Nrw annual report internals draft by NRWCommunications

CHAIRMAN’S LETTER It is with great pleasure we present NRW Holdings Limited’s 2015 annual financial year report. The past 12 months have seen NRW undertake our largest projects to date and the company has achieved a solid result for the year ended 30 June 2014. The group’s Net Profit After Tax (NPAT) was $44.2 million on revenue of $1.1 billion. Divisional revenue was $842 million from Civil, $187 million from Mining, $110 million from Action Drill & Blast and $28 million from Action Mining Services. The Board remains committed to achieving consistent financial performance year-on-year in order to deliver value to its shareholders. Despite challenging market conditions, the group delivered a strong cash result contributing to a significant debt reduction of $54.6 million in the year. The net debt position at year end of $34 million results in a gearing ratio of 9.1%, the strongest balance sheet position since listing in 2007. NRW’s focus on safety has once again been further evidenced by another outstanding safety result and the Board commends our employees on their commitment to continually improving safety across the organisation. Particularly pleasing was the 56.8% improvement in the group’s Total Recordable Injury Frequency Rate (TRIFR) to 2.36. As NRW enters its 20th year of operations, I would like to thank all of our employees for their efforts throughout the year and our leadership team for their contribution to the business. During those 20 years NRW has made a significant contribution to communities in which we work, particularly in the area of indigenous engagement. From humble beginnings as a small business with only a handful of machines, NRW has grown to be one of the most respected contractors in the civil construction and mining industries. This success would not have been possible without our employees and the quality of the work they undertake. I congratulate them on the high standards achieved and the positive culture they embrace across all operations.

DR IAN BURSTON CHAIRMAN NRW Holdings Limited

CHIEF EXECUTIVE OFFICER YEAR IN REVIEW I present to both our shareholders and stakeholders the results of NRW Holdings Limited for the financial year ended 30 June 2014. NRW reported Revenue of $1.1 billion and net after tax profits (“NPAT”) of $44.2 million both lower than the same period last year (Revenue of $1.4 biillion and NPAT of $74.1 million). The reduction in business activity reflects the completion of a number of expansion programs undertaken in iron ore and within a challenging market environment particularly in the contract mining coal sector. The company’s balance sheet continued to strengthen through the period with both cash balances and debt improving in the year to $155.5 million and $189.5 million respectively. Net debt reduced in the year by $54.6 million to $34 million reflecting strong cash flows from operations and lower Capex. Profit before tax (“PBT”) of $51.2 million was down on the same period last year reflecting lower activity across the business and an impairment expense ($4.8 million) further details of which are provided below. The full year effective tax rate at 14% reflects income tax and R&D credits. Net interest expense for the year was at a similar level to the previous financial year at $14.3 million. With a refresh of the “A Safe Day. Every Day” Program, the company experienced continued improvement and focus on safety performance across the business, sustaining a positive trend. This is reflected in the Lost Time Injury Frequency Rate (LTIFR) currently at 0.17, which represents a 69.1% decrease from the previous year (FY13: 0.55). The group’s Total Recordable Injury Frequency Rates (TRIFR) is industry leading and at 30 June 2014 is at 2.36, 56.8% less than the prior corresponding period (FY13: 5.47).

CHIEF EXECUTIVE OFFICER

YEAR IN REVIEW

I present to both our shareholders and stakeholders the results of NRW Holdings Limited for the financial year ended 30 June 2014.

Revenue of $1.1 billion EBITDA – $123.0M, 10.8% of revenue EBIT of $65.5M; NPAT of $44.2 million Strong cash position of $155.5 million Net Debt – $34.0M a reduction of $54.6 million Order book maintained at $1 billion Final fully franked dividend Net Debt / Equity at 9.1%

NRW reported Revenue of $1.1 billion and net after tax profits (“NPAT”) of $44.2 million both lower than the same period last year (Revenue of $1.4 biillion and NPAT of $74.1 million). The reduction in business activity reflects the completion of a number of expansion programs undertaken in iron ore and within a challenging market environment particularly in the contract mining coal sector. The company’s balance sheet continued to strengthen through the period with both cash balances and debt improving in the year to $155.5 million and $189.5 million respectively. Net debt reduced in the year by $54.6 million to $34 million reflecting strong cash flows from operations and lower Capex. Profit before tax (“PBT”) of $51.2 million was down on the same period last year reflecting lower activity across the business and an impairment expense ($4.8 million) further details of which are provided below. The full year effective tax rate at 14% reflects income tax and R&D credits. Net interest expense for the year was at a similar level to the previous financial year at $14.3 million. With a refresh of the “A Safe Day. Every Day” Program, the company experienced continued improvement and focus on safety performance across the business, sustaining a positive trend. This is reflected in the Lost Time Injury Frequency Rate (LTIFR) currently at 0.17, which represents a 69.1% decrease from the previous year (FY13: 0.55). The group’s Total Recordable Injury Frequency Rates (TRIFR) is industry leading and at 30 June 2014 is at 2.36, 56.8% less than the prior corresponding period (FY13: 5.47).

CORPORATE GOVERNANCE STATEMENT

NRW ANNUAL REPORT 2015

REVENUE OF $1.1 BILLION EBITDA – $123.0M, 10.8% OF REVENUE EBIT OF $65.5M; NPAT OF $44.2 MILLION STRONG CASH POSITION OF $155.5 MILLION NET DEBT – $34.0M A REDUCTION OF $54.6 ORDER BOOK MAINTAINED AT $1 BILLION FINAL FULLY FRANKED DIVIDEND NET DEBT / EQUITY AT 9.1%

It is with great pleasure we present NRW Holdings Limited’s 2015 annual financial year report. The past 12 months have seen NRW undertake our largest projects to date and the company has achieved a solid result for the year ended 30 June 2014. The group’s Net Profit After Tax (NPAT) was $44.2 million on revenue of $1.1 billion. Divisional revenue was $842 million from Civil, $187 million from Mining, $110 million from Action Drill & Blast and $28 million from Action Mining Services. The Board remains committed to achieving consistent financial performance year-on-year in order to deliver value to its shareholders. Despite challenging market conditions, the group delivered a strong cash result contributing to a significant debt reduction of $54.6 million in the year. The net debt position at year end of $34 million results in a gearing ratio of 9.1%, the strongest balance sheet position since listing in 2007. NRW’s focus on safety has once again been further evidenced by another outstanding safety result and the Board commends our employees on their commitment to continually improving safety across the organisation. Particularly pleasing was the 56.8% improvement in the group’s Total Recordable Injury Frequency Rate (TRIFR) to 2.36. As NRW enters its 20th year of operations, I would like to thank all of our employees for their efforts throughout the year and our leadership team for their contribution to the business. During those 20 years NRW has made a significant contribution to communities in which we work, particularly in the area of indigenous engagement. From humble beginnings as a small business with only a handful of machines, NRW has grown to be one of the most respected contractors in the civil construction and mining industries. This success would not have been possible without our employees and the quality of the work they undertake. I congratulate them on the high standards achieved and the positive culture they embrace across all operations.

DR IAN BURSTON CHAIRMAN NRW Holdings Limited

NRW ANNUAL REPORT 2015

CORPORATE GOVERNANCE STATEMENT

CHIEF EXECUTIVE OFFICER

YEAR IN REVIEW

I present to both our shareholders and stakeholders the results of NRW Holdings Limited for the financial year ended 30 June 2014. NRW reported Revenue of $1.1 billion and net after tax profits (“NPAT”) of $44.2 million both lower than the same period last year (Revenue of $1.4 biillion and NPAT of $74.1 million). The reduction in business activity reflects the completion of a number of expansion programs undertaken in iron ore and within a challenging market environment particularly in the contract mining coal sector. The company’s balance sheet continued to strengthen through the period with both cash balances and debt improving in the year to $155.5 million and $189.5 million respectively. Net debt reduced in the year by $54.6 million to $34 million reflecting strong cash flows from operations and lower Capex. Profit before tax (“PBT”) of $51.2 million was down on the same period last year reflecting lower activity across the business and an impairment expense ($4.8 million) further details of which are provided below. The full year effective tax rate at 14% reflects income tax and R&D credits. Net interest expense for the year was at a similar level to the previous financial year at $14.3 million. With a refresh of the “A Safe Day. Every Day” Program, the company experienced continued improvement and focus on safety performance across the business, sustaining a positive trend. This is reflected in the Lost Time Injury Frequency Rate (LTIFR) currently at 0.17, which represents a 69.1% decrease from the previous year (FY13: 0.55). The group’s Total Recordable Injury Frequency Rates (TRIFR) is industry leading and at 30 June 2014 is at 2.36, 56.8% less than the prior corresponding period (FY13: 5.47).

NRW ANNUAL REPORT 2015

CORPORATE GOVERNANCE STATEMENT

CHIEF EXECUTIVE OFFICER

YEAR IN REVIEW

NRW ANNUAL REPORT 2015

CORPORATE GOVERNANCE STATEMENT

As NRW enters its 20th year of operations, I would like to thank all of our employees for their efforts throughout the year and our leadership team for their contribution to the business. During those 20 years NRW has made a significant contribution to communities in which we work, particularly in the area of indigenous engagement. From humble beginnings as a small business with only a handful of machines, NRW has grown to be one of the most respected contractors in the civil construction and mining industries. This success would not have been possible without our employees and the quality of the work they undertake. I congratulate them on the high standards achieved and the positive culture they embrace across all operations.

DR IAN BURSTON CHAIRMAN NRW Holdings Limited

CORPORATE GOVERNANCE STATEMENT

NRW ANNUAL REPORT 2015

“Iquae eum quaepudit laboriandi to te volum volupti orersperrum is rae. Ita dolo”

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NRW ANNUAL REPORT 2015

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NRW ANNUAL REPORT 2015

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CORPORATE GOVERNANCE STATEMENT

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NRW ANNUAL REPORT 2015

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CORPORATE GOVERNANCE STATEMENT

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CORPORATE GOVERNANCE STATEMENT REMUNERATION REPORT (AUDITED) The information provided in this report has been prepared based on the requirements of the Corporations Act 2001 and the applicable accounting standards. The report has been audited. The report outlines the remuneration arrangements for the company for the period to 30 June 2013 for the following individuals, who are the Key Management Personal (KMP) of the company: Name

Position held

Resigned/Appointed

Dr I Burston

Chairman and Non-Executive Director

Appointed as Non-Executive Director, 27 July 2007

Mr J Cooper

Non-Executive Director

Appointed as Non-Executive Director, 29 March 2011

Mr M Arnett

Non-Executive Director

Appointed as Non-Executive Director, 27 July 2007

Managing Director and Chief Executive Officer

Appointed as a Director of the Company 1 July 2006 and as Chief Executive Officer 7 July 2010.

Mr W Rooney

Managing Director – NRW Civil & Mining

Appointed 1 October 2008

Mr M Stewart

General Manager – NRW Civil

Appointed 1 July 2008

Mr T Cook

General Manager – NRW Mining – WA, NT and Overseas

Appointed 30 May 2011 - Resigned 7 December 2012

Mr T Raschella

Acting Chief Financial Officer

Acting appointment 7 August 2013.

Mr W Fair

General Manager – Action Drill & Blast Pty Limited

Appointed 1 March 2012

Mr M Wallace

Chief Financial Officer

Appointed 8 December 2008 - Left on 7 August 2013

Mr K Hyman

Company Secretary, Risk Management & Legal

Appointed 10 July 2007

Non-Executive Directors

Executive Director Mr J Pemberton Executives

The report refers to both Non-Executive Directors and Executive KMP. Unless noted Executive Directors are included in discussion of Executive KMP. The Remuneration Report is divided into the following sections: Section

Page

Remuneration Governance

Five Year Snapshot

Executive KMP Remuneration Arrangements

Executive KMP Remuneration Outcomes

Non-Executive Director Remuneration

Other Statutory Disclosures

The N&RC is mandated to engage external and independent remuneration advisors who do not have a relationship with or advise NRW management. During the reporting period the N&RC did not engage any such advisors. However during this period the N&RC took an active role in meeting and liaising with some.

CORPORATE GOVERNANCE STATEMENT

NRW ANNUAL REPORT 2015

CORPORATE GOVERNANCE STATEMENT GLOSSARY The following terms used throughout our Remuneration Report are defined here: ASX

Australian Securities Exchange

EPS

Earnings Per Share

Executive KMP

Executive full time employees of NRW that are Key Management Personnel, i.e. KMP excluding NonExecutive Directors

FY12

The financial year ending 30 June 2012

FY13

The financial year ending 30 June 2013

FY14

The financial year ending 30 June 2014

KMP

Key Management Personnel according to the definition of that term in the Corporations Act 2001 (Cth), including Non-Executive Directors

LTI

Long Term Incentive

N&RC

Nomination and Remuneration Committee

NRW

NRW Holdings Limited

NRW Performance Rights

The Performance Rights plan of NRW approved by shareholders in general meeting on 23 November

Performance Right

A right that converts into one ordinary share in NRW on the meeting of the specified Vesting Conditions on the specified vesting dates

Relative TSR

Relative Total Shareholder Return

ROCE

Return on Capital Employed

STI

Short Term Incentive

Vesting Conditions

The Vesting Conditions that apply to the vesting of Performance Rights granted by NRW to its Executive KMP under the NRW Performance Rights Plan

VWAP

Volume Weighted Average Price of NRW ordinary shares quoted on the ASX

1. REMUNERATION GOVERNANCE NRW has established a Nomination and Remuneration Committee (N&RC) consisting of Michael Arnett, Ian Burston and John Cooper, being all of NRW’s independent Non-Executive Directors. The N&RC is responsible for making recommendations to the Board on the remuneration arrangements for Non-Executive Directors and Executive KMP as set out in the N&RC Charter. The N&RC provides advice, recommendation and assistance to the Board with respect to: • The remuneration of Non-Executive Directors, including the Chair of the Board; • The remuneration policies which are designed to attract and retain Executives with the expertise to enhance the competitive advantage, performance and growth of NRW; • Ensuring that the level and composition of Executive remuneration packages are fair, reasonable and adequate, and display a clear relationship between the performance of the individual and performance of NRW; • Termination and redundancy policies and the payments made to outgoing Executives; • Disclosures to be included in the corporate governance section of NRW’s annual report which relate to NRW’s remuneration policies and procedures. The N&RC is mandated to engage external and independent remuneration advisors who do not have a relationship with or advise NRW management. During the reporting period the N&RC did not engage any such advisors. However during this period the N&RC took an active role in meeting and liaising with some.

NRW ANNUAL REPORT 2015

CORPORATE GOVERNANCE STATEMENT