and	oversee	Group	ethics	on	a	global	
basis;

	provide	the	oversight	necessary	to	guide	Group	personnel	in	their	
efforts to adhere to ethical business practices and comply with 
regulatory	requirements;	and

	recommend	to	the	CEO	and	the	Executive	Committee	the	
objectives, policies and procedures that best serve the Group’s 
interests in maintaining a business environment committed to 
high standards of ethics and integrity, corporate responsibility and 
legal compliance.

The Ethics Committee comprises senior management representatives 
of Risk Management, Legal, Governance, Finance, and Internal Audit. 
It provides a forum through which ethical issues may be reported 
and investigated.

PART 3 – GOVeRNANCe POlICIes APPlYING TO THe GROUP
Relevant policies and charters 

(see www.worleyparsons.com)  

–  Board Charter 
– 

– 

– 

– 

 Audit and Risk Committee 
Charter
 Nominations Committee 
Charter
 Remuneration Committee 
Charter
 Health, Safety and 
Environment Committee 
Charter

–  Code of Conduct
–  Securities Dealing Policy
–  Continuous Disclosure Policy
 Corporate Risk Management 
– 
Policy

–  Diversity Policy
– 

 Corporate Responsibility 
Statement

3.1 eTHICAl DeCIsION mAKING – THe CODe OF CONDUCT
The Board has published various policies and codes to promote the 
Group’s approach to ethical and responsible decision making.

The Group’s Code of Conduct (Code) guides the Group’s personnel, 
including directors, as to the standards of behavior expected of them. 
The Code has been translated into Arabic, Bahasa Indonesian, Bahasa 
Malay, Bulgarian, French, Kazakh, Mandarin, Portuguese, Romanian, 
Russian, Spanish, Thai and Vietnamese.

While the Code seeks to prescribe standards of behavior for all Group 
personnel to observe, it does not, and understandably cannot, 
identify every ethical issue that a personnel member might face. 
The Code’s objective is to provide a benchmark for professional 
behavior throughout the Group, to safeguard the Group’s reputation 
and to make personnel members aware of the consequences of 
breaching the Code.

The Code deals with many ethical issues, including:

•	

•	

•	

•	

	the	Group’s	commitment	to	a	safe	and	harassment‑free	
workplace;

	good	corporate	citizenship	and	compliance	with	laws;

	acting	with	professional	integrity	(including	avoiding	conflicts	of	
interest);	and

	protecting	the	Group’s	reputation,	assets,	resources,	information	
and records.

The Group provides the Code and training in relation to it to all Group 
personnel when they start with the Group and provides all Group 
personnel with annual refresher training. All Group personnel can 
access the Code from the Group’s intranet or request a copy from 
their local People group representative.

3.2 seCURITIes DeAlING POlICY
The Board has approved a Securities Dealing Policy that applies to all 
the Group’s personnel, including directors. The policy is designed to:

•	

•	

	explain	the	type	of	conduct	in	relation	to	dealings	in	securities	
that is prohibited under the relevant law and by the Group, 
including	insider	trading;	and

	establish	a	procedure	for	buying,	selling	or	otherwise	dealing	in	
the Company’s securities that prohibits dealing by personnel and 
their associates during specified closed periods without prior 
approval from the Chairman of the Audit and Risk Committee, 
Chairman	of	the	Board,	CEO	or	Company	Secretary,	as	appropriate.	
Such approval will only be granted to the directors (including 
the	CEO),	the	CEO’s	direct	reports	and	members	of	the	CEO’s	
Committee in exceptional circumstances.

The Act prohibits members of the Group’s key management 
personnel and their closely related parties from hedging any 
performance rights that they have been granted under the 
WorleyParsons Performance Rights Plan. Under the Group’s Securities 
Dealing Policy, all personnel and their associates are prohibited from 
hedging any performance rights that they hold and they are also 
prohibited from hedging any shares that they hold that are subject 
to transfer restrictions or any minimum holding requirements.

Hedging includes entering into any transaction or arrangement in 
financial products which operates to limit the economic risk of a 
security holding in the Company, including equity swaps and 
contracts for difference.

3.3 mANAGemeNT OF mATeRIAl BUsINess RIsKs
The Group has a Corporate Risk Management Policy and Risk 
Management Framework. The Board requires management to design 
and implement a risk management and internal control system to 
manage the Group’s material business risks and report to it on 
whether those risks are being managed effectively. The Risk 
Management Framework supports the Corporate Risk Management 
Policy and describes the objectives, strategies, resources and 
responsibilities for managing risk.

The Group’s risk management approach is based on the International 
Standard	ISO	31000:2009	Risk management – Principles and 
guidelines. This approach adopts best practice in risk management so 
far as it relates to the Group’s requirements. The Group’s Risk 
Management systems are mature and embedded throughout the 
operations via the Group’s Enterprise Management System.

WorleyParsons Annual Report 2012  25

 
 
 
 
 
 
 
 
 
 
Corporate Governance continued

The Group has processes to systematically identify, assess, and 
report	on	both	financial	and	non‑financial	material	business	risks.	
Part of this process requires the Internal Audit group to report to 
the Board as to the effectiveness of the Group’s management of 
its material business risks and internal controls. A strategic and 
operational Corporate Risk Management report is prepared and 
analyzed by both management and the Board on a biannual basis. 
The Board received reports from management on the effectiveness 
of the Group’s management of material business risks during the 
Reporting Period.

This process enables the Board to consider the effectiveness of the 
Group’s management of its material business risks. The Board has 
also	received	a	written	assurance	from	the	CEO	and	the	CFO	that	
the declarations provided by them, in accordance with section 295A 
of the Act and ASX Recommendation 7.3, are founded on a sound 
system of risk management and internal control and that the system 
is functioning effectively in relation to financial reporting and 
material business risks.

3.4 INTeRNAl AUDIT
The Internal Audit function is independent of management and is 
overseen by the Audit and Risk Committee. It provides assurance 
that the Group’s financial and operational risks are being managed 
appropriately and that its internal control framework is operating 
effectively. In addition to his ongoing audit reports, the Director of 
Internal Audit provides an annual assessment to the Audit and Risk 
Committee of the adequacy and effectiveness of the Group’s control 
processes and risk management procedures in light of the nature, 
function and size of the Group’s operations.

3.5 CONTINUOUs DIsClOsURe
The Board is committed to ensuring that the Company complies with 
its continuous disclosure obligations and has approved a Continuous 
Disclosure Policy that applies to all Group personnel, including 
directors. The Board seeks to promote investor confidence by 
ensuring that trading in the Company’s shares takes place in an 
informed market.

The Continuous Disclosure Policy is designed to ensure that all Group 
personnel are aware of the Company’s obligations and to ensure 
accountability at a senior executive level for timely disclosure of 
material information. This policy aims to ensure that shareholders 
and the market in general are kept properly informed of material price 
sensitive information affecting the Company, on a timely basis. 
The Company discharges this obligation by releasing material price 
sensitive information to the ASX in ASX announcements and other 
documents distributed to shareholders, such as the annual report.

3.6 COmmUNICATING WITH sHAReHOlDeRs
The Board aims to ensure that shareholders are informed of all 
material information relating to the Company by communicating to 
shareholders through:

•	

•	

•	

	continuous	disclosure	reporting	to	the	ASX;

	the	annual	report;	and

	media	releases	and	other	investor	relations	publications	on	the	
Group’s website.

The Board encourages the full participation of shareholders at 
the annual general meeting to seek to ensure a high level of 

26  WorleyParsons Annual Report 2012

accountability and discussion of the Group’s performance and 
goals. The Chairman encourages questions and comments from 
shareholders and seeks to ensure that shareholders are given ample 
opportunity to participate.

The	CEO	and/or	the	CFO,	together	with	other	senior	executives,	
occasionally meet with analysts and investors. Any presentations 
made to these persons are released to the market via the ASX and 
published in the Investor Relations section of the Group’s website. 
Further,	the	CEO	and/or	CFO	endeavor	to	respond	to	queries	from	
investors and analysts for information in relation to the Group, 
provided the information requested is already publicly available or is 
not information which is price sensitive.

The external auditor attends the annual general meeting and is 
available to answer shareholder questions about the conduct of the 
audit and the preparation and content of the auditor’s report.

3.7 RemUNeRATION OF DIReCTORs AND seNIOR eXeCUTIVes
The Group seeks to attract and retain directors and senior executives 
with the appropriate expertise and ability to create value for 
shareholders.

The	remuneration	structure	for	the	non‑executive	directors	is	not	
related	to	performance.	Non‑executive	directors	receive	fees	which	
reflect their skills, responsibilities and the time commitments required 
to discharge their duties. The Company does not pay retirement 
benefits	to	non‑executive	directors	(other	than	superannuation	
contributions in accordance with its statutory superannuation 
obligations).

The remuneration structure for senior executives reflects the Group’s 
performance culture: there is a direct correlation between the 
executive’s reward and individual and Group performance so as to 
seek to ensure that the Group’s remuneration policy is aligned with 
its long term business objectives and the interests of shareholders 
and other stakeholders.

Further details of the remuneration policies and practices of the 
Group and the remuneration paid to directors and senior executives 
are set out in the Remuneration Report on pages 37 to 51 of the 
Annual Report.

3.8 DIVeRsITY AND INClUsION
The touchstone of the Group’s success is recognizing all its 
personnel for their performance, competence, collaboration and 
sense of professional accountability. The Group welcomes a very 
diverse population of personnel that reflects the range of countries, 
cultures and contexts spanned by the Group’s operations. The Group 
consider this diversity to be one of its strengths.

The diversity of the Group’s personnel includes factors such as race, 
ethnicity,	gender,	sexual	orientation,	socio‑economic	status,	culture,	
age, physical ability, education, skill levels, family status, religious, 
political and other beliefs and work styles. The Group knows from 
experience that differences in ideas, backgrounds, patterns of 
thinking and approaches to work can generate value for the 
Group’s stakeholders: its customers, shareholders, personnel and the 
communities in which it operates. It is therefore the Group’s policy to 
appreciate the distinctiveness of all of its personnel and to harness 
these differences within a productive, inclusive, talent and 
performance based environment, in which everybody feels valued, 
where their skills are fully utilized, their performance is recognized, 

professional accountability is expected and organizational goals 
are met.

3.8.1 THE GROUP’S DIVERSITY AND INCLUSION POLICY
The Group’s Diversity and Inclusion Policy is available on the Group’s 
website.

The Group’s approach to diversity and inclusion is based on the 
following objectives, being to:

•	

•	

•	

•	

•	

	retain,	promote	and	hire	the	best	people	the	Group	can,	focusing	
on actual and potential contribution in terms of their performance, 
competence,	collaboration	and	professional	accountability;

	foster	an	inclusive	culture	and	ensure	that	current	and	future	
opportunities for all Group personnel are based on competence 
and performance irrespective of race, ethnicity, gender, sexual 
orientation,	socio‑economic	status,	culture,	age,	physical	ability,	
education, family status, religious, political and other beliefs and 
work styles. This includes being intolerant of behaviors that 
denigrate or otherwise diminish such attributes or that 
discriminate	on	the	basis	of	such	attributes;

	create	ways	to	improve	talent	management,	cultural	diversity	
and	inclusion	–	including	where	the	under‑representation	of	an	
available population group is preventing the Group from taking full 
advantage	of	the	diversity	of	the	talent	pool;

	create	and	manage	a	strong	and	diverse	talent	pipeline	which	
takes a unified and talent based approach to recruitment, training 
and development, performance management, retention and 
succession	planning;

	provide	a	fair	level	of	reward	in	order	to	attract	and	retain	high	
caliber people – and build a culture of achievement by providing a 
transparent	link	between	reward	and	performance;	and

•	

	be	compliant	with	all	mandatory	diversity	reporting	requirements.

3.8.2 THE GROUP’S MEASURABLE OBJECTIVE AND CURRENT 
GENDER PROFILE
The Group’s measurable objective for increasing gender diversity is to 
increase the representation of women at all levels of its organization 
over time. The Group’s progress towards achieving that objective, 
along with the proportion of women employees within the Group, 
women	in	senior	executive	positions	and	women	non‑executive	
directors, is set out in the table below:

meAsURe 

Women employees1 

Women senior executives2 

Women	non‑executive	directors3 

2012 

2011

~26% 

~11% 

~25%

~11%

~25% 

~12.5%

1   This includes both employees and contractors engaged by the Group.
2   Senior executives includes all members of the Group’s Executive Committee and all 
executives	reporting	directly	to	a	member	of	that	committee,	including	the	CEO.

3	 	The	Company	has	chosen	to	report	the	percentage	of	women	non‑executive	directors	

rather than the percentage of women board members, because it has only one 
executive	director,	the	CEO,	who	is	counted	at	the	senior	executive	level.

WorleyParsons Annual Report 2012  27

 
Corporate Responsibility

INTRODUCTION
The Group acknowledges its responsibilities to the communities in 
which it operates. The Group aims to be recognized as an industry 
leader in Corporate Responsibility and to this end has embarked on 
a journey of continuous improvement.

For many years, the Group has engaged in a broad range of local 
Corporate Responsibility initiatives across its businesses. These 
initiatives include sponsorships, financial contributions to 
not‑for‑profit	organizations,	Group	personnel	volunteering	their	time,	
programs to reduce the Group’s impact on the environment, disaster 
relief	and	engaging	in	pro‑bono	projects.

1. CORPORATe ResPONsIBIlITY sTATemeNT
In 2012, the Group revised and updated its Corporate Responsibility 
Statement to more clearly articulate the Group’s commitment and 
aspirations of Corporate Responsibility leadership.

The Group adheres to the following commitments:

WorleyParsons is committed to working with our customers and 
suppliers to achieve results that grow our company, reward our 
shareholders and our people and contribute to our communities. 
We acknowledge our responsibilities to the communities in which 
we operate.

Governance, Ethics and Transparency
We maintain the highest standards of corporate governance and 
ethics, and report our governance performance annually.

We conduct our business in an open, honest and ethical manner as 
described in our Code of Conduct and our integrity framework, 
OneWayTM.

We integrate corporate responsibility in our business planning and 
decision making and measure, monitor and report our corporate 
responsibility performance on a regular basis.

Our People
Our people are our greatest asset and we support them by providing 
a work environment that is positive and safe and by committing to 
their ongoing development.

We promote a diverse and inclusive workplace as outlined in our 
Diversity and Inclusion Policy.

We are committed to being recognized as a leader in health and 
safety performance and have a goal of Zero Harm.

We apply fair labor practises and comply with applicable national and 
local labor laws of the countries and communities we work in.

We do not employ or condone the employment of forced or 
child labor.

Human Rights
We will respect the basic rights of the people we deal with and will 
not be complicit or engage in activities that solicit or encourage 
human rights abuse.

Community
We are committed to making a positive impact in the communities 
and environments in which we operate. Our people will be involved in 
community based initiatives, creating benefits for both the 
community and our people.

28  WorleyParsons Annual Report 2012

Our locations will support programs and initiatives specific to their 
locations, and wherever possible, in conjunction with our customers. 
We will support local businesses, train and employ local people, and 
utilize other local resources wherever we can.

Fair Operating Practises and Supply Chain
We will actively strive to implement socially responsible supply chain 
practises and anti‑corruption practises working closely with our 
clients and suppliers as partners.

We expect our suppliers to operate with similar values as ours and 
will encourage them, where necessary, to adopt similar corporate 
responsibility policies as our own.

Environment
We recognize the importance of operating sustainably and commit to 
continually identify opportunities for improving our environmental 
performance.

We believe that all our people are responsible for performing their 
work in an environmentally sustainable manner. We will continue to 
deliver profitable sustainability to our clients through our 
EcoNomicsTM service offering.

2. mIlesTONes
During the Reporting Period, the Group reached a number of 
Corporate Responsibility milestones, including:

•	

•	

•	

•	

•	

•	

	revising	the	Group’s	Corporate	Responsibility	Statement	to	reflect	
and strengthen the Group’s vision to be a leader in Corporate 
Responsibility;

	becoming	a	signatory	to	the	United	Nations	Global	Compact,	
a strategic policy initiative for businesses that are committed 
to aligning their operations and strategies with 10 universally 
accepted principles in the areas of human rights, labor, 
environment	and	anti‑corruption;

	enhancing	the	Group’s	website	to	include	additional	news	and	
reports	regarding	Corporate	Responsibility;

	initiating	the	tracking	of	contributions	and	volunteer	hours	in	
community	and	environmental	activities;

	reviewing	the	Group’s	methodology	for	measuring	water	usage;	
and

	continuing	to	deliver	sustainability‑enhancing	services	to	the	
Group’s customers through the Group’s EcoNomicsTM service 
offering.

During the year ending 30 June 2013, the Group intends to:

•	

•	

	commence	external	Corporate	Responsibility	reporting	using	the	
internationally	recognized	Global	Reporting	Initiative	framework;

	update	Corporate	Responsibility	indicators	and	set	target	
baselines	for	the	Group;

4. ACTIVITY HIGHlIGHTs
The Group undertook various community engagement and 
environmental activities over the Reporting Period, including:

•	

•	

•	

•	

•	

•	

•	

•	

•	

•	

•	

•	

	providing	$2.67	million	of	support	to	various	Corporate	
Responsibility	initiatives;

	raising	$1.95	million	of	Group	personnel	contributions	for	various	
not‑for‑profit	organizations;

	participating	directly	in	over	340	community	based	and	
environmental	projects	across	16	countries;

	contributing	$350,000	of	educational	sponsorships	across	
10 location programs in the United States, Australia, Canada, 
Indonesia	and	South	Africa;

	matching	$800,000	of	Group	personnel	fundraising	programs;

	supporting	local	community	action	groups	through	the	Group’s	
DeltaAfrik	Foundation	in	Nigeria;	“Make	a	Difference’”	campaign	in	
Indonesia;	and	“We	Care”	program	in	Canada;

	providing	pro‑bono	project	management	services	in	Australia	and	
Canada;

	providing	ongoing	support	to	the	Australian	Indigenous	
community	by:	hosting	Indigenous	business	forums;	providing	
sponsorship to enable Indigenous students to attend the 
Indigenous Australian Engineering Summer School program 
providing	internship;	and	sponsoring	art	exhibitions	and	cultural	
festivals;

	engaging	in	carbon	reduction	activities,	including	car‑pooling	
initiatives,	print‑on	demand	systems	and	the	provision	of	public	
transportation	passes	to	Group	personnel;

	engaging	in	bush	regeneration,	tree	planting	and	beach	clean‑up	
activities	across	a	number	of	countries;

	achieving	ISO	14001:	Environmental	Management	Systems	
certification	in	six	Group	offices;	and

	developing	an	internally	verified	greenhouse	gas	inventory	tool	
that tracks internal environmental activities.

•	

	implement	Group‑wide	Corporate	Responsibility	initiatives	and	
examine establishing a WorleyParsons Foundation to focus funds 
donated by the Group and its personnel on significant 
development projects in less developed parts of the world and 
responses	to	natural	disasters;	and

•	

	develop	broader	communications	across	locations	regarding	
Corporate Responsibility.

3. CORPORATe ResPONsIBIlITY INDICATORs
The Group measures and focuses on those areas that are important 
to the long term success of its business.

Contributions by Group personnel and the Group’s business 
operations are measured in terms of dollar contributions and 
volunteer time contributions.

The Group again completed a response for the Carbon Disclosure 
Project in 2012. The Group’s energy consumption and greenhouse 
gas emissions were measured to assist the Group to reduce its 
energy consumption and to reduce its greenhouse gas emissions.

The	Group	uses	the	US	OSHA	(United	States	Occupational	Safety	
and Health Administration) reporting requirements for Total 
Recordable Case Frequency Rate (TRCFR) and Lost Workday Case 
Frequency Rate (LWCFR).

The Group’s Corporate Responsibility indicators for the Reporting 
Period and the year ended 30 June 2011 are:

INDICATORs 

2012 

2011

Contributions by operations 

$2.67 million 

Not Available

Contributions by personnel members 

$1.95 million 

Not Available

Volunteer hours by personnel members 

23,748 hours 

Not Available

TRCFR 

LWCFR 

0.12 

0.03 

0.11

0.02

As data for greenhouse gas emissions and energy consumption is 
not	available	until	the	October	after	the	end	of	the	relevant	financial	
year, the table below shows those indicators for the year ended 
30 June 2011 and the year ended 30 June 2010.

INDICATORs 

2011 

2010

PeR 
PeRsONNel 
memBeR1 

PeR 
  PeRsONNel 
memBeR1 

TOTAl2 

TOTAl

Greenhouse gas  
emissions	tCO2‑e	
Energy consumption MWh 

2.24	
97,840	
4.10  263,949 

2.33	
69,997
5.56  166,878

1  Personnel includes employees and contractors.
2   Totals include gas emissions from, and energy consumed by, the Exmouth Power 

Station, Australia.

WorleyParsons Annual Report 2012  29

 
 
 
 
 
 
 
Corporate Responsibility continued

THe KeNYA PROjeCT, CANADA
Graduates from the New Grad Program and senior management 
from	the	Calgary	office	participated	in	the	Village	of	Hope	pro‑bono	
project in Kenya. As part of this project, these personnel were 
involved in designing, purchasing, constructing and installing a 
solar and water distribution system for a Kenyan orphanage. 
They raised CAD30,000 ($28,989) and 20 personnel contributed 
to a total of 1,000 volunteered hours.

“The risk of fire due to kerosene lanterns, poor sanitation and 
water borne diseases in our village in Kenya was eliminated 
through the installation of solar power and water distributions 
system. We are very grateful of WorleyParsons for making this 
project happen.” Sergio Bersaglio, Executive Director, Village of 
Hope – Africa.

mAlARIA AND CHOleRA PReVeNTION AWAReNess, NIGeRIA
The Group’s DeltaAfrik Charitable Foundation (DCF) in Lagos, 
Nigeria runs a number of programs including providing computers 
for schools and a malaria and cholera prevention awareness 
campaign that highlights the methods to prevent these diseases. 
The Group provided the participants with free distribution of 
anti‑malaria	drugs,	practical	water	treatment	solutions	and	
treated mosquito nets.

“The water in this community is very dirty and salty so we all 
doubted it could ever become clean. DCF with the water treatment 
solution has demonstrated to us how to clean our water, now 
our women are very glad, thank you.” Community leader, Ibeno, 
Akwa Ibom, Nigeria.

ANTI-CHIlD ABUse PUBlICATION, TRINIDAD
WorleyParsons Trinidad contributed TTD$50,000 ($7,568) towards 
an educational illustrative book that the Heroes Foundation 
published. Its primary purpose is to bring awareness and sensitivity 
towards the unfortunate reality of abused children, and to equip 
young	people	with	information	that	will	give	them	the	“confidence	
to	confide”	as	needed,	in	an	effort	to	lessen	the	frequency	of	
these events.

“We are pleased to have WorleyParsons come on board to 
augment the sponsorship of the book. The additional copies that 
WorleyParsons’ contribution has enabled will permit us collectively 
to be comforted by the fact that the Heroes Foundation can now 
positively influence the lives of even more young people, through 
the wider distribution of this book. This action speaks to the 
commitment that WorleyParsons has made towards having 
a positive impact on communities in Trinidad and Tobago.” 
Philip Kentwell, High Commissioner of Trinidad and Tobago.

30  WorleyParsons Annual Report 2012

Calgary graduates and Brian Faulkner, senior Vice President, Calgary 
Operations on the Village of Hope Kenya site

WorleyParsons DeltaAfrik personnel at a malaria and Cholera Prevention 
Awareness campaign

mr sean Kellman, location Director Caribbean Operations, 
WorleyParsons Trinidad, mr. Philip julien, Founder and Chairman, 
the Heroes Foundation (and Improve Director, WorleyParsons Trinidad), 
mr. Philip Kentwell, High Commissioner, Australia

Financial Contents

Financial Report
For the financial year ended 30 June 2012

Directors’ Report 

Statement of Financial Performance 

Statement of Comprehensive Income 

Statement of Financial Position 

Statement of Changes in Equity 

Statement of Cash Flows 

Notes to the Financial Statements 

Directors’ Declaration 

Independent Auditor’s Report to the Members of WorleyParsons Limited 

Shareholder Information 

Corporate Information 

WORLEYPARSONS LIMITED
ACN 096 090 158

Notes to the Financial Statements
1 

Corporate Information 

2 

3 

4 

Summary of Significant Accounting Policies 

Financial Risk Management 

Expenses and Losses/(Gains) 

5  Other Income 

6 

7 

8 

Income Tax 

Current Assets – Cash and Cash Equivalents 

Current Assets – Trade and Other Receivables 

9  Non-Current Assets – Property, Plant and Equipment 

10  Non-Current Assets – Intangible Assets 

11  Non-Current Assets – Deferred Tax Assets 

12  Current Liabilities – Trade and Other Payables 

13  Current Liabilities – Interest Bearing Loans and Borrowings 

14  Current Liabilities – Provisions 

15  Non-Current Liabilities – Interest Bearing Loans and Borrowings 

16  Non-Current Liabilities – Deferred Tax Liabilities 

17  Non-Current Liabilities – Provisions 

18 

Issued Capital 

19  Reserves 

20  Retained Profits 

57

57

63

64

64

65

65

65

66

67

68

68

68

68

69

69

70

70

71

71

21  Earnings Per Share 

22  Dividends 

23 

Investments in Controlled Entities 

24  Equity Accounted Investments 

25 

Interests in Jointly Controlled Operations and Assets 

26  Notes to the Statement of Cash Flows 

27  Finance Lease Receivable 

28  Procurement 

29  Commitments for Expenditure 

30  Contingent Liabilities 

31  Remuneration of Auditors 

32  Related Parties 

33  Key Management Personnel Disclosures 

34  Segment Information 

35  Credit Risk 

36  Liquidity Risk 

37  Currency Risk 

38 

Interest Rate Risk 

39  Fair Values 

40  Subsequent Events 

32

52

53

54

55

56

57

87

88

90

92

72

72

72

74

75

76

76

76

77

77

77

78

78

80

81

82

83

85

86

86

WorleyParsons Annual Report 2012  31
WorleyParsons Annual Report 2012  31

 
 
Directors’ Report

The directors present their report on the consolidated entity consisting of 
WorleyParsons Limited (Company) and the entities it controlled (Group or 
consolidated entity) at the end of, or during, the year ended 30 June 2012.

DIVIDENDS – WORLEYPARSONS LIMITED

Details of dividends paid in respect of the current financial year and previous 
financial year are as follows:

DIRECTORS

The following persons were directors of the Company during the financial 
year and, unless noted, were directors for the full financial year and until the 
date of this report:

Ron McNeilly (Chairman)

Larry Benke

Erich Fraunschiel

John M Green

John Grill (Chief Executive Officer)

Eric Gwee – retired as a director on 25 October 2011

Christopher Haynes, OBE – appointed as a director on 1 January 2012

Catherine Livingstone, AO

JB McNeil

Wang Xiao Bin – appointed as a director on 1 December 2011

William Hall (alternate director for Larry Benke) – retired as an alternate 
director on 25 October 2011.

As at the date of this report, the relevant interests of the directors in the 
shares and performance rights of the Company were:

DIRECTORS’ NUMBER OF SHARES AND PERFORMANCE RIGHTS

NUMBER OF SHARES 

NUMBER OF 
PERFORMANCE 
RIGHTS

387,484 

–

1,130,195 

7,812

168,755 

891,869 

–

–

DIRECTORS 

Ron McNeilly 

Larry Benke 

Erich Fraunschiel 

John M Green 

John Grill 

Christopher Haynes, OBE 

Catherine Livingstone, AO 

JB McNeil 

Wang Xiao Bin 

1 

 Excludes cash settled performance rights.

PRINCIPAL ACTIVITIES

During the financial year, the principal activities of the Group consisted of 
providing engineering design and project delivery services, including providing 
maintenance and reliability support services to the following sectors:

•	

•	

•	

•	

	Hydrocarbons;

	Power;

	Minerals,	Metals	&	Chemicals;	and

	Infrastructure	&	Environment.

32  WorleyParsons Annual Report 2012

2012 
$’M 

2011 
$’M

Interim ordinary dividend for 2012 of 40.0 cents per ordinary 
share paid on 30 March 2012 (31.7 cents franked) 

98.3 

Final ordinary dividend for 2011 of 50.0 cents per ordinary 
share paid on 27 September 2011 (12.9 cents franked) 

122.8 

Interim ordinary dividend for 2011 of 36.0 cents per ordinary 
share paid on 29 March 2011 (36.0 cents franked) 

Final ordinary dividend for 2010 of 40.0 cents per ordinary 
share paid on 28 September 2010 (18.8 cents franked) 

Total dividends paid 

– 

– 

221.1 

–

–

88.6

98.0

186.6

Since the end of the financial year, the directors have resolved to pay a 
dividend of 51.0 cents per fully paid ordinary share, including exchangeable 
shares, partially franked at 61.3% (2011: 50.0 cents per share, partially 
franked at 25.7%). In accordance with AASB 137 Provisions, Contingent 
Liabilities and Contingent Assets, the aggregate amount of the proposed final 
dividend of $125.3 million is not recognized as a liability as at 30 June 2012.

REVIEW OF OPERATIONS

A detailed review of the Group’s operations for the financial year and the 
results of those operations is contained in the CEO’s Report.

A summary of the consolidated revenues and results in respect of the current 
financial year and previous financial year is as follows:

CONSOLIDATED

2012 
$’M 

2011 
$’M

Revenue and other income 

7,408.4 

5,683.2

Less: net gain on revaluation of investments previously 
accounted for as equity accounted associates 

(7.6) 

(65.7)

Net profit excluding net gain on revaluation of investments 
previously accounted for as equity accounted investments 

368.9 

316.7

Profit after income tax expense attributable to:

Members of WorleyParsons Limited 

353.2 

364.2

Net gain on revaluation of investments previously 
accounted for as equity accounted associates attributable 
to members of WorleyParsons Limited 

Non-controlling interests 

(7.6) 

(65.7)

345.6 

23.3 

298.5

18.2

Revenue and other income 

7,408.4 

5,683.2

Less: procurement services revenue at nil margin 

(696.2) 

(426.8)

Add: share of revenue from associates 

665.0 

718.9

Less: net gain on revaluation of investments previously 
accounted for as equity accounted associates 

Less: interest income 

Aggregated revenue1 

(7.6) 

(7.0) 

(65.7)

(6.1)

7,362.6 

5,903.5

1 

 Aggregated revenue is defined as statutory revenue and other income plus 
share of revenue from associates less procurement services revenue at nil 
margin, interest income and net gain on revaluation of investments previously 
accounted for as equity accounted associates. The directors of the Company 
believe the disclosure of revenue attributable to associates provides additional 
information in relation to the financial performance of the Group.

Depreciation 

25,329,759 

140,7341

Amortization 

– 

13,000 

10,300 

4,000 

–

–

–

–

Earnings before interest and tax (EBIT) 

Net interest expense 

Profit before income tax expense 

Income tax expense 

Profit after income tax expense 

(19.1) 

(83.9) 

537.9 

(44.1) 

493.8 

(14.2)

(81.5)

539.9

(41.5)

498.4

(117.3) 

(116.0)

376.5 

382.4

 
 
 
 
 
 
 
 
 
 
AGGREGATED REVENUE 

EBIT 

EBIT MARGIN

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

(31.5) 

(32.5) 

(b)	

	the	results	of	those	operations	in	future	financial	years;	or

2012 
$’M 

2011 
$’M 

2012 
$’M 

2011 
$’M 

Hydrocarbons 

5,015.1  4,043.9 

586.5 

554.3 

Power 

581.3 

513.7 

59.9 

65.3 

2012 
% 

11.7 

10.3 

2011 
%

13.7

12.7

895.4 

643.8 

131.4 

102.7 

14.7 

16.0

870.8 

702.1 

115.3 

101.0 

7,362.6  5,903.5 

893.1 

823.3 

Global support costs 

(317.5) 

(299.6) 

13.2 

12.1 

14.4

13.9

(13.8) 

(17.0) 

Minerals,	Metals	&	 
Chemicals 

Infrastructure	&	 
Environment 

Interest and tax  
for associates 

Amortization of  
acquired intangible  
assets 

EBIT excluding the  
net gain on revaluation  
of investments previously  
accounted for as equity  
accounted associates 

530.3 

474.2 

7.2 

8.0

Aggregated revenue was $7,362.6 million, an increase of 24.7% on the prior 
financial year. EBIT, excluding the net gain on revaluation of investments 
previously accounted for as equity accounted associates, of $530.3 million, 
was up 11.8% from the prior financial year result of $474.2 million.

The EBIT margin on aggregated revenue for the Group, excluding the net gain 
on revaluation of investments previously accounted for as equity accounted 
associates, decreased to 7.2% compared with 8.0% in 2011. After tax, 
the Group earned a net margin, excluding the net gain on revaluation of 
investments previously accounted for as equity accounted associates, 
on aggregated revenue of 4.7%, compared to the 2011 net margin of 5.1%.

The effective tax rate, excluding the net gain on revaluation of investments 
previously accounted for as equity accounted associates, was 24.1% 
compared with 26.8% in 2011.

The Group retains a strong cash position and low level of gearing with (net 
debt/net debt plus total equity) at financial year end of 19.9% (2011: 21.5%). 
Cash as at 30 June 2012 was $247.3 million (2011: $171.2 million). Earnings 
before interest taxes depreciation amortization (EBITDA) interest cover for 
2012 was 12.5 times (2011: 13.4 times). EBITDA interest cover, excluding 
the net gain on revaluation of investments previously accounted for as equity 
accounted associates, for 2012 was 12.4 (2011: 12.0 times) times.

Operating cash inflow for the period was $437.5 million, compared to 
$293.8 million in 2011. Cash outflow from investing activities was 
$106.3 million (2011: $105.8 million).

EARNINGS PER SHARE

Basic earnings per share 

Basic earnings per share excluding net acquisition gains 

Diluted earnings per share 

2012 
CENTS 

143.7 

140.6 

142.5 

Diluted earnings per share excluding net acquisition gains 

139.5 

2011 
CENTS

148.3

121.5

147.2

120.6

Basic earnings per share, excluding net gain on revaluation of investments 
previously accounted for as equity accounted associates, were 140.6 cents 
per share, an increase of 15.7% from the previous financial year result of 
121.5 cents per share.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

ACQUISITIONS
The Group increased its ownership interest in ARA WorleyParsons SA from 
50% to 94%.

The ARA WorleyParsons SA business is located in Chile and provides 
consulting services in environmental engineering and project and construction 
management.

In July 2012, unsecured notes payable were offered by WorleyParsons 
Financial Services Pty Limited, WorleyParsons Canadian Finance Sub Limited 
and WorleyParsons US Finance Sub Limited in the United States private debt 
capital market. Financial close and funding are expected to occur in 
September 2012 of US$300 million fixed coupon notes payable that will 
mature in five to ten years from date of financial close.

Since the end of the financial year, the directors have resolved to pay a 
dividend of 51.0 cents per fully paid ordinary share, including exchangeable 
shares, partially franked at 61.3% (2011: 50.0 cents per share, partially 
franked at 25.7%). In accordance with AASB 137 Provisions, Contingent 
Liabilities and Contingent Assets, the aggregate amount of the proposed final 
dividend of $125.3 million is not recognized as a liability as at 30 June 2012.

No other matter or circumstance has arisen since 30 June 2012 that has 
significantly affected, or may significantly affect:

(a)	

	the	consolidated	entity’s	operations	in	future	financial	years;

(c) 

 the consolidated entity’s state of affairs in future financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Subject to the markets for our services remaining strong, we expect to 
achieve good growth in FY2013 compared to FY2012 underlying earnings. 
We have a clear growth strategy in place focused on improving margins, and 
developing our skill set and geographic footprint across our four customer 
sectors. This will be achieved through organic growth as well as by taking 
advantage of acquisition opportunities that provide value for shareholders. 
We are confident that our medium and long term prospects remain positive 
based on our competitive position, our diversified operations and strong 
financial capacity.

ENVIRONMENTAL REGULATION

In the majority of the Group’s business operations, it does not have 
responsibility for obtaining environmental licenses. The Group typically assists 
its customers, who usually own or operate plant and equipment, with the 
management of their environmental responsibilities, rather than having those 
responsibilities itself. However, the Group has environmental responsibilities in 
terms of compliance with environmental controls and in exercising reasonable 
care and skill in its design, construction management, operation and 
supervising activities. The risks associated with environmental issues are 
managed through the Group’s risk management and quality assurance systems.

It is the Group’s policy to comply with all environmental regulations applicable 
to it. The Company confirms, for the purposes of section 299(1)(f) of the 
Corporations Act 2001 (Act) that it is not aware of any breaches by the Group 
of any environmental regulations under the laws of the Commonwealth of 
Australia, or of a State or Territory of Australia.

In the financial year, the Group held ownership interests in the Exmouth 
power station asset which holds appropriate environmental licenses. 
Compliance with these licenses was managed through the operational 
systems which control and monitor the operation and maintenance of this 
asset.

CARBON AND ENERGY EMISSIONS AND CONSUMPTION 
PERFORMANCE

The Group recognizes that responsible, sustainable corporate performance is 
essential to the long term success of its business, and desirable to all of its 
stakeholders. For this reason, the Company again completed a response for 
the Carbon Disclosure Project (CDP) in 2012, detailing its energy consumption 
and measures implemented to assist both the Group to reduce its energy 
consumption and the Group’s customers to achieve more sustainable project 
solutions utilizing methodologies under the Group’s EcoNomics™ initiative. 
The data collection and analysis under the CDP have stimulated energy and 
carbon reduction measures in many of the Group’s offices around the world.

The Company is registered under the National Greenhouse and Energy 
Reporting Act 2007 (NGER Act) as the controlling corporation for the Group as 
prescribed by section 12 of the NGER Act. The Company lodged its National 
Greenhouse Energy Report (NGER Report) for the period 2010/2011 in 
October 2011. This NGER Report contained information in relation to the 
greenhouse gas emissions, energy production and energy consumption from 
the operation of facilities under the operational control of the Group. The 

WorleyParsons Annual Report 2012  33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report

Company intends to lodge its NGER Report for the Group for the period 
2011/2012 in October 2012.

NON‑AUDIT SERVICES

During the financial year, Ernst & Young, the Group’s auditor, performed 
certain other services in addition to its statutory audit duties. Total non‑audit 
services provided by the external auditor amounted to $626,001.

The Board has adopted a policy outlining the provision of non‑audit services. 
The Board has considered the position and, in accordance with the advice 
received from the Audit and Risk Committee, is satisfied that the provision 
of the non‑audit services is compatible with the general standard of 
independence for auditors imposed by the Corporations Act 2001 (the Act). 
The directors are satisfied that the provision of non‑audit services by the 
auditor did not compromise the auditor independence requirements of the Act 
for the following reasons:

•	

•	

	all	non‑audit	services	have	been	reviewed	by	the	Audit	and	Risk	
Committee to ensure they do not impact the integrity and objectivity of 
the auditor; and

	none	of	the	services	undermines	the	general	principles	relating	to	auditor	
independence as set out in APES 110 Code of Ethics for Professional 
Accountants, including reviewing and auditing the auditor’s own work, 
acting in a management or decision‑making capacity for the Group, acting 
as advocate for the Group or jointly sharing economic risk and rewards.

A copy of the auditor’s independence declaration as required under 
section 307C of the Act is as follows:

Auditor's Independence Declaration to the Directors of WorleyParsons 
Limited  

In relation to our audit of the financial report of WorleyParsons Limited for the year ended 30 June 2012, 
to the best of my knowledge and belief, there have been no contraventions of the auditor independence 
requirements of the Corporations Act 2001 or any applicable code of professional conduct. 

Ernst & Young 

Bruce Meehan 
Partner 
Sydney  
29 August 2012 

Liability limited by a scheme approved 
under Professional Standards Legislation 

34  WorleyParsons Annual Report 2012

INFORMATION ON DIRECTORS AND COMPANY SECRETARY

RON MCNEILLY BCOM, MBA, FCPA, FAICD
CHAIRMAN AND NON‑EXECUTIVE DIRECTOR – DIRECTOR SINCE LISTING IN 
NOVEMBER 2002, CHAIRMAN SINCE FEBRUARY 2005
Ron is Chairman of the Board and the Nominations Committee and a member 
of both the Remuneration Committee and the Health, Safety and Environment 
Committee. Ron is currently the Deputy Chairman of BlueScope Steel Limited 
(previously BHP Steel) and has over 30 years’ experience in the resources 
industry. Ron joined BHP Billiton Limited in 1962 and has held positions with 
that company including executive director and President BHP Minerals, Chief 
Operating Officer, Executive General Manager and Chief Executive Officer 
BHP Steel, General Manager Transport, General Manager Long Products 
Division and General Manager Whyalla Works. Ron is a former Chairman of 
Ausmelt Limited and Melbourne Business School Limited and is a former 
director of Alumina Limited, BHP and BHP Billiton, QCT Resources and 
Tubemakers of Australia.

Australian listed company directorships

LISTED COMPANY NAME 

NATURE OF  
DIRECTORSHIP 

DATE OF COMMENCEMENT  DATE OF CESSATION

BlueScope Steel 
Limited 

Deputy Chairman 
and non‑executive 
director

10 May 2002 

n/a 

LARRY BENKE BSC ENG (HONS)
NON‑EXECUTIVE DIRECTOR – DIRECTOR SINCE JULY 2010
Larry joined the Board as a non‑executive director on 1 July 2010 and is 
a member of the Nominations Committee and the Health, Safety and 
Environment Committee. He was appointed an alternate director for Bill Hall 
from March 2007, following the Company’s acquisition of the Colt Companies, 
until his retirement as Managing Director Canada on 30 June 2010. Larry has 
extensive experience in the engineering and construction industries including 
roles in engineering design, project management and general management 
including President/CEO of the Colt Companies and Managing Director of 
WorleyParsons Canada. He successfully led Colt through a period of 
substantial growth and expansion which continued with the integration of 
the company into the WorleyParsons Canada business. Larry is a director of 
the Board of The Calgary Airport Authority, a not‑for‑profit responsible for the 
operation and development of the Calgary International and Springbank 
airports. He is a director of CEDA International, an Ontario Municipal 
Employees Retirement System owned corporation providing specialty 
maintenance and turnaround services to industry. Larry is also a director of 
Cervus Equipment Corporation, a Toronto Stock Exchange listed company 
in the business of acquiring and operating agricultural, industrial and 
construction equipment dealerships. Larry graduated from the University of 
Alberta in 1973 with a Bachelor of Science in Electrical Engineering (Honors).

ERICH FRAUNSCHIEL BCOM (HONS), FCPA, FAICD
NON‑EXECUTIVE DIRECTOR – DIRECTOR SINCE MARCH 2003
Erich is Chairman of the Audit and Risk Committee and a member of 
the Nominations Committee. Erich is a non‑executive director of Woodside 
Petroleum Limited. He is Chairman of Wesfarmers General Insurance Limited 
and Wesfarmers Insurance Pty Limited. Erich’s early business career was in 
the petroleum marketing and management consulting industries. In 1981, 
he joined the Australian Industry Development Corporation where he was 
involved in project lending, investment banking and venture capital 
investment. In 1984, he joined Wesfarmers to start the company’s projects 
and business development function. In 1988, he became General Manager 
of Wesfarmers’ Commercial Division and from 1992 until his retirement in July 
2002 was an executive director and Chief Financial Officer of Wesfarmers.

Australian listed company directorships

LISTED COMPANY NAME 

NATURE OF  
DIRECTORSHIP 

DATE OF COMMENCEMENT  DATE OF CESSATION

Woodside 
Petroleum Limited  director

Non‑executive 

1 December 2002 

n/a 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
JOHN M GREEN BJURIS/LLB, FAICD, SFFIN
NON‑EXECUTIVE DIRECTOR – DIRECTOR SINCE LISTING IN NOVEMBER 2002
John is Chairman of the Remuneration Committee and a member of the 
Nominations Committee. John is a company director, a writer and the 
co-founder of book publisher, Pantera Press. He is the author of two novels 
(a financial thriller, ‘Nowhere Man’ and a political thriller, ‘Born to Run’). 
John is a director of QBE Insurance Group Limited, a member of the Australian 
Government Takeovers Panel and a director of the Centre for Independent 
Studies (a public policy think tank). He was previously an investment banker 
at Macquarie Bank, as an executive director. His career before banking was 
in law, including as a partner in Freehills and Dawson Waldron.

Australian listed company directorships

LISTED COMPANY NAME 

NATURE OF  
DIRECTORSHIP 

DATE OF COMMENCEMENT  DATE OF CESSATION

QBE Insurance 
Group Limited 

Non-executive 
director

1 March 2010 

n/a 

JOHN GRILL BSC, BENG (HONS), HON DENG (SYDNEY)
CHIEF EXECUTIVE OFFICER – DIRECTOR SINCE LISTING IN NOVEMBER 2002 
AND DIRECTOR OF THE COMPANY BEFORE LISTING AND ITS PREDECESSOR 
ENTITIES SINCE 1971
John is Chief Executive Officer of the Group. In 1971, he became Chief 
Executive of the entity that ultimately became WorleyParsons Limited – 
Wholohan Grill and Partners, after having joined Esso Australia in 1968. 
This specialised consulting practice acquired the business of Worley 
Engineering Pty Limited in Australia in 1987. Following group restructuring, 
in 2002 Worley Group Limited listed on the ASX. In 2004, Worley Group 
Limited	acquired	Parsons	E&C	Corporation,	a	US‑based	global	project	services	
company, and changed its name to WorleyParsons Limited. In March 2007, the 
Company then acquired the Colt Group in Canada substantially increasing the 
Group’s capability in the upstream and downstream components of oil sands. 
John has personal expertise in every aspect of project delivery for projects in 
the resources and energy industries. He has been directly involved with most 
of the Group’s major clients and remains closely involved at board level with 
the Group’s joint ventures. John is on the board of Neuroscience Research 
Australia.

CHRISTOPHER HAYNES, OBE BSC (HONS), DPHIL, CENG, FIMECHE
NON‑EXECUTIVE DIRECTOR – DIRECTOR SINCE JANUARY 2012
Chris was appointed to the Board effective 1 January 2012. He is Chairman 
of the Health, Safety and Environment Committee and a member of the 
Nominations Committee. He is based in the United Kingdom and is a 
non-executive director of Woodside Petroleum Limited. His appointment 
followed a 39 year career with the Shell Group of Companies and their 
affiliates. He has lived in a large number of countries, working in the oil and 
gas exploration and production, LNG and chemicals businesses, primarily in 
project development and delivery and in operations. Chris was seconded 
to Woodside from 1999 to 2002, where he was General Manager of the 
North West Shelf Venture and was subsequently Managing Director of Shell’s 
operations in Syria and of Nigeria LNG Limited. In 2008, Chris assumed 
responsibility for the delivery of Shell’s major upstream projects worldwide. 
He retired from Shell in August 2011. Chris graduated from the University 
of Manchester with a Bachelor of Science with Honors in Mechanical 
Engineering and obtained a Doctor of Philosophy degree in Applied Sciences 
from the University of Sussex. He is a Chartered Engineer and Fellow of the 
Institution of Mechanical Engineers in the United Kingdom and was appointed 
to the Order of the British Empire in June 2009 for his services to the British 
oil and gas industry in Nigeria.

Australian listed company directorships

LISTED COMPANY NAME 

NATURE OF  
DIRECTORSHIP 

DATE OF COMMENCEMENT  DATE OF CESSATION

Woodside 
Petroleum Limited  director

Non-executive 

1 June 2011 

n/a 

CATHERINE LIVINGSTONE, AO BA (HONS), HON DBUS (MACQUARIE),  
HON DSC (MURDOCH), FCA, FAICD, FTSE
NON‑EXECUTIVE DIRECTOR – DIRECTOR SINCE JULY 2007
Catherine joined the Board on 1 July 2007 and is a member of the Audit and 
Risk Committee and the Nominations Committee. She is Chairman and a 
director of Telstra Corporation Limited and a director of Macquarie Bank 
Limited and Macquarie Group Limited. She was Chairman of CSIRO from 2001 
to 2006 and has also served on the boards of Goodman Fielder Limited and 
Rural Press Limited. Catherine was the Managing Director of Cochlear Limited 
from 1994 to 2000, taking it through to an initial public offer in 1995. 
In 2000, Catherine received the Chartered Accountant in Business Award for 
that year and in 2002 was elected a Fellow of the Australian Academy of 
Technological Sciences and Engineering. She was further awarded in 2003 
the Centenary Medal for service to Australian Society in Business Leadership 
and the 2006 Macquarie University Alumni Award for Distinguished Service 
(Professional). In 2008, Catherine was appointed an Officer of the Order of 
Australia for service to the development of Australian science, technology and 
innovation policies to the business sector. She has a Bachelor of Arts (Hons) 
in Accounting, is a Chartered Accountant and was the Eisenhower Fellow 
for Australia in 1999.

Australian listed company directorships

LISTED COMPANY NAME 

NATURE OF  
DIRECTORSHIP 

Macquarie Bank 
Limited 

Non-executive 
director

Macquarie Group 
Limited 

Non-executive 
director

Telstra 
Corporation 
Limited 

Non-executive 
director 
Chairman 

DATE OF COMMENCEMENT  DATE OF CESSATION

19 November 2003  n/a 

30 August 2007 

n/a 

30 November 2000  n/a 

8 May 2009 

n/a

JB MCNEIL BSC (MONT), MSC (CAL), SPE, ASME
NON‑EXECUTIVE DIRECTOR – DIRECTOR SINCE MAY 2010
JB was appointed to the Board on 1 May 2010 and is a member of the 
Audit and Risk Committee, the Remuneration Committee and the Nominations 
Committee. His appointment followed a 34 year career with ExxonMobil 
Corporation. He began with Exxon in 1974 and over the next two decades he 
was involved in a variety of engineering and operations assignments in the 
Middle East and in the USA. In 1994, JB was appointed Offshore Division 
Manager responsible for production in the South China Sea. In 1996, he was 
appointed Director General for the Sakhalin 1 Project in Russia and in 2001, 
Vice President for Deep Water Development in Angola and Equatorial Guinea. 
Between 2003 and 2005, JB held project development responsibilities for 
Russia and the Caspian region and in 2005 was appointed Vice President of 
Arctic Projects (Russia, Canada and Alaska). JB retired from ExxonMobil 
in 2008.

WANG XIAO BIN BCOM, CPA
NON‑EXECUTIVE DIRECTOR – DIRECTOR SINCE DECEMBER 2011
Xiao Bin was appointed to the Board on 1 December 2011 and is a member 
of the Audit and Risk Committee and the Nominations Committee. She is 
based in Hong Kong and is an executive director and Chief Financial Officer 
of China Resources Power Holdings Company Limited. Prior to joining China 
Resources Power in July 2003, she was a Director of Corporate Finance at ING 
Investment Banking, responsible for execution of capital markets and merger 
and acquisition transactions in the Asia Pacific region. Xiao Bin worked for 
Price Waterhouse in Australia in the Audit and Business Advisory Division for 
five years before joining ING. She is a member of CPA Australia and holds a 
graduate diploma in Applied Finance and Investment from Securities Institute 
of Australia (now Finsia) and a Bachelor of Commerce from 
Murdoch University in Australia.

WorleyParsons Annual Report 2012  35

 
 
 
 
Directors’ Report

PETER JANU BEC/LLB, CA, FCIS
COMPANY SECRETARY AND GENERAL COUNSEL CORPORATE – APPOINTED 
OCTOBER 2008
Peter has broad experience across a range of disciplines including company 
secretarial, governance, legal, remuneration, project finance and corporate 
taxation. Peter has degrees in Law and Economics from The University of 
Sydney and is a Chartered Accountant and a Chartered Secretary.

INDEMNITIES AND INSURANCE

Under the Company’s Constitution, the Company indemnifies each current and 
former officer of the Group against certain liabilities and costs incurred by 
them as an officer of the Group. The Company also indemnifies each current 
and former officer of the Group against certain liabilities and costs incurred 
when the officer acts as an officer of another body corporate at the 
Company’s request and the liability or cost is incurred in that capacity. Neither 
indemnity extends to liabilities or costs from which the Company is prohibited 
from indemnifying current or former officers under the Act.

In addition, the Company has entered into Deeds of Access, Indemnity and 
Insurance with certain officers of the Group. Under those deeds, the Company 
agrees (among other things) to:

•	

•	

•	

	indemnify	the	officer	to	the	extent	permitted	by	law	and	the	Company’s	
Constitution;

	maintain	a	directors’	and	officers’	insurance	policy;	and

	provide	officers	with	access	to	Board	papers.

The Company maintains a directors’ and officers’ insurance policy that, subject 
to certain exemptions, provides insurance cover to former and current officers 
of the Group. During the financial year, the Company paid insurance premiums 
to insure those officers of the Group. The contracts of insurance prohibit the 
disclosure of the amounts of premiums paid and the nature of the liability 
covered.

ROUNDING OF AMOUNTS

The Company is of a kind referred to in Class Order 98/0100 issued by the 
Australian Securities and Investments Commission, relating to the “rounding 
off” of amounts in the Directors’ Report and financial statements. Unless 
otherwise expressly stated, amounts referred to in this report have been 
rounded off to the nearest hundred thousand dollars in accordance with that 
Class Order and amounts less than $50,000 that have been rounded down 
are represented in this report by 0.0.

36  WorleyParsons Annual Report 2012

REMUNERATION REPORT
The Company’s directors present the Remuneration Report prepared in accordance with section 300A of the Corporations Act 2001 (Act) for the Company and 
the consolidated entity for financial year 2012 (FY2012). The information provided in this Remuneration Report has been audited as required by 
section 308(3C) of the Act. This Remuneration Report forms part of the Directors’ Report.

The Remuneration Report is presented in three sections:

Section

What it coverS

remuneration Snapshot

guiding remuneration 
Principles

The guiding principles adopted by the Board which underpin all remuneration decisions 
and actions.

Looking Forward

executives

Provides an overview of the remuneration reviews and initiatives proposed for financial 
year 2013 (FY2013).

The names and positions of the executive directors and group managing directors 
(Executives), whose remuneration details are disclosed in the Annual Report.

actual remuneration 
outcomes

The actual remuneration outcomes for Executives in FY2012 and financial year 2011 
(FY2011).

remuneration Decisions

Explains how the Board, Remuneration Committee and Nominations Committee make 
decisions, including the use of external consultants.

executive remuneration 
in Detail

remuneration Structure

Provides a breakdown of the various components of remuneration, and summarizes the 
key terms and performance conditions for the “at risk” components (short and long term 
incentives) including a description of the new combined incentive plan.

company Performance 
over a Five Year Period

Shows how the Company’s performance has impacted on remuneration outcomes.

remuneration outcomes Details the remuneration outcomes for Executives in accordance with the Accounting 

Standards, including total remuneration, vesting of at risk components and movements 
in equity holdings.

employment 
arrangements

The key contract terms governing the employment of Executives (including termination 
entitlements where relevant).

non‑executive Director 
remuneration

non‑executive Directors

The names and positions of the non-executive directors (NEDs) whose remuneration 
details are disclosed in the Annual Report.

remuneration Policy

The guiding principles which govern the process and basis for setting non-executive 
director remuneration.

remuneration Structure

Outlines the components of remuneration for NEDs, including current Board and 
Committee fees.

remuneration outcomes Details of NEDs’ total remuneration in FY2012 and FY2011.

Page

38

38

39

39

40

41

45

46

50

50

50

50

51

WorleyParsons Annual Report 2012  37

 
Directors’ Report

REMUNERATION SNAPSHOT

This remuneration snapshot sets out the outcomes of our review of the Remuneration Framework, along with key details regarding Executive remuneration for 
FY2012 that are likely to be of interest to shareholders.

GUIDING REMUNERATION PRINCIPLES
The diagram below outlines the guiding principles that underpin the Company’s remuneration arrangements for Executives, and illustrates how we seek to put 
these into practice through our remuneration decisions and actions:

Strategic vision
WorleyParsons will be the preferred global provider of technical, project and operational support services to our customers, using the distinctive WorleyParsons culture to 
create value for them and prosperity for our people and stakeholders.

Leadership

relationships

agility

Performance

Our Executive Remuneration Principles will drive the behaviors and results to help us achieve our strategy and vision.

executive remuneration Principles

Providing a fair level of reward in order 
to retain and attract high caliber 
employees.

Building a culture of achievement by 
providing a transparent link between 
reward and performance.

Building long term employee 
commitment through continued 
WorleyParsons share ownership.

Promoting mutually beneficial outcomes 
by aligning employee, customer and 
shareholder interests.

Roles are benchmarked against roles in 
the market. We benchmark fixed pay, 
variable pay and pay mix.

Individual remuneration reflects the 
individual’s role, responsibilities 
performance, qualifications and 
experience.

Putting the remuneration Principles into Practice

Key performance indicators are set with 
Executives and reviewed with the Board.

Reward subject to Company performance 
and individual performance.

Opportunity to earn equity through the 
Long Term Incentive (LTI) Plan and the 
Deferred Equity Short Term Incentive 
(STI) Plan.

Performance metrics are geared at 
focusing Executives on strong financial 
performance, while balancing long term 
interests of the Company.

Having a minimum shareholding 
requirement.

LOOKING FORWARD
Review of the Executive remuneration mix
As foreshadowed at the 2011 Annual General Meeting (AGM), a comprehensive and in-depth review of our remuneration was completed during FY2012. The aim 
of the review was to ensure alignment of reward among Executives, customers and shareholders through a clear and transparent remuneration mix and to 
ensure such alignment is applied throughout all phases of the economic cycle. Several changes have been made for FY2013 and beyond and these are 
discussed further below.

The Board considered a variety of inputs, such as market practice, governance and compliance standards, and feedback from, and the expectations of, 
shareholders and Executives. In addition, both recent and anticipated legislative changes were considered.

The changes that are proposed as a result of this review include:

1.	 simplification	of	incentive	programs;

2.	

increased	period	of	deferral	for	deferred	incentive;

3.	 equal	weighting	for	total	shareholder	return	(TSR)	and	earnings	per	share	(EPS)	hurdles	for	LTI;

4.	

increased	vesting	period	for	LTI	from	three	to	four	years	with	no	retest;

5.	 expanded	peer	group	for	the	LTI	TSR	hurdle;	and

6.  piloting of an all employee share purchase plan.

1. Simplification of incentive programs
The Board will replace the Cash STI, Deferred Equity STI and Discretionary STI Plans with a new Combined Incentive Program (Incentive Plan). The LTI Plan will 
be retained in addition to the Incentive Plan.

Details of the new incentive programs can be found on pages 43 and 44.

2. Increased period of deferral for deferred incentive
The cash component of the Incentive Plan will remain payable at the conclusion of the performance period in which an Executive earned the incentive.

Delivery of the performance rights (rights) component will be deferred for three years following the conclusion of the performance period, changed from 
two equal tranches vesting after 12 and 24 months.

3. Equal weighting of TSR and EPS hurdles for LTI
The LTI remains subject to two specific performance hurdles, being TSR and EPS. To balance the outlook of Executives on creating shareholder wealth and 
delivering long term Company performance, the TSR and EPS performance hurdles will be equally weighted. Previously, the LTI plan had a TSR weighting 
of 60%.

4. Increased vesting period for LTI from three to four years with no retest
The vesting period for awards made under the LTI Plan will be increased from three to four years to drive longer term sustainable results, further aligning 
interests of Executives with those of shareholders. The Board believes that retesting is no longer required as the volatility of the TSR outcome is reduced by 
expanding the peer group.

5. Expanded peer group for the LTI TSR hurdle
The peer group for the TSR hurdle will be expanded to reduce the volatility of the outcome. The new peer group is listed on page 44.

38  WorleyParsons Annual Report 2012

The Board believes a specific TSR peer group is appropriate (rather than an ASX Index) in order to measure performance against those companies that compete 
with the Company for customers, people and projects, and who are subject to similar challenges, opportunities and market sentiment.

6. Piloting of an all employee share purchase plan
The Board believes that an employee share purchase plan will increase employees’ commitment to the Company and align participants to shareholder interests. 
The Board has approved the piloting of such a plan in three countries in FY2013, with a view to implementing it globally if the pilot is successful. Under the 
plan, for every five shares purchased by an employee and held for three years, the Company will match an additional share to a maximum value of $1,000 per 
annum, per employee.

Legislative and regulatory developments
On 21 February 2012, the Australian Government announced its in-principle response to the research and recommendations commissioned from the 
Corporations and Markets Advisory Committee. The Company’s remuneration arrangements are consistent with the Government supported recommendations to 
the extent the detail is currently available.

Consistent with the proposed reforms, the Company maintains a clawback provision within the Incentive Plan and the LTI Plan. The deferral was introduced prior 
to	the	Government’s	recommendations;	however,	as	mentioned	above,	the	Company	has	now	also	extended	the	deferral	periods	for	incentive	awards.

EXECUTIVES
Set out below is a list of the Executives of the Company whose remuneration details are outlined in this Remuneration Report. Except where noted, these 
Executives were employed for all of FY2012 in the positions noted below. The use of the term “Executives” throughout this report refers to the Executives 
listed below.

name 

PoSition 

countrY oF reSiDence

EXECUTIVE DIRECTORS
John Grill1 
William Hall 

GROUP MANAGING DIRECTORS
Barry Bloch 
Stuart Bradie 
Iain Ross 
David Steele 
Andrew Wood2 

Chief Executive Officer (CEO) 
Executive Director (retired as an alternative director on 25 October 2011) 

Australia
United States

Group Managing Director – People 
Group Managing Director – Operations 
Group Managing Director – Development 
Group Managing Director – Delivery 
Group Managing Director – Finance/CFO 

Australia
United Kingdom
United Kingdom
Malaysia
Australia

1  Mr Grill will retire as CEO on 23 October 2012.
2  Mr Wood will be appointed as CEO and an Executive director on 23 October 2012.

These Executives, in addition to the non-executive directors (NEDs) listed on page 50 of the Annual Report, comprised the key management personnel (KMP) of 
the Company for FY2012, as defined under the Australian Accounting Standards.

ACTUAL REMUNERATION OUTCOMES
The actual remuneration outcomes for FY2012 for Executives reflect their individual performance and the business conditions faced by, and performance 
outcomes achieved by, the Company. Outcome details for individual executives can be found on pages 46 and 47. In particular:

•	

•	

•	

	in	assessing	the	outcome	for	STI,	the	Board	exercised	its	discretion	to	base	the	STI	on	the	underlying	Group	net	profit	after	tax	(NPAT),	which	in	the	Board’s	
opinion reflects the Company’s operating results, instead of reported Group NPAT. This reduced the STI outcome available to Executives. In FY2012 
underlying Group NPAT was $345.6 million compared to reported Group NPAT of $353.2 million. In FY2011 underlying Group NPAT was $298.5 million 
compared	to	reported	Group	NPAT	of	$364.2	million;

	for	performance	rights	granted	in	FY2010,	achievement	against	the	LTI	Plan	performance	hurdles	for	the	three	year	period	ended	30	June	2012	will	result	
in 42% vesting. Executives have the choice to retain rights under the TSR measure to be retested for the four year period ending 30 June 2013. No rights 
subject	to	the	EPS	measure	will	vest	and	they	will	lapse	on	30	September	2012;

	for	performance	rights	granted	in	FY2009,	achievement	against	the	LTI	Plan	performance	hurdles	for	the	three	year	period	ended	30	June	2011	resulted	in	
nil vesting and rights under the EPS measure lapsed on 30 September 2011. All Executives elected to retain rights under the TSR measure to be retested 
for the four year period ended 30 June 2012. The retested outcome will result in a 90% vesting of rights under the TSR measure.

WorleyParsons Annual Report 2012  39

 
Directors’ Report

REMUNERATION DECISIONS
The diagram below illustrates the process by which remuneration and nomination decisions are made within the Company, and explains the roles played by 
various stakeholders who are involved in setting remuneration:

Board

•		Ensures	remuneration	policies	and	structures	are	competitive,	fair,	and	

aligned with the long term interests of the Company. 

•		Sets	and	approves	remuneration	structures.
•		Approves	non‑executive	director,	and	CEO	and	other	Executive	

remuneration. 

nominations committee

Reviews and assesses the CEO’s 
performance.
Advises the Board on the CEO’s 
remuneration, including:
•	amount;	
•	structure;	and
•	applicable	performance	targets.

remuneration committee

Assists/advises the Board in 
relation to:
•		remuneration	structuring	and	

policies;

•		non‑executive	director	

remuneration;	

•		performance	assessment	and	

remuneration	for	Executives;	and	

•		where	required,	engaging	

independent advisors for advice 
on remuneration structure and 
quantum for KMP including the 
CEO.

management

CEO recommends pay increases, and incentive outcomes for the Executives.
At the request of the Nominations and/or Remuneration Committee, 
management:
•		provides	information	relevant	to	remuneration	decisions;	and
•		where	appropriate,	liaises	with	independent	advisors	to	assist	the	

Nominations and/or Remuneration Committee with factual information 
(subject to prior Board approval of the provider).

All remuneration decisions relating to Executives are made by the Board. 
However, where appropriate, management is included in Committee and 
Board discussions.

external market data and 
external consultants

•		Market	data	sourced	from	
published reports and 
independent surveys. 
•		Where	required,	external	

consultants engaged by the 
Board and Committees to provide 
advice or information.

•		Any	advice	or	recommendations	
provided by external consultants 
are used as a guide. They do not 
substitute for the Board and 
Committee decision-making 
process.

During the year, PwC provided factual information in reports on market practice in support of the remuneration framework review. Aon Hewitt provided data in 
relation to the pay review for Executives and the review of NED fees. Outcomes relating to total shareholder return were provided by Orient Capital. There were 
no remuneration recommendations made by consultants in relation to KMP.

40  WorleyParsons Annual Report 2012

Putting policy into practice
In setting our remuneration policies and structures, we take into account a 
number of relevant factors so that our remuneration framework helps to 
achieve our vision and values.

Key factors are:

1.	

the	remuneration	mix	for	Executives;

2.	 executive	minimum	shareholding	requirement;	and

3.  Securities Dealing Policy.

1. Remuneration mix for Executives
Executive remuneration is structured to recognize both an individual’s 
responsibilities, qualifications and experience, as well as to drive performance 
over the short and long term. Executive remuneration comprises the 
following:

•	

•	

	fixed	pay,	which	consists	of	cash	(or	base)	salary,	superannuation/
retirement	contributions	and	any	salary	sacrificed	components;	and

	variable	incentive	remuneration,	which	may	be	comprised	of	cash	or	
equity and is dependent on the satisfaction of corporate, business unit 
and individual performance targets.

Allowances and benefits are for specific purposes and are excluded in 
determining the mix.

The FY2012 targeted mix of the remuneration components described above 
for each of the Executives is outlined below:

FY2012 targeted remuneration mix for executives

LTI

Deferred Equity STI

Cash STI

Fixed

28%

28%

28%

28%

11%

11%

23%

23%

13%

22%

11%

23%

38%

38%

37%

38%

d
r
a
w
e
r

t
e
g
r
a
t

l

a
t
o
t

f
o
e
g
a
t
n
e
c
r
e
P

100

80

60

40

20

0

25%

15%

30%

30%

l
l
i
r
G
n
h
o

J

18%

14%

23%

45%

l

h
c
o
B
y
r
r
a
B

Compliance with the requirement is assessed as at 30 June each year. 
The table below provides a summary of the position of each Executive 
against the requirement as at 30 June 2012:

WEIGHTED 
NUMBER OF 
SHARES HELD 
AT 30 JUNE 
20121 

VALUE OF 
SHARES HELD 
AT 30 JUNE 
20122 
$ 

PERCENTAGE 
ANNUAL 
FIXED PAY 
OF MINIMUM 
AT 30 JUNE SHAREHOLDING
20123  REQUIREMENT
ACHIEVED

$ 

EXECUTIVE DIRECTOR

John Grill 

25,433,946  641,342,382  2,100,000 

> 100%

GROUP MANAGING DIRECTORS

Barry Bloch4 

Stuart Bradie 

Iain Ross 

David Steele 

Andrew Wood 

5,116 

129,005 

675,000 

10%

90,300 

2,277,005 

760,534 

> 100%

527,929 

13,312,258 

704,885 

> 100%

132,965 

3,352,845 

750,000 

> 100%

233,663 

5,892,046 

834,000 

> 100%

1 

2 

3 
4 

 Includes shares held in the Company as provided in note 33(A) to the financial 
statements plus a 50% weighting of unvested performance rights provided 
in note 33(B) to the financial statements. Excludes shares held by each 
Executive’s personal related parties.
 Calculated as the weighted number of shares held at 30 June 2012 multiplied 
by the volume weighted average price of the Company’s shares for the five 
trading days commencing 2 July 2012.
 The Australian dollar equivalent of annual fixed pay as at 30 June 2012.
 Mr Bloch commenced employment as the Group Managing Director – People 
on 1 May 2011.

3. Securities dealing policy
Under the Company’s Securities Dealing Policy, directors and Executives are 
not permitted to hedge unvested performance rights or shares acquired on 
exercise of performance rights that are subject to restrictions.

EXECUTIVE REMUNERATION IN DETAIL

REMUNERATION STRUCTURE
Fixed pay
Fixed pay consists of cash (or base) salary, superannuation/retirement 
contributions and any salary sacrificed components. It is set relative to 
market, with the level of individual fixed pay aligned with the Executive’s 
responsibilities, performance, qualifications and experience.

s
s
o
R
n
a
I

i

i

e
d
a
r
B
t
r
a
u
t
S

l

e
e
e
t
S
d
v
a
D

i

d
o
o
W
w
e
r
d
n
A

STI program
By linking pay to performance via incentive plans, the Company increases the 
focus on total reward and provides motivation to Executives to achieve 
outcomes beyond the standard expected in the normal course of ongoing 
employment.

Executive
director

Group managing directors

The target at risk remuneration shown in the graph above refers to the 
incentive that would be payable if all performance conditions are satisfied 
and assumes the full vesting of STI and LTI. The elements of the 
remuneration shown above that are at risk are Cash STI, Deferred Equity STI 
and LTI. Actual incentive remuneration paid to the Executives can vary for 
individuals depending on the extent that they meet or exceed performance 
requirements.

Further details in relation to our incentive arrangements, including the 
specific performance conditions imposed and the outcomes of those 
arrangements (based on the Company’s performance over FY2012 and prior 
years), are set out in the next section “Executive Remuneration in Detail”.

2. Executive minimum shareholding requirement
The Executive minimum shareholding requirement applies to Executives 
to reinforce our objective of aligning their interests with the interests of 
shareholders, and to foster an increased focus on building long term 
shareholder value.

To satisfy the requirement, Executives must retain equity delivered via 
incentive plans until they hold shares equivalent in value to two times fixed 
pay (four times fixed pay for the CEO) and must subsequently maintain that 
multiple.

The target value of the Cash STI and Deferred Equity STI awards for 
Executives is shown in the chart on this page. FY2012 was the final year 
in which they also had the ability to earn an additional STI above this in 
recognition of exceptional performance under the Discretionary STI Plan. 
The minimum potential value of STI is zero where applicable gate-opener 
hurdles have not been met.

The Deferred Equity STI Plan first operated in FY2011. In FY2011, the Board, 
at its discretion, decided to use the underlying Group NPAT rather than 
reported Group NPAT. As this meant the threshold (95% of NPAT) was not 
achieved, no rights were issued under this plan. In FY2012, the Company 
achieved an underlying NPAT outcome of 102% which will result in the first 
allocation made under the Deferred Equity STI Plan. The value of the awards 
to be deferred to a future period can be viewed in the actual remuneration 
outcomes table on pages 46 and 47. This reflects both the Company 
achievement against Group NPAT and individual performance against an 
Executive’s KPIs.

WorleyParsons Annual Report 2012  41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report

Outlined below is a summary of the three components of the Company’s Executive STI program for FY2012 being Cash STI, Deferred Equity STI and 
Discretionary STI:

Overview of the STI program

Sti eLement

gate‑opener

caSh Sti PLan

DeFerreD eQuitY Sti PLan1

DiScretionarY Sti PLan

The actual performance is greater than 
90% of the budgeted Group NPAT 
approved by the Board.

Group NPAT performance must exceed 
the prior year’s actual reported results, 
representing	year‑on‑year	growth;	and

Same as for the Cash STI Plan.

Group NPAT performance must be 
greater than 95% of the budgeted Group 
NPAT approved by the Board.

maximum payout

Maximum payout is possible at 105% of 
budget.

Maximum payout is possible at 110% of 
budget.

vesting

Pro-rated percentage from zero to 100% 
where the actual Group NPAT is between 
90% and 105% of budget.

Pro-rated percentage from zero to 100% 
where the actual Group NPAT is between 
95% and 110% of budget.

Up to 60% of target Cash STI may be 
awarded in deferred rights where an 
Executive has achieved exceptional 
performance.

Up to 100% subject to performance.

Deferral threshold

n/a

A minimum deferral threshold of $50,000 applies. Awards that are below this 
amount will be paid as a cash lump sum at the conclusion of the performance 
period.

Sti delivery

Payment timing

Forfeiture conditions

Dividends

tenure

Payment of the award will be made as a 
gross cash amount.

Payment of the award will be through a Deferred Equity STI entitlement, in the 
form of rights granted under the WorleyParsons Performance Rights Plan.

Payment will be made at the conclusion 
of the performance period.

Following the conclusion of the 12 month performance period, the equity 
entitlement will be deferred in two equal tranches. 50% will vest after 12 months 
and the remaining 50% after a further 12 months.

n/a

n/a

Should the accounts be restated during the deferral period or where an individual’s 
behavior is fraudulent, dishonest or in breach of their obligations to the Company, 
the award may be forfeited. The performance outcomes that resulted in the award 
will be reviewed to ensure that the award is still appropriate at the time of vesting.

Dividend Equivalent Payment (DEP) plus interest will be paid in cash to participants 
on the respective vesting of the two tranches.

To be eligible for an STI payment, generally Executives must have been employed for at least three months of the financial 
year and remain in employment at the date of payment.

1 

 The first allocation under the Deferred Equity STI Plan was in FY2012 as the targets set for FY2011 were not achieved.

1. Cash STI Plan
Performance targets are agreed at the start of the financial year. A summary of the KPIs, along with the weightings for Executives for FY2012, 
is outlined below:

FinanciaL KPis (60% weighting)

non‑FinanciaL KPis (40% weighting)

The weighting of actual KPIs varies depending on the specific role of the individual 
and includes the following:

These may vary with Executive responsibility, but usually include KPIs as shown 
below. To the extent possible, performance is assessed against quantifiable, 
objective measures.

KPis

methoD oF aSSeSSment

KPis

methoD oF aSSeSSment

Group NPAT applicable to all Executives. Group NPAT is based upon audited 
financial statements, to ensure the 
performance assessment for financial 
KPIs is aligned with business 
performance and the creation of value 
for shareholders. The results are 
adjusted at Board discretion, to exclude 
abnormal items.

Health, safety and environment 
performance.

Reduction in the number of reportable 
injuries and environmental incidents, and 
the completion of advanced safety 
audits.

Cash collection for participants with 
operational or financial accountability.

Cash collection is measured via days 
sales outstanding.

Leadership, people management and 
development.

Reduction in turnover.

Development of strategic and tactical 
responses to changed economic and 
business landscapes.

Strategic goals are measured by other 
regularly reported financial and 
non-financial metrics e.g. growth in 
targeted business units1.

Successful implementation of the 
business plan and/or strategic priorities 
for the business unit, location or 
function.

Targeted business growth, customer 
retention and acquisition1.

1  The specific goals for Executives relating to strategic imperatives are considered commercially sensitive.

Details of the STI payments made to Executives in respect of FY2012 are set out on pages 46 and 47.

42  WorleyParsons Annual Report 2012

2. Deferred Equity STI Plan
Deferred Equity STI vests in two equal tranches. The first tranche will vest 12 months following the end of the performance period, with the remaining tranche 
vesting after a further 12 months.

Where rights cannot be readily issued to participants in certain overseas jurisdictions due to differing securities laws and taxation treatments, the Deferred 
Equity STI rules allow equivalent cash payments to be made (on similar conditions to those that apply to the Deferred Equity STI grants).

Given the CEO’s significant shareholding in the Company, it is appropriate that John Grill receive his Deferred Equity STI for FY2012 as a deferred cash payment. 
To ensure continued alignment with shareholders’ interests, the size of the payment will vary depending on the Company’s share price at the time of vesting. 
The payment will be subject to the same terms and conditions as the Deferred Equity STI grants outlined above, except that at the time of vesting rather than 
receiving fully paid ordinary shares in the Company at a nil exercise price, John Grill will receive their cash equivalent value.

3. Discretionary STI
Under the terms of the Discretionary STI Plan, Executives have the ability to earn an additional 60% of their target Cash STI, in recognition of exceptional 
performance.

NEW COMBINED INCENTIVE PLAN FROM FY2013

As a result of the extensive review of the remuneration framework, the Board has decided to simplify the STI program. From FY2013, the Cash STI Plan, the 
Deferred Equity STI Plan and the Discretionary STI Plan as outlined above will be replaced by the Combined Incentive Plan, an outline of which is as follows:

incentive eLement

gate‑opener

caSh Portion 
(tWo thirDS oF the aWarD)

eQuitY Portion 
(one thirD oF the aWarD)

comment/rationaLe

The actual performance is greater than 90% of the budgeted NPAT approved by the 
Board.

No change for the cash portion. A single 
metric is less complex to understand.

maximum payout

Maximum payout is possible at 110% of budget.

Outperformance potential replaces the 
Discretionary STI Plan.

Deferral threshold

n/a

The Board has removed the $50,000 
minimum quantum for deferral.

Sti delivery and payment timing

Payment of the award will be made as a 
gross cash amount at the end of the 
performance period.

Payment of the award will be through 
equity deferred for three years in the 
form of rights granted under the 
WorleyParsons Performance Rights Plan.

No change to the cash portion. The 
equity portion has an increased deferral 
period providing greater ability for 
clawback.

Forfeiture conditions

n/a

No change.

Should the accounts be restated during 
the deferral period or where an 
individual’s behavior is fraudulent, 
dishonest or in breach of their 
obligations to the Company, the award 
may be forfeited. The performance 
outcomes that resulted in the award will 
be reviewed to ensure that the award is 
still appropriate at the time of vesting.

In addition, the Executive must maintain 
a satisfactory performance rating.

Dividends

tenure

n/a

n/a

Dividends will not be paid on unvested 
equity.

To be eligible for an incentive payment, generally participants must have been 
employed for at least three months of the financial year and remain in employment 
at the date of payment.

No change.

WorleyParsons Annual Report 2012  43

 
Directors’ Report

LTI Plan
There are two specific performance targets, each assessed independently 
to earn LTI. These two performance hurdles align an Executive’s interests 
with shareholder returns whilst driving long term Company performance. 
The measures are as follows:

•	

	TSR	relative	to	peer	group	(which	applies	to	60%	of	potential	LTI	for	
FY2012);	and

•	

EPS	growth	(which	applies	to	40%	of	potential	LTI	for	FY2012).

The Board believes a relative TSR hurdle is appropriate to reflect returns to 
shareholders versus a group of companies with similar business profile, with 
which we compete for capital and executive talent. Allocations from FY2013 
will have equal weight on the two hurdles.

The Board has determined that the number of securities issued under the LTI 
Plan to Executives and all other participants should be capped at 5% of the 
issued share capital of the Company over a five year time horizon. Currently, 
the number of securities issued and held pursuant to the LTI Plan represents 
2.85% of the Company’s issued share capital (FY2011: 3.02%).

LTI grants for FY2012
LTI grants are delivered to Executives as rights that are issued under the 
WorleyParsons Performance Rights Plan. Each right entitles the holder to 
one fully paid ordinary share in the Company at a nil exercise price 
(i.e. a zero exercise price option). The number of rights issued is based on the 
Executive’s target LTI with reference to the underlying share price when 
issued. Rights vest and are automatically exercised after a three year period, 
subject to minimum performance hurdles being satisfied.

Where rights cannot be readily issued in certain overseas jurisdictions due to 
differing securities laws and taxation treatments, the LTI Plan rules ensure a 
participant can still be rewarded for their contribution, whilst catering for the 
local restrictions on the issue of securities.

Rights granted under the LTI Plan carry no voting or dividend entitlements. 
In addition, other than in relation to bonus issues and capital reorganizations 
(when the number of rights may be adjusted by the Board in accordance with 
the ASX Listing Rules, so as to ensure no advantage or disadvantage to the 
Executive), the rights carry no entitlement to participate in new share issues 
made by the Company.

Details of the rights granted to Executives as the LTI component of their 
remuneration in FY2012 are outlined on page 49.

Given the CEO’s significant shareholding in the Company, it is appropriate that 
John Grill receive his LTI for FY2012 as a deferred cash payment. To ensure 
continued alignment of his interests with those of shareholders, the size of 
the payment will vary depending on the Company’s share price at the time of 
vesting. The payment will be subject to the same terms and conditions as the 
equity settled rights outlined above, except that at the time of vesting rather 
than receiving fully paid ordinary shares in the Company at a nil exercise 
price, John Grill will receive their cash equivalent value.

Relative TSR performance hurdle 
(applies to 60% of potential LTI for FY2012, 50% for FY2013)
The TSR measure represents the change in the value of the Company’s share 
price over a period, plus reinvested dividends, expressed as a percentage 
of the opening value of the share. Relative TSR has been chosen as a 
performance hurdle because, in the opinion of the Board, it provides the most 
direct measure of shareholder return.

Executives will only derive value from the TSR component of the LTI Plan if 
the Company’s TSR performance is at least at the median of the companies 
in the peer comparison group. For LTI grants made in FY2012, the peer 
comparison group comprises AECOM, Aker Solutions, AMEC, Fluor Corporation, 
Foster Wheeler, Jacobs Engineering Group, KBR, SNC-Lavalin, URS Corporation 
and Wood Group. In FY2013, this peer group will be expanded, with the 
companies added shown below in bold:

44  WorleyParsons Annual Report 2012

auStraLia anD aSia

uniteD StateS anD canaDa

euroPe anD uniteD KingDom

WorleyParsons

AECOM

Aker Solutions

cardno

Downer eDi

Fluor Corporation

AMEC

Foster Wheeler

Wood Group

Jgc corporation

Jacobs Engineering Group

arcadis

Leighton holdings

KBR

atkins

monadelphous group

SNC-Lavalin

Balfour Beatty

ugL

URS Corporation

chicago Bridge & iron 
company1

mcDermott international

Stantec

tetra tech

the Shaw group1

Fugro

Saipem

Serco group

technip

tecnicas reunidas

1	

	Chicago	Bridge	&	Iron	Company	and	the	Shaw	Group	have	announced	a	merger	
agreement between the two companies which will be finalized early 2013, 
subject to regulatory and shareholder approval.

The Board has discretion to adjust the comparison group to take into account 
events including, but not limited to, takeovers or mergers that might occur 
during the performance period.

The vesting schedule of the rights subject to the relative TSR hurdle is 
outlined below:

reLative tSr PercentiLe ranKing 

Percentage oF rightS that maY Be eXerciSeD 
iF the reLative tSr hurDLe iS met

Less than 50th percentile 

At 50th percentile 

0%

30%

Greater than the 50th percentile 
but less than the 75th percentile 

Pro-rated vesting between more than 30% 
and less than 60%

At 75th percentile or greater 

60% (i.e. maximum available under the plan)

The initial test date of the rights subject to the relative TSR hurdle is at the 
end of year three. At the end of year three, participants can either:

•	

•	

	accept	the	vesting	outcome	achieved	(based	on	the	schedule	set	out	
above);	or

	elect	to	have	their	rights	retested	at	the	end	of	year	four	(in	which	case	
the same vesting schedule applies but the retest period covers the entire 
four year period from the date the rights were granted).

Executives are not permitted to “double dip”, so by electing to have their 
rights retested at the end of year four they forfeit any entitlement to rights 
which otherwise would have vested at the end of year three.

From FY2013, with an expanded peer group and four year performance 
period, it is expected there will be less volatility. As a result, a retest under 
the TSR measure will not be provided for performance rights granted from 
FY2013.

EPS performance hurdle 
(applies to 40% of potential LTI for FY2012, 50% for FY2013)
Basic EPS is determined by dividing the Group’s NPAT by the weighted 
average number of the Company’s ordinary shares on issue during the 
financial year. Growth in EPS will be measured by comparing the EPS in 
the year of issue and the measurement year. EPS has been chosen as a 
performance hurdle because it provides a clear line of sight between 
Executive performance and Company performance. It is also a well-recognized 
and understood measure of performance both within and outside the 
organization. The Group’s NPAT may be adjusted by the Board, where 
appropriate, to better reflect operating performance as was the case in 
FY2011.

Executives will only derive value from the EPS component of the grants made 
in FY2012 if the Company achieves average compound growth in EPS of at 
least 4% per annum above the increase in the Consumer Price Index (CPI) 
over the three year performance period.

 
The vesting schedule of the rights subject to the EPS hurdle is as follows:

average comPounD groWth in ePS over 
the PerFormance PerioD 

Percentage oF rightS that maY Be eXerciSeD 
iF the ePS hurDLe iS met

Less than 4% pa above the  
increase in CPI

0% 

4% pa above the increase in CPI 

20%

More than 4% pa above the  
An additional 5% of rights will vest for 
increase in CPI but less than 8% pa   each additional 1% pa plus CPI increase 
above the increase in CPI

8% pa or greater above the  
increase in CPI

40% (i.e. maximum available under the plan) 

Exercise of rights and allocation of shares
To the extent that the performance hurdles have been satisfied, rights are 
automatically exercised (unless an Executive elects otherwise) and 
participants acquire shares in the Company at a nil exercise price.

Shares allocated to participants upon exercise of rights rank equally with all 
other ordinary shares on issue. Whilst the shares allocated to participants 
remain subject to transfer restrictions, participants can apply to have the 
restrictions lifted. Upon release of the restrictions, participants will have 
unencumbered ownership of the shares, subject to compliance with the 
Company’s Securities Dealing Policy and minimum shareholding requirement.

Cessation of employment and change of control
Where an Executive leaves the Group, the Board may exercise its discretion 
and allow a proportion of any unvested rights to remain in the plan, and 
subsequently vest and be exercised in the ordinary course, having regard to 
such factors as it determines relevant. Such factors would include 
performance against applicable performance hurdles, as well as the 
performance and contribution that the relevant Executive has made. 
In instances of fraudulent or dishonest behavior, the Board will generally 
deem all unvested rights held by the Executive to have lapsed on cessation 
and may also deem any vested but unexercised rights to be forfeited.

In the event of a change of control of the Company (e.g. where a third party 
unconditionally acquires more than 50% of the issued share capital of the 
Company), the Board will exercise its discretion to determine whether any 
or all unvested rights vest, having regard to pro-rata performance against 
applicable performance hurdles up to the date of the change of control.

COMPANY PERFORMANCE OVER A FIVE YEAR PERIOD
The table below contains a snapshot of the Company’s performance against annual financial KPIs and shows how the Company’s performance has impacted on 
remuneration outcomes for Executives under the Company’s STI and LTI programs.

FY2007 

FY2008 

FY2009 

FY2010 

FY2011 

FY2012 

ANNUALIZED 
GROWTH OVER 
FIVE YEARS

FINANCIAL YEAR 
ENDED 30 JUNE 

Closing share price ($) 

Dividends paid1 (cents per share) 

1 year TSR for the Company (%) 

1 year TSR for median of peer group (%) 

3 year vesting outcome of LTI (%) 

34.00 

37.86 

23.81 

60.5 

69.7 

42.0 

100 

85.5 

15.9 

32.0 

100 

93.0 

(34.8) 

(34.8) 

100 

22.21 

75.5 

(1.6) 

(9.9) 

82 

Basic EPS (cents per share) 

101.8 

142.5 

161.1 

118.5 

Underlying EPS (cents per share)2 

  3 year vesting outcome of LTI (%) 

EBIT ($’m) 

NPAT ($’m) 

Underlying NPAT ($’m)3 

n/a 

100 

319.1 

224.8 

n/a 

Average % of maximum STI awarded to Executives (%) 

94.6 

n/a 

100 

520.0 

343.9 

n/a 

91.8 

n/a 

100 

605.3 

390.5 

n/a 

53.2 

n/a 

Nil 

427.4 

291.1 

n/a 

0.0 

n
o
i
t
r
o
p
R
S
T

I

T
L

f
o

S
P
E

n
o
i
t
r
o
p

I

T
L

f
o

i

d
e
n
b
m
o
C

e
v
i
t
n
e
c
n

I

28.24 

25.10 

(5.89%)

86.0 

37.4 

40.8 

Nil 

148.3 

121.5 

Nil 

539.9 

364.2 

298.5 

27.1 

91.0 

(6.8)

(21.9)

70

143.7 

140.6 

Nil

537.9 

353.2 

345.6 

47.0

8.5%

7.1%

6.7%

11.0%

9.5%

9.0%

1 
2 

3 

 The FY2012 final dividend has been announced and is scheduled to be paid on 28 September 2012.
 Underlying EPS which in the Board’s opinion reflects the Company’s operating results, has been used for calculating the outcomes under the vesting period ended 
30 June 2011.
 Underlying NPAT which in the Board’s opinion reflects the Company’s operating results, has been used for calculating the outcomes under the FY2011 STI payments. 
This excludes fair value gains on acquisitions of $7.6 million and $65.7 million for FY2012 and FY2011 respectively.

REMUNERATION OUTCOMES
Total remuneration
Details of remuneration for Executives are provided in the following table in accordance with accounting standards. Additional columns have been provided 
under Actual Remuneration Outcomes. This provides a comparison between the accounting standards, actual remuneration awarded during the year and actual 
remuneration received during the year.

Accounting standards require the value of equity based payments to be amortised over the relevant period of performance (or vesting period). For those 
interested in the value of equity based payments awarded during the year, the value is determined as a percentage of Fixed Pay that we aim to deliver. This can 
be found in the Deferred STI and LTI columns under remuneration awarded section. Those interested in the full value that was received during the year, the 
value is determined as the number of performance rights granted times the share price at the end of the period of performance, found under the remuneration 
received section.

WorleyParsons Annual Report 2012  45

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report

STATUTORY REMUNERATION OUTCOMES

SHORT TERM EMPLOYEE BENEFITS 

POST‑ 
EMPLOYMENT 
BENEFITS 

OTHER 
LONG TERM 
BENEFITS 

SHARE BASED PAYMENTS

CASH SALARY 
$ 

CASH 
ALLOWANCES1 
$ 

CASH STI2 
$ 

NON- 
MONETARY 
BENEFITS3 
$ 

totaL 
Short term 
caSh anD 
BeneFitS5 
$ 

SUPER- 
ANNUATION 
$ 

LONG 
SERVICE 
LEAVE 
$ 

STI EQUITY 
SETTLED4 
$ 

LTI EQUITY 
SETTLED4 
$ 

SHARE BASED 
PAYMENTS 
% OF TOTAL 

VARIABLE PAY 
% OF TOTAL 
$  REMUNERATION  REMUNERATION 

totaL 
  remuneration 
  in accorDance 
With 
accounting 
StanDarDS 

EXECUTIVE DIRECTORS

John Grill 

FY2012  2,092,241 

–  1,530,000 

13,635  3,635,876 

15,836 

34,812 

260,000 

874,926  4,821,450 

FY2011  1,706,593 

–  1,100,000 

14,129  2,820,722 

50,144 

29,010 

116,041 

11,660 

357,331 

– 

300,000 

36,564  1,071,415 

11,522 

– 

– 

205,000 

14,408 

905,533 

43,271 

11,094 

– 

– 

– 

– 

568,055  3,467,931 

85,868 

443,199 

219,604  1,302,541 

139,615  1,099,513 

23.5% 

16.4% 

19.4% 

16.9% 

12.7% 

55.3% 

48.1% 

45.6% 

39.9% 

31.3% 

% OF 
MAXIMUM 
STI AWARD 
FORFEITED

51.2%

70.1%

56.9%

61.8%

78.2%

William Hall9 

FY2012 

229,630 

FY2011 

734,851 

David Housego10 

FY2011 

686,125 

GROUP MANAGING DIRECTORS

Barry Bloch11 

FY2012 

661,760 

FY2011 

111,659 

– 

– 

– 

– 

– 

242,000 

12,489 

916,249 

15,845 

11,189 

43,333 

32,902  1,019,518 

7.5% 

31.2% 

53.4%

– 

1,882 

113,541 

2,572 

1,844 

– 

– 

117,957 

Stuart Bradie 

FY2012 

769,639 

284,870 

324,000 

707,108  2,085,617 

76,964 

FY2011 

722,797 

180,699 

251,000 

434,477  1,588,973 

72,280 

Iain Ross 

FY2012 

714,021 

178,505 

285,000 

209,247  1,386,773 

71,402 

– 

– 

– 

54,583 

324,979  2,542,143 

– 

225,062  1,886,315 

41,667 

307,639  1,807,481 

FY2011 

677,806 

157,372 

208,000 

169,628  1,212,806 

58,281 

2,212 

– 

216,286  1,489,585 

David Steele 

FY2012 

750,000 

75,000 

327,000 

219,595  1,371,595 

FY2011 

625,078 

111,508 

189,000 

214,824  1,140,410 

– 

– 

– 

– 

55,833 

212,443  1,639,871 

– 

126,064  1,266,474 

Andrew Wood 

FY2012 

821,372 

50,192 

369,000 

23,821  1,264,385 

15,836 

13,825 

62,917 

311,219  1,668,182 

FY2011 

677,650 

130,000 

235,000 

11,321  1,053,971 

50,143 

12,018 

– 

210,974  1,327,106 

Total remuneration 

FY2012  6,038,663 

588,567  3,193,041  1,197,555  11,017,826 

195,883 

59,826 

518,333 

2,149,976  13,941,844

FY2011  5,942,559 

579,579  2,488,000 

897,233  9,907,371 

288,213 

56,178 

–  1,705,660  11,957,422

– 

14.9% 

11.9% 

19.3% 

14.5% 

16.4% 

10.0% 

22.4% 

15.9% 

– 

100.0%

27.7% 

25.2% 

35.1% 

28.5% 

36.3% 

24.9% 

44.5% 

33.6% 

53.1%

73.3%

57.2%

75.4%

52.7%

76.7%

50.5%

75.1%

These footnotes apply to the table on pages 46 and 47.
1  This includes assignment uplifts and one off market adjustments.
2  The FY2012 amount relates to the FY2012 award under the Cash STI Plan, which is scheduled to be paid in September 2012.
3 

 Non-monetary benefits include benefits such as expatriate benefits (i.e. housing, home leave etc), health insurance, car parking, company cars or car allowances, fringe 
benefits tax, tax advisory services, life insurance and club memberships. In some cases, these are at the election of the Executives i.e. they are salary sacrificed.
 This remuneration includes a proportion of the fair value of equity compensation granted or outstanding during the year. The fair value of equity instruments is 
determined based on the fair value at grant date and is expensed progressively over the vesting period. The amount included as remuneration is not indicative of the 
benefit (if any) that individual Executives may ultimately realize should the equity instruments vest.

5  This is the total value of short term employee cash and benefits received during the reporting period.
6  This is the total of superannuation and long service leave benefits received during the reporting period.
7 

 Remuneration awarded during reporting period but deferred for future periods includes equity awards granted under the STI and LTI Plans which may vest and become 
available to Executives in future periods. A grant value based on fixed pay (as defined on page 41) multiplied by the STI and/or LTI payout percentage approved by the 
Board	has	been	included;	this	is	not	indicative	of	the	benefit	(if	any)	that	individual	Executives	may	ultimately	realize	should	the	equity	instruments	vest.
 Remuneration received in reporting period from previous periods includes equity awards granted under the STI and LTI Plans in previous years which vested during the 
reporting period. The STI and LTI value reflects the actual value realized by the Executive rather than the accounting value. In FY2011, all Executives elected to retest 
the TSR portion of rights granted in FY2009 over the four year period to 30 June 2012. The FY2012 value has been determined based on the number of performance 
rights granted in FY2010 and FY2009 that vested for the period ended 30 June 2012 and the closing share price at this date.
 Mr Hall retired as an alternative director on 25 October 2011. Share based payments are disclosed to the extent they relate to William Hall’s occupation in the capacity 
of a director.

4 

8 

9 

10   Mr Housego retired from his directorship on 23 February 2011 and from his Executive role on 2 June 2011. The Board exercised its discretion to allow STI and LTI held 
at the time of his retirement to be retained following his retirement, pro-rated for his period of contribution to results, and to be measurable and payable in accordance 
with the original plan vesting schedules.

11  Mr Bloch commenced employment as the Group Managing Director – People on 1 May 2011.

46  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ACTUAL REMUNERATION OUTCOMES

AWARDED AND RECEIVED 
DURING REPORTING PERIOD 

AWARDED DURING REPORTING PERIOD 

RECEIVED 
DURING REPORTING PERIOD

DEFERRED FOR 
FUTURE PERIODS7 

DEFERRED FROM 
PREVIOUS PERIODS8

SHORT TERM 
CASH AND 
BENEFITS 
$ 

OTHER 
BENEFITS6 
$ 

DEFERRED 
STI 
$ 

totaL 
  remuneration 
aWarDeD 
During 
rePorting 
PerioD 
$ 

LTI 
$ 

totaL 
remuneration 
receiveD 
During 
rePorting 
PerioD 
$

LTI 
$ 

EXECUTIVE DIRECTORS

John Grill 

FY2012  3,635,876 

50,648 

624,000  1,785,000  6,095,524 

1,064,591 

4,751,115

FY2011  2,820,722 

79,154 

–  1,487,500  4,387,376 

– 

2,899,876

William Hall9 

FY2012 

357,331 

– 

FY2011  1,071,415 

11,522 

David Housego10 

FY2011 

905,533 

54,365 

– 

– 

–  

GROUP MANAGING DIRECTORS

543,476  1,626,413 

– 

959,898 

Barry Bloch11 

FY2012 

916,249 

27,034 

104,000 

270,000  1,317,283 

FY2011 

113,541 

4,416 

– 

– 

117,957 

– 

– 

– 

– 

1,082,937

959,898

943,283

117,957

– 

357,331 

419,421 

776,752

Stuart Bradie 

FY2012  2,085,617 

76,964 

131,000 

567,256  2,860,837 

416,785 

2,579,366

FY2011  1,588,973 

72,280 

– 

607,727  2,268,980 

– 

1,661,253

Iain Ross 

FY2012  1,386,773 

71,402 

100,000 

525,749  2,083,924 

418,241 

1,876,416

FY2011  1,212,806 

60,493 

– 

563,809  1,837,108 

– 

1,273,299

David Steele 

FY2012  1,371,595 

FY2011  1,140,410 

– 

– 

134,000 

562,500  2,068,095 

232,677 

1,604,272

– 

343,750  1,484,160 

– 

1,140,410

Andrew Wood 

FY2012  1,264,385 

29,661 

151,000 

625,500  2,070,546 

403,809 

1,697,855

FY2011  1,053,971 

62,161 

– 

543,750  1,659,882 

– 

1,116,132

Total remuneration 

FY2012  11,017,826 

255,709  1,244,000  4,336,005  16,853,540 

2,955,524 

14,229,059

FY2011  9,907,371 

344,391 

–  4,090,012  14,341,774 

– 

10,251,762

WorleyParsons Annual Report 2012  47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report

STI outcomes

LTI outcomes

As outlined in the description of the STI Plan on page 41, reward outcomes 
for Executives are linked primarily to performance against annual financial 
KPIs, although non-financial (including individual) KPIs are also relevant.

In the above table, the increased Company performance results for FY2012 
are reflected in the increase to variable pay earned by Executives during 
FY2012. The challenging environment in FY2011 was reflected in low STI 
awards and a nil LTI vesting outcome.

Based on the underlying NPAT provided above and performance against 
individual KPIs, the resulting STI payments are detailed in the table on 
pages 46 and 47.

The graph below illustrates the average percentage of maximum STI awarded 
to Executives over the past five years compared to Group NPAT and 
demonstrates a strong alignment between Company performance and STI 
outcomes for Executives:

Average % of maximum STI awarded to Executives
compared to Group NPAT

390.5

53.2%

291.1

298.5

345.6

47.0%

27.1%

100

91.8%

343.9

1
d
e
d
r
a
w
a
I

T
S
m
u
m
x
a
m

i

f
o
%

80

60

40

20

0

450

400

350

300

250

200

150

100

50

0

2

’

m
$
T
A
P
N
p
u
o
r
G

2008

2009

0.0%

2010

Financial year

2011

2012

1 

2 

 The average percentage of maximum STI for any financial year relates to 
amounts paid in September following that year end, with the exception of a 
portion of Iain Ross’ 2009 STI which was deferred for 12 months.
 Group NPAT is the reported Group NPAT, except for FY2011 and FY2012 where 
the lower underlying FY2011 and FY2012 Group NPAT figures were used.

The graph below tracks the Company’s TSR over the last three years against 
the median TSR of the peer group used for the LTI Plan:

TSR performance measured over the last three years

Company 

Median peer group
75th percentile peer group

100%

80%

60%

40%

20%

0%

1
e
c
n
a
m
r
o
f
r
e
p
R
S
T

–20%

9
0

l

u

J

9
0
t
c
O

0
1
n
a

J

0
1
r
p
A

0
1

l

u

J

0
1
t
c
O

1
1
n
a

J

1
1
r
p
A

Date

1
1

l

u

J

1
1
t
c
O

2
1
n
a

J

2
1
r
p
A

2
1

l

u

J

1 

 In determining TSR outcomes previously, the one day closing share price was 
used. This has been changed to be a one month average closing share price to 
assist in reducing single day share price volatility.

This graph illustrates that growth in the Company’s TSR was above median, 
which may result in 70% vesting for Executives for TSR related LTI granted in 
FY2010. As full vesting was not achieved, Executives may elect to retain 
their TSR performance rights to be retested and measured for the four year 
period ending 30 June 2013. Executives who elect not to retest will receive 
vesting of their TSR related LTI on 30 September 2012.

Over the same three year period, the Company’s underlying EPS was below 
the minimum required to trigger vesting against the EPS performance hurdle 
for LTI granted in FY2010. EPS performance rights will lapse on 30 September 
2012. No retest applies to this measure.

No rights granted to Executives under the LTI Plan in FY2009 vested during 
FY2011. All rights subject to the EPS hurdle lapsed on 30 September 2011, 
and rights subject to the TSR hurdle were retained and retested this year over 
a four year performance period in line with Executive elections. The retested 
outcome will result in 90% vesting for Executives for TSR related LTI granted 
in FY2009.

The table below shows the history of Executives’ grants that have vested to date:

Summary of vested rights

GRANT 

EQUITY SETTLED

FY2007 

FY2008 

FY20095 

FY20106 

PERFORMANCE 
PERIOD 

TSR PERCENTILE 
ACHIEVED1 

RETESTED 
TSR PERCENTILE 
ACHIEVED2 

CHANGE IN 
EPS ACHIEVED3 

% OF TOTAL  
LTI GRANT 
VESTED/EXERCISED 

VALUE PER RIGHT 
VESTED/EXERCISED4 

VESTING DATE 

$

01 Jul 06 – 30 Jun 09 

01 Jul 07 – 30 Jun 10 

01 Jul 08 – 30 Jun 11 

01 Jul 09 – 30 Jun 12 

81st 

66th 

30th 

60th 

n/a 

68th 

70th 

n/a 

33.3% 

5.8% 

(5.2%) 

(4.4%) 

100% 

30 Sep 09 

49% 

54% 

42% 

30 Sep 10 

30 Sep 12 

30 Sep 12 

28.40

21.51

n/a

n/a

1 

2 

3 
4 

5 

6 

 Represents the Company’s relative TSR ranking over the initial three year performance period compared to the comparator group (being the ASX 50 to 150 ranked 
companies at the start of the performance period for FY2007 and FY2008, and for FY2009 and FY2010 the peer group listed on page 44).
 Represents the Company’s retested relative TSR ranking over a four year performance period compared to the comparator group (being the ASX 50 to 150 ranked 
companies at the start of the performance period for FY2007 and FY2008, and for FY2009 and FY2010 the peer group listed on page 44) over the initial three year 
performance period.
 Change in EPS achieved is calculated as the compound annual growth rate of EPS over the performance period.
 This amount is based on the volume weighted average price of the Company’s shares for the 10 trading days following the annual results announcement for the year 
in which the rights vest (as there is no exercise price payable in respect of equity or cash settled rights).
 Equity granted in FY2009 under the TSR measure is due to vest on 30 September 2012 based on the retested outcome over a four year performance period up to 
30 June 2012.
 Equity granted in FY2010 under the TSR measure is due to vest on 30 September 2012. Executives may elect to retain TSR performance rights to be measured for the 
four year performance period up to 30 June 2013.

48  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Details of vested and outstanding rights over the last five years

DATE OF GRANT 

EXECUTIVE DIRECTORS

John Grill 

William Hall8 

17 Oct 11 

15 Oct 10 

09 Oct 09 

03 Oct 08 

02 Oct 07 

15 Oct 10 

09 Oct 09 

03 Oct 08 

02 Oct 07 

NUMBER 
OF RIGHTS 
GRANTED1 

67,639 

69,450 

45,293 

43,317 

32,546 

25,375 

18,665 

16,428 

14,847 

FAIR VALUE 
PER RIGHT 

FAIR VALUE 
OF GRANT 

VESTING DATE/ 
(AT GRANT DATE)2  (AT GRANT DATE)3  FIRST EXERCISE 
DATE4 

$ 

$ 

VALUE OF 
RIGHTS VESTED 
RIGHTS VESTED  AND EXERCISED5 

NUMBER OF 

VALUE OF 
NUMBER OF  RIGHTS LAPSED7 
$ 

$  RIGHTS LAPSED6 

EXPIRY DATE  AND EXERCISED 

17.69  1,196,534 

30 Sep 14 

17 Oct 18 

16.93  1,175,789 

30 Sep 13 

15 Oct 17 

19.27 

872,796 

30 Sep 12 

30 Sep 16 

827,788 

30 Sep 12 

30 Sep 15 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

17,326 

457,233 

992,002 

30 Sep 10 

02 Oct 14 

15,973 

343,579 

16,573 

356,485 

429,599 

30 Sep 13 

15 Oct 17 

359,675 

30 Sep 12 

30 Sep 16 

313,939 

30 Sep 12 

30 Sep 15 

– 

– 

– 

– 

– 

– 

452,537 

30 Sep 10 

02 Oct 14 

7,287 

156,743 

– 

– 

– 

– 

6,571 

7,560 

173,409 

162,616 

19.11 

30.48 

16.93 

19.27 

19.11 

30.48 

GROUP MANAGING DIRECTORS

Barry Bloch 

17 Oct 11 

10,231 

17.69 

180,9 86 

30 Sep 14 

17 Oct 18 

Stuart Bradie 

17 Oct 11 

Iain Ross 

David Steele 

15 Oct 10 

09 Oct 09 

03 Oct 08 

02 Oct 07 

17 Oct 11 

15 Oct 10 

09 Oct 09 

03 Oct 08 

02 Oct 07 

17 Oct 11 

15 Oct 10 

09 Oct 09 

03 Oct 08 

02 Oct 07 

Andrew Wood 

17 Oct 11 

15 Oct 10 

09 Oct 09 

03 Oct 08 

02 Oct 07 

NON-EXECUTIVE DIRECTOR

Larry Benke9 

09 Oct 09 

03 Oct 08 
02 Oct 07 

Total vested 

Total outstanding 

Total 

21,495 

28,374 

19,361 

15,692 

12,109 

19,922 

26,324 

19,316 

15,834 

10,727 

21,315 

16,049 

10,746 

8,809 

6,536 

23,702 

25,387 

18,650 

15,288 

11,883 

11,214 

10,183 
9,105 

97,753 

624,059 

721,812 

17.69 

16.93 

19.27 

19.11 

380,247 

30 Sep 14 

17 Oct 18 

480,372 

30 Sep 13 

15 Oct 17 

373,086 

30 Sep 12 

30 Sep 16 

299,874 

30 Sep 12 

30 Sep 15 

30.48 

369,082 

30 Sep 10 

02 Oct 14 

5,943 

127,834 

17.69 

16.93 

19.27 

19.11 

352,420 

30 Sep 14 

17 Oct 18 

445,665 

30 Sep 13 

15 Oct 17 

372,219 

30 Sep 12 

30 Sep 16 

302,588 

30 Sep 12 

30 Sep 15 

– 

– 

– 

– 

– 

– 

– 

– 

30.48 

326,959 

30 Sep 10 

02 Oct 14 

5,265 

113,250 

199,217 

30 Sep 10 

02 Oct 14 

3,208 

69,004 

17.69 

16.93 

377,062 

30 Sep 14 

17 Oct 18 

271,710 

30 Sep 13 

15 Oct 17 

19.27 

207,075 

30 Sep 12 

30 Sep 16 

168,340 

30 Sep 12 

30 Sep 15 

17.69 

419,288 

30 Sep 14 

17 Oct 18 

429,802 

30 Sep 13 

15 Oct 17 

359,386 

30 Sep 12 

30 Sep 16 

292,154 

30 Sep 12 

30 Sep 15 

19.11 

30.48 

16.93 

19.27 

19.11 

30.48 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

6,276 

6,166 

165,624 

132,631 

– 

– 

– 

– 

– 

– 

6,333 

5,462 

167,128 

117,488 

– 

– 

– 

– 

– 

– 

3,523 

3,328 

92,972 

71,585 

– 

– 

– 

– 

– 

– 

6,115 

6,051 

161,375 

130,157 

362,194 

30 Sep 10 

02 Oct 14 

5,832 

125,446 

19.27 

216,094 

30 Sep 12 

30 Sep 16 

19.11 
30.48 

194,597 
277,520 

30 Sep 12 
30 Sep 10 

30 Sep 15 
02 Oct 14 

– 

– 
4,468 

– 

7,476 

159,687 

– 
96,107 

6,109 
4,637 

144,145 
99,742 

66.7%

60.0% 
50.9%

2,979,511 

  11,299,085 

  14,278,596 

47,976  1,031,963

– 

–

47,976  1,031,963 

109,506  2,592,275

% OF RIGHTS 
LAPSED

0.0%

0.0%

0.0%

40.0%

50.9%

0.0%

0.0%

40.0%

50.9%

0.0%

0.0%

0.0%

0.0%

40.0%

50.9%

0.0%

0.0%

0.0%

40.0%

50.9%

0.0%

0.0%

0.0%

40.0%

50.9%

0.0%

0.0%

0.0%

40.0%

50.9%

1 

2 

3 

4 

5 

6 
7 

8 
9 

 The service and performance criteria for the rights are discussed under the heading LTI Plan on page 44. Each right entitles the holder to one fully paid ordinary share 
in the Company at a nil exercise price (i.e. a zero exercise price option).
 Fair value per right at grant date is independently determined using an appropriate option pricing model in accordance with AASB 2 Share-based Payment that takes 
into account the exercise price, the term of the right, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the right, the share price 
at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the right. This amount 
represents the actual cost to the Company. A Monte Carlo simulation is used for the relative TSR portion and a Black-Scholes model is used for the EPS portion.
 Total fair value at grant is calculated by multiplying the fair value per right by the number of rights granted. This does not represent the actual value the Executive will 
derive from the grant, which will depend on the achievement of performance hurdles measured over the vesting period. The maximum value of the rights granted has 
been estimated based on the fair value per right. The minimum total value of the rights granted, if the applicable performance hurdles are not met, is nil.
 This is the date at which rights first become exercisable subject to meeting performance hurdles. Once vested, rights are exercisable up until the expiry date. Rights 
granted on 3 October 2008 were retained for retesting over a four year period (to 30 September 2012).
 This amount is based on the volume weighted average price of the Company’s shares for the 10 trading days following the annual results announcement for the year 
in which the rights vest (as there is no exercise price payable in respect of equity or cash settled rights).
 The number of rights lapsed represents rights lapsed due to performance hurdles not being met and/or rights lapsed on cessation of employment.
 This amount is based on the volume weighted average price of the Company’s shares for the 10 trading days following the annual results announcement for the year 
in which the rights lapse. Based on the measurement of the relevant performance hurdles, this total value may be an accumulation of values for rights lapsed over 
multiple periods.
 Performance rights issued to William Hall are disclosed to the extent they were granted and received during his occupation in the capacity of a director.
 Mr Benke received rights as part of his employment with the Company prior to his retirement as an employee on 30 June 2010 and commencement as a non-executive 
director on 1 July 2010. Board approval was received for retention of a pro-rated number of rights under the original terms of the grant including performance measures 
and vesting dates. This is consistent with the Company’s practice in relation to unvested LTI held by retiring employees. Full details are disclosed on page 45. Rights 
lapsed on Mr Benke’s retirement have been valued based on the volume weighted average price of the Company’s shares for the 10 trading days up to and including his 
retirement date on 30 June 2010.

WorleyParsons Annual Report 2012  49

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report

EMPLOYMENT ARRANGEMENTS
The key aspects of Executive contracts are outlined below:

contract 
Duration 

non‑comPete 
cLauSeS 

notice PerioDS

EXECUTIVE DIRECTOR

John Grill 

Retiring on 23 October 2012 

12 months 

n/a

GROUP MANAGING DIRECTORS

Barry Bloch 

Unlimited 

Stuart Bradie 

Unlimited 

Iain Ross 

Unlimited 

David Steele 

Unlimited 

Andrew Wood 

Unlimited 

12 months 

6 months

12 months 

6 months

12 months 

6 months

12 months 

6 months

12 months 

6 months1

REMUNERATION POLICY
The principles of fairness and shareholder alignment are reflected through 
the Company’s commitment to setting NED fees at a level which remain 
market competitive, whilst ensuring they reflect the caliber of directors 
required to address the significant strategic and operational challenges faced 
by the Company. NED fees have been comprehensively reviewed on both an 
Australian and global basis and will increase for FY2013.

The aggregate amount of fees (which include Board and Committee fees) that 
may be paid to NEDs in any year is capped at the level approved by 
shareholders. The current maximum aggregate amount of $2.6 million per 
annum was approved by shareholders at the 2011 AGM. Of the aggregate 
annual fee pool, 76% ($1.974 million) was utilized during FY2012 
(88% ($1.763 million) for FY2011 for the then $2.0 million limit).

NEDs do not receive performance related payments.

1 

 Mr Wood, in his new role as CEO from 23 October 2012, will have a notice 
period of 12 months.

The contracts include the components of remuneration which are to be paid 
to Executives, and provide for annual review, but do not prescribe how 
remuneration levels are to be modified from year to year.

REMUNERATION STRUCTURE
Board and Committee fees
Board and Committee fees for FY2012 and FY2013 are set out below. These 
amounts are inclusive of superannuation contributions made on behalf of 
NEDs in accordance with the Company’s statutory obligations.

In the event of termination, all Executives are generally entitled to receive 
their statutory leave entitlements and superannuation benefits. In relation to 
incentive plans upon termination, where an Executive resigns, STI is paid only 
if the Executive is employed on the date of payment. The Board retains 
discretion to make pro-rated STI payments in special circumstances such 
as retirement.

In accordance with the plan rules, the Board retains discretion on the 
treatment of both vested and unvested LTI in all instances of separation as 
outlined in the LTI Plan discussion on page 45. This applies to all LTI, whether 
equity or cash settled.

In exercising such discretion in the STI and LTI Plans, the Board typically 
allows retention of awards on a pro-rata basis and subject to the original 
performance requirements and timing. The Company did not pay sign-on 
payments to any Executives during FY2012.

At the October 2010 AGM, the Board sought and received approval from 
shareholders, where discretion was applied for the retention of LTI 
following cessation of employment for the value of LTI to be disregarded 
when calculating the relevant participant’s cap for the purposes of 
section 200F(2)(b) or section 200G(1)(c) of the Act.

NON‑EXECUTIVE DIRECTOR REMUNERATION

NON‑EXECUTIVE DIRECTORS
This section outlines the remuneration arrangements in place for the 
Company’s NEDs. All directors held office for the whole of FY2012, except 
where otherwise stated. The non-executive directors for FY2012 are listed 
below:

name 

Ron McNeilly 

Larry Benke 

Erich Fraunschiel 

John M Green 

Eric Gwee1 

Christopher Haynes, OBE2 

Catherine Livingstone, AO 

JB McNeil 

Wang Xiao Bin3 

PoSition 

countrY oF reSiDence

Chairman 

Director 

Director 

Director 

Director 

Director 

Director 

Director 

Director 

Australia

Canada

Australia

Australia

Singapore

United Kingdom

Australia

United States

Hong Kong

1  Mr Gwee retired as a director on 25 October 2011.
2  Dr Haynes commenced as a director on 1 January 2012.
3  Ms Wang commenced as a director on 1 December 2011.

roLe 

Chairman1 

Other non-executive director 

Chairman of Audit and Risk Committee 

Member of Audit and Risk Committee 

Chairman of Remuneration Committee 

Member of Remuneration Committee 

Chairman of Health, Safety and Environment Committee 

Member of Health, Safety and Environment Committee 

Chairman/Member of Nominations Committee 

FY2012 FeeS 

FY2013 FeeS

$495,000 

$520,000

$185,000 

$194,000

$45,000 

$47,000

$25,000 

$26,000

$35,000 

$37,000

$20,000 

$21,000

n/a 

n/a 

Nil 

$30,000

$12,000

Nil

1 

 The Chairman of the Board does not receive additional fees for Committees of 
which the Chairman may be a member.

Other benefits
NEDs are eligible to receive travel allowances of $5,000 for attendance at 
overseas meetings (effective 1 July 2009). NEDs are also entitled to be 
reimbursed for all business related expenses, including travel, incurred in the 
discharge of their obligations.

Superannuation contributions are made on behalf of the NEDs in accordance 
with the Company’s statutory superannuation obligations. The Company does 
not pay retirement benefits to NEDs in addition to its statutory obligations.

From time to time, the Board may determine special fees for additional duties 
undertaken by directors.

NED minimum shareholding requirement
A minimum shareholding requirement exists to provide alignment between 
director and shareholder interests. To comply with this requirement, each 
non-executive director must build a holding of the Company’s ordinary shares 
equivalent to that director’s annual fee. Directors are expected to comply with 
this requirement within their first full term of three years as a director.

All NEDs complied with the minimum shareholding requirement as at 30 June 
2012 with the exception of Wang Xiao Bin and Christopher Haynes, both of 
whom commenced during FY2012, and have three years to comply.

Particulars of directors’ beneficial interests in shares of the Company as at 
30 June 2012 are set out in note 33 to the financial statements.

50  WorleyParsons Annual Report 2012

 
 
REMUNERATION OUTCOMES
Remuneration of the NEDs for FY2012 and FY2011 is set out below:

This Directors’ Report is made in accordance with a resolution of the directors.

SHORT TERM 
EMPLOYEE BENEFITS 

POST‑ 
EMPLOYMENT 
BENEFITS

FEES 
$ 

ALLOWANCES 
$ 

SUPERANNUATION1 
$ 

TOTAL 
$

Ron McNeilly

FY2012 

FY2011 

Larry Benke

FY2012 

FY2011 

Grahame Campbell2

465,252 

388,516 

184,996 

175,000 

10,000 

5,000 

30,000 

20,000 

29,738 

28,509 

504,990

422,025

RON McNEILLY

Chairman

Sydney, 29 August 2012

– 

– 

214,996

195,000

FY2011 

59,099 

5,000 

5,066 

69,165

Erich Fraunschiel

FY2012 

FY2011 

John M Green

FY2012 

FY2011 

Eric Gwee3

FY2012 

FY2011 

214,221 

194,801 

194,221 

165,031 

65,026 

187,000 

10,000 

5,000 

10,000 

5,000 

5,000 

35,000 

Christopher Haynes, OBE4

FY2012 

92,498 

15,000 

Catherine Livingstone, AO

15,775 

15,199 

239,996

215,000

25,775 

50,444 

229,996

220,475

– 

– 

– 

70,026

222,000

107,498

FY2012 

FY2011 

JB McNeil

FY2012 

FY2011 

Wang Xiao Bin5

194,221 

177,301 

5,000 

5,000 

15,775 

15,199 

214,996

197,500

223,652 

186,667 

30,000 

35,000 

– 

– 

253,652

221,667

FY2012 

113,296 

15,000 

9,202 

137,498

Total remuneration

FY2012 

FY2011 

1,747,383 

130,000 

96,265 

1,973,648

1,533,415 

115,000 

114,417 

1,762,832

1 

 Superannuation contributions are made on behalf of the NEDs in accordance 
with the Company’s statutory superannuation obligations. The superannuation 
figures also include additional (i.e. non-statutory) salary sacrificed contributions 
to superannuation and pension plans, as nominated by NEDs.

2  Mr Campbell retired as a director on 26 October 2010.
3  Mr Gwee retired as a director on 25 October 2011.
4  Dr Haynes commenced as a director on 1 January 2012.
5  Ms Wang commenced as a director on 1 December 2011.

WorleyParsons Annual Report 2012  51

 
 
 
 
 
 
 
Statement of Financial Performance For the financial year ended 30 June 2012

ReVeNUe

Services revenue 

Interest income 

other income 

Revenue and other income 

eXPeNSeS

Staff costs 

Contract related reimbursable costs 

office and administration costs 

Depreciation 

Amortization 

Borrowing costs 

other 

Total expenses 

Share of net profits of associates accounted for using the equity method 

Profit before income tax expense 

Income tax expense 

Profit after income tax expense 

Profit after income tax expense attributable to:

Members of WorleyParsons Limited 

Non‑controlling interests 

Basic earnings per share (cents) 

Diluted earnings per share (cents) 

NoteS 

5 

9 

24(C) 

6(A) 

21 

21 

Consolidated

2012 
$’M 

2011 
$’M

7,389.5 

5,605.1

7.0 

11.9 

6.1

72.0

7,408.4 

5,683.2

(4,114.2) 

(2,999.2)

(2,032.3) 

(1,519.8)

(492.0) 

(430.1)

(19.1) 

(83.9) 

(51.1) 

(14.2)

(81.5)

(47.6)

(149.6) 

(123.9)

(6,942.2) 

(5,216.3)

27.6 

31.5

493.8 

498.4

(117.3) 

(116.0)

376.5 

382.4

353.2 

23.3 

143.7 

142.5 

364.2

18.2

148.3

147.2

the above statement of financial performance should be read in conjunction with the accompanying notes.

52  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of Comprehensive Income For the financial year ended 30 June 2012

Profit after income tax expense 

Net movement in foreign currency translation reserve 

Net movement in hedge reserve 

Total comprehensive income, net of tax 

total comprehensive income, net of tax, attributable to:

Members of WorleyParsons Limited 

Non‑controlling interests 

the above statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated

2012 
$’M 

2011 
$’M

376.5 

382.4

(34.6) 

(169.3)

1.2 

(1.5)

343.1 

211.6

319.9 

23.2 

195.1

16.5

WorleyParsons Annual Report 2012  53

 
 
 
 
 
 
 
 
 
 
 
 
Statement of Financial Position As at 30 June 2012

NoteS 

7 

8 

8 

35 

27 

9 

10 

24(B) 

35 

27 

11 

12 

13 

14 

36 

15 

16 

17 

36 

18 

19 

20 

Consolidated

2012 
$’M 

2011 
$’M

247.3 

171.2

1,725.9 

1,361.7

183.4 

149.8

1.4 

89.5 

0.6 

1.5 

1.3

77.5

0.6

1.4

2,249.6 

1,763.5

135.7 

108.1

1,704.8 

1,696.8

104.1 

16.0 

28.5 

132.6 

20.0 

86.3

–

30.0

123.9

7.5

2,141.7 

2,052.6

4,391.3 

3,816.1

976.4 

740.6

3.7 

15.7 

499.6 

4.0 

43.7

11.7

359.3

0.9

1,499.4 

1,156.2

733.1 

112.6 

66.3 

0.0 

631.8

99.1

57.1

15.1

912.0 

803.1

2,411.4 

1,959.3

1,979.9 

1,856.8

1,221.3 

1,219.6

(267.7) 

(249.8)

1,003.8 

871.7

1,957.4 

1,841.5

22.5 

15.3

1,979.9 

1,856.8

ASSetS

Current assets

Cash and cash equivalents 

trade receivables 

other receivables 

Inventories 

Prepayments 

Derivatives 

Finance lease receivable 

Total current assets 

Non‑current assets

Property, plant and equipment 

Intangible assets 

equity accounted associates 

Derivatives 

Finance lease receivable 

Deferred tax assets 

other non‑current assets 

Total non‑current assets 

TOTAL ASSETS 

LIABILItIeS

Current liabilities

trade and other payables 

Interest bearing loans and borrowings 

Income tax payable 

Provisions 

Derivatives 

Total current liabilities 

Non‑current liabilities

Interest bearing loans and borrowings 

Deferred tax liabilities 

Provisions 

Derivatives 

Total non‑current liabilities 

TOTAL LIABILITIES 

NET ASSETS 

eQUItY

Issued capital 

Reserves 

Retained profits 

Parent entity interest 

Non‑controlling interests 

TOTAL EQUITY 

the above statement of financial position should be read in conjunction with the accompanying notes.

54  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of Changes in equity For the financial year ended 30 June 2012

Consolidated

FoReIgN 
CURReNCY 
RetAINeD  tRANSLAtIoN 
ReSeRVe 
$’M 

PRoFItS 
$’M 

ISSUeD 
CAPItAL 
$’M 

  PeRFoRMANCe 
RIghtS 
ReSeRVe 
$’M 

heDge 
ReSeRVe 
$’M 

ACQUISItIoN 
ReSeRVe 
$’M 

MeMBeRS 
oF the 
NoN‑ 
PAReNt  CoNtRoLLINg 
INteReStS 
eNtItY 
$’M 
$’M 

totAL 
$’M

As at 1 July 2011 

1,219.6 

871.7 

(261.0) 

(3.1) 

23.9 

(9.6)  1,841.5 

15.3  1,856.8

Profit after income tax  
expense 

other comprehensive income 

Total comprehensive income, 
net of tax 

Transactions with owners

Performance rights  
transactions 

Non‑controlling interests  
on acquisition of subsidiaries 

Dividends paid 

– 

– 

– 

1.7 

– 

– 

353.2 

– 

– 

(34.5) 

– 

1.2 

353.2 

(34.5) 

1.2 

– 

– 

– 

– 

– 

(221.1) 

– 

– 

– 

– 

– 

– 

15.4 

– 

– 

– 

– 

– 

– 

– 

– 

353.2 

(33.3) 

23.3 

376.5

(0.1) 

(33.4)

319.9 

23.2 

343.1

17.1 

– 

17.1

– 

3.2 

3.2

(221.1) 

(19.2) 

(240.3)

As at 30 June 2012 

1,221.3  1,003.8 

(295.5) 

(1.9) 

39.3 

(9.6)  1,957.4 

22.5  1,979.9

As at 1 July 2010 

1,208.3 

694.1 

(93.4) 

(1.6) 

22.7 

–  1,830.1 

8.9  1,839.0

Profit after income tax 
expense 

other comprehensive income 

Total comprehensive income,  
net of tax 

– 

– 

– 

364.2 

– 

– 

– 

(167.6) 

(1.5) 

364.2 

(167.6) 

(1.5) 

Transactions with owners

Performance rights  
transactions 

Non‑controlling interests  
on acquisition of subsidiaries 

Non‑controlling interests 

Dividends paid 

11.3 

– 

– 

– 

– 

– 

– 

(186.6) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1.2 

– 

– 

– 

364.2 

18.2 

382.4

(169.1) 

(1.7) 

(170.8)

195.1 

16.5 

211.6

12.5 

– 

12.5

– 

– 

– 

– 

– 

(9.6) 

(9.6) 

– 

8.0 

0.6 

8.0

(9.0)

– 

(186.6) 

(18.7) 

(205.3)

As at 30 June 2011 

1,219.6 

871.7 

(261.0) 

(3.1) 

23.9 

(9.6)  1,841.5 

15.3  1,856.8

the above statement of changes in equity should be read in conjunction with the accompanying notes.

WorleyParsons Annual Report 2012  55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of Cash Flows For the financial year ended 30 June 2012

CASh FLoWS FRoM oPeRAtINg ACtIVItIeS

Receipts from customers (inclusive of goods and services tax) 

Payments to suppliers and employees (inclusive of goods and services tax) 

Dividends received from associates 

Interest received 

Borrowing costs paid 

Income taxes paid 

Net cash inflow from operating activities 

CASh FLoWS FRoM INVeStINg ACtIVItIeS

Payments for purchase of equity accounted investment 

Payments for acquisition of controlled entities 

Cash balances in controlled entities acquired, net of bank overdraft 

Payments for purchase of property, plant and equipment and computer software 

Proceeds from sale of property, plant and equipment 

Net cash outflow from investing activities 

CASh FLoWS FRoM FINANCINg ACtIVItIeS

Repayments of borrowings 

Proceeds from borrowings 

Costs of bank facilities and proceeds from finance leases 

Net loans (from)/to related parties 

Dividends paid to the Company’s shareholders 

Dividends paid to non‑controlling interests 

Net cash outflow from financing activities 

Net increase in cash 

Cash and cash equivalents at the beginning of the financial year 

effects of exchange rate changes on cash 

NoteS 

Consolidated

2012 
$’M 

2011 
$’M

6,853.6 

5,388.2

(6,286.7) 

(4,999.1)

566.9 

389.1

23.0 

7.0 

(45.3) 

(114.1) 

29.4

6.1

(31.7)

(99.1)

26 

437.5 

293.8

23(D) 

23(D) 

22(B) 

(21.5) 

(28.9) 

2.7 

(59.0) 

0.4 

–

(92.3)

28.9

(42.5)

0.1

(106.3) 

(105.8)

(2,252.9) 

(1,573.8)

2,267.9 

1,642.1

(6.4) 

(20.7) 

(7.1)

8.2

(221.1) 

(186.6)

(18.4) 

(18.7)

(251.6) 

(135.9)

79.6 

166.1 

1.6 

52.1

130.2

(16.2)

Cash and cash equivalents at the end of the financial year 

7 

247.3 

166.1

the above statement of cash flows should be read in conjunction with the accompanying notes.

56  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

1. CoRPoRate inFoRmation

the financial report of WorleyParsons Limited (Company or Parent entity) 
for the financial year ended 30 June 2012 was authorized for issue in 
accordance with a resolution of the directors on 29 August 2012.

WorleyParsons Limited is a company limited by shares incorporated in 
Australia whose shares are publicly traded on the Australian Securities 
exchange (ASX: WoR).

the nature of the operations and principal activities of the Company is 
described in note 34.

2. sUmmaRY oF siGniFiCant aCCoUntinG PoliCies

(A)  BASIS OF ACCOUNTING

(i)  Basis of preparation

this general purpose financial report has been prepared in 
accordance with the Corporations Act 2001, Australian Accounting 
Standards (AAS) and other authoritative pronouncements of the 
Australian Accounting Standards Board (AASB).

the group is of a kind referred to in Class order 98/0100 issued by 
the Australian Securities and Investments Commission, relating to 
the “rounding off” of amounts in the Directors’ Report and financial 
statements. Amounts have been rounded off to the nearest hundred 
thousand dollars in accordance with that Class order. Amounts shown 
as 0.0 represent amounts less than $50,000 which have been 
rounded down.

(ii)  Statement of compliance

the consolidated financial report complies with International 
Financial Reporting Standards (IFRS) and interpretations as issued by 
the International Accounting Standards Board.

(iii)  Historical cost convention

the financial report has been prepared on a historical cost basis, 
except for derivative financial instruments and available‑for‑sale 
financial assets that have been measured at fair value. the carrying 
values of recognized assets and liabilities that are hedged with fair 
value hedges are adjusted to record changes in the fair values 
attributable to the risks that are being hedged.

(iv)  Critical accounting estimates

In the application of AAS, management is required to make 
judgments, estimates and assumptions about carrying values of 
assets and liabilities that are not readily apparent from other sources. 
the estimates and underlying assumptions are based on historical 
experience and various other factors that are believed to be 
reasonable under the circumstances, the results of which form the 
basis of making judgments.

the estimates and underlying assumptions are reviewed on an 
ongoing basis. Revisions to accounting estimates are recognized in 
the period in which the estimate is revised if the revision affects 
only that period or in the period of the revision and future periods 
if the revision affects both current and future periods.

Management has identified the following critical accounting policies 
for which significant judgments, estimates and assumptions are 
made:

•	

•	

•	

•	

•	

	revenue	recognition,	refer	note	2(G);

	goodwill	and	intangible	assets	with	identifiable	useful	lives,	refer	
notes	2(M)	and	10;

	warranty	and	other	provisions,	refer	notes	2(P),	14	and	17;

	share	based	payments,	refer	note	2(C),	18	and	33;	and

	recovery	of	deferred	taxes,	refer	notes	2(D)	and	6(D).

Actual results may differ from these estimates under different 
assumptions and conditions and may materially affect financial 
results or the financial position reported in future periods.

(v)  Adoption of new accounting standards

the group has adopted the applicable new and amended accounting 
standards from 1 July 2011:

•	

•	

	revised	AASB	124	Related	Party	Disclosures;

	AASB	1054	Australian	Additional	Disclosures;

•	

•	

•	

•	

	AASB	2009‑12	and	AASB	2010‑5	Amendments	to	Australian	
Accounting	Standards;

	AASB	2010‑4	Further	Amendments	to	Australian	Accounting	
Standards	arising	from	the	Annual	Improvements	Project;

	AASB	2010‑6	Amendments	to	Australian	Accounting	Standards	–	
Disclosures	on	Transfers	of	Financial	Assets;	and

	AASB	2011‑1	Amendments	to	Australian	Accounting	Standards	
arising from the trans‑tasman Convergence Project.

Adoption of these standards did not have any material effect on the 
financial position or performance of the group.

(vi)  New standards not yet applicable

the following new and amended accounting standards and 
interpretations have been issued or amended but are not yet 
effective and have not been adopted by the group for the annual 
reporting period ended 30 June 2012:

effective 1 July 2015:
AASB 9 Financial Instruments and AASB 2009‑11 and AASB 2010‑7 
Amendments to Australian Accounting Standards arising from 
AASB 9

AASB 9 Financial Instruments addresses the classification, 
measurement and derecognition of financial assets and financial 
liabilities.

this standard is not applicable until 1 January 2015 but is available 
for early adoption.

AASB 2011‑9 Amendments to Australian Accounting Standards – 
Presentation of Items of Other Comprehensive Income
this standard requires entities to group items presented in other 
comprehensive income into those that might be reclassified 
subsequently to profit or loss and those that will not.

effective 1 July 2013:
AASB 10 Consolidated Financial Statements
AASB 10 establishes a new control model that applies to all entities 
and is applicable to accounting periods beginning on or after 
1 January 2013 and will be effective for the group from 1 July 2013. 
It replaces parts of AASB 127 Consolidated and Separate Financial 
Statements dealing with the accounting for consolidated financial 
statements and UIg 112 Consolidation – Special Purpose entities. 
the new control model broadens the situations when an entity is 
considered to be controlled by another entity and includes new 
guidance for applying the model to specific situations, including 
when acting as a manager may give control, the impact of potential 
voting rights and when holding less than a majority voting rights 
may give control. the group has commenced assessment of its 
relationships with other entities to determine if control may exist 
under the new definitions. No such situations have been identified to 
date.

AASB 11 Joint Arrangements
AASB 11 replaces AASB 131 Interests in Joint Ventures and 
UIg 113 Jointly Controlled entities – Non‑Monetary Contributions 
by Venturers. AASB 11 uses the principle of control in AASB 10 
Consolidated Financial Statements to define joint control, and 
therefore the determination of whether joint control exists may 
change. In addition, AASB 11 removes the option to account for 
jointly controlled entities using proportionate consolidation. 
this standard is applicable to accounting periods beginning on or 
after 1 January 2013 and will be effective for the group from 1 July 
2013 and may result in a change in the accounting for the joint 
arrangements held by the group. Management is in the process of 
assessing the full impact of the change to the accounting standards. 
the change is expected to result in changes in some line items in the 
statement of financial performance and statement of financial 
position;	however,	no	material	impact	is	expected	on	profit after 
income tax attributable to members or on net assets.

AASB 12 Disclosure of Interests in Other Entities
AASB 12 is applicable to accounting periods beginning on or after 
1 January 2013 and includes all disclosures relating to an entity’s 
interests in subsidiaries, joint arrangements, associates and 

WorleyParsons Annual Report 2012  57

 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

structured entities. there will be no impact on any of the amounts 
recognized in the group’s financial statements.

AASB 13 Fair Value Measurement
AASB 13 establishes a single source of guidance for determining the 
fair value of assets and liabilities. this standard does not change 
when an entity is required to use fair value, but rather, provides 
guidance on how to determine fair value when fair value is required 
or permitted. AASB 13 also expands the disclosure requirements for 
all assets or liabilities carried at fair value. this includes information 
about the assumptions made and the qualitative impact of those 
assumptions on the fair value determined. AASB 13 is applicable to 
accounting	periods	beginning	on	or	after	1	January	2013;	however,	
adoption of this standard is not expected to have any impact on the 
group’s financial statements.

AASB 119 Employee Benefits
the revised standard changes the definition of short term employee 
benefits. the distinction between short term and other long term 
employee benefits is now based on whether the benefits are 
expected to be settled wholly within 12 months after the reporting 
date. this standard is applicable to accounting periods beginning on 
or after 1 January 2013 and will result in a change in the group’s 
classification of provision for employee benefits, and therefore may 
change its measurement.

AASB 1053 Application of Tiers of Australian Accounting Standards
this standard establishes a differential financial reporting framework 
consisting of two tiers of reporting requirements for preparing 
general purpose financial statements. AASB 1053 is applicable 
to	accounting	periods	beginning	on	or	after	1	July	2013;	however,	
adoption of this standard is not expected to have any impact on the 
group’s financial statements.

(B)  BASIS OF CONSOLIDATION

the consolidated financial statements incorporate the assets and 
liabilities of all entities controlled by WorleyParsons Limited as at 30 June 
2012 and the results of all controlled entities for the financial year then 
ended. WorleyParsons Limited and its controlled entities together are 
referred to in this financial report as the consolidated entity or the group. 
Investments in associates and joint ventures are equity accounted and 
are not part of the consolidated group (refer note (B)(iv) below).

the impact of all transactions between entities in the consolidated entity 
are eliminated in full. Non‑controlling interests in the results and equity 
of controlled entities are shown separately in the statement of financial 
performance, statement of comprehensive income and statement of 
financial position.

(i)  Controlled entities

Where control of an entity is obtained during a financial year, its 
results are included in the statement of financial performance and 
the statement of comprehensive income from the date on which 
control commences. Where control of an entity ceases during a 
financial year, its results are included for that part of the year during 
which control existed.

A change in the ownership interest of a subsidiary that does not 
result in a loss of control, is accounted for as an equity transaction.

(ii)  Jointly controlled operations and assets

the proportionate interests in the assets, liabilities and expenses of 
jointly controlled operations and jointly controlled assets have been 
incorporated in the financial statements under the appropriate 
headings. Details of the jointly controlled operations have been set 
out in note 25.

(iii)  Equity accounted investments

(a) 

Joint ventures
the interest in joint ventures is carried at the lower of the equity 
accounted amount and the recoverable amount in the 
consolidated financial statements. the share of profits or losses 
of the entities is recognized in the statement of financial 
performance and the statement of comprehensive income, 
and the share of movements in reserves is recognized in the 
statement of financial position.

58  WorleyParsons Annual Report 2012

Profits or losses on transactions establishing joint ventures and 
transactions with the joint ventures are eliminated to the extent 
of the consolidated entity’s ownership interest until such time as 
they are realized by the joint ventures on consumption or sale.

Details of the joint ventures have been set out in note 24.

(b)  Associates

Investments in associates are accounted for in the consolidated 
financial statements using the equity method of accounting. 
Under this method, the consolidated entity’s share of the 
post‑acquisition profits or losses after tax of associates is 
recognized in the statement of financial performance and 
the statement of comprehensive income, and its share of 
post‑acquisition movements in reserves is recognized in 
consolidated reserves. the cumulative post‑acquisition 
movements are adjusted against the cost of the investment. 
Associates are those entities over which the consolidated entity 
exercises significant influence, but not control. Details of the 
associates are set out in note 24.

(iv)  Non‑controlling interests

Non‑controlling interests not held by the Company are allocated their 
share of net profit after tax in the statement of financial 
performance and of total comprehensive income net of tax in the 
statement of comprehensive income, and are presented within equity 
in the statement of financial position, separately from Parent entity 
interest.

(C)  EMPLOYEE BENEFITS

Provision is made for employee benefits accumulated as a result of 
employees rendering services up to the reporting date. these benefits 
include wages and salaries, annual leave, sick leave and long service 
leave.

Liabilities arising in respect of wages and salaries, annual leave, sick 
leave and any other employee benefits expected to be settled within 
12 months of the reporting date are measured at their nominal amounts 
based on remuneration rates which are expected to be paid when the 
liability is settled. All other employee benefits or liabilities are measured 
at the present value of the estimated future cash outflows to be made in 
respect of services provided by the employees up to the reporting date. 
In determining the present value of future cash outflows, the market 
yield as at the reporting date on national government bonds, which 
have terms to maturity approximating the terms of the related liability, 
is used.

employee benefits expenses arising in respect of wages and salaries, 
non‑monetary benefits, leave entitlements and other types of 
entitlements are charged against profits on a net basis in their 
respective categories.

Equity based compensation scheme – performance rights
Performance rights (rights) over the ordinary shares of WorleyParsons 
Limited are granted to executive directors and other executives of the 
consolidated entity for nil consideration in accordance with performance 
guidelines approved by the Board. the fair values of the rights are 
amortized on a straight line basis over their performance period. For 
share settled rights, the fair value of the rights is the share price at grant 
date adjusted for the impact of performance hurdles and other vesting or 
exercise criteria attached to the right. For cash settled rights, the fair 
value of the rights is recalculated at the end of each reporting period 
and amortized on a straight line basis over their vesting period. the 
accounting estimates and assumptions relating to rights would have no 
impact on the carrying amounts of assets and liabilities within the next 
annual reporting period but may impact expenses and equity.

Fair value per right at grant date is independently determined using an 
appropriate option pricing model in accordance with AASB 2 Share‑based 
Payment that takes into account the exercise price, the term of the 
right, the vesting and performance criteria, the impact of dilution, the 
non‑tradable nature of the right, the share price at grant date and 
expected price volatility of the underlying share, the expected dividend 
yield and the risk‑free interest rate for the term of the right. this amount 
represents the actual cost to the Company.

 
 
 
 
 
 
 
 
 
A Monte Carlo simulation is applied to fair value the tSR element. 
In accordance with the rules of the performance rights plan, the model 
simulates the Company’s tSR and compares it against the peer group 
over the three‑year period of each grant. the model takes into account 
the historic dividends, share price volatilities and co‑variances of 
the Company and each comparator company to produce a predicted 
distribution of relative share performance. this is applied to the grant to 
give an expected value of the tSR element. For the ePS and “continuing 
employment condition” the Black‑Scholes model is utilized.

total fair value at grant is calculated by multiplying the fair value per 
right by the number of rights granted. this does not represent the actual 
value the executive will derive from the grant, which will depend on the 
achievement of performance hurdles measured over the vesting period. 
the maximum value of the rights granted has been estimated based on 
the fair value per right. the minimum total value of the rights granted, 
if the applicable performance hurdles are not met, is nil.

Deferred short term incentive plan
Deferred short term incentives are granted to executive directors and 
other executives of the consolidated entity in accordance with guidelines 
approved by the Board. these incentives are delivered in the form of a 
grant of rights under the Performance Rights Plan, except where the 
value of the incentive is less than the established threshold.

the rights awarded under the plan are deferred and will vest in two equal 
tranches. the group accounts for these deferred awards as equity settled 
share based payments. Incentives granted which are less than the 
established threshold are accounted for as an employee benefit in 
accordance with the group accounting policies.

(D)  TAXES
(i) 

Income tax
the income tax expense for the period is the tax payable on the 
current period’s taxable income based on the income tax rate for 
each jurisdiction adjusted by changes in deferred tax assets and 
liabilities attributable to temporary differences between the tax 
bases of assets and liabilities and their carrying amounts in the 
financial statements and to unused tax losses as well as any 
adjustments required between prior periods current tax expense 
and income tax returns and any relevant withholding taxes.

Deferred tax assets and liabilities are recognized for temporary 
differences at the tax rates expected to apply when the assets are 
recovered or liabilities are settled, based on those tax rates which are 
enacted or substantially enacted for each jurisdiction. the relevant 
tax rates are applied to the cumulative amounts of deductible and 
taxable temporary differences to measure the deferred tax asset or 
liability. An exception is made for certain temporary differences 
arising from the initial recognition of an asset or a liability. No 
deferred tax asset or liability is recognized in relation to these 
temporary differences if they arose in a transaction, other than a 
business combination, that at the time did not affect either 
accounting profit or taxable profit or loss.

Deferred tax assets are recognized for deductible temporary 
differences and unused tax losses only if it is probable that future 
taxable amounts will be available to utilize those temporary 
differences.

Deferred tax liabilities and assets are not recognized for temporary 
differences between the carrying amount and tax bases of 
investments in controlled entities where the Parent entity is able to 
control the timing of the reversal of the temporary differences and it 
is probable that the differences will not reverse in the foreseeable 
future.

Current and deferred tax amounts relating to items recognized 
directly in equity are also recognized in equity and not in the 
statement of financial performance.

(ii)  Tax consolidation

WorleyParsons Limited and its wholly owned Australian entities 
elected to form a tax consolidated group from 1 July 2003. on 
formation of the tax consolidated group, the entities in the tax 
consolidated group entered into a tax sharing agreement which, 
in the opinion of the directors, limits the joint and several liability 

of the wholly owned entities in the case of a default by the head 
entity, WorleyParsons Limited.

the entities have also entered into a tax funding agreement under 
which the wholly owned entities fully compensate WorleyParsons 
Limited for any current tax liability assumed and are compensated by 
WorleyParsons Limited for any current tax loss, deferred tax assets 
and tax credits that are transferred to WorleyParsons Limited under 
the tax consolidation legislation. the tax consolidated current tax 
liability or current year tax loss and other deferred tax assets are 
required to be allocated to the members of the tax consolidated 
group in accordance with UIg 1052 tax Consolidation Accounting. 
the group uses an allocation method for this purpose where the 
allocated current tax payable, current tax loss, deferred tax assets 
and other tax credits for each member of the tax consolidated group 
are determined as if the group is a stand‑alone taxpayer but 
modified as necessary to recognize membership of a tax consolidated 
group. the funding amounts are determined by reference to the 
amounts recognized in the wholly owned entities’ financial 
statements which are determined having regard to membership of 
the tax consolidated group. the amounts receivable/payable under 
the tax funding agreement are due upon receipt of the funding 
advice from the head entity, which is issued as soon as practicable 
after the end of each financial year. the head entity may also require 
payment of interim funding amounts to assist with its obligations to 
pay tax installments. the funding amounts are recognized as current 
inter‑company receivables or payables.

(iii)  Goods and services tax (GST)

Revenues, expenses and assets are recognized net of the amount of 
gSt except where the gSt incurred on a purchase of goods and 
services is not recoverable from the taxation authority. In these 
circumstances, the gSt is recognized as part of the cost of 
acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of gSt 
included.

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 statement of cash flows on a gross 
basis. the gSt component of cash flows arising from investing and 
financing activities, which is recoverable from, or payable to, the 
taxation authority, is classified as an operating cash flow.

Commitments and contingencies are disclosed net of the amount of 
gSt recoverable from, or payable to, the taxation authority.

(E)  FOREIGN CURRENCY TRANSLATION

(i)  Functional and presentation currency

Items included in the financial statements of each of the group’s 
entities are measured using the currency of the primary economic 
environment in which the entity operates (functional currency). 
the consolidated financial statements are presented in Australian 
dollars, which is the group’s functional and presentation currency.

(ii)  Translation of foreign currency transactions

transactions denominated in a foreign currency are converted at the 
exchange rate at the date of the transaction. Foreign currency 
receivables and payables at balance date are translated at exchange 
rates at balance date. exchange gains and losses are brought to 
account in determining the profit and loss for the financial year.

(iii)  Specific hedges

hedging is undertaken to avoid or minimize potential adverse 
financial effects of movements in foreign currency exchange rates. 
gains or losses arising upon entry into a hedging transaction 
intended to hedge the purchase or sale of goods or services, 
together with subsequent exchange gains or losses resulting from 
those transactions, are deferred up to the date of the purchase or 
sale and included in the measurement of the purchase or sale. Note 3 
provides specific details on the calculation of these gains or losses.

Foreign exchange gains and losses arising from a monetary item 
receivable from or payable to a foreign operation, the settlement of 
which is neither planned nor likely in the foreseeable future, are 

WorleyParsons Annual Report 2012  59

 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

considered to form part of a net investment in a foreign operation 
and are recognized directly in equity in the foreign currency 
translation reserve.

At each balance date, the group measures the effectiveness of its 
cash flow hedges. the effective portion of the gain or loss on the 
hedging instrument is recognized directly in equity, while the 
ineffective portion is recognized in the profit and loss.

(F)  ACQUISITION OF ASSETS AND BUSINESS COMBINATIONS

the purchase method of accounting is used to account for all business 
combinations regardless of whether equity instruments or other assets 
are acquired. Cost is measured as the fair value of the assets given up, 
shares issued or liabilities undertaken or assumed at the date of 
acquisition. transaction costs directly attributable to the acquisition are 
expensed as incurred. Where equity instruments are issued in a business 
combination, the value of the instruments is their market price as 
determined by market valuation at the acquisition date. transaction costs 
arising on the issue of equity instruments are recognized directly 
in equity.

If the business combination is achieved in stages, the acquisition date 
fair value of the group’s previously held equity interest in the acquiree is 
remeasured to fair value at the acquisition date through profit or loss.

except for non‑current assets or disposal groups classified as held for 
sale (which are measured at fair value less costs to sell), all identifiable 
assets acquired and liabilities and contingent liabilities assumed in a 
business combination are measured initially at their fair values at the 
acquisition date. the excess of the cost of the business combination 
over the net fair value of the group’s share of the identifiable net assets 
acquired is recognized as goodwill. If the cost of acquisition is less than 
the group’s share of the net fair value of the identifiable net assets of 
the subsidiary, the difference is recognized as a gain in the statement of 
financial performance, but only after a reassessment of the identification 
and measurement of the net assets acquired.

Where settlement of any part of the consideration is deferred, the 
amounts payable in the future are discounted to their present value as at 
the date of exchange. the discount rate used is the group’s incremental 
borrowing rate, being the rate at which a similar borrowing could be 
obtained from an independent financier under comparable terms and 
conditions.

(G)  REVENUE RECOGNITION

Amounts disclosed as revenue are net of trade allowances, duties and 
taxes paid. Revenue is recognized and measured at the fair value of the 
consideration received or receivable to the extent that it is probable that 
the economic benefits will flow to the group and the revenue can be 
reliably measured. the following specific recognition criteria must be met 
before revenue is recognized:

(i)  Engineering design and project services

Contract revenue and expenses are recognized in accordance with 
the percentage of completion method unless the outcome of the 
contract cannot be reliably estimated. Where it is probable that a loss 
will arise from a contract, the excess of total costs over revenue is 
recognized as an expense immediately.

Where the outcome of a contract cannot be reliably estimated, 
contract costs are recognized as an expense as incurred, and where it 
is probable that the costs will be recovered, revenue is recognized to 
the extent of costs incurred. Incentive payments on contracts are 
recognized as part of total contract revenue where it is probable that 
specified performance standards are met or exceeded and the 
amount of the incentive payment can be reliably measured.

Revenue from cost plus contracts is recognized by reference to the 
recoverable costs incurred during the reporting period plus the 
percentage of fees earned.

For fixed price contracts, the stage of completion is measured by 
reference to labor hours incurred to date as a percentage of 
estimated total labor hours for each contract.

60  WorleyParsons Annual Report 2012

(ii)  Sale of goods – procurement services revenue

Revenue is recognized when the significant risks and rewards of 
ownership of the goods have passed to the buyer and the costs 
incurred or to be incurred in respect of the transaction can be 
measured reliably. Risks and rewards of ownership are considered 
passed to the buyer at the time of delivery of the goods to the 
customer.

(iii)  Interest

Interest income is recognized as it accrues using the effective 
interest rate method.

(iv)  Dividends

Revenue is recognized when the group’s right to receive the 
payment is established.

(H)  TRADE AND OTHER RECEIVABLES

All trade and other receivables are recognized at the original amounts 
less an allowance for any uncollectible debts. An allowance for doubtful 
debts is made when there is objective evidence that the group will not be 
able to collect debts. the recoverable amount of trade and other 
receivables is reviewed on an ongoing basis.

Unbilled contract revenue is stated at the aggregate of contract costs 
incurred to date plus recognized profits less recognized losses and 
progress billings. Contract costs include all costs directly related to 
specific contracts, costs that are specifically chargeable to the customer 
under the terms of the contract and an allocation of overhead expenses 
incurred in connection with the consolidated entity’s activities in general.

(I) 

INVENTORIES
(i)  Raw materials and finished goods

Raw materials and finished goods are stated at the lower of cost 
and net realizable value. Cost comprises direct materials, direct labor 
and an appropriate proportion of variable and fixed overhead 
expenditure, the latter being allocated on the basis of normal 
operating capacity. Costs are assigned to individual items of 
inventory on the first‑in, first‑out basis. Net realizable value is the 
estimated selling price in the ordinary course of business less the 
estimated costs of completion and the estimated costs necessary to 
make the sale.

(ii)  Consumables and stores

Consumables and stores are stated at the lower of cost and net 
realizable value and charged to specific contracts when used.

(iii)  Work in progress

Work in progress is valued at the lower of cost and net realizable 
value. Cost comprises staff salary costs and direct expenses together 
with an appropriate proportion of overheads. Net realizable value is 
based on estimated selling prices less further costs expected to be 
incurred to completion.

(J)  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated 
depreciation and impairment, if any. Depreciation is calculated on a 
straight line basis to write off the net cost or revalued amount of each 
item of property, plant and equipment (excluding land) over its expected 
useful life to the consolidated entity. the expected useful lives for plant 
and equipment range from three to 10 years. the estimated useful lives, 
residual values and depreciation method are reviewed at the end of each 
annual reporting period.

the cost of improvements to or on leasehold properties is amortized over 
the unexpired period of the lease or the estimated useful life of the 
improvement to the consolidated entity, whichever is the shorter.

(K)  IMPAIRMENT OF ASSETS

Assets that have an indefinite useful life are not subject to amortization 
and are tested at least twice a year for impairment. Assets that are 
subject to amortization are reviewed for impairment whenever events or 
changes in circumstances indicate that the carrying amount exceeds its 
recoverable amount. the recoverable amount is the higher of an asset’s 
fair value less costs to sell, and value in use. For the purposes of 
assessing impairment, assets are grouped at the lowest levels for which 
there are separately identifiable cash flows (cash generating units).

 
 
 
 
 
 
 
(L)  LEASES

(ii)  Identifiable intangible assets

the determination of whether an arrangement is or contains a lease is 
based on the substance of the arrangement and requires an assessment 
of whether the fulfillment of the arrangement is dependent on the use of 
a specific asset or assets and the arrangement conveys a right to use the 
asset.

(i)  The Group as a lessee

Finance leases, which transfer to the group substantially all the risks 
and rewards incidental to ownership of the leased item, are 
capitalized at the inception of the lease at the fair value of the 
leased asset or, if lower, at the present value of the minimum lease 
payments. Lease payments are apportioned between the finance 
charges and reduction of the lease liability so as to achieve a 
constant rate of interest on the remaining balance of the liability. 
Finance charges are recognized as an expense in the statement of 
financial performance.

the minimum lease payments of operating leases, where the lessor 
effectively retains substantially all of the risks and rewards of 
ownership of the leased item, are recognized as an expense on a 
straight line basis. Lease incentives are recognized in the statement 
of financial performance as an integral part of the total lease 
expense.

(ii)  The Group as a lessor

Leases where the group transfers substantially all the risks and 
rewards incidental to ownership of an asset to the lessee or a third 
party are classified as finance leases. A receivable at an amount 
equal to the present value of the lease payments, including any 
guaranteed residual value, is recognized.

Income on finance leases is recognized on a basis reflecting a 
constant periodic return based on the lessor’s net investment 
outstanding in respect of the finance lease.

Leases where the Company retains substantially all the risks and 
rewards incidental to ownership of an asset are classified as 
operating leases. operating lease rental revenue is recognized on a 
straight line basis.

(M)  INTANGIBLE ASSETS

(i)  Goodwill

goodwill represents the excess of the purchase consideration over 
the fair value of identifiable net assets acquired at the time of 
acquisition of a business or shares in a controlled entity or an 
associate. goodwill on acquisition of controlled entities is included 
in intangible assets and goodwill on acquisition of associates is 
included in investments in associates. gains and losses on the 
disposal of an entity include the carrying amount of goodwill relating 
to the entity sold.

Goodwill	is	not	amortized;	instead,	it	is	tested	at	least	twice	a	year	
for any impairment in the carrying amount or more frequently if 
events or changes in circumstances indicate that it might be 
impaired. goodwill is carried at cost less accumulated impairment 
losses.

For the purposes of impairment testing, goodwill acquired in a 
business combination is allocated to groups of cash generating units 
that are expected to benefit from the synergies of the combination, 
irrespective of whether other assets or liabilities of the group are 
assigned to those groups of units. the groups of cash generating 
units to which goodwill is allocated are the operating segments 
determined in accordance with AASB 8 operating Segments, as set 
out in note 34. these segments represent the lowest level within 
the entity at which the goodwill is monitored for internal 
management purposes.

Impairment is determined by assessing the recoverable amount of 
the groups of cash generating units to which the goodwill relates. 
When the recoverable amount of the groups of cash generating units 
is less than the carrying amount, an impairment loss is recognized.

Impairment losses recognized for goodwill are not subsequently 
reversed.

Intangible assets acquired separately or in a business combination 
are initially measured at cost. the cost of an intangible asset 
acquired in a business combination is its fair value as at the date of 
acquisition. Following initial recognition, intangible assets are carried 
at cost less any accumulated amortization and any accumulated 
impairment losses. Internally generated intangible assets are not 
capitalized and expenditure is recognized in the profit and loss in the 
year in which the expenditure is incurred.

the useful lives of intangible assets are assessed to be either finite 
or indefinite. Intangible assets with finite lives are amortized over 
the useful life and tested for impairment whenever there is an 
indication that the intangible asset may be impaired. the 
amortization period and the amortization method for an intangible 
asset with a finite useful life are reviewed at least each financial 
year end. Changes in the expected useful life or the expected 
pattern of consumption of future economic benefits embodied in the 
asset are accounted for prospectively by changing the amortization 
period or method, as appropriate, which is a change in accounting 
estimate. the amortization expense on intangible assets with finite 
lives is recognized in the statement of financial performance on a 
straight line basis over the following periods:

•	

•	

•	

•	

•	

	customer	contracts	and	relationships	

3‑15	years

	trade	names	

	computer	software	

	favorable	property	leases	

	other	

5‑10	years

5	years

3‑10	years

3‑10	years.

Intangible assets with indefinite useful lives are tested for 
impairment annually, either individually or at the cash generating 
unit level. Such intangible assets are not amortized. the useful life of 
an intangible asset with an indefinite life is reviewed each reporting 
period to determine whether indefinite life assessment continues to 
be supportable. If not, the change in the useful life assessment from 
indefinite to finite is accounted for as a change in an accounting 
estimate and is thus accounted for on a prospective basis.

Research costs are expensed as incurred. An intangible asset arising 
from development expenditure on an internal project is recognized 
only when the group can demonstrate the technical feasibility of 
completing the intangible asset so that it will be available for use or 
sale, its intention to complete and its ability to use or sell the asset, 
how the asset will generate future economic benefits, the availability 
of resources to complete the development and the ability to measure 
reliably the expenditure attributable to the intangible asset during 
its development.

(N)  TRADE AND OTHER PAYABLES

Liabilities for trade and other payables amounts are carried at cost which 
is the fair value of the consideration to be paid in the future for goods 
and services received, whether or not billed to the group.

(O)  INTEREST BEARING LOANS AND BORROWINGS

Loans are initially recognized at fair value, net of transaction costs 
incurred. Loans are subsequently measured at amortized cost. Any 
difference between the proceeds (net of transaction costs) and the 
redemption amount is recognized in the statement of financial 
performance over the period of the loan using the effective interest 
rate method.

(P)  PROVISIONS AND DEFERRED REVENUE

Provisions are recognized when the consolidated entity has a legal, 
equitable or constructive obligation to make a future sacrifice of 
economic benefits to other entities as a result of past transactions or 
other past events, it is probable that a future sacrifice of economic 
benefits will be required and a reliable estimate can be made of the 
amount of the obligation.

(i)  Deferred revenue

the group at times receives payment for services prior to revenue 
being recognized in the financial statements. Revenue is classified as 
deferred due to the criteria required for its recognition not being met 
as at the reporting date, in line with the accounting policy set out in 
note 2(g) above.

WorleyParsons Annual Report 2012  61

 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

(ii)  Expected losses on contracts

(T)  ISSUED CAPITAL

Where the outcome for a services contract is expected to result in an 
overall loss over the life of the contract, this loss is provided for 
when it first becomes known that a loss will be incurred.

(iii)  Insurance

Provision for insurance liabilities is recognized in line with actuarial 
calculations of unsettled insurance claims, net of insurance 
recoveries. the provision is based on the aggregate amount of 
individual claims incurred but not reported that are lower in value 
than the insurance deductible of the consolidated entity. It is based 
on the estimated cost of settling claims and consideration is given to 
the ultimate claim size, future inflation as well as the levels of 
compensation awarded through the courts.

(iv)  Warranties

Provision is made for the estimated liability on all products and 
services still under warranty at balance date. this provision is 
estimated having regard to prior service warranty experience. 
In calculating the liability at balance date, amounts were not 
discounted to their present value as the effect of discounting was 
not material.

In determining the level of provision required for warranties, the 
group has made judgments in respect of the expected performance 
and the costs of fulfilling the warranty. historical experience and 
current knowledge have been used in determining this provision.

Issued and paid up capital is recognized at the fair value of the 
consideration received by the group. Any transaction costs arising on the 
issue of ordinary shares are recognized directly in equity as a reduction of 
the share proceeds received.

(U)  EARNINGS PER SHARE

(i)  Basic earnings per share

Basic earnings per share is determined by dividing the profit 
attributable to members of WorleyParsons Limited by the weighted 
average number of ordinary shares outstanding during the financial 
year.

(ii)   Diluted earnings per share

Diluted earnings per share is calculated as profit attributable to 
members of WorleyParsons Limited adjusted for:

•	

•	

•	

	costs	of	servicing	equity	(other	than	dividends);

	the	after‑tax	effect	of	dividends	and	interest	associated	with	
dilutive potential ordinary shares that have been recognized as 
expenses;	and

	other	non‑discretionary	changes	in	revenues	or	expenses	during	
the period that would result from the dilution of potential 
ordinary shares, divided by the weighted average number of 
ordinary shares and dilutive potential ordinary shares, adjusted 
for any bonus element.

(v)  Deferred consideration

(V)  SEGMENT REPORTING

Deferred consideration acquired in a business combination is initially 
measured at fair value at the date of acquisition. Subsequently, it is 
measured in accordance with AASB 137 Provisions, Contingent 
Liabilities and Contingent Assets.

(vi)  Dividends payable

Provision is made for the amount of any dividends declared, 
determined or publicly recommended by the directors before or at 
the end of the financial year but not distributed at balance date.

(vii) Restructurings

Provisions for restructurings are recognized when the consolidated 
entity has developed a detailed formal plan for the restructuring and 
has raised a valid expectation in those affected that it will carry out 
the restructuring by starting to implement the plan or announcing its 
main features to those affected by it.

(Q)  REPAIRS AND MAINTENANCE

Repairs, minor renewals and improvements, and the purchase of minor 
items of tools and equipment are charged to expense as incurred. Major 
renewals and improvements are capitalized to the respective asset and 
depreciated.

(R)  BORROWING COSTS

Borrowing costs are recognized as expenses in the period in which they 
are incurred, except when they are included in the costs of qualifying 
assets. Borrowing costs include:

(i) 

 interest on bank overdrafts, and short term and long term 
borrowings;

(ii)	

	amortization	of	discounts	or	premiums	relating	to	borrowings;	and

(iii)  finance lease charges.

(S)  CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the statement of financial position comprise 
cash at bank and in hand and short term deposits with an original 
maturity of three months or less that are readily convertible to known 
amounts of cash and which are subject to an insignificant risk of changes 
in value.

For the purposes of the statement of cash flows, cash and cash 
equivalents consist of cash and cash equivalents as defined above, net of 
outstanding bank overdrafts. Bank overdrafts are included within interest 
bearing loans and borrowings in current liabilities on the statement of 
financial position.

Where cash and cash equivalents held by the group are subject to 
external restrictions, the nature of the restrictions and value of cash 
subject to these restrictions are disclosed in note 7.

62  WorleyParsons Annual Report 2012

(i) 

Identification of reportable segments
the group has identified its operating segments based on the 
internal reports that are reviewed and used by the Chief executive 
officer and the group Managing Directors (the chief operating 
decision makers) in assessing performance and in determining the 
allocation of resources. the operating segments identified by 
management are based on the customer sector groups: 
hydrocarbons, Power, Minerals, Metals & Chemicals and Infrastructure 
& environment.

Discrete pre‑tax financial information about each of these customer 
sector groups is reported to the chief operating decision makers on a 
monthly basis.

the group’s operations are organized and managed separately 
according to the nature of the services they provide, with each 
segment serving different markets. the group provides engineering 
design, project services, and maintenance and reliability support 
services to a number of markets. the consolidated entity’s activities 
also include infrastructure developments within the Power sector.

(ii)  Accounting policies and inter‑segment transactions

Segment revenues, expenses, assets and liabilities are those that are 
directly attributable to a segment and the relevant portion that can 
be allocated to the segment on a reasonable basis. Segment assets 
include all assets used by a segment and consist primarily of 
receivables and plant and equipment. Segment revenues, expenses 
and results include transactions between segments incurred in the 
ordinary course of business. these transactions are priced on an 
arm’s length basis and are eliminated on consolidation.

the accounting policies used by the group in reporting segments 
internally are the same as those contained in these financial 
statements and are consistent with those used in the prior period.

Segment result includes the allocation of overhead that can be 
directly attributed to an individual business segment. the following 
items and associated assets and liabilities are not allocated to 
segments as they are not considered part of the core operations of 
any segment:

•	

•	

•	

•	

•	

	income	tax	expense;

interest	and	tax	for	associates;

	amortization	of	intangible	assets;

	gains	and	losses	on	the	sale	or	revaluation	of	investments;

	certain	general	and	administration	expenditure	(performance	
rights	and	corporate	expenses);	and

•	

	net	borrowing	costs.

 
 
 
 
 
 
 
	
 
 
 
 
 
(W)  ASSETS HELD FOR SALE

Non‑current assets and disposal groups are classified as held for sale and 
measured at the lower of their carrying value and fair value less costs to 
sell if their carrying amount will be recovered principally through a sale 
transaction. they are not depreciated or amortized. For an asset or 
disposal group to be classified as held for sale, it must be available for 
immediate sale in its present condition and its sale must be highly 
probable.

An impairment loss is recognized for any initial or subsequent write‑down 
of the asset (or disposal group) to fair value less costs to sell. A gain is 
recognized for any subsequent increases in fair value less costs to sell of 
an asset (or disposal group), but not in excess of any cumulative 
impairment loss previously recognized. A gain or loss not previously 
recognized by the date of the sale of the non‑current asset (or disposal 
group) is recognized at the date of derecognition.

the assets and liabilities are presented separately on the face of the 
statement of financial position.

(X)  DETERMINATION OF FAIR VALUES

A number of the group’s accounting policies and disclosures require the 
determination of fair value, for both financial and non‑financial assets 
and liabilities. Fair values have been determined for measurement and/or 
disclosure purposes based on the following methods. When applicable, 
further information about the assumptions used in determining fair 
values is disclosed in the notes specific to that asset or liability.

(i)  Property, plant and equipment

the fair value of property, plant and equipment recognized as the 
result of a business combination is based on market values. the 
market value of property is the estimated amount for which a 
property could be exchanged on the date of valuation between a 
willing buyer and a willing seller in an arm’s length transaction of 
proper marketing wherein the parties had each acted knowledgeably, 
prudently and without compulsion. the market value of plant, 
equipment, fixtures and fittings is based on quoted market prices 
for similar items.

(ii)  Investments in equity and debt securities

the fair value of held‑to‑maturity investments, financial assets at 
fair value through profit and loss, and available‑for‑sale financial 
assets is determined by reference to their quoted bid price at the 
reporting date. the fair value of held‑to‑maturity investments is 
determined for disclosure purposes only.

(iii)  Derivatives

the fair value of forward exchange contracts is estimated by 
discounting the difference between the contractual forward price 
for the residual maturity of the contract using a risk‑free interest rate 
(based on government bonds). the fair value of interest rate swaps 
and cross currency swaps is based on broker quotes. those quotes 
are tested for reasonableness by discounting estimated cash flows 
based on the terms and maturity of each contract and using market 
interest rates for similar instruments at the measurement date.

(iv)  Non‑derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated 
based on the present value of future principal and interest cash 
flows, discounted at the market rate of interest at the reporting date. 
In respect of the liability component of convertible notes, the market 
rate of interest is determined by reference to similar liabilities that 
do not have a conversion option. For finance leases, the market rate 
of interest is determined by reference to similar lease agreements.

3. FinanCial RisK manaGement

(A)  OVERVIEW

the group’s principal financial instruments comprise receivables, 
payables, bank loans and overdrafts, finance leases, cash and short term 
deposits and derivatives. the group has exposure to the following risks 
from its use of financial instruments:

•	

•	

•	

	credit	risk;

	liquidity	risk;	and

	market	risk.

this note presents information about the group’s exposure to each of the 
above risks, its objectives, policies and processes for measuring and 
managing risk, and the management of capital. Quantitative disclosures 
are included throughout this financial report.

the Board has overall responsibility for the establishment and oversight 
of the risk management framework. the Audit and Risk Committee 
assists the Board in overseeing the integrity of the group’s financial 
reporting risk management framework and internal controls.

Risk management policies are established to identify and analyze the 
risks faced by the group, to set appropriate risk limits and controls, and to 
monitor risks and adherence to limits. Risk management policies and 
systems are reviewed regularly to reflect changes in market conditions 
and the group’s activities. the group, through its training and 
management standards and procedures, aims to develop a disciplined and 
constructive control environment in which all employees understand their 
roles and obligations.

the Committee is assisted in its oversight role by Internal Audit. Internal 
Audit undertakes both regular and ad hoc reviews of risk management 
controls and procedures, the results of which are reported to the 
Committee.

(B)  CREDIT RISK

Credit risk is the risk of financial loss to the group if a customer or 
counterparty to a financial instrument fails to meet its contractual 
obligations, and arises principally from the group’s receivables from 
customers and investment securities.

(i)  Trade and other receivables

the group’s exposure to credit risk is influenced mainly by the 
individual characteristics of each customer. the profiles of the 
group’s customer base, including the default risk of the industry and 
country in which customers operate, have less of an influence on 
credit risk. geographically and on a customer basis, there is no 
concentration of credit risk.

the group has a credit policy under which each new customer is 
analyzed for creditworthiness before the group’s standard payment 
and delivery terms and conditions are offered. the group’s review 
includes external ratings, when available, and in some cases bank 
references.

the group has established an allowance for impairment that 
represents its estimate of incurred losses in respect of trade and 
other receivables. this allowance comprises only those components 
that are individually significant.

(ii)  Guarantees

Details of outstanding guarantees are provided in note 30A. 
the group is, in the normal course of business, required to provide 
guarantees and letters of credit on behalf of controlled entities, 
associates and related parties in respect of their contractual 
performance related obligations.

(C)  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’s approach to managing 
liquidity is to ensure, as far as possible, that it will always have sufficient 
liquidity to meet its liabilities when due, under both normal and stressed 
conditions, without incurring unacceptable losses or risking damage to 
the group’s reputation.

the group ensures that it has sufficient cash on demand to meet 
expected operational expenses including the servicing of financial 
obligations;	this	excludes	the	potential	impact	of	extreme	circumstances	
that cannot reasonably be predicted, such as natural disasters.

WorleyParsons Annual Report 2012  63

 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

3. FinanCial RisK manaGement (continued)

4. eXPenses and losses/(Gains)

Profit before income tax expense includes the following specific expenses 
and losses/(gains):

(ii)  Interest rate risk

the group enters into interest rate swaps to manage interest rate 
risk. the group adopts a policy of ensuring that the majority of its 
exposure to interest rates on borrowings is on a fixed rate basis.

5. otheR inCome

Net gain on revaluation of investments previously  
accounted for as equity accounted associates 

eXPeNSeS AND LoSSeS

operating lease rentals – minimum lease payments 

Superannuation and other retirement benefits 

Performance rights expense 

MoVeMeNtS IN PRoVISIoNS

employee benefits 

Warranties 

Insurance 

Deferred consideration 

other 

Consolidated

2012 
$’M 

2011 
$’M

172.2 

129.0 

17.1 

165.6

111.0

12.5

247.8 

170.0

2.8 

0.2 

– 

36.9 

0.7

(3.1)

(0.1)

57.2

Consolidated

2012 
$’M 

2011 
$’M

7.6 

4.3 

11.9 

65.7

6.3

72.0

other 

Other income 

the group has acquired additional interests in an entity which had previously 
been accounted for as an equity accounted associate.

this acquisition resulted in a change in the nature of the investment from 
equity accounted associate to subsidiary of the Company. As part of the 
accounting for the acquisition, the original investment held in this entity was 
remeasured to fair value and a fair value gain of $7.6 million was recognized 
in the statement of financial performance.

During the year ended 30 June 2011, the group acquired additional interests 
in a number of entities which had previously been accounted for as equity 
accounted associates. A net fair value gain of $65.7 million was recognized in 
the statement of financial performance.

Refer note 23(D) for details of these acquisitions.

(D)  MARKET RISK

Market risk is the risk that changes in market prices, such as foreign 
exchange rates, interest rates and equity prices, will affect the group’s 
income or the value of its holdings of financial instruments. the objective 
of market risk management is to manage and control market risk 
exposures within acceptable parameters, while optimizing the return. the 
group enters into derivatives, and also incurs financial liabilities, in order 
to manage market risk. generally, the group seeks to apply hedge 
accounting in order to reduce volatility in profit and loss.

(i)  Currency risk

the group is exposed to currency risk on sales, purchases and 
borrowings that are denominated in a currency other than the 
respective functional currencies of group entities.

the group uses forward exchange contracts, foreign currency options 
and foreign currency swaps to hedge its currency risk, most with a 
maturity of less than one year from the reporting date. When 
necessary, forward exchange contracts are rolled over at maturity.

Interest on borrowings is denominated in currencies that match the 
cash flows generated by the underlying operations for the group 
resulting in an economic hedge. Interest is primarily AUD, CAD 
and USD.

(E)  CAPITAL MANAGEMENT

the Board’s policy is to maintain a strong capital base so as to maintain 
investor, creditor and market confidence and to sustain future 
development of the business. the Board monitors the return on capital, 
which the group defines as net operating income divided by total 
shareholders’ equity, excluding non‑controlling interests. the Board also 
determines the level of dividends to ordinary shareholders.

the Board seeks to maintain a balance between the higher returns that 
might be possible with higher levels of borrowings and the advantages 
and security afforded by a sound capital position.

the Board monitors this through the gearing ratio (net debt/net debt plus 
total equity), the size of available banking facilities and the assessment 
of the outlook for the group operations. the target for the group’s 
gearing ratio is between 25% and 35%. the gearing ratio at 30 June 
2012 and 2011 was as follows:

total interest bearing loans and borrowings1 

Less: cash and cash equivalents 

Net debt 

total equity 

Gearing 

Consolidated

2012 
$’M 

739.8 

247.3 

492.5 

2011 
$’M

679.8

171.2

508.6

1,979.9 

1,856.8

19.9% 

21.5%

1  excluding capitalized borrowing costs.

there were no changes in the group’s approach to capital management during 
the financial year.

Neither the group nor any of its subsidiaries is subject to externally imposed 
capital requirements.

64  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
247.3 

247.3 

– 

171.2

171.2

(5.1)

6. inCome taX

(A) INCOME TAX EXPENSE
Current tax 

Deferred tax 

over provision in previous financial periods 

Consolidated

2012 
$’M 

2011 
$’M

117.7 

136.3

12.5 

(12.9) 

(16.5)

(3.8)

NoteS 

Consolidated

2012 
$’M 

2011 
$’M

7. CURRent assets – Cash and Cash eQUiValents

Cash and cash equivalents 

247.3 

171.2

the above figures are reconciled to cash at the end of the financial year as shown 
in the statement of cash flows as follows:

Cash at bank and on hand 

Income tax expense 

117.3 

116.0

Cash and cash equivalents 

Deferred income tax expense/(benefit) included in  
income tax expense comprises:

Decrease/(increase) in deferred tax assets 

Increase in deferred tax liabilities 

Deferred tax 

(B) RECONCILIATION OF PRIMA FACIE TAX PAYABLE TO  
INCOME TAX EXPENSE
Profit before income tax expense 

At the group’s statutory income tax rate of 30%  
(2011: 30%) 

tax effect of amounts which are non‑deductible/ 
(non‑taxable) in calculating taxable income:

Non‑deductible performance rights 

Non‑taxable gain on acquisitions 

Share of net profits of associates accounted for using  
the equity method 

tax losses not previously recognized 

over provision in previous financial periods 

Difference in overseas tax rate* 

other 

Income tax expense 

Bank overdraft 

13 

4.2 

8.3 

(26.5)

10.0

12.5 

(16.5)

493.8 

498.4

148.1 

149.5

5.3 

(2.3) 

(8.2) 

(0.4) 

(12.9) 

(14.3) 

2.0 

3.9

(19.7)

(9.5)

(1.2)

(3.8)

(8.5)

5.3

Balance per statement of cash flows 

247.3 

166.1

PROCUREMENT AND RESTRICTED CASH AND CASH EQUIVALENTS
Included within cash and cash equivalents is $51.4 million 
(2011: $10.1 million) which has been identified as for procurement services 
or restricted, but available for use under certain circumstances by the group.

Procurement cash is held in relation to procurement activities undertaken 
by the group on behalf of its customers (refer note 28). Restricted cash is 
held in relation to guarantees (refer note 30(A)) and financing activities.

NoteS 

Consolidated

2012 
$’M 

2011 
$’M

8. CURRent assets – tRade and otheR ReCeiVaBles

tRADe ReCeIVABLeS

trade receivables 

Unbilled contract revenue 

Retentions 

Allowance for doubtful debts 

Allowance for doubtful debts

941.5 

782.2 

27.1 

(24.9) 

798.5

573.2

15.7

(25.7)

1,725.9 

1,361.7

117.3 

116.0

Balance at the beginning of the financial year 

25.7 

* 

 Represents income tax expense for foreign tax rate differential and international withholding 
taxes.

(C)  AMOUNTS RECOGNIZED DIRECTLY IN EQUITY
Aggregate amount of tax arising in the reporting period and not recognized in 
profit after income tax expense but directly credited to equity:

Deferred tax – credited directly to equity 

2.5 

2.5

(D)  TAX LOSSES
the group has tax losses for which no deferred tax asset is recognized on the 
statement of financial position:

Unused tax losses for which no deferred tax asset has  
been recognized 

Potential tax benefit at 30% 

28.3 

8.5 

33.6

10.1

the benefit for tax losses will only be recognized if:

(i) 

 the consolidated entity derives future assessable income of a nature and 
of an amount sufficient to enable the benefit from the deductions for the 
losses	to	be	realized;	or

(ii)	

	the	losses	are	transferred	to	an	eligible	entity	in	the	consolidated	entity;	
and

(iii)   the consolidated entity continues to comply with conditions for 

deductibility	imposed	by	tax	legislation;	and

(iv)   no changes in legislation adversely affect the consolidated entity in 

realizing the benefit from the deductions for the losses.

42.2

(11.8)

3.1

(2.8)

(5.0)

Net charge/(credit) to the statement of financial performance 

4.3 

Provision from entities acquired 

Amounts written off against the opening provision balance 

Differences arising on translation of foreign operations 

– 

(3.1) 

(2.0) 

Balance at the end of the financial year 

24.9 

25.7

the group’s exposure to credit, currency and interest rate risk for trade 
receivables and unbilled contract revenue is disclosed respectively in 
notes 35, 37 and 38.

otheR ReCeIVABLeS

other receivables 

Amounts owing by associates  
and related parties 

111.5 

118.4

32(B) 

71.9 

31.4

183.4 

149.8

WorleyParsons Annual Report 2012  65

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

9. non‑CURRent assets – PRoPeRtY, Plant and eQUiPment

Consolidated

2012 
$’M 

2011 
$’M

Land and buildings

At cost 

Accumulated depreciation 

Leasehold improvements

At cost 

Accumulated amortization 

Plant and equipment

At cost 

Accumulated depreciation 

Computer equipment

At cost 

Accumulated depreciation 

1.6 

(0.1) 

1.5 

144.2 

(65.3) 

78.9 

140.8 

(94.0) 

46.8 

63.2 

(54.7) 

8.5 

1.8

(0.2)

1.6

110.2

(49.2)

61.0

106.4

(70.9)

35.5

56.9

(46.9)

10.0

Total property, plant and equipment 

135.7 

108.1

RECONCILIATIONS
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current and previous financial years are 
set out below:

LAND AND 
BUILDINgS 
$’M 

LeASehoLD 
IMPRoVeMeNtS 
$’M 

Consolidated

PLANt AND 
eQUIPMeNt 
$’M 

CoMPUteR 
eQUIPMeNt 
$’M 

35.5 

2.3 

23.8 

(0.6) 

(14.1) 

– 

(0.1) 

46.8 

39.2 

4.6 

7.0 

(3.2) 

(9.2) 

– 

(2.9) 

10.0 

– 

4.0 

(0.4) 

(5.0) 

– 

(0.1) 

8.5 

10.0 

3.4 

3.2 

(0.2) 

(5.0) 

– 

(1.4) 

totAL 
$’M

108.1

2.4

65.5

(1.3)

(19.1)

(20.8)

0.9

135.7

116.0

8.8

34.9

(6.4)

(14.2)

(19.3)

(11.7)

35.5 

10.0 

108.1

Balance at 1 July 2011 

Additions due to the acquisition of entities 

Additions 

Disposals 

Depreciation 

Amortization 

Differences arising on translation of foreign operations 

Balance at 30 June 2012 

Balance at 1 July 2010 

Additions due to the acquisition of entities 

Additions 

Disposals 

Depreciation 

Amortization 

Differences arising on translation of foreign operations 

Balance at 30 June 2011 

1.6 

– 

0.0 

(0.1) 

(0.0) 

– 

0.0 

1.5 

1.9 

– 

– 

– 

(0.0) 

– 

(0.3) 

1.6 

61.0 

0.1 

37.7 

(0.2) 

– 

(20.8) 

1.1 

78.9 

64.9 

0.8 

24.7 

(3.0) 

– 

(19.3) 

(7.1) 

61.0 

66  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
10. non‑CURRent assets – intanGiBle assets

Goodwill

At cost 

Accumulated impairment 

Customer contracts and relationships

At cost 

Accumulated amortization 

Trade names

At cost 

Accumulated amortization 

Computer software

At cost 

Accumulated amortization 

Favorable property leases

At cost 

Accumulated amortization 

Other

At cost 

Accumulated amortization 

Consolidated

2012 
$’M 

2011 
$’M

1,570.3 

1,530.8

(1.6) 

(1.6)

1,568.7 

1,529.2

127.2 

(91.3) 

35.9 

69.9 

(51.9) 

18.0 

191.1 

(109.7) 

81.4 

9.1 

(9.1) 

– 

3.2 

(2.4) 

0.8 

129.0

(67.1)

61.9

70.1

(45.1)

25.0

159.5

(81.3)

78.2

9.1

(7.8)

1.3

3.3

(2.1)

1.2

Total intangible assets 

1,704.8 

1,696.8

RECONCILIATIONS
Reconciliations of intangible assets at the beginning and end of the current and previous financial years are set out below:

Balance at 1 July 2011 

Additions due to the acquisition of entities 

Additions 

Amortization 

Differences arising on translation of foreign operations 

Balance at 30 June 2012 

Balance at 1 July 2010 

Additions due to the acquisition of entities 

Additions 

Amortization 

gooDWILL 
$’M 

1,529.2 

37.0 

– 

– 

2.5 

1,568.7 

1,586.7 

140.2 

– 

– 

Differences arising on translation of foreign operations 

(197.7) 

Balance at 30 June 2011 

1,529.2 

CUStoMeR 
CoNtRACtS AND 
ReLAtIoNShIPS 
$’M 

61.9 

– 

– 

(22.8) 

(3.2) 

35.9 

69.7 

17.1 

– 

(20.0) 

(4.9) 

61.9 

Consolidated

tRADe 
NAMeS 
$’M 

25.0 

– 

– 

(7.1) 

0.1 

18.0 

35.6 

– 

– 

(9.3) 

(1.3) 

25.0 

CoMPUteR 
SoFtWARe 
$’M 

FAVoRABLe 
PRoPeRtY 
LeASeS 
$’M 

78.2 

0.0 

34.8 

(31.6) 

– 

81.4 

84.0 

– 

24.7 

(30.5) 

– 

78.2 

1.3 

– 

– 

(1.3) 

0.0 

– 

3.5 

– 

– 

(1.9) 

(0.3) 

1.3 

otheR 
$’M 

totAL 
$’M

1.2 

1,696.8

– 

– 

(0.3) 

(0.1) 

0.8 

1.7 

– 

– 

(0.5) 

0.0 

1.2 

37.0

34.8

(63.1)

(0.7)

1,704.8

1,781.2

157.3

24.7

(62.2)

(204.2)

1,696.8

Impairment testing
Identifiable intangible assets with finite lives are carried at cost less 
accumulated amortization and adjusted for any accumulated impairment loss. 
the assets are assessed at each reporting date as to whether there is any 
indication that the asset may be impaired. goodwill is an intangible asset with 
an indefinite life which is tested at least twice a year for impairment. the 
recoverable amount test is based on the higher of value in use and fair value 

less costs to sell. these calculations use cash flow projections based on 
financial forecasts of how the business is expected to operate based on 
current performance and the business environment but taking into account 
expected future changes.

the groups of cash generating units to which goodwill is allocated are the 
operating segments determined in accordance with AASB 8 operating 
Segments.

WorleyParsons Annual Report 2012  67

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

10. non‑CURRent assets – intanGiBle assets (continued)

the goodwill allocated to the groups of cash generating units (CgUs) and the 
key assumptions used for impairment testing are as follows:

NoteS 

Consolidated

2012 
$’M 

2011 
$’M

12. CURRent liaBilities – tRade and otheR PaYaBles

trade payables 

Accruals 

Payables to associates and related parties  32(B) 

Billings in advance 

Accrued staff costs 

346.7 

372.0 

10.2 

73.6 

173.9 

976.4 

219.6

308.0

7.5

59.4

146.1

740.6

the group’s exposure to currency and interest rate risk for trade and other 
payables is disclosed in notes 37 and 38.

Consolidated

2012 
$’M 

2011 
$’M

13. CURRent liaBilities – inteRest BeaRinG loans 
and BoRRoWinGs

Bank overdraft 

Notes payable 

Secured bank loan 

Unsecured bank loans 

– 

– 

1.4 

2.3 

3.7 

5.1

37.3

1.3

–

43.7

BANK OVERDRAFT
the bank overdraft facilities can be drawn at any time subject to the terms 
and conditions set out in the facility agreement.

NOTES PAYABLE
Unsecured notes payable were issued in the United States private debt 
capital market in May 2007, April 2008 and March 2011 (refer note 15).

SECURED BANK LOAN
Refer note 15 for terms and conditions.

UNSECURED BANK LOANS
Refer note 15 for terms and conditions.

14. CURRent liaBilities – PRoVisions

employee benefits 

Deferred revenue and projects 

Insurance 

Warranties 

Deferred consideration 

other 

Refer note 17 for accounting policies.

Consolidated

2012 
$’M 

2011 
$’M

289.5 

163.7 

19.2 

13.8 

– 

13.4 

215.8

89.3

20.7

15.0

10.7

7.8

499.6 

359.3

2012 

hydrocarbons 

Power 

Minerals, Metals & Chemicals 

Infrastructure & environment 

2011 

hydrocarbons 

Power 

Minerals, Metals & Chemicals 

Infrastructure & environment 

PRe‑tAX 
DISCoUNt 
% PA

12.8

13.0

14.5

15.4

PRe‑tAX 
DISCoUNt 
% PA

12.8

13.4

13.5

16.1

gooDWILL 
$’M 

1,186.7 

150.1 

74.8 

157.1 

1,568.7

gooDWILL 
$’M 

1,177.2 

131.5 

50.3 

170.2 

1,529.2

the first five years forecast cash flows are based on management’s estimates 
of the short and long term prospects for the industry and previous 
experience. the growth rate beyond five years is assumed to be 3% per 
annum.

the calculation of value in use for the CgUs is most sensitive to the following 
assumptions:

•	

•	

•	

	growth	rates	used	in	years	1	to	5;

	change	in	discount	rates;	and

	long	term	growth	rate.

goodwill is not impaired at reporting date and there are no known probable 
changes in estimates that would lead to an impairment. the business 
segments form the basis of the CgUs.

Consolidated

2012 
$’M 

2011 
$’M

11. non‑CURRent assets – deFeRRed taX assets

the balance comprises differences attributable to:

Allowance for doubtful debts 

employee benefits provisions 

Warranty provisions 

Project provisions 

other provisions 

Fixed assets 

Sundry accruals 

Recognized tax losses 

Unused foreign tax credits 

Unrealized foreign exchange losses 

Lease incentives 

other 

Deferred tax assets 

5.9 

56.1 

0.7 

5.0 

18.2 

9.8 

14.3 

2.2 

4.4 

4.4 

5.0 

6.6 

2.8

48.1

2.0

0.6

7.1

9.1

10.0

1.8

20.0

18.4

–

4.0

132.6 

123.9

Balance at the beginning of the financial year 

123.9 

108.9

Acquisition of controlled entities 

1.2 

(Charged)/credited to the statement of financial performance 

(4.2) 

Credited to equity 

Differences arising on translation of foreign operations 

6.7 

5.0 

–

26.5

2.6

(14.1)

Balance at the end of the financial year 

132.6 

123.9

68  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RECONCILIATIONS
Reconciliations of the carrying amounts of each class of current provision at the beginning and end of the current and previous financial years are set out below:

Carrying amount at 1 July 2011 

Provision from entities acquired 

Additional provisions 

Release of unused provision 

Amounts utilized 

Differences arising from translation of foreign operations 

Carrying amount at 30 June 2012 

Carrying amount at 1 July 2010 

Provision from entities acquired 

Additional provisions 

Release of unused provision 

Amounts utilized 

Differences arising from translation of foreign operations 

Carrying amount at 30 June 2011 

eMPLoYee 
BeNeFItS 
$’M 

215.8 

7.7 

238.8 

(3.0) 

(173.3) 

3.5 

289.5 

174.8 

15.3 

163.7 

(0.3) 

(118.3) 

(19.4) 

215.8 

DeFeRReD 
ReVeNUe 
AND PRoJeCt 
PRoVISIoNS 
$’M 

89.3 

0.0 

149.6 

(2.6) 

(70.1) 

(2.5) 

163.7 

76.1 

1.2 

53.0 

– 

(31.6) 

(9.4) 

89.3 

Consolidated

INSURANCe 
$’M 

WARRANtIeS 
$’M 

DeFeRReD 
CoNSIDeRAtIoN 
$’M 

20.7 

0.0 

3.1 

(2.9) 

(2.8) 

1.1 

19.2 

28.6 

– 

0.7 

(3.3) 

(0.5) 

(4.8) 

15.0 

– 

8.2 

(5.4) 

(4.4) 

0.4 

13.8 

16.2 

– 

8.2 

(6.3) 

(1.2) 

(1.9) 

20.7 

15.0 

10.7 

0.0 

– 

0.0 

(10.7) 

– 

– 

10.7 

– 

1.6 

(0.1) 

(0.9) 

(0.6) 

10.7 

otheR 
$’M

7.8

–

8.6

–

(2.7)

(0.3)

13.4

9.6

1.9

4.5

(0.3)

(6.4)

(1.5)

7.8

Consolidated

2012 
$’M 

2011 
$’M

15. non‑CURRent liaBilities – inteRest BeaRinG loans 
and BoRRoWinGs

Notes payable 

Secured bank loan 

Unsecured bank loans 

Capitalized borrowing costs 

658.9 

17.4 

59.8 

(3.0) 

617.2

18.9

–

(4.3)

733.1 

631.8

NOTES PAYABLE
Unsecured notes payable were issued in the United States private debt 
capital market in May 2007, April 2008 and March 2011.

the issue in March 2011 comprised US$175.0 million maturing in March 2021 
with a fixed coupon of 5.56% per annum, US$22.0 million maturing in March 
2018 with a fixed coupon of 4.86% per annum and US$10.0 million maturing 
in 2016 with a fixed coupon of 4.16% per annum.

the issue in April 2008 comprised US$144.5 million maturing in April 2018 
with a fixed coupon of 6.5% per annum.

the issue in May 2007 comprised US$140.5 million maturing in May 2014 
with a fixed coupon of 5.61% per annum and US$169.5 million maturing in 
May 2017 with a fixed coupon of 5.75% per annum. US$40.0 million matured 
in May 2012.

In accordance with the group’s financial risk management policy, cross 
currency swaps have been entered into, swapping US$296.5 million of notes 
payable into C$294.4 million. this represents 84.4% of the notes issued in 
2008 and 2011.

SECURED BANK LOAN
The	secured	bank	loan	of	$18.8	million	(current:	$1.4	million;	non‑current:	
$17.4 million) is a floating facility with an Interest Rate Swap. this bank loan 
is secured by the assets of exmouth Power Station Pty Limited which have a 
carrying value of $33.7 million. the terms of the loan facility preclude the 
assets from being used as a security for other debt within the group. the 
loan facility requires the assets to be insured.

UNSECURED BANK LOANS
Unsecured bank loans are floating interest rate debt facilities. these facilities, 
denominated in various currencies, are subject to negative pledge 
arrangements which require the group to comply with certain minimum 
financial requirements.

Consolidated

2012 
$’M 

2011 
$’M

16. non‑CURRent liaBilities – deFeRRed taX liaBilities

the balance comprises temporary differences attributable to:

Amounts recognized in the statement of financial performance:

Identifiable intangible assets and goodwill 

Unbilled contract revenue 

Fixed assets 

Unrealized foreign exchange gains 

Prepayments 

other 

Amounts recognized directly in equity:

other 

Deferred tax liabilities 

Balance at the beginning of the financial year 

Acquisition of controlled entities 

Charged to the statement of financial performance 

Charged to equity 

Differences arising on translation of foreign operations 

42.9 

53.3 

7.2 

3.7 

0.6 

0.5 

47.1

31.1

7.0

6.4

0.7

6.7

108.2 

99.0

4.4 

112.6 

99.1 

0.0 

8.3 

4.4 

0.8 

0.1

99.1

95.8

3.9

10.0

0.1

(10.7)

99.1

Balance at the end of the financial year 

112.6 

WorleyParsons Annual Report 2012  69

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

17. non‑CURRent liaBilities – PRoVisions

employee benefits 

Warranties 

Deferred consideration 

other 

Consolidated

2012 
$’M 

2011 
$’M

37.9 

0.7 

12.2 

15.5 

66.3 

28.4

–

12.2

16.5

57.1

NATURE AND TIMING OF PROVISIONS
employee benefits: Refer note 2(C) for the relevant accounting policy and 
a discussion of the significant estimation and assumptions applied in the 
measurement of this provision.

Deferred revenue and project provisions: the group at times recovers 
payment for services prior to revenue being recognized in the financial 
statements. It is expected that this revenue will be earned within two years 
of the balance date.

Warranties: Provision is made for the estimated liability on all products and 
services under warranty at balance date. It is expected that these costs will 
be incurred within two years of the balance date.

Deferred consideration: Where settlement of any part of the consideration for 
a business combination is deferred, the amounts payable in the future are 
discounted to their present value as at the date of exchange. the discount 
rate used is the group’s incremental borrowing rate, being the rate at which a 
similar borrowing could be obtained from an independent financier under 
comparable terms and conditions.

RECONCILIATIONS
Reconciliations of the carrying amounts of each class of non‑current provision 
at the beginning and end of the current and previous financial years are set 
out below:

Consolidated

eMPLoYee 
BeNeFItS  WARRANtIeS 
$’M 

$’M 

DeFeRReD 
CoNSIDeRAtIoN 
$’M 

otheR 
$’M

Carrying amount at 1 July 2011 

28.4 

Provision from entities acquired 

Additional provisions 

Release of unused provision 

Amounts utilized 

– 

15.8 

(3.8) 

(3.4) 

– 

– 

0.7 

– 

– 

Differences arising from translation  
of foreign operations 

0.9 

0.0 

12.2 

16.5

– 

– 

– 

– 

– 

–

4.6

(5.0)

–

(0.6)

Carrying amount at  
30 June 2012 

Carrying amount at 1 July 2010 

Provision from entities acquired 

Additional provisions 

Release of unused provision 

Amounts utilized 

Differences arising from translation  
of foreign operations 

Carrying amount at  
30 June 2011 

37.9 

9.6 

14.7 

6.6 

– 

(2.4) 

(0.1) 

28.4 

0.7 

12.2 

15.5

– 

– 

– 

– 

– 

– 

– 

– 

– 

3.8

–

12.2 

14.2

– 

– 

– 

–

(0.7)

(0.8)

12.2 

16.5

70  WorleyParsons Annual Report 2012

Consolidated

2012 

2011

NUMBeR oF 
ShAReS 

$’M 

NUMBeR oF 
ShAReS 

$’M

18. issUed CaPital

ordinary shares, fully paid1,2  245,735,305 

1,221.3  245,699,306 

1,219.6

Special voting share 

1 

– 

1 

–

245,735,306  1,221.3  245,699,307  1,219.6

1 

2 

 Included in ordinary shares are 3,847,859 (2011: 4,295,003) exchangeable shares. 
the issuance of the exchangeable shares and the attached special voting share replicate 
the economic effect of issuing ordinary shares in the Company. Accordingly, for accounting 
purposes, exchangeable shares are treated in the same single class of issued capital 
as ordinary shares. In addition, the Australian Securities exchange (ASX) treats these 
exchangeable shares to have been converted into ordinary shares of the Company at the 
time of their issue for the purposes of the ASX Listing Rules.
 the WorleyParsons Limited Plans trust holds 267,173 (2011: 267,173) shares in the 
Company, which has been consolidated and eliminated in accordance with the accounting 
standards.

(A) MOVEMENTS IN SHARES

Balance at the beginning  
of the financial year 

ordinary shares issued on  
redemption of  
exchangeable shares 

exchangeable shares  
exchanged for ordinary  
shares 

Issuance of shares upon 
exercise of performance 
rights 

2012 

2011

NUMBeR oF 
ShAReS 

$’M 

NUMBeR oF 
ShAReS 

$’M

245,699,307 

1,219.6  245,425,980 

1,208.3

447,144 

12.0 

1,866,366 

50.0

(447,144) 

(12.0) 

(1,866,366) 

(50.0)

35,999 

1.7 

273,327 

11.3

245,735,306  1,221.3  245,699,307  1,219.6

(B) TERMS AND CONDITIONS OF ISSUED CAPITAL
Ordinary shares
ordinary shares have the right to receive dividends as declared and, in the 
event of the winding up of the Company, to participate in the proceeds from 
the sale of all surplus assets in proportion to the number of and amounts paid 
up on shares held. ordinary shares entitle their holder to one vote, either in 
person or by proxy, at a meeting of the Company.

Exchangeable shares
the exchangeable shares were issued by WorleyParsons Canada SPV 
Limited as part of the consideration for the acquisition of the Colt group. 
exchangeable shares may be exchanged into ordinary shares of the Company 
on a one‑for‑one basis (subject to adjustments) at any time by the 
exchangeable shareholders.

exchangeable shares have the right to receive the same cash dividends or 
cash distributions as declared on the ordinary shares into which they are 
convertible. In the event of the winding up of the Company, the exchangeable 
shares would convert to ordinary shares, which would participate in the 
proceeds from the sale of all surplus assets pro‑rata with other ordinary 
shares.

the exchangeable shares, through a voting trust which holds a special voting 
share in the Company, entitle their holders to vote at the Company’s general 
meetings as though they hold ordinary shares. During the financial year 
ended 30 June 2012, 447,144 (2011: 1,866,366) exchangeable shares 
were exchanged.

Special voting share
the special voting share was issued to Computershare trust Company of 
Canada Limited (trustee) as part of the consideration for the acquisition of 
the Colt group. the special voting share does not have the right to receive 
dividends as declared, and in the event of the winding up of the Company 
is unable to participate in the proceeds from the sale of all surplus assets. 
the special voting share has a right to vote together as one class of share 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
with the holders of ordinary shares in the circumstances in which 
shareholders have a right to vote, subject to the Company’s Constitution 
and applicable law. the trustee must vote in the manner instructed by an 
exchangeable shareholder in respect of the number of votes that would 
attach to the ordinary shares to be received by that exchangeable 
shareholder on exchange of its exchangeable shares. the special voting share 
has an aggregate number of votes equal to the number of votes attached to 
ordinary shares into which the exchangeable shares are retracted or 
redeemed.

(C) PERFORMANCE RIGHTS
the policy in respect of performance rights is outlined in note 2(C).

nUmBeR oF 
PeRFoRmanCe RiGhts

2012 

2011

Balance at the beginning of the financial year 

3,298,344  2,676,556

Rights granted 

Rights exercised 

Rights lapsed or expired 

993,730  1,446,979

(35,999) 

(273,327)

(634,616) 

(551,864)

Balance at the end of the financial year 

3,621,459  3,298,344

exercisable at the end of the financial year 

3,106 

5,347

Weighted average exercise price 

$nil 

$nil

the outstanding balance as at 30 June 2012 is represented by:

•	

•	

•	

•	

•	

•	

	961,361	performance	rights,	vesting	on	30	September	2014	and	expiring	
on	17	October	2018;

	1,315,196	performance	rights,	vesting	on	30	September	2013	and	
expiring	on	15	October	2017;

	852,940	performance	rights,	vesting	on	30	September	2012	and	expiring	
on	30	September	2016;

	488,856	performance	rights,	vesting	on	30	September	2012	and	expiring	
on	30	September	2015;

	2,255	performance	rights,	vested	on	30	September	2011	and	expiring	
on	2	October	2014;	and

	851	performance	rights,	vested	on	30	September	2009	and	expiring	on	
1 February 2014.

the performance rights are exercisable upon meeting the conditions set out 
in note 33(B).

Consolidated

2012 
$’M 

2011 
$’M

Consolidated

2012 
$’M 

2011 
$’M

(B) HEDGE RESERVE
the hedge reserve is used to record gains or losses on hedging instruments 
used in the cash flow hedges that are recognized directly in equity, as 
described in note 2(e)(iii). Amounts are recognized in the statement of 
financial performance when the associated hedged transaction affects the 
profit and loss.

Balance at the beginning of the financial year 

Net (loss)/gain on foreign exchange hedges 

Income tax on net (loss)/gain on foreign exchange hedges 

Fair value gain/(loss) on mark to market of cross  
currency hedge 

Income tax on fair value (loss)/gain on mark to market of  
cross currency hedge 

(Loss)/gain on interest rate hedges net of tax 

Balance at the end of the financial year 

(3.1) 

(0.9) 

0.2 

(1.6)

0.5

(0.1)

11.6 

(6.1)

(8.5) 

(1.2) 

(1.9) 

4.0

0.2

(3.1)

the total amount recognized in the statement of financial performance was a 
loss of $0.6 million (2011: $0.4 million). this amount is included in other 
expenses.

(C) PERFORMANCE RIGHTS RESERVE
the performance rights reserve is used to recognize the fair value of 
performance rights issued but not vested.

Balance at the beginning of the financial year 

Performance rights expense 

23.9 

17.1 

22.7

14.5

Reversal of performance rights expense associated with  
rights which did not vest based on the earnings per  
share hurdles 

transfer to issued capital on purchase and issuance of  
shares to satisfy performance rights 

Balance at the end of the financial year 

– 

(2.0)

(1.7) 

39.3 

(11.3)

23.9

(D) ACQUISITION RESERVE
the acquisition reserve is used to record differences between the carrying 
value of non‑controlling interests before acquisition and the consideration 
paid upon acquisition of an additional shareholding, where the transaction 
does not result in a loss of control. the reserve is attributable to the equity of 
the Parent entity.

Balance at the beginning of the financial year 

(9.6) 

–

19. ReseRVes

Foreign currency translation reserve 

(295.5) 

(261.0)

Consideration paid in excess of carrying value of 
non‑controlling interests 

Balance at the end of the financial year 

hedge reserve 

Performance rights reserve 

Acquisition reserve 

(1.9) 

39.3 

(9.6) 

(3.1)

23.9

(9.6)

(267.7) 

(249.8)

(A) FOREIGN CURRENCY TRANSLATION RESERVE
the foreign currency translation reserve is used to record exchange 
differences arising from the translation of the financial statements of foreign 
controlled entities and associates, and the net investments hedged in their 
entities.

Balance at the beginning of the financial year 

(261.0) 

(93.4)

Foreign exchange movement on translation of foreign  
controlled entities and associates 

Net investments hedged 

Income tax on net investments hedged 

(24.9) 

(13.7) 

4.1 

(159.3)

(11.8)

3.5

Balance at the end of the financial year 

(295.5) 

(261.0)

– 

(9.6) 

(9.6)

(9.6)

Consolidated

2012 
$’M 

2011 
$’M

871.7 

694.1

353.2 

364.2

NoteS 

20. Retained PRoFits

Balance at the beginning of the  
financial year 

Profit attributable to members of  
WorleyParsons Limited 

Dividends paid 

22(B) 

(221.1) 

(186.6)

Balance at the end of the financial year 

1,003.8 

871.7

WorleyParsons Annual Report 2012  71

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

21. eaRninGs PeR shaRe

AttRIBUtABLe to MeMBeRS

Basic earnings per share (cents) 

Basic earnings per share (cents) excluding net  
acquisition gains 

Diluted earnings per share (cents) 

Diluted earnings per share (cents) excluding net  
acquisition gains 

Consolidated

2012 

2011

143.7 

148.3

140.6 

142.5 

121.5

147.2

139.5 

120.6

the following reflects the income and security data used in the calculation of 
basic and diluted earnings per share:

(A) RECONCILIATION OF EARNINGS USED IN CALCULATING EARNINGS 
PER SHARE

$’M 

$’M

Consolidated

2012 
$’M 

2011 
$’M

(B) DIVIDENDS PAID DURING THE FINANCIAL YEAR
Dividend in respect of the six months to 31 December 2011: 
40.0 cents per share (31.7 cents franked) 

Dividend in respect of the six months to 30 June 2011: 
50.0 cents per share (12.9 cents franked) 

Dividend in respect of the six months to 31 December 2010: 
36.0 cents per share (36.0 cents franked) 

Dividend in respect of the six months to 30 June 2010: 
40.0 cents per share (18.8 cents franked) 

98.3 

122.8 

– 

– 

–

–

88.6

98.0

221.1 

186.6

(C) IMPUTATION CREDIT BALANCE OF THE PARENT ENTITY
the amount of imputation credits available for future tax  
distributions is:

earnings used in calculating basic and diluted earnings  
per share 

353.2 

364.2

Imputation credits balance as at the end of the financial  
year at the corporate tax rate of 30% (2011: 30%) 

34.6 

26.1

Less: net gain on revaluation of investments previously  
accounted for as equity accounted associates (refer note 5) 

(7.6) 

(65.7)

Imputation credits arising from the payment of income  
tax provided in this financial report 

earnings used in calculating basic and diluted earnings per  
share excluding net acquisition gains 

345.6 

298.5

(B) WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR
Weighted average number of ordinary securities  
used in calculating basic earnings per share 

245,725,630  245,622,982

element of performance rights which are  
considered dilutive 

Adjusted weighted average number of ordinary  
securities used in calculating diluted earnings  
per share 

2,096,599 

1,848,051

Imputation credits available for distribution 

Imputation debits that will arise from the payment of  
the final dividend 

(1.7) 

32.9 

(12.6)

13.5

(32.9) 

(13.5)

Imputation credits available for future dividends 

– 

–

eNtItY 

  CoUNtRY oF 

INCoRPoRAtIoN 

2012 
% 

2011 
%

BeneFiCial  
inteRest held BY 
Consolidated entitY

247,822,229  247,471,033

23. inVestments in ContRolled entities

In accordance with the accounting standards, the group discloses only 
significant entities identified on the basis of materiality:

(A) WORLEYPARSONS LIMITED GROUP ACCOUNTS INCLUDE A 
CONSOLIDATION OF THE FOLLOWING ENTITIES:
Significant entities
Worley No 2 Pty Limited1 

Australia 

100 

WorleyParsons Canada Services Ltd2 

Canada   

WorleyParsons engineering Pty Limited1  Australia 

WorleyParsons europe Limited 

United Kingdom 

WorleyParsons Financial Services  
Pty Limited1 

WorleyParsons group Inc 

WorleyParsons International Inc 

Australia 

USA 

USA 

WorleyParsons oman engineering LLC 

oman 

WorleyParsons Services Pty Limited1 

Australia 

Acquired during the year
ARA WorleyParsons SA3 

Chile 

100 

100 

100 

100 

100 

100 

51 

100 

94 

100

100

100

100

100

100

100

51

100

–

1 

 entities subject to Australian Securities and Investments Commission Class order 98/1418 
relief.

2  Previously named WorleyParsons Canada Ltd.
3  Previously an equity accounted associate.

the weighted average number of converted, lapsed or cancelled potential 
ordinary shares used in calculating diluted earnings per share was 180,029 
(2011: 202,871).

Consolidated

2012 
$’M 

2011 
$’M

22. diVidends

(A) FINAL DIVIDEND PROPOSED
Dividend in respect of the six months to 30 June 2012:

51.0 cents per share (31.3 cents franked) 

125.3 

–

Dividend in respect of the six months to 30 June 2011:

50.0 cents per share (12.9 cents franked) 

– 

122.8

The	directors	have	resolved	to	pay	a	final	dividend	of	51.0	cents	per	share;	
partially franked at 61.3% (2011: 50.0 cents per share, partially franked at 
25.7%). Combined with the half year (interim) dividend, the Company will 
make total dividend payments of 91.0 cents per share for the financial year 
(2011: 86.0 cents per share). the dividend will be paid on 28 September 2012 
for shareholders on the register at the record date of 7 September 2012.

In accordance with AASB 137 Provisions, Contingent Liabilities and 
Contingent Assets, the aggregate amount of the proposed final dividend of 
$125.3 million is not recognized as a liability as at 30 June 2012.

72  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(B) PARENT ENTITY
WorleyParsons Limited Parent entity financial statements include investments 
in the following entities:

eNtItY 

  CoUNtRY oF 

INCoRPoRAtIoN 

2012 
$’M 

2011 
$’M

engineering Securities Pty Limited atf  
the Worley Limited trust 

WorleyParsons Canada Callco Ltd. 

WorleyParsons Canada holdings  
Pty Limited 

WorleyParsons Financial Services  
Pty Limited 

Australia 

Canada   

94.7 

220.8 

94.7

220.8

Australia 

197.9 

197.9

Australia 

440.1 

953.5 

440.1

953.5

the Parent entity’s summary financial information as required by the 
Corporations Act 2001 is as follows:

(C) CLOSED GROUP
Pursuant to Australian Securities and Investments Commission Class order 
98/1418, relief has been granted to Worley No 2 Pty Limited, WorleyParsons 
engineering Pty Limited, WorleyParsons Financial Services Pty Limited and 
WorleyParsons Services Pty Limited, from the Corporations Act 2001 
requirements for preparation, audit and lodgment of their financial reports. 
As a condition of the Class order, WorleyParsons Limited together with the 
parties noted entered into a Deed of Cross guarantee on 26 May 2003. 
the effect of the deed is that WorleyParsons Limited has guaranteed to 
pay any deficiency in the event of the winding up of the abovementioned 
controlled entities. the controlled entities have also given a similar guarantee 
in the event that WorleyParsons Limited is wound up. the statement of 
financial performance and statement of financial position of the entities 
which are parties to the Deed of Cross guarantee and the Worley Limited 
trust (Closed group) are as follows:

STATEMENT OF FINANCIAL PERFORMANCE

Profit before income tax expense 

Income tax expense 

Profit after income tax expense 

Profit attributable to members of WorleyParsons Limited 

Retained profits at the beginning of the financial year 

2012 
$’M 

2011 
$’M

STATEMENT OF FINANCIAL PERFORMANCE

Profit before income tax expense 

208.8 

304.0

Income tax expense 

(2.1) 

(0.5)

Profit after income tax expense 

206.7 

206.7 

202.6 

303.5

303.5

85.7

Profit attributable to members of WorleyParsons Limited 

Retained profits at the beginning of the financial year 

Dividends paid 

(217.2) 

(182.4)

Closed GRoUP

2012 
$’M 

2011 
$’M

277.8 

(57.9) 

219.9 

219.9 

309.2 

354.1

(46.6)

307.5

307.5

184.1

Dividends paid 

(221.1) 

(186.6)

Retained profits at the end of the financial year 

311.9 

309.2

Retained profits at the end of the financial year 

188.2 

202.6

STATEMENT OF FINANCIAL POSITION

STATEMENT OF COMPREHENSIVE INCOME

Profit after income tax expense 

total comprehensive income, net of tax 

STATEMENT OF FINANCIAL POSITION

Current assets 

total assets 

Current liabilities 

total liabilities 

Net assets 

Issued capital 

Performance rights reserve 

Retained profits 

total equity 

206.7 

206.7 

303.5

303.5

510.4 

492.8

1,464.0 

1,446.3

15.1 

15.1 

0.2

0.2

1,448.9 

1,446.1

1,221.3 

1,219.6

39.4 

188.2 

23.9

202.6

1,448.9 

1,446.1

Details in relation to parent company guarantees are disclosed in note 30.

ASSetS

Current assets

Cash and cash equivalents 

trade and other receivables 

other current assets 

total current assets 

Non‑current assets

Property, plant and equipment 

Intangible assets 

Deferred tax assets 

other non‑current assets 

total non‑current assets 

totAL ASSetS 

LIABILItIeS

Current liabilities

trade and other payables 

Provisions 

total current liabilities 

Non‑current liabilities

Interest bearing loans and borrowings 

Deferred tax liabilities 

Provisions 

total non‑current liabilities 

totAL LIABILItIeS 

Net ASSetS 

eQUItY

Issued capital 

Reserves 

Retained profits 

totAL eQUItY 

23.8 

6.1

1,262.2 

1,152.2

10.3 

0.3

1,296.3 

1,158.6

0.3 

64.9 

45.5 

895.6 

1,006.3 

0.3

64.9

33.4

875.7

974.3

2,302.6 

2,132.9

595.3 

14.2 

609.5 

57.8 

21.5 

24.4 

103.7 

713.2 

513.2

2.4

515.6

–

20.4

24.4

44.8

560.4

1,589.4 

1,572.5

1,221.3 

1,219.6

56.2 

311.9 

43.7

309.2

1,589.4 

1,572.5

WorleyParsons Annual Report 2012  73

 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

the group also acquired an additional 25% share in the following joint 
venture entities in Saudi Arabia in the prior year:

•	

•	

•	

	Petrocon	Arabia	Co	Limited;

	WorleyParsons	Arabia	Limited	Company;	and

	WorleyParsons	Engineering	Consultancies	Company.

As part of this acquisition the remaining 50% share was acquired in 
WorleyParsons Bahrain WLL.

oWneRshiP 
inteRest 
Consolidated 

CaRRYinG 
amoUnt 
Consolidated

2012 
% 

2011 
% 

2012 
$’M 

2011 
$’M

eNtItY 

PRINCIPAL ACtIVItY 

24. eQUitY aCCoUnted inVestments

(A) DETAILS OF EQUITY ACCOUNTED INVESTMENTS ARE AS FOLLOWS:
In accordance with the accounting standards, the group discloses only 
significant investments identified on the basis of materiality:

Significant investments
ARA WorleyParsons   Minerals, Metals & 
SA1 

Chemicals 

DeltaAfrik  
engineering Limited  hydrocarbons 

– 

50 

– 

15.1

49 

49 

19.2 

16.0

NANA  
WorleyParsons LLC 

Ranhill  
WorleyParsons  
Sdn Bhd 

Sakhneftegaz  
engineering2 

transfield Worley  
Limited 

transfield Worley  
Power Services  
Pty Ltd 

Other investments 

hydrocarbons 

50 

50 

7.9 

6.7

hydrocarbons 

49 

49 

28.6 

24.6

hydrocarbons 

49 

49 

2.8 

2.8

hydrocarbons 

50 

50 

8.1 

7.7

Power 

50 

50 

12.1 

13.0 

2.6

10.8

Acquired during the year
Cegertec  
WorleyParsons Inc3 

Minerals, Metals & 
Chemicals 

50 

– 

12.4 

–

104.1 

86.3

1  Acquired control during the financial year. Refer note 23.
2 

 Balance date is 31 December, which was the balance date when the interest/entity was 
acquired.

3  Acquired interest during the financial year.

Consolidated

2012 
$’M 

2011 
$’M

(B) CARRYING AMOUNT OF EQUITY ACCOUNTED INVESTMENTS
Carrying amount at the beginning of the financial year 

86.3 

Share of net profits of investments accounted for using  
the equity method 

Dividends declared by equity accounted investments 

Change in nature of investment and investment acquired 

Movement in foreign currency translation reserve of equity 
accounted investments 

27.6 

(18.5) 

7.1 

1.6 

Carrying amount at the end of the financial year 

104.1 

135.6

31.5

(31.5)

(33.0)

(16.3)

86.3

23. inVestments in ContRolled entities (continued)

(D) ACQUISITION OF CONTROLLED ENTITIES
effective 16 May 2012, WorleyParsons Limitada (Chile), a subsidiary of the 
Company, acquired an additional 44% share in ARA WorleyParsons SA and 
affiliated businesses. total cash consideration paid for this acquisition was 
$17.7 million.

the above acquisition’s contribution to the group’s reported after‑tax profit 
attributable to members of the Parent entity was $0.7 million, and the 
reported contribution to revenue was $10.3 million. had this acquisition taken 
place at 1 July 2011, the contribution to the group’s profit after income tax 
expense would have been $2.2 million and revenue would have been 
$64.3 million.

ARA 
WoRLeYPARSoNS SA 
ACQUISItIoN

ASSetS

Cash and cash equivalents 

trade receivables 

other receivables 

Property, plant and equipment 

Deferred tax assets 

other assets 

total assets 

LIABILItIeS

trade and other payables 

Interest bearing loans and borrowings 

Income tax payable 

Provisions 

Deferred tax liabilities 

total liabilities 

Net assets acquired 

goodwill arising on acquisition 

Adjustments to non‑controlling interests 

total consideration, excluding acquisition costs expensed 

Consideration:

Cash consideration 

Fair value of previously held equity accounted associate 

total consideration 

Net cash effect:

Cash consideration paid 

Cash included in net assets acquired 

Net cash outflow 

2.7

15.3

4.6

2.4

1.2

1.2

27.4

12.5

1.0

0.6

7.7

0.0

21.8

5.6

34.5

(3.2)

36.9

17.7

19.2

36.9

17.7

(2.7)

15.0

goodwill represents the value of the assembled workforce and any premium 
from synergies and future growth opportunities that cannot be recognized 
separately. except as indicated, the carrying value equals the fair value of the 
net assets acquired.

the fair values of the acquisition balances are provisional due to the 
complexity and timing of the acquisitions. the review of the assets and 
liabilities will continue for 12 months from acquisition date.

In the prior year, Beijing MaisonWorleyParsons engineering & technology Co 
Limited and Beijing MaisonParsons engineering & technology Co Limited 
were acquired for $18.9 million. In the same period, the group also acquired 
WorleyParsons SA (Proprietary) Limited and Kwezi V3 engineers (Pty) Limited 
for $2.4 million and $49.8 million respectively.

the group paid $11.2 million during the year in respect of acquisitions made 
in previous financial years.

74  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
JoINtLY CoNtRoLLeD oPeRAtIoNS AND ASSetS 

PRINCIPAL ACtIVItY 

oWneRshiP 
inteRest 
Consolidated

2012 
% 

2011 
%

25. inteRests in JointlY ContRolled oPeRations and assets

In accordance with the accounting standards, the group discloses only 
significant jointly controlled operations and assets identified on the basis 
of materiality:

WORLEYPARSONS LIMITED GROUP ACCOUNTS INCLUDE A PROPORTIONATE 
CONSOLIDATION OF THE FOLLOWING ENTITIES:

Significant jointly controlled operation and asset
transfield Worley Services Joint Venture 

hydrocarbons 

50 

50

Jointly controlled operations and assets established during the year
Consortium Pt Rekayasa Industri – Pt  
WorleyParsons Indonesia 

hydrocarbons 

50 

–

the consolidated entity’s interests in the assets and liabilities employed in 
the jointly controlled operations and assets are included in the statement of 
financial position under the following classifications:

Consolidated

2012 
$’M 

2011 
$’M

(C) NET PROFITS ATTRIBUTABLE TO EQUITY ACCOUNTED INVESTMENTS
Profits before income tax expense 

40.7 

43.8

Income tax expense 

Net profits of equity accounted investments 

(13.1) 

27.6 

(12.3)

31.5

(D) REVENUE ATTRIBUTABLE TO EQUITY ACCOUNTED INVESTMENTS
Share of revenue from equity accounted investments 

665.0 

718.9

(E) RESERVES ATTRIBUTABLE TO EQUITY ACCOUNTED INVESTMENTS
FoReIgN CURReNCY tRANSLAtIoN ReSeRVe

Balance at the beginning of the financial year 

effect of decrease in reserve 

(24.9) 

1.6 

(8.6)

(16.3)

Balance at the end of the financial year 

(23.3) 

(24.9)

(F) RETAINED PROFITS ATTRIBUTABLE TO EQUITY ACCOUNTED 
INVESTMENTS
Balance at the beginning of the financial year 

106.3 

Share of net profits of investments accounted for using  
the equity method 

Dividends declared 

27.6 

(18.5) 

106.3

31.5

(31.5)

Balance at the end of the financial year 

115.4 

106.3

(G) SHARE OF EQUITY ACCOUNTED INVESTMENTS’ CONTINGENT LIABILITIES
18.4
Performance related guarantees issued 

12.4 

(H) SHARE OF EQUITY ACCOUNTED INVESTMENTS’ EXPENDITURE 
COMMITMENTS
operating lease commitments 

6.7 

ASSetS

Current assets

Cash and cash equivalents 

trade and other receivables 

other financial assets 

Total current assets 

12.4

Non‑current assets

(I) SUMMARY OF FINANCIAL POSITION OF EQUITY ACCOUNTED INVESTMENTS
the consolidated entity’s share of aggregate assets and liabilities of equity 
accounted investments is:

Current assets 

Non‑current assets 

Current liabilities 

Non‑current liabilities 

Net assets 

goodwill 

189.7 

38.1 

(109.7) 

(21.5) 

96.6 

7.5 

Carrying amount at the end of the financial year 

104.1 

152.8

22.4

(82.7)

(12.3)

80.2

6.1

86.3

Property, plant and equipment 

Total non‑current assets 

TOTAL ASSETS 

LIABILItIeS

Current liabilities

trade and other payables 

Provisions 

Total current liabilities 

Non‑current liabilities

other non‑current liabilities 

Total non‑current liabilities 

TOTAL LIABILITIES 

NET ASSETS 

Consolidated

2012 
$’M 

2011 
$’M

17.9 

102.3 

2.5 

122.7 

0.4 

0.4 

23.4

73.2

–

96.6

0.1

0.1

123.1 

96.7

90.4 

19.1 

109.5 

1.2 

1.2 

110.7 

12.4 

60.6

16.1

76.7

1.4

1.4

78.1

18.6

WorleyParsons Annual Report 2012  75

 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

Consolidated

2012 
$’M 

2011 
$’M

26. notes to the statement oF Cash FloWs

Reconciliation of profit after income tax expense to  
net cash inflow from operating activities:

Profit after income tax expense 

376.5 

382.4

27. FinanCe lease ReCeiVaBle

Current finance lease receivable 

Non‑current finance lease receivable 

Gross investment in lease receivable 

19.1 

83.9 

17.1 

4.3 

14.2

81.5

12.5

(11.8)

Present value of minimum lease payments:

Within one year 

Later than one year and not later than five years 

More than five years 

Present value of minimum lease payments 

(4.7) 

(2.1)

Gross investment in lease receivable 

Consolidated

2012 
$’M 

2011 
$’M

1.5 

28.5 

30.0 

1.5 

7.1 

21.4 

30.0 

30.0 

1.4

30.0

31.4

1.4

6.7

23.3

31.4

31.4

the finance lease receivable relates to the power supply contract held by the 
Company’s 100% subsidiary, exmouth Power Station Pty Limited, which is an 
arrangement that contains a lease.

28. PRoCURement

In certain situations, the group will enter into contracts with its customers 
which require the group to procure goods and services on behalf of the 
customer.

Where the risks and rewards associated with the procurement activities are 
assumed by the group, the revenues and expenses, and assets and liabilities 
are recognized on a gross basis in the statement of financial performance and 
statement of financial position.

the following procurement services revenues and expenses, and assets and 
liabilities have been recognized on a gross basis in the statement of financial 
performance and statement of financial position:

REVENUES AND EXPENSES¹

Procurement services revenue at margin 

Procurement cost at margin 

Procurement services revenue at nil margin 

Procurement cost at nil margin 

ASSETS AND LIABILITIES

Cash and cash equivalents 

trade and other receivables 

trade and other payables 

Consolidated

2012 
$’M 

2011 
$’M

216.3 

204.7

(198.4) 

(166.8)

696.2 

426.8

(696.2) 

(426.8)

42.9 

26.2 

(15.2) 

7.6

4.0

(6.8)

1  Revenue and expenses exclude procurement services revenue and expenses from associates.

NON‑CASH ITEMS

Depreciation 

Amortization 

Performance rights expense 

Doubtful debts expense/(credit) 

Share of associates’ net profits in excess of  
dividends received 

Net gain on revaluation of investments previously  
accounted for as equity accounted associates 

Net loss on foreign exchange 

other 

(7.6) 

5.6 

(0.3) 

(65.7)

4.8

1.2

Cash flow adjusted for non‑cash items 

493.9 

417.0

CHANGES IN ASSETS AND LIABILITIES ADJUSTED FOR  
EFFECTS OF PURCHASE OF CONTROLLED ENTITIES

Increase in trade and other receivables 

(401.4) 

(314.0)

Increase in inventories 

Increase in prepayments 

Increase in deferred tax assets 

Increase in trade and other payables 

Increase in billings in advance 

(Decrease)/increase in income tax payable 

Increase in deferred tax liabilities 

Increase in other provisions 

(0.1) 

(42.2) 

(2.8) 

234.3 

14.2 

(1.6) 

7.6 

135.6 

(0.4)

(24.2)

(14.9)

84.5

23.1

28.4

3.0

91.3

Net cash inflow from operating activities 

437.5 

293.8

76  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
29. Commitments FoR eXPenditURe

(A) OPERATING LEASES
Commitments for minimum lease payments in relation to  
non‑cancellable operating leases are payable as follows:

Within one year 

Later than one year and not later than five years 

Later than five years 

Commitments not recognized in the  
financial statements 

(B) OPERATING EXPENDITURE COMMITMENTS
estimated commitments for operating expenditure in  
relation to software and other items are payable as follows:

Consolidated

2012 
$’M 

2011 
$’M

179.3 

458.2 

62.6 

165.5

441.1

96.2

Consolidated

2012 
$ 

2011 
$

31. RemUneRation oF aUditoRs

Remuneration for audit or review of the financial  
reports of the Parent entity or any other entity in  
the group:

Auditor of the Parent entity – ernst & Young 

2,539,297  2,619,406

other auditors of controlled entities 

189,713 

177,700

700.1 

702.8

tax related services 

Amounts received for other services from ernst & Young:

Acquisition related assurance services 

other non‑audit services 

2,729,010  2,797,106

211,967 

237,659

116,000 

–

298,034 

317,773

626,001 

555,432

3,355,011  3,352,538

Within one year 

Later than one year and not later than five years 

Commitments not recognized in the  
financial statements 

20.1 

22.3 

39.1

29.5

42.4 

68.6

the Parent entity has no commitments for expenditure.

30. ContinGent liaBilities

(A) GUARANTEES
the Company is, in the normal course of business, required to provide 
guarantees and letters of credit on behalf of controlled entities, associates 
and related parties in respect of their contractual performance related 
obligations.

these guarantees and letters of credit only give rise to a liability where the 
entity concerned fails to perform its contractual obligation.

Consolidated 

PaRent entitY

2012 
$’M 

2011 
$’M 

2012 
$’M 

2011 
$’M

Bank guarantees outstanding  
at balance date in respect of  
contractual performance 

Commitments not recognized  
in the financial statements 

522.3 

413.2 

346.2 

258.7

522.3 

413.2 

346.2 

258.7

(B) ASBESTOS
Certain subsidiaries acquired as part of the Parsons acquisition (Parsons e&C), 
have been, and continue to be, the subject of litigation relating to the 
handling of, or exposure to, asbestos. Due to the continuation and extension 
of the existing indemnity and asbestos claims administration arrangements 
between Parsons Corporation and Parsons e&C Corporation, the group is not 
aware of any circumstance that is likely to lead to a residual contingent 
exposure for the group in respect of asbestos liabilities.

(C) ACTUAL AND PENDING CLAIMS
the Company is subject to various actual and pending claims arising in 
the normal course of business. the Company has regular claims reviews, 
including updates from corporate and outside counsel, to assess the need for 
accounting recognition or disclosure of these contingencies. the directors 
are currently of the view that the consolidated entity is adequately provided 
in respect of these claims in accordance with the accounting policy set out in 
note 2(P).

WorleyParsons Annual Report 2012  77

 
 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

32. Related PaRties

33. KeY manaGement PeRsonnel disClosURes

(A) DIRECTORS
the names of persons who were directors of the Company at any time during 
the financial year were as follows:

Ron McNeilly (Chairman)

Larry Benke

erich Fraunschiel

John M green

John grill (Chief executive officer)

eric gwee – retired as a director on 25 october 2011

William hall (alternate director) – retired as an alternate director on 
25 october 2011

Christopher haynes, oBe – appointed as a director on 1 January 2012.

Catherine Livingstone, Ao

JB McNeil

Wang Xiao Bin – appointed as a director on 1 December 2011

(B) OTHER RELATED PARTIES

Consolidated

2012 
$’M 

2011 
$’M

Aggregate amounts included in the determination of profit  
before income tax expense that resulted from transactions  
with each class of other related parties were as follows:

Dividend revenue from associates 

18.5 

31.5

Aggregate amounts brought to account in relation to other  
transactions with each class of other related parties:

Loans advanced to:

Associates and related parties 

Loan repayments from:

Associates and related parties 

4.4 

3.4 

9.0

1.7

Aggregate amounts, receivable from, and payable to, each  
class of other related parties at balance date were as follows:

Current receivables

(A) PARTICULARS OF KEY MANAGEMENT PERSONNEL (KMP)  
INTERESTS IN SHARES
Particulars of KMP’s beneficial interest in shares of the Company as at 30 June 
2012 are as follows:

nUmBeR oF shaRes held in WoRleYPaRsons limited

BALANCe At 
1 JULY 2011 

ChANge IN 
StAtUS2 

otheR 
tRANSACtIoNS 

BALANCe At 
30 JUNe 2012

NoN‑eXeCUtIVe DIReCtoRS

Ron McNeilly 

401,064 

Larry Benke1 

1,180,195 

erich Fraunschiel 

168,755 

John M green 

891,869 

– 

– 

– 

– 

eric gwee2 

Christopher  
haynes, oBe 

Catherine  
Livingstone, Ao 

JB McNeil 

Wang Xiao Bin 

36,802 

(36,802) 

– 

13,000 

6,500 

– 

– 

– 

– 

– 

– 

401,064

(50,000) 

1,130,195

– 

– 

– 

– 

– 

3,800 

4,000 

168,755

891,869

–

–

13,000

10,300

4,000

Sub‑total 

2,698,185 

(36,802) 

(42,200) 

2,619,183

eXeCUtIVe DIReCtoRS

John grill 

25,329,759 

– 

William hall2 

49,800 

(49,800) 

Sub‑total 

25,379,559 

(49,800) 

otheR

Barry Bloch 

Stuart Bradie 

Iain Ross 

David Steele 

Andrew Wood 

– 

50,977 

490,397 

107,379 

804,583 

Sub‑total 

1,453,336 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

25,329,759

–

25,329,759

–

50,977

490,397

107,379

804,583

1,453,336

Associates and related parties 

71.9 

31.4

Grand total 

29,531,080 

(86,602) 

(42,200)  29,402,278

Current payables

Associates and related parties 

10.2 

7.5

2  Messrs gwee and hall retired as directors on 25 october 2011.

1 

 Mr Benke received exchangeable shares as part of the Colt group consideration upon 
acquisition in 2007.

Related entities provide specific advisory services to controlled entities in the 
normal course of business. these transactions are made on normal terms and 
conditions and at market rates.

(C) CONTROLLING ENTITIES
WorleyParsons Limited is the ultimate Australian parent company.

78  WorleyParsons Annual Report 2012

 
 
 
 
 
 
– 

(2,715) 

7,812

AVeRAge CoMPoUND gRoWth IN ePS oVeR the  
PeRFoRMANCe PeRIoD 

PeRCeNtAge oF RIghtS thAt MAY Be eXeRCISeD 
IF the ePS hURDLe IS Met

(B) PARTICULARS OF KMP PERFORMANCE RIGHTS
Particulars of KMP’s equity settled performance rights granted as at 30 June 
2012 are as follows:

nUmBeR oF PeRFoRmanCe RiGhts oVeR shaRes in WoRleYPaRsons limited

BALANCe At 
1 JULY 2011 

gRANteD 

eXeRCISeD 

ChANge IN 
StAtUS1 

LAPSeD 

BALANCe 
At 
30 JUNe 
2012

eXeCUtIVe AND NoN‑eXeCUtIVe DIReCtoRS

John grill2 

William hall 

Larry Benke3 

158,060 

67,639 

60,468 

10,527 

– 

– 

Sub‑total 

229,055 

67,639 

gRoUP MANAgINg DIReCtoRS

Barry Bloch 

– 

10,231 

Stuart Bradie 

63,427 

21,495 

Iain Ross 

61,474 

19,922 

David Steele 

35,604 

21,315 

Andrew Wood 

59,325 

23,702 

Sub‑total 

219,830 

96,665 

Grand total 

448,885 

164,304 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(17,326)  208,373

(53,897) 

(6,571) 

–

(53,897) 

(26,612)  216,185

– 

– 

– 

– 

– 

– 

– 

10,231

(6,276)  78,646

(6,333)  75,063

(3,523)  53,396

(6,115)  76,912

(22,247)  294,248

(53,897) 

(48,859)  510,433

1  Mr hall retired as an alternate director on 25 october 2011.
2 

 Cash settled performance rights are granted to Mr grill as at 30 June 2012. No equity settled 
performance rights are granted to Mr grill as at 30 June 2012.
 Mr Benke was appointed as a non‑executive director effective 1 July 2010. Prior to this 
appointment, he received allocations of performance rights under the LtI plan. Upon his 
retirement as an executive, the Board exercised discretion to allow a pro‑rata proportion of 
his outstanding performance rights to remain in the plan.

3 

All performance rights vested during the financial year were exercised in full.

Long term incentive (LtI) grants are delivered to executive directors, other 
KMP and other executives as performance rights (rights). During the year, two 
different offers were made to KMP who are also executives and to other 
executive employees. the rights are issued under the WorleyParsons 
Performance Rights Plan and are settled in shares when vested (except rights 
granted to John grill as noted above which are settled in cash).

each right entitles the holder to one fully paid ordinary share in the Company 
at a nil exercise price (i.e. a zero exercise price option). the number of rights 
issued is based on the target LtI with reference to the underlying share price 
when issued. Rights vest and are automatically exercised after a three year 
period, subject to minimum performance hurdles being satisfied.

the measurement of performance is based on the following:

•	

•	

	Total	shareholder	return	(TSR)	relative	to	peer	group	(which	applies	to	
60%	of	potential	long	term	incentive	for	FY2012);	and

	Earnings	per	share	(EPS)	growth	(which	applies	to	40%	of	potential	long	
term incentive for FY2012).

For LtI grants made in FY2012, the peer comparison group comprises AeCoM, 
Aker Solutions, AMeC, Fluor Corporation, Foster Wheeler, Jacobs engineering 
group, KBR, SNC‑Lavalin, URS Corporation and Wood group.

the vesting schedule of the rights subject to the relative tSR hurdle is 
outlined below:

ReLAtIVe tSR PeRCeNtILe RANKINg 

Less than 50th percentile 

At 50th percentile 

PeRCeNtAge oF RIghtS thAt MAY Be eXeRCISeD 
IF the ReLAtIVe tSR hURDLe IS Met

0%

30%

greater than the 50th percentile but  
less than the 75th percentile 

Pro‑rated vesting between more than 
30% and less than 60%

At 75th percentile or greater 

 60% (i.e. maximum available under 
the plan)

the initial test date of the rights subject to the relative tSR hurdle is at the 
end of year three. At the end of year three, participants can either accept the 
vesting outcome achieved or elect to have their rights retested at the end of 
year four (in which case the same vesting schedule applies but the retest 
period covers the entire four year period from the date the rights were 
granted).

executives will only derive value from the ePS component of the grants made 
in FY2012 if the Company achieves average compound growth in ePS of at 
least 4% per annum above the increase in customer pricing index (CPI) over 
the three year performance period.

the vesting schedule of the rights subject to the ePS hurdle is as follows:

Less than 4% pa above the increase 
in CPI

0% 

4% pa above the increase in CPI 

20%

More than 4% pa above the increase  
in CPI but less than 8% pa above the  
increase in CPI

An additional 5% of rights will vest for 
each additional 1% pa plus CPI increase 

8% pa or greater above the increase 
in CPI 

40% (i.e. maximum available under 
the plan)

other executive employees were granted the rights vesting upon 
achievement of continuing employment conditions and achievement of a 
“meeting expectations performance” rating between 1 July 2011 and 30 June 
2014.

Where a participant leaves the group, the Board may exercise its discretion 
and allow a proportion of any unvested rights to remain in the plan, and 
subsequently vest and be exercised in the ordinary course, having regard to 
such factors as it determines relevant.

Weighted average remaining contractual life
the weighted average remaining contractual life for the rights outstanding as 
at 30 June 2012 is 1.3 years (2011: 1.4 years).

Weighted average fair value
the weighted average fair value of rights granted during the year was 
$17.69 (2011: $16.93).

Pricing model
the following table lists the inputs to the models used for the years ended 
30 June 2012 and 30 June 2011:

Dividend yield (%) 

expected volatility (%) 

Risk‑free interest rate (%) 

expected life of rights (years) 

Rights exercise price ($) 

PeRFoRMANCe 
RIghtS PLAN 
2012 – tSR 
 & ePS 

PeRFoRMANCe 
RIghtS PLAN 
2011 – tSR 
& ePS

3.49 

35 

3.23 

3 

– 

2.90

35

5.22

3

–

Weighted average share price at measurement date ($) 

27.46 

26.85

the expected volatility was determined based on the historical share price 
volatility of the Company. the resulting expected volatility therefore reflects 
the assumption that the historical volatility is indicative of future trends, 
which may not necessarily be the actual outcome.

(C) SUMMARY OF KMP REMUNERATION

Consolidated

2012 
$ 

2011 
$

Short term employee benefits 

11,017,826  9,907,371

Post‑employment benefits 

other long term benefits 

Share based payments 

Total compensation 

195,883 

288,213

59,826 

56,178

2,668,309  1,705,660

13,941,844  11,957,422

WorleyParsons Annual Report 2012  79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

34. seGment inFoRmation

(A) IDENTIFICATION OF REPORTABLE SEGMENTS
the group has identified its operating segments based on the internal reports 
that are reviewed and used by the Chief executive officer and the group 
Managing Directors (the chief operating decision makers) in assessing 
performance and in determining the allocation of resources. the operating 
segments identified by management are based on the customer sector 
groups: Hydrocarbons;	Power;	Minerals,	Metals	&	Chemicals;	and	Infrastructure	
& environment.

Discrete pre‑tax financial information about each of these customer sector 
groups is reported to the chief operating decision makers on a monthly basis.

the group’s operations are organized and managed separately according to 
the nature of the services they provide, with each segment serving different 
markets. the group provides engineering design, project services, and 
maintenance and reliability support services to a number of markets. 
the consolidated entity’s activities also include infrastructure developments 
within the Power sector.

(B) ACCOUNTING POLICIES AND INTER‑SEGMENT TRANSACTIONS
Segment revenues, expenses, assets and liabilities are those that are directly 
attributable to a segment and the relevant portion that can be allocated to 
the segment on a reasonable basis. Segment assets include all assets used by 
a segment and consist primarily of receivables and plant and equipment. 
Segment revenues, expenses and results include transactions between 

(D) OPERATING SEGMENTS

segments incurred in the ordinary course of business. these transactions 
are priced on an arm’s length basis and are eliminated on consolidation.

the accounting policies used by the group in reporting segments internally 
are the same as those contained in note 2.

the segment result includes the allocation of overhead that can be directly 
attributed to an individual business segment.

the following items and associated assets and liabilities are not allocated to 
segments as they are not considered part of the core operations of any 
segment:

•	

•	

•	

•	

•	

	income	tax	expense;

interest	and	tax	for	associates;

	amortization	of	intangible	assets;

	gains	and	losses	on	the	sale	or	revaluation	of	investments;

	certain	general	and	administration	expenditure	(performance	rights	and	
corporate	expenses);	and

•	

	net	borrowing	costs.

(C) MAJOR CUSTOMERS 
the group has a number of customers to which it provides services. the most 
significant customer accounts for 11.3% (2011: 10.2%) of external revenue 
within the hydrocarbons customer sector group. the next most significant 
customer accounts for less than 10% of external revenue.

hYDRoCARBoNS 

PoWeR 

MINeRALS, MetALS & CheMICALS 

INFRAStRUCtURe 
 & eNVIRoNMeNt 

totAL

2012 
$’M 

2011 
$’M 

2012 
$’M 

2011 
$’M 

2012 
$’M 

2011 
$’M 

2012 
$’M 

2011 
$’M 

2012 
$’M 

2011 
$’M

Revenue
Sales to external customers 
Procurement services revenue at margin 
other income 

4,728.7 
285.8 
0.6 

3,784.1 
258.3 
1.5 

524.1 
55.2 
2.0 

483.3 
27.8 
2.6 

892.5 
1.2 
1.7 

606.2 
37.0 
0.6 

840.3 
30.5 
0.0 

679.5 
21.0 
1.6 

6,985.6 
372.7 
4.3 

5,553.1
344.1
6.3

Total segment revenue1 

5,015.1 

4,043.9 

581.3 

513.7 

895.4 

643.8 

870.8 

702.1 

7,362.6 

5,903.5

Reconciliation of segment revenue to total revenue and other income per the statement of financial performance:
Segment revenue 
Procurement services revenue at nil margin 
Share of revenue from associates 
Net gain on revaluation of investments previously accounted for as equity accounted associates 
Interest income 

Total revenue and other income per the statement of financial performance 

7,362.6 
696.2 
(665.0) 
7.6 
7.0 

5,903.5
426.8
(718.9)
65.7
6.1

7,408.4 

5,683.2

Segment result2,3 
Segment margin 

586.5 
11.7% 

554.3 
13.7% 

59.9 
10.3% 

65.3 
12.7% 

131.4 
14.7% 

102.7 
16.0% 

115.3 
13.2% 

101.0 
14.4% 

893.1 
12.1% 

823.3
13.9%

Reconciliation of segment result to profit after income tax expense per the statement of financial performance:
Segment result 
global support costs³ 
Interest and tax for associates 
Amortization of acquired intangible assets 

eBIt excluding the net gain on revaluation of investments previously accounted for as equity accounted associates 
eBIt margin on aggregated revenue for the group, excluding the net gain on revaluation of investments previously accounted for as equity  
accounted associates 
Net gain on revaluation of investments previously accounted for as equity accounted associates 
Net borrowing costs 
Income tax expense 

Profit after income tax expense per the statement of financial performance 

893.1 
(317.5) 
(13.8) 
(31.5) 

823.3
(299.6)
(17.0)
(32.5)

530.3 

474.2

7.2% 
7.6 
(44.1) 
(117.3) 

8.0%
65.7
(41.5)
(116.0)

376.5 

382.4

Other segment information
Depreciation and amortization expense 
Share of net profits of associates accounted  
for using the equity method 
equity accounted associates 
Purchase of non‑current assets 

59.0 

57.9 

3.9 

7.9 

22.6 

16.7 

17.5 

13.2 

103.0 

95.7

22.6 
75.2 
49.6 

23.3 
66.4 
36.1 

0.9 
13.6 
4.8 

(0.2) 
(1.1) 
4.6 

3.0 
10.1 
28.0 

8.0 
16.2 
10.7 

1.1 
5.2 
17.9 

0.4 
4.8 
8.2 

27.6 
104.1 
100.3 

31.5
86.3
59.6

1 

2 
3 

 Segment revenue represents aggregated revenue, which is defined as statutory revenue and other income plus share of revenue from associates less procurement services revenue at nil margin, 
interest income and net gain on revaluation of investments previously accounted for as equity accounted associates.
 Segment result represents earnings before interest and income tax expense (eBIt) which is the key financial measure that is presented to the chief operating decision makers.
 Due to a change in presentation of global support costs in the internal reports presented to the chief operating decision makers, the prior year Segment result and global support costs have been 
restated to be comparable with the current year’s disclosure, as required by AASB 8 operating Segments. the impact of this change is an increase in global support costs from $70.8 million to 
$299.6 million for the financial year ended 30 June 2011.

80  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(E) GEOGRAPHIC SEGMENTS

35. CRedit RisK

Services revenue from external customers:1

Asia and China 

Australia east, Pacific and New Zealand 

Australia West 

Canada 

europe 

Latin America 

Middle east, North Africa and India 

Sub Saharan Africa 

2012 
$’M 

2011 
$’M

542.2 

787.8 

921.2 

606.7

549.6

612.9

1,832.1 

1,273.0

635.1 

207.8 

812.0 

162.9 

485.1

134.9

803.2

88.5

Non‑current assets by geographical location:2

Asia and China 

Australia east, Pacific and New Zealand 

Australia West 

Canada 

europe 

Latin America 

Middle east, North Africa and India 

Sub Saharan Africa 

96.3 

186.9 

85.1 

969.3 

87.3 

197.7 

6.6 

70.3 

56.1

170.6

82.6

992.8

85.6

171.5

13.5

77.7

United States of America and Caribbean 

1,488.4 

1,051.2

Total revenue from external customers 

7,389.5 

5,605.1

Cash and cash equivalents 

United States of America and Caribbean 

293.6 

278.3

Unbilled contract revenue 

Total non‑current assets 

1,993.1 

1,928.7

0‑30 days 

1 

 Revenue is attributed to the geographic location based on the location of the entity 
providing the services.

2  excludes derivative financial instruments and deferred tax assets.

Past due 31‑60 days 

Past due 61‑90 days 

Past due 91‑120 days 

gRoSS 
2012 
$’M 

782.2 

649.1 

115.5 

56.5 

29.5 

IMPAIRMeNt 
2012 
$’M 

– 

(7.3) 

(3.3) 

(0.4) 

(0.8) 

the financial assets of the group comprise cash and cash equivalents, trade 
and other receivables, and derivative financial instruments and off statement 
of financial position guarantees and letters of credit. the group’s exposure to 
credit risk arises from potential default of the counterparty, with a maximum 
exposure equal to the carrying amount of these instruments. exposure at 
balance date is addressed in each applicable note. Credit exposure of 
derivatives is considered to be any positive market value.

the carrying amount of the group’s financial assets represents the maximum 
credit exposure. the group’s maximum exposure to credit risk at the reporting 
date was:

trade receivables, unbilled contract revenue  
and retentions 

Amounts owing by associates and related parties 

Derivatives 

the ageing of the group’s trade receivables, unbilled contract revenue and 
retentions at the reporting date was:

CaRRYinG amoUnt 
Consolidated

2012 
$’M 

2011 
$’M

247.3 

171.2

1,725.9 

1,361.7

73.9 

16.6 

31.4

0.6

2,063.7 

1,564.9

gRoSS 
2011 
$’M 

573.2 

534.8 

113.9 

46.2 

34.3 

85.0 

IMPAIRMeNt 
2011 
$’M

–

(2.7)

(0.6)

(2.0)

(1.5)

(18.9)

(25.7)

More than 121 days 

118.0 

(13.1) 

1,750.8 

(24.9) 

1,387.4 

Based on historic default rates, the group believes that no impairment 
allowance is necessary in respect of receivables not past due or past due 
by up to 30 days other than for specifically identified accounts. the group’s 
typical payment terms are 30 days from date of invoice.

the allowance amounts in respect of trade receivables are used to record 
impairment losses unless the group is satisfied that no recovery of the 
amount	owing	is	possible;	at	that	point,	the	amount	is	considered	
irrecoverable and is written off against the financial asset directly.

Counterparties with receivables neither past due nor impaired are assessed as 
creditworthy.

WorleyParsons Annual Report 2012  81

 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

36. liQUiditY RisK

Liquidity risk is the risk that the group will not be able to meet its financial 
obligations as they will fall due. the group’s approach to managing liquidity 
is to ensure that it will always have sufficient liquidity to meet its liabilities 
when due, under both normal and stressed conditions, without incurring 
unacceptable losses or risking damage to the group’s reputation.

the group has unrestricted access at balance date to the following lines 
of credit:

Consolidated

2012 
$’M 

2011 
$’M

SECURED FACILITIES

total facilities available:

Loan facilities 

Facilities utilized at balance date:

Loan facilities 

Facilities available at balance date:

Loan facilities 

18.8 

18.8 

18.8 

18.8 

– 

– 

the maturity profile in respect of the group’s secured loan facilities is set 
out below:

Due within one year 

Due between one and four year(s) 

Due after four years 

1.4 

5.0 

12.4 

18.8 

20.2

20.2

20.2

20.2

–

–

1.3

4.7

14.2

20.2

UNSECURED FACILITIES

total facilities available:

Loan facilities 

overdraft facilities 

Bank guarantees and letters of credit 

Facilities utilized at balance date:

Loan facilities 

overdraft facilities 

Bank guarantees and letters of credit 

Facilities available at balance date:

Loan facilities 

overdraft facilities 

Bank guarantees and letters of credit 

Consolidated

2012 
$’M 

2011 
$’M

1,336.2 

1,185.5

89.6 

787.3 

71.6

681.7

2,213.1 

1,938.8

721.0 

– 

522.3 

654.5

5.1

413.2

1,243.3 

1,072.8

615.2 

89.6 

265.0 

531.0

66.5

268.5

969.8 

866.0

the maturity profile in respect of the group’s available unsecured loan and 
overdraft facilities is set out below:

Due within one year 

Due between one and four year(s) 

Due after four years 

137.5 

731.1 

557.2 

152.8

394.3

710.0

1,425.8 

1,257.1

the table below analyzes the group’s financial liabilities into relevant maturity groupings based on the remaining period from balance date to the contractual 
maturity date. As the amounts disclosed in the table are the contractual undiscounted cash flows, their balances will not necessarily agree with the amounts 
disclosed in the statement of financial position.

tRADe 
PAYABLeS 
$’M 

PAYABLeS to 
ASSoCIAteS AND 
ReLAteD PARtIeS 
$’M 

INteReSt BeARINg 
LoANS AND 
BoRRoWINgS 
$’M 

eXPeCteD FUtURe 
INteReSt 
PAYMeNtS 
$’M 

DeRIVAtIVeS 
$’M 

Consolidated

346.7 

10.2 

– 

– 

– 

– 

346.7 

10.2 

219.6 

– 

– 

219.6 

7.5 

– 

– 

7.5 

3.7 

214.6 

521.5 

739.8 

43.7 

135.7 

500.4 

679.8 

0.6 

20.2 

194.9 

215.7 

1.5 

24.3 

213.0 

238.8 

4.0 

0.0 

– 

4.0 

0.9 

– 

15.1 

16.0 

totAL 
FINANCIAL 
LIABILItIeS 
$’M

365.2

234.8

716.4

1,316.4

273.2

160.0

728.5

1,161.7

AS At 30 JUNe 2012

Due within one year 

Due between one and four year(s) 

Due after four years 

AS At 30 JUNe 2011

Due within one year 

Due between one and four year(s) 

Due after four years 

82  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37. CURRenCY RisK

the group operates internationally and is therefore subject to foreign currency risk.  In the ordinary course of business, the group structures its contracts to 
be in the functional currency of the country where the work is performed and cost is incurred. If group entities enter into transactions in currencies other than 
their respective functional currencies, in order to hedge the resulting foreign currency transaction risk, the group utilizes derivative financial instruments 
(e.g. forward exchange contracts and foreign currency options).

A number of the group controlled entities have a functional currency other than AUD. the exchange gains or losses on the net equity investment of foreign 
operations are reflected in the foreign currency translation reserve within Parent entity’s equity. Currency exposure arising from the net assets of the group’s 
foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies.

(A) FORWARD EXCHANGE CONTRACTS
the group is exposed to exchange rate transaction risk on foreign currency sales, purchases, and loans to and from related entities. the most significant 
exchange risk is US dollar receipts by Australian and non‑US entities. When required, hedging is undertaken through transactions entered into in the foreign 
exchange markets. Forward exchange contracts have been used for hedging purposes. Forward exchange contracts are generally accounted for as 
cash flow hedges.

At balance date, the details of outstanding contracts were:

WeiGhted aVeRaGe  
eXChanGe Rate 

2012 

2011 

amoUnt 
ReCeiVaBle/(PaYaBle) 

amoUnt 
ReCeiVaBle/(PaYaBle)

2012 
$’M 

2012 
$’M 

2011 
$’M 

2011 
$’M

Maturing in the next six months to 31 December 2012:

Buy AUD and Sell USD 

Buy BRL and Sell USD 

Buy CAD and Sell eUR 

Buy CAD and Sell KWD 

Buy CAD and Sell USD 

Buy CNY and Sell USD 

Buy gBP and Sell AUD 

Buy gBP and Sell SgD 

Buy gBP and Sell USD 

Buy hKD and Sell SgD 

Buy IDR and Sell USD 

Buy INR and Sell USD 

Buy JPY and Sell AUD 

Buy QAR and Sell ZAR 

Buy SgD and Sell AUD 

Buy SgD and Sell USD 

Buy USD and Sell eUR 

Buy USD and Sell ZAR 

Maturing in the next 6‑12 months to 30 June 2013:

Buy BRL and Sell USD 

Buy CAD and Sell USD 

Buy CNY and Sell USD 

Buy gBP and Sell USD 

Buy hKD and Sell SgD 

Buy SgD and Sell USD 

Buy USD and Sell eUR 

Maturing in the next 12‑18 months to 31 December 2013:

Buy BRL and Sell USD 

Buy gBP and Sell USD 

0.99 

1.94 

1.39 

3.61 

1.02 

6.33 

0.64 

0.51 

0.64 

6.10 

9,287.23 

50.73 

83.88 

0.45 

1.26 

1.27 

1.29 

0.12 

1.96 

1.03 

6.34 

0.64 

6.11 

1.27 

1.3 

1.98 

0.64 

– 

– 

– 

– 

– 

– 

– 

– 

1.49 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1.48 

– 

– 

– 

– 

– 

AUD 44.9 

USD (45.4) 

BRL 1.5 

CAD 0.9 

USD (0.8) 

eUR (0.6) 

CAD 19.0 

KWD (5.3) 

CAD 1.6 

CNY 46.8 

gBP 10.0 

gBP 0.2 

gBP 2.1 

hKD 20.8 

IDR 69,600 

INR 149.7 

JPY 7.7 

QAR 1.6 

USD (1.5) 

USD (7.4) 

AUD (15.5) 

SgD (0.4) 

USD (3.4) 

SgD (3.4) 

USD (7.5) 

USD (3.0) 

AUD (0.1) 

ZAR (3.6) 

SgD 14.4 

AUD (11.4) 

SgD 8.9 

USD 5.8 

USD 0.1 

BRL 2.4 

CAD 0.5 

CNY 16.5 

gBP 1.5 

hKD 5.6 

SgD 2.5 

USD 1.3 

USD (7.0) 

eUR (4.5) 

ZAR (1.1) 

USD (1.2) 

USD (0.5) 

USD (2.6) 

USD (2.4) 

SgD (0.9) 

USD (2.0) 

eUR (1.0) 

BRL 0.2 

gBP 0.7 

USD (0.1) 

USD (1.2) 

– 

– 

– 

– 

– 

– 

– 

– 

–

–

–

–

–

–

–

–

gBP 0.2 

USD (0.2)

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

–

–

–

–

–

–

–

–

–

–

–

–

gBP 0.1 

USD (0.2)

– 

– 

– 

– 

– 

–

–

–

–

–

As these contracts are hedging anticipated future receipts and sales to the extent that they satisfy hedge accounting criteria, any unrealized gains and losses 
on the contracts, together with the cost of the contracts, are deferred and will be recognized in the measurement of the underlying transaction provided the 
underlying transaction is still expected to occur as originally designated. Included in the amounts deferred are any gains and losses on hedging contracts 
terminated prior to maturity where the related hedged transaction is still expected to occur as designated.

the gains and losses deferred in the statement of financial position were:

effective hedge – unrealized gains 

effective hedge – unrealized losses 

Net unrealized gains/(losses), pre‑tax 

Consolidated

2012 
$’M 

0.6 

(1.6) 

(1.0) 

2011 
$’M

0.5

(0.6)

(0.1)

WorleyParsons Annual Report 2012  83

 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

37. CURRenCY RisK (continued)

(B) CROSS CURRENCY SWAPS
the group uses cross currency swaps to hedge its foreign currency interest rate risk, most with a maturity of greater than one year from the reporting date.

At balance date, the details of cross currency swaps were:

Contracts to buy USD and sell CAD:

Maturing 24 March 2016 

Maturing 24 March 2018 

Maturing 30 April 2018 

Maturing 24 March 2021 

the following gains and losses have been deferred at balance date:

Fair value gain/(loss) on cross currency hedge 

Foreign exchange (loss)/gain on hedge relationship 

Net unrealized gain/(loss) pre‑tax in hedge reserve 

WeiGhted aVeRaGe  
eXChanGe Rate 

2012 

2011 

amoUnt 
ReCeiVaBle/(PaYaBle) 

amoUnt 
ReCeiVaBle/(PaYaBle)

2012 
$’M 

2012 
$’M 

2011 
$’M 

2011 
$’M

0.99 

0.99 

1.00 

0.99 

0.99 

0.99 

1.00 

0.99 

USD 10.0 

USD 22.0 

CAD (9.9) 

CAD (21.7) 

USD 10.0 

USD 22.0 

CAD (9.9)

CAD (21.7)

USD 144.5 

CAD (144.5) 

USD 144.5 

CAD (144.5)

USD 120.0 

CAD (118.3) 

USD 120.0 

CAD (118.3)

Consolidated

2012 
$’M 

16.0 

(11.6) 

4.4 

2011 
$’M

(15.2)

8.2

(7.0)

(C) CONSOLIDATED FOREIGN CURRENCY RISK EXPOSURE
the group’s year‑end statement of financial position exposure to foreign currency risk was as follows, based on notional amounts. the following are financial 
assets and liabilities (unhedged amounts) in currencies other than the functional currencies of the entity in which they are recorded.

AS At 30 JUNe 2012 

Cash and cash equivalents 

trade receivables and unbilled contract revenue 

Derivative assets 

trade payables 

gross statement of financial position exposure 

AS At 30 JUNe 2011 

Cash and cash equivalents 

trade receivables and unbilled contract revenue 

Derivative assets 

trade payables 

gross statement of financial position exposure 

1  Represents in currency millions as indicated.

CAD1 

0.2 

0.3 

16.6 

(0.6) 

16.5 

CAD1 

1.1 

4.1 

– 

(1.3) 

3.9 

gBP1 

1.0 

1.9 

0.1 

(0.5) 

2.5 

gBP1 

1.3 

4.7 

– 

(2.1) 

3.9 

USD1 

otheR1

15.3 

52.7 

0.0 

(21.4) 

46.6 

USD1 

26.7 

94.2 

0.1 

(34.1) 

86.9 

5.0

51.5

0.0

(14.6)

41.9

otheR1

6.1

28.9

–

(8.1)

26.9

(D) CURRENCY SENSITIVITY ANALYSIS
A 10% weakening of the Australian dollar against the following currencies at 30 June 2012 would have increased/(decreased) equity and profit by the amounts 
shown below. this analysis assumes that all other variables, in particular interest rates, remain constant. the analysis is performed and shown on the same 
basis for 2011.

Consolidated

2012 

2011

eFFeCtS IN MILLIoNS oF AUD 

eQUItY 

PRoFIt 

eQUItY 

PRoFIt

CAD 

gBP 

USD 

other 

– 

– 

– 

– 

0.0 

0.3 

3.6 

2.9 

– 

– 

– 

– 

0.3

0.5

6.3

1.9

A 10% strengthening of the Australian dollar against the above currencies at 30 June 2012 would have had the equal but opposite effect on the above 
currencies to the amounts shown above, on the basis that all other variables remain constant.

the following significant exchange rates against AUD applied during the financial year:

CAD 

gBP 

USD 

84  WorleyParsons Annual Report 2012

aVeRaGe eXChanGe Rate 

RePoRtinG date 
sPot eXChanGe Rate

2012 

2011 

2012 

2011

1.0349 

0.6513 

1.0324 

0.9883 

0.6206 

0.9878 

1.0374 

0.6469 

1.0039 

1.0333

0.6679

1.0717

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
38. inteRest Rate RisK

Interest rate risk is the risk that changes in interest rates will affect the group’s income or the value of its holdings of financial instruments.

(A) INTEREST RATE RISK EXPOSURE
the group’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods are set out in the following table:

FIXeD INteReSt MAtURINg IN:

1 YeAR 
oR LeSS 
$’M 

1 to 
2 YeAR(S) 
$’M 

2 to 
3 YeARS 
$’M 

3 to 
4 YeARS 
$’M 

4 to  MoRe thAN 
5 YeARS 
$’M 

5 YeARS 
$’M 

NoN‑ 
INteReSt 
BeARINg 
$’M 

totAL 
$’M

WeIghteD 
AVeRAge 
INteReSt 
RAte 
% PA 

FLoAtINg 
INteReSt 
RAte 
$’M 

2.9 

247.3 

– 

– 

– 

3.0 

6.0 

– 

– 

– 

– 

– 

– 

– 

247.3 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

62.1 

1.4 

1.5 

1.7 

– 

– 

– 

– 

– 

– 

– 

– 

139.9 

– 

– 

– 

(18.4) 

43.7 

1.4 

2.8 

1.5 

142.9 

– 

– 

– 

– 

– 

1.8 

9.9 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

247.3

–  1,725.9  1,725.9

– 

– 

71.9 

16.6 

71.9

16.6

–  1,814.4  2,061.7

1.9 

10.5 

168.9 

340.2 

– 

– 

– 

– 

– 

– 

– 

– 

346.7 

10.2 

4.0 

– 

80.9

658.9

346.7

10.2

4.0

–

1.7 

1.9 

10.3 

13.4 

172.7 

361.0 

360.9  1,100.7

961.0

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

171.2

–  1,361.7  1,361.7

– 

– 

31.4 

0.6 

31.4

0.6

–  1,393.7  1,564.9

– 

– 

– 

– 

1.6 

3.3 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

AS At 30 JUNe 2012

FINANCIAL ASSETS

Cash and cash equivalents 

trade receivables, unbilled contract revenue and retentions 

Amounts owing by associates and related parties 

Derivatives 

total financial assets 

FINANCIAL LIABILITIES

Bank loans 

Notes payable 

trade payables 

Payables to associates and related parties 

Derivatives 

Interest rate swaps 

total financial liabilities 

Net financial assets 

AS At 30 JUNe 2011

FINANCIAL ASSETS

Cash and cash equivalents 

trade receivables, unbilled contract revenue and retentions 

Amounts owing by associates and related parties 

Derivatives 

total financial assets 

FINANCIAL LIABILITIES

Bank loans 

Notes payable 

trade payables 

Payables to associates and related parties 

Derivatives 

Interest rate swaps 

total financial liabilities 

Net financial assets 

2.4 

171.2 

– 

– 

– 

– 

– 

– 

171.2 

5.0 

5.7 

5.1 

37.3 

– 

– 

– 

– 

– 

– 

– 

(19.6) 

22.8 

1.3 

1.4 

1.6 

1.7 

– 

– 

– 

– 

1.3 

2.6 

– 

– 

– 

– 

131.1 

– 

– 

– 

1.4 

2.8 

1.5 

134.2 

– 

– 

– 

– 

1.6 

3.3 

1.8 

9.3 

12.4 

476.8 

– 

– 

– 

– 

– 

– 

1.7 

12.1 

– 

– 

219.6 

7.5 

16.0 

– 

25.3

654.5

219.6

7.5

16.0

–

12.8 

501.3 

243.1 

922.9

642.0

WorleyParsons Annual Report 2012  85

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
notes to the FinanCial statements For the financial year ended 30 June 2012

38. inteRest Rate RisK (continued)

39. FaiR ValUes

(B) INTEREST RATE SWAP CONTRACTS
exmouth Power Station Pty Limited, 100% owned by a wholly owned 
subsidiary of WorleyParsons Limited, built and operates the exmouth power 
station and has drawn down on a loan facility which currently has a floating 
interest rate. It is policy to protect part of the loan from exposure to 
increasing interest rates. Accordingly, the entity has entered into an interest 
rate swap contract under which it is obliged to receive interest at variable 
rates and to pay interest at fixed rates. the contract is settled on a net basis 
and the net amount receivable or payable at the reporting date is included in 
other receivables or payables.

the contract requires settlement of net interest receivable or payable six 
monthly. the settlement dates coincide with the dates on which interest is 
payable on the underlying debt.

Swaps currently in place cover approximately 97.5% (2011: 97.5%) of the 
loan principal outstanding and are timed to expire as each loan repayment 
falls due. the fixed interest rate is 5.89% per annum (2011: 5.89%).

At 30 June 2012, the notional principal amounts and periods of expiry of the 
interest rate swap contracts were as follows:

Less than one year 

Later than one year but not later than five years 

Later than five years 

Consolidated

2012 
$’M 

1.4 

6.7 

10.3 

18.4 

2011 
$’M

1.3

6.2

12.1

19.6

As these contracts are hedging anticipated future receipts and sales, any 
unrealized gains and losses on the contract, together with the cost of the 
contract, are deferred and will be recognized in the measurement of the 
underlying transactions provided the underlying transactions are still 
expected to occur as originally designated. Included in the amounts deferred 
are any gains and losses on hedging contracts terminated prior to maturity 
where the related hedging transaction is still expected to occur as 
designated. this contract has been accounted for as a cash flow hedge.

(C) CASH FLOW SENSITIVITY ANALYSIS FOR VARIABLE INTEREST BEARING 
FINANCIAL ASSETS AND LIABILITIES
A change of 100 basis points (BP) per annum in interest rates at the reporting 
date would have increased/(decreased) equity and profit by the amounts 
shown below. this analysis assumes that all other variables, in particular 
foreign currency rates, remain constant. the analysis is performed on the 
same basis for 2011.

eFFeCt IN MILLIoNS oF AUD 

2012

Variable rate instruments 

Interest rate swaps 

Cash and overdraft 

Cash flow sensitivity (net) 

2011

Variable rate instruments 

Interest rate swaps 

Cash and overdraft 

Cash flow sensitivity (net) 

eQUitY 

PRoFit

100BP 
INCReASe 

100BP 
DeCReASe 

100BP 
INCReASe 

100BP 
DeCReASe

– 

0.1 

– 

0.1 

– 

0.1 

– 

0.1 

– 

(0.1) 

– 

(0.1) 

– 

(0.1) 

– 

(0.1) 

0.4 

– 

1.6 

2.0 

0.1 

– 

1.1 

1.2 

(0.4)

–

(1.6)

(2.0)

(0.1)

–

(1.1)

(1.2)

FAIR VALUES COMPARED TO CARRYING AMOUNTS
the fair values of financial assets and liabilities, together with the carrying 
amounts shown in the statement of financial position, are as follows:

2012 

2011

CARRYINg 
AMoUNt 
$’M 

FAIR VALUe 
$’M 

CARRYINg 
AMoUNt 
$’M 

FAIR VALUe 
$’M

Assets:

Cash and cash equivalents 

247.3 

247.3 

171.2 

171.2

trade receivables, unbilled  
contract revenue and  
retentions 

Amounts owing by associates  
and related parties 

Derivatives 

Liabilities:

Interest bearing loans and  
borrowings 

trade payables 

Payables to associates and  
related parties 

Derivatives 

1,725.9 

1,725.9 

1,361.7 

1,361.7

71.9 

16.6 

71.9 

16.6 

31.4 

0.6 

31.4

0.6

739.8 

346.7 

10.2 

4.0 

825.1 

346.7 

10.2 

4.0 

679.8 

219.6 

7.5 

16.0 

801.2

219.6

7.5

16.0

961.0 

875.7 

642.0 

520.6

the group classifies fair value measurement using the hierarchy that reflects 
the significance of the inputs used in making the measurements. Derivatives 
held by the group are fair valued using Level 2 measurements within the 
hierarchy. the fair value of the derivatives held by the group are estimated 
using inputs other than quoted prices that are observable for the asset or 
liability, either directly (as prices) or indirectly (derived from prices), such 
as forward interest and foreign currency rates. the group uses valuation 
techniques such as present value techniques, comparison to similar 
instruments for which market observable inputs exist and other relevant 
models used by market participants.

the basis for determining fair values is disclosed in note 2(X).

40. sUBseQUent eVents

In July 2012, unsecured notes payable were offered by WorleyParsons 
Financial Services Pty Limited, WorleyParsons Canadian Finance Sub Limited 
and WorleyParsons US Finance Sub Limited in the United States private debt 
capital market. Financial close and funding are expected to occur in 
September 2012 of US$300 million fixed coupon notes payable that will 
mature in five to ten years from date of financial close.

Since the end of the financial year, the directors have resolved to pay a 
dividend of 51.0 cents per fully paid ordinary share, including exchangeable 
shares, partially franked at 61.3% (2011: 50.0 cents per share, partially 
franked at 25.7%). In accordance with AASB 137 Provisions, Contingent 
Liabilities and Contingent Assets, the aggregate amount of the proposed final 
dividend of $125.3 million is not recognized as a liability as at 30 June 2012.

No other matter or circumstance has arisen since 30 June 2012 that has 
significantly affected, or may significantly affect:

(a)	

	the	consolidated	entity’s	operations	in	future	financial	years;

(b)	

	the	results	of	those	operations	in	future	financial	years;	or

(c) 

 the consolidated entity’s state of affairs in future financial years.

86  WorleyParsons Annual Report 2012

 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Declaration

In accordance with a resolution of the directors of WorleyParsons Limited, I state that:

In the opinion of the directors:

(a)  the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:

(i)	

	giving	a	true	and	fair	view	of	the	consolidated	entity’s	financial	position	as	at	30	June	2012	and	of	its	performance	for	the	year	ended	on	that	date;	
and

(ii) 

 complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001;

(b)	 the	financial	statements	and	notes	also	comply	with	International	Financial	Reporting	Standards	as	disclosed	in	note	2(A);

(c)	 there	are	reasonable	grounds	to	believe	that	the	consolidated	entity	will	be	able	to	pay	its	debts	as	and	when	they	become	due	and	payable;

(d) 

(e) 

 this declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations 
Act 2001	for	the	financial	year	ending	30	June	2012;	and

 as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed group identified in note 23 will be able to meet 
any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross guarantee.

on behalf of the Board

Ron mcneillY

Chairman

Sydney, 29 August 2012

WorleyParsons Annual Report 2012  87

 
	
 
Independent auditor’s report to the members of WorleyParsons Limited 

To the members of WorleyParsons Limited, 

We have audited the accompanying financial report of WorleyParsons Limited, which comprises the 
Independent auditor’s report to the members of WorleyParsons Limited 
consolidated statement of financial position as at 30 June 2012, the consolidated statement of financial 
performance, the consolidated statement of comprehensive income, the consolidated statement of 
changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising 
To the members of WorleyParsons Limited, 
a summary of significant accounting policies and other explanatory information, and the directors' 
declaration of the company and the consolidated entity comprising the company and the entities it 
We have audited the accompanying financial report of WorleyParsons Limited, which comprises the 
controlled at the year's end or from time to time during the financial year. 
consolidated statement of financial position as at 30 June 2012, the consolidated statement of financial 
performance, the consolidated statement of comprehensive income, the consolidated statement of 
Directors' responsibility for the financial report 
changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising 
a summary of significant accounting policies and other explanatory information, and the directors' 
The directors of the company are responsible for the preparation of the financial report that gives a true 
declaration of the company and the consolidated entity comprising the company and the entities it 
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for 
controlled at the year's end or from time to time during the financial year. 
such internal controls as the directors determine are necessary to enable the preparation of the financial 
report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also 
Directors' responsibility for the financial report 
state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the 
financial statements comply with International Financial Reporting Standards. 
The directors of the company are responsible for the preparation of the financial report that gives a true 
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for 
Auditor's responsibility 
such internal controls as the directors determine are necessary to enable the preparation of the financial 
report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also 
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our 
state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the 
audit in accordance with Australian Auditing Standards. Those standards require that we comply with 
financial statements comply with International Financial Reporting Standards. 
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain 
reasonable assurance about whether the financial report is free from material misstatement. 
Auditor's responsibility 
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our 
the financial report. The procedures selected depend on the auditor's judgment, including the assessment 
audit in accordance with Australian Auditing Standards. Those standards require that we comply with 
of the risks of material misstatement of the financial report, whether due to fraud or error. In making 
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain 
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and 
reasonable assurance about whether the financial report is free from material misstatement. 
fair presentation of the financial report in order to design audit procedures that are appropriate in the 
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's 
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and 
the financial report. The procedures selected depend on the auditor's judgment, including the assessment 
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall 
of the risks of material misstatement of the financial report, whether due to fraud or error. In making 
presentation of the financial report. 
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and 
fair presentation of the financial report in order to design audit procedures that are appropriate in the 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's 
our audit opinion. 
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and 
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall 
Independence 
presentation of the financial report. 

In conducting our audit we have complied with the independence requirements of the Corporations Act 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 
2001.  We have given to the directors of the company a written Auditor’s Independence Declaration, a 
our audit opinion. 
copy of which is included in the directors’ report.  
Independence 

In conducting our audit we have complied with the independence requirements of the Corporations Act 
2001.  We have given to the directors of the company a written Auditor’s Independence Declaration, a 
copy of which is included in the directors’ report.  

88  WorleyParsons Annual Report 2012

Liability limited by a scheme approved 
under Professional Standards Legislation 

Liability limited by a scheme approved 

under Professional Standards Legislation 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opinion 

In our opinion: 

a. 

the financial report of WorleyParsons Limited is in accordance with the Corporations Act 2001, 
including: 

i 

ii 

giving a true and fair view of the company's and consolidated entity's financial position as 
at 30 June 2012 and of their performance for the year ended on that date; and 

complying with Australian Accounting Standards and the Corporations Regulations 2001; 
and 

b. 

the financial report also complies with International Financial Reporting Standards as disclosed 
in Note 2. 

Report on the remuneration report 

We have audited the Remuneration Report included in pages 37 to 51 of the directors' report for the year 
ended 30 June 2012. The directors of the company are responsible for the preparation and presentation 
of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our 
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in 
accordance with Australian Auditing Standards. 

Opinion 

In our opinion, the Remuneration Report of WorleyParsons Limited for the year ended 30 June 2012, 
complies with section 300A of the Corporations Act 2001. 

Ernst & Young 

Bruce Meehan 
Partner 
Sydney 
29 August 2012 

WorleyParsons Annual Report 2012  89

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholder Information

toP 20 holdinGs oF FUllY Paid oRdinaRY shaRes as at 24 aUGUst 2012

NAMe 

hSBC Custody Nominees (Australia) Limited 

J P Morgan Nominees Australia Limited 

National Nominees Limited 

Wilaci Pty Limited 

Citicorp Nominees Pty Limited 

Lujeta Pty Ltd 

Mr John Michael grill 

Citicorp Nominees Pty Limited 

UBS Wealth Management Australia Nominees Pty Ltd 

Behana Pty Ltd 

BNP Paribas Noms Pty Ltd 

J P Morgan Nominees Australia Limited 

Behana Pty Ltd 

haju Pty Limited 

Juha Pty Limited 

taylor Square Designs Pty Ltd 

Inmac engineering Pty Ltd 

Lujeta Pty Ltd 

UBS Bank Canada tR Chalet holdings Inc 

Johalius Pty Ltd 

total 

ShAReS  % oF ISSUeD CAPItAL 

RANK

63,638,468 

33,885,202 

26,765,405 

15,594,439 

8,075,966 

5,190,000 

3,578,960 

3,120,190 

2,955,607 

2,300,000 

2,125,362 

2,115,618 

1,759,810 

1,500,000 

1,500,000 

1,457,997 

1,225,000 

1,165,000 

1,077,475 

1,053,136 

25.87 

13.77 

10.88 

6.34 

3.28 

2.11 

1.45 

1.27 

1.20 

0.93 

0.86 

0.86 

0.72 

0.61 

0.61 

0.59 

0.50 

0.47 

0.44 

0.43 

180,083,635 

73.20

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

total number of current holders for all named classes is 28,257.

the table above includes exchangeable shares. the ASX treats these shares as having been converted into ordinary shares of the Company at the time of their 
issue for the purposes of the ASX Listing Rules.

90  WorleyParsons Annual Report 2012

sUBstantial holdeRs oF 5% oR moRe oF FUllY Paid oRdinaRY shaRes as at 24 aUGUst 2012*

NAMe 

John grill and associated companies 

*  As disclosed in substantial shareholder notices received by the Company.

RanGe oF FUllY Paid oRdinaRY shaRes as at 24 aUGUst 2012

1 – 1,000 

1,001 – 5,000 

5,001 – 10,000 

10,001 – 100,000 

100,001 and over 

total 

UNMARKETABLE PARCELS

Minimum $500.00 parcel at $26.48 per unit 

NotICe DAte 

ShAReS

31 May 2010 

25,313,786

ShAReS 

% oF ISSUeD CAPItAL

hoLDeRS 

20,729 

6,435 

586 

394 

113 

28,257 

8,744,686 

13,460,713 

4,193,680 

10,517,694 

209,086,310 

246,003,083 

MINIMUM PARCeL SIZe 

19 

hoLDeRS 

353 

3.55

5.47

1.71

4.28

84.99

100.00

ShAReS

2,071

the table above includes exchangeable shares. the ASX treats these exchangeable shares to have been converted into ordinary shares of the Company at the 
time of their issue for the purposes of the ASX Listing Rules. In addition to the shares set out in the table there is one special voting share issued to 
Computershare trust Company of Canada Limited (trustee) as part of the consideration for the acquisition of the Colt group.

RanGe oF FUllY Paid oRdinaRY shaRes as at 24 aUGUst 2012

All ordinary shares carry one vote per share without restriction. In the case of the exchangeable shares, voting rights are provided through the special voting 
share which carried an aggregate number of votes equal to the number of votes attached to the ordinary shares into which the exchangeable shares are 
exchangeable.

WorleyParsons Annual Report 2012  91

 
 
 
 
 
Corporate information

WorleyParsons limited

aCn 096 090 158

DIReCtoRS

Ron mcneilly (Chairman)  

larry Benke

erich Fraunschiel

John m Green

John Grill (Chief executive officer)

Christopher haynes, oBe

Catherine livingstone, ao

JB mcneil

Wang Xiao Bin

CoMPANY SeCRetARY

Peter Janu

RegISteReD oFFICe

level 12
141 Walker street
north sydney nsW 2060

AUDItoRS

ernst & Young

BANKeRS

hsBC
Royal Bank of scotland
Westpac Banking Corporation
JPmorgan Chase
Commonwealth Bank of australia
Royal Bank of Canada
Bank of america
UBs
standard Chartered Bank

LAWYeRS

Freehills

ShARe RegIStRY

Computershare investor services Pty limited
level 4, 60 Carrington street
sydney nsW 2000
australia
Ph: 1300 850 505

92  WorleyParsons Annual Report 2012

OUR VALUES

Performance

• Zero harm
• Results for our customers and employees
• Creating wealth for our shareholders
• World class resources, capability and experience

Agility

•  Smallest assignment to world scale 

development

• Local capablity with global leverage
• Responsive to customer preferences
• Optimum solutions customized to needs

Relationships

• Rapport with all stakeholders
• Open and respectful
• Collaborative approch to business

Leadership

• Committed, empowered and rewarded people
• EcoNomics™ - Delivering profitable sustainability
• Integrity in all aspects of business
• Minimum bureacracy

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