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F Y 2 4 A N N U A L R E P O R T

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Y ear
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||CONTENTS
About Duratec
2
Industries Serviced
4
Duratec Locations
6
FY24 Highlights
8
Chair’s Report
10
Managing Director’s Report
12
CFO’s Report
16
Update By Sector
19
Risk Management
32
Sustainability
34
Directors’ Report
42
Remuneration Report (audited)
49
Auditor’s Independence Declaration
55
��
and Other Comprehensive Income
57
Consolidated Statement of Financial Position
58
Consolidated Statement of Changes in Equity
59
Consolidated Statement of Cash Flows
60
Notes to the Financial Statements
62
Consolidated Entity Disclosure Statement
98
Directors’ Declaration
99
Independent Auditor’s Report
100
Shareholding Details
104
Corporate Directory
106
Duratec Lim
ited
(ASX:DUR) |
Annual Report for the
al Y
2024
Financi|
|---|---|

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Duratec Limited (ASX:DUR) | Annual Report for t he 202 4 Financi al Y ear

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(ASX:DUR) |
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Duratec Limited
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Annual Report for the 2024 Financial Year
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About Duratec

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WHO WE ARE

We are the preferred smart contractor for protecting, remediating and extending the life of assets across various industries.

VISION

To sustainably grow our business and become the most respected specialist civil contractor, providing technological, innovative solutions.

BUSINESS MODEL

End-to-end specialist Early Contractor Involvement (ECI), condition assessment, technical services, specialised construction, remediation and maintenance. We cater to every stage of the life cycle of an asset.

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VALUES

Integrity

A fair and honest approach in all our dealings. Honouring our commitments.

Accountability

Each of us “getting it right and on time.”

Courage

��

Pride

In our people, equipment and work.

Recognition

Of individual and team performance and supporting personal growth.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

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INDUSTRIES SERVICED

DEFENCE

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Maintaining Defence capability

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BUILDING & FACADE

Delivering client value for better project outcomes by ECI

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MINING & INDUSTRIAL

Partnering with mining asset owners to maximise the operational life of their ��

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ENERGY

Construction, remediation, refurbishment and fabrication of critical assets, enabling optimal functionality, including Oil & Gas

MARINE

With a focus on ports and wharfs, we remediate, refurbish, design and construct marine structures to withstand harsh conditions

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TRANSPORT INFRASTRUCTURE

We maintain and protect the road and rail bridges that are critical to our communities

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WATER INFRASTRUCTURE

We maintain and protect infrastructure needed for safe, secure water storage, and wastewater treatment

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year
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Darwin
Katherine
Pt Hedland NORTHERN
Karratha TERRITORY
WESTERN
AUSTRALIA
SOUTH
AUSTRALIA
Kalgoorlie
Perth
Albany
| Annual Report for the 2024 Financial Year
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DURATEC LOCATIONS

Duratec’s 1,132 employees are spread across 19 locations Australia-wide.

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Pt Hedland
Karratha
Exmouth
WESTERN
AUSTRALIA
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

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Duratec Locations
Townsville
QUEENSLAND Gladstone
7
Brisbane
NEW SOUTH
WALES Newcastle
Adelaide
Canberra
Sydney
A.C.T. Berry Shoalhaven
VICTORIA
Melbourne
Launceston
TAS
Hobart
Duratec Limited ( ASX:DUR) | Annual Report for the 2024 Financial Year
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FY24 HIGHLIGHTS

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$ $ $
555.8m 47.6m 21.4m
13.0% 22.6% 11.6%
from $491.8m in FY23 from $38.8m in FY23 from $19.2m in FY23
$
8.66¢ 4.0¢ 65.2m
Per Share Per Share 1.5%
9.5% Fully Franked from $66.2m in FY23
from 7.9¢ in FY23
1 DA 2
3
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$ $ $
405.0m 1.4b 3.8b
DERBOOK ENDERS5 IPELINE6
R T P
O
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1 Revenue excludes DDR Australia Pty Ltd (49% share).
2 ��
3 ��
4 Basic earnings per share (cents).
5 Tenders includes submitted and currently being tendered opportunities.
6 ��

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

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PEOPLE HIGHLIGHTS
1,132 18.2% 1,652
Employees Female Courses Delivered
Employees in FY24
OPERATIONAL HIGHLIGHTS
2.92m 81% 1,588
HSEQ HIGHLIGHTS
2.74 0.00 7,543
per million per million Conducted
hours worked hours worked in FY24
7 ��
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8 ��
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Duratec Limited (ASX:DUR) | Annual Report for t he 202 4 Financi al Y
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CHAIR’S REPORT

Dear Shareholders,

��

FY24 has been an exciting time of change and progress on the back of the record FY23 results. A strong performance was again delivered by all our business groups, with revenue ending at another historic high. Our strong pipeline of work and tender outlook positions the Company well to continue to deliver its growth ambitions.

Through our wholly owned subsidiary WPF, we acquired A&B Welding in Darwin, enhancing our geographic capability and capacity to deliver projects for the Mining and Industrial, and Energy sectors. Duratec’s 49% owned associate business, DDR Australia, completed the strategic acquisition of RC Construction, expanding our capability and allowing further access to aligned procurement opportunities.

STRONG OPERATING RESULTS

FY24 reported revenue was $555.8m, 13% higher than FY23 ($491.8m). This represents another successful year of revenue growth for the Company. Normalised EBITDA was $47.6m, a 22.6% increase year on year and towards the upper end of our guidance range, with increased average margins. These results demonstrate Duratec’s ability to grow and adapt to the inevitable shifts in demand across industries and projects, whilst delivering strong levels of �� standards. For the 12-month reporting period we recorded a lost time injury frequency rate (LTIFR) of zero and a total recordable injury frequency rate (TRIFR) of 2.74 per 1 million hours worked.

�� in, and advancement of, our in-house technologies to support future growth. We have enhanced our �� remain competitive and dynamic. Our investments in FY24 included advanced 3D modelling, adopting further early contractor involvement practices, and technical assets such as the Novarc Technologies’ spool welding robot (SWR) which we installed earlier in the year.

At the end of FY24, our orderbook and pipeline remain extremely strong, with projects of varying sizes progressing �� be awarded in FY25. With an orderbook of $405m and tendered works of $1.4b on within a total $3.8b pipeline of opportunities, Duratec is well positioned for continued ��

SUSTAINABLE OPERATIONS

During the year we formalised our Board Sustainability Committee, with Krista Bates appointed as Chair.

Our Sustainability function within the business has been working on establishing a baseline of our sustainability impacts, with Scope 1 and Scope 2 emissions as a priority. By understanding how our business activities drive environmental impacts, we will be able to model the impact of our business growth aspirations and identify the highest value impact reduction opportunities. In addition, we are undertaking a risk assessment to ensure the necessary mitigations are in place for key Sustainability-related risks.

�� share, taking the total dividend for the year to 4 cents per share. This represents a payout ratio of 46%, which the Board believes strikes a good balance between dividend distribution and preserving cash for future growth. Our balance sheet remains strong, with net cash of $65.2m able to support our key growth objectives.

BUSINESS STRATEGY SUPPORTS ONGOING GROWTH

The Sustainability Team will work closely with all parts of the business to progressively ensure Sustainability is integrated at a pace and scale that meets the �� stakeholders.

The strong FY24 results were underpinned by our proven �� various sectors including Defence, Building and Facade, Mining and Industrial, Energy, Marine and Infrastructure. In FY24, we continued to focus on winning projects that capitalise on our expertise, experience and capability, whilst simultaneously investing in our tender outlook. Early Contractor Involvement (ECI) and catering to every stage of the life cycle of customers’ assets, remains key in delivering strong end-to-end project outcomes for our clients.

We continue to be passionate about supporting women in construction as well as delivering ongoing Aboriginal and Torres Strait Islander opportunities and will continue to do so in FY25.

In FY24, we made a number of acquisitions and entered into new partnerships to boost our end-to-end capabilities.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

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Chair’s Report
11
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LEADERSHIP TRANSITION

Following Phil Harcourt’s retirement after 14 very successful years at the helm of the Company, the Board was very pleased to appoint Chris Oates as Managing Director in November 2023.

Chris, a fellow founding member of the business who served as Executive Manager at Duratec since its inception in 2010, is ideally suited to take over the leadership of the Company. Chris has more than 30 years of experience in the engineering, construction and remediation sectors. �� and values to lead the Company into a successful future. The Board and I would like to extend our congratulations to Chris on his appointment as Managing Director. We are also delighted that Phil has agreed to remain with the business as a Non-Executive Director, on both the Duratec Limited and DDR Australia boards.

OUTLOOK FOR FY25

Shortly after stepping into the Managing Director role, Chris led a strategic review which resulted in an organisational restructure of the business. This review ensures sustainable operations, positioning Duratec for future growth and to deliver on our long-term vision and strategy.

On behalf of the Board, I would like to extend my deep gratitude to all our employees – in a time of change and evolution, your commitment and professionalism have been unwavering. To our shareholders, clients and suppliers – thank you for supporting Duratec and being a cornerstone of our success, and we look forward to your continued support as we continue to shape an even more successful future. Finally, I would like to thank my fellow Board members, for your service and wise counsel during the year.

The Board looks forward to supporting Chris and his leadership team through the next stage of Duratec’s development.

Yours faithfully,

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Martin Brydon

Non-Executive Chair - Duratec Limited

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

MANAGING DIRECTOR’S REPORT

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�� our strong pipeline of projects, will help drive growth into the future.

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I am very proud of what we have accomplished over the past year, consistently delivering excellent results on challenging and exciting projects. During visits to project sites where we have long been a key partner of our clients, I have been delighted to engage with our teams and observe the quality of our work. This, together with the strength of our relationships, is leading to new opportunities.

Maintaining a safe working environment is a top priority, �� people bring not only towards their work, but also to one another. Our commitment to safety and quality and desire to take on challenging and complex projects has earned the continued trust of our clients and has helped us attract top talent to support our strategic goals.

�� Recordable Injury Rate improved to 2.74, down from 7.39 �� operations, and we continue to strive for improvements year on year.

Duratec’s investment in technology and sustainability has contributed to our past, present and future successes. In FY24, we developed and advanced technologies through 3D modelling innovations, digital engineering, commissioning of a large-scale welding robot, and ECI ��

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Duratec achieved strong growth in revenue and �� the Company has delivered since its inception. Key highlights for FY24 include the following:

Revenue increased 13% to $555.8m (excluding $67.6m from DDR Australia), a record for the Company. This �� and continuing buoyant conditions across our markets.
Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) margins improved from 7.9% to 8.6%, driven by improved productivity across the business, �� through selective acquisitions in the Northern Territory.
Normalised EBITDA was $47.6m, up 22.6% on FY23, and EBIT was $31.5m, compared to $28.5m in FY23.
�� contributions from associates) was $21.4m, 11.6% higher than in FY23.
We continued to secure contracts of varying sizes across �� Our order book is strong at $405m and our pipeline has �� future growth.
�� bidding processes and preparation for winning future work. This is up 65% from $844.9m in FY23.
Master Service Agreements and annuity style contracts made up $145.8m of revenue for FY24, showcasing the strength of our ongoing engagements with our trusted clients.

(See “Update By Sector” on page 19 for a detailed outline of the operational highlights by sector).

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Managing Director’s Report

STRATEGIC REVIEW

An important achievement of FY24 was the completion of a strategic review. The review undertook an in-depth analysis of our past performance, company structure, and industry trends. We developed an updated strategy to support �� systems and processes to track our progress.

Our past operational performance has delivered healthy results. As we prepare for our next stage of growth, this new strategy is shaping a sustainable pathway for Duratec into the future. Our updated Executive Leadership Team has a wide range of skills and expertise that will lead us into this next period of growth.

OUTLOOK

Our strategic approach, including the use of ECI, has consistently delivered optimal outcomes for clients and stakeholders through collaboration and comprehensive solutions. Our investments in technology through our wholly owned subsidiary, MEnD, have enabled us to assist our clients at an early stage in understanding their assets and projects digitally, allowing them to make informed decisions on project delivery and maximising value. Due to the high levels of tendering and ECI assignments, we �� sectors in FY25.

The Australian Department of Defence (DoD) has released indications of expected works into the future through the latest Defence Strategic Review. Key opportunities include an $8 billion spend at Garden Island Stirling base, where Duratec and Duratec Ertech Joint Venture (DEJV) �� the Company’s tender pipeline. Our past work with the DoD has shown our ability to deliver large scale projects in line with its high quality and safety standards. We have �� Australian Government strategic relationships, as well as US Department of Defence spend which aligns with our capabilities and in-house experience.

We are seeing a demand from existing clients for our �� the opportunity to grow and expand our geographical presence. Australian based opportunities are still plentiful as we continue to work with Santos on decommissioning works and recently gained Woodside vendor status which will provide maintenance opportunities for the Company.

Both Duratec and our wholly owned subsidiary, WPF, have exciting current and prospective projects in these areas which are expected to deliver growth in this sector.

With favourable commodity prices and on the back of major capital expenditure in previous years, the maintenance requirements continue to grow across our clients’ assets in the Mining and Industrial sector. With the assistance of MEnD, we are working collaboratively with our clients to complete asset condition assessments and are a trusted partner in delivering the remediation scopes which we have vision of in our pipeline.

Increasing numbers of building owners across Australia are de-risking their portfolios or repurposing their assets by remediating the facades of their buildings. Our strategic approach to leveraging our in-house building and facade design capabilities, coupled with our nationwide presence, has positioned us well to work with clients and assist them ��

The Company will leverage its strong position by taking a strategic and targeted approach to tendering and securing new work. Engaging with our clients early will continue to be our focus, to ensure we can convert our pipeline and deliver ��

�� growth in line with our strategy, supported by our diverse capabilities across Australia and beyond. Our achievements would not be possible without our committed and talented workforce, and I am looking forward to engaging with them as I travel around the business in the coming year.

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This is an exciting time for Duratec, and I am looking forward to continuing our journey with you.

Thank you for your ongoing support,

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Chris Oates

Managing Director - Duratec Limited

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GROWTH OVER 15 YEARS

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DDR acquisition of RC Construction
600 CAGR * WPF acquisition of the business of A&B Welding
32.5%
Acquisition of Wilson’s
Pipe Fabrication
500 Establish Spatial
Integration Division
Duratec
East Coast Presence Expanded Listed
400 on ASX
DDR Australia
Joint Venture Founded
300
Establish
Defence Division
200 Acquisition of
MEnD Consulting
Establish East
Coast Presence
Duratec
100
Established
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Compound Annual Growth Rate over 15 Years
PIPELINE
��
ORDER BOOK TENDERS PIPELINE
11%
16%
23%
7% 3%
39% 42%
14% $405.0 3% $1.4 11% $3.8
million billion billion
9% 54%
16%
29% 23%
Defence Building & Facade Mining & Industrial Energy Othe r
(AUD millions)
REVENUE
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PIPELINE

��

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

CFO’S REPORT

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REVENUE & PROFITABILITY

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Duratec achieved a record revenue result in FY24 of $555.8m. This was an increase of 13.0% compared to FY23 revenue of $491.8m.

All sectors contributed to this strong result. The Mining �� revenue of $155.6m in FY24, a 79.4% increase to FY23. The growth for M&I is attributable to BHP Berth C&D Remediation and several structural integrity upgrades on various key Rio Tinto sites.

�� growth with a total revenue of $111.3m, 42.0% higher than FY23. Key projects included Central Park Tower Recladding and the Sydney Harbour Federation Trust project.

Revenue from Defence was slightly lower by 3.8%, though it remained a solid contributor to overall revenue, closing at $220.2m for FY24. Several Defence projects further progressed this year including RAAF Base Tindal Fuel Facility, HMAS Coonawarra Harbour Works and HMAS Stirling Oxley Wharf Extension.

The Energy sector revenue was 29.6% lower at $46.6m due to the delivery of the aviation fuel hydrant package at Western Sydney Airport (WSA) in 1HFY24.

Overheads increased in FY24 due to heightened tendering activity and additional administrative support as we position for continued growth in FY25 and FY26.

DDR Australia, Duratec’s 49% owned associate business, delivered a strong result in FY24 with Duratec’s share of �� undertaking of several successful projects during the year as well as completing a strategic acquisition of RC Construction (RCC) in January 2024. Duratec’s share of �� shown as Equity Accounted Investment results.

Duratec achieved normalised EBITDA of $47.6m in �� each market sector and DDR Australia. Depreciation and �� asset additions in the year, as well as having a full year of customer relationship amortisation for WPF Duratec, which was acquired part way through FY23.

FY24 REVENUE BY OPERATING SEGMENT

The Other sector generated $22.0m of revenue, which was down 29.9% compared to FY23. This was mainly due to Transport Infrastructure projects undertaken in FY23 being completed.

�� of 17.3% being achieved. This improved average margin was the result of an increase in self-perform MSA contracts delivered in both M&I and Energy sectors whilst we also experienced better gross margins on projects secured via our ECI model. Due to the high level of ECI opportunities in our pipeline, we have the ability to uphold our margins at these levels going forward.

$555.8m FY24 Total Revenue 28% Mining & Industrial Defence Building & Facade Energy Other

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

CFO’s Report

REVENUE TREND

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NPAT TREND

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1 ��

BALANCE SHEET & CASH FLOW

Duratec’s balance sheet continued to strengthen during FY24 with Net Assets increasing by 28.3%.

The year closed with a strong cash on hand balance of $65.2m, down slightly compared to FY23 due to �� the continuous provision of a solid return to shareholders through dividend payments.

Maintaining cash levels was achieved through a healthy cash conversion on operating activities of 84%, which �� the year. Investment activities included $16.3m of capital �� for the acquisition of WPF. Dividend payments made during FY24 totalled $10m.

SHAREHOLDER RETURNS

�� dividend of 2.5 cents per share. This brought the total dividend for the year to 4 cents per share. This is in line with the Board-approved policy range of between 30% to �� the desire to provide returns directly to shareholders as dividends and the business’ need to retain funds for future growth opportunities.

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Ashley Muirhead ��

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Trade debtors continue to be well managed, with the increase in FY24 representing higher invoicing levels undertaken at year end which is evident with a corresponding reduction in contract assets. Duratec’s client base is comprised of reputable clients resulting in low risk of bad debts.

Right of use assets and the related property lease liabilities increased in FY24 as a result of our continued expansion and growth. Borrowings also increased in FY24 mainly due to Asset Financing for Plant, Equipment and Vehicles and a short-term cash advance facility that was used to support upfront procurement purchases.

Duratec continues to be well supported by debt providers, with facilities increasing by $69m to $174m during FY24 from $105m in FY23. This includes Banking facilities of $109m with CBA and NAB and $65m with Insurance Bond providers and ��

�� position will support the future growth and expansion of the Company.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

UPDATE BY SECTOR

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Defence

REVENUE 3.8% on FY23 PROFIT[*] 24% on FY23 $220.2m $23.6m $229.0m $31.2m

FY24 FY23

In FY24, the Defence sector delivered revenue of $220m �� Duratec has worked with DoD in the evolution of their contracting models towards a Head Contract (Early Contractor Involvement – ECI) model. Duratec’s expertise in ECI model contracts continues to establish the business as a leader in innovative project delivery.

The DoD Strategic Review has impacted the Capital Facilities and Infrastructure (CFI) pipeline, with the reprioritisation of spend delaying some projects coming to market. The resulting May 2024 National Defence Strategy allocated increases in spend in Guided Weapons, Nuclear Submarines, Northern Bases and general increases to �� opportunities for growth in this sector.

In Q1 FY24, Duratec was awarded the Parkes Wharf ECI HC Project. FY24 also saw an increase in the pipeline of major projects coupled with increased investment in the Estate �� works, placing Duratec in a strong position for FY25.

Following Defence’s review, there are noteworthy opportunities in north west Australia associated with major Airbase upgrades including hydrocarbons storage and marine infrastructure remediation. Furthermore, the �� and AUKUS at HMAS Stirling lays the foundations for another decade of works on the base with a particular focus on Maritime Remediation and Construction to support the new Navy Fleet.

Several major projects secured in FY23 have moved into delivery phase in FY24, cementing Duratec’s reputation as specialists in Defence Maritime and Hydrocarbons Storage Projects. Additionally, during FY24, major milestones were achieved across a variety of Defence projects:

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The Coonawarra project completed Level 1 dredging, pontoon fabrication and sheet pile wall works.

Duratec’s established footprint in Northern Queensland and the Northern Territory positions the business well for the further substantial investment in Northern Bases.

DEJV completed the Oxley Wharf project and handed ��
RAAF Tindal is nearing construction completion for the Bulk Fuel Storage Works with ongoing opportunities being tendered on base.

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year
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Parkes Wharf ECI project award.

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Update By Sector

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Mining & Industrial

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REVENUE 79.4% on FY23 PROFIT [] 70.1% on FY23
$155.6m $33.6m
$86.8m $19.8m
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�� delivered a strong result for FY24, underpinned by several ongoing contracts with long-term clients such as Newmont, BHP, Northern Star and Gold Fields. Duratec’s self-perform capability has positioned the Company as the partner of choice in delivering shutdown projects as well as recurring maintenance work.

The Mining & Industrial (M&I) sector delivered a strong result in FY24, with revenue increasing 79% to $155.6m �� $33.6m (FY23: $19.8m).

Long-term relationships and the early engagement of clients positioned the Company for success in the M&I sector. Securing Master Service Agreements (MSA) and annuity style contracts, delivered by Duratec’s self-perform capability, contributed to the strong performance and this trend continues to provide good quality revenue.

The Company’s strategic approach to operations in the Northern Territory and North Queensland has delivered positive results in delivering schedule of rates style work for Rio Tinto Gove Operations in Northern Territory and BMA BHP in Queensland, whilst increasing Duratec’s client base over the past year.

Duratec has maintained a consistent presence at Rio Tinto’s West Angelas, Cape Lambert, East Intercourse Island and Tom Price mines with our team delivering specialist remedial solutions on Structural Integrity and remediation projects. Work continues to progress well on one of our key projects for BHP Iron Ore on their Berth C&D structure on Finucane Island, whilst we continue to deliver ongoing maintenance services for Fortescue Metals Group and Yara Pilbara. MEnD, our consulting business, was engaged by Rio Tinto and BHP throughout FY24 to help model assets requiring remediation, this positions the area well for growth in FY25.

Due to ageing assets in the M&I sector, maintenance and remediation activities are expected to grow, while strong commodity prices will also support demand �� appointment of a dedicated National M&I Manager will help us leverage the Company’s self-perform capabilities across the country.

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See our website for more information on the BHP Berth C&D project

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REVENUE 42% on FY23 PROFIT[*] 73.4% on FY23 $111.3m $20.9m $78.4m $12.0m FY24 FY23

Building & Facade

Our dedicated team is at the forefront of early design and procurement for large scale projects and is well positioned to secure and deliver more works in this market sector. The Company is currently using digital tools for reporting and tracking of our projects. Duratec shares this with clients, allowing them to understand their asset delivery cycle, making us a preferred delivery partner of their projects.

The Building and Facade (B&F) sector delivered revenue of �� $20.9m (compared to $12.0m in FY23).

The completion of the University of NSW project, Westside Hospital in Queensland and near completion of our �� CBD, were highlights in FY24. The transformation of the Central Park facade is testimony to the skills of the project team in delivering precise, high-risk works with a high��

Stricter building code compliance, insurance risk and a high demand for due diligence investigations on existing building facades has contributed to a heightened demand for maintenance. Duratec continues to build strong relationships with clients early in the procurement process. The Company’s strategic and selective approach of focusing on key public building infrastructure for State �� as well as asset owners who value a safe and quality outcome, has resulted in a strong order book and pipeline ��

Recent awards of Market City (major heritage facade restoration following an ECI) in Sydney, New South Wales, Air Apartments in Adelaide, South Australia and Glebe Park Residences in Canberra, Australian Capital Territory will be delivered in FY25. In Western Australia, Duratec was recently awarded contracts for the iconic Perth Library �� two successful bids underpin Duratec’s position as the preeminent remediation contractor.

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Energy

REVENUE 29.6% on FY23 PROFIT[*] 8.3% on FY23 $46.6m $15.3m $66.3m $16.7m FY24 FY23

The Energy sector, which covers the maintenance and decommissioning of oil and gas assets as well as the expansion and refurbishment of hydrocarbon storage 22 infrastructure, delivered revenue of $46.6m (FY23: ��

�� of the aviation fuel hydrant package at Western Sydney Airport (WSA) in 1HFY24. The Company has since secured the WSA Cargo works contract, continuing its presence on site into FY25. This package encompasses the supply, installation, testing and commissioning of the fuel hydrant reticulation system for the Cargo Site. This complements other contracts awards with Vopak on their Fuel Infrastructure Terminals in New South Wales.

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The acquisition of WPF in FY23 enabled Duratec to develop a presence in the oil and gas market which contributed to the Energy Sector results for FY24. �� are being realised as WPF and Duratec roll out their respective capabilities into their existing client bases, increasing the quality and reliability of our delivery.

Leveraging the combined experience of both Duratec and WPF, the Company has focused on strategically securing maintenance and decommissioning contracts ��

Growing on its existing relationship with Santos, the Company has progressed discussions with Chevron, BP, �� Company recently gained Woodside vendor status which opens up maintenance opportunities across their assets.

In mid-west WA, project works were successfully completed at the Waitsia Gas Project and Duratec was recently awarded the Inpex MOF Wharf refurbishment project in the Northern Territory.

A newly formed national focus for the Energy sector will ensure Duratec and WPF are well positioned to secure and deliver projects which provide growth in revenue ��

See our website for more information on the Western Sydney Airport project

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REVENUE 29.9% on FY23 PROFIT [] 17.4% on FY23
$22.0m $2.7m
$31.4m $2.3m
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Other

Marine, Transport Infrastructure, Water Infrastructure

For FY24, the “Other” sector delivered revenue of $22.0m ��

The Company’s tender pipeline is strong for this sector with larger scale prospects expected to come to fruition in FY25.

This sector includes the remediation and upgrading of marine, transport and water infrastructure.

The work on hand position of more than $40m supports Duratec’s growth trajectory for FY25 and beyond.

We continue to deliver and target transport infrastructure projects across the country and as part of Duratec’s strategic review, in FY24 a Marine Division was established. This new division positions the business to target further market share across the sector as well as better support existing and upcoming Defence Marine Contracts.

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An increase in water and wastewater infrastructure projects aligns with increased investment in Queensland and New South Wales utilities.

Update By Sector

WPF

WPF delivered FY24 full year revenue of $33.8m and a �� strategic investment. This revenue is accounted for in the Energy and M&I sectors. From when Duratec acquired its 100% interest on 20 October 2022, to 30 June 2024 �� of $16m.

In line with Duratec’s selective approach to acquisitions �� the acquisition of the assets of A&B Welding Pty Ltd in Darwin, NT for $1.5m. This acquisition has allowed WPF to expand its business into the Northern Territory, aligning with the location of several of Duratec’s major clients, including Inpex, Shell and Santos, and doubling WPF’s fabrication capacity.

To support the Northern Territory business, WPF relocated �� replicating the success of the Cockburn facility.

Following winning Contractor of the Year for Santos in 2023, in FY24 WPF secured further work with the Santos team on the North West Shelf program. After a delayed start to the program, WPF is now a key partner for Santos in its program to progressively decommission its assets in the north west of Australia. Originally engaged through WPF’s in-house expertise with the plugging and abandonment process, WPF is now involved with all key components of the decommissioning process including pre-works survey, access design and engineering, preparatory works to platform topsides, plugging, abandonment and removal of platform topsides and substructure.

�� in Western Australia to purchase and install the Novarc �� Based in Canada, Novarc Technologies specialises in the design of collaborative robots for welding applications. The SWR allows for increased productivity and faster turnaround times, enhances consistent high-quality welds, and powerful in-built safety systems. This state-of-the-art robot is currently being integrated into operations, with a rigorous and detailed training program now completed by �� modern solution for the Energy sector.

WPF expect continued future growth in FY25 and beyond.

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WPF’S NEW NOVARC SPOOL WELDING ROBOT: CHANGING THE FACE OF PIPE FABRICATION

Since acquiring engineering services company WPF in late 2022, Duratec has helped to grow ��

Established more than 20 years ago, WPF is a valued and trusted provider of manufacturing, fabrication and repair services to complex and specialised equipment used within the oil and gas, and resources sectors. A contributing factor to WPF’s success is its commitment to ongoing investment in the latest equipment and technology. A good �� welding robot.

GAME-CHANGING TECHNOLOGY

Based in Canada, Novarc Technologies specialises in the design of collaborative robots (cobots) for welding applications. AI is enabling the transition from manual processes to sophisticated, automated systems. Cobots, such as the SWR, are designed to work in conjunction with human operators. Novarc’s technology is capable of welding a variety of joints, while operators make adjustments during the weld without the need to reprogram. Development of the SWR was a result of Novarc’s close collaboration with fabrication companies, who were looking for ways to automate the pipe spool welding process. There was general frustration at the lack of industry innovation and this set the wheels in motion for Novarc. The team got to work, designing and producing a robot with the precision and dexterity required by workshops.

BENEFITS OF THE SWR

�� way the workshop operates. The robot combines advanced automation technology with human input to produce fast, �� the heavy lifting to Novarc’s collaborative robot.”

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INCREASED PRODUCTIVITY, FASTER TURNAROUND TIME

The SWR alleviates some of the pressures borne by the industry. On implementing the robot, a single human �� allowing WPF to deliver projects faster, which is of great advantage to the client. It also increases WPF’s physical capacity as welding jobs that would have previously occupied four welding bays are now contained in just one bay. International users of Novarc’s technology have said that it allows “pipe welding tasks to be completed more ��

SAFETY

Automation in welding involves the use of robotic systems to perform tasks carried out by human welders. When welding pipe, it is crucial that workers are protected from the UV radiation produced by the arc. The SWR does just this, thereby preserving workers’ safety and increasing the longevity of their careers. The SWR collaborates with the operator and is equipped with a powerful, in-built safety system. This system features various sensors that can detect initial faults and isolate prior to failures occurring. It also includes emergency stop buttons at all practical locations to ensure the �� welding with minimised human intervention as the machine is operated via a pendant control. The operator simply positions the SWR, hits start and then presses stop upon completion of the weld. It means the rotatable, repetitive welds can be allocated to the SWR, freeing up skilled welders to concentrate on more complex welds.

QUALITY

The SWR consistently delivers high-quality welds. According to CEO of Novarc Technologies, Soroush Karimzadeh, �� the repair rate drop to less than one per cent. The machine also meets key quality tests, while Novarc’s software programs provide accountability and traceability when it comes to quality assurance and quality control. Novarc’s smart-vision and image-processing system, which integrates state-of-the-art AI algorithms with advanced robotic controls, delivers X-ray quality welds.

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MEND

�� Transformation in the asset management and sustaining capital sectors. MEnD delivered the largest reality modelling, inspection, testing and engineer scopes on �� Australia Department of Schools survey and ongoing investigatory works for Sydney Harbour Federation Trust.

Our key projects enabled MEnD to attract diverse, experienced talent across the country, despite a constrained labour market. Accelerated growth through technology requires the right people to drive it, and the team the Company ��

MEnD continues to innovate by proactively introducing new technology �� projects with Duratec. Version 2.0 of our Digital Defect Management platform AnnoView was launched in FY24. It has become a fully integrated and mobile solution, empowering our engineers, estimators, project managers and clients to collaborate in a spatial context through the entire life of a project. The Company has proven the value of Digital Defect Management to clients and �� management and contracting spaces. This can be seen in projects such as the National Carillon project in ACT.

�� of engineering inspection of rail bridges. Following a successful trial on two �� across the client’s network were awarded. Early involvement in the inspection cycle provides MEnD and Duratec with greater visibility of future sustaining capital works and the ability to proactively engage with those clients. MEnD’s �� of services for an entire asset’s lifecycle.

The professional asset management services sector was also a key area of growth for MEnD in FY24. In the future, the Company foresees ample opportunity to vertically integrate into the value chain. Through our experience of maintaining a wide range of assets, MEnD is able to capture �� data into meaningful asset management planning. Because of this, MEnD has entered this sector with a clear advantage. This is strengthened by the ability for Duratec to scope and execute works as a turnkey solution.

�� of concrete analysis. This reputation has seen our client base grow to include national concrete suppliers, specialist consultants and other laboratories. Into �� niche, high-value laboratory services.

Demand for MEnD’s services from our key clients across our sectors remains very strong and is expected to grow in FY25.

See our recently released MEnD Corporate video for more information

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PROFIT[*] 39.1% on FY23

REVENUE 106.7% on FY23

$67.6m $9.6m $32.7m $6.9m

FY24 FY23

DDR Australia, Duratec’s Aboriginal and Torres Strait Islander associate business, delivered FY24 full year revenue of $67.6m, �� $9.6m (FY23: $6.9m).

DDR completed a strategic acquisition of RC Constructions (RCC) in January 2024. An increase in Defence spend and the acquisition ��

With work in hand of $52.7m at the commencement of FY25, DDR has a solid platform for further growth. We are seeking to expand through selective regional expansion, developing increased capability, and further accessing aligned procurement opportunities. Our client’s Aboriginal procurement policies continue to mature, and engagement targets increase, both in the number of contracts and value of works.

In addition, DDR’s goal is to increase our Aboriginal engagement through employment and supply chain opportunities for other Aboriginal businesses. This, along with a structured plan for �� for Duratec but also for the wider Aboriginal and Torres Strait Islander community.

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Check out the DDR website for more information

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Risk Management

RISK MANAGEMENT

�� management. The Audit and Risk Committee, a Board sub-committee, oversees risk. The risks outlined below represent a ��

SAFETY INCIDENTS

Employee and contractor workplace incidents that could lead to serious injury or death could materially impact the ��

Mitigation Strategies

The safety function reports to the Managing Director and all key activities are risk assessed. The Company has a safety team that supports the business at the operational level. The Company actively monitors lead, lag and other safety related KPI’s. Systems and processes have been updated during FY24 to further streamline and support these objectives. The Company actively monitors �� meet or exceed requirements.

CUSTOMERS RELIANCE

�� of Defence.

Mitigation Strategies

To mitigate the expose the Company is working to expand its other key market sectors. Having a diverse client base is an important key metric as it helps the Company navigate the changes in government policy and the circular nature of each industries peaks and troughs. The Company has capability to expand in all of its other key sectors, and all other key sectors have substantial growth opportunity. To maintain the relationships and manage this exposure to the Department of Defence, Duratec has a manager responsible for the Defence engagement and involves other senior management in key interactions.

SAFETY REGULATION

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The Company operates in a highly regulated environment �� approvals to operate. Failure to maintain these approvals ��

Mitigation Strategies

�� regularly reviews key policies, procedures and legislation to ensure it remains compliant.

SUBCONTRACTOR SAFETY MANAGEMENT

The Company operations are such that the engagement of Subcontractors is key to the successful delivery of projects as a business. With the engagement of third parties as Subcontractors there is an inherent risk from a safety compliance perspective.

Mitigation Strategies

�� management are held accountable for the implementation of policies and procedures including �� supervision, payment approval including appropriate �� incident management involving subcontractors.

HUMAN RESOURCES

Inability of the Company to retain and attract key personnel whose technical expertise is important in �� contracted project commitments.

Mitigation Strategies

The Company has many long term and loyal employees. �� work in an environment where they have development opportunities. The Company has a Human Resources function that actively manages programs designed to develop talent and embraces a diverse and inclusive culture.

POOR QUALITY PROJECT DELIVERY

Project issues, including scope and delivery, compromising the quality of project outcomes.

Mitigation Strategies

The Company has a dedicated tendering and quality team and is led by experienced personnel who invest time in understanding client requirements. Lessons learned on previous projects are documented and shared which assists with a process of continuous improvement. In addition, the Company utilises the Early Contractor Involvement (ECI) client engagement model on many ��

SUPPLY CHAIN RISK

Supply chain risk associated with over reliance on key suppliers and unexpected cost increases.

Mitigation Strategies

The Company has a procurement function that reviews key supplier exposure with typically more than one supplier for individual items procured. In relation to commodity related items, which the use varies from project to project, costs �� estimates are utilised in tendering processes to minimise risk to the Company. The Company reviewed potential exposure to Modern Slavery under the Modern Slavery Act 2018 with no issues noted.

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Risk Management

LEGAL RISK

The Company regularly executes customer, supplier and employment contracts. There is an inherent risk of ��

Mitigation Strategies

The Company has a commercial team that works closely with operational leaders in the review and negotiation of contracts. There is a formal contract review and approval process to help mitigate this exposure. Employment risks are managed by Human Resources policies and procedures. To limit potential losses, the Company maintains various insurance policies.

CONTRACT TERMINATION

Termination for convenience could result in the loss of a contract and impose unplanned costs on the Company.

Mitigation Strategies

This risk exists in Department of Defence contracts and in limited examples of other commercial engagements. It would typically arise due to poor performance by the Company. The Company seeks to mitigate this risk through �� at or above expectations.

CYBER-SECURITY

�� resulting from cyber penetration.

Mitigation Strategies

The Company has in place policies and protocols for managing system access, data storage and data recovery. These processes are tested and reviewed periodically with third party auditors engaged to assist as required. In addition to this, the Company maintains an appropriate insurance policy to manage these risks.

REPUTATION

�� event that falls short of community and stakeholder expectations.

Mitigation Strategies

Employees are trained on the requirements of key policies including Code of Conduct, health and safety, bullying and harassment, anti-bribery and competition.

ACCESS TO FINANCE

Access to funds for business sustaining and growth activities.

Mitigation Strategies

The Company has in place facilities for project guarantees �� future needs.

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Sustainability

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SUSTAINABILITY

OUR PEOPLE

PEOPLE AND CULTURE

At Duratec, our people are at the heart of everything we do. The Company believes that our success is deeply rooted in fostering work environments that prioritise safety, wellbeing, and care for our employees, clients, and the environment. By ensuring the safety and wellbeing of our teams and contracting partners, we create a strong foundation for long-term, sustainable growth. Our commitment is to cultivate a positive workplace where our people are equipped for success, recognised for their contributions, and can take pride in their work.

Our leadership team is dedicated to providing clear strategic direction to navigate industry challenges and capitalise on innovative opportunities. Following a comprehensive review of our internal structures this year, Duratec appointed an updated executive leadership team. This, coupled with a ��

With a diverse and highly collaborative culture, both within the organisation and in our client partnerships, the collective �� and accomplishments. As we continue to grow, we remain ��

In FY24, our workforce remained stable with 1,132 employees engaged in corporate services or self-performing project delivery across our national portfolio. The Company remains steadfast in its commitment to the wellbeing of our employees, ensuring that they feel respected and safe. This commitment �� on domestic violence and support for current victims and �� initiatives such as standing against domestic violence.

�� platform accessible to all employees. The mobile-friendly platform provides everyday shopping discounts and other �� of electronic technology to enhance employee engagement and digitise the employee experience, particularly with the planned implementation of new HR software next year.

Our employee onboarding processes, which involve welcoming new hires by our senior leaders, continue to receive outstanding feedback. Employee recognition programs, such as referral programs, Employee of the Month awards, and the popular Employee Photo of the Month ��

TALENT

To meet future talent needs, the Company strengthened our resourcing capabilities by forming strategic partnerships that allow Duratec to target talent across Australia and leverage talent acquisition for international projects.

Enhancing our company branding, clearly communicating how the Company values employees, and exhibiting what it’s like to work at Duratec has been key in attracting candidates via social media. Our video campaigns showcase our culture, focus on talent development, and highlight the unique career opportunities within �� diverse and talented audiences.

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EMPLOYEE BREAKDOWN

As at 30 June 2024

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STATE LOCATION
ACT
NSW
NT
1,132 QLD
Employees SA
WA Total
VIC TAS
ACT (3%) NSW (10%)
NT (9%) QLD (6%)
SA (3%) TAS (2%)
VIC (4%) WA (63%)
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Sustainability
35
ABORIGINAL AND TORRES STRAIT
EMPLOYMENT STATUS GENDER ISLANDER PEOPLE
3%
15%
18%
3%
1,132 1,132 1,132
Employees Employees Employees
Total Total Total
82% 82%
97%
Full Time Men Aboriginal and Torres
Part Time Women Strait Islander People
Casual Non Aboriginal and Torres
Strait Islander People
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Sustainability

SAFETY & WELLBEING

Duratec reported a FY24 Total Recordable Injury Frequency Rate of 2.74, an all-time low for the Company. This result was achieved by investment in key safety and improvement initiatives such as the Care Factor and Supervisor Leadership programs, alongside improved risk management processes. Whilst this result is a positive improvement, Duratec is committed to continuing our work towards an injury free workplace.

The Company’s safety culture is our top priority – Duratec will continue to maintain and improve a physically and psychologically safe work environment. With safety embedded in the company’s culture, Duratec continuously strives to make improvements within the management �� practical solutions to mitigate risks in the business.

Employee health and wellbeing programs continued to be rolled out across the business in FY24 with psychosocial hazards being a key focus. Maintaining a work environment where employee’s mental health needs are supported is paramount, especially in the sectors in which Duratec work.

With the business preparing for future growth, technologybased solutions will be explored to complement and strengthen new and existing risk mitigation strategies. Computer learning in the ergonomics industry has

�� technologies to measure and analyse tasks, and to identify risk controls and job design improvements.

LEARNING & DEVELOPMENT

With leadership programs now in place, the Learning and Development department has been instrumental in �� trust and psychological safety.

�� of competency assessments. This now provides in-house capabilities for classroom and practical learning across a ��

Duratec is dedicated to fostering the growth and advancement of young individuals by providing various apprenticeships and traineeships tailored to their skills and current roles within the company. Over the past year, Duratec completed six successful traineeships and �� and Blast and Paint. Currently Duratec has 40 trainees and apprentices. The Company remains committed to assisting and involving local youth across the country to pave the way in the construction, engineering and remediation sectors.

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Sustainability

RESPONSIBLE BUSINESS DELIVERY

As part of our Business Improvement initiatives, Duratec formally established a Sustainability function in FY24. This enables Duratec to have appropriate oversight of our material impacts and ensures accurate tracking and monitoring of initiative implementation. To further support this, Duratec’s Executive Management Team Sustainability Committee meets monthly to address prioritised actions. Duratec also implemented a Sustainability Committee Charter to establish a Board Sustainability Committee which can be found on our website.

FOCUSED ON AUSTRALIAN SUSTAINABILITY REPORTING STANDARDS (ASRS) AND EMISSIONS CALCULATIONS

To ensure our focus remains on sustainability impacts pertinent to our operations, Duratec undertook an initial Materiality Assessment aligned with the Sustainability Accounting Standards Board (SASB) standards. Priority ��

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Dimension Issue Category
GHG Emissions
Environment
Waste and Hazardous Materials
Employee Health & Safety
Social Employee Engagement, Diversity,
and Inclusion
Physical impacts of climate change
Governance
Supply Chain Management
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Duratec remains future focused and understands the requirements of the forthcoming Australian Sustainability Reporting Standards (ASRS) that are being developed by the Australian Accounting Standards Boards (AASB). The �� disclosures to be included in the FY26 annual report.

In preparation for these disclosures, Duratec has recently engaged Automic ESG to undertake a greenhouse gas assessment of Scope 1 and 2 emissions (direct emissions).

Scope 1 and 2 emissions sources include the following:

Scope 1: Diesel, unleaded petrol, LNG, LPG, Petroleumbased oils and lubricants, and refrigerants
Scope 2: Electricity

In line with guidance from the GHG Protocol and the AASB Sustainability Reporting Exposure Draft (ED SR1), Duratec has chosen an equity share approach to consolidated �� reporting approach.

Our FY24 emissions will be reported once calculations are complete.

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Sustainability

ENVIRONMENT

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As a demonstration of our commitment to Sustainability, Duratec also implemented several initiatives during FY24, �� improvement.

Duratec is committed to ensuring our business activities are undertaken in such a way as to minimise any environmental �� ISO 14001, with this standard guiding our on-site operations teams to appropriately mitigate environmental risk.

Construction sites typically rely on diesel- or petrol-powered generators where access to power is not available. Knowing the impacts this fuel use has, Duratec worked with Blue Diamond to undertake a six-week Hydrogen Generator trial at one of our construction sites in Sydney. Whilst ‘Blue’ Hydrogen was used (sourced from fossil fuel), our team were impressed with the reduction of carbon dioxide emissions on-site.

As part of Duratec’s commitment to environmental sustainability, all works will include recycling of removed materials where possible. Duratec seeks procurement from suppliers who are committed to low emissions-based material manufacturing.

In FY24, Duratec’s environmental performance across our projects remained consistent with our performance from FY23. Environmental incidents that occurred were minor in nature (including small-scale oil, fuel or water spills) and our teams responded as per their training and the relevant project environmental management plans.

In FY24, Duratec transitioned to an average of 20% GreenPower for 15 of our properties. Duratec is seeking to increase both the number of sites on GreenPower, and the proportion of GreenPower over time.

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�� in the north west of Western Australia, the Company relies on aviation to undertake our business. Duratec partnered with Blue Halo to understand the impact of our travel and �� to increase as our processes and understanding of the impact of our Scope 3 emissions mature.

As part of National Tree Day, Duratec’s Victorian team worked with the ‘Friends of Gardiner Creek Valley’ group to restore a crucial wildlife corridor. Members of our �� Gardiner Creek. Duratec employees also took part in Clean Up Australia Day. Duratec’s participation was the largest it has been to date, with teams across Victoria, South Australia, Western Australia and Tasmania removing rubbish from areas nearby to our operations. To further reduce our �� Card’ option for our employees. Traditional business cards remain available if required, but the intent is to transition to ��

Duratec relies on long-sleeved clothing, protective pants and uniforms to ensure the safety and visibility of our teams �� contribution to textile waste, Duratec recently started a trial with UPPAREL. UPPAREL is a well-known recycler which upcycles textiles into several materials. Our Victorian team is �� cleaning cloths in select warehouses.

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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Sustainability

RECOGNISING ABORIGINAL AND TORRES STRAIT ISLANDER PEOPLE

RECONCILIATION ACTION PLAN

Towards the end of FY24, Duratec commenced planning in relation to a Reconciliation Action Plan (RAP) Framework. Through FY25, the Company plan to establish a foundational framework to enable Duratec to better contribute to the reconciliation movement.

PROFESSIONAL OPPORTUNITIES AND SUPPLY CHAIN SELECTION

SUPPORTING LOCAL ARTISTS

Duratec is passionate about supporting Aboriginal and Torres Strait Islander artists. During a Defence project in Victoria, the Company engaged a local Wurundjeri artist to assist with the permanent display of his artwork titled ‘Generations of Wurundjeri’ on the Defence base. The artwork represents ‘Wurundjeri generations linked together, passing on stories and culture’.

In line with our associate, DDR, Duratec is passionate about providing professional opportunities to Aboriginal and Torres Strait Islander peoples (see the DDR website for details on the work undertaken). Additionally, the Company has targets in place to ensure Duratec’s people are �� businesses where applicable.

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Sustainability

COMMUNITY

Duratec understands the importance of connecting and engaging with charitable organisations and community groups in the areas in which the Company works. Over FY24, members of our team engaged with a range of charitable groups across Australia. Although the Company participates in a variety of community engagement programmes, the below are a few highlights from FY24:

�� McDonald House ‘Meals from the Heart’ program. Across

Australia, Ronald McDonald Houses provide home comforts, including a place to stay, for families of children �� prior to cooking dinner and dessert for families staying at the Ronald McDonald House.

�� and partook in the ‘Run for Kids’, helping to raise funds for the Royal Children’s Hospital.

RADICOOL SKATE DAY

GOVERNANCE

In FY24, Duratec established the Board Sustainability Committee, with Duratec Board member Krista Bates appointed as chair. The committee are responsible for overseeing the planning and implementation of our Sustainability approach, including the management of Sustainability risks and opportunities. In addition, there is an Executive Management Team Sustainability committee who meet monthly to coordinate activities with the Sustainability leads embedded across the business.

FUTURE FOCUSED

Duratec remains future-focused and will continue to identify innovations and opportunities that enable us to act sustainably and limit our carbon footprint. The �� understanding this footprint clearly, and will continue to do so, whilst supporting the needs of our employees and clients.

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2021 2022 2023 2024
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Resource Hired
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

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DIRECTORS’ REPORT
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��
��
��
Company Secretary Managing Director ��
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�� Duratec Limited ABN 94 141 614 075 (“the Company” or “Duratec”) and the entities it controlled (together referred to as “the Group” or the “consolidated entity”) at the end of, or during, the year ended 30 June 2024.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Directors’ Report

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DIRECTORS AND COMPANY SECRETARY

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Name Position ��
Martin Brydon Non-Executive Chair Appointed 1 September 2020
Executive Director, Managing Director Appointed 24 November 2023
��
Appointed 26 August 2010
Executive Director, General Manager
Resigned 24 November 2023
Non-Executive Director Appointed 24 November 2023
��
Appointed 26 August 2010
Executive Director, Managing Director
Resigned 24 November 2023
Gavin Miller Non-Executive Director Appointed 14 April 2010
Krista Bates Non-Executive Director Appointed 1 July 2023
�� Company Secretary Appointed 1 September 2020
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Directors’ Report

INFORMATION ON DIRECTORS AND COMPANY SECRETARY

��

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Non-Executive Chair

Mr Brydon is currently a Non-Executive Director of the �� Building Limited and resides in Perth. Mr Brydon has more than 30 years’ experience in the Australian construction materials and building product industries, commencing as an electrical engineer at Cockburn Cement Limited (CCL) in WA before moving into roles in operations management, sales & marketing and general management before ultimately becoming Chief Executive �� Limited (ABL) in 1999, Mr Brydon became Executive General Manager - Strategy and Business Development and worked closely with the Managing Director in formulating and executing strategy. This included ABL entering the downstream businesses of concrete and concrete aggregates and masonry products through a series of acquisitions. Mr Brydon was appointed Chief �� to the ABL Board as Managing Director in November 2015. He retired from ABL in January 2019. During his tenure, ABL grew to have a market capitalisation of over $4 billion and was included in the S&P ASX100 index.

Mr Brydon is an independent Director as, in the Board’s view, he is free from any business or other relationship that could materially interfere with, or reasonably be perceived to materially interfere with, the independent exercise of his judgement.

Other Listed Company Directorships in last 3 years

Fletcher Building Limited

Special Responsibilities

Executive Director – Managing Director

Mr Oates holds a Bachelor of Science in Construction Management and Economics and has over 25 years’ experience in the construction and remediation industries. Mr Oates is a registered builder across the business in several states and territories. Prior to assuming his role as Managing Director, Mr Oates was a General Manager and Executive Director of Duratec responsible for the general management of the Company in Western Australia and the Northern Territory where he was involved in securing and delivering a wide range of projects across numerous sectors, including mining & resources, oil & gas, water & wastewater, transport infrastructure, marine as well as direct engagement with projects on Department of Defence bases across Australia. In his role as Managing Director, Mr Oates is responsible for the overall management of the Company, Health, Safety, Environment and Quality, strategic planning, new business opportunities and risks and business development.

Other Listed Company Directorships in last 3 years

None
Special Responsibilities � Member of the Audit and Risk Committee
Member of the Nominations and Remuneration Committee
Member of the Sustainability Committee
�� 23,953,389
Chair of the Nominations and Remuneration Committee
Member of the Audit and Risk Committee

��

104,286

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Directors’ Report

Non-Executive Director

Mr Harcourt has over 45 years of experience in the civil and structural engineering industry. During this time Mr Harcourt has held numerous roles including; Senior Project Engineer and CEO of Savcor Finn Pty �� company Savcor Group. Mr Harcourt along with two trusted colleagues established Duratec in 2010 and led the Company as Managing Director through a period of rapid growth to become a highly recognised and reputable specialist civil remediation contracting company. He resigned as Managing Director on 24 November 2023 and was appointed as a Non-Executive Director on that date.

Other Listed Company Directorships in last 3 years

None

Special Responsibilities

Member of the Audit and Risk Committee
Member of the Nominations and Remuneration Committee
Member of the Sustainability Committee

��

23,953,389

Non-Executive Director

Ms Bates has over 25 years’ experience as a lawyer and has extensive experience as an executive and non-executive director for listed companies on both the Australian Stock Exchange and London Stock Exchange. Ms Bates advises a diverse base of clients including; private and listed companies, private equity funds, governments and individuals in relation to mergers, acquisitions, disposals, private equity investments, joint ventures, management buy-outs, schemes of arrangements, corporate governance issues, commercial contracts and general corporate advice. Admitted to practice as a lawyer in England and Australia, Ms Bates now heads up her own �� provides a range of advisory services to clients across multiple sectors.

Other Listed Company Directorships in last 3 years

AusCann Group Holdings Ltd
Neurotech International Limited

Special Responsibilities

Member of the Audit and Risk Committee
Member of the Nominations and Remuneration Committee
Chair of the Sustainability Committee

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��

33,150

Non-Executive Director

�� Secretary and graduate of the Australian Institute of �� and commercial management experience in various industries, including manufacturing, utilities and civil construction.

Other Listed Company Directorships in last 3 years

None

Special Responsibilities

Chair of the Audit and Risk Committee
Member of the Nominations and Remuneration Committee

Company Secretary

Mr Wilkins is the founder and principal of DWCorporate �� providing governance, compliance and capital raising services. Since 1994 he has been a director of, and involved in the executive management of, several publicly listed companies with operations in Australia, PNG, Scandinavia and Africa. Mr Wilkins is currently a Director of Key Petroleum Limited, and an alternate Director of Middle Island Resources Limited.

��

20,000

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Directors’ Report

DIRECTORS’ MEETINGS

The number of Directors’ meetings and the numbers of meetings attended by each Director of the Group during the ��

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Nomination & Sustainability
Board Meetings ��
Remuneration Committee
Attended Held Attended Held Attended Held Attended Held
Martin Brydon 11 11 2 2 �� 3 0 0
Christopher Oates 11 11 2 2 1 3 0 0
Robert (Phil) Harcourt 10 11 2 2 3 3 0 0
Gavin Miller 10 11 2 2 3 3 0 0
Krista Bates 10 11 2 2 3 3 0 0
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��

The principal activities of the consolidated entity during the period were the provision of assessment, protection, remediation and refurbishment services to a broad range of assets, in particular steel and concrete infrastructure. No ��

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REVIEW OF OPERATIONS

For the year ended 30 June 2024, the consolidated entity generated revenues of $555,792,000, an increase of 13% �� was $21,430,000, an increase of 12% on the previous year.

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Jun-24 Jun-23
$’000 $’000
Revenue from contracts
555,792 491,796
with customers
�� 21,430 19,201
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MATERIAL BUSINESS RISKS

�� of the Company’s strategies and prospects are outlined in “Risk Management” on page 32 of this annual report.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

�� of notes thereto.

DIVIDENDS

�� year were $11,140,000 (2023: $6,046,000).

�� 2024 of 2.5 cents per fully paid share, franked to 100%, to be paid on 9 October 2024.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Likely developments in the operations of the consolidated entity and the expected results of those operations in �� as the inclusion of such information is likely to result in unreasonable prejudice to the consolidated entity.

ENVIRONMENTAL REGULATION

The consolidated entity’s operations are not regulated by �� Commonwealth or of a state or territory.

OPTIONS

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

There has not been any matter or circumstance occurring ��

No options over issued shares or interests in the company or a controlled entity were granted during or since the end �� at the date of this report.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Directors’ Report

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is party for the purposes of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

NON-AUDIT SERVICES

Details of the amounts paid or payable to the auditor �� by the auditor are outlined in Note 26�� statements.

�� compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The Directors are of the opinion that the services as disclosed in Note 26�� not compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.

INDEMNITY AND INSURANCE OF OFFICERS

�� of the Company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.

INDEMNITY AND INSURANCE OF AUDITOR

To the extent permitted by law, the Company has agreed to indemnify its auditors, RSM, as part of the terms of its audit engagement agreement against claims by third �� No payment has been made to indemnify RSM during the ��

CORPORATE GOVERNANCE STATEMENT

The board of Duratec Limited is responsible for corporate governance. The Board has prepared the Corporate Governance Statement in accordance with the third edition of the Corporate Governance Council’s Principles and Recommendations, which is available on the Company’s website at www.duratec.com.au under the ‘Investors’ section.

ROUNDING OF AMOUNTS

The Company is of a kind referred to in Corporations �� with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.

AUDITOR’S INDEPENDENCE DECLARATION

As required under section 307C of the Corporations Act 2001, please see “Auditor’s Independence Declaration” on page 55.

AUDITOR

�� the Corporations Act 2001.

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

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�� respect of a contract to insure the directors and executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

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Directors’ Report
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Duratec Limi ted (ASX:DUR) | Annual Report for the 2024 Financial Year
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REMUNERATION REPORT (AUDITED)

The Directors present the Duratec Limited 2024 remuneration report, outlining key aspects of our remuneration policy and framework, and remuneration awarded this year.

VOTING AND COMMENTS MADE AT DURATEC LIMITED’S 2023 ANNUAL GENERAL MEETING (‘AGM’)

At the 2023 AGM, 99.91% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2023. The company did not �� remuneration practices.”

The report is structured as follows:

A. Key Management Personnel (KMP) covered in this report
B. Remuneration policy and link to performance
C. Elements of remuneration
D. Link between remuneration and performance

A. KEY MANAGEMENT PERSONNEL COVERED IN THIS REPORT

Non-executive and executive directors (see “Information on Directors and Company Secretary” on page 44 for details).

Martin Brydon: Non-Executive Chair
Gavin Miller: Non-Executive Director
Krista Bates: Non-Executive Director
�� Executive Director until 24 November 2023, Non-Executive Director from that date onwards.
�� Executive Director
Deane Diprose: Executive Manager
�� Executive Manager
Ashley Muirhead: ��
E. Remuneration expenses
�� Contractual arrangements with executive KMPs
G. Non-executive director arrangements
H. Additional statutory information

B. REMUNERATION POLICY AND LINK TO PERFORMANCE

Any review of remuneration is determined by the Nomination and Remuneration Committee and approved by the Board. The Board aims to ensure that remuneration practices are:

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competitive and reasonable, enabling the Company to attract and retain key talent;
aligned to the Company’s strategic and business objectives and the creation of shareholder value;
transparent and easily understood; and
acceptable to shareholders.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Remuneration Report (audited)

B. Remuneration Policy and Link to Performance continued…

ASSESSING PERFORMANCE

The Nomination and Remuneration Committee is responsible for assessing performance against KPIs and determining the STI and LTI to be paid. To assist in this assessment, the committee receives detailed reports on performance from ��

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Element Purpose �� Potential value
Provide competitive
�� market salary including Positioned at the
Nil
�� superannuation and non- market rate
��
�� Directors: up to 100% of
Reward for in-year excluding DDR, shareholder ��
��
performance and retention �� Executives: up to 50%
KPI’s including safety performance. ��
Employee Equity Plan (EEP) rules
Alignment of employees
contain two components and
including directors to long- At the discretion of the
�� vesting conditions; achievement
term shareholder value Board
of Total Shareholder Return (TSR)
creation
and Earnings Per Share (EPS).
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C. ELEMENTS OF REMUNERATION

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50
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i. FIXED REMUNERATION (FR)

�� such as motor vehicle allowances. FR is reviewed annually and is benchmarked against market data for comparable roles in companies in a similar industry and with similar market capitalisation.

The Board aims to position executives at or near the �� experience, value to the organisation and performance of the individual.

ii. SHORT-TERM INCENTIVES (STI)

Certain employees are entitled to participate in a shortterm incentive scheme as part of their total remuneration. The STI requires the achievement of certain Key Performance Indicators (KPI’s). KPI’s are set by the Board and Executives for eligible employees, depending on the role. The STI is payable in cash and is calculated with ��

iii. LONG-TERM INCENTIVES (LTI)

LTI targets are set by the Board. Achievement of the LTI �� Rights, Options or Restricted Shares with vesting conditions subject to the Company’s Total Shareholder Return (TSR) and Earnings Per Share (EPS). The vesting conditions provide employees and directors with close alignment with shareholder interests. The Board has the discretion to cancel or vary LTI’s, including the claw back ��

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Remuneration Report (audited)

D. LINK BETWEEN REMUNERATION AND PERFORMANCE

STATUTORY PERFORMANCE INDICATORS

The Company aligns Executive remuneration to its strategic and business objectives and the creation of shareholder �� decisions. As a consequence, there is not a direct correlation between the statutory key performance measures and the variable remuneration awarded.

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2024 2023 2022 2021
$’000 $’000 $’000 $’000
Sales revenue 555,792 491,796 310,003 235,709
�� 29,122 27,582 10,202 10,032
�� 21,430 19,201 7,761 7,131
EBITDA 46,159 38,109 17,769 15,918
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��

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2024 2023 2022 2021
�� 1.2 1.1 0.4 0.4
Total dividends declared (cents per share) 4.0 4.0 2.0 1.5
Diluted earnings per share (cents per share) 8.3 7.6 3.1 3.1
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��

E. REMUNERATION EXPENSES

The following table shows details of the remuneration expense recognised for the Group’s key management personnel for ��

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Post- Share-
Long-term
�� employment based
��
�� payments
Long Rights to
Cash salary Annual
Year Cash bonus Superannuation service �� Total
�� leave
leave shares
��
2024 139,640 - - 15,360 - - 155,000
Martin Brydon
2023 118,868 - - 12,481 - - 131,349
2024 85,586 - - 9,414 - - 95,000
Gavin Miller
2023 66,515 - - 6,984 - - 73,499
Krista Bates � 2024 95,000 - - - - - 95,000
2023 - - - - - - -
Robert (Phil) Harcourt � 2024 354,087 126,819 18,036 32,239 - - 531,181
2023 472,499 450,000 41,304 27,500 20,744 - 1,012,047
��
2024 522,499 302,541 53,262 62,292 35,978 - 976,572
Christopher Oates
2023 422,498 405,000 34,004 27,500 19,306 - 908,308
��
Deane Diprose � 2024 168,173 20,429 16,626 13,984 3,983 - 223,195
2023 395,336 140,000 32,565 27,500 9,705 - 605,106
Oliver McKeon � 2024 140,743 20,429 14,701 13,951 7,185 49,184 246,193
2023 321,423 140,000 24,901 27,500 10,604 124,698 649,126
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Remuneration Report (audited)

E. Remuneration Expenses continued…

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Post- Share-
Long-term
�� employment based
��
�� payments
Long Rights to
Cash salary Annual
Year Cash bonus Superannuation service �� Total
�� leave
leave shares
Ashley Muirhead � 2024 264,972 49,029 27,571 33,182 4,213 53,958 432,925
2023 99,038 63,290 13,805 12,109 761 1,636 190,639
2024 - - - - - - -
Paul Ryan �
2023 184,938 67,873 6,906 17,383 (5,056) 28,231 300,275
Total executive directors 2024 1,096,387 392,428 112,160 123,409 51,359 103,142 1,878,885
& other KMPs 2023 1,423,233 816,163 112,181 111,992 35,320 154,565 2,653,454
2024 674,313 126,819 18,036 57,013 - - 876,181
Total NED
2023 657,882 450,000 41,304 46,965 20,744 - 1,216,895
Total KMP remuneration 2024 1,770,700 519,247 130,196 180,422 51,359 103,142 2,755,066
expensed 2023 2,081,115 1,266,163 153,485 158,957 56,064 154,565 3,870,349
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1 ��

2 ��

3 ��

4 ��

5 ��

F. CONTRACTUAL ARRANGEMENTS WITH EXECUTIVE KMPS

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Contract
Name Position Notice period Fixed remuneration
duration
Executive Director –
General Manager until 24 For the year ended 30 June
November 2023 3 months by 2025: $700,000 per annum,
�� Permanent
Executive Director – either party inclusive of superannuation
and motor vehicle allowance
Managing Director since 24
November 2023
For the year ended 30 June
4 weeks by
Ms Ashley Muirhead �� Permanent 2025: $345,000 per annum,
either party
inclusive of superannuation
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G. NON-EXECUTIVE DIRECTOR ARRANGEMENTS

Non-executive directors receive a Board fee as outlined below. They do not receive performance-based pay or retirement allowances. The fees are inclusive of superannuation. The Board Chair receives a higher base fee compared to the other non-executive director, �� this role.

Fees are reviewed annually by the Board taking into account comparable roles and market data provided by the Board’s independent remuneration adviser.

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�� $
Chair 155,000
Other Non-executive directors 95,000
��
Audit Committee - Chair
Audit Committee - Member
Nomination & Remuneration Committee - Chair
Nomination & Remuneration Committee - Member
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All non-executive directors enter into a service agreement with the company in the form of a letter of appointment. The letter summarises the board policies and terms, ��

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Remuneration Report (audited)

H. ADDITIONAL STATUTORY INFORMATION

RELATIVE PROPORTIONS OF FIXED VS VARIABLE REMUNERATION EXPENSE

�� based on the amounts disclosed as statutory remuneration expense (see “Remuneration Expenses” on page 51).

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Fixed Remuneration ��
2024 2023 2024 2023 2024 2023
% % % % % %
��
Martin Brydon 100% 100% - - - -
Gavin Miller 100% 100% - - - -
Robert (Phil) Harcourt 76% 56% 24% 44% - -
Krista Bates 100% - - - - -
��
Christopher Oates 69% 55% 31% 45% - -
��
Deane Diprose 91% 77% 9% 23% - -
Oliver McKeon 72% 59% 8% 22% 20% 19%
Ashley Muirhead 76% 66% 11% 33% 12% 1%
Paul Ryan - 68% - 22% - 9%
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RECONCILIATION OF OPTIONS AND ORDINARY SHARES HELD BY KMP SHAREHOLDINGS

��

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�� Balance at end
2024 Additions Disposals
the year ��
�
Martin Brydon 76,291 27,995 - 104,286
Gavin Miller 20,000 - - 20,000
Robert (Phil) Harcourt 26,653,389 - 2,700,000 23,953,389
Krista Bates - 33,150 - 33,150
Christopher Oates 26,653,389 - 2,700,000 23,953,389
�
Deane Diprose 26,608,522 - 2,700,000 23,908,522
Oliver McKeon � 4,216,120 500,000 400,000 4,316,120
Ashley Muirhead - - - -
Total 84,227,711 561,145 8,500,000 76,288,856
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1 Includes the shareholdings of personally related parties

2��

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Remuneration Report (audited)

H. Additional Statutory Information continued…

RIGHTS

This table shows Rights granted, vested and forfeited during the year:

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Balance at Granted during Balance at
2024 Vested ��
�� year ��
- - - - -
Martin Brydon
Gavin Miller - - - - -
- - - - -
Robert (Phil) Harcourt
- - - - -
Christopher Oates
� - - - - -
Deane Diprose
Oliver McKeon� 900,000 100,000 500,000 - 500,000
- -
Ashley Muirhead 70,000 100,000 170,000
Total 970,000 200,000 500,000 - 670,000
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1��

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SHARE-BASED PAYMENTS: PERFORMANCE RIGHTS

During the year 200,000 unlisted performance rights, subject to vesting conditions and performance criteria were issued to Key Management Personnel.

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Grant date 1 Dec 2023
Expiry Date 30 Sep 2028
Number of Performance Rights 200,000
Share Price at Valuation Date $1.30
Expected Volatility 47.90%
Dividend yield 3.02%
Risk Free Interest Rate 4.07%
Fair Value at Valuation Date:
Subject to Total Shareholder $0.66
Return (TSR) performance
condition
Subject to Earnings Per Share (EPS) $1.30
performance condition
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This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the directors,

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Chris Oates Managing Director - Duratec Limited Date: 27 August 2024 Perth

No options have been granted over unissued fully paid ordinary shares in the Company.

�� which has been audited]

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

AUDITOR’S INDEPENDENCE DECLARATION

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RSM Australia Partners

Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844

T +61 (0) 8 9261 9100

www.rsm.com.au

AUDITOR’S INDEPENDENCE DECLARATION

�� I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

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RSM AUSTRALIA

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Perth, WA Dated: 27 August 2024

J A KOMNINOS Partner

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation

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Auditor’s Independence Declaration

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Duratec Limited (A SX:DU R) | Annual R eport fo r the 2024 Financial Year

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

For the year ended 30 June 2024

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Consolidated Entity
Note 2024 2023
$’000 $’000
��
Revenue from contracts with customers 4 555,792 491,796
Contracting cost of sales 5 (459,617) (409,723)
96,175 82,073
Other income 4 3,969 1,859
�� 5 (42,675) (35,817)
Administration expense (10,518) (9,180)
Occupancy expense (1,988) (1,462)
Depreciation and amortisation expense 5 (14,678) (9,569)
Finance costs 5 (2,359) (958)
Equity accounted investment results 6 1,196 636
�� 29,122 27,582
Income tax expense 7 (7,692) (8,381)
�� 21,430 19,201
�� 21,430 19,201
��
Owners of Duratec Limited 21,430 19,201
Earnings per share attributable to the owners of Duratec Limited: cents cents
Basic earnings per share (cents) 8 8.66 7.91
Diluted earnings per share (cents) 8 8.29 7.55
Earnings per share from continuing operations attributable to the owners of Duratec Limited:
Basic earnings per share (cents) 8 8.66 7.91
Diluted earnings per share (cents) 8 8.29 7.55
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�� accompanying notes.

Duratec Limited (ASX:DUR) | Annual Report for t he 2 02 4 Financi al Y ear

CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

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As at 30 June 2024
Consolidated Entity
Note 2024 2023
$’000 $’000
��
Current Assets
Cash and cash equivalents 9 65,218 66,187
Trade and other receivables 10 74,016 59,821
Contract assets 4 18,802 25,185
Inventories 11 1,017 346
Other current assets 12 2,253 1,820
Total Current Assets 161,306 153,359
��
Trade and other receivables 10 234 6,298
Property, plant and equipment 14 33,446 25,962
Right-of-use assets 15 5,723 2,744
Investments accounted for using the equity method 16 5,732 4,536
Other non-current assets 12 320 249
Intangible assets 17 13,868 14,711
Deferred tax assets 13 4,769 4,573
Total Non-Current Assets 64,092 59,073
Total Assets 225,398 212,432
��
Current Liabilities
Trade and other payables 18 75,475 82,076
Contingent consideration payable 18 - 9,000
Borrowings 19 11,844 4,773
Property lease liabilities 15 2,509 2,071
Contract liabilities 4 39,332 35,727
Current tax payable 13 231 1,773
Provisions 20 11,255 10,484
Total Current Liabilities 140,646 145,904
��
Trade and other payables 18 3,361 3,360
Borrowings 19 13,651 10,535
Property lease liabilities 15 3,558 945
Deferred tax liabilities 13 3,257 4,311
Provisions 20 1,804 1,314
Total Non-Current Liabilities 25,631 20,465
Total Liabilities 166,277 166,369
Net Assets 59,121 46,063
��
Issued capital 21 29,858 26,899
Reserves 22 1,993 2,184
Retained earnings 23 27,270 16,980
Total Equity 59,121 46,063
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The above Statement of Financial Position should be read in conjunction with the accompanying notes.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the year ended 30 June 2024

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Issued Retained Total
Consolidated Entity Note Reserves
Capital Earnings Equity
$’000 $’000 $’000 $’000
Balance at 1 July 2022 25,167 3,825 1,965 30,957
Comprehensive Income
�� - 19,201 - 19,201
�� - 19,201 - 19,201
��
Share based payments 31 - - 1,402 1,402
- -
Transfer from share-based payment reserve 1,183 (1,183)
Dividend Reinvestment Plan 549 - - 549
Dividends paid 24 - (6,046) - (6,046)
Balance at 30 June 2023 26,899 16,980 2,184 46,063
Balance at 1 July 2023 26,899 16,980 2,184 46,063
Comprehensive Income
�� - 21,430 - 21,430
�� - 21,430 - 21,430
��
Share-based payments 31 - - 1,579 1,579
Transfer from share-based payments reserve 22 1,770 - (1,770) -
Dividend Reinvestment Plan 24 1,189 - - 1,189
Dividends paid 24 - (11,140) - (11,140)
Balance at 30 June 2024 29,858 27,270 1,993 59,121
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The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 30 June 2024

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Consolidated Entity
Note 2024 2023
$’000 $’000
��
Receipts from customers 614,325 493,236
Payments to suppliers and employees (575,700) (451,855)
Income tax paid (10,482) (6,536)
�� (2,359) (746)
Interest received 1,497 741
�� 35 27,281 34,840
��
Proceeds from sale of plant and equipment 763 404
Purchase of property, plant and equipment 14 (16,255) (13,001)
Payment for business combinations, net of cash acquired 30 (9,965) (9,988)
Dividends received 4 997 365
�� (24,460) (22,220)
��
Dividend paid 24 (9,950) (5,497)
Proceeds from borrowings 25,875 8,078
Repayment of borrowings (15,689) (4,792)
Repayment lease liabilities (4,026) (2,485)
�� (3,790) (4,696)
�� (969) 7,924
Cash and cash equivalents at beginning of period 66,187 58,263
�� 9 65,218 66,187
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The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year
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NOTES TO THE FINANCIAL STATEMENTS

�� Material accounting policy information 63 ��Critical accounting estimates and judgements 71 �� Segment reporting 72 �� Revenue 73 �� Expenses 74 �� Equity accounted investment results 74 �� Income tax expense 75 �� Earnings per share 75 �� Cash and cash equivalents 76 ��Trade and other receivables 76 ��Inventories 76 ��Other assets 77 ��Current and deferred taxes 77 ��Property, plant and equipment 78 ��Leases 79 ��Investments accounted for using the equity method 80 ��Intangible assets 80 ��Trade and other payables 81	��Borrowings 82
	��Provisions 82
	��Issued capital 83
	��Reserves 83
	��Retained earnings 84
	��Dividends 84
	��Financial instruments 84
	��Remuneration of auditors 88
	��Contingent liabilities 88
	��Capital commitments 88
	��Related party transactions 89
	��Business combinations 90
	��Share-based payments 91
	��Parent entity information 93
	��Interests in subsidiaries, associates and joint arrangements 94
	��Deed of cross guarantee 95
	���� to net cash from operating activities 97
	��Events after the reporting period 97

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 1: MATERIAL ACCOUNTING POLICY INFORMATION

The principal accounting policies adopted in the preparation �� have been consistently applied to all the years presented, unless otherwise stated.

NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.

A. NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED BY THE GROUP

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

BASIS OF PREPARATION

�� incorporated and domiciled in Australia. The Company’s registered address is 108 Motivation Drive, Wangara, �� June 2024 comprises the Company and its subsidiaries (together referred to as the “Group” or the “consolidated entity”). The Group provides assessment, protection, remediation and refurbishment services to a broad range of assets, in particular steel and concrete infrastructure.

�� Australian dollars, which is Duratec Limited’s functional and presentation currency. All values are rounded to the nearest thousand, except when otherwise indicated, under the option available to the Company under ASIC �� this legislative instrument applies.

�� ended 30 June 2024 have been prepared in accordance with Australian Accounting Standards and interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001.

HISTORICAL COST CONVENTION

�� have been measured at fair value.

COMPLIANCE WITH IFRS

�� comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

B. REVENUE RECOGNITION

The Group is in the business of providing construction and maintenance services. Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that �� to be entitled in exchange for those goods or services. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods and services before transferring them to the customer.

I. CONSTRUCTION SERVICES

Construction contracts are assessed to identify the performance obligations contained in the contract. The total transaction price is allocated to each individual performance obligation. Typically, the Group’s construction contracts contain a single performance obligation.

Work is performed on assets that are controlled by the customer or on assets that have no alternative use to the Group, with the Group having right to payment for performance to date. As performance obligations are �� an input method based on costs incurred to date relative to forecasts to cost to complete.

Fundamental to this calculation is a reliable estimate of the transaction price (total contract revenue). In determining the transaction price, variable consideration including claims and certain contract variations are only included to �� in revenue will not occur in the future. Where a variation in scope has been agreed with the customer but the corresponding change in the transaction price has not been agreed the variation is accounted for as variable consideration. The estimate of variable consideration is determined using the expected value approach taking into account the facts and circumstances of each individual contract and the historical experience of the Group and is reassessed throughout the life of the contract.

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When it is probable that total contract costs will exceed total contract revenue, the contract is considered onerous and the present obligation under the contract is recognised immediately as a provision. Key assumptions regarding costs to complete contracts include estimation of labour, technical costs, impact of delays and productivity.

Customers are typically invoiced on a monthly basis and invoices are paid on normal commercial terms.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

Note 1: Material Accounting Policy Information > B. Revenue Recognition continued…

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II. SERVICES CONTRACTS

Contracts for performance of maintenance activities cover servicing of assets and involve various activities. These activities tend to be substantially the same with the same pattern of transfer to the customer. Where this is the case, which is the majority of the services contracts, these services are taken to be one performance obligation and the total transaction price is allocated to the performance ��

�� Group largely enhances assets which the customer controls. For these contracts, the transaction price is determined as an estimate of this variable consideration.

III. VARIABLE CONSIDERATION

If the consideration in the contract includes a variable amount, the Group estimates the amount of the consideration to which it is entitled in exchange for transferring the goods and services to the customer. The Group includes some or all of this variable consideration in the transaction price only to the extent it is highly probable �� recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.

Certain contracts are subject to claims which are enforceable under the contract. If the claim does not result in any additional goods or services, the transaction price is updated, and the claim accounted for as variable consideration.

IV. SIGNIFICANT FINANCING COMPONENT

Using the practical expedient in AASB 15, the Group does not adjust the promised amount of consideration for the �� at contract inception, that the period between the transfer or the promised good or service to the customer and when the customer pays for that good or service will be one year or less.

All revenue is stated net of the amount of goods and services tax (GST).

V. INTEREST

Interest Revenue is recognised on a proportional basis �� assets.

C. GOVERNMENT REBATES

Government grants relating to costs are deferred and �� to match them with the costs that they are intended to compensate.

D. INCOME TAX

The charge for current income tax expense is based on �� disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted at statement of ��

Deferred tax is accounted for using the liability method in �� bases of assets and liabilities and their carrying amounts �� be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is ��

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited direct to equity, in which case the deferred tax is adjusted directly against equity.

Deferred tax assets are recognised to the extent that it is �� carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer �� allow all or part of the deferred tax asset to be utilised.

�� be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation �� realised and comply with the conditions of deductibility imposed by law.

Duratec Limited and its wholly-owned Australian subsidiaries have formed an income-tax consolidated group under the tax consolidation regime. Duratec Limited and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has been applied the ‘separate taxpayer within group’ approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

Note 1: Material Accounting Policy Information continued…

E. OPERATING SEGMENTS

Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Maker (‘CODM’). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

F. CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, deposits �� highly liquid investments with original maturities of three months or less that are readily convertible to known �� risk of change in value.

G. TRADE AND OTHER RECEIVABLES

A receivable represents the Group’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies in “Financial Assets” on page 65.

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the �� credit losses (‘ECL’). The consolidated entity has applied �� losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.

H. CONTRACT ASSETS AND CONTRACT LIABILITIES

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is owing) from the customer. If a customer is invoiced before the Group transfers goods or services to the customer, a contract liability is recognised when the invoice is raised. Contract liabilities are recognised as revenue when the Group performs under the contract.

I. INVENTORIES

Inventories are measured at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for at �� value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

J. FINANCIAL ASSETS

�� subsequently measured at amortised cost, fair value through other comprehensive income (OCI), or fair value ��

�� at amortised cost or fair value through OCI, it needs to give �� interest (SPPI)’ on the principal amount outstanding. Financial assets are derecognised when the rights to �� and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a ��

I. SUBSEQUENT MEASUREMENT - FINANCIAL ASSETS AT AMORTISED COST

This category is the most relevant to the Group. The Group �� following conditions are met:

��
�� principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently �� and are subject to impairment. Gains and losses ��

�� trade receivables.

II. IMPAIRMENT OF FINANCIAL ASSETS

�� assets are also provided in the following notes:

For trade receivables and contract assets, the Group �� Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss �� the debtors and the economic environment.

�� contractual payments are 90 days past due. However, �� asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A ��

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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

Note 1: Material Accounting Policy Information continued…

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K. PROPERTY, PLANT AND EQUIPMENT

Plant & equipment are measured on the cost basis less, where applicable, any accumulated depreciation and impairment losses. Assets previously measured at valuation are now carried at deemed cost less, where applicable, any accumulated depreciation.

I. DEPRECIATION

The depreciable amount of all plant and equipment including capitalised lease assets, is depreciated over the asset’s useful life commencing from the time the asset is held ready for use.

The depreciation rates used for each class of depreciable assets are:

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�� Depreciation Rate
Capital Work in Progress 0%
Plant & Machinery 4 – 50%
Leasehold Improvements 10 – 50%
Land & Buildings 0 – 8%
Motor Vehicles 16 – 50%
�� 20 – 100%
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The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater that its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income.

II. IMPAIRMENT

The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.

The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In �� discounted to their present value using a pre-tax discount ��

For an asset that does not generate largely independent �� generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.

An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash generating unit is then written down to its recoverable amount. For plant and equipment, impairment losses are recognised in the statement of comprehensive income.

L. RIGHT-OF-USE ASSETS

�� of between 1 and 5 years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.

A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.

Right-of-use assets are depreciated on a straight- line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are ��

M. TRADE AND OTHER PAYABLES

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Company prior to the end of the �� becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

N. BORROWINGS – LEASE LIABILITIES

�� or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Group ��

Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between �� to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in ��

�� and loss in the period in which they are incurred.

III. DERECOGNITION AND DISPOSAL

An item of plant and equipment is derecognised upon �� expected from its use or disposal. Any gain or loss arising �� between the net disposal proceeds and the carrying �� and loss in the year the asset is derecognised.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

Note 1: Material Accounting Policy Information continued…

O. PROVISIONS - EMPLOYEE BENEFITS

Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which �� are measured at the best estimate of the amounts required to settle the obligation at the end of the reporting period.

��

Liabilities for wages and salaries, including non-monetary �� be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

��

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the ��

��

�� plans are expensed in the period in which they are incurred. The Company has no legal obligation to provide ��

P. GOODS AND SERVICES TAX (GST)

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the �� the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense.

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

The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Statement of Financial Position. Cash Flows are stated with the amount of GST included.

Q. COMPARATIVES

Where required by Accounting Standards, comparative ��

R. INVESTMENT IN ASSOCIATES AND JOINT ARRANGEMENTS

An associate is an entity, including an unincorporated �� and that is neither a subsidiary, nor a joint arrangement. �� is not control or joint control over those policies.

An investment in an associate includes goodwill on acquisition, which is accounted for in accordance with the �� However the entire carrying amount of the investment is �� comparing the carrying amount of the investment with its recoverable amount (higher of value in use and fair value) �� standard indicates the investment may be impaired.

�� investment in associates is accounted for using the equity method. Under the equity method, the investment in an associate is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group’s share of the associates’ net assets. The carrying value and the net book value of the investment in the associate are not necessarily indicative of the amounts that would be realised in a current market exchange. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately.

�� comprehensive income of those investees is presented as part of the Group’s other comprehensive income. Losses of an associate in excess of the Group’s interest in the associate are not recognised except to the extent that �� resulting from transactions between the Group and the �� to the extent of unrelated reporting entity’s interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

When necessary, accounting policies of associates are changed to ensure consistency with the policies adopted by the Group. The Group discontinues the use of the equity method from the date the investment ceases to be an associate and from that date then accounts �� investment retained in the former associate is measured at fair value at the date that it ceases to be an associate.

�� investment in an associate is accounted for at cost less any allowance for impairment in value. Impairment loss �� only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying value and the net book value of an investment in the associate are not necessarily indicative of the amounts that would be realised in a current market exchange.

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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

Note 1: Material Accounting Policy Information > R. Investments in Associates and Joint arrangements continued…

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A joint arrangement (that is either a joint operation or a joint venture, depending on the rights and obligations of the jointly controlling parties to the arrangement) is one in which the Group is a party to of which two or more parties have control. A joint arrangement exists when the parties have contractually agreed to share control of the arrangement whereby decisions about the �� the arrangement) require the unanimous consent of the parties sharing control. In a joint operation, the parties with joint control have rights to the assets, and obligations of the liabilities, relating to the arrangement. The Group recognises its share of the operation’s assets, liabilities and income and expenses that are combined line by line with �� and accounts for the assets, liabilities, revenues and expenses relating to its interest in the joint operation in �� for each particular asset, liability, revenue and expense. When the Group enters into a transaction with a joint operation, such as a sale or contribution of asset, the reporting entity recognises gains and losses resulting from such a transaction only to the extent of the other parties’ interests in the joint operation.

S. SHARE-BASED PAYMENTS

�� provided to employees. These transactions are awards of shares, or options, that are provided to employees in exchange for the rendering of services.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using a valuation model that takes into account the exercise price, the term of the option, the impact of dilution, 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 option, together with non-vesting conditions that do not determine whether the Group receives the service that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over �� loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. �� is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, �� not been made. An additional expense is recognised, �� that increases the total fair value of the share-based �� If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or ��

any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled ��

T. PARENT ENTITY FINANCIAL INFORMATION

�� Limited, disclosed in “Note 32: Parent entity information” on page 93 has been prepared on the same basis as �� below:

Investments in subsidiaries and associates are accounted �� Dividends received from associates are recognised in the �� from carrying value of these investments.

U. PRINCIPLES OF CONSOLIDATION

�� as at 30 June 2024 – refer to “Note 33” on page 94. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the �� an investee if, and only if, the Group has:

Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee
�� returns

Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

The contractual arrangement(s) with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated �� until the date the Group ceases to control the subsidiary.

�� to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

Note 1: Material Accounting Policy Information > U. Principles of Consolidation continued…

�� statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-Group assets and liabilities, equity, income, expenses �� of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, noncontrolling interest and other components of equity, while ��

Any investment retained is recognised at fair value.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Where controlled entities have entered or left the consolidated entity during the year, their operating �� was obtained or until the date control ceased.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as �� consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of �� of the consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling ��

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary �� recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or ��

V. CURRENT AND NON-CURRENT CLASSIFICATION

The Group presents assets and liabilities in the statement ��

Expected to be realised or intended to be sold or consumed in the normal operating cycle;
Held primarily for the purpose of trading;
Expected to be realised within twelve months after the reporting period; or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

�� current when:

It is expected to be settled in the normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

��

�� current assets and liabilities.

W. FAIR VALUE MEASUREMENT

�� measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. �� based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which �� maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed �� on market knowledge and reputation. Where there is a �� one period to another, an analysis is undertaken, which �� latest valuation and a comparison, where applicable, with external sources of data.

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X. ISSUED CAPITAL

�� costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

Note 1: Material Accounting Policy Information continued…

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Y. DIVIDENDS

�� year and are no longer at the discretion of the Company.

Z. BUSINESS COMBINATIONS

The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired.

The consideration transferred is the sum of the acquisitiondate fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interests in the acquiree is measured at either fair value or at the proportionate ��

On the acquisition of a business, the consolidated entity �� with the contractual terms, economic conditions, the consolidated entity’s operating of accounting policies and other pertinent conditions in existence at the acquisition date.

Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the acquiree at the acquisition date fair value ��

Contingent consideration to be transferred by the acquirer is recognised at the acquisition date fair value. Subsequent changes in the fair value of the contingent consideration �� remeasured and its subsequent settlement is accounted for within equity.

�� of assets acquired, liabilities assumed and any noncontrolling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the �� and measurement of the net assets acquired, the noncontrolling interest in the acquiree, if any, the consideration transferred and the acquirer’s previously held equity interest in the acquirer.

Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.

AA. INTANGIBLE ASSETS

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired �� intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation �� or loss arising from the derecognition of intangible assets are �� and the carrying amount of the intangible asset. The method �� annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.

Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. �� and are not subsequently reversed.

Customer contracts acquired in a business combination are amortised on a straight-line basis over the period of their ��

Goodwill and other intangible assets that have an �� are tested annually for impairment, or more frequently if events or changes in circumstances indicate that �� reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-use �� to the asset or cash-generating unit to which the asset �� are grouped together to form a cash-generating unit.

AB. EARNINGS PER SHARE

��

�� attributable to the owners of Duratec Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding ��

��

�� determination of basic earnings per share to take into �� shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 2: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

�� actual results. Management also needs to exercise judgement in applying the group’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information about each of these estimates and judgements is included in other notes together with information about the basis of ��

A. KEY ESTIMATES

I. REVENUE FROM CONTRACTS WITH CUSTOMERS

�� revenue is recognised in the consolidated income statement by reference to the progress towards complete satisfaction of each performance obligation.

For construction contracts, revenue is recognised using an input method based on project to date cost over total expected contract cost of the contract.

II. ALLOWANCE FOR EXPECTED CREDIT LOSSES

The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent sales experience, historical collection rates and forward-looking information that is available. The allowance for expected credit losses, as disclosed in “Note 10” on page 76 is calculated based on the information available at the time of preparation. The actual credit losses in future years may be higher or lower.

III. IMPAIRMENT TESTING

The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment, �� the accounting policy stated in Note 1. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and �� Note 17 for further information.

IV. RECOVERY OF DEFERRED TAX ASSETS

Deferred tax assets are recognised for deductible �� considers it is probable that future taxable amounts will be ��

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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

NOTE 3: SEGMENT REPORTING

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All revenue is currently derived in Australia and there is no single major customer for the year.

The Group is organised into four operating segments �� Mining & Industrial, Building & Facade and Energy. Other segments relate to Ports, Transport, Marine and Water. These operating segments are based on the internal reports that are reviewed and used by the Managing �� Decision Maker, ‘CODM’) in assessing performance and in determining the allocation of resources.

The principal services of each of the operating segments are as follows:

Defence – dedicated to the delivery of capital facilities, infrastructure and estate works program projects
Mining & Industrial – provision of tailored preventative maintenance programmes

The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal reporting to the CODM are �� Balance sheet data is not currently tracked or provided to the CODM at operating segment level therefore the breakdown is not disclosed.

�� – completion of facade condition assessments and facade restorations
Energy - non-defence capital facilities, remediation and refurbishment of critical assets

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Mining & Building & Other
�� Energy Total
Industrial Facade Segments
$’000 $’000 $’000 $’000 $’000 $’000
Sales to external customers 220,159 155,641 111,329 46,641 22,022 555,792
Total revenue 220,159 155,641 111,329 46,641 22,022 555,792
�� 23,601 33,629 20,882 15,343 2,720 96,175
Unallocated amounts
(50,016)
(including corporate overheads)
EBITDA 46,159
Depreciation and amortisation (14,678)
Finance costs (2,359)
�� 29,122
Income tax expense (7,692)
�� 21,430
Consolidated - June 2023 Mining & Building & Other
�� Energy Total
Industrial Facade Segments
$’000 $’000 $’000 $’000 $’000 $’000
Sales to external customers 228,950 86,746 78,418 66,262 31,420 491,796
Total revenue 228,950 86,746 78,418 66,262 31,420 491,796
�� 31,211 19,775 12,042 16,729 2,316 82,073
Unallocated amounts
(including corporate overheads) (43,964)
EBITDA 38,109
Depreciation and amortisation (9,569)
Finance costs (958)
�� 27,582
Income tax expense (8,381)
�� 19,201
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The Group no longer considers WPF as a separate operating segment. As a result, the results the WPF segment reported in the 30 June 2023 Annual Report have been reallocated to the Mining & Industrial and Energy operating segments.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 4: REVENUE

A. DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS

The Group derives revenue from the transfer of goods and services over time in the following major geographical regions.

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2024 2023
$’000 $’000
Revenues from contracts with customers 555,792 491,796
Disaggregation of revenue from contracts with customers by location
Western Australia 238,604 173,193
New South Wales 91,780 108,999
Victoria 27,344 22,151
Northern Territory 102,334 89,221
South Australia 22,888 18,922
Queensland 31,045 35,874
Tasmania 4,470 4,344
Australian Capital Territory 37,327 39,092
555,792 491,796
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B. OTHER INCOME

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2024 2023
$’000 $’000
Dividends received from associate 997 365
Rental income 253 348
Interest received 1,497 741
Sundry income 715 172
Gain on bargain purchase (Note 30b) 198 -
Gain on disposal of plant and equipment 309 233
3,969 1,859
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C. ASSETS & LIABILITIES RELATED TO CONTRACTS WITH CUSTOMERS

The Group has recognised the following assets and liabilities related to contracts with customers

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2024 2023
$’000 $’000
Total current contract assets 18,802 25,185
Total current contract liabilities 39,332 35,727
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As of 30 June 2024, approximately $328m of revenue is expected to be recognised from remaining performance obligations (2023: $437m). We expect to recognise 93% of these remaining performance obligations as revenue over the next 12 months, with the balance recognised thereafter (2023: 88%).

D. SIGNIFICANT CHANGES IN CONTRACT ASSETS & LIABILITIES

Changes in contract assets and liabilities are due to the stage of the projects in progress and the timing of invoicing.

Contract assets are transferred to trade receivables when the Group’s rights to consideration for work performed have become unconditional. This usually occurs when the Group issues an invoice in accordance with the contractual terms to the customer.

If the net amount of the Group’s rights to consideration for work performed after deduction of progress payments ��

Of the contract liabilities balance of $35,727,000 at 30 June 2023, substantially all of this revenue has been recognised in the current year, while substantially all of the contract assets balance of $25,185,000 as at 30 June 2023 was invoiced in the current year.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

NOTE 5: EXPENSES

��

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2024 2023
$’000 $’000
��
Cost of sales 459,617 409,723
��
External – Interest on loans and borrowings 1,841 799
Interest on lease liabilities 518 159
�� 2,359 958
��
Salaries & wages 39,642 33,567
Share based payments 1,467 1,334
Other 1,566 916
�� 42,675 35,817
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The above Cost of sales and Employee expenses include superannuation contribution expenses of $12,779,000 (2023: $9,151,000.)

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��
Depreciation for property, plant and equipment 9,459 6,348
Depreciation for right-of-use assets 4,097 2,488
Amortisation 1,122 733
Total depreciation and amortisation expense 14,678 9,569
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NOTE 6: EQUITY ACCOUNTED INVESTMENT RESULTS

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2024 2023
$’000 $’000
Equity accounted investment results – associate – DDR Australia Pty Ltd 1,196 636
1,196 636
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On 24 December 2023, DDR Australia Pty Ltd entered into a share purchase agreement to acquire 100% share capital of RC Construction WA Pty Ltd. The purchase was completed on 31 January 2024 with control transferring at that time.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 7: INCOME TAX EXPENSE

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2024 2023
$’000 $’000
��
Current tax expense 9,481 8,392
Adjustments in respect of previous years (24) 2
�� (427) (157)
��
�� (1,338) 144
Aggregate income tax expense 7,692 8,381
��
�� 29,122 27,582
Tax at the Australian tax rate of 30% (2023: 30%) 8,737 8,275
��
-
Adjustments recognised for prior periods (24)
Other non-allowable items (363) 407
�� (359) (192)
Franking credits for dividends (299) (109)
Income tax expense 7,692 8,381
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NOTE 8: EARNINGS PER SHARE

A. BASIC AND DILUTED EARNINGS PER SHARE

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2024 2023
cents cents
From continuing operations attributable to the ordinary equity holders
8.66 7.91
of the company
Total basic earnings per share attributable to the ordinary equity holders
8.66 7.91
of the company
Total diluted earnings per share attributable to the ordinary equity
8.29 7.55
holders of the company
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B. RECONCILIATIONS OF EARNINGS USED IN CALCULATING EARNINGS PER SHARE

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2024 2023
$’000 $’000
��
21,430 19,201
the company used in calculating basic earnings per share
��
21,430 19,201
the company used in calculating diluted earnings per share
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C. WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR

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2024 2023
Number Number
Weighted average number of ordinary shares used as the denominator in
247,351,061 242,723,467
calculating basic earnings per share
Weighted average number of ordinary shares used as the denominator in 258,481,061 254,163,467
calculating diluted earnings per share
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

NOTE 9: CASH AND CASH EQUIVALENTS

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2024 2023
$’000 $’000
Cash at bank and on hand 60,218 61,187
Short-term deposits 5,000 5,000
Total cash and cash equivalents 65,218 66,187
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NOTE 10: TRADE AND OTHER RECEIVABLES

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2024 2023
$’000 $’000
Current
Trade receivables 75,042 59,922
Less: allowance for expected credit losses (289) (289)
74,753 59,633
Other receivables (737) 188
Total current trade and other receivables 74,016 59,821
��
Trade receivables 234 6,298
Total non-current trade and other receivables 234 6,298
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��

�� year a loss allowance is recognised at an amount equal to 12 month expected credit losses because there has not been a �� impaired. A loss allowance balance of $289,000 (2023: $289,000) is recognised in respect of the expected credit losses for the year ended 30 June 2024. Movements in the allowance for expected credit losses are as follows:

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2024 2023
$’000 $’000
Opening balance 289 17
Additional provisions recognised 13 289
�� (13) -
Unused amounts reversed - (17)
Closing balance 289 289
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NOTE 11: INVENTORIES

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2024 2023
$’000 $’000
Current
Consumable stock 1,017 346
Total inventories 1,017 346
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

Note 12: OTHER ASSETS

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2024 2023
$’000 $’000
Current
Prepayments 2,253 1,820
2,253 1,820
��
Security deposits 320 249
320 249
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NOTE 13: CURRENT AND DEFERRED TAXES

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2024 2023
$’000 $’000
Current
Provision for income tax 231 1,773
Total current payable 231 1,773
��
Deferred tax assets 4,769 4,573
Deferred tax liabilities (3,257) (4,311)
Net 1,512 262
��
��
��
��
Provisions and accruals 4,300 3,837
Right-of-use assets 103 82
�� 214 467
Provision for expected credit loss 87 87
Work in progress 36 71
Borrowing costs 29 29
�� 4,769 4,573
Movements:
Opening balance 4,573 3,428
Acquisition of subsidiary - 164
�� (23) -
�� 219 981
Closing balance 4,769 4,573
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

Note 13: Current & Deferred Taxes continued…

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2024 2023
$’000 $’000
��
��
��
��
Consumable stock 305 104
Plant & equipment 2,952 4,207
�� 3,257 4,311
Movements:
Opening balance 4,311 3,186
�� 65 -
�� (1,119) 1,125
Closing balance 3,257 4,311
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NOTE 14: PROPERTY, PLANT AND EQUIPMENT

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2024 2023
$’000 $’000
Land and buildings
At cost 2,914 2,914
Accumulated depreciation (57) (29)
2,857 2,885
Plant and machinery
At cost 26,456 18,563
Accumulated depreciation (11,543) (8,297)
14,913 10,266
Motor vehicles
At cost 21,464 17,141
Accumulated depreciation (9,872) (7,260)
11,592 9,881
��
At cost 6,393 4,764
Accumulated depreciation (4,004) (2,845)
2,389 1,919
Leasehold improvements
At cost 2,971 2,570
Accumulated depreciation (1,924) (1,596)
1,047 974
��
At cost 648 37
Total plant and equipment 33,446 25,962
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

Note 14: Property, Plant and Equipment continued…

��

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Consolidated
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance at 1 July 2022 617 7,719 7,331 1,636 1,338 182 18,823
�� 2,290 4,366 5,259 1,178 53 (145) 13,001
Acquired in subsidiary - 605 30 22 - - 657
Disposals - (78) (91) (2) - - (171)
Depreciation expense (22) (2,346) (2,648) (915) (417) - (6,348)
Balance at 30 June 2023 2,885 10,266 9,881 1,919 974 37 25,962
Additions - 8,249 5,366 1,531 498 611 16,255
Acquired through business
combinations (Note 30) - 851 172 123 - - 1,146
Disposals - (309) (133) (2) (14) - (458)
Depreciation expense (28) (4,144) (3,694) (1,182) (411) - (9,459)
Balance at 30 June 2024 2,857 14,913 11,592 2,389 1,047 648 33,446
Land and Buildings Plant and Machinery Motor Vehicles �� Equipment Leasehold Improvements Capital WIP Total
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NOTE 15: LEASES

��

The balance sheet shows the following amounts relating to leases:

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2024 2023
$’000 $’000
Land and buildings
Right-of-use 11,485 6,630
Accumulated depreciation (5,762) (3,886)
5,723 2,744
Property lease liabilities
Current 2,509 2,071
Non-current 3,558 945
Total non-current property lease liabilities 6,067 3,016
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79
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Refer to “Note 25: Financial instruments” on page 84��

��

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Accumulated Carrying
Cost
Depreciation Value
$’000 $’000 $’000
Balance at 1 July 2022 5,224 (2,699) 2,525
-
Additions during the year 2,162 2,162
Acquired in acquisition 395 - 395
Leases expired during the year (1,151) 1,301 150
-
Depreciation expense (2,488) (2,488)
Balance at 30 June 2023 6,630 (3,886) 2,744
-
Additions during the year 6,431 6,431
Leases expired during the year (1,576) 2,221 645
-
Depreciation expense (4,097) (4,097)
Balance at 30 June 2024 11,485 (5,762) 5,723
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

Note 15: Leases continued…

��

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2024 2023
$’000 $’000
Depreciation charge of right-of-use assets
Buildings 4,097 2,488
4,097 2,488
�� 518 159
Expense relating to short-term leases 188 236
Expense relating to leases of low value assets not shown as short-term leases 57 55
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��

NOTE 16: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

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2024 2023
$’000 $’000
��
DDR Australia Pty Ltd 5,732 4,536
5,732 4,536
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80
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Refer to “Note 32: Parent entity information” on page 93 for further information on interests in associates and joint arrangements.

NOTE 17: INTANGIBLE ASSETS

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2024 2023
$’000 $’000
Customer relationships - at cost 11,271 10,992
Less: Accumulated amortisation (1,855) (733)
Carrying amount at year end 9,416 10,259
Goodwill 4,452 4,452
- -
Less: impairment
Carrying amount at year end 4,452 4,452
Total 13,868 14,711
Customer
Goodwill Total
Relationships
$’000 $’000 $’000
- - -
Carrying amount at 1 July 2022
Recognised on acquisition of a subsidiary 10,992 4,452 15,444
Amortisation (733) - (733)
Carrying amount at 30 June 2023 10,259 4,452 14,711
Recognised on acquisition of a business (Note 30) 279 - 279
Amortisation (1,122) - (1,122)
Carrying amount at 30 June 2024 9,416 4,452 13,868
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

Note 17: Intangible Assets continued…

�� estimate of the time value of money and the group’s weighted average cost of capital adjusted for WPF, the risk free rate and the volatility of the share price relative to market movements.

The entire goodwill balance noted above relates to the acquisition of WPF Duratec Pty Ltd (WPF) in 2023. The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired in accordance with accounting policy AA. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

Management believes at this stage the conservative projected revenue growth rate used for impairment testing is prudent and have no reason to revise this estimate based on current performance.

The recoverable amount of goodwill and other intangible assets are determined based on value in use of WPF as a cash generating unit (CGU). The value in use �� period, together with a terminal value. At 30 June 2024 ��

Based on the above, the recoverable amount of WPF CGU exceeded the carrying amount by $28.2m.

Management have made judgements and estimates in respect of impairment testing of goodwill. Should these judgements and estimates not occur the resulting goodwill carrying amount may decrease. The sensitivities are as follows:

Key assumptions are those to which the recoverable amount of an asset of cash-generating unit is most sensitive.

WPF CGU Revenue would need to decrease by more than 26% in FY2026 before goodwill would need to be impaired, with all other assumptions remaining constant.

The following key assumptions were used in the ��

11.95% pre-tax discount rate;
The discount rate would be required to increase from 11.9% to 24.9% before goodwill would need to be impaired, with all other assumptions remaining constant.
3.60% per annum projected revenue growth rate which is a conservative growth rate used for the purposes of the impairment testing

Management believe that any reasonable possible change in key assumptions on which the recoverable amounts of the WPF CGU is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount.

3.60% per annum increase in operating costs and overheads

�� extrapolated using a steady 1.1% per annum growth rate.

NOTE 18: TRADE AND OTHER PAYABLES

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2024 2023
$’000 $’000
Current
Trade payables 43,489 44,447
Sundry payables and accrued expenses 22,987 27,233
Other payables 3,783 6,118
Employee entitlements 5,216 4,278
Total current trade and other payables 75,475 82,076
Contingent consideration payable (refer to Note 30) - 9,000
-
Total contingent consideration payable 9,000
��
Trade payables 3,361 3,360
Total non-current trade and other payables 3,361 3,360
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81
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

NOTE 19: BORROWINGS

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2024 2023
$’000 $’000
Current
�� 11,844 4,773
Total current borrowings 11,844 4,773
��
�� 13,651 10,535
Total non-current borrowings 13,651 10,535
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Refer to “Note 25: Financial instruments” on page 84 ��

NOTE 20: PROVISIONS

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82
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2024 2023
$’000 $’000
Current
��
Carrying amount at the start of the year 10,484 6,824
Additional provisions recognised 6,555 8,183
Amounts used (5,784) (4,523)
�� 11,255 10,484
��
��
Carrying amount at the start of the year 1,314 732
Additional provisions recognised 490 582
Amounts used - -
�� 1,804 1,314
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�� required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount is presented as current, since the consolidated entity does not have an unconditional right to defer settlement. However, based on past experience, the consolidated entity does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 21: ISSUED CAPITAL

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2024 2023 2024 2023
Shares Shares $’000 $’000
Ordinary shares – fully paid 248,372,718 244,020,537 29,858 26,899
��
Cumulative
Details Date Shares Issue price ($) ��
Shares
Balance 1 Jul 2022 240,573,404 25,167
Dividend Reinvestment Plan 5 Oct 2022 761,138 241,334,542 0.38 291
Vested IPO Performance Rights 4 Nov 2022 2,367,500 243,702,042 0.50 1,183
Dividend Reinvestment Plan 9 May 2023 318,495 244,020,537 0.81 258
Balance 30 Jun 2023 244,020,537 26,899
Performance Rights 25 Aug 2023 3,320,000 247,340,537 0.53 1,770
Dividend Reinvestment Plan 9 Oct 2023 619,447 247,959,984 1.19 738
Dividend Reinvestment Plan 7 May 2024 412,734 248,372,718 1.09 451
Balance 30 Jun 2024 248,372,718 29,858
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A. ORDINARY SHARES

Ordinary shareholders participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

NOTE 22: RESERVES

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2024 2023
$’000 $’000
��
�� (231) (231)
�� (231) (231)
Share Based Payment Reserve
�� 2,415 2,196
Share-based payments 1,579 1,402
Transfer to issued capital (1,770) (1,183)
�� 2,224 2,415
Total Reserves 1,993 2,184
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83
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The acquisition reserve is used to recognise the acquisition of non-controlling interests.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

NOTE 23: RETAINED EARNINGS

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2024 2023
$’000 $’000
�� 16,980 3,825
�� 21,430 19,201
Dividends paid (11,140) (6,046)
�� 27,270 16,980
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NOTE 24: DIVIDENDS

��

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2024 2023
$’000 $’000
Other dividends (cash) 9,950 5,497
Dividend Reinvestment Plan 1,190 549
�� 11,140 6,046
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�� 2.5 cents per fully paid share, franked to 100%, to be paid on 9 October 2024.

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84
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NOTE 25: FINANCIAL INSTRUMENTS

�� any provisions for impairment of those assets, as disclosed �� hold any collateral.

The Group’s overall risk management program focuses on identifying risks and seeking to minimise any potential �� Group. The consolidated entity is subject to certain �� is given priority in all capital risk management decisions. �� Directors is responsible for risk management and the �� analysis of risk exposure of the Group, and appropriate procedures, controls and risk limits.

The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix �� provisions are considered representative across all customers of the consolidated entity based on recent sales experience, historical collection rates and forwardlooking information that is available.

A. MARKET RISK

�� reasonable expectation of recovery.

Market risk is the risk that changes in market prices will ��

Cash and cash equivalents (as disclosed in Note 9) are also subject to the impairment requirements of the standard �� collateral held as security at 30 June 2024.

B. INTEREST RATE RISK

The consolidated entity’s main interest rate risk arises from long-term borrowings.

C. CREDIT RISK

Credit risk refers to the risk that a counterparty will default �� the Group. To mitigate the risk, the Group has a strict credit policy, including setting appropriate credit limits. The maximum exposure to credit risk at the reporting date to

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements Note 25: Financial Instruments continued…

D. LIQUIDITY RISK

�� cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.

The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast ��

��

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Weighted
Carrying Contractual 1 year or Over 5
average ��
amount �� less years
interest
$’000 $’000 $’000 $’000 $’000 $’000
2024
��
Trade and other payables 78,836 78,836 75,475 3,361 - -
Borrowings 6.27% 25,495 27,958 12,940 6,344 8,674 -
Property lease liabilities 10.10% 6,067 6,634 2,960 1,525 1,620 529
110,398 113,428 91,375 11,230 10,294 529
2023
��
Trade and other payables 85,436 85,436 82,076 2,009 702 649
Contingent consideration payable 9,000 9,000 9,000 - - -
Borrowings 5.08% 15,308 16,852 5,438 4,694 6,720 -
Property lease liabilities 6.82% 3,016 3,243 2,221 641 381 -
112,760 114,531 98,735 7,344 7,803 649
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85
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E. CAPITAL MANAGEMENT

The consolidated entity’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders �� optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the �� is calculated as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s capital risk management policy remains unchanged from 30 June 2023.

�� services under the Bankwest brand, the Group entered into a new facilities agreement with Commonwealth Bank

of Australia (CBA) on 2 November 2023. As part of this agreement, the Group is subject to terms and conditions �� debt (leverage ratio) and current assets to current liabilities (current ratio). All covenants were complied with during the reporting period.

In relation to the Group’s main funding agreement, Duratec Limited, Duratec Australia (ES) Pty Ltd, MEnD Consulting Pty Ltd and WPF Duratec Pty Ltd each provide a guarantee and indemnity and a General Security Deed in favour of CBA.

�� security interests are granted in favour of NAB and CBA in respect of goods acquired using each respective Asset Finance Facility.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

Note 25: Financial Instruments continued…

The Group issues surety bonds during the course of business via its facilities with AssetInsure, Vero and Berkshire Hathaway Specialty Insurance Company.

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86
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Expiry date 2024 2023
$’000 $’000
��
CBA
Multi option facility 50,000 35,000
Cash advance sub-facility 3 November 2024 20,000 -
-
Overdraft sub-facility 20,000
Procurement management facilities 40 -
��
Corporate credit card facility 400 400
Market rate loan facility 3 November 2026 5,600 -
�� 24,000 12,000
��
�� 31 January 2025 9,000 7,600
AssetInsure
Bond facility 1 March 2025 30,000 20,000
Vero
Bond facility 15 October 2024 20,000 10,000
��
Bond facility 2 November 2028 15,000 -
174,040 105,000
��
CBA
Multi option facility 42,387 30,148
-
Cash advance sub-facility 5,000
- -
Overdraft sub-facility
- -
Procurement management facilities
Corporate credit card facility 146 127
- -
Market rate loan facility
�� 13,062 10,479
��
�� 7,016 4,829
AssetInsure
Bond facility 19,886 7,659
Vero
Bond facility 10,027 6,927
��
-
Bond facility 14,611
112,134 60,169
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

Note 25: Financial Instruments continued…

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Expiry date 2024 2023
$’000 $’000
��
CBA
Multi option facility 7,613 4,852
-
Cash advance sub-facility 15,000
-
Overdraft sub-facility 20,000
Procurement management facilities 40 -
Corporate credit card facility 254 273
-
Market rate loan facility 5,600
�� 10,938 1,521
��
�� 1,984 2,771
AssetInsure
Bond facility 10,114 12,341
Vero
Bond facility 9,973 3,073
��
Bond facility 389 -
61,906 44,831
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F. CURRENCY RISK

The Group’s receivables are all denominated in Australian dollars and accordingly no currency risk exists.

G. FAIR VALUE OF FINANCIAL INSTRUMENTS

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87
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��

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

NOTE 26: REMUNERATION OF AUDITORS

�� auditor of the Group:

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2024 2023
$’000 $’000
Audit services – RSM Australia Partners
�� 238 243
��
Tax services 90 34
Other consulting services 45 -
373 277
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NOTE 27: CONTINGENT LIABILITIES

The Company uses both Bank Guarantee and Insurance Bond facilities to guarantee contract completion obligations and maintain period liabilities in respect of contracts undertaken. These guarantees and insurance bonds can be activated only in the event of a failure by the Company to meet its obligations under the contract.

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2024 2023
$’000 $’000
�� 86,911 44,733
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88
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NOTE 28: CAPITAL COMMITMENTS

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2024 2023
$’000 $’000
Committed at the reporting date but not recognised as liabilities, payable:
Plant and equipment 1,010 1,179
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 29: RELATED PARTY TRANSACTIONS

The Group’s main related parties are as follows:

Parent Entity

Duratec Limited is the parent entity.

��

All directors (whether executive or otherwise) of the entities in the Group are considered KMP.

��
��
�� share ownership, statute or agreement. For further details of interests held in associates and joint ventures, refer to “Note 33” on page 94.
Entities, or Any Member of the Group that it is Part of, Provides Key Management Personnel Services An entity with a director, who is also considered as Key Management Personnel of the Group.
��
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

The following transactions occurred with related parties during the year:

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$’000 $’000 $’000 $’000 $’000 $’000 $’000
Associates
2024 6,367 2,034 475 89 - - -
DDR Australia Pty Ltd
2023 6,581 1,792 366 196 365 - -
2024 - 268 - - - - -
Jimann Pty Ltd
2023 - 263 - - - - -
Entity providing KMP services
2024 31 22 - - - - -
Fortec Australia Pty Ltd
2023 92 64 68 13 - - -
2024 - 137 - - - - -
Bold Drainage Pty Ltd
2023 - 126 - - - - -
KB Corporate Advisors 2024 - 95 - - - - -
Pty Ltd 2023 - - - - - - -
Total 2024 6,398 2,556 475 89 - - -
Total 2023 6,673 2,245 434 209 365 - -
Sales to related parties �� related parties Related party balances in Trade receivables Related party balances in Trade Payables Dividends received Loan balances payable to related parties Loan balances receivable �� parties
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89
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��

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2024 2023
$’000 $’000
�� 2,420 3,500
�� 180 159
�� 51 56
Share-based payments 104 155
Total compensation paid to Key Management Personnel 2,755 3,870
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

NOTE 30: BUSINESS COMBINATIONS

A. ACQUISITION OF WILSON’S PIPE FABRICATION PTY LTD

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90
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Refer to the 2023 Financial Statements for details of the acquisition of Wilson’s Pipe Fabrication Pty Ltd. Except for changes noted below, the disclosures are consistent with Note 30 of the 2023 Financial Statements.

On 7 October 2022, Duratec entered an agreement to acquire 100% Wilson’s Pipe Fabrication Pty Ltd, one of �� engineering services to the oil and gas industry. The acquisition was completed on 20 October 2022.

The purchase price comprised initial consideration of $9.0m and the maximum earn out of $9.0m which was subject to EBITDA hurdles being met for the 12 months to 30 June 2023. The Company also paid an additional amount in relation to working capital in excess of the estimated working capital in line with the Share Purchase Agreement. The �� resulting an reduction of $0.5m from the initial estimate �� These adjustments were made within the initial 12-month measurement period.

On 28 November 2023, Wilson’s Pipe Fabrication Pty Ltd changed its name to WPF Duratec Pty Ltd.

The following table summarises the acquisition-date fair value of consideration

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20 Oct 2022
$’000
Initial consideration 9,000
Working capital 1,009
Contingent consideration 9,000
19,009
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The following summarises the recognised fair value amounts of assets acquired and liabilities assumed as at 20 October 2022

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20 Oct 2022
$’000
Cash 483
Trade and other receivables 3,888
Work in progress 925
Other current assets 281
Property, plant and equipment 657
Right-of-use assets 395
Other non-current assets 63
Deferred tax assets 137
Customer relationships 10,992
Trade and other payables (1,772)
Loans and borrowings (274)
Property lease liabilities (404)
Current tax liability (334)
Provisions (480)
14,557
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Goodwill arising from the acquisition has been recognised as follows:

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20 Oct 2022
$’000
Total consideration transferred 19,009
�� (14,557)
liabilities
Goodwill 4,452
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The goodwill is attributable mainly to the skills and talent of WPF Duratec Pty Ltd employees. The goodwill is not deductible for tax purposes.

��

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30 June 2024 30 June 2023
$’000 $’000
Initial consideration - 9,000
Earn out 9,000 -
-
Working capital (based on initial estimate) 1,471
-
Cash acquired as part of acquisition (483)
-
Working capital settlement adjustment (462)
�� 8,538 9,988
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

Note 30: Business Combinations continued…

B. ACQUISITION OF THE BUSINESS OF A&B WELDING PTY LTD

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Fair Value
29 Jan 2024
$’000
Inventories 319
Property, plant and equipment 1,146
Customer relationships 279
Employee liabilities (119)
Net assets acquired 1,625
Gain on bargain purchase (198)
Acquisition-date fair value of the total consideration transferred 1,427
Representing:
Cash paid to vendor 1,427
�� 28
��
Acquisition-date fair value of the total consideration transferred 1,427
-
Less: cash and cash equivalents
Net cash used 1,427
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On 15 December 2023, WPF Duratec Pty Ltd (a wholly owned subsidiary of Duratec Limited) entered a Business Purchase Agreement to acquire the operational assets and business of A&B Welding Pty Ltd for a total consideration transferred of $1,427,000. A&B Welding Pty Ltd provides fabrication & welding, labour hire, maintenance and other specialised services. The acquisition was completed on 29 January 2024. The transaction has been accounted for as a business combination on that date, as it resulted in the transfer of control over the business operations including key customer contracts, rather than the legal entity itself.

�� the acquisition of the business of �� 30 June 2024.

NOTE 31: SHARE-BASED PAYMENTS

As at 30 June 2024, the Company had the following share-based payment arrangements:

A. HURDLED PERFORMANCE RIGHTS

�� Board of Directors:

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91
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��
��
��
��
��
��

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�� Vesting
Lapsed Vested Balance Vesting Hurdles
Rights granted Date
1,855,000 31 Aug 2023 395,000 1,460,000 -¹
-
1,997,500 6 Sep 2024 412,500 1,585,000¹
2,455,000 5 Sep 2025 400,000 - 2,055,000¹ 1 Continued employment to
vesting date & meeting an
-
170,000 31 Aug 2025 20,000 150,000¹
earnings per share (EPS) target
145,000 31 Aug 2025 - - 145,000¹
-
1,655,000 31 Aug 2026 25,000 1,630,000¹
1,855,000 31 Aug 2023 395,000 1,460,000 -²
-
1,997,500 6 Sep 2024 412,500 1,585,000²
2,455,000 5 Sep 2025 400,000 - 2,055,000² 2 Continued employment to
vesting date & meeting a total
-
170,000 31 Aug 2025 20,000 150,000²
shareholder return (TSR) target
- -
145,000 31 Aug 2025 145,000²
-
1,655,000 31 Aug 2026 25,000 1,630,000²
16,555,000 2,505,000 2,920,000 11,130,000
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

B. NON-HURDLED PERFORMANCE RIGHTS

�� determined by the Board of Directors

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�� Vesting
Lapsed Vested Balance Vesting Hurdles
Rights granted Date
450,000 31 Aug 2023 50,000 400,000 - Continued employment to
450,000 50,000 400,000 - 31 August 2023
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The cost of equity-settled transactions is measured at fair value on their respective grant dates. Where market vesting conditions apply, fair value has been determined using a Monte Carlo simulation model. The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative �� the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

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C. VALUATION MODEL INPUTS

D. EXPENSES ARISING FROM SHAREBASED PAYMENT TRANSACTIONS

For the performance rights issued during the current �� determine the fair value at the grant date, are as follows:

Total expenses arising from share-based payment transactions recognised during the period as part of ��

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��
Grant date 1 Dec 2023
Expiry Date 30 Sep 2028 2024 2023
Number of Performance Rights 3,310,000 $’000 $’000
Deferred shares issued under
Share Price at Valuation Date $1.30
the short-term incentive 1,391 1,302
Expected Volatility 47.90% scheme - Duratec Limited
Dividend yield 3.02% Deferred shares issued under
Risk Free Interest Rate 4.07% the short-term incentive 76 32
scheme - WPF Duratec Pty Ltd
Fair Value at Valuation Date:
1,467 1,334
Subject to Total Shareholder Return
$0.66 Deferred shares issued under
(TSR) performance condition
the short-term incentive 112 68
Subject to Earnings Per Share (EPS) $1.30 scheme - DDR Australia Pty Ltd
performance condition
1,579 1,402
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 32: PARENT ENTITY INFORMATION

Set out below is the supplementary information about the parent entity.

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2024 2023
$’000 $’000
��
�� 20,458 16,756
Total comprehensive income� 20,458 6,950
��
Assets
Current assets 149,552 144,267
Non-current assets 64,076 62,021
Total assets 213,628 206,288
Liabilities
Current liabilities 135,313 143,825
Non-current liabilities 23,161 20,204
Total liabilities 158,474 164,029
��
Issued capital 29,858 26,899
Reserves 2,225 2,415
Retained earnings 23,071 12,945
Total equity 55,154 42,259
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1��

��

The accounting policies of the parent entity are consistent with those of the Group, as disclosed in “Note 1” on page 63, except for the following:

Other than disclosed in “Note 27” on page 88, the parent entity had no contingent liabilities as at 30 June 2024 and 30 June 2023.

Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

��

Other than disclosed in “Note 28” on page 88, the parent entity had no capital commitments for property, plant and equipment as at 30 June 2024 and 30 June 2023.

Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.

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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

NOTE 33: INTERESTS IN SUBSIDIARIES, ASSOCIATES AND JOINT ARRANGEMENTS

A. SUBSIDIARIES

�� accordance with the accounting policy described in “Note 1” on page 63. The proportion of ownership interests held ��

		Ownership interest held by the Group	Ownership interest held by the Group
��	�� ��	2024 %	2023 %
Duratec Australia (ES) Pty Ltd Australia		100 100
MEnD Consulting Pty Ltd Australia		100 100
�� ��		100 100
WPF Duratec Pty Ltd Australia		100 100
Duratec (PNG) Limited� Papua New Guinea		100 -

1 ��

2��

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B. ASSOCIATES AND JOINT ARRANGEMENTS

Interests in associates are accounted for using the equity method of accounting whilst Duratec Limited’s share of the joint ��

			�� interests/ participating share	�� interests/ participating share
��	�� business and country ��	��	2024 %	2023 %
DDR Australia Pty Ltd Australia		Associate	49 49
Duratec Ertech JV Australia		Joint Arrangement	50 50

C. INFORMATION ABOUT ASSOCIATES

DDR Australia Pty Ltd (‘DDR’) is registered as an incorporated company. 51% of DDR’s issued shares are owned by Hutcheson & Co Holdings Pty Ltd and 49% is owned by Duratec Limited. The purpose of the business is to carry out Commonwealth and State Government works, whether directly or via Government contractors, where there is an indigenous procurement policy.

D. INFORMATION ABOUT JOINT ARRANGEMENT

�� a 50% interest. Duratec Ertech JV is a contractual arrangement between participants for the sharing of costs and outputs ��

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 34: DEED OF CROSS GUARANTEE

At 30 June 2024, Duratec Limited, MEnD Consulting Pty Ltd and WPF Duratec Pty Ltd are parties to a deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed, the wholly ��

The above companies represent a ‘Closed Group’ for the purposes of the Corporations Instrument, and as there are no other parties to the deed of cross guarantee that are controlled by Duratec Limited, they also represent the ‘Extended Closed Group’.

�� position of the ‘Closed Group’.

��

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2024 2023
$’000 $’000
��
Revenue from contracts with customers 555,792 471,783
Contracting cost of sales (459,617) (396,058)
96,175 75,725
Other income 3,969 1,859
�� (42,675) (35,046)
Administration expense (10,518) (8,553)
Occupancy expense (1,988) (1,426)
Depreciation and amortisation expense (14,678) (8,522)
Finance costs (2,359) (924)
Equity accounted investment results 1,196 636
�� 29,122 23,749
Income tax expense (7,692) (7,002)
�� 21,430 16,747
�� 21,430 16,747
��
Owners of Duratec Limited 21,430 16,747
�� 21,430 16,747
�� 21,430 16,747
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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Notes to the Financial Statements

Note 34: Deed of Cross Guarantee continued…

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�� 2024 2023
$’000 $’000
��
Current Assets
Cash and cash equivalents 65,014 62,550
Trade and other receivables 74,016 54,782
Contract assets 18,802 24,585
Inventories 1,017 346
Other current assets 2,253 1,761
Total Current Assets 161,102 144,024
��
Trade and other receivables 234 6,298
Property, plant and equipment 33,446 25,356
Right-of-use assets 5,723 2,439
Investments accounted for using the equity method 5,732 23,545
Other non-current assets 320 186
Intangible assets 13,868 -
Deferred tax assets 4,769 4,392
Total Non-Current Assets 64,092 62,216
Total Assets 225,194 206,240
��
Current Liabilities
Trade and other payables 75,475 80,826
Contingent consideration - 9,000
Borrowings 11,844 4,773
Property lease liabilities 2,509 1,940
Contract liabilities 39,332 34,550
Current tax receivable 231 1,257
Provisions 11,255 10,082
Total Current Liabilities 140,646 142,428
��
Trade and other payables 3,361 3,359
Borrowings 13,651 10,535
Property lease liabilities 3,558 752
Deferred tax liabilities 3,257 4,311
Provisions 1,804 1,246
Total Non-Current Liabilities 25,631 20,203
Total Liabilities 166,277 162,631
Net Assets 58,917 43,609
��
Issued capital 29,858 26,899
Reserves 1,993 2,184
Retained earnings 27,066 14,526
Total Equity 58,917 43,609
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On 3 July 2023, the Group executed a Revocation Deed to release Duratec Australia (ES) Pty Ltd from the Deed of Cross Guarantee. An original of the Revocation Deed was lodged with Australian Securities and Investments Commission (ASIC) �� under the Deed of Cross Guarantee in respect of any debts of the Group entities.

An agreement was signed on 3 July 2023 to add WPF Duratec Pty Ltd to the Deed of Cross Guarantee.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Notes to the Financial Statements

NOTE 35: RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH FROM OPERATING ACTIVITIES

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2024 2023
$’000 $’000
�� 21,430 19,201
Adjustments for:
Depreciation and amortisation expense 14,678 9,569
�� (1,196) (636)
Dividends received from associate (997) (365)
�� (309) (232)
Share based payment expense 1,467 1,334
-
Gain on bargain purchase (198)
Other reconciling items 6 -
Change in operating assets and liabilities:
Increase in trade and other receivables (8,593) (29,853)
�� 6,383 (7,600)
Increase in inventories (352) (29)
Increase in other assets (505) (225)
�� (6,488) 44,032
�� 3,604 (5,963)
Increase in provisions 1,142 3,762
�� (2,791) 1,845
�� 27,281 34,840
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��

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Additions to the right-of-use assets during the year amounted to $6,431,000 (2023: $2,162,000).

��

�� cash changes.

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Acquired in Repayments Other 30 June
1 July 2023 New leases
acquisition made non-cash adj 2024
$’000 $’000 $’000 $’000 $’000 $’000
Borrowings 15,308 25,875 - (15,689) 1 25,495
Lease Liabilities 3,016 6,431 - (4,026) 646 6,067
Acquired in Repayments Other 30 June
1 July 2022 New leases
acquisition made non-cash adj 2023
$’000 $’000 $’000 $’000 $’000 $’000
Borrowings 12,022 8,078 - (4,792) - 15,308
Lease Liabilities 2,786 2,162 395 (2,485) 158 3,016
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NOTE 36: EVENTS AFTER THE REPORTING PERIOD

��

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

CONSOLIDATED ENTITY DISCLOSURE STATEMENT

As at 30 June 2024

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�� Ownership
Entity name Entity type Tax residency
�� interest %
Duratec Australia (ES) Pty Ltd Body corporate Australia 100% Australia�
MEnD Consulting Pty Ltd Body corporate Australia 100% Australia�
�� Body corporate �� 100% Australia�
WPF Duratec Pty Ltd Body corporate Australia 100% Australia�
Duratec (PNG) Limited Body corporate Papua New Guinea 100% Australia�
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1�� the tax consolidation regime.

2 The tax residency of these entities is deemed to be Australia as they are dormant and are controlled from Australia.

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

DIRECTORS’ DECLARATION

For the year ended 30 June 2024

�� 2001 and;

a. Comply with Australian Accounting Standards, the Corporations Regulations 2001, and other mandatory professional reporting requirements;
b. ��
c. Comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in Note 1��
d. At the date of this declaration, there are reasonable grounds to believe that the members of Duratec Limited will be able to meet any obligations or liabilities to which they are, or may become, subject to by virtue of the deed of cross guarantee described in Note 34��

There are reasonable grounds to believe the Group will be able to pay its debts as and when they become due and payable, and the information disclosed in the attached consolidated entity disclosure statement is true and correct.

The directors have been given the declarations required by Section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors and in accordance with section 295(5)(a) of the Corporations Act 2001 for the year ended 30 June 2024.

On behalf of the Directors,

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Chris Oates

Managing Director - Duratec Limited

Date: 27 August 2024 Perth

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INDEPENDENT AUDITOR’S REPORT

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RSM Australia Partners

Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844

T +61 (0) 8 9261 9100

www.rsm.com.au

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DURATEC LIMITED

OPINION

�� disclosure statement and the directors’ declaration.

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100
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��
(i) �� the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.

BASIS FOR OPINION

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including independence standards) ��

�� directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

��

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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Independent Auditor’s Report

KEY AUDIT MATTERS

�� whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter

How our audit addressed this matter

Recognition of Revenue

Refer to Note 4��

The Group’s largest source of revenue is derived from construction services and services contracts.

Construction services and services contracts revenue is recognised by management after assessing all factors �� the following as applicable:

Estimation of total contract revenue and costs, including the estimation of cost contingencies;
Determination of contractual entitlement and assessment of the probability of customer approval of variations and acceptance of claims;
Determination of the stage of completion and measurement of progress towards performance obligations; and
Estimation of project completion dates.

The above determinations will also impact on account balances such as contract assets and liabilities.

We determined this area to be a key audit matter due to the number and type of estimation events over the course of the contract life, the unique nature of individual contract conditions, leading to complex and judgmental revenue recognition from contracts.

Our audit procedures included:

Assessing contractual terms with customers and substantiating project revenues and costs incurred against underlying supporting documents;
Assessing management’s assumptions in determining the stage of completion, total contract revenue and total estimated costs;
Checking the mathematical accuracy of revenue recognised during the year based on the stage of completion;
Reading customers and subcontractor correspondence and discussing the progress of projects with project managers for any potential disputes, variation order claims, known technical �� estimated contract costs;
Discussing the rationale for revisions made to estimated costs with project personnel and management and checking explanations to supporting documentation;
Challenging management’s assessment and testing the reasonableness of the provision for foreseeable losses; and
Challenging the judgements made by management in estimating the expected credit loss relating to contract assets.

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Impairment of Intangible Assets

Refer to Note 17��

The carrying amount of goodwill and customer relationships are $4,452,000 and $9,416,000 respectively. Management has performed an impairment test on the recoverability of the goodwill as required by Australian Accounting Standards.

We determined this area to be a key audit matter due to the size of the goodwill and customer relationships balance and because the directors’ assessment of the value-in-use of the cash generating unit (CGU) �� the business and the discount rate applied

Our audit procedures included:

Assessing management’s determination that the goodwill should be allocated to one CGU;
Assessing the valuation methodology used to determine the recoverable amount of goodwill and the CGU’s customer relationships, property plant and equipment and right of use assets;
Challenging the reasonableness of key assumptions, �� growth rates, the discount rates and sensitivities used;
Reviewing management’s sensitivity analysis over the key assumptions used in the model;
Checking the mathematical accuracy of the value-inuse model and reconciling input data to supporting evidence, such as approved budgets and considering the reasonableness of these budgets; and
Reviewing the appropriateness of disclosures in the ��

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

Independent Auditor’s Report

OTHER INFORMATION

The directors are responsible for the other information. The other information comprises the information included in the �� thereon.

�� assurance conclusion thereon.

�� the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL REPORT

The directors of the Company are responsible for the preparation of:

a. �� accordance with Australian Accounting Standards and the Corporations Act 2001; and
b. the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001 , and

for such internal control as the directors determine is necessary to enable the preparation of:

i. �� free from material misstatement, whether due to fraud or error; and

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ii. the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error.

�� concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL REPORT

�� misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or ��

�� of our auditor’s report.

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

REPORT ON THE REMUNERATION REPORT

Opinion on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2024.

In our opinion, the Remuneration Report of Duratec Limited, for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001.

Responsibilities

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.

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RSM AUSTRALIA

Perth, WA Dated: 27 August 2024

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J A KOMNINOS Partner

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Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

SHAREHOLDING DETAILS

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CLASS OF SHARES AND VOTING RIGHTS

As at 31 July 2024 there were 2,147 shareholders of the ordinary shares of the Company. The voting rights attaching to the ordinary shares, subject to any rights or restrictions for the time being attached to any class or classes of shares, are:

�� at meetings of members or class of members, each member entitled to vote may vote in person or by proxy or representative; and
�� on a show of hands every person present who is a member has one vote, and on a poll every person present in person or by proxy or representative has one vote for each ordinary share held.

SUBSTANTIAL SHAREHOLDERS AS AT 31 JULY 2024

The names of the substantial shareholders who have �� the Corporations Act 2001 (Cth) are:

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----- Start of picture text -----

Shareholder Name ��
ERTECH HOLDINGS PTY LTD 47,348,514
JAMES ROBERT GIUMELLI 47,348,514 ¹
JAMES PATRICK GIUMELLI 47,748,514 ¹
DENCORT PTY LTD <HARCOURT 23,953,389
��
MR CHRIS OATES + MRS PAMELA 23,953,389
��
KENT COLONY VENTURES PTY LTD 23,908,522
��
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1 ��

DISTRIBUTION OF SHAREHOLDINGS

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----- Start of picture text -----

Number of
Shareholders
2,417
-
Total shares
on issue
248,372,718
-
Nº of
unmarketable
parcels
73�
-
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as at 31 July 2024

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----- Start of picture text -----

Range Total Holders % Units
1-1,000 460 0.12
1,001-5,000 745 0.86
5,001-10,000 397 1.27
10,001-100,000 708 8.67
100,001 and over 107 89.08
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2��

Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

Shareholding Details

TOP 20 SHAREHOLDERS

as at 31 July 2024

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----- Start of picture text -----

Holder ��
1 ERTECH HOLDINGS PTY LTD 47,348,514 19.06
2 �� 23,953,389 9.64
2 �� 23,853,389 9.60
4 �� 23,853,389 9.60
5 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 17,564,476 7.07
6 CITICORP NOMINEES PTY LIMITED 11,755,826 4.73
7 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 7,980,946 3.21
8 �� 7,475,425 3.01
9 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 5,707,027 2.30
10 BNP PARIBAS NOMS PTY LTD 5,330,559 2.15
11 JAWP INVESTMENTS PTY LTD 4,575,000 1.84
12 �� 4,316,120 1.74
13 �� 2,415,046 1.73
14 UBS NOMINEES PTY LTD 2,212,458 0.89
15 MR MICHAEL JOHN WILSON 2,200,000 0.89
16 FORT BARAMBA PTY LTD 1,715,674 0.69
17 �� 1,590,759 0.64
18 NATIONAL NOMINEES LIMITED 1,569,547 0.63
19 EXLDATA PTY LTD 1,438,919 0.58
20 �� 1,224,670 0.49
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ON-MARKET SHARE BUY-BACK

DISTRIBUTION OF PERFORMANCE RIGHTS

There is no current on-market buy-back.

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105
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as at 31 July 2024

RESTRICTED SECURITIES

There are no securities in the capital of the Company subject to escrow arrangements.

UNQUOTED SECURITIES

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��
Class
securities holders
Performance Rights 11,508,000 80
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----- Start of picture text -----

Total
Range % Units
Holders
- -
1-1,000
- -
1,001-5,000
- -
5,001-10,000
10,001-100,000 35 15.1%
100,001 and over 45 84.9%
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There are no rights attaching to performance rights.

Duratec Limited (ASX:DUR) | Annual Report for t he 20 2 4 Financi al Y ear

SHARE REGISTRY

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SHARE TRADING FACILITIES

AUDITOR

CONTACT DETAILS

REGISTERED OFFICE

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��
��
108 Motivation Drive, Wangara
Western Australia 6065
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��+61 (8) 9206 6900
��[email protected]
�� www.duratec.com.au
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DIRECTORS

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----- Start of picture text -----

Martin Brydon Gavin Miller
Non-Executive Director, Chair Non-Executive Director
�� Krista Bates
Executive Director, Managing Director Non-Executive Director
��
Non-Executive Director Company Secretary
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Duratec Limited (ASX:DUR) | Annual Report for the 2024 Financial Year

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107
Duratec Limi ted (ASX:DUR) | Annual Report for the 2024 Financial Year
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108 Motivation Drive, Wangara Western Australia 6065 �� +61 8 6206 6900 �� [email protected]

www.duratec.com.au

AI assistant

DURATEC LIMITED — Annual Report 2024

64799_rns_2024-08-27_594a9dd7-ca49-4156-8015-6acd76c1da97.pdf

F Y 2 4 A N N U A L R E P O R T

WHO WE ARE

VISION

BUSINESS MODEL

VALUES

Integrity

Accountability

Courage

Pride

Recognition

INDUSTRIES SERVICED

DEFENCE

BUILDING & FACADE

MINING & INDUSTRIAL

ENERGY

MARINE

TRANSPORT INFRASTRUCTURE

WATER INFRASTRUCTURE

DURATEC LOCATIONS

FY24 HIGHLIGHTS

CHAIR’S REPORT

Dear Shareholders,

��������������������������������������������������������������������������������������������

STRONG OPERATING RESULTS

SUSTAINABLE OPERATIONS

BUSINESS STRATEGY SUPPORTS ONGOING GROWTH

LEADERSHIP TRANSITION

OUTLOOK FOR FY25

Martin Brydon

MANAGING DIRECTOR’S REPORT

FINANCIAL AND OPERATIONAL HIGHLIGHTS

STRATEGIC REVIEW

OUTLOOK

Chris Oates

PIPELINE

CFO’S REPORT

REVENUE & PROFITABILITY

FY24 REVENUE BY OPERATING SEGMENT

REVENUE TREND

BALANCE SHEET & CASH FLOW

SHAREHOLDER RETURNS

UPDATE BY SECTOR

Defence

Mining & Industrial

Building & Facade

Energy

Other

WPF

WPF’S NEW NOVARC SPOOL WELDING ROBOT: CHANGING THE FACE OF PIPE FABRICATION

GAME-CHANGING TECHNOLOGY

BENEFITS OF THE SWR

INCREASED PRODUCTIVITY, FASTER TURNAROUND TIME

SAFETY

QUALITY

MEND

FY24 FY23

RISK MANAGEMENT

SAFETY INCIDENTS

Mitigation Strategies

CUSTOMERS RELIANCE

Mitigation Strategies

SAFETY REGULATION

Mitigation Strategies

SUBCONTRACTOR SAFETY MANAGEMENT

Mitigation Strategies

HUMAN RESOURCES

Mitigation Strategies

POOR QUALITY PROJECT DELIVERY

Mitigation Strategies

SUPPLY CHAIN RISK

Mitigation Strategies

LEGAL RISK

Mitigation Strategies

CONTRACT TERMINATION

Mitigation Strategies

CYBER-SECURITY

Mitigation Strategies

DURATEC LIMITED Annual Report 2024

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