Worthington Industries Annual Report 2013

FY2013 Annual Report · Worthington Industries
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Annual Report 2013

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

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. 

OuR VALuES

Performance
• Zero harm

Leadership
•  Committed, empowered and rewarded people

•  Results for our customers and employees

•  EcoNomics™ – Delivering profitable sustainability

• Creating wealth for our shareholders 

• Integrity in all aspects of business

•  World class resources, capability and experience

• Energy and excitement

Relationships
• Rapport with all stakeholders

• Open and respectful

• Collaborative approach to business

• Minimum bureaucracy

Agility
•  Smallest assignment to world scale development

• Local capability with global leverage

• Responsive to customer preferences

•  Optimum solutions customized to needs

Annual General Meeting

WorleyParsons’ 2013 Annual General Meeting will be held on 
Wednesday, 9 October 2013 commencing at 2.00pm (AEDT) 
at The Westin Sydney, 1 Martin Place, Sydney. 

We have created our 2013 shareholder results microsite, 
which offers our 2013 results documents and detailed 
information on our business operations.  

Visit us online 

annualreport2013.worleyparsons.com

Contents
Group Financial Highlights
Chairman’s Review
Global Operations and Significant 
Awards for 2013
Business Summary
Chief Executive Officer’s Report
Board of Directors
Operating and Financial Review
Corporate Governance
Corporate Responsibility
Directors’ Report
Remuneration Report
Financial Statements
Shareholder Information
Corporate Information
Glossary

1
2
4

6
10 
16
18
25 
35
41
46
60  
98
100
101

GROUP FINANCIAL
HIGHLIGHTS

FIVE YEAR PERFORMANCE AT A GLANCE

$m 

2009 

2010 

2011 

2012 

2013 

% change

Aggregated revenue1 

6,219.4 

4,967.1 

5,903.5 

7,362.6 

7,627.0 

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) 

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 

527.0 

6.9% 

322.1 

4.2% 

443.5 

16.2% 

137.8 

130.8 

92.5 

3.6

(2.0)

(8.8)

1.4

(9.8)

(9.0)

1.6

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 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

$7,627.0m

$527.0m

$322.1m

$443.5m

.

.

.

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The result was earned 
on aggregated revenue 
of $7,627.0 million, an 
increase of 3.6% on the 
$7,362.6 million reported in 
m
m
2012.
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EBIT for the year was 
$527.0 million, a decrease 
of 2% on the $537.9 million 
(including fair value gains of 
$7.6 million) reported in 2012.

The full year result for 2013 
was $322.1 million, a decrease 
of 8.8% on the $353.2 million 
(including fair value gains 
of $7.6 million) net profit 
reported in 2012.

Cash flow from operations was 
$443.5 million, an increase 
of 1.4% on the $437.5 million 
reported in 2012.

.

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WorleyParsons Annual Report 2013  1
$
$

   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CHAIRMAN’S 
REVIEW

The Group reported a solid performance, despite a challenging year, with 
strong cash flow, and is well positioned to take advantage of future 
opportunities. We are continuing to see good momentum in new contract 
wins for the Group across a number of geographies and industries.

WorleyParsons continued to expand its global 
footprint, aided by two substantial acquisitions; 
being the South African business, TWP, and 
Rosenberg in Norway. TWP enables WorleyParsons 
to provide its global customers with access to 
engineering and project delivery capabilities for 
underground mining and precious metals, while the 
acquisition of Rosenberg provides WorleyParsons 
with an ideal platform to expand its presence in the 
fast growing Norwegian Continental Shelf market.

With a network of 165 offices, WorleyParsons 
is one of the most global companies in our 
international peer group. This global diversification 
has been an important factor in the ability of 
WorleyParsons to offset challenging conditions 
in a number of key markets, particularly South 
Africa and Western Australia, by capitalizing on 
opportunities in better performing markets.

We have been pleased by the strong performance 
by our Chemicals sector, and by the continuing 
strength of our Hydrocarbons sector, particularly in 
Australia and the Improve market in Canada.

The Group reported net profit after tax of 
$322 million, down 7% on our 2012 underlying 
result. Even in the current market conditions, 
the Company delivered a solid performance. It 
is pleasing to note that the Group delivered a 
strong operating cash flow of $444 million. Margin 
performance remains a concern, particularly in the 
Power and Infrastructure & Environment sectors.

The Board has resolved to pay a final dividend of 
51.0 cents per share unfranked, taking the total 
dividend for the year to 92.5 cents per share, up 
2% from 91 cents last year. 

As the 2013 financial result was below the 
threshold for vesting, no combined incentive will 
be awarded to Executives. Non–Executive Director 
fees and Executive fixed pay and remuneration 
structure have been reviewed on both an 
Australian and global basis, but will not increase 
in 2014.

Health, Safety and Environment
There is nothing more important to WorleyParsons 
than the safety of our people. To this end, the 
Board and Management continue to strive to 
achieve the goal of Zero Harm across all countries 
in which we operate. 

During the period, the Health, Safety and 
Environment Committee of the Board commenced 
meeting. This Committee, chaired by Dr Haynes, 
has been responsible for making recommendations 
to the Board on issues such as the Group’s 
performance with respect to health, safety and 
the environment and the effectiveness of the 
resources and processes that the Group uses to 
manage risks in these areas. To provide visible 
leadership in this area, there has been an increase 
in the number of visits made to WorleyParsons’ 
sites by both members of the Board and by senior 
members of the leadership team.

People 
We have always been, and remain, fundamentally 
a people business, we rely on our people to meet 
our customers’ needs. Our people continue to grow 
and adapt to respond to the changing needs of 
our customers and the dynamics of our markets. 
By retaining a deep focus on our people and our 
culture we continue to serve our customers and 
respond to our markets in challenging times.

Central to our People strategy is our empowered 
and entrepreneurial spirit and our local/global 
organizational model. It is inspiring to hear 
stories of our people achieving extraordinary 
results through their technical expertise, focus 
on customer relationships and passion for 
collaboration. This combination of culture and 
capability augurs well for even greater success for 
WorleyParsons in the future.

I would like to express the Board’s appreciation and 
admiration for the commitment and contribution to 
WorleyParsons by our people over this past year.

2  WorleyParsons Annual Report 2013

In February this year I was honoured to accept 
the invitation of the non-executive directors to 
re-join the WorleyParsons Board as non-executive 
Chairman. In doing so, I took over as Chairman 
from Ron McNeilly, who has been a member of the 
WorleyParsons Board since November 2002 and 
Chairman since November 2004. Ron continues to 
serve on the Board as the Deputy Chairman and 
Lead Independent Director.

I would like to acknowledge the outstanding job 
that Ron has done as Chairman over the past 9 
years. I look forward to continuing to work with 
Ron and am confident that the Company will 
continue to benefit from his knowledge and insight.

Conclusion
I would like to thank the WorleyParsons leadership 
team, and my fellow directors, for their excellent 
work in what has been a challenging year for 
WorleyParsons. I believe that the hard work that 
has been done over this period means that the 
Group is well positioned to take advantage of the 
growth opportunities that we continue to see in 
the market.

John Grill 
Chairman and 
Non-Executive Director

Ethics and Corporate Responsibility
The Board recognises that WorleyParsons’ 
reputation for honesty, integrity and ethical 
dealings is one of its key business assets and a 
critical factor in ensuring the Company’s continued 
success. All of WorleyParsons’ people continue to 
strive to maintain the standard of ethical behaviour 
expected by our people, customers, suppliers 
and shareholders. 

During the period the Company has issued an 
updated Code of Conduct that emphasizes the 
importance of a culture in which ethical issues 
and concerns can be discussed freely and openly 
without any fear of retribution. The Company 
has also acted to ensure that those who we 
engage with, or partner with in business, share 
WorleyParsons’ ethical values and act in accordance 
with those values.

The Company continues to refine its corporate 
responsibility efforts across all the parts of 
the world in which we do business, in an effort 
to ensure that our programs are as effective 
and efficient as possible in delivering value to 
the communities we support. The Corporate 
Responsibility section of this Annual Report 
provides greater detail on these activities.

Corporate Governance
The Board remains confident that the Company has 
in place a strong corporate governance system, and 
that this system is well maintained, reviewed and 
updated. Our governance policies and procedures 
are benchmarked against other comparable 
companies to ensure that the appropriate 
standards are maintained.

The Group maintains a comprehensive, 
independent, internal audit program that reports 
directly to the Audit and Risk Committee. This 
function not only focuses on specific areas of 
interest, but provides an annual assurance to the 
Audit and Risk Committee of the adequacy and 
effectiveness of the Group’s internal controls.

Board and management changes
On 23 October 2012 Andrew Wood took up the 
position of Chief Executive Officer, and became a 
member of the WorleyParsons Board. I have been 
very pleased with the leadership that Andrew has 
provided to the Group in these challenging times 
and would also like to acknowledge the exceptional 
support that Andrew continues to receive from his 
leadership team.

WorleyParsons Annual Report 2013  3

GLOBAL OPERATIONS &  
SIGNIFICANT AWARDS 
FOR 2013

United States Anchorage

18
15
14
13

11
8

17

10

23

1

21

20 19

3

4

16

2

5

2 5 4

1 3

6 8

9 10 11

12 13

6 

12 

22

9 

7 

7

14

Local Ofﬁce

Global Hub

Kitimat

Grande
Prairie

Burnaby
Victoria

Richland
Vancouver, WA
Bellevue
Portland
Seattle
Sacramento

Azusa

Arcadia
Fountain Valley

Fort McMurray
Cold Lake

Fort St John
Edmonton

Lloydminster

Canada

Blackfalds
Calgary

Billings

Saskatoon

Bismarck

Markham
Sarnia

Chicoutimi
Trois-Riviere
Sudbury
Tiverton

Alma

Fermont

Quebec City

Sept-lles

Montreal

Brossard

Farnham

Mississauga

Denver

Phoenix

Tulsa

Dallas

Nanticoke

Reading
Philadelphia

Chattanooga

Monrovia

Houston

Bayport

St. John's

United Kingdom

Norway Stavanger

Aberdeen

Manchester

Teesside

London

Leeds

Gloucester

Farnborough

Bristol

Woking

Netherlands Delft

Czech Republic Plzen

Russia Moscow

Poland Warsaw

Kazakhstan Aksay

Spain Madrid

Bulgaria Sofia

Bulgaria Stara Zagora

Turkey Istanbul

Kazakhstan Astana

Kazakhstan Tengiz

Kazakhstan Almaty

Kazakhstan Atyrau

Kazakhstan Aktau

Uzbekistan Tashkent

Libya Tripoli

Egypt Cairo

Saudi Arabia Al Khobar

Saudi Arabia Yanbu

Saudi Arabia Riyadh

Iraq Basrah

Kuwait Ahmadi

Bahrain Manama

UAE Dubai

Oman Muscat

Qatar Doha

Oman Sohar

UAE Abu Dhabi

Vietnam Hanoi

India Mumbai

India Hyderabad

HYDROCARBONS

Chevron

FEED for the Rosebank field

BP Iraq NV, PetroChina 
and the State Oil 
Marketing Organisation 
of the Republic of Iraq
Saudi Arabian Oil 
Company

LukOil Mid-East Limited

Maersk

Singapore LNG 
Corporation 
Pte Ltd 
CNOOC and Shell 
Petrochemicals 
Company Limited
Canadian National 
Resources Limited
Inpex

Talisman 

Husky

Engineering, procurement and 
management services for the 
Rumaila oilfield

General engineering and project 
management service contract

Project management, technical 
and construction supervision 
services.
Detailed design of Phase 2 with 
NIPIneftegas
Expansion of the LNG Terminal 
send out and storage capacities

Detail design, site engineering 
services and home office 
engineering services. 
Engineering services, bitumen 
production department
Integrity and maintenance 
contract
EPMS

Engineering and procurement

ConocoPhillips

Engineering services

Suncor

Suncor

Talisman

Shell 

Suncor Energy, Total 
E&P Canada Ltd. and 
Teck Resources Ltd. 
Total

19

Maersk

Saudi Arabian Oil 
Company 

Samsung Heavy 
Industries 

Chevron

EP on SSP Firebag Plant 91,92 
and 93
EP on SSP Base Plant

Engineering and procurement

Project management, technical 
and construction services

Detailed engineering services 
for the Fort Hills Oil Sands 
Project
Significant change order for 
Joslyn North Mine Extraction 
Project
General Design Contract for 
engineering support to the 
offshore asset 
Engineering and project 
management services for 
offshore green and brownfields 
projects
Detailed design and engineering 
for the topsides process 
modules of the Total Egina 
FPSO vessel
Brownfield engineering services

Addax Petroleum

Global alliance agreement

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

20

21

22

23

4  WorleyParsons Annual Report 2013

17 7

19

17

15

34
28 32

Trinidad & Tobago
Port of Spain

Colombia Bogota

MINERALS, METALS & CHEMICALS

BHP Biliton

Project management and engineering 
services for the Escondida Mine

Peru Lima

Brazil Altamira

Brazil Itaituba

Brazil Brasilia

Chile Calama

Chile Santiago

Brazil Bauru
Brazil Araçatuba

Brazil Belo Horizonte

Brazil Rio de Janeiro

Brazil Sao Paulo

10

8

20

30

10

27

5

1

8

7

25
33
24

Pacific Aluminium

Pipeline and gas conversion

Ma’aden Phosphate

Improve services

Emirates Aluminium

PMC services 

Votorantim Metals

Detailed engineering services

Nyrstar

Replacement study for sinter plant

Ressources d’Arriane

Feasibility services

Alderon Iron Ore 
Corporation

Preliminary engineering services for 
Alderon Kami Iron Ore Project

Dynasol

EPCM

Potash Corporation of 
Saskatchewan

Underground expansion construction 
management

MEC Global

Invista

Momentive

Honeywell

Production of Ingot/Wafers for Solar Cells 

Engineering services

Basic engineering package and 
preliminary design package 
EPCM

Stepan Chemical

Chemicals plant sustaining capital EPCM

Newcrest

Xstrata

EPCM

Master services agreement

Ma'aden Phosphate

Engineering services

Boyne Smelters

EPCM

BASF

BASF

BASF

BASF

Front end engineering for EOCG plant

Front end engineering for NPG plant

FEED for the greenfield resin plant 

Front end engineering

Anglo American

Companhia Siderúrgica 
Nacional
First Quantum Metals Ltd

PFS for expansion of Phosphate 
Fertilizer Plants 
Scoping study for the expansion of the 
Casa de Pedra Mine
Kansanshi Copper Smelter Project

Noranda Jamaica Bauxite 
Partners
Celanese

St. Ann’s Bauxite Production and Export 
Improvement Program
EPCM

PT Vale Indonesia

Indonesian growth project

Vale

BHP Billiton

Sasol

Vale

Iowa Fertilizer Company

Overflow engineering services

Olympic Dam Definition Phase Study for 
the Acid Plant Expansion
Integrated program management team 
services for the FEED phase
Detailed design of the ore processing 
facilities
Technical PMC and detailed design

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

Nigeria Lagos

Ghana Accra

Angola Luanda

11

18

4

18

11

3

Mozambique Maputo

Namibia Swakopmund

Namibia Windhoek

Kimberley

Bloemfontein

Cape Town

Polokwane

Pretoria

Johannesburg

Secunda

Durban

East London

Port Elizabeth

South Africa 

26

Mongolia Ulaanbaatar

China 

Beijing

Tianjin

Shenyang

Nanjing

Chengdu

Shanghai

Hong Kong

Shenzhen

Thailand Bangkok

Thailand Sriracha

India Chennai

Kuantan

Kerteh

Malacca

Kuala Lumpur

Vietnam Ho Chi Minh City

Brunei Kuala Belait

Kota Kinabalu

Malaysia

Duri

Miri

Bintulu

Indonesia Balikpapan

Indonesia Jakarta

Darwin

Australia

Adelaide

Townsville

Mackay

Gladstone

Brisbane

Singleton

Newcastle

Sydney

Geelong

Melbourne

New Caledonia Noumea

Auckland

Blenheim

New Plymouth

Hastings

Wellington

Christchurch

New Zealand

Port Hedland

Perth

Bunbury

1

2

6

9

12

13

14

15

16

12

29

14

9

22

23

31

13

21

20

2 6

16

19

18

15

14

13

11

8

17

10

23

1

21

20 19
3
4

16

2

5

2 5 4

1 3

6 8

9 10 11

12 13

United Kingdom

Norway Stavanger

Aberdeen
Manchester

Teesside
London

Leeds
Gloucester

Netherlands Delft

Poland Warsaw

Russia Moscow

Kazakhstan Aksay

St. John's

Farnborough

Bristol

Woking

Czech Republic Plzen

Kazakhstan Atyrau

Spain Madrid

Bulgaria Sofia

Bulgaria Stara Zagora
Turkey Istanbul

Kazakhstan Aktau

Uzbekistan Tashkent

Kazakhstan Astana

Kazakhstan Tengiz

Kazakhstan Almaty

United States Anchorage

Local Ofﬁce

Global Hub

Kitimat

Grande

Prairie

Burnaby

Victoria

Richland

Vancouver, WA

Bellevue

Portland

Seattle

Sacramento

Azusa

Arcadia

Fountain Valley

Monrovia

Fort McMurray

Cold Lake

Fort St John

Edmonton

Lloydminster

Canada

Saskatoon

Bismarck

Markham

Sarnia

Blackfalds

Calgary

Billings

Chicoutimi

Trois-Riviere

Sudbury

Tiverton

Alma

Fermont

Quebec City

Sept-lles

Montreal

Brossard

Farnham

Denver

Phoenix

Tulsa

Dallas

Mississauga

Nanticoke

Reading

Philadelphia

Chattanooga

Houston

Bayport

6 

12 

22
9 

7 

7

14

Mongolia Ulaanbaatar

China 

Beijing
Tianjin

Shenyang

Nanjing

Chengdu

Shanghai

Libya Tripoli

Egypt Cairo

Saudi Arabia Al Khobar

Saudi Arabia Yanbu

Saudi Arabia Riyadh

Iraq Basrah
Kuwait Ahmadi

Bahrain Manama

UAE Dubai

Oman Muscat

Qatar Doha

Oman Sohar

UAE Abu Dhabi

17 7

19

17

15

34

28 32

Trinidad & Tobago

Port of Spain

Colombia Bogota

Brazil Altamira

Brazil Itaituba

Peru Lima

Brazil Brasilia

Nigeria Lagos

Ghana Accra

Angola Luanda

Chile Calama

Chile Santiago

Brazil Bauru

Brazil Araçatuba

Brazil Belo Horizonte

Brazil Rio de Janeiro

Brazil Sao Paulo

Namibia Swakopmund
Namibia Windhoek

Kimberley
Bloemfontein

Cape Town

11

18

4

18

11
3

Mozambique Maputo

Polokwane
Pretoria
Johannesburg
Secunda
Durban
East London

Port Elizabeth

South Africa 
26

10

8

20

INFRASTRUCTURE & ENVIRONMENT

India Mumbai

Vietnam Hanoi

Hong Kong

Shenzhen

India Hyderabad

India Chennai

Kuantan
Kerteh
Malacca
Kuala Lumpur

Thailand Bangkok
Thailand Sriracha

Vietnam Ho Chi Minh City

Malaysia

Duri

Brunei Kuala Belait
Kota Kinabalu
Miri
Bintulu

Indonesia Balikpapan

Indonesia Jakarta

30

10

27

5

1

8

7

25

33

24

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

Chevron

Woodside

BP

BP

Tullow Oil

Water Corporation

Alderon Mining

Consórcio Complexo Tapajós 

Caltex

Ecopetrol

Environmental panel contract

Environmental services panel

Lighthouse – global remediation  
management framework agreement

Atlas – global remediation management 
contract

Environment, Safety and Health Impact  
Assessment (ESHIA) Global Framework

Infrastructure panel contract

Rail and terminal expansion 
pre-feasibility

Environmental impact assessment for Sao 
Luiz do Tapajos dam

Kurnell port and berthing project

Refineria del Pacifico port and marine 
pre-FEED

Wafra Joint Operations

Integrated master plan

Rio Tinto

Enbridge

Chevron

Koodaiderie hydrology studies 

Remediation program

Onslow water infrastructure upgrade project

Australia Pacific LNG 

Receiving environment monitoring program

Government of Timor-Leste

Tasi Mane Project

Port of Los Angeles 

Contaminated soil remediation 

ASTAD Project Management/  
Economic Zone Company

Master planning and engineering consultancy

BP 

Windmill framework agreement

Norte Energia S.A

Coordinate and deploy environmental socio-
economic plans for Belo Monte Hydroelectric 
Power Plant

Darwin

Australia

Adelaide

Townsville
Mackay

Gladstone

Brisbane

Singleton

Newcastle
Sydney

Geelong

Melbourne

Blenheim

New Zealand

12
29
14

9
22

2 6

16

19

New Caledonia Noumea

Auckland

New Plymouth
Hastings
Wellington

Christchurch

Port Hedland

Perth

Bunbury

1
2
6
9
12
13
14
15

16

31

13

23

21

20

POWER

1

2

3

4

5

6

7

8

9

10

11

12

13

14

US Government - Department of Energy 
(DOE)  - National Nuclear Security 
Administration (NNSA)

Technical and engineering services 

Los Angeles Department of  
Water and Power

Owners engineering services for repowering 
projects

Calpine Corporation

Alliance engineering services

Arizona Public Service

Alliance engineering services

Southern California Edison

Owner's engineering and design services, 
provision of techical support of electrical 
transmission and distribution systems

Tennessee Valley Authority

Plant outage and support

Fortescue Metals Group

Southern Co

Polska Arupa Energetyczna 

Solomon Mine Power Station 
operations and maintenance

Detailed engineering

Site characterization and licensing/permitting 
services

Kozlody Nuclear Power Plant 

Operational safety review    

Akkuyu NGS Elektrik Üretim Anonim 
Sirketi 

Consultancy services for Akkuyu Nuclear 
Power Plant

Saudi Electric Company

Master services agreement

Saudi Electricity Company

Integrated EPCM services contract

BHP Billiton

Operations and maintenance

WorleyParsons Annual Report 2013  5

BUSINESS
SUMMARY

HYDROCARBONS

We deliver a range of services to the hydrocarbons 
market. Those services span the upstream, 
mid-stream and downstream sectors, from early 
conceptual studies to the execution of mega 
projects, and include asset management and 
enhancement programs.

Performance overview

Future 

We are encouraged by the growth in the US gas, downstream 
and petrochemicals market, opportunities in Norway and in the 
developing world.  Potential market slowdown in Australia is 
expected to be offset by our continued global growth.  

The continued global diversification, together with ongoing 
strengthening of key customer relationships, gives us 
confidence that the Hydrocarbons sector will continue to grow 
in the medium and long term.

We expect improved earnings for the Hydrocarbons sector in 
FY2014.  

The Hydrocarbons sector reported aggregated revenue 
of $5,344 million, an increase of 7% from the previous 
corresponding period. Hydrocarbons’ contribution to the 
Group’s aggregated revenue was 70%. Segment EBIT was 
$634 million with a reported segment margin of 11.9% 
(FY2012: EBIT $598 million; margin 11.9%).  The Hydrocarbons 
sector grew in both revenue and EBIT.  The professional 
services margin within the sector improved from 12.3% 
to 13.1%.

Growth in the Hydrocarbons sector was underpinned by an 
increase in average customer capital expenditure during 
FY2013 when compared with that for FY2012, with continued 
demand for oil and gas and robust commodity prices creating 
favorable market conditions.  WorleyParsons’ exposure to 
the downstream petrochemicals market increased with new 
projects awarded in FY2013, including the Integrated Program 
Management Team project for Sasol in the United States.  

The acquisition of Bergen Group Rosenberg AG with effect 
from January 2013 complements and extends WorleyParsons’ 
current hydrocarbons services offering and provides access to 
the Norwegian Continental Shelf offshore oil and gas market.

Aggregated
Revenue

Contribution to Group 
aggregated revenue

$m

Growth%

2013

5,344.3

2012

5,015.1

2011

4,043.9

6.6

24.0

18.1

%

70

68

68

6  WorleyParsons Annual Report 2013

EBIT

$m

Growth%

633.7

598.4

554.3

5.9

8.0

10.5

EBIT 
Margin

%

11.9

11.9

13.7

AGGREGATED REVENUE

$5,344.3m

$5,015.1m

$4,043.9m

$561.3m

$581.3m

$513.7m

2013

2012

2011

2013

2012

2011

2013

2012

2011

2013

2012

2011

$937.6m

$895.4m

$643.8m

$783.8m

$870.8m

$702.1m

2013

2012

2011

$937.6m

$895.4m

$643.8m

m

3

.

4

4

3

,

5

$

m

1

.

5

1

0

,

5

$

m

9

.

3

4

0

,

4

$

m

6

.

7

3

9

$

m

4

.

5

9

8

$

m

8

.

3

4

6

$

m

3

.

1

8

5

$

m

3

.

1

6

5

$

m

7

.

3

1

5

$

m

8

.

0

7

8

$

m

8

.

3

8

7

$

m

1

.

2

0

7

$

MINERALS, METALS 
& CHEMICALS

We deliver a range of services to the minerals, 
metals and chemicals markets, encompassing 
alumina, base metals, precious metals, coal, iron 
ore and chemicals. The services we offer include 
preparing conceptual and feasibility studies, front–end 
engineering design, project–delivery services and 
Improve services. 

Performance overview

The Minerals, Metals & Chemicals sector reported aggregated 
revenue of $938 million, an increase of 5% from the 
previous corresponding period. Minerals, Metals & Chemicals’ 
contribution to the Group’s aggregated revenue was 12%. 
Segment EBIT was $136 million with a reported segment 
margin of 14.5% (FY2012: EBIT $134 million; margin 15.0%).

The performance of the Minerals, Metals & Chemicals sector 
was underpinned by the strength of the global chemicals 
market, notwithstanding a significant slowdown of investment 
in major capital projects by our minerals and metals customers 
over the period, particularly in Western Australia.

The current market dynamics have seen our mining customers 
looking for improvements in efficiency and cost of production, 
particularly in mature, high cost regions. This has resulted in a 
greater emphasis on sustaining capital activities. To assist our 
customers with these activities, we are continuing the ongoing 
development of our Improve offering.  

The acquisition of TWP Holdings Proprietary Ltd in March 2013 
has further increased the geographic reach of WorleyParsons’ 
Minerals, Metals & Chemicals sector and enables us to offer our 
customers project delivery capabilities for underground mining 
and precious metals.   

Future 

We will continue to globalize our Minerals, Metals & Chemicals 
offering and develop our long term relationships with major 
customers. We expect that asset optimization will continue 
to be a key concern in the year ahead.  Project activity will 
predominantly be in early phase study work.

The global chemicals market continues to support strong 
investment in new developments and provides a high growth 
opportunity for WorleyParsons. We will continue to directly 
address this market particularly in the Middle East and the 
US, leveraging our strength in China, to benefit our customers 
across the globe.

We expect improved earnings in the Minerals, Metals & 
Chemicals sector in FY2014.

Aggregated Revenue

$m

Growth%

2013

937.6

2012

895.4

2011

643.8

4.7

39.1

14.5

Contribution to Group 
aggregated revenue

EBIT

EBIT 
Margin

AGGREGATED REVENUE

%

12

12

11

2013

$m

Growth%

$5,344.3m
%

2012

135.5

1.1

$5,015.1m
14.5

2011

134.1

30.6

$4,043.9m

15.0

102.7

(2.9)

16.0

2013

2012

2011

$561.3m

$581.3m

$513.7m

2013

2012

2011

2013

2012

2011

$937.6m

$895.4m

$643.8m

2013

2012

2011

$937.6m

$895.4m

$643.8m

WorleyParsons Annual Report 2013  7

$783.8m

$870.8m

$702.1m

m

3

.

4

4

3

,

5

$

m

1

.

5

1

0

,

5

$

m

9

.

3

4

0

,

4

$

m

6

.

7

3

9

$

m

4

.

5

9

8

$

m

8

.

3

4

6

$

m

3

.

1

8

5

$

m

3

.

1

6

5

$

m

7

.

3

1

5

$

m

8

.

0

7

8

$

m

8

.

3

8

7

$

m

1

.

2

0

7

$

BUSINESS SUMMARY CONTINUED

INFRASTRUCTURE & 
ENVIRONMENT

Our Infrastructure & Environment sector offers a range 
of services in water, environment, transport, ports and 
marine terminals, restoration, geosciences, master 
planning and advanced analysis.  When providing 
those services, we manage approvals, stakeholder 
engagement, project delivery, logistics, cost and 
schedule for our customers.

Performance overview
The Infrastructure & Environment sector reported aggregated 
revenue of $784 million, a decrease of 10% from the previous 
corresponding period. Infrastructure & Environment’s 
contribution to the Group’s aggregated revenue was 10%. 
Segment EBIT was $86 million with a reported segment 
margin of 11.0% (FY2012: EBIT $118 million; margin 13.6%).

The performance of the Infrastructure & Environment sector 
was adversely impacted by the downturn in the Australian 
resources sector and the South African government sector.  

Given the adverse markets in Australia and South Africa, 
it is pleasing that we secured Improve opportunities with 
government, resource and energy customers.  We have 
delivered environment and water services to unconventional 
oil and gas customers and expanded our geographic footprint 
by delivering restoration services under several global 
services agreements.  

Future 

The growth of unconventional oil and gas globally offers 
significant opportunity as customers seek an integrated 
approach to environment, community and water management.  
Resource infrastructure has a strong outlook in Sub-Saharan 
Africa and Latin America, particularly relating to significant gas 
discoveries in East Africa and mineral developments in Latin 
America.  Our Restoration offering is positioned to service our 
customers’ growing need for support in liability management 
and remediation, demolition and decommissioning and 
resilience preparedness across their asset portfolios.

We expect improved earnings in the Infrastructure & 
Environment sector in FY2014.

2013

2012

2011

$5,344.3m

$5,015.1m

$4,043.9m

Contribution to Group 
aggregated revenue

EBIT

%

10

12

12

$m

Growth%

2013

85.9

2012

118.4

2011

101.0

$561.3m
(27.4)

$581.3m
17.2

$513.7m
25.5

EBIT 
Margin

%

11.0

13.6

14.4

2013

2012

2011

2013

2012

2011

$937.6m

$895.4m

$643.8m

AGGREGATED REVENUE

$783.8m

$870.8m

$702.1m

Aggregated Revenue

$m

Growth%

2013

783.8

(10.0)

2012

870.8

2011

702.1

24.0

49.4

8  WorleyParsons Annual Report 2013

2013

2012

2011

$937.6m

$895.4m

$643.8m

m

3

.

4

4

3

,

5

$

m

1

.

5

1

0

,

5

$

m

9

.

3

4

0

,

4

$

m

6

.

7

3

9

$

m

4

.

5

9

8

$

m

8

.

3

4

6

$

m

3

.

1

8

5

$

m

3

.

1

6

5

$

m

7

.

3

1

5

$

m

8

.

0

7

8

$

m

8

.

3

8

7

$

m

1

.

2

0

7

$

POWER

We offer a range of services across the power 
generation, transmission and distribution value chain, 
from conventional technologies such as fossil fuel 
and nuclear power generation through to renewable 
energy and advanced coal-fired generation and smart 
grid transmission and distribution. We work with our 
customers on all stages of the asset lifecycle, including 
early planning, project delivery, facility start-up and 
asset management, operation and maintenance.

Performance overview

Future 

The Power sector reported aggregated revenue of 
$561 million, a decrease of 3% on the previous corresponding 
period. Segment EBIT was $49 million with a reported segment 
margin of 8.8% (FY2012: EBIT $61 million; margin 10.6%)

Our Power sector performance was materially impacted by 
impacted by increased costs on a lump sum procurement 
project in Brazil and the cancellation of a key project in both 
Europe and Canada.  

Our customers in the developed world have been engaging 
in asset improvement, while our customers in the 
developing world have been building new generation and 
network capacity.  

In the United States, Australia and Canada, we provided a 
range of Improve services in assets optimization and operation 
and maintenance, such as for the Tennessee Valley Authority 
in the United States.  

In the developing world, WorleyParsons was awarded a 
number of projects in nuclear, conventional power generation 
and networks.  

While there is some uncertainty in the global economy, we 
expect to continue to grow our support to resource and 
industry customers leveraging our Hydrocarbons and Minerals, 
Metals & Chemicals customer sector groups.  In the developing 
world we expect demand for new capacity to continue to 
provide opportunities in power generation and networks.

We anticipate further demand for our services in the nuclear 
sector, given the expected expansion of nuclear programs 
in developing countries and increases in safety upgrades to 
existing reactors.

In order to strengthen our service offering to resource 
customers, we are combining our Power and Infrastructure & 
Environment sectors into a single customer sector group.

We expect improved earnings in the Power sector and the 
combined group in FY2014.

Aggregated 
Revenue

Contribution to Group 
aggregated revenue

$m

Growth%

2013

561.3

(3.4)

2012

581.3

2011

513.7

13.2

0.8

%

8

8

9

EBIT

$m

Growth%

49.4

61.4

65.3

(19.5)

(6.0)

12.2

EBIT 
Margin

%

8.8

10.6

12.7

2013

2012

2011

2013

2012

2011

$5,344.3m

$5,015.1m

$4,043.9m

AGGREGATED REVENUE

$561.3m

$581.3m

$513.7m

2013

2012

2011

2013

2012

2011

$937.6m

$895.4m

$643.8m

$783.8m

$870.8m

$702.1m

WorleyParsons Annual Report 2013  9

2013

2012

2011

$937.6m

$895.4m

$643.8m

m

3

.

4

4

3

,

5

$

m

1

.

5

1

0

,

5

$

m

9

.

3

4

0

,

4

$

m

6

.

7

3

9

$

m

4

.

5

9

8

$

m

8

.

3

4

6

$

m

3

.

1

8

5

$

m

3

.

1

6

5

$

m

7

.

3

1

5

$

m

8

.

0

7

8

$

m

8

.

3

8

7

$

m

1

.

2

0

7

$

CHIEF EXECUTIVE 
OFFICER’S REPORT 

Iain Ross

Randy Karren

Barry Bloch

David Steele

Stuart Bradie

Andrew Wood

Group Managing 
Director - Improve

Group Managing 
Director - People

Randy is responsible 
for the strategy 
and growth of our 
Improve business 
across all customer 
sector groups.

Barry is responsible 
for leading the 
delivery of all 
People-related 
services and 
support across the 
Group. 

Group Managing 
Director – 
Development

Iain is responsible 
for Strategy for 
the Group, leading 
the customer 
sector groups, 
mergers and 
acquisitions, 
investor relations 
and innovation 
incubation.

Group Managing 
Director - 
New Ventures

From 1 July 
2013, David is 
responsible for the 
establishment and 
ongoing operation of 
a small group set 
up to successfully 
launch new business 
for WorleyParsons, 
and responsible 
for information 
management within 
the Company.

Group Managing 
Director - Operations

Chief Executive 
Officer

Stuart is responsible 
for leading the 
Group’s global 
operations with 
a focus on our 
customers and 
locations.

Andrew was 
appointed as 
Chief Executive 
Officer effective 
23 October 2012. 
With tenure of 
19 years with 
WorleyParsons, 
and over 30 years’ 
experience in the 
resources and 
energy industry.

10  WorleyParsons Annual Report 2013

The 2013 financial year saw challenging conditions for our industry in a 
number of our key markets. However, the geographic and sector diversification 
of WorleyParsons’ operations enabled us to largely offset these challenges 
and allowed us to deliver what we believe is a solid financial result. 

Introduction – highlights
The Hydrocarbons sector has continued to grow 
both revenue and EBIT, with good results coming 
from Australia, the US gas and downstream market 
and the Improve sector in Canada.  The second half 
did see lower demand and higher costs adversely 
impacting WorleyParsonsCord, the Group’s Canadian 
construction and fabrication business.  Even with 
the significant downturn in the Western Australia 
market, the Minerals, Metals & Chemicals sector still 
delivered overall growth.  This growth has occurred 
largely in the chemicals market in locations such as 
China, Brazil and the US.  

The reduced demand for the Group’s resource 
infrastructure services, particularly in the once 
buoyant Western Australia market impacted the 
Group’s Infrastructure & Environment sector.  This 
sector was also adversely impacted by a reduction 
in Government spending in South Africa and the US.  
The Power sector was impacted by the cancellation 
of a key project in both Europe and Canada 
and increased material costs on a substantially 
complete lump sum procurement project in Brazil.

The Group’s decline in earnings has been further 
impacted by restructuring costs incurred as a result 
of a reduction in the number of people we employ.

We have approximately 39,800 people operating 
out of 165 offices across 43 countries, 87% of 
whom are based outside Australia, which is a 
testament to the success of our strategic global 
expansion over many years. 

The Group made two acquisitions during the period, 
being the TWP business in South Africa and the 
Rosenberg business in Norway.  These acquisitions 
demonstrate the Group’s commitment to not 
only growing organically but also via strategic 
acquisitions.

We were pleased to be ranked the number one 
international design firm by Engineering News 
Record for the year ended 31 December 2012.

For customers in each of our sectors, we provide 
Consult, Deliver, Improve and Advisory services. 

Our Consulting Practices provide technical 
consulting services to customers across all of 
our sectors. While we have seen some impact on 
this business from project delays in places such 
as Western Australia, we believe that they will 
increasingly play a key role in enabling the Group to 
respond to our customer’s needs and provide entry 
points into new markets.

Project Delivery remains at the heart of our 
business, and demand for these services remains 
robust in most parts of the world.  During the 
period we continued to see the impacts of the 
Group’s change in product mix.  As we continue our 
move toward a full project delivery organization, 
we have seen an increase in reimbursable EPC work 
including a significant increase in procurement 
at nil margin and an increase in revenue from 
construction activities. 

Improve continues to be an important part of our 
strategy going forward.  We expect an increased 
demand for our Improve services driven by a 
global trend of aging assets, greater regulatory 
requirements and new assets coming on line.

There is increasing demand for the project and 
business solutions provided by our Advisory 
services to customers who develop, operate and 
maintain physical assets in the infrastructure and 
resources sectors. 

We put the customer at the center of everything 
that we do and to reflect this we have reorganized 
our Customer Sector Group (“CSG”) structure.  
We have combined the existing Power and 
Infrastructure & Environment groups into a 
single CSG, to be referred to in the future as 
‘Infrastructure’.  These changes will enable us to 
better meet the continuing needs of our customers 
both locally and globally.

We are constantly challenging ourselves to develop 
new opportunities for growth and, to this end, have 
formed a ‘New Ventures’ group, led by David Steele, 
responsible for exploring opportunities that are 
aligned with but additional to our traditional areas 
of activity. 

WorleyParsons Annual Report 2013  11

CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED

Screens 
from our 
Road Safety 
Initiative 
awareness 
videos.

In further developing the Local/global model we 
have sought to ensure that the Group structure is 
efficient but flexible enough to meet the changing 
demands of our customers.  This has driven a 
number of initiatives including the combining of 
regions and the re-alignment of CSGs described 
above, resulting in a reduction in overheads in 
the second half.  In addition, we have refined our 
business development efforts to focus not just on 
winning work, but on winning work that we can 
execute well and that will provide good outcomes 
for both the customer and for WorleyParsons.  
While there is more work to be done in some of 
these areas, we believe that the Group is in good 
shape to take advantage of the opportunities that 
are in front of us.

As we move into FY2014, we are continuing to 
see some uncertainty in the markets for our 
services and many customers still have expenditure 
constraints. Our key resource customers are 
increasingly looking for a smaller number of 
suppliers, and for suppliers who can meet their 
needs both locally and globally.  We believe that 
the geographic diversity of WorleyParsons, as well 
as our continued emphasis on key global customer 
relationships, will mean that we remain well placed 
to continue to service these customers.

12  WorleyParsons Annual Report 2013

Safety performance
Travel remains one of the most hazardous 
activities for our people. As signatories to the UN 
Decade of Action for Road Safety, we continued 
our Group-wide emphasis on road safety this 
year which included the introduction of new 
requirements for driver training, vehicle standards 
and journey management. In addition, we are 
taking actions to drive a step-change in our on-site 
safety performance.

WorleyParsons uses the United States Occupational 
Safety and Health Administration reporting 
protocol for our global operations, including the 
calculation of our Total Recordable Case Frequency 
Rate (“TRCFR”) and Lost Workday Case Frequency 
Rate (“LWCFR”).

The TRCFR for our personnel for the FY2013 was 
0.13 (0.12 in FY2012) and the LWCFR was 0.03 
which was the same as last year. We continue 
to strive to improve the safe performance of 
our work, both in field and office environments. 
While the TRCFR for our own personnel was flat, 
we are pleased that there has been an almost 
20% reduction in the TRCFR for combined 
WorleyParsons personnel and our contractors for 
whom we are responsible.

People 
Our people are the fundamental reason why we 
have been able to respond successfully to volatile 
markets in the past financial year. We have had to 
make some very difficult people decisions in some 
of our locations. This has been done with care and 
respect but was necessary to ensure that these 
locations remain sustainable and profitable for the 
long term. 

I am pleased that our people’s wide range of skills 
and expertise, spread across so many countries 
and offices, has enabled us to respond quickly and 
competently to our customers’ changing needs. 

I am appreciative of all of our people who continue 
to provide support and commitment to both their 
customers and to WorleyParsons. I welcome the 
many people who have joined our organization, 
both in our growing locations and through the 
acquisitions of TWP in Africa and Latin America 
and Rosenberg in Norway. 

Our people and our culture remain two of the 
fundamental competitive differentiators for 
WorleyParsons. 

Management changes
During the period Randy Karren was appointed to 
the Executive Committee with responsibility for the 
Group’s Improve activities. Randy was formerly the 
Managing Director of our Canadian operations and 
his appointment reinforces our commitment to the 
growth of our Improve offering.

On my taking up of the Chief Executive Officer role, 
Simon Holt took up the position of Chief Financial 
Officer. Simon had previously been the Deputy 
Chief Financial Officer and had led many of the 
significant improvements in the Group’s finance 
function over the past seven years. He will be 
joining the Executive Committee from September.

Financial performance 
After excluding for fair value gains on acquisition 
of associates in FY2012, aggregated revenue of 
$7,627 million was up 4% on the prior year. EBIT of 
$527 million was down 1% against the prior year, 
while NPAT of $322 million was down 7% and in 
line with guidance. The EBIT margin of 6.9% was 
down from 7.2% in the prior period. EBIT margin 
rose from 6.5% in the first half to 7.3% in the 
second half.

Operating cash flow for the period was $444 
million, compared to $438 million in the previous 
corresponding period.  The Group invested $347 
million in the business in FY2013 (FY2012: $106 
million) for acquisitions, property, plant and 
equipment and computer software. Our balance 
sheet metrics remain strong. The Group’s gearing 
ratio at 30 June 2013 was 25% and cash interest 
cover remains high at 10.6 times.

The effective tax rate for the half year was 27.3% 
being higher than the tax rate for the previous 
corresponding period of 24.1%.  The previous 
year’s tax rate was favorably impacted by a refund 
received in Canada.

Exchange rate movements in the year to 30 June 
2013 compared to FY2012 had a favorable impact 
on net profit of only approximately $3m. The 
contribution from associates represented 7% of the 
Group’s net profit for the year (FY2012: 8%).

The Chief Executive Officer’s 
Committee (CEOC) acts as an advisory 
group to the CEO and Executive 
Committee.  The CEOC comprises 
the leaders of our regions, customer 
sector groups and key functional 
areas.

WorleyParsons Annual Report 2013  13

CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED

SEGMENT PERFORMANCE

Hydrocarbons
The Hydrocarbons sector reported aggregated 
revenue of $5,344 million an increase of 7% from 
the previous corresponding period. Hydrocarbons’ 
contribution to the group’s aggregated revenue 
was 70%. Segment EBIT was $634 million with a 
reported segment margin of 11.9% (FY2012: EBIT 
$598 million; margin 11.9%). The Hydrocarbons 
sector grew in both revenue and EBIT. The 
professional services margin within the sector 
improved from 12.3% to 13.1%.

Continued demand growth for oil and gas, 
together with robust commodity prices led to 
an increased level of capital expenditure in 
upstream developments. New greenfield assets 
coming on line led to increased spend on Improve 
asset management and enhancement programs. 
The lower cost of natural gas in the US drove 
development of the downstream market, with a 
focus on petrochemicals and other gas monetization 
opportunities.

Unconventional oil and gas development has 
escalated, with program management and project 
delivery for developments in the US, Canada, 
Australia and the Middle East being undertaken 
during the period. The acquisition of Rosenberg, 
which provides fully-integrated engineering, 
fabrication and construction solutions to the 
Norwegian offshore oil and gas sector, will extend 
WorleyParsons’ current hydrocarbons offering into 
the Norwegian market.

Outlook for Hydrocarbons

We are encouraged by the growth in the US 
gas, downstream and petrochemicals market, 
opportunities in Norway and in the developing 
world. Potential market slowdown in Australia is 
expected to be offset by our continued global 
growth.

The continued global diversification, together 
with ongoing strengthening of key customer 
relationships, gives us confidence that the 
Hydrocarbons sector will continue to grow in the 
medium and long term.

We expect improved earnings for the Hydrocarbons 
sector in FY2014. 

Minerals, Metals & Chemicals
The Minerals, Metals & Chemicals sector reported 
aggregated revenue of $938 million, an increase 
of 5% from the previous corresponding period. 
Minerals, Metals & Chemicals’ contribution to the 
group’s aggregated revenue was 12%. Segment 
EBIT was $136 million with a reported segment 
margin of 14.5% (FY2012: EBIT $134 million; margin 
15.0%).

The performance of the Minerals, Metals & 
Chemicals sector was underpinned by the strength 
of the global chemicals market notwithstanding the 
significant slowdown of investment in major capital 
projects by our minerals and metals customers over 
the period, particularly in Western Australia.

The current market dynamics has seen our mining 
customers looking for improvements in efficiency 
and cost of production, particularly in mature, high 
cost regions. This has resulted in a greater emphasis 
on sustaining capital activities and we are focused 
on the ongoing development of our integrated 
Improve offering.

The acquisition of TWP in March 2013 has further 
increased our geographic diversification bringing 
approximately 1,100 additional people to our 
operations in Africa and Latin America. We are now 
one of the largest specialized EPCM companies in 
Africa. TWP also enables WorleyParsons to provide 
its global customers with access to engineering and 
project delivery capabilities for underground mining 
and precious metals.

Outlook for Minerals, Metals & Chemicals

We will continue to globalize our Minerals, Metals 
& Chemicals offering and develop our long term 
relationships with major customers. We expect 
that asset optimization will continue to be a key 
concern in the year ahead. Project activity will 
predominately be in early phase study work.

The global chemicals market continues to 
support strong investment in new developments 
and provides a high growth opportunity for 
WorleyParsons. We will continue to directly address 
this market particularly in the Middle East and the 
US, leveraging our strength in China, to benefit our 
customers across the globe.

We expect improved earnings in the Minerals, 
Metals & Chemicals sector in 2014.

14  WorleyParsons Annual Report 2013

Infrastructure & Environment
The Infrastructure & Environment sector reported 
aggregated revenue of $784 million, a decrease 
of 10% from the previous corresponding period. 
Infrastructure & Environment’s contribution to the 
group’s aggregated revenue was 10%. Segment 
EBIT was $86 million with a reported segment 
margin of 11.0% (FY2012: EBIT $118 million; margin 
13.6%).

The performance of the Infrastructure & 
Environment sector was impacted by major project 
deferrals and customer cost management initiatives 
in Western Australia. Reduction in South African 
government spend has further impacted the 
business.

Given the adverse markets in Australia and South 
Africa, it is pleasing that our enhanced Improve 
capability platform has enabled us to secure 
opportunities with Government, resource and 
energy customers. We have delivered integrated 
environment and total water solutions to 
unconventional oil and gas customers and expanded 
our geographic presence in Restoration services.

Outlook for Infrastructure & Environment

The growth of unconventional oil and gas globally 
offers significant opportunity as customers seek 
an integrated approach to environment, community 
and water management. Resource infrastructure 
has a strong outlook in Sub-Saharan Africa and 
Latin America, particularly relating to significant gas 
discoveries in East Africa and mineral developments 
in Latin America. Our Restoration offering is 
positioned to service our customers’ growing need 
for support in liability management and remediation, 
demolition and decommissioning and resilience 
preparedness across their asset portfolios.

We expect improved earnings in the Infrastructure 
& Environment sector in FY2014.

Power 
The Power sector reported aggregated revenue 
of $561 million, a decrease of 3% on the previous 
corresponding period. Segment EBIT was $49 
million with a reported segment margin of 8.8% 
(FY2012: EBIT $61 million; margin 10.6%)

The fall in earnings is largely driven by increased 
material costs on a substantially complete lump sum 
procurement project in Brazil and the cancellation of 
a key project in both Europe and Canada. 

In the developed world, customers have been 
looking for support services in asset optimization, 
operation and maintenance, energy efficiency and 
environmental compliance. This has led to demand 
for our Improve asset management services in these 
geographies.

In the developing world, increased capacity demand 
led to the Group being awarded a number of key 
projects in nuclear, conventional power generation 
and networks.

We continue to support resource and industrial 
customers in securing and managing critical power 
needs for their operations in both developed and 
developing markets.

Outlook for Power

Whilst there is some uncertainty in the global 
economy, we expect to continue to grow our 
support to resource and industry customers 
leveraging our Hydrocarbons and Minerals, 
Metals & Chemicals customer sector groups. In 
the developing world we expect demand for new 
capacity to continue to provide opportunities in 
power generation and networks.

We anticipate further demand for our services to 
the nuclear sector, given the expected expansion 
of nuclear programs in developing countries and 
increases in safety upgrades to existing reactors.

In order to strengthen our service offering to 
resource customers, we are combining our Power 
and Infrastructure & Environments sectors into a 
single customer sector group.

We expect improved in earnings in the Power sector 
and the combined group in FY2014.

Outlook for the group 
While recognizing the uncertainties in world 
markets, we expect our geographic and sector 
diversification to provide a solid foundation to 
deliver increased earnings in FY2014.

We have a clear growth strategy in place which 
includes developing our skill set and geographic 
footprint across our 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.

WorleyParsons Annual Report 2013  15

BOARD OF 
DIRECTORS

John Grill
Chairman and 
Non-Executive Director 

Andrew Wood
Chief Executive Officer 

John M Green
Non-Executive Director

Catherine Livingstone, AO
Non-Executive Director

Wang Xiao Bin 
Non-Executive Director

Erich Fraunschiel
Non-Executive Director

16  WorleyParsons Annual Report 2013

Erich Fraunschiel

Non-Executive Director

Christopher Haynes, OBE
Non-Executive Director

JB McNeil
Non-Executive Director

Ron McNeilly
Deputy Chairman and Lead 
Independent Director 

Larry Benke 
Non-Executive Director

Peter Janu
Company Secretary & 
General Counsel Corporate

WorleyParsons Annual Report 2013  17

OPERATING AND
FINANCIAL REVIEW

1 Operations

1.1 Overview

WorleyParsons is a professional services provider to the 
resources, energy and industrial sectors.

During the year ended 30 June 2013 (FY2013), our business 
was reported in four customer sector groups which focused on 
customers involved in the following activities:

•   Hydrocarbons – the extraction and processing of oil and gas;

•   Minerals, Metals & Chemicals – the extraction and processing 

of mineral resources and the manufacture of chemicals;

•   Infrastructure & Environment – projects related to water, 

the environment, transport, ports and site remediation and 
decommissioning; and

•   Power – all forms of power generation, transmission and 

distribution.

From 1 July 2013, we combined our Power and Infrastructure 
& Environment sectors into one sector referred to as 
Infrastructure.

For customers in each of these sectors, we provide Consult, 
Deliver, Improve and Advisory services:

•   Consult – assisting with project viability, assessment and 

selection. Consult services can include undertaking feasibility 
studies, providing conceptual designs, being involved in cost 
estimating and contract planning and providing technical 
advice;

•   Deliver – converting projects from concept into fully defined 

and executed projects. Defining a project can include 
undertaking cost estimates and preparing preliminary 
engineering designs. Executing a project can include 
preparing detailed engineering designs, procuring specialist 
materials and components required for the project and 
managing and executing the project’s construction;

•   Improve – maintaining and improving existing assets such 

as a gas processing plant or power station. This can involve 
us in reducing the costs involved in operating an asset or 
increasing the revenue earned from an asset; and

18  WorleyParsons Annual Report 2013

•   Advisory – providing project and business solutions to 
customers who develop, operate and maintain physical 
assets in the infrastructure and resources sectors. This can 
involve us in bringing our commercial and technical insights 
and experience to the complex problems they face and 
working alongside them to solve those problems.

These services range from small studies bringing in thousands 
of dollars in revenue to the delivery of major projects bringing 
in hundreds of millions of dollars in revenue.

Our customers range from multi-national oil and gas, resources 
and chemicals companies to more locally focused companies, 
national oil companies and government utilities operating in 
the sectors described above.

In order to provide local delivery to our customers, with global 
support, we employ around 39,800 people, in 165 offices 
located in 43 countries.

Our competitive position was most recently assessed 
when, in July 2013, the Engineering News-Record’s Top 
225 International Design Firms ranked WorleyParsons as 
the number one International Design Firm, number one for 
Petroleum Design and number two for Power Design. 

1.2 Business model
We are a people business. We empower our people to deliver 
services to our customers at a local level, but with the 
benefit of globalized support. We support our people with our 
systems and other infrastructure and charge their time spent 
performing professional services to our customers. 

Aggregated revenue and profit: Our sources of revenue and 
profit are diversified and our revenue and profit are generated 
from a large number of customers. As a result, we are not 
dependent on any one of our customers for a significant 
portion of our revenue and profit. We believe the disclosure 
of revenue attributable to associates provides additional 
information in relation to the financial performance of the 
Group and include this within Aggregated revenue.

Costs: Other than costs reimbursed by our customers, our two 
largest costs are: staff costs; and administration costs, which 
includes office lease costs.

Assets and liabilities: The significant items on our balance 
sheet are mainly project related, such as trade receivables 
(e.g. payments due from our customers), and provisions (e.g. 

amounts we have set aside for potential future liabilities, 
particularly those related to our employees), and borrowings 
(eg. bank debt). We also hold a number of intangible assets 
generated through previous acquisitions.

Our business is not capital intensive. However, our contract 
terms typically require our customers to pay us within 30 days 
of receiving our invoice, while, in a number of our locations, 
we must pay expenses (e.g. staff salaries) at shorter intervals. 
This time differential makes up the majority of our capital 
requirements. 

WorleyParsons Annual Report 2013  19

FY2013 AGGREGATED REVENUE BY GEOGRAPHIC REGION  70% 8% 10% FY2013 AGGREGATED REVENUE BY CUSTOMER SECTOR GROUP  HydrocarbonsPowerMinerals, Metals & Chemicals Infrastructure & Environment Middle East, North Africa & IndiaAustralia & New ZealandCanadaSub-Saharan AfricaAsia & ChinaLatin AmericaEuropeUnited States & Carribean8% 23% 29% 9% 4% 5% 15% 7% 12% OPERATING AND FINANCIAL REVIEW CONTINUED

1.3 Review of operations
A review of WorleyParsons’ operations for FY2013 can be found in the section headed “Business Summary” on pages 6 to 9 of 
the Annual Report. That section is incorporated into, and forms part of this Operating and Financial Review.

There are three measures that are key to understanding our results: 

1.  Aggregated revenue;
2.  EBIT (earnings before interest and tax); and
3.   NPAT (net profit after tax), attributable to shareholders 

1.  Aggregated 
revenue

FY2013 

FY2012* 

$’M

$’M Comments

7,627.0

7,362.6 We define aggregated revenue as:

• 

• 

• 

 our revenue and income calculated 
in accordance with relevant 
accounting standards;

 plus our share of revenue earned by 
our associates; and

 less procurement at nil margin, 
interest income, and net gain on 
revaluation of investments previously 
accounted for as equity accounted 
associates. 

Movement

Our aggregated revenue increased by 
4% in FY2013 when compared with 
that for FY2012 due to increased 
construction activities and contribution 
from acquired entities.

2.  EBIT

527.0

530.3 EBIT means earnings before interest 

and tax. 

Our EBIT is in line with that for 
FY2012.

3.  NPAT, 

322.1

345.6 NPAT means net profit after tax.

attributable to 
shareholders

Our NPAT decreased by 7% in FY2013 
when compared with that for FY2012 
due to a higher effective tax rate 
(27.3% v 24.1%) and additional interest 
costs from the US debt raised to fund 
acquisitions and working capital.

*We have calculated the numbers set out above so that they do not take into account the effect of the net gain of $7.6 million 
on revaluation of investments already held, as required under the accounting standards, that occurred during FY2012, but for 
which there were no corresponding gains during FY2013.

1.4  Significant changes in operations during FY2013 
With effect from the conclusion of our 2012 Annual General Meeting on 23 October 2012, John Grill retired as our Chief 
Executive Officer and Andrew Wood was appointed to that role. 

20  WorleyParsons Annual Report 2013

2 Financial Position and Cashflow

2.1  Matters relevant to understanding WorleyParsons’ financial position

There are four items that are key to understanding our financial position:

1.  Operating cash flow;
2.  Gearing ratio;
3.   Debt facility utilization; and
4.   Loan and overdraft facilities

1.  Operating 
cash flow

FY2013 
$’M

FY2012 

$’M Comments

443.5

437.5 Our operating cash flow comprises the 

payments we receive from our customers 
less the amount we pay our suppliers plus 
related interest and tax paid. In our financial 
statements, operating cash flow is called 
“net cash inflow from operating activities”. 

2.  Gearing 
ratio

25.3%

19.9% Our gearing ratio is our net debt divided 
by the sum of our net debt and our total 
equity, at the end of the financial year. 

Movement

Our operating cash flow increased by 1% in 
FY2013. 

Our gearing ratio increased by 5.4 
percentage points in FY2013 when 
compared with that for FY2012 because 
we funded acquisitions. 

This ratio is at the lower end of our gearing 
target of 25% to 35%.

3.  Debt 

55.5%

51.2% Our debt facility utilization is the 

facility 
utilization

4.  Loan and 
overdraft 
facilities

percentage of our debt facilities that we 
were using at the end of the financial year.

1,912.4 1,444.6 Our loan and overdraft facilities are the 

amount of our debt facilities at the end of 
the financial year. 

Our debt facility utilization increased 
4.3 percentage points in FY2013 when 
compared with that for FY2012 because of 
funding required for acquisitions.

The amount of our loan and overdraft 
facilities increased during FY2013 given 
the US debt raising referred to above and 
the change in foreign exchange rates 
from the beginning of the year to the 
end of the year. 

Our financial capacity remains strong given our cash, gearing and debt positions. 

WorleyParsons Annual Report 2013  21

  
OPERATING AND FINANCIAL REVIEW CONTINUED

2.2  Dividends
Our practise has been that in the order of 60% to 70% of 
WorleyParsons’ full year net profit after tax will be available 
for distribution as dividends, with the balance being retained 
for funding ongoing growth. Dividends are franked to the 
extent franking credits are available.

In line with this practise, our directors have resolved to pay 
a final dividend of 51.0 cents per fully paid ordinary share 
unfranked. As a result, 70.8% of our full year net profit 
after tax for FY2013 will be distributed to shareholders as a 
dividend. This compares with distributing 64.7% of our full 
year net profit after tax for FY2012.

2.3  Significant changes in WorleyParsons’ Statement 

of Financial Position during FY2013
There were no significant changes in WorleyParsons’ 
Statement of Financial Position during FY2013.

2.4 Future commitments
There are two types of future commitments which do not 
appear on our balance sheet and are relevant to understanding 
our financial position:

1.  operating leases; and

2.  operating expenditure commitments.

In general, we lease the various office buildings from which 
we operate, rather than owning those buildings. “Operating 
leases” refers to those leases.

In addition, we are generally licensed to use software 
(e.g. engineering software) and also lease various items of 
computer hardware (e.g. laptops, monitors and keyboards) 
that we use in operating our business, rather than owning the 
software or computer hardware ourselves. We refer to our 
commitments to pay software license and equipment lease 
fees as “operating expenditure commitments”.

These future commitments represent approximately 10% of 
our expenses.

3  Business Strategy, Outlook and Risks

3.1 Business Strategy
We develop strategy at an overall group level, within our 
sectors and for our locations and functions. Our process is 
intended to be one that is iterative and that remains alive and 
is updated and adjusted to suit the changing competitive and 
economic landscape.

Our strategy includes building our project delivery capability 
and as a result, doing more reimbursable EPC and full scope 
EPCM for greenfield projects and expanding the scope 
of support we offer for existing assets as a part of our 
Improve offering. 

We see growth potential in Improve, which includes services in 
engineering, procurement and construction across a portfolio 
of minor capital projects and maintenance, asset integrity and 
operations support. 

Equally, we see benefit in continuing to develop our EPCM, 
PMC and largely reimbursable EPC capabilities in the major 
project arena. Core to this is our Consult capability, along with 
front-end engineering design and detailed engineering. 

Our EcoNomics™ offering is a differentiated way of helping 
customers build sustainability into their operations and make 
increasingly difficult economic decisions around social license 
to operate and other traditionally intangible areas.

22  WorleyParsons Annual Report 2013

We continue to move into new locations, particularly in the 
developing world and to refine and leverage our customer 
relationships both globally and locally.

Strategy cycle: We have a mature, structured approach to 
strategy which includes development of:

1. 

 a five year aspirational vision for our organization;

2.   a three year global strategy, which is refreshed on an 

annual basis;

3.   three year sector strategies, which are refreshed on an 

annual basis; and

4.   functional and location annual business plans that reflect 

the sector and global strategies.

Our annual strategy workshops are followed by a series of 
communications across our business.

Strategy focus: The annual strategy process includes 
consideration of the following three factors and how they 
can best be combined to deliver value to our customers and 
returns to our shareholders:

1.  market conditions;

2.  customer needs; and

3.  our capability.

Strategy review: While a detailed strategy provides us with 
direction, it is also designed to be sufficiently flexible to 
adapt to changing market and customer demands. We monitor 
progress against our strategy throughout the year and we 
make adjustments where appropriate.

3.2 Outlook
While recognizing the uncertainties in world markets, we 
expect our geographic and sector diversification to provide a 
solid foundation to deliver increased earnings in FY2014.

We have a clear growth strategy in place which includes 
developing our skill set and geographic footprint across our 
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 our medium and long term prospects remain 
positive based on our competitive position, our diversified 
operations and strong financial capacity.

3.3 Risks
Achievement of our medium and long term prospects could 
be impacted by a number of risks, some of which are beyond 
our control. Those risks could, individually or together, have an 
adverse effect on achievement of those prospects. 

Set out below is an overview of a number of key risks that 
we face in seeking to achieve our medium and long term 
prospects. The risks are not set out in any particular order and 
do not comprise every risk we face in conducting our business 
or every risk that may affect the achievement of those 
prospects. Rather, they are the most significant of the risks 
that we believe we should be monitoring and seeking to 
mitigate or otherwise manage at this point in time.

Health and safety risk: Our business sometimes requires our 
people to be in high risk geographies, travel long distances by 
road, be in close proximity to complex operating equipment 
and be engaged in construction and operating activities. 
There is the risk of injury to, or the loss of life of, our people. 
To seek to mitigate this risk, we have a OneWay™ framework 
which includes the expectations that every one of our people 
must meet with respect to health and safety. OneWay™ 
expectations are supported by our business processes and 
we use them in assessing our performance; however, the 
risk exists that the failure to comply with such processes, 
customer health and safety requirements and applicable 
regulations could expose us to losses and liability.

Reputation risk: We rely on the strength of our reputation to 
help win and retain work, attract and retain employees, secure 
lines of credit and gain access to capital. Reputation can be 
damaged in a number of ways including through unethical 
business practises, poor project outcomes, negative media 
and not meeting the market’s expectation of our financial 
performance. We use a range of strategies and actions to seek 
to mitigate this risk including training on our Code of Conduct 
for our people globally, an ethics helpline and our enterprise 
management systems.

Strategy risk: Strategy risk is the risk of failing to develop 
and implement an effective business strategy. Failure to do so 
may over time lead to a loss of market share, damage to our 
reputation and negatively impact our financial performance. 
To mitigate this risk, we have an annual strategy development 
process which is discussed under the heading “Business 
strategy” on page 22 of this Operating and Financial Review. 
We develop and implement strategic initiatives and review our 
strategy during each year, making adjustments to it where 
appropriate.

People risk: Our ability to attract and retain top talent and 
industry leaders is a risk that, if not effectively managed, 
could have a negative impact on our reputation, technical 
performance and longer term financial performance. We seek 
to mitigate this risk by seeking to offer market competitive 
remuneration, training and career development opportunities 
and by seeking to be an attractive and engaging employer.

Project delivery risk: Our execution of projects and 
assignments involves professional judgment regarding the 
planning, design, development, construction and operation 
of often complex operating facilities. While our customers 
generally retain liability for consequential damages and while 
we have adopted a range of insurance, risk management and 
mitigation programs designed to seek to reduce potential 
liabilities, a catastrophic event resulting from the services 
we have provided could result in significant professional or 
product liability, warranty or other claims against us, as well as 
reputational damage.

WorleyParsons Annual Report 2013  23

OPERATING AND FINANCIAL REVIEW CONTINUED

Contract pricing risk: We have a relatively low level of 
exposure to fixed price contracts with the majority of our 
revenue derived on a reimbursable basis. However, if we 
materially underestimate the cost of providing equipment, 
plant and/or services, there is a risk of a material negative 
impact on financial performance. Where we do enter into 
fixed price contracts, we mitigate the pricing risk by using our 
estimating systems, knowledge and experience to seek to 
price them appropriately.

Competition risk: Our markets are highly competitive and 
this competition can place downward pressure on prices 
and margins. If we are unable to compete effectively in our 
markets, we run the risk of losing market share. We mitigate 
this risk by seeking to target the projects in relation to 
which we have a competitive advantage, manage our costs 
and margins and use low cost delivery centers to execute 
certain aspects of our work.

Demand risk: The volatile and cyclical nature of commodity 
prices and demand for our customers’ goods and services 
means that the demand for our services can likewise be 
cyclical and may sometimes vary markedly over relatively 
short periods. We have a number of strategies and processes 
in place to mitigate this risk including retaining a proportion 
of personnel on short notice contracts, seeking contractual 
protection for project demobilization, particularly for projects 
that require a significant in-country mobilization of our people, 
and sharing work across locations.

Legal and contractual risk: We are, from time to time, 
engaged in disputes with third parties, some of which involve 
litigation and disputes over contractual terms. The outcomes 
of these disputes can be difficult to predict and may cause 
a material negative impact on any one year’s financial 
performance. We manage this risk through our contract review 
and risk screening processes and active dispute management.

Finance market risk: Finance market risk is the risk that 
changes in market prices, such as foreign exchange rates 
and interest rates, will affect our income or the value of our 
balance sheet items. We use risk management techniques 
to seek to contain finance market risk exposures within 
acceptable parameters. We enter into derivatives, and also 
incur financial liabilities, in order to mitigate that risk and 
reduce volatility in earnings. In the ordinary course of business, 
we structure our contracts to be paid in the currency of the 
country in which the costs are incurred.

24  WorleyParsons Annual Report 2013

Liquidity risk: Liquidity risk is the risk that we will not be able 
to meet our financial obligations as they fall due. Our approach 
to managing liquidity is to seek to ensure that we will always 
have sufficient liquidity to meet our liabilities when due, 
under both normal and stressed conditions, without incurring 
unacceptable losses or risking damage to our reputation. 
In addition, we seek to ensure that we have efficient cash 
management processes and carry sufficient cash and credit 
lines to meet expected operational expenses, including 
obligations to our lenders.

Business interruption risk: As a global company, we are 
heavily reliant on computer, information and communications 
technology and related systems to operate efficiently and 
securely. We also operate at times in locations subject to 
natural disasters, civil unrest and military conflict. We seek 
to manage this risk through business continuity and disaster 
recovery systems and planning using a Ready, Response and 
Recovery (R3) methodology.

Partner risk: We operate through a number of joint ventures 
and partnering arrangements. The success of these businesses 
depends on the satisfactory performance by our partners 
of their obligations. The failure of our partners to meet 
these obligations could impose on us additional financial and 
performance obligations that could cause significant impact 
on our reputation and financial results. We mitigate this risk by 
conducting due diligence in relation to potential partners and 
by undertaking compliance reviews and regularly monitoring 
the performance of our joint ventures.

3.4 Unreasonable prejudice
We have omitted information regarding: (1) our internal 
budgets and internal forecasts; and (2) details of our business 
strategy, on the basis that if we had included that information, 
doing so would have been likely to result in unreasonable 
prejudice to us.

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 over, 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 (or a summary of them). These documents are 
periodically reviewed and enhanced where necessary to take 
account of changes in the law and governance practices.

The Group’s governance systems meet the requirements of the 
Corporations Act 2001 (Act) and the Listing Rules of the 
Australian Securities Exchange (ASX Listing Rules and ASX 
respectively).

As required by the ASX Listing Rules, this statement discloses 
the extent to which the Company has followed the Corporate 
Governance Principles and Recommendations with 2010 
Amendments (2nd Edition) released in June 2010 by the ASX 
Corporate Governance Council (ASX Recommendations) during 
the reporting period comprising the year ended 30 June 2013 
(Reporting Period). Except where otherwise explained, the 
Company followed all of the ASX Recommendations during the 
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 

Principles, it should consist of a minimum of three members, the majority being independent directors and 
have an independent chair).

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, 1.4, 2.3

2.5 Companies should disclose the process for evaluating the performance of the board, its committees and 

1.7

individual directors.

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

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 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 for the board to assess annually both the objectives and progress in achieving them. 

3.3 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.

3.4 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

WorleyParsons Annual Report 2013  25

 
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

2.3

2.3

2.3

2.3

5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule 

2.4, 3.5

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.

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 

2.3, 3.3, 3.4

disclose a summary of those policies.

7.2 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.

7.3 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 35 of the Annual Report.

26  WorleyParsons Annual Report 2013

CORPORATE GOVERNANCE CONTINUEDPART 1 – COMPOSITION AND GOVERNANCE 
POLICIES OF THE BOARD
Relevant policies and charters (see www.worleyparsons.com)

-	 Board	Charter

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	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,	its	Committees	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 

John	Grill	

Ron	McNeilly	

Larry	Benke	

Erich	Fraunschiel	

John	M	Green	

POSITION

Chief	Executive	Officer	and 
Executive Director 
(until	23	October	2012)

Chairman	and	Non-Executive			
Director (from 1 March 2013)

Chairman	and	Non-Executive			
Director (until 1 March 2013)

Deputy Chairman and Lead  
Independent Director 
(from 1 March 2013)

Non-Executive	Director

Non-Executive	Director

Non-Executive	Director

Christopher	Haynes,	OBE	

Non-Executive	Director

Catherine	Livingstone,	AO	

Non-Executive	Director

JB	McNeil	

Wang	Xiao	Bin	

Andrew	Wood	

Non-Executive	Director

Non-Executive	Director

Chief	Executive	Officer	and 
Executive Director 
(from	23	October	2012)

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 43–45 in the Directors’ Report.

During the Reporting Period:

•	

•	

•	

•	

	John	Grill	retired	as	Chief	Executive	Officer	and	Executive	
Director	on	23	October	2012.	On	1	March	2013,	he	rejoined	
the	Board	as	Chairman	and	Non-Executive	Director;

	Ron	McNeilly	retired	as	Chairman	and	Non-Executive	Director	
on 1 March 2013 and was appointed Deputy Chairman and 
Lead	Independent	Director	on	1	March	2013;

	Andrew	Wood	was	appointed	as	Chief	Executive	Officer	and	
Executive	Director	on	23	October	2012;	and

	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 an appropriate mix of 
directors with experience in engineering, relevant customer 
sector groups, general management and finance.

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.

During the Reporting Period, the Board visited offices in the USA 
and	South	Africa.	In	addition,	each	non-executive	director	
conducted	safety-awareness	visits	to	at	least	two	of	the	
Company’s project sites during the Reporting Period and in total 
32	such	non-executive	director	visits	took	place	in	the	Reporting	
Period.	Non-executive	directors	visited	project	sites	in	Australia,	
the USA, Canada, South Africa and Saudi Arabia. In addition, the 
current	CEO	visited	eight	project	sites	in	six	countries	in	the	
period	since	his	appointment	to	the	role	in	October	2012	until	
the end of the Reporting Period.

WorleyParsons Annual Report 2013  27

 
 
	
	
 
 
 
 
 
 
	
Company’s founders and a substantial shareholder, which aligns 
him with the interests of all shareholders.

Consistent with the ASX Recommendations, with Mr Grill’s 
appointment as Chairman, the Board created the role of Lead 
Independent Director. Ron McNeilly, the former Chairman, was 
appointed Deputy Chairman and Lead Independent Director from 
1 March 2013.

Appointing a Lead Independent Director seeks to ensure that the 
views of independent directors are effectively raised and 
considered by the Board in accordance with the spirit of the ASX 
Recommendations.

The Lead Independent Director provides leadership and support 
to the other independent directors in relation to matters that 
uniquely concern them as independent directors. The Lead 
Independent Director also, together with the Chairman, ensures 
that conflicts of interest on the Board (whether actual or 
potential) are identified and managed appropriately. The Lead 
Independent Director will call and chair at least four meetings 
of independent directors each calendar year (at which neither 
the Chairman nor members of senior management are present) 
for the purposes of discussing matters relevant to the Board’s 
business and responsibilities and two such meetings have 
been held during the Reporting Period since Mr Grill was 
appointed Chairman.

Dr Haynes, the Chairman of the Company’s Health, Safety and 
Environment	Committee,	is	a	non-executive	director	of	Woodside	
Petroleum Limited (Woodside), which is a customer of the Group. 
Mr Fraunschiel, the Chairman of the Company’s Audit and Risk 
Committee,	was	also	a	non-executive	director	of	Woodside,	until	
28 February 2013. The Board considers each of Dr Haynes and 
Mr Fraunschiel to be independent after applying the principles 
stated above, given the percentage of total revenue and total 
gross margin the Group earned from Woodside was less than the 
5% threshold stated above, during the Reporting Period.

In the Board’s opinion, the judgment of each of Dr Haynes and 
Mr Fraunschiel is not impaired or conflicted even though Dr 
Haynes	is,	and	Mr	Fraunschiel	was,	a	non-executive	director	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 or received any remuneration other 
than directors’ fees from either the Company or Woodside.

Mr	Benke	was	appointed	a	non-executive	director	on	the	day	
after resigning as an executive of the Group on 30 June 2010. 
The Board has determined that from 1 July 2013 Mr Benke 
should be regarded as independent on the basis of the time that 
has elapsed since he ceased employment with the Group, his 
relatively short period of employment with the Group prior to 
his appointment to the Board and the Board’s assessment of 
the extent to which Mr Benke’s previous employment with 
the Group has impacted on, or could be perceived to impact on, 
his independence.

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 practice 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	nine	non-executive	directors	and	has	formed	the	view	
that	eight	of	the	nine	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 Grill was appointed Chairman of the Board on 1 March 2013. 
Mr	Grill	was	Chief	Executive	Officer	of	the	entity	that	ultimately	
became WorleyParsons Limited from 1971 and held the position 
of	Chief	Executive	Officer	until	23	October	2012.	Mr	Grill	is	also	
a substantial shareholder of the Company. Accordingly, Mr Grill is 
not regarded as independent.

While the ASX Recommendations provide that the Chairman 
should be independent, the Board carefully assessed Mr Grill’s 
appointment as Chairman and considered that there were a 
number of unique circumstances that made Mr Grill’s 
appointment appropriate. Almost every one of the Group’s global 
industry	peers	is	chaired	by	a	former	Chief	Executive	Officer	
demonstrating the ongoing importance of strong industry and 
customer relationships in the Group’s industry. The Board wished 
to retain the benefit of Mr Grill’s close relationships with major 
global customers and his extensive industry experience. The 
Board also considered the fact that Mr Grill is one of the 

28  WorleyParsons Annual Report 2013

CORPORATE GOVERNANCE CONTINUED1.5  NOTIFICATION OF INTERESTS AND TREATMENT 

OF CONFLICTS

Directors are required to notify the Chairman of any contracts, 
offices (including other directorships) held, and 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, or be present during any discussion or vote on that 
matter. In the event that the Chairman has a conflict, the Lead 
Independent Director’s approval is required.

Neither Dr Haynes nor Mr Fraunschiel has received any relevant 
Board papers, been present during any discussion nor voted on 
any matter concerning Woodside.

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. In the case of the Chairman, the approval of the Lead 
Independent Director is required.

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

There is a review of Board and Committee performance, policies 
and practice every 12 months.

The review includes:

•	

comparing	performance	against	agreed	relevant	criteria;	and

•	 examining	the	Board’s	effectiveness	and	composition.

changes to the programs of the Board and Committees to adjust 
their focus on particular areas.

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

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

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

-	

-	

	Health,	Safety	and	Environment	Committee	Charter

	Continuous	Disclosure	Policy

•	 monitoring	of	business	performance;

2.1  BOARD RESPONSIBILITIES AND DELEGATION TO SENIOR 

•	

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 Committee evaluation took place during the 
Reporting Period in accordance with this process with each 
director conducting an individual evaluation of the performance 
of the Board and Committees as well as the structure and 
administration of the Board and Committees. The outcomes of 
the evaluations were discussed by the Board as well as 
measures to be taken to improve the effectiveness and 
efficiency of the Board and Committees, including improvements 
to certain reporting and analysis received by the Board and 

MANAGEMENT

The Board’s key responsibilities 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 seek to 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 

WorleyParsons Annual Report 2013  29

 
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 certain Board meetings, 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.

In addition to those meetings, eight special purpose Board Committee meetings were held during the Reporting Period. The Board 
also met informally during the Reporting Period by way of a Board briefing on seven occasions.

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

BOARD

AUDIT AND RISK 
COMMITTEE

NOMINATIONS 
COMMITTEE

REMUNERATION 
COMMITTEE

HEALTH, SAFETY AND 
ENVIRONMENT COMMITTEE

DIRECTOR

John Grill

Ron McNeilly

Larry Benke

Erich Fraunschiel

John M Green

Christopher	Haynes,	OBE

Catherine	Livingstone,	AO

JB McNeil

Wang Xiao Bin

Andrew Wood

MEETINGS 
HELD 
WHILE A 
DIRECTOR

MEETINGS 
HELD 
WHILE A 
MEMBER

NUMBER 
ATTENDED

MEETINGS 
HELD 
WHILE A 
MEMBER

MEETINGS 
HELD 
WHILE A 
MEMBER

NUMBER 
ATTENDED

MEETINGS 
HELD 
WHILE A 
MEMBER

NUMBER 
ATTENDED

NUMBER 
ATTENDED

NUMBER 
ATTENDED

8

11

11

11

11

11

11

11

11

7

8

11

11

11

11

11

11

11

11

7

1

6

6

6

6

2

5

5

5

5

5

5

5

5

1

6

6

6

6

1

6

6

6

2

5

5

5

5

5

5

5

5

1

6

6

6

1

6

6

6

1

6

6

6

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, and 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	

Whole	Reporting	Period

JB McNeil 

Wang Xiao Bin 

Ron McNeilly 

Whole Reporting Period

Whole Reporting Period

From 10 April 2013

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, and removal and 
evaluation and approval of the auditor’s engagement terms, fees 
and audit plan.

30  WorleyParsons Annual Report 2013

CORPORATE GOVERNANCE CONTINUEDDetails of the qualifications of the members of the Audit and 
Risk Committee are set out in the Directors’ Report on pages 
43–45. Details of the Audit and Risk Committee meetings held 
and attendances at those meetings are set out in this statement 
on page 30.

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.

The Audit and Risk Committee is responsible for establishing 
procedures for the selection and recommendation 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.

NAME 

DURATION

Ron McNeilly (Chairman)  

To 8 April 2013

Ron McNeilly 

Whole Reporting Period

John Grill (Chairman) 

From 8 April 2013

Larry Benke 

Erich Fraunschiel 

John M Green 

Whole Reporting Period

Whole Reporting Period

Whole Reporting Period

Christopher	Haynes,	OBE	

Whole	Reporting	Period

Catherine	Livingstone,	AO	

Whole	Reporting	Period

JB McNeil 

Wang Xiao Bin 

Whole Reporting Period

Whole Reporting Period

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.

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.

Remuneration 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	
responsible for ensuring that the Group has and observes 
coherent remuneration policies and practices 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 on page 48 of the Annual Report.

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

NAME 

DURATION

John M Green (Chairman) 

Whole Reporting Period

JB McNeil 

Ron McNeilly 

John Grill  

Whole Reporting Period

Whole Reporting Period

From 10 April 2013

Details of the Nominations Committee meetings held and 
attendances at those meetings are set out in this statement on 
page 30.

Details of the Remuneration Committee meetings held and 
attendances at those meetings are set out in this statement on 
page 30.

WorleyParsons Annual Report 2013  31

 
Health, Safety and Environment Committee

3.1 ETHICAL DECISION MAKING – THE CODE OF CONDUCT

The Health, Safety and Environment Committee assists the 
Board to fulfill 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.

The following directors were members of the Health, Safety and 
Environment Committee during the Reporting Period:

NAME 

DURATION

Christopher	Haynes,	OBE	
(Chairman) 

Ron McNeilly  

Larry Benke 

John Grill  

Whole	Reporting	Period 

Whole Reporting Period

Whole Reporting Period

From 10 April 2013

Details of the Health, Safety and Environment Committee 
meetings held and attendances at those meetings are set out in 
this statement on page 30.

2.4 DISCLOSURE COMMITTEE

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.

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

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

–  Global Diversity and Inclusion Policy

–  Corporate Responsibility Statement

32  WorleyParsons Annual Report 2013

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, Hindi, 
Kazakh, Mandarin, Norwegian, Portuguese, Russian, Spanish, 
Tagalog, Thai and Vietnamese.

The Code was updated during the Reporting Period to reflect 
changes in legislation and corporate governance standards.

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 an individual might face. 
The Code’s objective is to provide a benchmark for professional 
and personal behavior throughout the Group, to safeguard the 
Group’s reputation and to make clear 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 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.

CORPORATE GOVERNANCE CONTINUED3.3 MANAGEMENT OF MATERIAL BUSINESS RISKS

The Group has a Corporate Risk Management Policy and Risk and 
Assurance framework. The Board requires management to 
design and implement risk management and internal control 
systems to identify, assess and manage the Group’s material 
business risks and report to it on whether those risks are being 
managed effectively. The Risk and Assurance framework 
describes the objectives, strategies, resources and 
responsibilities for managing risk and how assurance is 
provided to the Board and management in relation to 
compliance and effectiveness.

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 insofar 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.

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 
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,	the	Group	Managing	Director	–	Development	and/or	the	
CFO	and	occasionally	other	senior	executives,	meet	with	
analysts and investors from time to time. 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,	Group	Managing	Director	–	
Development	and/or	the	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 
46 to 59 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 

WorleyParsons Annual Report 2013  33

 
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:

MEASURES 

Women employees1 

Women senior executives2 

Women	non-executive	directors3 

2013 

~25% 

~15% 

~22% 

2012

~26%

~11%

~25%

1 
2 

3	

 This includes both employees and contractors engaged by the Group.
 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.
	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.

countries, cultures and contexts spanned by the Group’s 
operations. The Group considers 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, their skills are fully utilized, 
their performance is recognized, professional accountability is 
expected and organizational goals are met.

3.8.1  THE GROUP’S GLOBAL DIVERSITY AND 

INCLUSION POLICY

The Group’s Global 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. In accordance with the Australian Workplace 
Gender Equality Act 2012, the Group has submitted a 
Workplace	Gender	Equality	Report	for	the	2012/2013	
reporting period and the submission is available on the 
Group’s website.

34  WorleyParsons Annual Report 2013

CORPORATE GOVERNANCE CONTINUEDCORPORATE RESPONSIBILITY

INTRODUCTION
The Group recognizes the importance of our communities as 
stakeholders and influencers in the areas in which we operate. 
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.

The Group is committed to contribute to the development of 
local communities through local employment and Corporate 
Responsibility projects. The key drivers for success in these 
projects have been the Group’s overarching support and the 
willingness of the Group’s personnel to volunteer their time 
and make donations in support of their local Corporate 
Responsibility activities.

A broad range of projects were delivered across the business 
such	as	pro-bono	projects,	sponsorships,	education	programs,	
fundraising	for	not-for-profit	organizations	and	programs	to	
reduce the Group’s impact on the environment.

The Group will be launching a WorleyParsons Foundation in the 
next financial year in addition to its locally executed Corporate 
Responsibility program.

1. CORPORATE RESPONSIBILITY STATEMENT

In 2012, the Group revised and updated its Corporate 
Responsibility Statement to clearly articulate the Group’s 
commitment to, 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.

1.1 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, OneWay™.

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

1.2 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 practices 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.

1.3 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.

1.4 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.

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.

1.5 Fair Operating Practices and Supply Chain

We will actively strive to implement socially responsible supply 
chain practices and anti-corruption practices working closely 
with our customers 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.

1.6 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 customers 
through our EcoNomicsTM service offering.

2. MILESTONES

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

•	

•	

•	

•	

•	

•	

	granted	approval	by	the	Executive	Committee	to	establish	a	
WorleyParsons Foundation that will provide support for the 
execution	of	strategic	community	projects;

	revised	the	WorleyParsons	Code	of	Conduct	that	reaffirms	
the	Group’s	Corporate	Responsibility	expectations;

	developed	and	introduced	the	Group’s	Human	Rights	Policy	
that is aligned to the United Nations Human Rights Council’s 
“Protect, Respect and Remedy Framework” which states the 
Group’s business principles and confirms the Group’s 
commitment	to	human	rights;

	published	the	Group’s	first	Supply	Chain	Code	of	Conduct	
which sets the minimum and preferred requirements for the 
Group’s suppliers and contractors, and reflects the best 
practice and continuous improvement in sustainability of the 
Group’s	business	and	projects;

	achieved	global	Chartered	Institute	of	Purchasing	&	Supply	
(CIPS) Certification for the Group procurement policies, 
strategies, procedures and processes as part of the Group 
commitment	to	be	the	best	in	class	in	procurement	policies;

	hosted	Corporate	Responsibility	alignment	meetings	with	a	
number of the Group’s Tier 1 customers to identify any real 
or perceived gaps and to share lessons learnt and best 
practices;	and

WorleyParsons Annual Report 2013  35

 
•	

	fulfilled	the	Group’s	first	year	obligations	as	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.

During the year ending 30 June 2014, the Group intends to:

•	

•	

•	

•	

	establish	a	WorleyParsons	Foundation	Council	to	
provide governance and oversight to the new 
WorleyParsons	Foundation;

	undertake	ongoing	continuous	improvement	of	external	
reporting commitments using the internationally recognized 
Global	Reporting	Initiative	framework;

	further	assess	Corporate	Responsibility	targets,	objectives	
and	collaboration	with	various	Group	functions;	and

	further	integrate	awareness	and	importance	of	road	safety	
within the Group and the communities in which it operates.

3. AWARDS

•	

•	

•	

•	

•	

•	

	WorleyParsons	was	a	Top	50	finalist	in	the	2012 Social 
Investment Pioneer Awards. The inaugural global award is an 
initiative of the Principles for Social Investment Secretariat, 
United Nations Global Compact Initiative and recognizes the 
importance of private sector engagement in sustainable 
community development.

	WorleyParsons	China	was	recognized	as	one	of	the	Top 100 
Best Enterprises with an Award for Excellence in Corporate 
Social Responsibility in the fourth China Corporate Social 
Responsibility Annual Summit in Beijing.

	WorleyParsons	received	an	Honorable	Mention	in	the	2013 
Asia-Pacific Enterprise Leadership Awards for its educational 
service and commitment to philanthropy.

	WorleyParsons	Europe	was	recognized	for	its	approach	to	
occupational safety and health in an awards scheme run by 
the safety charity, the Royal Society for the Prevention of 
Accidents. 2013 is the fourth consecutive year that 
WorleyParsons	Europe	has	attained	the	GOLD	Award	and	
once again illustrates our commitment to industry leadership 
in Health, Safety and Environmental performance.

	WorleyParsons	was	recognized	as	the	Most Improved 
Purchasing Operation – Step Change at the CIPS Middle East 
Awards in recognition of its detailed strategy and clear 
objectives in sustainable project procurement and delivery. It 
was also recognized as a finalist in the Best Contribution to 
the Reputation of the Procurement Profession category.

	WorleyParsons	was	awarded	the	Chairman’s	Award	for	
outstanding commitment, participation and leadership at an 
executive level, in supporting CareerTrackers internships for 
Australian Indigenous university students.

36  WorleyParsons Annual Report 2013
36  WorleyParsons Annual Report 2013

CORPORATE RESPONSIBILITY CONTINUED4. CORPORATE RESPONSIBILITY INDICATORS

5. ACTIVITY HIGHLIGHTS

The Group undertook various community engagement and 
environmental activities over this Reporting Period, including:

•	

•	

•	

•	

•	

•	

•	

•	

•	

•	

	participating	directly	in	over	365	community	based	and	
environmental projects across 26 countries via ongoing 
participation in the Group’s own programs: DeltaAfrik 
Foundation in Nigeria, We Care program in Canada and other 
location	Corporate	Responsibility	committees;

	contributing	over	$200,000	and	450	volunteer	hours	
towards educational programs and sponsorships across 20 
location programs in the USA, Australia, Canada, Thailand, 
Bulgaria	and	South	Africa;

	providing	1,400	pro-bono	hours	towards	project	management	
and engineering services in Australia, Canada and the 
United	Kingdom;

	matching	$480,000	of	Group	personnel	
fundraising	programs;

	training	743	people	in	leadership	development	programs,	
representing 61 nationalities, speaking 21 primary languages 
and	38	secondary	languages;

	expanding	the	Women	of	WorleyParsons	professional	
women’s global network to 970 members across 30 
locations.	Over	100	events	were	hosted	to	celebrate	and	
promote	diversity	and	inclusion	across	the	Group;

	providing	ongoing	support	to	the	Australian	Indigenous	
community by hosting Indigenous business forums, 
internships,	art	exhibitions	and	cultural	festivals;

	providing	sponsorship	to	organizations	who	champion	
women	in	science	and	technology;

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

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

The Group measures and focuses on those areas that are 
important to the long term success of its business and are 
desirable to all of its stakeholders.

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

The Group completed a response for the Carbon Disclosure 
Project in 2013. The Group’s energy consumption and 
greenhouse gas emissions were recorded to assist the Group to 
measure and reduce its energy consumption and to reduce its 
greenhouse gas emissions.

The	Group	uses	the	US	OSHA	(United	States	Occupational	Safety	
&	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 2012 are:

INDICATORS 

2013 

2012

Contributions by operations 

$2.25 million 

$2.67 million

Contributions by personnel members  $1.90 million 

$1.95 million

Volunteer hours by personnel 
members  

TRCFR 
LWCFR 

10,473 hours 

23,748 hours 

0.13 
0.03 

0.12 
0.03

The Group’s Corporate Responsibility program has achieved 
positive results and maintains the levels of employee fundraising 
and company contribution.

As data for greenhouse gas emissions and energy consumption 
is	not	available	until	the	October	after	the	end	of	financial	year,	
the table below shows those indicators for the year ended 
30 June 2012 and the year ended 30 June 2011:

2012 

2011

PER 
PERSONNEL 
MEMBER1 

PER 
 PERSONNEL 
TOTAL2  MEMBER1 

TOTAL

INDICATORS 

Greenhouse gas  
emissions	tCO2-e	
Energy consumption MWh 

2.36 
96,168 
6.78  276,650 

2.80 
97,840
7.54  263,949

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

Exmouth Power Station, Australia.

WorleyParsons Annual Report 2013  37

 
 
 
 
 
 
 
 
YOUTH MENTORING, CANADA
A group of 23 volunteers from the Edmonton office donated 
their time, on a weekly basis, to help and mentor children 
from the Boys and Girls Club Big Brothers Big Sisters in 
Calgary (BGCBigs) in navigating the challenges in their lives 
such	as	peer	pressure,	puberty	and	self-esteem	issues.

Every week, mentors and their protégés spent time together 
in a casual environment with a focus on having fun and 
self-development.

“ My big sister is someone I can look up to. We talk about my 
future and what is important to me. When I talk to her, it 
reminds me that no matter how tough life seems right now, 
everything will turn out OK at the end.”
Former mentee of BGCBigs, Calgary.

HELPING ORPHANS, KAZAKHSTAN
In September 2012, WorleyParsons Kazakhstan (WPK) began 
fundraising efforts to raise money for orphaned children in 
the village of Geolog, near Atyrau. There are over 80,000 
orphans	currently	living	in	state-run	homes	across	
Kazakhstan and many of these homes depend on donations 
to supplement limited government funding.

The event collected a total of KZT621,500 ($4,000) which 
was used to purchase much needed winter clothing for 49 
orphans, festival costumes and musical instruments. The 
goods were delivered to the orphanage in November 2012.

“ We were very glad to see so many smiles yesterday on kids’ 
faces ... it must go on.”
Dina Gabdesheva, Human Resources Manager WPK and member of 
WPK Corporate Responsibility committee.

TRANSPORT SYSTEM DESIGN, AUSTRALIA

WorleyParsons	Perth	provided	pro-bono	engineering	work	to	
Royal Flying Doctor Service (RFDS) to identify and implement 
a solution to the difficulties presented to RFDS in 
transporting larger patients. WorleyParsons was involved in 
the conceptual study, organization of tender documents, and 
working with RFDS in interviewing and selecting the 
preferred suppliers.

The goal from the collaboration was an integrated bariatric 
transport system, which will be adaptable from the aircraft to 
ambulance ground support. In May 2013, WorleyParsons 
Perth and RFDS achieved a significant milestone in the 
delivery of a new aeromedical stretcher and loading system 
to cope with larger patients.

“ Obviously, the size of our aircraft means that it can be a 
challenge to transport these (larger) patients so we had to 
be innovative in how we manage this and the expertise 
of WorleyParsons engineers has been invaluable in 
finding a solution.”
Dr Stephen Langford, RFDS Medical Director.

38  WorleyParsons Annual Report 2013

WorleyParsons Edmonton mentor Lydia Fernandez with her protégé, Taylor 
(Photo credit: United Way of the Alberta Capital Region, WE Magazine 2013)

WorleyParsons personnel with Geolog orphanage children

Royal Flying Doctor Service aircraft in Western Australia

CORPORATE RESPONSIBILITY CONTINUEDMUSEUM REFURBISHMENT, UNITED KINGDOM
Graduates, with support and guidance from senior 
management from the WorleyParsons London office, have 
undertaken	pro-bono	work	with	the	Kew	Bridge	Steam	
Museum, a nationally significant museum with the world’s 
largest collection of Cornish Beam Engines.

The first phase of the project includes design work to be 
incorporated into the museum’s GBP2.5 million refurbishment 
program. The Group’s graduates have been working on the 
design for a support structure for a gas engine and 
re-engineering	the	water	pump	to	the	entrance	of	the	
museum. Plans to incorporate this design are scheduled and 
construction is underway at the museum.

“ The services provided to date have been of the highest 
professional quality throughout and have helped the 
museum make significant financial savings. We are very 
grateful to the WorleyParsons teams.”
Richard Albanese, Project Coordinator for Project Aquarius, Kew 
Bridge Steam Museum.

UNITED WAY CAMPAIGN, 
CANADA/UNITED STATES OF AMERICA
United Way is a community based charity which focuses on 
working with the local community to find effective solutions 
to social issues using a combination of employee fundraising 
and corporate matching.

In FY2013, WorleyParsons Canada as well as the Group’s 
Houston and Tulsa offices had their most successful United 
Way campaign to date. Two of the largest campaigns were 
from the Calgary and Edmonton offices with a total 
contribution of CAD1,175,000 ($1,133,000).

“ For more than 30 years, WorleyParsons has been a 
wonderful partner to the United Way and to the city 
of Calgary. At WorleyParsons, employees have a good 
understanding that they have an opportunity to make a 
difference in the world and they are committed to that as 
individuals and as an organization.”
Dr Lucy Miller, President and Chief Executive Officer of the United 
Way of Calgary and area.

ENTERPRISE DEVELOPMENT PROGRAM, SOUTH AFRICA
An Enterprise Development (ED) Program is funded by 
WorleyParsons TWP. An ED business center was 
established in Johannesburg consisting of nine 
promising small businesses.

WorleyParsons TWP contributes ZAR150,000 ($15,000) per 
month by supplying these small businesses with office 
space, computers, telephones and printing facilities at no 
cost to the businesses. The business owners have access 
to technical mentorship and technical skills transfer from 
the local WorleyParsons knowledge base. Further, these 
businesses have been incorporated into the Group’s 
supply chain.

Additional assistance in marketing, financial advice, tender 
preparation, human resources and business processes has 
also been provided to the business owners.

“ Our business has grown exponentially since our 
involvement with WorleyParsons TWP. Gridbow is now a 
force to be reckoned with in the engineering sector.”
Evans Farai Chabata, Managing Director, Gridbow Engineering. 

Graduates inspecting control equipment at Kew Bridge Steam Museum, 
United Kingdom

United Way campaign kick-off in WorleyParsons Calgary

WorleyParsons TWP Enterprise Development Program participants, 
South Africa

WorleyParsons Annual Report 2013  39

 
Financial Report
For the financial year ended 30 June 2013

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 

NOTES TO THE FINANCIAL STATEMENTS

1 Corporate Information 

2 Summary of Significant Accounting Policies 

3 Financial Risk Management 

4 Expenses and Losses/(Gains) 

5 Other Income 

6 Income Tax 

7 Current Assets – Cash and Cash Equivalents 

8 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 

WORLEYPARSONS LIMITED
ACN 096 090 158

40  WorleyParsons Annual Report 2013

65

65

71

72

72

72

73

73

74

75

76

76

76

77

77

78

78

79

80

80

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 

41

60

61

62

63

64

65

95

96

98

100

80

80

81

83

83

84

84

84

85

85

85

85

86

87

89

90

90

93

94

94

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 2013.

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:

Interim ordinary dividend for 2013 of 41.5 cents per 
ordinary share paid on 22 March 2013 (41.5 cents franked) 

John Grill (Chief Executive Officer and Executive Director until 23 October 
2012, Chairman and Non-Executive Director from 1 March 2013)

Final ordinary dividend for 2012 of 51.0 cents per ordinary 
share paid on 28 September 2012 (31.3 cents franked) 

Ron McNeilly (Chairman and Non-Executive Director until 1 March 2013, 
Deputy Chairman and Lead Independent Director from 1 March 2013)

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

Larry Benke

Erich Fraunschiel

John M Green

Christopher Haynes, OBE

Catherine Livingstone, AO

JB McNeil

Wang Xiao Bin

Andrew Wood (Chief Executive Officer and Executive Director from 
23 October 2012).

The number of Board and Committee meetings held during the financial year 
and the number of meetings attended by each of the Company’s directors is 
set out on page 30 in the Corporate Governance statement.

DIRECTORS’ NUMBER OF SHARES AND PERFORMANCE RIGHTS

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

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

Total dividends paid 

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, unfranked (2012: 51.0 cents per share, partially franked at 61.3%). In 
accordance with AASB 137 Provisions, Contingent Liabilities and Contingent 
Assets, the aggregate amount of the proposed final dividend of 
$125.7 million is not recognized as a liability as at 30 June 2013.

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 Operating and Financial 
Review, which is incorporated into, and forms part of, this directors’ report.

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

2013 
$’M 

2012 
$’M

102.4 

125.3 

– 

– 

227.7 

–

–

98.3

122.8

221.1

DIRECTORS 

John Grill 

Ron McNeilly 

Larry Benke 

Erich Fraunschiel 

John M Green 

Christopher Haynes, OBE 

Catherine Livingstone, AO 

JB McNeil 

Wang Xiao Bin 

Andrew Wood 

NUMBER OF SHARES 

NUMBER OF 
PERFORMANCE 
RIGHTS

25,372,173 

53,6081

Revenue and other income 

387,484 

1,133,383 

168,755 

891,869 

6,055 

13,000 

10,800 

11,000 

-

-

-

-

-

-

-

-

828,171 

108,067

Depreciation 

Amortization 

Earnings before interest and tax (EBIT) 

Net interest expense 

Profit before income tax expense 

Income tax expense 

Profit after income tax expense 

1  Excludes cash settled performance rights.

Further details in relation to the rights issued by the Company are set out in 
the Remuneration Report, note 18 (c) and note 33.

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:

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

CONSOLIDATED

2013 

$’M 

2012 

$’M

8,831.5 

7,408.4

(21.0) 

(81.3) 

527.0 

(53.4) 

473.6 

(19.1)

(83.9)

537.9

(44.1)

493.8

(129.4) 

(117.3)

344.2 

376.5

•	 Hydrocarbons;

•	 Minerals,	Metals	&	Chemicals;

•	

•	

Infrastructure	&	Environment;	and

Power.

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

– 

(7.6)

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

344.2 

368.9

Profit after income tax expense attributable to:

Members of WorleyParsons Limited 

322.1 

353.2

– 

(7.6)

322.1 

22.1 

345.6

23.3

Non-controlling interests 

Revenue and other income 

8,831.5 

7,408.4

Less: procurement services revenue at nil margin 

(1,747.7) 

(696.2)

Add: share of revenue from associates 

549.2 

665.0

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

Less: interest income 

Aggregated revenue1 

– 

(6.0) 

(7.6)

(7.0)

7,627.0 

7,362.6

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.

WorleyParsons Annual Report 2013  41

 
 
 
 
 
 
 
 
 
 
 
DIRECTORS’ REPORT CONTINUED

AGGREGATED REVENUE 

EBIT 

EBIT MARGIN

ACQUISITIONS

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

2013 
$’M 

2012 
$’M 

2013 
$’M 

2012 
$’M 

2013 
% 

2012 
%

Hydrocarbons 

5,344.3  5,015.1 

633.7 

598.4 

11.9 

11.9

Minerals, Metals 
&	Chemicals	

Infrastructure 
and Environment 
Power 

937.6	

895.4	

135.5	

134.1	

14.5	

15.0

783.8 
561.3 

870.8 
581.3 

85.9 
49.4 

118.4 
61.4 

7,627.0  7,362.6 

904.5 

912.3 

11.0 
8.8 

11.9 

13.6 
10.6

12.4

Global support costs 

(342.7) 

(336.7) 

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 

(11.1) 

(13.8) 

(23.7) 

(31.5) 

527.0 

530.3 

6.9 

7.2

Aggregated revenue was $7,627.0 million, an increase of 3.6% on the prior 
financial year. EBIT, excluding net gain on revaluation of investments 
previously accounted for as equity accounted associates, of $527.0 million, 
was down 0.6% from the prior financial year result of $530.3 million.

The EBIT margin on aggregated revenue for the Group, excluding net gain on 
revaluation of investments previously accounted for as equity accounted 
associates, decreased to 6.9% compared with 7.2% in 2012. After tax, the 
members of WorleyParsons Limited earned a net margin, excluding net gain 
on revaluation of investments previously accounted for as equity accounted 
associates, on aggregated revenue of 4.2%, compared to the 2012 net margin 
of 4.7%.

The effective tax rate was 27.3% compared with 24.1%, excluding net gain 
on revaluation of investments previously accounted for as equity accounted 
associates, in 2012.

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 25.3% (2012: 19.9%). 
Cash as at 30 June 2013 was $320.0 million (2012: $247.3 million). Earnings 
before interest, tax, depreciation and amortization (EBITDA) interest cover for 
2013 was 10.6 times (2012: 12.5 times). EBITDA interest cover, excluding 
net gain on revaluation of investments previously accounted for as equity 
accounted associates, for 2013 was 10.6 times (2012: 12.4 times).

Operating cash inflow for the period was $443.5 million, compared to 
$437.5 million in 2012. Cash outflow from investing activities was $346.7 
million (2012: $106.3 million).

EARNINGS PER SHARE

Basic earnings per share 

Basic earnings per share excluding net acquisition gains 

Diluted earnings per share 

2013 
CENTS 

130.8 

130.8 

129.9 

Diluted earnings per share excluding net acquisition gains 

129.9 

2012 
CENTS

143.7

140.6

142.5

139.5

Basic earnings per share, excluding net gain on revaluation of investments 
previously accounted for as equity accounted associates, were 130.8 cents 
per share, a decrease of 7.0% from the previous financial year result of 
140.6 cents per share.

Effective from 1 January 2013, the Group acquired Bergen Group Rosenberg 
AS, currently known as Rosenberg WorleyParsons AS (Rosenberg) and its 
controlled entities in Norway. Rosenberg is a major supplier of engineering 
solutions to the Norwegian oil and gas industry.

Effective from 1 March 2013, the Group acquired TWP Holdings Proprietary 
Limited (TWP) and its controlled entities in South Africa and Peru. TWP 
provides engineering design, procurement, construction management and 
asset planning services to the mining sector.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

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, unfranked (2012: 51.0 cents per share, partially franked at 61.3%). In 
accordance with AASB 137 Provisions, Contingent Liabilities and Contingent 
Assets, the aggregate amount of the proposed final dividend of 
$125.7 million is not recognized as a liability as at 30 June 2013.

No other matter or circumstance has arisen since 30 June 2013 that has 
significantly affected, or may significantly affect:

•	

•	

•	

the	consolidated	entity’s	operations	in	future	financial	years;

the	results	of	those	operations	in	future	financial	years;	or

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

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

While recognizing the uncertainties in world markets, we expect our 
geographic and sector diversification to provide a solid foundation to deliver 
increased earnings in FY2014. We have a clear growth strategy in place which 
includes developing our skill set and geographic footprint across our 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.

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. The Company again 
completed a response for the Carbon Disclosure Project (CDP) in 2013, 
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 also completed a CDP 
response in respect of its water use for 2013.

42  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 2011/2012 in 
October 2012. 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 
Company intends to lodge its NGER Report for the Group for the period 
2012/2013 in October 2013.

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 $1,481,658.

The Board has adopted a policy outlining the provision of non-audit services 
by the external auditor. 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 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.

Ernst & Young 
680 George Street 
Sydney  NSW  2000 Australia 
GPO Box 2646 Sydney  NSW  2001 

Tel: +61 2 9248 5555 
Fax: +61 2 9248 5959 
ey.com/au 

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 
2013, 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 
680 George Street 
Sydney  NSW  2000 Australia 
GPO Box 2646 Sydney  NSW  2001 

Tel: +61 2 9248 5555 
Fax: +61 2 9248 5959 
ey.com/au 

Ernst & Young 

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 
Bruce Meehan 
2013, to the best of my knowledge and belief, there have been no contraventions of the auditor 
Partner 
independence requirements of the Corporations Act 2001 or any applicable code of professional 
Sydney  
conduct. 
14 August 2013 

Ernst & Young 

Bruce Meehan 
Partner 
Sydney  
14 August 2013 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

A member firm of Ernst & Young Global Limited 

Liability limited by a scheme approved under Professional Standards Legislation 

INFORMATION ON DIRECTORS AND COMPANY SECRETARY

JOHN GRILL BSC, BENG (HONS), HON DENG (SYDNEY)
CHAIRMAN AND NON-EXECUTIVE DIRECTOR – CHIEF EXECUTIVE OFFICER 
AND DIRECTOR FROM LISTING IN NOVEMBER 2002 UNTIL OCTOBER 2012 
AND DIRECTOR OF THE COMPANY BEFORE LISTING AND ITS PREDECESSOR 
ENTITIES FROM 1971
COUNTRY OF RESIDENCE – AUSTRALIA
John is Chairman of the Board and Chairman of the Nominations Committee 
and a member of the Remuneration Committee and Health, Safety and 
Environment Committee. He has over 40 years’ experience in the resources 
and energy industry, starting his career with Esso Australia. In 1971, he 
became Chief Executive of Wholohan Grill and Partners, the entity that 
ultimately became WorleyParsons Limited. This specialized consulting practice 
acquired the business of Worley Engineering Pty Limited in Australia in 1987. 
It listed on the Australian Securities Exchange in 2002 as Worley Group 
Limited following a restructuring of the company. In 2004, Worley Group 
Limited	acquired	Parsons	E&C	Corporation,	a	US-based	global	project	services	
company, and changed its name to WorleyParsons Limited. The Group then 
acquired the Colt Group in Canada in 2007, substantially increasing its 
capability in the upstream and downstream components of oil sands. John has 
personal expertise in every aspect of project delivery in the resources and 
energy industry. He has strong relationships with WorleyParsons’ major 
customers and was closely involved at board level with the Group’s joint 
ventures. John was awarded an honorary doctorate by The University of 
Sydney in 2010 in recognition of his contribution to the engineering 
profession. He is the Chairman of the National Precincts Board and is also 
on the board of Neuroscience Research Australia and the Australian 
Chamber Orchestra. 

RON MCNEILLY BCOM, MBA, FCPA, FAICD
DEPUTY CHAIRMAN AND LEAD INDEPENDENT DIRECTOR – DIRECTOR SINCE 
LISTING IN NOVEMBER 2002
COUNTRY OF RESIDENCE – AUSTRALIA
Ron is Deputy Chairman and Lead Independent Director of the Board and was 
previously Chairman of the Board. He is a member of the Audit and Risk 
Committee, Nominations Committee, Remuneration Committee and 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. He joined BHP Billiton Limited in 1962 
and 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
COUNTRY OF RESIDENCE – CANADA
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 Group, 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 Group 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 

WorleyParsons Annual Report 2013  43

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LISTED COMPANY NAME 

NATURE OF  
DIRECTORSHIP 

Woodside 
Petroleum Limited  director

Non-executive 

DATE OF COMMENCEMENT  DATE OF CESSATION

1 December 2002  28 February 2013 

Australian listed company directorships

DIRECTORS’ REPORT CONTINUED

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
COUNTRY OF RESIDENCE – AUSTRALIA
Erich is Chairman of the Audit and Risk Committee and a member of the 
Nominations Committee. He is Chairman of Wesfarmers General Insurance 
Limited and Wesfarmers Insurance Pty Limited and was a non-executive 
director of Woodside Petroleum Limited until February 2013. 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

JOHN M GREEN BJURIS/LLB, FAICD, SFFIN
NON-EXECUTIVE DIRECTOR – DIRECTOR SINCE LISTING IN NOVEMBER 2002
COUNTRY OF RESIDENCE – AUSTRALIA
John is Chairman of the Remuneration Committee and a member of the 
Nominations Committee. He is a company director, a business writer and a 
novelist. John is a non-executive director of QBE Insurance Group Limited, a 
member of the Australian Government Takeovers Panel and a member of the 
Council of the National Library of Australia. John is co-founder of book 
publisher, Pantera Press. He was previously an investment banker at 
Macquarie Bank, as an executive director. His career before banking was in 
law, including as a partner at two major law firms. 

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 

CHRISTOPHER HAYNES OBE BSC (HONS), DPHIL, CENG, FIMECHE
NON-EXECUTIVE DIRECTOR – DIRECTOR SINCE JANUARY 2012
COUNTRY OF RESIDENCE – UNITED KINGDOM
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 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 

44  WorleyParsons Annual Report 2013

CATHERINE LIVINGSTONE AO BA (HONS), HON DBUS (MACQUARIE), 
HON DSC (MURDOCH), FCA, FAICD, FTSE
NON-EXECUTIVE DIRECTOR – DIRECTOR SINCE JULY 2007
COUNTRY OF RESIDENCE – AUSTRALIA
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 was formerly a director of 
Macquarie Bank Limited and Macquarie Group Limited. Catherine is also a 
director of Saluda Medical Pty Ltd and The George Institute for Global Health 
and is a member of the Advisory Board of the John Grill Centre for Project 
Leadership at The University of Sydney. 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 (Honors) in Accounting, is a Chartered Accountant and 
was the Eisenhower Fellow for Australia in 1999. 

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  25 July 2013 

30 August 2007 

25 July 2013 

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
COUNTRY OF RESIDENCE – UNITED STATES OF AMERICA
JB was appointed to the Board on 1 May 2010 and is a member of the Audit 
and Risk Committee, the Nominations Committee and the Remuneration 
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, GDIP APPLIED FINANCE AND INVESTMENT
NON-EXECUTIVE DIRECTOR – DIRECTOR SINCE DECEMBER 2011
COUNTRY OF RESIDENCE – HONG KONG
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 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. 

 
 
 
 
ANDREW WOOD BENG, GDIP FIN MGMT, GDIP LAB RELATIONS, FIE AUST
CHIEF EXECUTIVE OFFICER – EXECUTIVE DIRECTOR SINCE OCTOBER 2012
COUNTRY OF RESIDENCE – AUSTRALIA
Andrew was appointed as Chief Executive Officer effective 23 October 2012. 
With tenure of 19 years with the Group, and over 30 years’ experience in 
the resources and energy industry, Andrew has extensive knowledge 
across the Group. His previous roles include Group Managing Director – 
Finance/CFO responsible for Group-wide direction and support to the business 
functions of finance, information management, internal procurement and 
communications,	legal	and	risk;	Managing	Director	for	the	Australia/New	
Zealand	region;	and	Managing	Director	of	Mergers	and	Acquisitions,	
overseeing	15	business	acquisitions	including	Parsons	E&C	Corporation	in	
November 2004 and the Colt Group in March 2007. He was also responsible 
for WorleyParsons’ early expansion into Thailand and into the Middle East, 
Canada and Chile in his capacity as Managing Director for International 
Operations. Andrew holds a Bachelor of Engineering and graduate diplomas in 
Financial Management and Labour Management Relations. He is also a Fellow 
of the Institution of Engineers, Australia. 

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.

WorleyParsons Annual Report 2013  45

 
DIRECTORS’ REPORT CONTINUED

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 2013 (FY2013). 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 four sections:

SECTION

WHAT IT COVERS

1. Remuneration Snapshot

The names and positions of the executive directors and group executives (Executives) whose remuneration 
details are disclosed.

Key changes during FY2013.

How performance was reflected in the actual remuneration outcomes for Executives in FY2013 and financial year 2012 
(FY2012).

2.  Remuneration 

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

Governance Framework

How the Board, Nominations Committee and Remuneration Committee make remuneration decisions.

3.  Executive Remuneration 

in Detail

A breakdown of the Executive remuneration structure, and summary of the key terms and performance conditions for the 
“at risk” components (short and long term incentives) including a description of the Combined Incentive Plan.

How the Company’s performance over a five year period has impacted on remuneration outcomes.

Details the remuneration outcomes for Executives in accordance with the Australian Accounting Standards (accounting 
standards), including total remuneration, vesting of at risk components and movements in equity holdings. It also includes 
details of actual remuneration awarded during the year and actual remuneration received.

The key contract terms governing the employment arrangements of Executives. 

4.  Non‑Executive Director 

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

Remuneration

The guiding principles which govern the process and basis for setting NED remuneration.

An outline of the remuneration structure for NEDs, including current Board and Committee fees.

Details of NEDs’ total remuneration in FY2013 and FY2012.

PAGE

46

47

47

47

48

49

52

53

58

58

58

59

59

1. REMUNERATION SNAPSHOT

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 FY2013 in the positions noted below. The use of the term “Executives” throughout this report refers to the Executives 
listed below. These Executives, in addition to the NEDs listed on page 58 of the Annual Report, comprised the key management personnel (KMP) of the 
Company for FY2013, as defined under the accounting standards.

NAME 

POSITION 

COUNTRY OF RESIDENCE

EXECUTIVE DIRECTORS
Andrew Wood1 
John Grill2 

GROUP EXECUTIVES
Barry Bloch 
Stuart Bradie  
Simon Holt3 
Randy Karren4 
Iain Ross 
David Steele5 

Chief Executive Officer (CEO) from 23 October 2012 
Chief Executive Officer (CEO) until 23 October 2012 

Group Managing Director – People 
Group Managing Director – Operations  
Chief Financial Officer from 23 October 2012 
Group Managing Director – Improve from 23 October 2012 
Group Managing Director – Development 
Group Managing Director – Delivery 

Australia
Australia

Australia
United Kingdom
Australia 
Canada
United Kingdom
Malaysia

1  Mr Wood was appointed as CEO and an executive director on 23 October 2012. Prior to that, he was the Group Managing Director – Finance/CFO.
2 

 Mr Grill retired as CEO on 23 October 2012. He became a NED and Chairman on 1 March 2013 and further details are provided in the Non-Executive Director 
Remuneration section and below.

3  Mr Holt commenced as an Executive on 23 October 2012. Prior to that, he was Deputy Chief Financial Officer.
4  Mr Karren commenced as an Executive on 23 October 2012. Prior to that, he was Regional Managing Director Canada.
5  Mr Steele commenced in the role Group Managing Director – New Ventures from 1 July 2013.

Change in role for Mr John Grill

Mr Grill retired as CEO and an executive director of WorleyParsons on 23 October 2012, when he ceased employment with the Company. Mr Grill’s termination 
arrangements were in line with his executive service agreement. The termination arrangements comprised payment of accrued annual and long service leave. 
Mr	Grill	retained	his	deferred	short	term	incentive	(STI)	which	was	granted	in	relation	to	performance	during	FY2012;	these	are	retained	under	the	original	terms	
of the grant including vesting dates. Consistent with the Company’s practice in relation to unvested long term incentive (LTI) held by retiring employees, Mr Grill 
retained a pro-rated portion of his unvested LTI under the original terms of the grant including performance measures and vesting dates. No additional benefits 
were received by Mr Grill in relation to his retirement.

At the unanimous invitation of the Board’s non-executive directors, Mr Grill subsequently re-joined the Board as non-executive Chairman. He commenced in that 
role on 1 March 2013.

46  WorleyParsons Annual Report 2013

KEY CHANGES

New remuneration arrangements implemented in FY2013
During FY2013, a number of changes to executive remuneration arrangements were implemented as foreshadowed in last year’s Remuneration Report, 
including:

•	

•	

•	

•	

•	

•	

	simplification	of	incentive	programs,	including	adoption	of	the	new	Combined	Incentive	Plan;

	three	year	deferral	period	for	equity	under	the	Combined	Incentive	Plan,	increased	from	the	prior	plan;

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

	increased	vesting	period	for	new	LTI	awards	from	three	to	four	years	with	no	retest.	To	ensure	continuity	of	equity	vesting	opportunity,	the	awards	for	
FY2013	were	granted	as	two	equal	tranches	to	vest	over	a	three	and	four	year	period;

	expanded	peer	group	for	the	LTI	TSR	hurdle	for	new	LTI	awards;	and

	piloting	of	an	all	employee	share	purchase	plan	in	Canada,	Singapore	and	Indonesia.

These changes were adopted following a comprehensive and in-depth review of our remuneration arrangements undertaken in FY2012.

HOW PERFORMANCE WAS REFLECTED IN THE ACTUAL REMUNERATION OUTCOMES
The actual remuneration outcomes for FY2013 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 54 and 55. In particular:

•	

•	

•	

	in	assessing	the	outcome	for	the	Combined	Incentive	Plan,	the	threshold	for	Executives	requires	that	Group	net	profit	after	tax	(NPAT)	be	90%	or	more	of	
budget	Group	NPAT.		In	FY2013,	the	Group	NPAT	of	$322.1	million	was	below	this	threshold.		As	a	result	no	Combined	Incentive	will	be	awarded;

	for	performance	rights	granted	in	FY2011,	achievement	against	the	LTI	Plan	performance	hurdles	for	the	three	year	period	ended	30	June	2013	will	result	
in a nil vesting. Executives have the choice to retain rights under the TSR measure to be retested for the four year period ending 30 June 2014. No rights 
subject	to	the	EPS	measure	will	vest	and	they	will	lapse	on	30	September	2013;	and

	for	performance	rights	granted	in	FY2010,	achievement	against	the	LTI	Plan	performance	hurdles	for	the	three	year	period	ended	30	June	2012	resulted	in	
nil vesting under the EPS measure, with rights lapsed on 30 September 2012, and 70% vesting under the TSR measure. All Executives elected to accept 
the vesting outcome at that time. For employees who elected to retain rights under the TSR measure and be retested for the four year period ended 
30 June 2013, the retested outcome will result in a nil vesting of rights under the TSR measure.

In addition, fixed pay and the remuneration structure have been reviewed on both an Australian and global basis, and will not increase in FY2014.

2. REMUNERATION GOVERNANCE FRAMEWORK

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.

Our values guide our vision and provide the discipline to achieve our strategy.

VALUES

Performance

Relationships

Agility

Leadership

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.

Putting the Remuneration Principles into Practice

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

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

Opportunity to earn equity through 
the LTI Plan and the Combined 
Incentive Plan.

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

Reward subject to Company 
performance and 
individual performance.

Having a minimum 
shareholding requirement.

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

WorleyParsons Annual Report 2013  47

 
DIRECTORS’ REPORT CONTINUED

REMUNERATION DECISIONS

The diagram below illustrates the process by which remuneration 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	NED,	CEO	and	other	Executive	remuneration.

NOMINATIONS COMMITTEE

REMUNERATION COMMITTEE

Reviews and assesses the CEO’s performance.

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

Assists/advises the Board in relation to:

•	remuneration	structuring	and	policies;
•	NED	remuneration;
•		performance	assessment	and	remuneration	for	

Executives;	and

•		where	required,	engaging	independent	advisors	

for advice on remuneration structure and 
quantum for Executives including the CEO.

MANAGEMENT

CEO recommends pay increases and incentive outcomes for the Executives, other than the CEO. 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 FY2013, Aon Hewitt 
provided data in relation to the pay 
review for Executives and the 
review of NED fees. Outcomes 
relating to TSR were provided by 
Orient Capital. There were 
no remuneration recommendations 
made by consultants in relation 
to Executives.

48  WorleyParsons Annual Report 2013

 
3. EXECUTIVE REMUNERATION IN DETAIL

Executive minimum shareholding requirement

REMUNERATION STRUCTURE – PUTTING POLICY INTO PRACTICE

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. The proportion of variable incentive is reflective 
of an Executive’s ability to influence Company performance through their role. 
Executive remuneration comprises the following:

•	

•	

	fixed	pay,	which	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;	and

	incentives	may	be	comprised	of	cash	or	equity	and	are	dependent	on	the	
satisfaction of corporate, business unit and individual performance 
targets. Details of the Combined Incentive Plan and LTI Plan are set out in 
detail in the sections below.

The FY2013 targeted mix of the remuneration components described above 
for each of the Executives is outlined below:

The Executive minimum shareholding requirement applies to Executives to 
reinforce the Company’s 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.

Executives are also encouraged to acquire shares independently of the equity 
incentive programs.  However, privately acquired shares are not subject to the 
restrictions of the minimum shareholding requirement.

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 2013:

WEIGHTED 
NUMBER OF 
SHARES 
HELD AT 
30 JUNE 20131 

VALUE OF 
SHARES 
HELD AT 
30 JUNE 20132 
$ 

ANNUAL 

PERCENTAGE 
OF MINIMUM 
FIXED PAY AT SHAREHOLDING
30 JUNE 20133  REQUIREMENT
ACHIEVED

$ 

FY2013 targeted remuneration mix for Executives

Andrew Wood 

274,302 

5,374,427  1,600,000 

84%

LTI

Equity Incentive

Cash Incentive

Fixed

GROUP EXECUTIVES

EXECUTIVE DIRECTOR

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%

19%

12%

24%

28%

11%

23%

45%

38%

15%

32%

53%

18%

13%

26% 

28%

28%

11%

11%

23%

23%

43%

38%

38%

A ndre w W ood 

Barry Bloch 

Stuart Bradie 

Sim on H olt 

Randy Karren 

Iain Ross 

D avid Steele 

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 Combined Incentive, comprised of a cash and 
an equity incentive, and LTI awards. The elements of the remuneration shown 
above that are at risk are Cash Incentive, Equity Incentive and LTI. Allowances 
and benefits are for specific purposes and are excluded in determining the 
mix. 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 the Company’s incentive arrangements, 
including the specific performance conditions imposed and the outcomes of 
those arrangements (based on the Company’s performance over FY2013 
and prior years), are set out in the “Combined Incentive Plan” and “LTI Plan” 
sections below.

Barry Bloch 

Stuart Bradie 

Simon Holt4 

Randy Karren5 

Iain Ross 

David Steele 

13,695 

268,328 

709,000 

74,227 

1,454,337  1,208,267 

9,993 

195,794 

463,000 

19%

60%

21%

81,570 

1,598,209 

623,603 

> 100%

497,509 

9,747,744  1,052,096 

> 100%

151,315 

2,964,730 

900,000 

> 100%

1 

2 

 Includes ordinary and exchangeable 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 2013 multiplied 
by the volume weighted average price of the Company’s shares for the five 
trading days up to and including 28 June 2013.
 The Australian dollar equivalent of annual fixed pay as at 30 June 2013.

3 
4  Mr Holt commenced as Chief Financial Officer on 23 October 2012.
 Mr Karren commenced as Group Managing Director – Improve on 
5 
23 October 2012.

In addition, 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, 
including shares that count towards an Executive’s minimum holding 
requirement. This ensures that Executives cannot “limit the risk” associated 
with these instruments and are subject to the same impacts from fluctuations 
in the share price as all other shareholders.

WorleyParsons Annual Report 2013  49

 
 
 
 
 
 
 
 
 
 
 
DIRECTORS’ REPORT CONTINUED

Combined Incentive Plan

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.

The target value of the Combined Incentive Plan for Executives is shown in the graph on the previous page and is made up of a two thirds Cash portion 
(Cash Incentive) and a one third Equity portion (Equity Incentive). The Combined Incentive Plan was introduced in FY2013 and replaces the previous Cash STI, 
Deferred Equity STI and Discretionary STI Plans. The minimum potential value of Combined Incentive is zero where applicable gate-opener hurdles have not 
been met.

The value of the awards achieved can be viewed in the remuneration outcomes table on pages 54 and 55. This reflects both the Company’s achievement 
against Group NPAT and individual performance against an Executive’s key performance indicators (KPIs).

Outlined below is a summary of the Combined Incentive Plan introduced in FY2013:

INCENTIVE ELEMENT

Gate‑opener

CASH INCENTIVE 
(TWO THIRDS OF THE AWARD)

EQUITY INCENTIVE 
(ONE THIRD OF THE AWARD)

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

Maximum payout

Maximum payout is possible at 110% of budget.

Delivery and payment timing Payment of the award will be made as a 

gross cash amount at the end of the 
performance period.

See KPI summary table below.

Performance and forfeiture 
conditions

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

The Equity Incentive is subject to the same performance conditions as the Cash Incentive. 
In addition, the Executive must maintain a satisfactory performance rating. There are no 
further hurdles during the deferral period.

However, 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.

Dividends

Tenure

n/a

n/a

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.

Performance targets are agreed at the start of the financial year. A summary of the KPIs, along with the weightings for Executives for FY2013, is 
outlined below:

FINANCIAL KPIs (50% weighting)1

NON‑FINANCIAL KPIs (50% weighting)1

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 in support of the Company’s goal 
of Zero Harm.

Cash collection for participants with 
operational or financial 
accountability.

Cash collection is measured via 
days sales outstanding which is 
used internally to measure 
business performance.

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

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

Leadership, people management 
and development.

Strategic goals are measured by other 
regularly reported financial and non-
financial metrics e.g. growth in targeted 
business units2. These goals help to 
deliver on our Strategic Vision.

Targeted business growth and customer 
retention and acquisition2.

Reduction in turnover which helps to 
deliver on our corporate values of 
Leadership and Relationships.

1  The CEO has a 60% weighting of Financial KPIs and 40% weighting of Non-Financial KPIs.
2  The specific goals for Executives relating to strategic imperatives are considered commercially sensitive.

50  WorleyParsons Annual Report 2013

Long Term Incentive 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	50%	of	potential	LTI	for	
FY2013);	and

•	

	EPS	growth	(which	applies	to	50%	of	potential	LTI	for	FY2013).

The Board has determined that the number of securities issued to 
Executives and all other participants under the incentive Plans 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 incentive Plans represents 2.46% of the Company’s issued share capital, 
(FY2012: 2.85%).

LTI grants for FY2013
LTI grants are delivered to Executives as rights that are issued under the 
WorleyParsons Performance Rights Plan. After vesting, 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 the 
rights are issued. Rights vest and are automatically exercised after a three or 
four year period, subject to minimum performance hurdles being satisfied.

In FY2013, LTI awarded to Andrew Wood, in his role as CEO, was granted with 
a four year vesting period. LTI awarded to Group Managing Directors was 
granted in two equal tranches. The first tranche will vest after a three year 
period and the remaining tranche after a four year period. Each tranche has 
an equal weighting between TSR and EPS. LTI awarded to the Chief Financial 
Officer in FY2013 was granted with a three year vesting period with an 
individual performance requirement.  The Chief Financial Officer’s 
remuneration structure will align to the other KMPs for FY2014, with a four 
year vesting period and subject to EPS and TSR performance hurdles.

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 part of their remuneration in 
FY2013 are outlined on page 56.

Relative TSR performance hurdle
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. This is a group of companies with similar business 
profiles, with which the Company competes for capital and executive talent. 
For LTI grants made in FY2013, the peer comparison group comprises the 
companies shown as follows:

AUSTRALIA AND ASIA

UNITED STATES AND CANADA

EUROPE AND UNITED KINGDOM

Cardno

Downer EDI

JGC Corporation

Leighton Holdings

Monadelphous Group

UGL

AECOM

Aker Solutions

Chicago	Bridge	&	Iron	
Company1

Fluor Corporation

Foster Wheeler

Jacobs Engineering Group

KBR

McDermott International

SNC-Lavalin

Stantec

Tetra Tech

URS Corporation

AMEC

Arcadis

Atkins

Balfour Beatty

Fugro

Saipem

Serco Group

Technip

Tecnicas Reunidas

Wood Group

1	

	Chicago	Bridge	&	Iron	Company	and	the	Shaw	Group	merged	with	an	effective	
completion date of 13 February 2013.

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%

25%

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

Pro-rated vesting between more than 25% 
and less than 50%

At 75th percentile or greater 

50% (i.e. maximum available under the plan)

No retesting
With an expanded peer group and transition to a four year performance 
period, it is expected there will be less volatility. As a result, for LTI awards 
made in FY2013 and new LTI awards going forward, Executives will no longer 
have an opportunity to retest under the TSR measure.

EPS performance hurdle
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 
financial year immediately preceding the issue and the EPS in 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 FY2012 and FY2011.

Executives will only derive value from the EPS component of the grants made 
in FY2013 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 or four year performance period.

WorleyParsons Annual Report 2013  51

 
 
DIRECTORS’ REPORT CONTINUED

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% p.a. above  
the increase in CPI 

4% p.a. above the increase 
in CPI 

0% 

25% 

More than 4% p.a. above the 
increase in CPI but less than 
8% p.a. above the increase in CPI 

8% p.a. or greater above the 
increase in CPI

Pro-rated vesting between 
more than 25% and less than 50% 

50% (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 incentive programs.

The remuneration arrangements for Executives ensure that remuneration outcomes are lower when the Company’s performance does not justify large awards, 
and higher when Company performance is strong. As demonstrated by the table, incentive outcomes have moved in line with the Company’s performance 
against relevant key metrics:

FINANCIAL YEAR ENDED 30 JUNE 

FY2008 

FY2009 

FY2010 

FY2011 

FY2012 

FY2013 

ANNUALIZED 
GROWTH OVER 
FIVE YEARS

TSR portion of LTI 

Closing share price ($) 

37.86 

23.81 

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 (%) 

EPS portion of LTI 

Underlying EPS (cents per share)2 

3 year vesting outcome of LTI (%) 

85.5 

15.9 

32.0 

100 

142.5 

100 

STI/ Combined 
Incentive 

Underlying NPAT ($’m)3 
Average % of maximum STI awarded to Executives (%) 

343.9 
91.8 

93.0 

(34.8) 

(34.8) 

100 

161.1 

100 

390.5 
53.2 

22.21 

75.5 

(1.6) 

(9.9) 

82 

28.24 

25.10 

19.49 

(12.4%)

86.0 

37.4 

40.8 

nil 

91.0 

(6.8) 

(21.9) 

70 

92.5 

(19.6) 

21.6 

nil

1.6%

118.5 

121.5 

140.6 

130.8 

(1.7%)

nil 

291.1 
nil 

nil 

nil 

nil

298.5 
27.1 

345.6 
47.0 

322.1 
nil

(1.3%) 

1  The FY2013 final dividend has been announced and is scheduled to be paid on 20 September 2013.
2  Underlying EPS, which in the Board’s opinion reflects the Company’s operating results, has been used for calculating the outcomes.
3 

 Underlying NPAT, which in the Board’s opinion reflects the Company’s operating results, has been used for calculating the outcomes for FY2011 and FY2012. 
Underlying NPAT excludes fair value gains on acquisitions. 

52  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REMUNERATION OUTCOMES
Combined Incentive outcomes
As outlined in the description of the Combined Incentive Plan on page 50, 
reward outcomes for Executives are linked primarily to performance against 
annual financial KPIs, although non-financial (including individual) KPIs are 
also relevant.

In the table, “Company Performance over a Five Year Period” on page 52, the 
Company performance results for FY2013 are reflected in the decrease to 
variable pay earned by Executives during FY2013. The Company performance 
in FY2012 was reflected in incentive awards and LTI vesting outcomes.

Based on the NPAT provided above and performance against individual KPIs, 
the resulting Combined Incentive payments are detailed in the table on pages 
54 and 55.

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

Average % of maximum Combined Incentive/STI awarded to
Executives compared to Group NPAT

1
d
e
d
r
a
w
a
I

T
S
m
u
m
x
a
m

i

f
o
%

100

390.5 

80

60

40

20

0

53.2% 

291.1 

345.6 

322.1 

47.0% 

298.5 

27.1% 

0.0%

0
1
0
2

9
0
0
2

1
1
0
2

2
1
0
2

Financial year

0.0%

3
1
0
2

450 

400 

350 

300 

250 

200 

150 

100 

50 

0 

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.
 Reported Group NPAT, except for FY2011 and FY2012 where the lower 
underlying Group NPAT figures were used.

2

’

m
$
T
A
P
N
p
u
o
r
G

LTI outcomes
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

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

60% 

50% 

40% 

30% 

20% 

10% 

0% 

-10% 

-20% 

0
1

l

u

J

0
1
t
c
O

1
1
n
a

J

1
1
r
p
A

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

2
1
t
c
O

3
1
n
a

J

3
1
r
p
A

3
1

l

u

J

Date 

This graph illustrates that growth in the Company’s TSR was below median, 
which may result in a nil vesting for Executives for TSR related LTI granted in 
FY2011. As 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 2014.

Over the same three year period, the Company’s EPS was below the minimum 
required to trigger vesting against the EPS performance hurdle for LTI granted 
in FY2011. EPS performance rights will lapse on 30 September 2013. No 
retest applies to this measure.

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

Summary of vested rights

GRANT 

EQUITY SETTLED

FY2008 

FY20095 

FY2010 

FY20116 

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 07 – 30 Jun 10 

01 Jul 08 – 30 Jun 11 

01 Jul 09 – 30 Jun 12 

66th 

30th 

60th 

01 Jul 10 – 30 Jun 13 

lowest 

68th 

70th 

10th 

n/a 

5.8% 

(5.2%) 

(4.4%) 

3.3% 

49% 

54% 

42% 

0% 

30 Sep 10 

30 Sep 12 

30 Sep 12 

30 Sep 13 

21.51

25.65

25.65

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 FY2008, and for FY2009 to FY2011 the peer group comprises AECOM, Aker Solutions, AMEC, Fluor Corporation, 
Foster Wheeler, Jacobs Engineering Group, KBR, SNC-Lavalin, URS Corporation and Wood Group).
 Represents the Company’s retested relative TSR ranking over a four year performance period compared to the comparator group (as described in Note 1 above).
 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 vested on 30 September 2012 based on the retested outcome over a four year performance period up 
to 30 June 2012.
 Equity granted in FY2011 under the TSR and EPS measure is due to have a nil vesting on 30 September 2013. Executives may elect to have TSR performance rights 
retested and be measured for the four year performance period up to 30 June 2014.

WorleyParsons Annual Report 2013  53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DIRECTORS’ REPORT CONTINUED

Total remuneration outcomes
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 amortized 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 the Company aims to 
deliver. This can be found in the Equity Incentive/Deferred STI and LTI columns under the remuneration awarded section of Actual Remuneration Outcomes. For 
those interested in the full value that was received during the year, the value is determined as the number of performance rights vested times the share price 
at the end of the period of performance, found under the remuneration received section of Actual Remuneration Outcomes.

STATUTORY REMUNERATION OUTCOMES

SHORT TERM EMPLOYEE BENEFITS

POST- 
EMPLOYMENT 
BENEFITS

OTHER LONG 
TERM 
BENEFITS

SHARE BASED PAYMENTS

CASH SALARY

CASH  
ALLOWANCES1

CASH 
INCENTIVE/ 
CASH STI2

NON-
MONETARY 
BENEFITS3

TOTAL  
SHORT TERM  
CASH AND  
BENEFITS4

SUPER- 
ANNUATION

LONG SERVICE 
LEAVE

EQUITY 
INCENTIVE/  
STI EQUITY 
SETTLED5

LTI EQUITY 
SETTLED5

TOTAL 
REMUNERATION 
IN ACCORDANCE 
WITH 
ACCOUNTING 
STANDARDS

$

$

$

$

$

$

$

$

$

$

SHARE 
BASED 
PAYMENTS % 
OF TOTAL 
REMUNERATION

VARIABLE 
PAY % OF TOTAL 
REMUNERATION

% OF MAXIMUM 
STI AWARD 
FORFEITED

EXECUTIVE DIRECTORS

Andrew Wood

FY2013 1,344,869 

15,769 

–

 22,964 

 1,383,602 

 16,470 

26,523 

 73,135 

 288,188 

 1,787,918 

20.2%

20.2%

100.0%

FY2012

821,372 

50,192

369,000

23,821  1,264,385

15,836 

13,825 

62,917  311,219 

1,668,182

22.4%

44.5%

50.5%

John Grill

FY2013 2,484,268 

FY2012 2,092,241 

William Hall10

FY2012

 229,630 

GROUP EXECUTIVES

Barry Bloch

FY2013

692,537 

FY2012

 661,760 

Stuart Bradie

FY2013 1,122,925 

- 

–

–

- 

–

- 

–

6,829  2,491,097 

5,384 

10,903 

276,908  224,480 

3,008,772 

16.7%

16.7%

100.0%

1,530,000 

 13,635 

 3,635,876 

 15,836 

34,812 

 260,000  874,926

 4,821,450 

23.5%

55.3%

51.2%

 116,041 

 11,660 

 357,331 

–

–

–

 85,868

443,199

19.4%

45.6%

56.9%

–

14,269 

706,806 

16,470 

11,753 

50,368 

88,563 

873,960 

15.9%

15.9%

100.0%

 242,000 

 12,489 

 916,249 

 15,845 

11,189 

 43,333 

 32,902 

 1,019,518 

7.5%

31.2%

53.4%

FY2012

769,639 

284,870 

324,000 

 707,108  2,085,617 

76,964 

–

639,585 1,762,510 

112,293 

Simon Holt11

FY2013

307,418 

Randy Karren11

FY2013

401,322 

Iain Ross

FY2013

977,785 

–

– 

–

–

–

–

10,854

318,272

11,339

5,278

5,947 

407,269 

10,232 

225,145 1,202,930 

97,779 

FY2012

 714,021 

178,505 

285,000 

 209,247 

 1,386,773 

 71,402 

David Steele

FY2013

887,903 

- 

–

212,156  1,100,059 

FY2012

 750,000 

 75,000 

 327,000 

 219,595 

 1,371,595 

- 

–

- 

- 

63,447  197,378 

2,135,628 

12.2%

12.2%

100.0%

54,583  324,979 

2,542,143 

14.9%

27.7%

53.1%

-

- 

11,687

346,576

18,773 

436,274 

3.4%

4.3%

3.4%

4.3%

100.0%

100.0%

48,432  180,366 

1,529,507 

15.0%

15.0%

100.0%

 41,667 

 307,639 

 1,807,481 

19.3%

35.1%

57.2%

64,895  186,063 

1,351,017 

18.6%

18.6%

100.0%

 55,833 

 212,443 

 1,639,871 

16.4%

36.3%

52.7%

- 

- 

–

- 

–

Total 
remuneration

FY2013 8,219,027 

15,769

– 1,137,749  9,372,545 

269,967 

54,457  577,185  1,195,498  11,469,652 

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 

These footnotes apply to the table on pages 54 and 55.
1 
2 

3 

4 
5 

6 
7 

8 

9 

 This includes assignment uplifts and market adjustments.
 The FY2013 amount relates to the FY2013 award under the Cash Incentive portion of the Combined Incentive Plan, in line with the outcomes, there will be no payment 
made in September 2013. The FY2012 amount relates to the FY2012 award under the Cash STI Plan and was paid in September 2012.
 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 is the total value of short term employee cash and benefits received during reporting period.
 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.
 This is the total of superannuation received and long service leave benefits accrued during reporting period.
 Remuneration awarded during reporting period but deferred for future periods includes equity awards granted under the Combined Incentive 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 49) multiplied by the Incentive plan 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.
 In FY2013 WorleyParsons launched the pilot of the Employee Share Plan in Canada, Singapore and Indonesia. This plan allows all permanent employees in these 
countries the opportunity to purchase up to $5,000 worth of shares per annum. The Company will provide an additional share for every five shares purchased and held 
for three years. Approximately 2,500 employees participated in the pilot, including Mr Karren.
 Remuneration received in reporting period from previous periods includes equity awards granted under the incentive plans in previous years which vested during 
reporting period. The STI and LTI value reflects the actual value realized by the Executive. The FY2013 value has been determined based on the number of performance 
rights granted in FY2011 that vested for the period ended 30 June 2013 and the closing share price at this date. 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.

10  Mr Hall retired as an alternate director on 25 October 2011. Share based payments are disclosed to the extent they relate to his occupation in the capacity of a director. 
11 Remuneration is disclosed to the extent that it relates to Mr Holt’s and Mr Karren’s occupation in the capacity of an Executive, which commenced on 23 October 2012.

54  WorleyParsons Annual Report 2013

ACTUAL REMUNERATION OUTCOMES

AWARDED AND RECEIVED DURING 
REPORTING PERIOD

SHORT TERM 
CASH AND 
 BENEFITS

$

OTHER  
BENEFITS6

$

EXECUTIVE DIRECTORS

Andrew Wood

FY2013

 1,383,602 

 42,993 

FY2012

 1,264,385 

29,661 

John Grill

FY2013

 2,491,097 

 16,287 

FY2012

 3,635,876 

 50,648 

William Hall

FY2012

 357,331 

–

GROUP EXECUTIVES

Barry Bloch

FY2013

 706,806 

 28,223 

FY2012

 916,249 

 27,034 

Stuart Bradie

FY2013

 1,762,510 

 112,293 

FY2012

 2,085,617 

 76,964 

Simon Holt

FY2013

318,272

16,617

Randy Karren

FY2013

 407,269 

 10,232 

 962 

Iain Ross

FY2013

 1,202,930 

 97,779 

FY2012

 1,386,773 

 71,402 

David Steele

FY2013

 1,100,059 

FY2012

 1,371,595 

–

–

–

-

–

-

$

–

–

–

$

–

-

–

 -

-

–

-

–

-

-

AWARDED DURING REPORTING PERIOD

RECEIVED DURING REPORTING PERIOD

DEFERRED FOR FUTURE PERIODS7

DEFERRED FROM PREVIOUS PERIODS9

EMPLOYEE  
SHARE 
PLAN8

EQUITY 
INCENTIVE/ 
DEFERRED STI

TOTAL 
REMUNERATION 
AWARDED DURING 
REPORTING PERIOD

EQUITY 
INCENTIVE/ 
DEFERRED STI

$

$

LTI

$

TOTAL 
REMUNERATION 
RECEIVED DURING 
REPORTING PERIOD

$

LTI

$

 1,360,012 

2,786,607 

 57,437 

–

1,484,032

 151,000 

 625,500 

 2,070,546 

–

 403,809 

 1,697,855

–

–

2,507,384 

 237,349 

–

2,744,733

 624,000 

 1,785,000 

6,095,524 

–

 357,331 

–

–

 1,064,591 

4,751,115

 419,421 

 776,752

 283,588 

1,018,617 

 39,565 

 104,000 

 270,000 

 1,317,283 

–

–

 847,305 

2,722,108 

 49,836 

–

–

–

774,594

 943,283

1,924,639

 131,000 

 567,256 

 2,860,837 

–

 416,785 

 2,579,366

-

–

–

111,114

446,003

27,988

 233,936 

652,399 

 44,067 

 737,779 

2,038,488 

 38,044 

–

–

–

362,877

461,568

1,338,753

 100,000 

 525,749 

 2,083,924 

–

 418,241 

 1,876,416

–

 675,010 

1,775,069 

 50,966 

–

1,151,025

 134,000 

 562,500 

 2,068,095 

–

 232,677 

 1,604,272

Total remuneration

FY2013

9,372,545

324,424

962

–

4,248,744

13,946,675

545,252

–

10,242,221

FY2012

 11,017,826 

 255,709 

–

 1,244,000 

 4,336,005 

 16,853,540 

–

 2,955,524 

 14,229,059

WorleyParsons Annual Report 2013  55

 
DIRECTORS’ REPORT CONTINUED

Details of vested and outstanding rights over the last five years

NUMBER 
OF 
RIGHTS 
GRANTED1

FAIR VALUE 
PER RIGHT 
(AT GRANT 
DATE)2 
$

FAIR VALUE 
OF GRANT 
(AT GRANT 
DATE)3 
$

VESTING 
DATE/ 
FIRST 
EXERCISE 
DATE4

DATE OF 
GRANT

NUMBER 
OF  
RIGHTS 
VESTED

VALUE OF 
RIGHTS 
VESTED5 
$

NUMBER 
OF  
RIGHTS 
EXERCISED

EXPIRY 
DATE

PLAN

EXECUTIVE DIRECTOR

Andrew Wood

LTI

23 Oct 12

53,084

17 Oct 11

23,702

15 Oct 10

25,387

09 Oct 09

18,650

03 Oct 08

15,288

Deferred Equity STI

01 Oct 12

GROUP EXECUTIVES

Barry Bloch

LTI

01 Oct 12

08 Feb 13

08 Feb 13

2,947

2,947

5,534

5,535

17 Oct 11

10,231

Deferred Equity STI

01 Oct 12

01 Oct 12

2,030

2,029

Stuart Bradie

LTI

08 Feb 13

16,536

08 Feb 13

16,536

17 Oct 11

21,495

15 Oct 10

28,374

09 Oct 09

19,361

03 Oct 08

15,692

Deferred Equity STI

01 Oct 12

Simon Holt8

LTI

01 Oct 12

08 Feb 13

17 Oct 11

15 Oct 10

Deferred Equity STI

01 Oct 12

Randy Karren8

LTI

01 Oct 12

08 Feb 13

08 Feb 13

17 Oct 11

15 Oct 10

Deferred Equity STI

01 Oct 12

01 Oct 12

Employee Share Plan

15 May 13

2,557

2,556

4,337

2,842

3,268

1,436

1,435

4,566

4,565

6,079

8,717

2,261

2,261

40

Iain Ross

LTI

08 Feb 13

14,398

08 Feb 13

14,399

17 Oct 11

19,922

15 Oct 10

26,324

09 Oct 09

19,316

03 Oct 08

15,834

Deferred Equity STI

01 Oct 12

01 Oct 12

1,952

1,951

David Steele

LTI

08 Feb 13

13,174

08 Feb 13

13,173

17 Oct 11

21,315

15 Oct 10

16,049

09 Oct 09

10,746

03 Oct 08

Deferred Equity STI

01 Oct 12

01 Oct 12

8,809

2,615

2,615

VALUE OF  
RIGHTS 
EXERCISED5

$

 -

 -

 -

NUMBER 
OF  
RIGHTS 
LAPSED6

VALUE OF  
RIGHTS 
LAPSED7 
$

% OF 
RIGHTS 
LAPSED

 -

 -

 -

 -

 -

 -

0.0%

0.0%

0.0%

836,604

30 Sep 16

18 Oct 19

419,288

30 Sep 14

17 Oct 18

429,802

30 Sep 13

15 Oct 17

 -

 -

 -

 -

 -

 -

 -

 -

 -

359,386

30 Sep 12

30 Sep 16

  7,833

  200,916

  7,833

  200,916

  10,817

  277,448

58.0%

292,154

30 Sep 12

30 Sep 15

  8,255

  211,741

  8,255

  211,741

  7,033

  184,921

46.0%

81,632

30 Jun 13

30 Jun 19

  2,947

  57,741

81,632

30 Jun 14

30 Jun 19

85,168

30 Sep 16

18 Oct 19

83,745

30 Sep 15

18 Oct 19

180,986

30 Sep 14

17 Oct 18

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

56,231

30 Jun 13

30 Jun 19

  2,030

  39,774

  2,030

  39,774

56,203

30 Jun 14

30 Jun 19

254,489

30 Sep 16

18 Oct 19

250,190

30 Sep 15

18 Oct 19

380,247

30 Sep 14

17 Oct 18

480,372

30 Sep 13

15 Oct 17

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

373,086

30 Sep 12

30 Sep 16

  8,131

  208,560

  8,131

  208,560

  11,230

  288,041

58.0%

299,874

30 Sep 12

30 Sep 15

  8,474

  217,358

  8,474

  217,358

  7,218

  189,785

46.0%

70,829

30 Jun 13

30 Jun 19

  2,557

  50,100

70,801

30 Jun 14

30 Jun 19

74,813

30 Sep 15

18 Oct 19

50,275

30 Sep 14

17 Oct 18

55,327

30 Sep 13

15 Oct 17

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

39,777

30 Jun 13

30 Jun 19

  1,436

  28,136

  1,436

  28,136

39,750

30 Jun 14

30 Jun 19

70,271

30 Sep 16

18 Oct 19

69,068

30 Sep 15

18 Oct 19

107,538

30 Sep 14

17 Oct 18

147,579

30 Sep 13

15 Oct 17

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

62,630

30 Jun 13

30 Jun 19

  2,261

  44,300

62,630

30 Jun 14

30 Jun 19

962

15 May 16

15 May 16

221,585

30 Sep 16

18 Oct 19

217,857

30 Sep 15

18 Oct 19

352,420

30 Sep 14

17 Oct 18

445,665

30 Sep 13

15 Oct 17

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

372,219

30 Sep 12

30 Sep 16

  8,113

  208,098

  8,113

  208,098

  11,203

  287,348

58.0%

302,588

30 Sep 12

30 Sep 15

  8,550

  219,308

  8,550

  219,308

  7,284

  191,520

46.0%

54,070

30 Jun 13

30 Jun 19

  1,952

  38,246

54,043

30 Jun 14

30 Jun 19

202,748

30 Sep 16

18 Oct 19

199,307

30 Sep 15

18 Oct 19

377,062

30 Sep 14

17 Oct 18

271,710

30 Sep 13

15 Oct 17

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

207,075

30 Sep 12

30 Sep 16

  4,513

  115,758

  4,513

  115,758

  6,233

  159,872

58.0%

168,340

30 Sep 12

30 Sep 15

  4,757

  122,017

  4,757

  122,017

  4,052

  106,540

46.0%

72,436

30 Jun 13

30 Jun 19

  2,615

  51,236

  2,615

  51,236

72,436

30 Jun 14

30 Jun 19

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

  37,954

  15,842

 -

 -

 -

 -

0.0%

0.0%

56.1%

22.8%

15.76

17.69

16.93

19.27

19.11

27.70

27.70

15.39

15.13

17.69

27.70

27.70

15.39

15.13

17.69

16.93

19.27

19.11

27.70

27.70

17.25

17.69

16.93

27.70

27.70

15.39

15.13

17.69

16.93

27.70

27.70

24.05

15.39

15.13

17.69

16.93

19.27

19.11

27.70

27.70

15.39

15.13

17.69

16.93

19.27

19.11

27.70

27.70

NON-EXECUTIVE DIRECTORS – earned while an Executive

John Grill9

LTI

17 Oct 11

67,639

17.69

1,196,534

30 Sep 14

17 Oct 18

15 Oct 10

69,450

16.93

1,175,789

30 Sep 13

15 Oct 17

09 Oct 09

45,293

03 Oct 08

43,317

Deferred Equity STI

01 Oct 12

12,178

01 Oct 12

12,178

09 Oct 09

11,214

03 Oct 08

10,183

19.27

19.11

27.70

27.70

19.27

19.11

872,796

30 Sep 12

30 Sep 16

  19,023

  487,940

  19,023

  487,940

  26,270

  673,806

58.0%

827,788

30 Sep 12

30 Sep 15

  23,391

  599,979

  23,391

  599,979

  19,926

  523,921

46.0%

337,331

30 Jun 13

30 Jun 19

  12,178

  238,605

  12,178

  238,605

337,331

30 Jun 14

30 Jun 19

 -

 -

 -

 -

 -

 -

 -

 -

0.0%

0.0%

216,094

30 Sep 12

30 Sep 16

  1,570

  40,271

  1,570

  40,271

  9,644

  247,361

86.0%

194,597

30 Sep 12

30 Sep 15

  3,666

  94,033

  3,666

  94,033

  6,517

  169,167

64.0%

 261,679 

 544,643 

 806,322 

 5,260,933 

 9,412,227 

 14,673,160 

 134,252 

 3,274,117 

 124,535 

 3,083,730 

 -   

 -   

 -   

 -   

 134,252 

 3,274,117 

 124,535 

 3,083,730 

 181,223 

 3,299,730 

Larry Benke9

LTI

Total vested

Total outstanding

Total

56  WorleyParsons Annual Report 2013

1 

2 

3 

4 

5 

 The service and performance criteria for the rights are discussed in the “LTI Plan” section on page 51. 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).

6  The number of rights lapsed represents rights lapsed due to performance hurdles not being met and/or rights lapsed on cessation of employment.
7  Based on the measurement of the relevant performance hurdles, this total value may be an accumulation of values for rights lapsed over multiple periods.
8 

 Rights issued to Mr Holt and Mr Karren are disclosed to the extent they were outstanding or granted following the commencement of their occupation in the capacity of 
an Executive, which commenced on 23 October 2012.
 Mr Grill and Mr Benke received rights as part of their employment with the Company prior to their retirement on 23 October 2012 and 30 June 2010 respectively. 
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 52. Rights lapsed on Mr Grill’s 
and 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 their 
retirement dates.

9 

WorleyParsons Annual Report 2013  57

 
Unlimited 

12 months 

12 months

NAME 

POSITION 

COUNTRY OF RESIDENCE

4. 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 FY2013, except 
where otherwise stated. The NEDs for FY2013 are listed below:

John Grill1 

Ron McNeilly2 

Larry Benke 

Erich Fraunschiel 

John M Green 

Christopher Haynes, OBE 

Catherine Livingstone, AO 

JB McNeil 

Wang Xiao Bin 

Chairman 

Deputy Chairman and 
Lead Independent Director 

Director 

Director 

Director 

Director 

Director 

Director 

Director 

Australia

Australia

Canada

Australia

Australia

United Kingdom

Australia

United States

Hong Kong

1  Mr Grill commenced as a NED and Chairman on 1 March 2013.
2 

 Mr McNeilly was Chairman until 1 March 2013, when he commenced as Deputy 
Chairman and Lead Independent Director.

REMUNERATION POLICY
The principles of fairness and shareholder alignment are reflected through 
the Company’s commitment to setting NED fees at a level which remains 
market competitive, whilst ensuring they reflect the caliber of directors 
required to address the significant strategic and operational challenges faced 
by the Company, domestically and abroad.

NED fees have been reviewed on both an Australian and global basis and will 
not increase in FY2014.

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 $3.25 million per 
annum was approved by shareholders at the 2012 AGM. Of the aggregate 
annual fee pool, 72% ($2.355 million) was utilized during FY2013 (76% 
($1.974 million) for FY2012 for the then $2.6 million limit). NEDs do not 
receive performance related payments.

DIRECTORS’ REPORT CONTINUED

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

CONTRACT 
DURATION 

NON‑COMPETE 
CLAUSES 

NOTICE PERIODS

EXECUTIVE DIRECTOR

Andrew Wood 

GROUP EXECUTIVES

Barry Bloch 

Stuart Bradie 

Simon Holt 

Randy Karren 

Iain Ross 

David Steele 

Unlimited 

12 months 

6 months

Unlimited 

12 months 

6 months

Unlimited 

12 months 

6 months

Unlimited 

12 months 

6 months

Unlimited 

12 months 

6 months

Unlimited 

12 months 

6 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.

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, the 
Combined Incentive is paid only if the Executive is employed on the date of 
payment which is subsequent to the performance year. The Board retains 
discretion to pro-rate deferred equity 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 51. In exercising such discretion in 
the Combined Incentive and LTI Plans, where the Board allows retention of 
awards, this is typically 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 FY2013.

At the October 2010 Annual General Meeting (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.

58  WorleyParsons Annual Report 2013

 
 
 
REMUNERATION OUTCOMES
Remuneration of the NEDs for FY2013 and FY2012 is set out below:

REMUNERATION STRUCTURE
Board and Committee fees
Board and Committee fees for FY2013 and FY2014 are set out below. These 
amounts are inclusive of superannuation contributions made on behalf of 
NEDs in accordance with the Company’s statutory obligations.

ROLE 

Chairman1 

Deputy Chairman and Lead Independent Director1 

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 

FY2013 AND 
FY2014 FEES

$520,000

$312,000

$194,000

$47,000

$26,000

$37,000

$21,000

$30,000

$12,000

nil

1 

 The Chairman of the Board and Deputy Chairman and Lead Independent 
Director do not receive additional fees for Committees of which they may be 
a member.

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

John Grill2

FY2013 

Ron McNeilly

FY2013 

FY2012 

Larry Benke

FY2013 

FY2012 

Erich Fraunschiel

FY2013 

FY2012 

John M Green

FY2013 

FY2012 

Eric Gwee3

FY2012 

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.

Christopher Haynes, OBE4

FY2013 

FY2012 

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

Catherine Livingstone, AO

NED minimum shareholding requirement
A minimum shareholding requirement exists to provide alignment between 
director and shareholder interests. Each NED must build a holding of the 
Company’s ordinary shares equivalent to that director’s annual fee. NEDs 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 2013 with the exception of Christopher Haynes, OBE, who 
commenced during FY2012 and has a further eighteen months to comply.

Particulars of directors’ beneficial interests in shares of the Company as at 
30 June 2013 are set out in note 33 to the financial statements.

FY2013 

FY2012 

JB McNeil

FY2013 

FY2012 

Wang Xiao Bin5

FY2013 

FY2012 

Total remuneration

SHORT TERM 
EMPLOYEE BENEFITS 

POST- 
EMPLOYMENT 
BENEFITS

FEES 
$ 

ALLOWANCES 
$ 

SUPERANNUATION1 
$ 

TOTAL 
$

167,840 

5,000 

5,490 

178,330

434,188 

465,252 

204,125 

184,996 

224,526 

214,221 

214,526 

194,221 

10,000 

10,000 

25,000 

30,000 

10,000 

10,000 

10,000 

10,000 

65,026 

5,000 

219,318 

92,498 

203,526 

194,221 

240,995 

223,652 

203,526 

113,296 

30,000 

15,000 

10,000 

5,000 

25,000 

30,000 

30,000 

15,000 

16,470 

29,738 

460,658

504,990

- 

- 

229,125

214,996

16,470 

15,775 

250,996

239,996

16,470 

25,775 

240,996

229,996

- 

- 

- 

70,026

249,318

107,498

16,470 

15,775 

229,996

214,996

- 

- 

265,995

253,652

16,470 

249,996

9,202 

137,498

FY2013 

FY2012 

2,112,570  

155,000  

87,840  

2,355,410

1,747,383  

130,000  

96,265  

1,973,648

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 Grill commenced as a NED and Chairman on 1 March 2013.
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.

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

JOHN GRILL 
Chairman

Sydney, 14 August 2013

WorleyParsons Annual Report 2013  59

 
 
 
 
 
 
 
 
Statement of financial Performance For the financial year ended 30 June 2013

Notes 

conSolidated

2013 
$’M 

2012 
$’M

ReVeNUe ANd otheR iNcoMe

Professional services revenue 

Procurement revenue 

construction and fabrication revenue 

interest income 

other 

Revenue and other income 

eXPeNses

staff costs 

Procurement 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) 

6,025.2 

5,858.3

1,938.5 

847.7 

6.0 

14.1 

912.5

618.7

7.0

11.9

8,831.5 

7,408.4

(4,326.4) 

(4,114.2)

(1,931.0) 

(894.6)

(1,288.6) 

(1,137.7)

(579.3) 

(492.0)

(21.0) 

(81.3) 

(59.4) 

(94.3) 

(19.1)

(83.9)

(51.1)

(149.6)

(8,381.3) 

(6,942.2)

23.4 

27.6

473.6 

493.8

(129.4) 

(117.3)

344.2 

376.5

322.1 

22.1 

130.8 

129.9 

353.2

23.3

143.7

142.5

5 

9 

24(c) 

6(A) 

21 

21 

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

60  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of comPrehenSive income For the financial year ended 30 June 2013

Profit after income tax expense 

Items that may be reclassified in future periods to the Statement of Financial Performance:

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

2013 
$’M 

2012 
$’M

344.2 

376.5

82.9 

18.8 

(34.6)

1.2

445.9 

343.1

418.4 

27.5 

319.9

23.2

WorleyParsons Annual Report 2013  61

 
 
 
 
 
 
 
 
 
 
 
 
Statement of financial PoSition As at 30 June 2013

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

2013 
$’M 

2012 
$’M

320.0 

247.3

1,915.7 

1,725.9

176.1 

184.8

2.5 

105.3 

1.1 

1.6 

–

89.5

0.6

1.5

2,522.3 

2,249.6

139.6 

135.7

2,050.4 

1,704.8

131.4 

104.1

30.8 

27.1 

160.5 

22.3 

16.0

28.5

132.6

20.0

2,562.1 

2,141.7

5,084.4 

4,391.3

1,175.6 

976.4

156.0 

– 

468.1 

4.0 

3.0

15.7

499.6

4.0

1,803.7 

1,498.7

902.7 

141.6 

43.2 

0.3 

733.8

112.6

66.3

0.0

1,087.8 

912.7

2,891.5 

2,411.4

2,192.9 

1,979.9

1,238.5 

1,221.3

(177.8) 

(267.7)

1,098.2 

1,003.8

2,158.9 

1,957.4

34.0 

22.5

2,192.9 

1,979.9

Assets

Current assets

cash and cash equivalents 

trade receivables 

other receivables 

income tax receivable 

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.

62  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of changeS in equity For the financial year ended 30 June 2013

conSolidated

FoReigN 
cURReNcY 
RetAiNed  tRANsLAtioN 
ReseRVe 
$’M 

PRoFits 
$’M 

issUed 
cAPitAL 
$’M 

  PeRFoRMANce 
Rights 
ReseRVe 
$’M 

hedge 
ReseRVe 
$’M 

AcQUisitioN 
ReseRVe 
$’M 

PAReNt 
NoN- 
eNtitY  coNtRoLLiNg 
iNteRests 
$’M 

iNteRest 
$’M 

totAL 
$’M

As at 1 July 2012 

1,221.3  1,003.8 

(295.5) 

(1.9) 

39.3 

(9.6)  1,957.4 

22.5  1,979.9

Profit after income tax  
expense 

other comprehensive income 

Total comprehensive income,  
net of tax 

– 

– 

– 

322.1 

– 

– 

– 

77.5 

18.8 

322.1 

77.5 

18.8 

– 

– 

– 

Transactions with owners

Performance rights  
transactions 

Non-controlling interests 

dividends paid 

17.2 

– 

– 

– 

– 

(227.7) 

– 

– 

– 

– 

– 

– 

(6.4) 

– 

– 

– 

– 

– 

– 

– 

– 

322.1 

96.3 

22.1 

5.4 

344.2

101.7

418.4 

27.5 

445.9

10.8 

– 

– 

1.2 

10.8

1.2

(227.7) 

(17.2) 

(244.9)

As at 30 June 2013 

1,238.5  1,098.2 

(218.0) 

16.9 

32.9 

(9.6)  2,158.9 

34.0  2,192.9

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  
(loss)/income 

Total comprehensive income,  
net of tax 

Transactions with owners

transfer of performance  
rights on purchase and  
issuance of shares 

Non-controlling interests on  
acquisition of subsidiaries 

dividends paid 

– 

– 

– 

353.2 

– 

– 

– 

(34.5) 

1.2 

353.2 

(34.5) 

1.2 

– 

– 

– 

1.7 

– 

– 

– 

– 

(221.1) 

– 

– 

– 

– 

– 

– 

15.4 

– 

– 

– 

– 

– 

– 

– 

– 

353.2 

23.3 

376.5

(33.3) 

(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

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

WorleyParsons Annual Report 2013  63

 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of caSh floWS For the financial year ended 30 June 2013

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 net payments for 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

2013 
$’M 

2012 
$’M

8,467.2 

6,853.6

(7,846.0) 

(6,286.7)

621.2 

566.9

13.8 

6.0 

23.0

7.0

(47.6) 

(45.3)

(149.9) 

(114.1)

26 

443.5 

437.5

23(d) 

23(d) 

22(B) 

(8.7) 

(282.5) 

22.4 

(78.2) 

0.3 

(21.5)

(28.9)

2.7

(59.0)

0.4

(346.7) 

(106.3)

(1,758.0) 

(2,252.9)

1,963.0 

2,267.9

(10.7) 

10.9 

(6.4)

(20.7)

(227.7) 

(221.1)

(16.9) 

(18.4)

(39.4) 

(251.6)

57.4 

247.3 

15.3 

79.6

166.1

1.6

Cash and cash equivalents at the end of the financial year 

7 

320.0 

247.3

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

64  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

1. corPorate information

the financial report of worleyParsons Limited (company or Parent entity) for 
the financial year ended 30 June 2013 was authorized for issue in accordance 
with a resolution of the directors on 14 August 2013.

worleyParsons Limited is a company limited by shares incorporated in 
Australia whose shares are publicly traded on the Australian securities 
exchange (AsX: woR). worleyParsons Limited is a for-profit entity for the 
purpose of preparing the financial statements.

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. Unless otherwise expressly stated, 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 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(L)	and	10;

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

	share	based	payments,	refer	note	2(C);	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 and amended accounting standards

the group has adopted the following new and amended accounting 
standards from 1 July 2012:

•	

•	

•	

	AASB	7	Financial	Instruments:	Disclosures	–	Enhanced	
Derecognition	Disclosure	Requirements;

	AASB	2010‑8	Amendments	to	Australian	Accounting	Standards	
–	Deferred	Tax:	Recovery	of	Underlying	Assets;	and

	AASB	2011‑9	Amendments	to	Australian	Accounting	Standards	
– Presentation of items of other comprehensive income.

Adoption of these standards did not have any material effect on the 
statement of financial performance, statement of comprehensive 
income and statement of financial position of the group.

(vi)  New and amended standards not yet applicable

the following new and amended accounting standards 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 
2013:

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 made its assessment of its 
relationships with other entities to determine if control may exist 
under the new definitions. No material 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 has assessed the impact of the change to the 
accounting standards. No material impact is expected to result in 
the statement of financial performance and statement of financial 
position;	and	no	material	impact	is	expected	on	total	earnings	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 
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.

WorleyParsons Annual Report 2013  65

 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

AASB 119 Employee Benefits
the amended standard changes the definition of short term 
employee benefits. the distinction between short term and 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 be effective for the group from 
1 July 2013. it will result in a change in the group’s classification 
of provision for employee benefits.

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 
2013 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 2(B)(iii) 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 and assets 
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.

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. 

66  WorleyParsons Annual Report 2013

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.

(i)  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.

 
 
 
 
 
 
 
 
 
(ii)  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.

(iii)  Employee share plan

employees in eligible countries are invited to participate in an 
employee share plan. shares purchased under the employee share 
plan are subject to dealing restrictions until the restriction end date. 
the group will grant one bonus entitlement to a share for every five 
shares purchased through employee share plan which vests on the 
restriction end date at which point it will convert to an ordinary 
share. the group accounts for the bonus entitlements as equity 
settled share based payments.

(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 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 
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.

WorleyParsons Annual Report 2013  67

 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

(F)  ACQUISITION OF ASSETS AND BUSINESS COMBINATIONS

(iv)  Dividends

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, irrespective of the extent of any non-controlling interest. 
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, construction and fabrication 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 costs incurred to date as a percentage of estimated total 
costs for each contract.

(ii)  Sale of goods

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.

68  WorleyParsons Annual Report 2013

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)  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.

(J) 

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 (cgUs)).

(K)  LEASES

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.

(L)  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 cgUs 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 cgUs 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 cgUs to which the goodwill relates. when the 
recoverable amount of the groups of cgUs is less than the carrying 
amount, an impairment loss is recognized.

impairment losses recognized for goodwill are not subsequently 
reversed.

(ii)  Identifiable intangible assets

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 cgU 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.

(M)  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.

(N)  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.

(O)  PROVISIONS

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.

(ii)  Expected losses on contracts

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.

(v)  Deferred consideration

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.

WorleyParsons Annual Report 2013  69

 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

(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.

(P)  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.

(Q)  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.

(R)  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.

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.

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:

•	

•	

•	

•	

•	

•	

	global	support	costs;

	interest	and	tax	for	associates;

	amortization	of	acquired	intangible	assets;

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

	net	borrowing	costs;	and

	income	tax	expense.

(S)  ISSUED CAPITAL

(V)  ASSETS HELD FOR SALE

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.

(T)  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.

(U)  SEGMENT REPORTING

(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;	Minerals,	Metals	&	Chemicals;	Infrastructure	
&	Environment	and	Power.

70  WorleyParsons Annual Report 2013

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.

(W)  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 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. 
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 30(A). 
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.

(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 and foreign currency 
options 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, gBP 
and Usd.

(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.

(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.

WorleyParsons Annual Report 2013  71

 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

3. financial riSK management (continued)

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 
2013 and 2012 was as follows:

6. income taX

(A) INCOME TAX EXPENSE
current tax 

deferred tax 

overprovision in previous financial periods 

Income tax expense 

deferred income tax expense included in  
income tax expense comprises:

conSolidated

2013 
$’M 

1,062.2 

320.0 

742.2 

2012 
$’M

739.8

247.3

492.5

2,192.9 

1,979.9

(increase)/decrease in deferred tax assets 

25.3% 

19.9%

increase in deferred tax liabilities 

total interest bearing loans and borrowings1 

Less: cash and cash equivalents 

Net debt 

total equity 

Gearing 

conSolidated

2013 
$’M 

2012 
$’M

135.5 

117.7

4.2 

(10.3) 

12.5

(12.9)

129.4 

117.3

(1.1) 

5.3 

4.2 

4.2

8.3

12.5

1  excluding capitalized borrowing costs.

Deferred tax 

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.

4. eXPenSeS and loSSeS/(gainS)

(B) RECONCILIATION OF PRIMA FACIE TAX EXPENSE TO  
INCOME TAX EXPENSE
Profit before income tax expense 

473.6 

493.8

Prima facie tax expense at the group’s statutory income  
tax rate of 30% (2012: 30%) 

142.1 

148.1

Profit before income tax expense includes the following specific expenses 
and losses/(gains):

tax effect of amounts which are non-deductible/ 
(non-taxable) in calculating taxable income:

eXPeNses ANd Losses

operating lease rentals – minimum lease payments 

Retirement benefits 

Performance rights expense 

MoVeMeNts iN PRoVisioNs

employee benefits 

warranties 

insurance 

other 

5. other income

Net gain on revaluation of investments previously accounted  
for as equity accounted associates 

other 

Other income 

conSolidated

Non-deductible performance rights 

2013 
$’M 

2012 
$’M

Non-taxable gain on acquisitions 

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

203.7 

137.8 

10.8 

172.2

129.0

17.1

tax losses not previously recognized 

over provision in previous financial periods 

difference in overseas tax rate1 

other 

3.2 

– 

(7.0) 

(1.9) 

(10.3) 

(7.1) 

10.4 

5.3

(2.3)

(8.2)

(0.4)

(12.9)

(14.3)

2.0

239.5 

247.8

Income tax expense 

129.4 

117.3

(1.9) 

5.0 

(11.5) 

2.8

0.2

36.9

conSolidated

2013 
$’M 

2012 
$’M

– 

14.1 

14.1 

7.6

4.3

11.9

1 

 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 

16.8 

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% 

25.6 

7.7 

28.3

8.5

the benefit for tax losses will only be recognized if:

•	

•	

•	

•	

	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

	the	losses	are	transferred	to	an	eligible	entity	in	the	consolidated	entity;	
and

	the	consolidated	entity	continues	to	comply	with	conditions	for	
deductibility	imposed	by	tax	legislation;	and

	no	changes	in	legislation	adversely	affect	the	consolidated	entity	in	
realizing the benefit from the deductions for the losses.

72  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
Notes 

conSolidated

2013 
$’M 

2012 
$’M

7. current aSSetS – caSh and caSh equivalentS

cash and cash equivalents 

320.0 

247.3

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 

Balance per statement of cash flows 

320.0 

320.0 

247.3

247.3

PROCUREMENT AND RESTRICTED CASH AND CASH EQUIVALENTS
included within cash and cash equivalents is $53.2 million (2012: $51.4 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

2013 
$’M 

2012 
$’M

8. current aSSetS – trade and other receivaBleS

tRAde ReceiVABLes

trade receivables 

Unbilled contract revenue 

Retentions 

Allowance for doubtful debts 

Allowance for doubtful debts

939.7 

984.5 

22.0 

(30.5) 

941.5

782.2

27.1

(24.9)

1,915.7 

1,725.9

Balance at the beginning of the financial year 

24.9 

25.7

Net charge to the statement of financial performance 

Provision from entities acquired 

Amounts written off against the opening provision balance 

differences arising on translation of foreign operations 

4.8 

4.9 

(2.6) 

(1.5) 

4.3

–

(3.1)

(2.0)

Balance at the end of the financial year 

30.5 

24.9

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 equity accounted 
associates and related parties 

130.7 

112.9

32(B) 

45.4 

71.9

176.1 

184.8

WorleyParsons Annual Report 2013  73

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

9. non‑current aSSetS – ProPerty, Plant and equiPment

conSolidated

2013 
$’M 

2012 
$’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 

1.7 

(0.3) 

1.4 

172.9 

(100.5) 

72.4 

175.1 

(118.7) 

56.4 

79.4 

(70.0) 

9.4 

1.6

(0.1)

1.5

144.2

(65.3)

78.9

140.8

(94.0)

46.8

63.2

(54.7)

8.5

Total property, plant and equipment 

139.6 

135.7

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 

1.5 

0.0 

0.1 

0.0 

0.0 

– 

(0.2) 

1.4 

1.6 

– 

0.0 

(0.1) 

0.0 

– 

0.0 

1.5 

78.9 

2.0 

13.7 

(0.5) 

– 

(25.1) 

3.4 

72.4 

61.0 

0.1 

37.7 

(0.2) 

– 

(20.8) 

1.1 

78.9 

46.8 

8.8 

15.5 

(0.6) 

(15.9) 

– 

1.8 

56.4 

35.5 

2.3 

23.8 

(0.6) 

(14.1) 

– 

(0.1) 

46.8 

8.5 

1.3 

4.4 

(0.3) 

(5.1) 

– 

0.6 

9.4 

10.0 

– 

4.0 

(0.4) 

(5.0) 

– 

(0.1) 

8.5 

totAL 
$’M

135.7

12.1

33.7

(1.4)

(21.0)

(25.1)

5.6

139.6

108.1

2.4

65.5

(1.3)

(19.1)

(20.8)

0.9

135.7

Balance at 1 July 2012 

Additions due to the acquisition of entities 

Additions 

disposals 

depreciation 

Amortization 

differences arising on translation of foreign operations 

Balance at 30 June 2013 

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 

74  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
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

2013 
$’M 

2012 
$’M

1,874.8 

1,570.3

(1.6) 

(1.6)

1,873.2 

1,568.7

166.7 

(115.8) 

50.9 

85.1 

(58.2) 

26.9 

127.2

(91.3)

35.9

69.9

(51.9)

18.0

233.7 

191.1

(148.7) 

(109.7)

85.0 

81.4

9.7 

(9.7) 

– 

17.3 

(2.9) 

14.4 

9.1

(9.1)

–

3.2

(2.4)

0.8

Total intangible assets 

2,050.4 

1,704.8

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 2012 

Additions due to the acquisition of entities 

Additions 

Amortization 

differences arising on translation of  
foreign operations 

Balance at 30 June 2013 

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 

goodwiLL 
$’M 

1,568.7 

207.7 

– 

– 

96.8 

1,873.2 

1,529.2 

37.0 

– 

– 

2.5 

1,568.7 

conSolidated

cUstoMeR 
coNtRActs ANd 
ReLAtioNshiPs 
$’M 

tRAde NAMes 
$’M 

coMPUteR 
soFtwARe 
$’M 

FAVoRABLe 
PRoPeRtY 
LeAses 
$’M 

35.9 

34.1 

– 

(19.2) 

0.1 

50.9 

61.9 

– 

– 

18.0 

13.2 

– 

(4.5) 

0.2 

26.9 

25.0 

– 

– 

81.4 

0.4 

35.3 

(32.3) 

0.2 

85.0 

78.2 

0.0 

34.8 

(22.8) 

(7.1) 

(31.6) 

(3.2) 

35.9 

0.1 

18.0 

– 

81.4 

– 

– 

– 

– 

– 

– 

1.3 

– 

– 

(1.3) 

0.0 

– 

otheR 
$’M 

0.8 

– 

13.8 

(0.2) 

0.0 

14.4 

1.2 

– 

– 

(0.3) 

(0.1) 

0.8 

totAL 
$’M

1,704.8

255.4

49.1

(56.2)

97.3

2,050.4

1,696.8

37.0

34.8

(63.1)

(0.7)

1,704.8

WorleyParsons Annual Report 2013  75

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

10. non‑current aSSetS – intangiBle aSSetS (continued)

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 cost 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 cgUs to which goodwill is allocated are the operating segments 
determined in accordance with AAsB 8 operating segments.

the goodwill allocated to the groups of cgUs and the key assumptions used 
for the value in use impairment testing are as follows:

2013 

hydrocarbons 

Minerals,	Metals	&	Chemicals	

Infrastructure	&	Environment	

Power 

2012 

hydrocarbons 

Minerals,	Metals	&	Chemicals	

Infrastructure	&	Environment	

Power 

PRe-tAX 
discoUNt 
% PA

11.4

13.4

13.9

11.2

PRe-tAX 
discoUNt 
% PA

12.8

14.5

15.4

13.0

goodwiLL 
$’M 

1,397.3 

156.3	

158.4	

161.2 

1,873.2

goodwiLL 
$’M 

1,186.7 

74.8	

157.1	

150.1 

1,568.7

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.

76  WorleyParsons Annual Report 2013

conSolidated

2013 
$’M 

2012 
$’M

11. non‑current aSSetS – deferred taX aSSetS

the balance comprises temporary differences attributable to:

Amounts recognized in the statement of financial performance:

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 

5.1 

49.2 

0.4 

6.6 

31.1 

6.0 

16.3 

11.7 

1.6 

21.2 

4.8 

6.5 

5.9

56.1

0.7

5.0

18.2

9.8

14.3

2.2

4.4

4.4

5.0

6.6

160.5 

132.6

Balance at the beginning of the financial year 

132.6 

123.9

Acquisition of controlled entities 

credited/(charged) to the statement of Financial Performance 

credited to equity 

differences arising on translation of foreign operations 

1.4 

1.1 

19.7 

5.7 

1.2

(4.2)

6.7

5.0

Balance at the end of the financial year 

160.5 

132.6

Notes 

conSolidated

2013 
$’M 

2012 
$’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 

389.2 

473.6 

21.7 

98.7 

192.4 

1,175.6 

346.7

372.0

10.2

73.6

173.9

976.4

the group’s exposure to currency and interest rate risk for trade and other 
payables is disclosed in notes 37 and 38.

conSolidated

2013 
$’M 

2012 
$’M

13. current liaBilitieS – intereSt Bearing loanS  
and BorroWingS

Notes payable 

secured bank loan 

Unsecured bank loans 

Finance lease liability 

capitalized borrowing costs 

151.4 

1.5 

1.7 

2.3 

(0.9) 

156.0 

–

1.4

2.3

0.0

(0.7)

3.0

NOTES PAYABLE IN US$
Unsecured notes payable were issued in the United states private debt 
capital market in May 2007, April 2008, March 2011 and september 2012 
(refer note 15).

SECURED BANK LOAN
Refer note 15 for terms and conditions.

UNSECURED BANK LOANS
Refer note 15 for terms and conditions.

FINANCE LEASE LIABILITY
Refer note 15 for terms and conditions.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14. current liaBilitieS – ProviSionS

employee benefits 

deferred revenue and project 

insurance 

warranties 

deferred consideration 

other 

the nature and timing of provisions is set out in note 17.

conSolidated

2013 
$’M 

2012 
$’M

290.5 

94.3 

25.0 

16.7 

12.2 

29.4 

289.5

163.7

19.2

13.8

–

13.4

468.1 

499.6

RECONCILIATIONS
Reconciliations of the carrying amounts of each class of current provisions at the beginning and end of the current and previous financial years are set out below:

carrying amount at 1 July 2012 

Provision from entities acquired 

Additional provisions 

Non-current provision reclassified to current 

Release of unused provision 

Amounts utilized 

differences arising from translation of foreign operations 

Carrying amount at 30 June 2013 

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 

conSolidated

eMPLoYee 
BeNeFits 
$’M 

deFeRRed 
ReVeNUe 
ANd PRoJect 
$’M 

iNsURANce 
$’M 

wARRANties 
$’M 

deFeRRed 
coNsideRAtioN 
$’M 

289.5 

22.6 

241.9 

– 

(14.8) 

(262.7) 

14.0 

290.5 

215.8 

7.7 

238.8 

(3.0) 

(173.3) 

3.5 

289.5 

163.7 

– 

52.5 

– 

(31.5) 

(95.1) 

4.7 

94.3 

89.3 

0.0 

149.6 

(2.6) 

(70.1) 

(2.5) 

19.2 

– 

6.8 

– 

(1.0) 

(1.6) 

1.6 

25.0 

20.7 

0.0 

3.1 

(2.9) 

(2.8) 

1.1 

13.8 

4.2 

4.0 

– 

(5.9) 

(0.2) 

0.8 

16.7 

15.0 

– 

8.2 

(5.4) 

(4.4) 

0.4 

163.7 

19.2 

13.8 

– 

– 

– 

12.2 

– 

– 

– 

12.2 

10.7 

0.0 

– 

0.0 

(10.7) 

– 

– 

otheR 
$’M

13.4

–

17.0

12.2

(3.4)

(10.8)

1.0

29.4

7.8

–

8.6

–

(2.7)

(0.3)

13.4

conSolidated

2013 
$’M 

2012 
$’M

15. non‑current liaBilitieS – intereSt Bearing loanS  
and BorroWingS
Notes payable 
secured bank loan 
Unsecured bank loans 
Finance lease liability 
capitalized borrowing costs 

884.6 
15.9 
– 
4.8 
(2.6) 

658.9
17.4
59.8
–
(2.3)

902.7 

733.8

NOTES PAYABLE IN US$
Unsecured notes payable were issued in the United states private debt 
capital market in May 2007, April 2008, March 2011 and september 2012. 
the issue in september 2012 comprised Us$205.0 million maturing in 
september 2022 with a fixed coupon of 4.00% per annum, Us$75.0 million 
maturing in september 2019 with a fixed coupon of 3.45% per annum and 
Us$20.0 million maturing in 2017 with a fixed coupon of 3.09% per annum.

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 
6.50% 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 5.76% 
per annum.

WorleyParsons Annual Report 2013  77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

15. non‑current liaBilitieS – intereSt Bearing loanS  
and BorroWingS (continued)
in accordance with the group’s financial risk management policy, cross 
currency swaps have been entered into, swapping Us$521.5 million of notes 
payable into c$522.4 million. this represents 80.0% of the notes issued in 
2008, 2011 and 2012.

SECURED BANK LOAN
The	secured	bank	loan	of	$17.4	million	(current:	$1.5	million;	non‑current:	
$15.9 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 $32.6 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.

FINANCE LEASE LIABILITY
the group leases various plant and equipment under finance leases with 
terms of three to eight years.

conSolidated

2013 
$’M 

2012 
$’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 

52.9 
58.0 
2.7 
16.5 
1.3 
2.9 

42.9
53.3
7.2
3.7
0.6
0.5

Amounts recognized directly in equity:
other 

Deferred tax liabilities 

134.3 

108.2

7.3 

4.4

141.6 

112.6

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 

112.6 
15.8 
5.3 
2.9 
5.0 

99.1
0.0
8.3
4.4
0.8

Balance at the end of the financial year 

141.6 

112.6

17. non‑current liaBilitieS – ProviSionS

employee benefits 

deferred consideration 

warranties 

other 

conSolidated

2013 
$’M 

2012 
$’M

43.0 

– 

– 

0.2 

43.2 

37.9

12.2

0.7

15.5

66.3

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.

insurance: the provision is based on the estimated cost of settling 
insured claims.

RECONCILIATIONS
Reconciliations of the carrying amounts of each class of non-current 
provisions at the beginning and end of the current and previous financial 
years are set out below:

carrying amount at 1 July 2012 

Additional provisions 

Non-current provision reclassified 
to current 

Release of unused provision 

Amounts utilized 

differences arising from translation  
of foreign operations 

Carrying amount at  
30 June 2013 

carrying amount at 1 July 2011 

Provision from entities acquired 

Additional provisions 

Release of unused provision 

Amounts utilized 

eMPLoYee 
BeNeFits 
$’M 

37.9 

18.7 

– 

(6.3) 

(8.9) 

1.6 

43.0 

28.4 

– 

15.8 

(3.8) 

(3.4) 

differences arising from translation  
of foreign operations 

0.9 

conSolidated

deFeRRed 

coNsideRAtioN  wARRANties 
$’M 

$’M 

otheR 
$’M

15.5

0.1

(12.2)

(3.3)

–

0.7 

0.4 

– 

(1.2) 

– 

0.1 

0.1

– 

– 

– 

0.7 

– 

– 

– 

0.2

16.5

–

4.6

(5.0)

–

(0.6)

12.2 

– 

(12.2) 

– 

– 

– 

– 

12.2 

– 

– 

– 

– 

– 

Carrying amount at  
30 June 2012 

37.9 

12.2 

0.7 

15.5

78  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
conSolidated

2013 

2012

NUMBeR oF 
shARes 

$’M 

NUMBeR oF 
shARes 

$’M

18. iSSued caPital

ordinary shares, fully paid1,2  246,480,559 

1,238.5  245,735,305 

1,221.3

special voting share 

1 

– 

1 

–

246,480,560  1,238.5  245,735,306  1,221.3

1 

2 

 included in ordinary shares are 3,594,667 (2012: 3,847,859) 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. ordinary shares have no par 
value and the company does not have a limited amount of authorized capital.
 the worleyParsons Limited Plans trust holds 267,173 (2012: 267,173) shares in the 
company, which has been consolidated and eliminated in accordance with the accounting 
standards.

(A) MOVEMENTS IN SHARES

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

2013 

2012

2013 

2012

Balance at the beginning of the financial year 

3,621,459  3,298,344

NUMBeR oF 
shARes 

$’M 

NUMBeR oF 
shARes 

$’M

245,735,306 

1,221.3  245,699,307 

1,219.6

Rights granted 

Rights exercised 

Rights lapsed or expired 

985,829 

993,730

(745,254) 

(35,999)

(727,740) 

(634,616)

Balance at the end of the financial year 

3,134,294  3,621,459

exercisable at the end of the financial year 

54,626 

3,106

253,192 

6.8 

447,144 

12.0

weighted average exercise price 

$nil 

$nil

Balance at the beginning  
of the financial year 

ordinary shares issued on  
redemption of  
exchangeable shares 

exchangeable shares  
exchanged for ordinary  
shares 

transfer from performance  
rights reserve on purchase  
and issuance of shares 

(253,192) 

(6.8) 

(447,144) 

(12.0)

745,254 

17.2 

35,999 

1.7

Balance at the end of 
the financial year 

246,480,560  1,238.5  245,735,306  1,221.3

(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 2013, 253,192 (2012: 447,144) exchangeable shares were 
exchanged.

the outstanding balance as at 30 June 2013 is represented by:

•	

•	

•	

•	

•	

•	

•	

•	

•	

•	

•	

•	

	107,292	performance	rights,	vesting	on	30	September	2016	and	expiring	
on	18	October	2019;

	755,389	performance	rights,	vesting	on	30	September	2015	and	expiring	
on	18	October	2019;

	891,404	performance	rights,	vesting	on	30	September	2014	and	expiring	
on	17	October	2018;

	51,185	performance	rights,	vesting	on	30	June	2014	and	expiring	on	
30	June	2019;

	1,236,856	performance	rights,	vesting	on	30	September	2013	and	
expiring	on	15	October	2017;

	51,202	performance	rights,	vested	on	30	June	2013	and	expiring	on	
30	June	2019;

	37,542	performance	rights,	vested	on	30	September	2012	and	expiring	
on	30	September	2016;

	499	performance	rights,	vested	on	30	September	2012	and	expiring	on	
30	September	2016;

	1,236	performance	rights,	vested	on	30	September	2012	and	expiring	on	
30	September	2015;

	505	performance	rights,	vested	on	30	September	2011	and	expiring	
on	2	October	2014;

	333	performance	rights,	vested	on	30	September	2010	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).

WorleyParsons Annual Report 2013  79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

conSolidated

2013 
$’M 

2012 
$’M

Notes 

conSolidated

2013 
$’M 

2012 
$’M

19. reServeS

Foreign currency translation reserve 

(218.0) 

(295.5)

hedge reserve 

Performance rights reserve 

Acquisition reserve 

16.9 

32.9 

(9.6) 

(1.9)

39.3

(9.6)

(177.8) 

(267.7)

(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.

20. retained ProfitS
Balance at the beginning of the  
financial year 

Profit attributable to members of  
worleyParsons Limited 

1,003.8 

871.7

322.1 

353.2

dividends paid 

22(B) 

(227.7) 

(221.1)

Balance at the end of the financial year 

1,098.2 

1,003.8

conSolidated

2013 

2012

21. earningS Per Share
AttRiBUtABLe to MeMBeRs oF woRLeYPARsoNs LiMited

Balance at the beginning of the financial year 

(295.5) 

(261.0)

Basic earnings per share (cents) 

130.8 

143.7

Foreign exchange movement on translation of foreign  
controlled entities and associates 

Net investments hedged 

income tax on net investments hedged 

123.5 

(65.7) 

19.7 

(24.9)

(13.7)

4.1

Balance at the end of the financial year 

(218.0) 

(295.5)

Basic earnings per share (cents) excluding net  
acquisition gains 

diluted earnings per share (cents) 

diluted earnings per share (cents) excluding net  
acquisition gains 

130.8 

129.9 

140.6

142.5

129.9 

139.5

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

earnings used in calculating basic and diluted  
earnings per share 

Less: net gain on revaluation of investments  
previously accounted for as equity accounted  
associates (refer note 5) 

32.7 

11.6

earnings used in calculating basic and diluted  
earnings per share excluding net acquisition gains 

$’M 

$’M

322.1 

353.2

– 

(7.6)

322.1 

345.6

(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 on foreign exchange hedges 

income tax on net gain on foreign exchange hedges 

(1.9) 

(6.2) 

1.7 

(3.1)

(0.9)

0.2

Fair value gain on mark to market of cross  
currency hedge 

income tax on fair value loss on mark to market of  
cross currency hedge 

Net gain/(loss) on interest rate hedges 

Balance at the end of the financial year 

(9.5) 

0.1 

16.9 

(8.5)

(1.2)

(1.9)

the total amount recognized in the statement of financial performance was a 
loss of $0.1 million (2012: $0.6 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 

39.3 

19.8 

23.9

17.1

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 

(9.0) 

–

22. dividendS

(17.2) 

32.9 

(1.7)

39.3

(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 and end of the financial year 

(9.6) 

(9.6)

80  WorleyParsons Annual Report 2013

(B) WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR
weighted average number of ordinary securities  
used in calculating basic earnings per share 

246,285,840  245,725,630

element of performance rights which are  
considered dilutive 

Adjusted weighted average number of ordinary  
securities used in calculating diluted earnings  
per share 

1,744,159  2,096,599

248,029,999 247,822,229

the weighted average number of converted, lapsed or cancelled potential 
ordinary shares used in calculating diluted earnings per share was 324,622 
(2012: 180,029).

conSolidated

2013 
$’M 

2012 
$’M

(A) FINAL DIVIDEND PROPOSED
dividend in respect of the six months to 30 June 2013:

51.0 cents per share (unfranked) 

125.7 

–

dividend in respect of the six months to 30 June 2012:

51.0 cents per share (31.3 cents franked) 

– 

125.3

the directors have resolved to pay a final dividend of 51.0 cents per share, 
unfranked (2012: 51.0 cents per share, partially franked at 61.3%). combined 
with the half year (interim) dividend, the company will make total dividend 
payments of 92.5 cents per share for the financial year (2012: 91.0 cents per 
share). the dividend will be paid on 20 september 2013 for shareholders on 
the register at the record date of 30 August 2013.

in accordance with AAsB 137 Provisions, contingent Liabilities and 
contingent Assets, the aggregate amount of the proposed final dividend of 
$125.7 million is not recognized as a liability as at 30 June 2013.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
conSolidated

2013 
$’M 

2012 
$’M

(B) PARENT ENTITY
worleyParsons Limited Parent entity financial statements include investments 
in the following entities:

eNtitY 

coUNtRY oF 
iNcoRPoRAtioN 

2013 
$’M 

2012 
$’M

engineering securities Pty Limited atf  
the worley Limited trust 

Australia 

worleyParsons canada callco Ltd. 

canada 

94.7 

220.8 

94.7

220.8

worleyParsons canada holdings  
Pty Limited 

worleyParsons Financial services  
Pty Limited 

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:

(B) DIVIDENDS PAID DURING THE FINANCIAL YEAR
dividend in respect of the six months to 31 december 2012:

41.5 cents per share (41.5 cents franked) 

dividend in respect of the six months to 30 June 2012:

51.0 cents per share (31.3 cents franked) 

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) 

102.4 

125.3 

– 

– 

227.7 

–

–

98.3

122.8

221.1

(C) IMPUTATION CREDIT BALANCE OF THE PARENT ENTITY
the amount of imputation credits available on a tax  
paid basis for future tax distributions is:

imputation credits balance as at the end of the financial  
year at the corporate tax rate of 30% (2012: 30%) 

15.8 

34.6

Profit before income tax expense 

STATEMENT OF FINANCIAL PERFORMANCE

imputation debits arising from the refund of income  
tax provided in this financial report 

(15.8) 

imputation credits available for distribution 

imputation debits that will arise from the payment of  
the final dividend 

Imputation credits available for future dividends 

– 

– 

– 

(1.7)

32.9

(32.9)

–

income tax expense 

Profit after income tax expense 

Profit attributable to members of worleyParsons Limited 

Retained profits at the beginning of the financial year 

dividends paid 

eNtitY 

coUNtRY oF 
iNcoRPoRAtioN 

2013 
% 

2012 
%

Beneficial  
intereSt held By 
conSolidated entity

STATEMENT OF COMPREHENSIVE INCOME

Profit after income tax expense 

total comprehensive income, net of tax 

23. inveStmentS in controlled entitieS

STATEMENT OF FINANCIAL POSITION

Retained profits at the end of the financial year 

130.7 

188.2

current assets 

total assets 

current liabilities 

total liabilities 

Net assets 

issued capital 

Performance rights reserve 

Retained profits 

total equity 

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 SIGNIFICANT ENTITIES:
worley No 2 Pty Limited1 

Australia 

100 

worleyParsons canada services Ltd 

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
Rosenberg worleyParsons As2 

Norway 

twP holdings Proprietary Limited 

south Africa 

100 

100 

100 

100 

100 

100 

51 

100 

100 

100 

100

100

100

100

100

100

100

51

100

–

–

1 

2 

 entities subject to Australian securities and investments commission class order 98/1418 
relief.
 Previously named Bergen group Rosenberg As.

2013 
$’M 

2012 
$’M

171.2 

208.8

(1.0) 

(2.1)

170.2 

170.2 

188.2 

206.7

206.7

202.6

(227.7) 

(221.1)

170.2 

170.2 

206.7

206.7

577.2 

510.4

1,534.5 

1,464.0

131.7 

132.4 

15.1

15.1

1,402.1 

1,448.9

1,238.5 

1,221.3

32.9 

130.7 

39.4

188.2

1,402.1 

1,448.9

details in relation to parent company guarantees are disclosed in note 30(A).

WorleyParsons Annual Report 2013  81

 
 
 
 
 
 
 
 
 
 
 
 
 
 
23. INVESTMENTS IN CONTROLLED ENTITIES (continued)

(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 

CLOSED GROUP

2013 
$’M 

2012 
$’M

190.5 

(55.5) 

135.0 

135.0 

311.9 

277.8

(57.9)

219.9

219.9

309.2

Dividends paid 

(224.7) 

(217.2)

Retained profits at the end of the financial year 

222.2 

311.9

STATEMENT OF FINANCIAL POSITION

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 

82  WorleyParsons Annual Report 2013

43.5 

23.8

1,417.0 

1,262.2

16.2 

10.3

1,476.7 

1,296.3

0.3 

64.9 

48.4 

0.3

64.9

45.5

902.8 

895.6

1,016.4 

1,006.3

2,493.1 

2,302.6

828.4 

4.5 

832.9 

159.4 

14.2 

0.0 

173.6 

1,006.5 

595.3

14.2

609.5

57.8

21.5

24.4

103.7

713.2

1,486.6 

1,589.4

1,238.5 

1,221.3

25.9 

222.2 

56.2

311.9

1,486.6 

1,589.4

(D) ACQUISITION OF CONTROLLED ENTITIES
Effective 1 January 2013, WorleyParsons Norway AS, a wholly owned 
subsidiary of the Company, acquired 100% of shares in Bergen Group 
Rosenberg AS, currently known as Rosenberg WorleyParsons AS, and its 
subsidiaries for a cash consideration of $185.6 million (NOK1,079 million).

Effective 1 March 2013, WorleyParsons RSA Group Proprietary Limited, a 
wholly owned subsidiary of the Company, acquired 100% of the shares in 
TWP Holdings Proprietary Limited and its subsidiaries for a cash consideration 
of $96.9 million (ZAR883 million).

The above acquisitions’ contribution to the Group’s reported after‑tax profit 
attributable to members of the Parent Entity was $7.6 million, and the 
reported contribution to revenue was $190.0 million. Had these acquisitions 
taken place at 1 July 2012, the additional contribution to the Group’s profit 
after income tax expense would have been $9.8 million and to revenue would 
have been $218.5 million.

BERGEN GROUP 
ROSENBERG AS 
ACQUISITION 
$’M 

TWP HOLDINGS 
PROPRIETARY 
LIMITED 
ACQUISITION 
$’M 

TOTAL 
ACQUISITIONS 
$’M

ASSETS

Cash and cash equivalents 

Trade and other receivables 

Prepayments 

Property, plant and equipment 

Intangible assets 

Deferred tax assets 

Other assets 

Total assets 

LIABILITIES

Trade and other payables 

Interest bearing loans and borrowings 

Provisions 

Deferred tax liabilities 

Total liabilities 

Net assets acquired 

Intangible assets 

25.6 

46.0 

1.6 

9.2 

0.2 

– 

13.4 

96.0 

36.2 

4.6 

21.0 

2.6 

64.4 

31.6 

32.0 

Deferred tax liability on intangible assets 

Goodwill arising on acquisition 

(9.0) 

131.0 

(3.2) 

37.4 

1.1 

2.9 

0.2 

1.4 

0.3 

22.4

83.4

2.7

12.1

0.4

1.4

13.7

40.1 

136.1

20.6 

4.6 

5.8 

– 

31.0 

9.1 

15.3 

(4.2) 

76.7 

56.8

9.2

26.8

2.6

95.4

40.7

47.3

(13.2)

207.7

Total consideration, excluding acquisition  
costs expensed 

185.6 

96.9 

282.5

Consideration:

Cash consideration 

Total consideration 

Net cash effect:

Cash consideration paid 

Cash and overdrafts included in net  
assets acquired 

185.6 

185.6 

96.9 

96.9 

282.5

282.5

185.6 

96.9 

282.5

(25.6) 

3.2 

(22.4)

Net cash outflow 

160.0 

100.1 

260.1

Acquisition related costs are included in other expenses in profit or loss and 
in operating cash flows in the statement of cash flows.

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, an additional 44% share in ARA WorleyParsons SA and 
affiliated businesses was acquired for $17.7 million.

There were no changes to the acquisition values recognized in the 
30 June 2013 financial statements.

NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 30 June 2013 
 
 
 
 
 
 
 
 
 
oWnerShiP 
intereSt 
conSolidated 

carrying 
amount 
conSolidated

2013 
% 

2012 
% 

2013 
$’M 

2012 
$’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
Cegertec		
worleyParsons inc 

Minerals,	Metals	& 
chemicals 

deltaAfrik  
engineering Limited  hydrocarbons 

50 

50 

13.5 

12.4

49 

49 

26.1 

19.2

Ranhill  
worleyParsons  
sdn Bhd 

transfield worley  
Power services  
Pty Limited 

Other investments 

hydrocarbons 

49 

49 

33.5 

28.6

Power 

50 

50 

21.9 

36.4 

12.1

31.8

conSolidated

2013 
$’M 

2012 
$’M

(F) RETAINED PROFITS ATTRIBUTABLE TO EQUITY ACCOUNTED 
INVESTMENTS
Balance at the beginning of the financial year 

115.4 

share of net profits of investments accounted for using  
the equity method 

dividends declared 

23.4 

(15.2) 

106.3

27.6

(18.5)

Balance at the end of the financial year 

123.6 

115.4

(G) SHARE OF EQUITY ACCOUNTED INVESTMENTS’ CONTINGENT LIABILITIES
12.4
Performance related guarantees issued 

12.7 

(H) SHARE OF EQUITY ACCOUNTED INVESTMENTS’ EXPENDITURE 
COMMITMENTS
operating lease commitments 

5.1 

6.7

(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 

131.4 

104.1

Non-current assets 

current liabilities 

Non-current liabilities 

Net assets 

goodwill 

240.7 

69.6 

189.7

38.1

(163.3) 

(109.7)

(23.3) 

(21.5)

123.7 

7.7 

96.6

7.5

conSolidated

2013 
$’M 

2012 
$’M

(B) CARRYING AMOUNT OF EQUITY ACCOUNTED INVESTMENTS
carrying amount at the beginning of the financial year 

104.1 

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 

23.4 

(15.2) 

10.8 

8.3 

86.3

27.6

(18.5)

7.1

1.6

Carrying amount at the end of the financial year 

131.4 

104.1

(C) NET PROFITS ATTRIBUTABLE TO EQUITY ACCOUNTED INVESTMENTS
Profits before income tax expense 

33.5 

40.7

income tax expense 

Net profits of equity accounted investments 

(10.1) 

23.4 

(13.1)

27.6

(D) REVENUE ATTRIBUTABLE TO EQUITY ACCOUNTED INVESTMENTS
share of revenue from equity accounted investments 

549.2 

665.0

(E) RESERVES ATTRIBUTABLE TO EQUITY ACCOUNTED INVESTMENTS
FoReigN cURReNcY tRANsLAtioN ReseRVe

Balance at the beginning of the financial year 

effect of decrease in reserve 

(23.3) 

8.3 

(24.9)

1.6

Balance at the end of the financial year 

(15.0) 

(23.3)

Carrying amount at the end of the financial year 

131.4 

104.1

JoiNtLY coNtRoLLed oPeRAtioNs ANd Assets 

PRiNciPAL ActiVitY 

oWnerShiP 
intereSt 
conSolidated

2013 
% 

2012 
%

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
Foster wheeler energy worleyParsons 
(Pluto LNg) Joint Venture

hydrocarbons 

40 

transfield worley Joint Venture 

hydrocarbons 

50 

40 

50

Jointly controlled operations and assets established during the year
SKM‑WorleyParsons	JV	

	Infrastructure	&	 
environment 

50 

–

WorleyParsons Annual Report 2013  83

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

27. finance leaSe receivaBle

current finance lease receivable 

Non-current finance lease receivable 

Gross investment in lease receivable 

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 

Gross investment in lease receivable 

conSolidated

2013 
$’M 

2012 
$’M

1.6 

27.1 

28.7 

1.6 

7.6 

19.5 

28.7 

28.7 

1.5

28.5

30.0

1.5

7.1

21.4

30.0

30.0

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 
customers.

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 expenses at margin 

conSolidated

2013 
$’M 

2012 
$’M

190.8 

216.3

(183.3) 

(198.4)

Procurement services revenue at nil margin 

1,747.7 

696.2

Procurement expenses at nil margin 

(1,747.7) 

(696.2)

ASSETS AND LIABILITIES

cash and cash equivalents 

trade and other receivables 

trade and other payables 

38.8 

123.1 

42.9

26.2

(130.3) 

(15.2)

1  Revenue and expenses exclude procurement services revenue and expenses from associates.

25. intereStS in Jointly controlled oPerationS and 
aSSetS (continued)
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:

Assets

Current assets

cash and cash equivalents 

trade and other receivables 

other financial assets 

Total current assets 

Non‑current assets

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 (LIABILITIES)/ASSETS 

conSolidated

2013 
$’M 

2012 
$’M

7.5 

47.5 

5.8 

17.9

102.3

2.5

60.8 

122.7

3.4 

3.4 

0.4

0.4

64.2 

123.1

57.5 

15.6 

73.1 

1.1 

1.1 

90.4

19.1

109.5

1.2

1.2

74.2 

110.7

(10.0) 

12.4

conSolidated

2013 
$’M 

2012 
$’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 

344.2 

376.5

NON‑CASH ITEMS

depreciation 

Amortization 

Performance rights expense 

doubtful debts expense 

share of associates’ net profits in excess of  
dividends received 

Net gain on revaluation of investments previously  
accounted for as equity accounted associates 

other 

21.0 

81.3 

10.8 

4.8 

19.1

83.9

17.1

4.3

(9.6) 

(4.7)

– 

2.6 

(7.6)

5.3

cash flow adjusted for non-cash items 

455.1 

493.9

CHANGES IN ASSETS AND LIABILITIES ADJUSTED FOR  
EFFECTS OF PURCHASE OF CONTROLLED ENTITIES

increase in trade and other receivables 

(166.3) 

(401.5)

decrease/(increase) in prepayments and other assets 

increase in deferred tax assets 

increase in trade and other payables 

increase in billings in advance 

decrease in income tax payable 

increase in deferred tax liabilities 

(decrease)/increase in provisions 

Net cash inflow from operating activities 

0.5 

(26.5) 

214.1 

25.1 

(18.2) 

13.2 

(53.5) 

443.5 

(42.2)

(2.8)

234.3

14.2

(1.6)

7.6

135.6

437.5

84  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
29. commitmentS for eXPenditure

31. remuneration of auditorS

conSolidated

2013 
$’M 

2012 
$’M

conSolidated

2013 
$ 

2012 
$

(A) OPERATING LEASES
commitments for minimum lease payments in relation to non-cancelable 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 

215.4 

514.5 

89.7 

179.3

458.2

62.6

819.6 

700.1

(B) OPERATING EXPENDITURE COMMITMENTS
estimated commitments for operating expenditure in relation to software are 
payable as follows:

within one year 

Later than one year and not later than five years 

Commitments not recognized in the  
financial statements 

28.9 

58.7 

20.1

22.3

87.6 

42.4

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

2013 
$’M 

2012 
$’M 

2013 
$’M 

2012 
$’M

Bank guarantees outstanding  
at balance date in respect of  
contractual performance 

Commitments not recognized  
in the financial statements 

616.1 

522.3 

359.1 

346.2

616.1 

522.3 

359.1 

346.2

(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(o).

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	

3,166,110	 2,539,297

other auditors of controlled entities 

166,403 

189,713

Amounts received for other services:

tax related services 

Acquisition related assurance services 

other non-audit services 

3,332,513  2,729,010

335,210 

211,967

210,731 

116,000

935,717 

298,034

1,481,658 

626,001

4,814,171  3,355,011

32. related PartieS

(A) DIRECTORS
the names of persons who were directors of the company at any time during 
the financial year were as follows:

John grill (chairman and chief executive officer) – retired as a director and 
chief executive officer on 23 october 2012, and was appointed as a director 
and chairman on 1 March 2013.

Ron McNeilly (chairman and Non-executive director) until 1 March 2013, 
deputy chairman and Lead independent director from 1 March 2013.

Larry Benke

erich Fraunschiel

John M green

christopher haynes, oBe

catherine Livingstone, Ao

JB McNeil

wang Xiao Bin

Andrew wood (chief executive officer) – appointed as a director and chief 
executive officer on 23 october 2012.

(B) OTHER RELATED PARTIES

conSolidated

2013 
$’M 

2012 
$’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 

15.2 

18.5

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 

6.7 

8.8 

4.4

3.4

Aggregate amounts, receivable from, and payable to, each class of other related 
parties at balance date were as follows:

Current receivables

Associates and related parties 

45.4 

71.9

Current payables

Associates and related parties 

21.7 

10.2

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.

WorleyParsons Annual Report 2013  85

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

33. Key management PerSonnel diScloSureS

(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 2013 are as follows:

numBer of ShareS held in WorleyParSonS limited

BALANce At 
1 JULY 2012 

  oN eXeRcise oF 
PeRFoRMANce 
Rights 

chANge iN 
stAtUs 

otheR 
tRANsActioNs 

BALANce At 
30 JUNe 2013

(B) PARTICULARS OF KMP PERFORMANCE RIGHTS
Particulars of KMP’s equity settled performance rights granted as at 
30 June 2013 are as follows:

numBer of Performance rightS 
held in WorleyParSonS limited

BALANce At 
1 JULY 2012 

gRANted 

eXeRcised 

chANge iN 
stAtUs 

otheR 
tRANs- 
ActioNs 

BALANce 
At 
30 JUNe 
2013

– 

25,372,173

Grand total 

510,433  214,432  (123,099) 

26,863  (128,065)  500,564

eXecUtiVe ANd NoN-eXecUtiVe diRectoRs

John grill1,2 

208,373 

24,356 

(54,592) 

Larry Benke3 

7,812 

– 

(5,236) 

Andrew wood 

76,912 

58,978 

(16,088) 

Sub‑total 

293,097 

83,334 

(75,916) 

gRoUP eXecUtiVes

Barry Bloch 

10,231 

15,128 

(2,030) 

78,646 

38,185 

(16,605) 

stuart Bradie 

simon holt4 

Randy Karren5 

– 

– 

– 

– 

– 

– 

(82,666)  95,471

(2,576) 

–

(11,735)  108,067

(96,977)  203,538

– 

23,329

(12,172)  88,054

– 

– 

4,337 

9,171 

– 

– 

7,545 

19,318 

–  11,882

– 

28,489

iain Ross 

75,063 

32,700 

(16,663) 

david steele 

53,396 

31,577 

(11,885) 

– 

– 

(12,154)  78,946

(6,762)  66,326

Sub‑total 

217,336  131,098 

(47,183) 

26,863 

(31,088)  297,026

1 

2 

3 

4 
5 

 Mr grill retired as a director and chief executive officer on 23 october 2012, and was 
appointed as a director and chairman on 1 March 2013.
 cash settled performance rights were 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 Long term incentive 
Plan. Upon his retirement, the Board exercised discretion to allow a pro-rata proportion of his 
outstanding performance rights to remain in the Plan.
 Mr holt commenced as an executive on 23 october 2012.
 Mr Karren commenced as an executive on 23 october 2012.

Long term incentive (Lti) grants are delivered to executive directors, other 
KMP and other executives as performance rights (rights). during the year, an 
offer was 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.

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 or four 
year period, subject to minimum performance hurdles being satisfied.

For executives the measurement of performance is based on the following:

•	

•	

	Total	shareholder	return	(TSR)	relative	to	peer	group	is	at	least	at	the	
median of the companies in the peer comparison group (which applies to 
50%	of	potential	long	term	incentive	for	FY2013);	and

	Earnings	per	share	(EPS)	growth	(which	applies	to	50%	of	potential	long	
term incentive for FY2013).

NoN-eXecUtiVe diRectoRs

Ron McNeilly 

401,064 

Larry Benke1 

1,130,195 

erich Fraunschiel 

168,755 

John M green 

891,869 

christopher  
haynes, oBe 

catherine  
Livingstone, Ao 

JB McNeil 

wang Xiao Bin 

– 

13,000 

10,300 

4,000 

Sub‑total 

2,619,183 

eXecUtiVe diRectoRs

John grill2 

25,329,759 

Andrew wood3 

804,583 

– 

– 

– 

– 

– 

– 

– 

– 

– 

42,414 

16,088 

Sub‑total 

26,134,342 

58,502 

gRoUP eXecUtiVes

Barry Bloch 

– 

stuart Bradie 

50,977 

simon holt4 

Randy Karren5 

– 

– 

2,030 

16,605 

3,275 

4,461 

– 

– 

– 

– 

401,064

1,130,195

168,755

891,869

6,055 

6,055

– 

500 

7,000 

13,000

10,800

11,000

13,555  2,632,738

15,000 

835,671

15,000  26,207,844

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(38,661) 

777 

– 

63,279 

(1,745) 

2,030

28,921

4,052

65,995

iain Ross 

490,397 

16,663 

david steele 

107,379 

11,885 

– 

– 

(50,000) 

457,060

– 

119,264

Sub‑total 

648,753 

54,919 

64,056 

(90,406) 

677,322

Grand total 

29,402,278 

113,421 

64,056 

(61,851)  29,517,904

1 
2 

3 
4 
5 

 Mr Benke received exchangeable shares as part of the colt group consideration.
 Mr grill retired as a director and chief executive officer on 23 october 2012, and was 
appointed as a director and chairman on 1 March 2013.
 Mr wood was appointed as a director and as chief executive officer on 23 october 2012.
 Mr holt commenced as an executive on 23 october 2012.
 Mr Karren commenced as an executive on 23 october 2012 and received exchangeable 
shares as part of the colt group consideration.

86  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the peer comparison group for Lti grants made in FY2013, the vesting 
schedule of the rights subject to the relative tsR hurdle and the vesting 
schedule of rights subject to the ePs hurdle are set out in the Remuneration 
Report on pages 51 to 52.

executives will only derive value from the ePs component of the grants made 
in FY2013 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 or four year performance period.

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 2012 and 30 June 
2015.

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 2013 is 1.1 years (2012: 1.3 years).

Weighted average fair value
the weighted average fair value of rights granted during the year was 
$19.50 (2012: $17.69).

Pricing model
the following table lists the inputs to the models used for the years ended 
30 June 2013 and 30 June 2012:

PeRFoRMANce Rights 
PLAn	2013	–	TSR	&	EPS	

GROUP	ExECUTIVES	

CEO	

PeRFoRMANce
Rights PLAN
2012	–	TSR
&	EPS

dividend yield (%) 

expected volatility (%) 

3.94 

30 

Risk-free interest rate (%) 

2.82 – 2.86 

expected life of rights (years) 

Rights exercise price ($) 

weighted average share price at  
measurement date ($) 

4.08 

30 

2.57 

4 

– 

3.49

35

3.23

3

–

3 – 4 

– 

25.53 

25.33 

27.46

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

short term employee benefits 

Post-employment benefits 

other long term benefits 

share based payments 

Total compensation 

conSolidated

2013 
$ 

2012 
$

9,372,545  11,017,826

269,967 

195,883

54,457 

59,826

1,772,683  2,668,309

11,469,652  13,941,844

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;	Minerals,	Metals	&	Chemicals;	Infrastructure	&	
environment and Power.

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 
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:

•	

•	

•	

•	

•	

•	

	global	support	costs;

	interest	and	tax	for	associates;

	amortization	of	acquired	intangible	assets;

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

	net	borrowing	costs;	and

	income	tax	expense.

(C) MAJOR CUSTOMERS 
the group has a number of customers to which it provides services. the 
most significant customer accounts for 12.4% (2012: 11.3%) of aggregated 
revenue including procurement and is within the hydrocarbons customer 
sector group. the next most significant customer accounts for less than 10%.

WorleyParsons Annual Report 2013  87

 
 
 
 
 
 
	
	
	
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

34. Segment information (continued)

(D) OPERATING SEGMENTS

HYDROCARBOnS	

MInERALS,	METALS	&	CHEMICALS	

iNFRAstRUctURe 
	&	EnVIROnMEnT	

POWER	

TOTAL

JUNe 
2013 
$’M 

JUNe 
2012 
$’M 

JUNe 
2013 
$’M 

JUNe 
2012 
$’M 

JUNe 
2013 
$’M 

JUNe 
2012 
$’M 

JUNe 
2013 
$’M 

JUNe 
2012 
$’M 

JUNe 
2013 
$’M 

JUNe 
2012 
$’M

Revenue

Professional services revenue 

4,250.0 

4,110.0 

926.5 

892.5 

745.1 

840.3 

524.5 

524.1 

6,446.1 

6,366.9

construction and fabrication revenue 

Procurement services revenue at margin 

other income 

847.7 

245.4 

1.2 

618.7 

285.8 

0.6 

– 

10.9 

0.2 

– 

1.2 

1.7 

– 

38.4 

0.3 

– 

30.5 

0.0 

– 

24.4 

12.4 

– 

55.2 

2.0 

847.7 

319.1 

14.1 

618.7

372.7

4.3

Total segment revenue1 

5,344.3 

5,015.1 

937.6 

895.4 

783.8 

870.8 

561.3 

581.3 

7,627.0 

7,362.6

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 

7,627.0 

7,362.6

1,747.7 

696.2

(549.2) 

(665.0)

– 

6.0 

7.6

7.0

8,831.5 

7,408.4

Segment result2 

Segment margin 

633.7 

11.9% 

598.4 

11.9% 

135.5 

14.5% 

134.1 

15.0% 

85.9 

11.0% 

118.4 

13.6% 

49.4 

8.8% 

61.4 

10.6% 

904.5 

11.9% 

912.3

12.4%

Reconciliation of segment result to profit after income tax per the statement of Financial Performance:

Segment result 

global support costs3 

interest and tax for associates 

Amortization of acquired intangible assets 

eBit 

eBit margin on aggregated revenue for the group 

Net gain on revaluation of investments previously accounted for as equity accounted associates 

Net borrowing costs 

income tax expense 

Profit after income tax per the Statement of Financial Performance 

Other segment information

904.5 

912.3

(342.7) 

(336.7)

(11.1) 

(23.7) 

527.0 

6.9% 

– 

(13.8)

(31.5)

530.3

7.2%

7.6

(53.4) 

(44.1)

(129.4) 

(117.3)

344.2 

376.5

depreciation and amortization expense 

76.1 

59.0 

14.6 

22.6 

6.2 

17.5 

5.4 

3.9 

102.3 

103.0

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

equity accounted associates 

Purchase of non-current assets 

19.9 

88.9 

38.3 

22.6 

75.2 

49.6 

2.2 

15.1 

4.3 

3.0 

10.1 

28.0 

0.3 

0.1 

35.8 

1.1 

5.2 

17.9 

1.0 

27.3 

1.9 

0.9 

13.6 

4.8 

23.4 

131.4 

80.3 

27.6

104.1

100.3

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. the directors believe the disclosure of revenue attributable to associates 
provides additional information in relation to the financial performance of the group.
 segment result represents earnings before interest and 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 $317.5 million to 
$336.7 million for the year ended 30 June 2012.

88  WorleyParsons Annual Report 2013

 
 
 
	
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2013 
$’M 

2012 
$’M

35. credit riSK

(E) GEOGRAPHIC SEGMENTS
Revenue from external customers:1

Asia and china 

Australia and New Zealand 

canada 

europe 

Latin America 

Middle east, North Africa and india 

sub-saharan Africa 

460.3 

542.2

1,501.7 

1,709.0

2,581.7 

1,832.1

721.7 

408.3 

1,277.4 

194.0 

635.1

207.8

812.0

162.9

United states of America and caribbean 

1,666.3 

1,488.4

Total revenue from external customers 

8,811.4 

7,389.5

Non-current assets by geographical location:2

Asia and china 

Australia and New Zealand 

canada 

europe 

Latin America 

Middle east, North Africa and india 

sub-saharan Africa 

United states of America and caribbean 

113.0 

303.8 

1,055.3 

114.8 

191.8 

5.7 

265.9 

320.5 

96.3

272.0

969.3

87.3

197.7

6.6

70.3

293.6

Non‑current assets by geographical location 

2,370.8 

1,993.1

Unbilled contract revenue 

1 

 Revenue is attributed to the geographic location based on the location of the entity 
providing the services and includes professional services revenue, procurement revenue and 
construction and fabrication revenue.

2  excludes derivative financial instruments and deferred tax assets.

0-30 days 

Past due 31-60 days 

Past due 61-90 days 

Past due 91-120 days 

More than 121 days 

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:

cash and cash equivalents 

carrying amount 
conSolidated

2013 
$’M 

2012 
$’M

320.0 

247.3

trade receivables, unbilled contract revenue and retentions  1,915.7 

1,725.9

Amounts owing by associates and related parties 

derivatives 

45.4 

31.9 

71.9

16.6

2,313.0 

2,061.7

the ageing of the group’s trade receivables, unbilled contract revenue and 
retentions at the reporting date was:

gRoss 
2013 
$’M 

984.5 

708.2 

102.5 

45.1 

18.9 

87.0 

iMPAiRMeNt 
2013 
$’M 

– 

(1.6) 

(0.2) 

(1.1) 

(0.6) 

gRoss 
2012 
$’M 

782.2 

649.1 

115.5 

56.5 

29.5 

(27.0) 

118.0 

1,946.2 

(30.5) 

1,750.8 

iMPAiRMeNt 
2012 
$’M

–

(7.3)

(3.3)

(0.4)

(0.8)

(13.1)

(24.9)

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 2013  89

 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

36. 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 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

2013 
$’M 

2012 
$’M

SECURED FACILITIES

total facilities available:

Loan facilities 

Finance lease facilities 

Facilities utilized at balance date:

Loan facilities 

Finance lease facilities 

Facilities available at balance date:

Loan facilities 

Finance lease facilities 

17.4 

7.1 

24.5 

17.4 

7.1 

24.5 

– 

– 

– 

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 

3.8 

10.1 

10.6 

24.5 

18.8

–

18.8

18.8

–

18.8

–

–

–

1.4

5.0

12.4

18.8

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

2013 
$’M 

2012 
$’M

1,770.8 

1,336.2

117.1 

861.8 

89.6

787.3

2,749.7 

2,213.1

1,037.7 

721.0

– 

–

616.1 

522.3

1,653.8 

1,243.3

733.1 

117.1 

245.7 

615.2

89.6

265.0

1,095.9 

969.8

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 

427.0 

490.2 

970.7 

137.5

731.1

557.2

1,887.9 

1,425.8

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.

As At 30 JUNe 2013

due within one year 

due between one and four year(s) 

due after four years 

As At 30 JUNe 2012

due within one year 

due between one and four year(s) 

due after four years 

37. currency riSK

tRAde 
PAYABLes 
$’M 

389.2 

– 

– 

conSolidated

PAYABLes to 
AssociAtes ANd 
ReLAted PARties 
$’M 

iNteRest BeARiNg 
LoANs ANd 
BoRRowiNgs 
$’M 

eXPected FUtURe 
iNteRest 
PAYMeNts 
$’M 

deRiVAtiVes 
$’M 

21.7 

– 

– 

156.9 

203.5 

701.8 

389.2 

21.7 

1,062.2 

346.7 

– 

– 

346.7 

10.2 

– 

– 

10.2 

3.7 

214.6 

521.5 

739.8 

8.9 

44.8 

237.6 

291.3 

0.6 

20.2 

194.9 

215.7 

4.0 

0.3 

– 

4.3 

4.0 

0.0 

– 

4.0 

totAL 
FiNANciAL 
LiABiLities 
$’M

580.7

248.6

939.4

1,768.7

365.2

234.8

716.4

1,316.4

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 the 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.

90  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,796.44 

9,287.23 

idR 42,614 

Usd (4.4) 

idR 69,600 

– 

– 

hKd 20.8 

hKd 3.5 

Usd (0.5) 

– 

iNR 45.0 

Usd (0.8) 

iNR 149.7 

– 

– 

JPY 7.7 

MYR 0.9 

AUd (0.3) 

– 

At balance date, the details of outstanding contracts were:

Maturing in the next six months to 31 December 2013

Weighted average  
eXchange rate 

2013 

2012 

amount 
receivaBle/(PayaBle) 

2013 
$’M 

2013 
$’M 

Buy AUd and sell cAd 

Buy AUd and sell QAR 

Buy AUd and sell Usd 

Buy AUd and sell ZAR 

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 eUR and sell AUd 

Buy gBP and sell AUd 

Buy gBP and sell sgd 

Buy gBP and sell Usd 

Buy hKd and sell sgd 

Buy hKd and sell Usd 

Buy idR and sell Usd 

Buy iNR and sell Usd 

Buy JPY and sell AUd 

Buy MYR and sell AUd 

Buy QAR and sell ZAR 

Buy sgd and sell AUd 

Buy sgd and sell eUR 

Buy sgd and sell Usd 

Buy sgd and sell ZAR 

Buy Usd and sell cAd 

Buy Usd and sell eUR 

Buy Usd and sell MYR 

Buy Usd and sell ZAR 

Buy ZAR and sell gBP 

Buy ZAR and sell Usd 

Maturing in the next 6‑12 months to 30 June 2014

Buy AUd and sell sgd 

Buy AUd and sell Usd 

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 

Buy AUd and sell sgd 

Maturing in the next 12‑18 months to 31 December 2014

Buy BRL and sell Usd 

Buy gBP and sell Usd 

Maturing in the next 18‑24 months to 30 June 2015

Buy BRL and sell Usd 

Maturing in the next 24‑30 months to 31 December 2015

Buy BRL and sell Usd 

Maturing in the next 30‑36 months to 30 June 2016

Buy BRL and sell Usd 

1.03 

0.27 

1.07 

0.11 

1.97 

– 

– 

– 

6.18 

0.70 

– 

– 

0.64 

– 

7.76 

– 

– 

0.99 

– 

1.94 

1.39 

3.61 

1.02 

6.33 

– 

0.64 

0.51 

0.64 

6.10 

– 

55.61 

– 

3.11 

– 

1.26 

1.60 

1.23 

0.14 

0.97 

1.30 

0.32 

– 

14.57 

10.20 

0.86 

1.06 

2.01 

– 

6.21 

– 

– 

– 

– 

0.86 

2.06 

– 

2.09 

2.38 

2.43 

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 

– 

– 

– 

amount 
receivaBle/(PayaBle)

2012 
$’M 

– 

– 

2012 
$’M

–

–

AUd 44.9 

Usd (45.4)

– 

BRL 1.5 

cAd 0.9 

cAd 19.0 

cAd 1.6 

cNY 46.8 

– 

–

Usd (0.8)

eUR (0.6)

Kwd (5.3)

Usd (1.5)

Usd (7.4)

–

gBP 10.0 

AUd (15.5)

gBP 0.2 

gBP 2.1 

AUd 9.3 

AUd 0.1 

AUd 37.1 

AUd 4.5 

BRL 4.8 

– 

– 

– 

cAd (9.0) 

QAR (0.3) 

Usd (34.8) 

ZAR (42.4) 

Usd (2.5) 

– 

– 

– 

cNY 10.5 

eUR 2.0 

Usd (1.7) 

AUd (2.9) 

– 

– 

– 

– 

gBP 9.6 

Usd (15.0) 

sgd (0.4)

Usd (3.4)

sgd (3.4)

–

Usd (7.5)

Usd (3.0)

AUd (0.1)

–

–

–

–

–

Usd (1.2)

Usd (0.5)

Usd (2.6)

Usd (2.4)

sgd (0.9)

Usd (2.0)

eUR (1.0)

–

Usd (0.1)

Usd (1.2)

–

–

–

– 

QAR 1.6 

ZAR (3.6)

AUd (5.6) 

eUR (0.1) 

Usd (1.2) 

ZAR (17.7) 

cAd (3.0) 

eUR (0.3) 

MYR (0.7) 

sgd 14.4 

AUd (11.4)

– 

–

sgd 8.9 

Usd (7.0)

– 

– 

–

–

Usd 5.8 

eUR (4.5)

– 

–

– 

Usd 0.1 

ZAR (1.1)

– 

sgd 7.1 

sgd 0.2 

sgd 1.5 

sgd 2.4 

Usd 2.9 

Usd 0.3 

Usd 0.2 

– 

ZAR 7.1 

ZAR 23.4 

AUd 0.0 

AUd 2.6 

BRL 2.2 

– 

gBP (0.5) 

Usd (2.3) 

sgd (0.0) 

Usd (2.5) 

Usd (1.1) 

– 

– 

– 

– 

– 

BRL 2.4 

cAd 0.5 

cNY 1.9 

Usd (0.3) 

cNY 16.5 

– 

– 

– 

– 

– 

– 

– 

– 

AUd 0.0 

sgd 0.0 

BRL 1.7 

Usd (0.8) 

– 

– 

BRL 1.2 

Usd (0.6) 

BRL 1.4 

Usd (0.6) 

BRL 0.5 

Usd (0.2) 

gBP 1.5 

hKd 5.6 

sgd 2.5 

Usd 1.3 

– 

BRL 0.2 

gBP 0.7 

– 

– 

– 

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.

WorleyParsons Annual Report 2013  91

 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

37. currency riSK (continued)

the gains and losses deferred in the statement of financial position were:

effective hedge – unrealized gains 

effective hedge – unrealized losses 

Net unrealized losses, pre-tax 

conSolidated

2013 
$’M 

1.1 

(2.6) 

(1.5) 

2012 
$’M

0.6

(1.6)

(1.0)

(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 13 september 2017 

Maturing 24 March 2018 

Maturing 30 April 2018 

Maturing 13 september 2019 

Maturing 24 March 2021 

Maturing 13 september 2022 

the following gains and losses have been deferred at balance date:

Fair value gain on cross currency hedge 

Foreign exchange loss on hedge relationship 

Net unrealized gain pre-tax in hedge reserve 

Weighted average  
eXchange rate 

2013 

2012 

amount 
receivaBle/(PayaBle) 

amount 
receivaBle/(PayaBle)

2013 
$’M 

2013 
$’M 

2012 
$’M 

2012 
$’M

0.99 

1.01 

0.99 

1.00 

1.01 

0.99 

1.01 

0.99 

– 

0.99 

1.00 

– 

0.99 

Usd 10.0 

Usd 20.0 

Usd 22.0 

cAd (9.9) 

Usd 10.0 

cAd (9.9)

cAd (20.3) 

cAd (21.7) 

– 

–

Usd 22.0 

cAd (21.7)

Usd 144.5 

cAd (144.5) 

Usd 144.5 

cAd (144.5)

Usd 75.0 

cAd (76.0) 

– 

–

Usd 120.0 

cAd (118.3) 

Usd 120.0 

cAd (118.3)

– 

Usd 130.0 

cAd (131.7) 

– 

–

conSolidated

2013 
$’M 

30.8 

(25.0) 

5.8 

2012 
$’M

16.0

(11.6)

4.4

(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 2013 

cash and cash equivalents 

trade receivables and unbilled contract revenue 

derivative assets 

trade payables 

gross statement of financial position exposure 

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 

1  Represents in currency millions as indicated.

cAd1 

0.4 

0.6 

30.0 

(0.5) 

30.5 

cAd1 

0.2 

0.3 

16.6 

(0.6) 

16.5 

gBP1 

2.5 

3.1 

0.0 

(1.5) 

4.1 

gBP1 

1.0 

1.9 

0.1 

(0.5) 

2.5 

Usd1 

otheR1

34.6 

51.8 

0.0 

(50.5) 

35.9 

14.6

39.0

0.0

(6.4)

47.2

Usd1 

otheR1

15.3 

52.7 

0.0 

(21.4) 

46.6 

5.0

51.5

0.0

(14.6)

41.9

(D) CURRENCY SENSITIVITY ANALYSIS
A 10% weakening of the Australian dollar against the following currencies at 30 June 2013 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 2012.

conSolidated

2013 

2012

eFFects iN MiLLioNs oF AUd 

eQUitY 

PRoFit 

eQUitY 

PRoFit

cAd 

gBP 

Usd 

other 

92  WorleyParsons Annual Report 2013

– 

– 

– 

– 

0.0 

0.5 

3.0 

3.3 

– 

– 

– 

– 

0.0

0.3

3.6

2.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
A 10% strengthening of the Australian dollar against the above currencies at 30 June 2013 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 the AUd applied during the financial year:

cAd 

gBP 

Usd 

38. intereSt rate riSK

average eXchange rate 

rePorting date 
SPot eXchange rate

2013 

2012 

2013 

2012

1.0311 

0.6545 

1.0274 

1.0349 

0.6513 

1.0324 

0.9726 

0.6083 

0.9281 

1.0374

0.6469

1.0039

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

As At 30 JUNe 2013

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 

Finance lease liabilities 

trade payables 

Payables to associates and related parties 

derivatives 

interest rate swaps 

total financial liabilities 

Net financial assets 

As At 30 JUNe 2012

FINANCIAL ASSETS

weighted 
AVeRAge 
iNteRest 
RAte 
% PA 

FLoAtiNg 
iNteRest 
RAte 
$’M 

2.3 

320.0 

– 

– 

– 

320.0 

– 

– 

– 

6.0 

5.5 

4.0 

– 

– 

– 

– 

1.7 

1.5 

– 

– 

– 

– 

– 

151.4 

2.3 

– 

– 

– 

(17.0) 

1.5 

(15.3) 

156.7 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1.7 

– 

2.0 

– 

– 

– 

1.6 

5.3 

– 

– 

– 

– 

– 

cash and cash equivalents 

2.9 

247.3 

– 

– 

– 

247.3 

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 

– 

– 

– 

3.0 

6.0 

– 

– 

– 

– 

62.1 

1.4 

1.5 

1.7 

– 

– 

– 

– 

– 

– 

– 

– 

139.9 

– 

– 

– 

(18.4) 

43.7 

1.4 

2.8 

1.5 

142.9 

– 

– 

– 

– 

1.6 

3.3 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

320.0

–  1,926.6  1,926.6

– 

– 

45.4 

31.9 

45.4

31.9

–  2,003.9  2,323.9

1.8 

1.9 

2.0 

8.5 

10.8 

182.6 

200.9 

490.3 

1.6 

1.0 

0.2 

0.0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1.7 

1.9 

2.0 

8.3 

– 

19.1

–  1,036.0

– 

7.1

389.2 

389.2

21.7 

21.7

4.3 

– 

4.3

–

15.9 

187.4 

205.1 

507.1 

415.2  1,477.4

846.5

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

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

WorleyParsons Annual Report 2013  93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noteS to the financial StatementS For the financial year ended 30 June 2013

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% (2012: 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 (2012: 5.89%).

At 30 June 2013, 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

2013 
$’M 

1.5 

7.2 

8.3 

17.0 

2012 
$’M

1.4

6.7

10.3

18.4

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 2012.

eFFect iN MiLLioNs oF AUd 

2013

Variable rate instruments 

interest rate swaps 

cash and overdraft 

cash flow sensitivity (net) 

2012

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) 

0.0 

– 

2.1 

2.1 

0.4 

– 

1.6 

2.0 

(0.0)

–

(2.1)

(2.1)

(0.4)

–

(1.6)

(2.0)

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:

2013 

2012

cARRYiNg 
AMoUNt 
$’M 

FAiR VALUe 
$’M 

cARRYiNg 
AMoUNt 
$’M 

FAiR VALUe 
$’M

ASSETS

cash and cash equivalents 

320.0 

320.0 

247.3 

247.3

trade receivables, unbilled  
contract revenue and  
retentions 

Amounts owing by associates  
and related parties 

derivatives 

LIABILITIES

1,915.7 

1,915.7 

1,725.9 

1,725.9

45.4 

31.9 

45.4 

31.9 

71.9 

16.6 

71.9

16.6

interest bearing loans and  
borrowings 

1,062.2 

1,232.8 

trade payables 

389.2 

389.2 

Payables to associates and  
related parties 

derivatives 

21.7 

4.3 

21.7 

4.3 

739.8 

346.7 

10.2 

4.0 

825.1

346.7

10.2

4.0

835.6 

665.0 

961.0 

875.7

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(w).

40. SuBSequent eventS

since the end of the financial year, the directors have resolved to pay a final 
dividend of 51.0 cents per fully paid ordinary share, including exchangeable 
shares, unfranked (30 June 2012: 51.0 cents per share, partially franked 
at 61.3%).

in accordance with AAsB 137 Provisions, contingent Liabilities and 
contingent Assets, the aggregate amount of the proposed final dividend 
of $125.7 million is not recognized as a liability as at 30 June 2013.

No other material matter or circumstance has arisen since 30 June 2013 that 
has significantly affected, or may significantly affect:

•	

•	

•	

	the	consolidated	entity’s	operations	in	future	financial	years;

	the	results	of	those	operations	in	future	financial	years;	or

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

94  WorleyParsons Annual Report 2013

 
 
 
 
 
 
 
 
 
 
 
 
directorS’ declaration

in accordance with a resolution of the directors of worleyParsons Limited, i state that:

1. 

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 2013 and of its performance for the year ended on that 
date;	and

(ii) 

 complying with Australian Accounting standards 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	Company	will	be	able	to	pay	its	debts	as	and	when	they	become	due	and	payable;	and

(d) 

 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.

2. 

 this declaration has been made after receiving the declarations required to be made to the directors from the chief executive officer and chief financial 
officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2013.

on behalf of the Board

John grill

chairman

sydney, 14 August 2013

WorleyParsons Annual Report 2013  95

 
 
 
 
 
 
	
	
 
Ernst & Young 

680 George Street 

Sydney  NSW  2000 Australia 
GPO Box 2646 Sydney  NSW  2001 

Tel: +61 2 9248 5555 

Fax: +61 2 9248 5959 

ey.com/au 

Independent auditor’s report to the members of WorleyParsons Limited 

Ernst & Young 
680 George Street 
Sydney  NSW  2000 Australia 
GPO Box 2646 Sydney  NSW  2001 

Tel: +61 2 9248 5555 
Fax: +61 2 9248 5959 
ey.com/au 

Report on the financial report 

We have audited the accompanying financial report of WorleyParsons Limited (“the company”), which 
comprises the consolidated statement of financial position as at 30 June 2013, 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 
Independent auditor’s report to the members of WorleyParsons Limited 
then ended, notes comprising a summary of significant accounting policies and other explanatory 
information, and the directors' declaration of the consolidated entity comprising the company and the 
Report on the financial report 
entities it controlled at the year's end or from time to time during the financial year. 
We have audited the accompanying financial report of WorleyParsons Limited (“the company”), which 
comprises the consolidated statement of financial position as at 30 June 2013, the consolidated 
Directors' responsibility for the financial report 
statement of financial performance, the consolidated statement of comprehensive income, the 
The directors of the company are responsible for the preparation of the financial report that gives a 
consolidated statement of changes in equity and the consolidated statement of cash flows for the year 
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 
then ended, notes comprising a summary of significant accounting policies and other explanatory 
and for such internal controls as the directors determine are necessary to enable the preparation of 
information, and the directors' declaration of the consolidated entity comprising the company and the 
the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, 
entities it controlled at the year's end or from time to time during the financial year. 
the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial 
Statements, that the financial statements comply with International Financial Reporting Standards. 
Directors' responsibility for the financial report 

The directors of the company are responsible for the preparation of the financial report that gives a 
Auditor's responsibility 
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our 
and for such internal controls as the directors determine are necessary to enable the preparation of 
audit in accordance with Australian Auditing Standards. Those standards require that we comply with 
the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, 
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain 
the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial 
reasonable assurance about whether the financial report is free from material misstatement. 
Statements, that the financial statements comply with International Financial Reporting Standards. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 
Auditor's responsibility 
the financial report. The procedures selected depend on the auditor's judgment, including the 
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our 
assessment of the risks of material misstatement of the financial report, whether due to fraud or error. 
audit in accordance with Australian Auditing Standards. Those standards require that we comply with 
In making those risk assessments, the auditor considers internal controls relevant to the entity's 
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain 
preparation and fair presentation of the financial report in order to design audit procedures that are 
reasonable assurance about whether the financial report is free from material misstatement. 
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 
of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting 
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 
policies used and the reasonableness of accounting estimates made by the directors, as well as 
the financial report. The procedures selected depend on the auditor's judgment, including the 
evaluating the overall presentation of the financial report. 
assessment of the risks of material misstatement of the financial report, whether due to fraud or error. 
In making those risk assessments, the auditor considers internal controls relevant to the entity's 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 
preparation and fair presentation of the financial report in order to design audit procedures that are 
our audit opinion. 
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 
of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting 
Independence 
policies used and the reasonableness of accounting estimates made by the directors, as well as 
In conducting our audit we have complied with the independence requirements of the Corporations Act 
evaluating the overall presentation of the financial report. 
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.  
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 
our audit opinion. 

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.  

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

96  WorleyParsons Annual Report 2013

A member firm of Ernst & Young Global Limited 

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 

giving a true and fair view of the consolidated entity's financial position as at 30 June 
2013 and of its performance for the year ended on that date; and 

Opinion 
ii 

In our opinion: 

a. 

b. 

 complying with Australian Accounting Standards and the Corporations Regulations 
2001; and 

the financial report of WorleyParsons Limited is in accordance with the Corporations Act 
2001, including: 
the financial report also complies with International Financial Reporting Standards as 
i 
disclosed in Note 2. 

giving a true and fair view of the consolidated entity's financial position as at 30 June 
2013 and of its performance for the year ended on that date; and 

Report on the remuneration report 

ii 

b. 

 complying with Australian Accounting Standards and the Corporations Regulations 
2001; and 

the financial report also complies with International Financial Reporting Standards as 
disclosed in Note 2. 

We have audited the Remuneration Report included in pages 46 to 59 of the directors' report for the 
year ended 30 June 2013. 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. 
Report on the remuneration report 
Opinion 
We have audited the Remuneration Report included in pages 46 to 59 of the directors' report for the 
In our opinion, the Remuneration Report of WorleyParsons Limited for the year ended 30 June 2013, 
year ended 30 June 2013. The directors of the company are responsible for the preparation and 
complies with section 300A of the Corporations Act 2001. 
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 2013, 
complies with section 300A of the Corporations Act 2001. 
Ernst & Young 

Bruce Meehan 
Partner 
Ernst & Young 
Sydney 
14 August 2013 

Bruce Meehan 
Partner 
Sydney 
14 August 2013 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

A member firm of Ernst & Young Global Limited 

Liability limited by a scheme approved under Professional Standards Legislation 

WorleyParsons Annual Report 2013  97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholder information

toP 20 holdingS of fully Paid ordinary ShareS aS at 1 auguSt 2013

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  

BNP Paribas Noms Pty Ltd  

JP Morgan Nominees Australia Limited  

Mr John Michael grill 

Behana Pty Ltd  

Lujeta Pty Ltd  

citicorp Nominees Pty Limited  

haju Pty Limited  

Juha Pty Limited  

taylor square designs Pty Ltd 

UBs wealth Management Australia Nominees Pty Ltd 

inmac engineering Pty Ltd 

UBs Bank canada tr chalet holdings inc 

Johalius Pty Ltd  

citicorp Nominees Pty Limited  

shARes  % oF issUed cAPitAL 

RANK

62,402,007 

36,628,297 

33,141,792 

12,200,039 

8,246,081 

5,198,000 

4,597,166 

4,126,794 

3,932,055 

2,300,000 

2,200,000 

2,082,066 

1,500,000 

1,500,000 

1,457,997 

1,437,180 

1,208,000 

1,077,475 

1,053,136 

1,026,247 

25.29 

14.84 

13.43 

4.94 

3.34 

2.11 

1.86 

1.67 

1.59 

0.93 

0.89 

0.84 

0.61 

0.61 

0.59 

0.58 

0.49 

0.44 

0.43 

0.42 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

total 

187,314,332 

75.90

total number of current holders for all named classes is 27,960.

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.

98  WorleyParsons Annual Report 2013

SuBStantial holderS of 5% or more of fully Paid ordinary ShareS aS at 1 auguSt 2013*

NAMe 

John grill and associated companies 

*  As disclosed in substantial shareholder notices received by the company.

range of fully Paid ordinary ShareS aS at 1 auguSt 2013

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 $22.06 per unit 

Notice dAte 

shARes

31 May 2010 

25,313,786

shARes 

% oF issUed cAPitAL

hoLdeRs 

20,680 

6,159 

551 

472 

98 

27,960 

8,297,494 

13,039,088 

3,936,678 

10,498,023 

211,008,343 

246,779,626 

MiNiMUM PARceL siZe 

23 

hoLdeRs 

914 

3.36

5.28

1.60

4.25

85.51

100.00

shARes

9,139

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.

voting rightS

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 carries 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 2013  99

 
 
 
 
 
corPorate information

worleyParsons Limited

AcN 096 090 158

directorS

John grill (chairman)

Ron McNeilly (deputy chairman and Lead independent director)

Larry Benke

erich Fraunschiel

John M green

christopher haynes, oBe

catherine Livingstone, Ao

JB McNeil

wang Xiao Bin

Andrew wood (chief executive officer)

comPany Secretary

Peter Janu

regiStered office

Level 12 
141 walker street 
North sydney Nsw 2060

auditorS

Ernst	&	Young

BanKerS

Bank of America 
commonwealth Bank of Australia 
hsBc 
JPMorgan chase 
Royal Bank of canada 
Royal Bank of scotland 
standard chartered Bank 
UBs 
wells Fargo 
westpac Banking corporation

laWyerS

herbert smith Freehills

Share regiStry

computershare investor services Pty Limited 
Level 4, 60 carrington street 
sydney Nsw 2000 
Australia 
Ph: 1300 850 505

100 WorleyParsons Annual Report 2013

GLOSSARY

Term

Definition

Brownfield project

A project which is constrained by prior work. Such projects very often involve rebuilding or 
re-engineering a facility from an existing facility. Such a project may be contrasted with a “greenfield 
project” which is a project that lacks constraints imposed by prior work – for example, a project that, 
apart from a small number of interfaces with existing facilities, is a standalone project. 

Downstream 

EcoNomics™

EP

EPC

EPC contract

EPCM

EPCM contract

The refining of petroleum crude oil and the processing and purifying of raw natural gas, as well as the 
marketing and distribution of products derived from crude oil and natural gas.

Our framework for integrating sustainability into our customers’ projects and operations. That 
framework assists them in making decisions where trade-offs exist between technical, social, 
environmental and financial performance.

Engineering and Procurement.

Engineering, Procurement and Construction.

Under an EPC contract, we will generally be responsible for the design, the procurement of equipment 
and materials, and the construction and commissioning of an asset, such as a power station. This will 
generally require us to ensure that the completed asset meets certain specified performance targets. 
To do so, we will generally procure the necessary equipment and materials and engage various sub-
contractors ourselves.

Engineering, Procurement and Construction Management. 

Under an EPCM contract, we will generally be responsible for providing our professional services, but, 
unlike an EPC contract, will not be responsible for delivering a completed asset to our customer. 
Instead, we will provide engineering and design services to our customer, procure equipment but only 
as agent for our customer and manage our customer’s other suppliers as the customer’s representative. 
We will generally be paid an hourly rate for the services we provide. 

EPMS

Engineering and Project Management Services.

Front-end engineering design

Basic engineering design providing owners and their financiers with information enabling them to 
determine whether or not, and if so how, to commit resources to a proposed project to maximize its 
projected returns. 

Greenfield project

Midstream 

OneWay™

A project that lacks constraints imposed by prior work - for example, a project that, apart from a small 
number of interfaces with existing facilities, is a standalone project. A greenfield project can be 
contrasted with a “brownfield project” which is a project constrained by prior work. Such projects very 
often involve rebuilding or re-engineering a facility from an existing facility. 

The transport (by pipeline, rail, barge or truck), storage, and wholesale marketing of crude or refined 
petroleum products. 

Our enterprise-wide integrity management framework which establishes our corporate expectations for 
zero harm to our business.

PMC

Project Management Consultancy.

Reimbursable EPC

Arrangements under which we are reimbursed for the costs we incur plus a margin in meeting our 
obligations under an EPC contract. 

Unconventional oil and gas

Types of oil and gas that were traditionally thought of as being difficult and/or expensive to locate and 
extract. They include shale gas, shale oil, basin-centred gas, gas hydrates and coal seam gas. 

Upstream 

The searching for potential underground or underwater crude oil and natural gas fields, drilling of 
exploratory wells, and the subsequent drilling and operation of the wells that recover and bring the 
crude oil and/or raw natural gas to the surface.

101 WorleyParsons Annual Report 2013