1HFY24

FINANCIAL REPORT
Contents
Directors' Report 3
Auditor's Independence Declaration 4
Consolidated Statement of Profit or Loss and Other Comprehensive Income 5
Consolidated Statement of Financial Position 6
Consolidated Statement of Changes in Equity 7
Consolidated Statement of Cash Flows 8
Notes to the Financial Statements 9
Directors' Declaration 19
Independent Auditor's Report 20

1
Corporate Directory

Registered Office & Principal Place of Business

108 Motivation Drive, Wangara
Western Australia 6065

Contact Details
Phone: +61 (8) 9206 6900
E-mail: info@[Link]
Internet: [Link]

Directors
Martin Brydon Non-Executive Director, Chairman
Chris Oates Executive Director, Managing Director
Robert (Phil) Harcourt Non-Executive Director
Gavin Miller Non-Executive Director
Krista Bates Non-Executive Director

Company Secretary
Dennis Wilkins

Share Registry
Computershare Investor Services Pty Limited
Level 17, 221 St Georges Terrace, Perth
Western Australia 6000

Share Trading Facilities

The Company's ordinary shares are listed on the Australian Securities Exchange (Code: DUR)
The Home exchange is Perth.

Auditor
RSM Australia Partners
Level 32, Exchange Tower, 2 The Esplanade, Perth
Western Australia 6000

2
Directors’ Report
The Directors of Duratec Limited present their report, together with the consolidated financial statements of 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 half-year ended 31 December 2023.

Directors and Company Secretary

Name / Position Period of Directorship
Martin Brydon
Non-Executive Chairman Appointed 1 September 2020
Christopher Oates
Executive Director, Managing Diretor Appointed 24 November 2023
Executive Director, General Manager Appointed 26 August 2010 - Resigned 24 November 2023
Robert (Phil) Harcourt
Non-Executive Director Appointed 24 November 2023
Executive Director, Managing Director Appointed 26 August 2010 - Resigned 24 November 2023
Gavin Miller
Non-Executive Director Appointed 14 April 2010
Krista Bates
Non-Executive Director Appointed 30 June 2023
Dennis Wilkins
Company Secretary Appointed 1 September 2020

Principal Activities
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 significant change in the
nature of these activities occurred during the period.

Review of operations
For the six months ended 31 December 2023, the consolidated entity generated revenues of $292.7m, an increase of 28.1% on
the previous corresponding period. Profit after income tax for the six-month period was $12.2m, an increase of 55.8% on the
previous corresponding period.
Dec-23 Dec-22
$’000 $’000
Revenue from contracts with customers 292,737 228,532
Profit after income tax 12,225 7,846

Significant changes in state of affairs

There were no significant changes in the consolidated entity’s state of affairs during the financial half-year other than that
referred to in the financial statements of notes thereto.

Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this Directors’ report.
This report is made in accordance with a resolution of Directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the Directors,

Chris Oates
Managing Director
22 February 2024

3
 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

F +61 (0) 8 9261 9111
[Link]

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the review of the financial report of Duratec Limited for the half-year ended 31 December 2023,
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 review; and

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

RSM AUSTRALIA PARTNERS

Perth, WA J A KOMNINOS
Dated: 22 February 2024 Partner

THE POWER OF BEING UNDERSTOOD

AUDIT | TAX | CONSULTING
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

Consolidated Statement of
Profit or Loss
and Other Comprehensive Income
For the half-year ended 31 December 2023
Consolidated Entity
Dec-23 Dec-22
Note $'000 $'000
Continuing Operations
Revenue from contracts with customers 3 292,737 228,532
Contracting cost of sales 4 (245,355) (192,864)
47,382 35,668
Other income 3 1,324 703
Employee benefits expense 4 (19,294) (16,887)
Administration expense (5,209) (4,146)
Occupancy expense (1,038) (673)
Depreciation and amortisation expense (6,873) (4,260)
Finance costs 4 (941) (343)
Equity accounted investment results 5 576 940
Profit before income tax expense 15,927 11,002
Income tax expense (3,702) (3,156)
Profit after income tax for the half-year 12,225 7,846

Total comprehensive income for the half-year 12,225 7,846

Profit for the half-year is attributable to:

Owners of Duratec Limited 12,225 7,846
Profit for the half-year 12,225 7,846
Total comprehensive income for the half year, net of tax 12,225 7,846

Earnings per share attributable to the owners of Duratec Limited: cents cents
Basic earnings per share (cents) 19 4.96 3.25
Diluted earnings per share (cents) 19 4.74 3.09

The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes 5
Consolidated Statement of
Financial Position
As at 31 December 2023 Consolidated Entity
Dec-23 Jun-23
Note $'000 $'000
ASSETS
Current Assets
Cash and cash equivalents 7 58,539 66,187
Trade and other receivables 39,908 59,821
Contract assets 38,646 25,185
Inventories 584 346
Current tax receivable 907 -
Other current assets 3,704 1,820
Total Current Assets 142,288 153,359

Non-Current Assets
Trade and other receivables 6,273 6,298
Property, plant and equipment 8 31,499 25,962
Right-of-use assets 9 4,409 2,744
Intangible assets 10 14,162 14,711
Investments accounted for using the equity method 5,112 4,536
Other non-current assets 298 249
Deferred tax assets 4,305 4,573
Total Non-Current Assets 66,058 59,073
Total Assets 208,346 212,432

LIABILITIES
Current Liabilities
Trade and other payables 77,505 82,076
Contingent consideration payable 6 - 9,000
Borrowings 11 14,221 4,773
Property lease liabilities 12 2,832 2,071
Contract liabilities 28,637 35,727
Current tax liability - 1,773
Provisions 9,020 10,484
Total Current Liabilities 132,215 145,904

Non-Current Liabilities
Trade and other payables 3,771 3,360
Borrowings 11 12,895 10,535
Property lease liabilities 12 1,851 945
Deferred tax liabilities 3,788 4,311
Provisions 1,615 1,314
Total Non-Current Liabilities 23,920 20,465
Total Liabilities 156,135 166,369
Net Assets 52,211 46,063

EQUITY
Issued capital 13 29,406 26,899
Reserves 14 1,020 2,184
Retained earnings 21,785 16,980
Total Equity 52,211 46,063

The above statement of financial position should be read in conjunction with the accompanying notes 6
Consolidated Statement of
Changes in Equity
For the half year ended 31 December 2023

Reserves
Retained
Earnings
Capital
Issued

Equity
Total
Consolidated Entity
Note $’000 $’000 $’000 $’000
Balance at 1 July 2022 25,167 3,825 1,965 30,957

Profit after income tax expense for the half-year - 7,846 - 7,846
Other comprehensive income for the half-year, net
of tax - - - -
Total comprehensive income for the half-year - 7,846 - 7,846
Transactions With Owners
Share based payments - - 821 821
Issue of ordinary shares 1,183 - (1,183) -
Dividend Reinvestment Plan 291 - - 291
Dividends paid 15 - (3,609) - (3,609)
Balance at 31 December 2022 26,641 8,062 1,603 36,306

Balance at 1 July 2023 26,899 16,980 2,184 46,063

Profit after income tax expense for the half-year - 12,225 - 12,225
Other comprehensive income for the half-year, net
of tax - - - -
Total comprehensive income for the half-year - 12,225 - 12,225
Transactions With Owners
Share-based payments - - 605 605
Transfer from share-based payments reserve 1,769 - (1,769) -
Dividend Reinvestment Plan 738 - - 738
Dividends paid 15 - (7,420) - (7,420)
Balance at 31 December 2023 29,406 21,785 1,020 52,211

The above statement of changes in equity should be read in conjunction with the accompanying notes 7
Consolidated Statement of
Cash Flows
For the half-year ended 31 December 202 3
Consolidated Entity
Dec-23 Dec-22
Note $'000 $'000
Cash flows from operating activities
Receipts from customers 323,216 241,933
Payments to suppliers and employees (309,050) (217,613)
Income tax paid (6,719) (3,630)
Interest and finance costs paid (707) (272)
Interest received 767 299
Net cashflows from operating activities 18 7,507 20,717

Cash flows from investing activities

Proceeds from sale of property, plant and equipment 182 323
Purchase of property, plant and equipment (10,033) (5,116)
Acquisition of subsidiary, net of cash acquired (8,538) (9,988)
Net cashflows used in investing activities (18,389) (14,781)

Cash flows from financing activities

Dividend paid 15 (6,682) (3,318)
Proceeds from borrowings 15,849 2,840
Repayment of borrowings (4,055) (2,174)
Repayment lease liabilities (1,878) (1,144)
Net cashflows from/ (used in) financing activities 3,234 (3,796)

Net increase/ (decrease) in cash and cash equivalents (7,648) 2,140

Cash and cash equivalents at beginning of period 66,187 58,263
Cash and cash equivalents at the end of the financial half year 7 58,539 60,403

The above statement of cash flows should be read in conjunction with the accompanying notes 8
Note 1. Material accounting policy information
(a) Basis of preparation
Duratec Limited is a for-profit company limited by shares, incorporated and domiciled in Australia. The Company’s registered address is 108
Motivation Drive, Wangara, WA 6065. The consolidated financial statements of the Company as at and for the financial half-year ended 31
December 2023 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.

The consolidated financial report is presented in 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 Corporations (Rounding
in Financial/Director’s Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies.

These general purpose financial statements for the interim half-year reporting period ended 31 December 2023 have been prepared in accordance
with Australian Accounting Standard AASB 134 ‘Interim Financial Reporting’ and the Corporations Act 2001, as appropriate for for-profit entities.
Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly,
these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2023 and any public announcements
made by the Company during the interim reporting period in accordance with continuous disclosure requirements of the Corporations Act 2001.

The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless
otherwise stated.

New or amended Accounting Standards and interpretations adopted by the Group

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

(b) Principles of consolidation and equity accounting

(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity where the group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from
the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also
eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the group.

(ii) Associates
Associates are all entities over which the group has significant influence but not control or joint control. This is generally the case where the group
holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see (iv)
below), after initially being recognised at cost.

(iii) Joint arrangements

A joint arrangement (that is either classified as a joint operation or a joint venture, depending on the rights and obligations of the jointly controlling
parties to the arrangement) is one in with the Group is party to an arrangement of which two or more parties have control. The classification
depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. Duratec Limited is party
to a joint operation.

Joint operations
Duratec Limited recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or
incurred assets, liabilities, revenues and expenses. These have been incorporated in the financial statements under the appropriate headings.

(iv) Equity accounting method

Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the group’s share of the
post-acquisition profits or losses of the investee in profit or loss, and the group’s share of movements in other comprehensive income of the investee
in other comprehensive income. Dividends received or receivable from associates are recognised as a reduction in the carrying amount of the
investment.

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 9

Note 2. Segment reporting
The Group is organised into four operating segments based on difference in services provided; Defence, Mining & Industrial, Buildings & Façades
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 Director (who is identified as the Chief Operating Decision Maker, ‘CODM’) in assessing performance and in
determining the allocation of resources.

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

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
Buildings & Façades – completion of façade condition assessments and façade restorations
Energy - non-defence capital facilities, remediation and refurbishment of critical assets

Defence Mining & Buildings & Energy Other Total

Consolidated - December 2023 Industrial Façades Segments

$’000 $’000 $’000 $’000 $’000 $’000

Sales to external customers 124,151 84,044 52,871 23,250 8,421 292,737
Total revenue 124,151 84,044 52,871 23,250 8,421 292,737
Gross profit for reportable segments 13,377 18,389 6,581 8,126 909 47,382
Unallocated amounts
(including corporate overheads) (23,641)
EBITDA 23,741
Depreciation and amortisation (6,873)
Finance costs (941)
Profit before income tax expense 15,927
Income tax expense (3,702)
Profit after income tax expense 12,225

Defence Mining & Buildings & Energy Other Total

Consolidated - December 2022 Industrial Façades Segments

$’000 $’000 $’000 $’000 $’000 $’000

Sales to external customers 112,069 32,220 38,093 26,850 19,300 228,532
Total revenue 112,069 32,220 38,093 26,850 19,300 228,532
Gross profit for reportable segments 15,940 8,239 6,205 4,571 713 35,668
Unallocated amounts
(including corporate overheads) (20,063)
EBITDA 15,605
Depreciation and amortisation (4,260)
Finance costs (343)
Profit before income tax expense 11,002
Income tax expense (3,156)
Profit after income tax expense 7,846

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 10

Note 3. Revenue

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

Dec-23 Dec-22
$’000 $’000
Revenues from contracts with customers 292,737 228,532
Disaggregation of revenue from contracts with customers by location
Western Australia 123,663 65,896
New South Wales 45,530 57,256
Victoria 11,772 9,879
Northern Territory 59,107 42,487
South Australia 11,164 8,964
Queensland 16,085 20,238
Tasmania 1,410 1,538
Australian Capital Territory 24,006 22,274
292,737 228,532

Other income Dec-23 Dec-22

$’000 $’000
Rental income 141 187
Interest received 767 299
Sundry income 253 41
Foreign exchange gain 33 -
Gain on disposal of plant and equipment 130 176
1,324 703

Note 4. Expenses
Profit before income tax from continuing operations includes the following specific expenses:
Dec-23 Dec-22
$’000 $’000
Expenses
Cost of sales 245,355 192,864
Interest expense for financial liabilities not at fair value through profit or loss
External – Interest on loans and borrowings 750 346
Interest on lease liabilities 191 (3)
Total finance costs 941 343
Employee Expenses
Salaries & wages 16,697 14,690
Share based payments (refer Note 20) 573 821
Post employment benefits 1,441 1,038
Other 583 338
19,294 16,887

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 11

Note 5. Equity accounted investment results
Dec-23 Dec-22
$’000 $’000
Equity accounted investment results – associate – DDR Australia Pty Ltd 576 940
576 940

Note 6. Acquisition
On 7 October 2022, Duratec entered an agreement to acquire 100% Wilson's Pipe Fabrication Pty Ltd (WPF), one of Australia's leading providers of
onshore and offshore 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 as a result of 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 following table summarises the acquisition-date fair value of consideration

20 Oct 2022
$’000
Initial consideration 9,000
Working capital 1,009
Contingent consideration 9,000
19,009

The following summarises the recognised fair value amounts of assets acquired and liabilities assumed as at 20 October 2022

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

Goodwill arising from the acquisition has been recognised as follows:

20 Oct 2022
$’000
Total consideration transferred 19,009
Fair value of identifiable assets and liabilities (14,557)
Goodwill 4,452

The goodwill is attributable mainly to the skills and talent of Wilson's Pipe Fabrication employees.

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 12

Note 6. Acquisition (continued)

The following table summarises the cash flows in relation to the acquisition at 31 December 2023:
31 Dec 2023 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) -
Acquisition of subsidiary, net of cash acquired 8,538 9,988

Note 7. Cash and cash equivalents

Dec-23 Jun-23
$’000 $’000
Cash at bank and on hand 53,539 61,187
Short-term deposits 5,000 5,000
Total cash and cash equivalents 58,539 66,187

Note 8. Plant and equipment

Reconciliation of written down values at the beginning and end of the current financial period are set out below:

Improvements
Office and IT

Capital WIP
Equipment
Machinery

Leasehold
Plant and
Land and
Buildings

Vehicles
Motor

Total
Consolidated $’000 $’000 $’000 $’000 $’000 $’000 $’000
At 30 June 2023
At cost 2,914 18,563 17,141 4,764 2,570 37 45,989
Accumulated depreciation (29) (8,297) (7,260) (2,845) (1,596) - (20,027)
2,885 10,266 9,881 1,919 974 37 25,962

Balance at 1 July 2023 2,885 10,266 9,881 1,919 974 37 25,962

Additions - 5,751 2,984 747 362 189 10,033
Disposals - (14) (22) (2) (14) - (52)
Depreciation (14) (1,937) (1,743) (549) (201) - (4,444)
Balance at 31 December 2023 2,871 14,066 11,100 2,115 1,121 226 31,499

At 31 December 2023
At cost 2,914 23,952 19,781 5,484 2,835 226 55,192
Accumulated depreciation (43) (9,886) (8,681) (3,369) (1,714) - (23,693)
2,871 14,066 11,100 2,115 1,121 226 31,499

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 13

Note 9. Right of use assets
Dec-23 Jun-23
$’000 $’000
Land and buildings
Right-of-use 8,982 6,630
Accumulated depreciation (4,573) (3,886)
4,409 2,744

Reconciliation of written down values at the beginning and end of the current financial period are set out below:

Accumulated
Depreciation

Carrying
Value
Cost
Balance at 1 July 2023 6,630 (3,886) 2,744
Additions during the half-year 3,545 - 3,545
Leases expired during the half-year (1,193) 1,193 -
Depreciation expense - (1,880) (1,880)
Balance at 31 December 2023 8,982 (4,573) 4,409

Note 10. Intangible assets

Dec-23 Jun-23
$’000 $’000
Goodwill 4,452 4,452
Less: Impairment - -
4,452 4,452
Customer relationships 10,992 10,992
Less: Accumulated amortisation (1,282) (733)
9,710 10,259

Total intangibles 14,162 14,711

Reconciliations of the written down values at the beginning and end of the current and previous financial period are set out
below:
Customer
Goodwill Total
Relationships
$’000 $’000 $’000
Balance at 1 July 2023 4,452 10,259 14,711
Amortisation expense - (549) (549)
Balance at 31 December 2023 4,452 9,710 14,162

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 14

Note 11. Borrowings
Dec-23 Jun-23
$’000 $’000
Current
Equipment finance 5,869 4,773
Cash advance1 5,000 -
Insurance premium funding 2 3,352 -
Total current borrowings 14,221 4,773
Non-current
Equipment finance 12,895 10,535
Total non-current borrowings 12,895 10,535
Total borrowings 27,116 15,308

1
As a result of Bankwest no longer offering business products or services under the Bankwest brand, a new facilities
agreement with CBA was entered into on 2 November 2023. This provides Duratec with a $70 million Multi‐Option Facility,
a $400,000 Corporate Credit Card Facility and a Market Rate Loan Facility of $5.6 million.

2
In October 2023 Duratec entered into an Insurance Premium Funding agreement with Arteva Funding for a total of $4.2m.

Note 12. Property lease liabilities

Dec-23 Jun-23
$’000 $’000
Current
Lease liabilities – Property (AASB 16) 2,832 2,071
Total current property lease liabilities 2,832 2,071
Non-current
Lease liabilities – Property (AASB 16) 1,851 945
Total non-current property lease liabilities 1,851 945
Total property lease liabilities 4,683 3,016

Note 13. Issued capital

Dec-23 Jun-23 Dec-23 Jun-23
Shares Shares $’000 $’000
Ordinary shares – fully paid 247,959,984 244,020,537 29,406 26,899

Movement in ordinary share capital:

Cumulative
Details Date Shares Issue price ($) $’000
Shares

Balance 1 Jul 2023 244,020,537 244,020,537 - 26,899

Conversion of Performance Rights 25 Aug 2023 3,320,000 247,340,537 0.53 1,769
Dividend Reinvestment Plan 9 Oct 2023 619,447 247,959,984 1.19 738
Balance 31 Dec 2023 247,959,984 247,959,984 - 29,406

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 15

Note 14. Reserves
Dec-23 Jun-23
$’000 $’000
Acquisition Reserve
Balance at the beginning of the financial period (231) (231)
Balance at end of the financial period (231) (231)

Share Based Payment Reserve

Balance at the beginning of the financial period 2,415 2,196
Share-based payments 605 1,402
Transfer from share-based payments reserve (1,769) (1,183)
Balance at end of the financial period 1,251 2,415

Total Reserves 1,020 2,184

Note 15. Dividends

Dividends paid during the financial half-year were as follows:
Dec-23 Dec-22
$’000 $’000
Other dividends (cash) 6,682 3,318
Dividend Reinvestment Plan 738 291
Declared fully franked ordinary dividends franked at 30% (2022: 30%) 7,420 3,609

Note 16. 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.

Dec-23 Dec-22
$’000 $’000
Bonds & Guarantees on issue at end of financial half-year 55,512 37,353

Note 17. Events after the reporting period

On 15 December 2023 WPF Duratec Pty Ltd (a wholly owned subsidiary of Duratec Ltd) entered a Business Purchase
Agreement to acquire A & B Welding Pty Ltd for $1.5 million. The purchase completed in January 2024 with control transferring
at that time.

On 24 December 2023, DDR Australia Pty Ltd (a 49% owned associate of Duratec Ltd) entered into a share purchase
agreement to acquire 100% share capital of RC Construction WA Pty Ltd. The purchase completed on 31 January 2024, with
control transferring at that time.

No other matter or circumstance has arisen since 31 December 2023 that has significantly affected, or may significantly affect
the Group’s operations, the result of those operations, or the Group’s state of affairs in future financial years.

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 16

Note 18. Reconciliation of profit after income tax to net cash
from operating activities
Dec-23 Dec-22
$’000 $’000
Profit after income tax expense for the half-year 12,225 7,846
Adjustments for:
Depreciation 6,873 4,260
Share of profits of associates and joint ventures (576) (940)
Gain on sale of fixed assets (130) (176)
Share based payment expense 573 821
Change in operating assets and liabilities:
Decrease/ (Increase) in trade and other receivables 19,579 (3,771)
(Increase)/ Decrease in contract assets (13,461) 6,532
(Increase) in inventories (238) (88)
(Increase) in other assets (1,933) (1,138)
(Decrease)/ Increase in trade and other payables (4,135) 17,962
(Decrease) in contract liabilities (7,090) (12,149)
(Decrease)/ Increase in provisions (1,163) 2,033
(Decrease) in tax balances (3,017) (475)
Net cash from operating activities 7,507 20,717

Note 19. Earnings per share

Dec-23 Dec-22
$’000 $’000
Earnings used to calculate basic EPS ($’000) 12,225 7,846
Weighted average number of ordinary shares outstanding during
the period used in calculating basic EPS (number of shares) 246,609,527 241,666,700
Basic earnings per share (cents per share) 4.96 3.25

Earnings used to calculate diluted EPS ($’000) 12,225 7,846

Weighted average number of ordinary shares outstanding during
the period used in calculating diluted EPS (number of shares) 257,839,527 253,726,700
Diluted earnings per share (cents per share) 4.74 3.09

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 17

Note 20. Share-based payments
As at 31 December 2023, the Company had the following share-based payment arrangements:

a) Hurdled Performance Rights

On the dates noted below offers of rights were made to senior executives and key managers, as determined by the Board of Directors:
- 24 November 2020, an offer of 3,710,000 Rights
- 26 November 2021, an offer of 3,995,000 Rights
- 19 August 2022, an offer of 4,910,000 Rights
- 27 January 2023, an offer of 340,000 Rights
- 12 June 2023, an offer of 290,000 Rights
- 1 December 2023, an offer of 3,260,000 Rights

Number of Rights Vesting

Lapsed Vested Balance Vesting Hurdles
granted Date
1,855,000 31 Aug 2023 395,000 1,460,000 -
1,997,500 6 Sep 2024 412,500 - 1,585,0001
2,455,000 5 Sep 2025 350,000 - 2,105,0001
170,000 31 Aug 2025 20,000 - 150,0001 1Continued employment to vesting date &
meeting an earnings per share (EPS) target
145,000 31 Aug 2025 - - 145,0001
1,630,000 31 Aug 2026 - - 1,630,0001
1,855,000 31 Aug 2023 395,000 1,460,000 -

1,997,500 6 Sep 2024 412,500 - 1,585,0002

2Continued employment to vesting date &
2,455,000 5 Sep 2025 350,000 - 2,105,0002 meeting a total shareholder return (TSR) target
170,000 31 Aug 2025 20,000 - 150,0002
145,000 31 Aug 2025 - - 145,0002
1,630,000 31 Aug 2026 - - 1,630,0002

16,505,000 2,355,000 2,920,000 11,230,000

b) Non-Hurdled Performance Rights

On 24 November 2020, an offer of 450,000 Rights was made to certain employees deemed to have key roles as determined by the Board of
Directors

Number of Rights Vesting

Lapsed Vested Balance Vesting Hurdles
granted Date
450,000 31 Aug 2023 50,000 400,000 -
Continued employment to 31 August 2023
450,000 50,000 400,000 -

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 charge to the profit or loss is calculated based on the grant date
fair value, the best estimate of the number of awards that are likely to vest and any expired portion of the vesting period. The amount
recognised in the profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in
previous periods.

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 18

Directors' Declaration
For the half year ended 31 December 2023

In the Directors’ opinion:

a. the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard
AASB 134 ‘Interim Financial Reporting’, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;

b. the attached financial statements and notes give a true and fair view of the consolidated entity’s financial position as at
31 December 2023 and of its performance for the financial half-year ended on that date; and

c. there are reasonable grounds to believe the Company will be able to pay its debts as and when they become due and
payable.

Signed in accordance with a resolution of the Directors made pursuant to Section 303(5)(a) of the Corporations Act 2001.

On behalf of the Directors

Chris Oates
Director
Perth
22 February 2024

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2023 19

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

T +61 (08) 9261 9100

F +61 (08) 9261 9111

[Link]

INDEPENDENT AUDITOR’S REVIEW REPORT

TO THE MEMBERS OF DURATEC LIMITED

Report on the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of Duratec Limited which comprises the consolidated
statement of financial position as at 31 December 2023, the statement of comprehensive income, statement of
changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising
a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time
during the half-year.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that
the half-year financial report of Duratec Limited is not in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and of its
performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations
2001.

Basis for Conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the
Independent Auditor of the Entity. Our responsibilities are further described in the Auditor’s Responsibilities for the
Review of the Financial Report section of our report. We are independent of the Company 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) (the Code) that are relevant to our audit of the annual financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of Duratec Limited, would be in the same terms if given to the directors as at the time of this auditor’s
report.

THE POWER OF BEING UNDERSTOOD

AUDIT | TAX | CONSULTING
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

Directors' Responsibility for the Half-Year Financial Report

The directors of Duratec Limited are responsible for the preparation of the half-year financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the half-year financial report
that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility for the Review of the Financial Report

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted
our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report
Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures
described, we have become aware of any matter that makes us believe that the half-year financial report is not in
accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial
position as at 31 December 2023 and its performance for the half-year ended on that date; and complying with
Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope
than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.

RSM AUSTRALIA PARTNERS

Perth, WA J A KOMNINOS
Dated: 22 February 2024 Partner