VERBREC LIMITED — Annual Report 2011

Sep 12, 2011

12 September 2011

error or omission therefrom. The Company accepts no responsibility to update any person regarding any

Vision & Values

Our Vision is to be a market leader delivering outstanding

”Our Business is our People and our Customers”

Peter Watson

Executive Chairman

Former CEO Transfield Services and highly experienced in engineering, construction and services industries.

Giles Everist

Non Executive Director

Former Monadelphous CFO with extensive financial and executive management experience.

Peter Wall

Non Executive Director

Extensive corporate management and board experience.

David Humann

Non Executive Director

CA ex PWC Managing Partner with extensive public company experience.

Garry McGrechan

Non Executive Director Extensive mining, project and engineering experience.

Damian Young

Non Executive Director

Extensive hydrocarbons, engineering and management experience.

Paul Bowker

Corporate lawyer with extensive regulatory and compliance background.

Karsten Guster

Director of Strategy and M&A Extensive background in hydrocarbons, business strategy and development.

Matthew Adamo

Chief Financial Officer Extensive finance and commercial experience in engineering services.

Flora Furness

Executive HR Director Over 20 years in human resources, organisational development and advisory roles.

• Expanded to over 400 staff

• Western business unit achieved AS4801 safety accreditation

• Appointment of national HSE Manager

• Productivity impacted by Queensland natural disasters and investment in EPCM offering

Finance & Risk

• Appointment of new Chief Financial Officer and General Counsel

• Strengthening of risk management framework

• Increased balance sheet strength, including bonding facilities

• Rollout of project pursuit, delivery and assurance procedures

• Transition to an integrated national financial system

HSE Performance

• TRIFR 2.8 (and falling) per 1m hours worked.

Attracted top tier capability

Introduced integrated incentive scheme

• AS4801 accreditation now achieved within Western & Southern business unit

• National HSE Manager appointed

• Focus on:

• Behavioural Based Safety Program development and implementation.

• Sub-Contractor management program for EPC projects.

• Focus on development on HSE support tools for EPC Project Management.

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Project Lifecycle Phases
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Multidiscipline EPCM engineering for process facility, SA

Engineering support services and systems, SA and QLD

FEED study for LNG plant, NSW Multidiscipline project work, QLD Asset Management services, QLD Multidiscipline engineering Design and Construct, WA Mobile machine controls and automation engineering, WA and South Africa

Financial Highlights

Financial Highlights

			12 FY10 Comparison Statutory Results 12 Months to 30 June 2010 Change $70.8m �38.1% $26.5m 37.4% �24.9% $7.0m 9.9% �31.4% $6.4m �32.8% $5.6m 7.9% �17.9% $2.9m �24.1% 11.7 �35.0% 6.25 �28.0%	12 FY10 Comparison Statutory Results 12 Months to 30 June 2010 Change $70.8m �38.1% $26.5m 37.4% �24.9% $7.0m 9.9% �31.4% $6.4m �32.8% $5.6m 7.9% �17.9% $2.9m �24.1% 11.7 �35.0% 6.25 �28.0%
			FY10 Comparison
A$m	Statutory Results 12 Months to 30 June 2011		Statutory Results 12 Months to 30 June 2010	**Change **
Revenue $97.8m
Gross Profit Gross Profit % $33.1m 34.6%
EBITDA EBITDA % $4.8m 4.9%
EBIT $4.3m
NPAT Attrib to Members NPAT Margin (%) $4.6m 4.7%
Operating Cash Flow (incl JV distributions) $3.6m
EPS (cents per share) (WAve) 7.6
DPS (cents per share, ff) 4.5

Balance Sheet (June ‘11) – Key Items	Balance Sheet (June ‘11) – Key Items	Balance Sheet (June ‘11) – Key Items	Balance Sheet (June ‘11) – Key Items
Balance			Comparison
Sheet Item		Balance	to June 10 Comment
Cash		$13.5m	Up $6.9m• Raised $8.7m
			• Dividend paid increased by $1.1m
Trade		$16.4m	Down $4.4m • Improved debtor collection of trade receivables
Receivables
WIP and Other		$5.5m	Up $1.7m • Reflects changes in project workloads and
Receivables			milestone payments
Trade and other		$6.0m	Down $3.7m • Reflects project workloads and mix of work in
Payables			materials and subcontractors
Deferred		$2.0m	Down $0.7m • Decrease reflects project billings in advance
income
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Bank guarantee facility extended to $7.0m Performance bond facility for $10.0m remains in place

Financing Facilities	Financing Facilities
		Facility Limit	Drawn	Un-utilised
Performance Bonds
Bank Guarantee facility - NAB		$7.0m	$3.6m	$3.4m
Surety Bond Facility		$10.0m	$1.2m	$8.8m
Total Facilities		$17.0m	$4.8m	$12.2m

• Increase number and value of EPCM contracts with top tier customers

• Focus on long term service agreements with key customers

markets within the mining and minerals,

• Develop centres of excellence and enhance national work share

• Leverage national capabilities to deliver market leading expertise to our local customers

• Single/dual discipline services

• Small EPC projects

• Large number of small projects, mostly fixed price

• Established Asset Management

• Multidiscipline projects in hubs

• Awarded large EPC and EPCM projects

• Majority of work with blue chip clients

• Award of several long term service agreements with key customers

• Market leading engineering, project delivery and asset management offering

• Balanced portfolio of customers, contracts and services

• Continue to pursue expansion of existing capability in areas of strategic focus through both organic and inorganic investment

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an increase in earnings is anticipated. The Company is confident that the medium and long term prospects remain positive based on the quality of its people and customers plus its strong financial capacity. LogiCamms is committed to being optimally positioned for the significant opportunities ahead”.

Greenfield LNG production and export facility

New South Wales

Eastern Star Gas

Electrical engineering and Instrumentation FEED work

The LogiCamms team demonstrated expertise in electrical and instrumentation project delivery.

LogiCamms is delivering the FEED work for the electrical and instrumentation component of this greenfield LNG facility at Newcastle.

$800,000

New Process facility at brownfield site

South Australia

BHP Billiton

Multidiscipline Engineering, Procurement and Construction (EPC)

LogiCamms could provide a single source, turn key solution and had previously successfully delivered the feasibility study and a range of additional services at the Olympic Dam site.

LogiCamms is providing a multidiscipline EPC solution to deliver the new process facility at the Olympic Dam site for BHP Billiton.

$10m+

Coal Handling Process Plant

Queensland

Wesfarmers Curragh

Multidiscipline Asset Management services including Operational Readiness solutions LogiCamms’ people have years of asset management experience supporting their delivery of sustainable operational readiness solutions.

LogiCamms provided multidiscipline solutions including Operational Readiness services for a coal handling process plant at the Curragh mine in central Queensland.

$1.4m

Train Load Out Western Australia Rio Tinto

Multidiscipline Design and Construct for train loading improvement project LogiCamms has a strong track record in the iron ore industry, and offered innovative solutions for optimising the ore train weighing and ultimately throughput at the Client’s mine sites.

LogiCamms delivered multidiscipline Design and Construct work for a dynamic rail weighing system at three of Rio Tinto’s operational sites.

$5.4m

Mobile machines

Western Australia and South Africa

Sandvik and Sandvik RSA (for Rio Tinto)

Electrical engineering and automation, plus commissioning services

LogiCamms is a leading provider of automation and control systems for mobile machines, and has an established relationship with Sandvik.

LogiCamms is delivering electrical engineering and automation solutions for at least 4 mobile machines for Rio Tinto’s Western Australian and South African iron ore mine sites. $4.5m+

“A Platform for Future Growth”

West Perth WA 6005

State Offices

Brisbane, Queensland Adelaide, South Australia Melbourne, Victoria

Regional Offices

Mackay, Queensland Gladstone, Queensland Whyalla, South Australia Darwin, Northern Territory

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