SRG : FY17 - Annual Report

2017 ANNUAL REPORT

FOR THE YEAR ENDING 30 JUNE 2017

SRG LIMITED

ANNUAL GENERAL MEETING

10:30am - 15 November 2017

River Room, Royal Perth Yacht Club, Australia II Drive, Crawley WA 6009

CHAIRMAN'S REPORT 02

OUR RESULTS 06

OUR BUSINESS 07

YEAR IN BRIEF 08

MANAGING DIRECTOR'S REPORT 09

OUR BOARD 12

OUR LEADERS 14

OUR PROJECTS 16

DIRECTORS' REPORT 28

AUDITOR'S INDEPENDENCE DECLARATION 41

CONSOLIDATED STATEMENT OF PROFIT OR LOSS 42

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 43

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 44

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 45

CONSOLIDATED STATEMENT OF CASH FLOWS 46

NOTES TO THE FINANCIAL STATEMENTS 47

DIRECTORS' DECLARATION 82

INDEPENDENT AUDIT REPORT 83

SHAREHOLDER INFORMATION 89

FINANCIAL OVERVIEW 91

SRG Limited ABN: 57 006 413 574

BRING US YOUR IMPOSSIBLE

We are an Australian complex services company. We solve the challenging and difficult problems that others can't. Our vision is to make the complex simple for our customers.

We have people working across Australia and the world bringing our unique blend of innovation, precision, technical excellence and safety to every civil, mining and building project we touch.

We are not afraid to challenge what is considered possible.

DISCOVER OUR INNOVATIONS

SRGLIMITED.COM.AU

CHAIRMAN'S REPORT

FY17 - A YEAR OF SOLID PROGRESS

It is my pleasure to open the 2017 annual report, following a year in which SRG took another major step toward its ambition of leading the market.

On behalf of my fellow directors, and the entire SRG team, we continue to offer our thoughts and sincere condolences to the friends and family of Nathan Beesley, whose life was tragically lost

in a significant land slide at a mine site earlier this year. Our resolve around Zero Harm is greater than ever and we continue to drive a strong safety culture across all parts of our business.

DRIVING IMPROVEMENT AND GROWTH

Together with our focus on Zero Harm and on further embedding the values and culture established within the Foundational Phase of our business strategy, the SRG team took steps to drive further growth for shareholders in FY17, in the Development Phase of our strategy.

We continue to deliver growth in the Australian operations of our business and we commenced investing in our international expansion program with positive early signs. During the period we opened offices in Hong Kong and New Zealand and as a result secured a major international project in Kuwait with one of our key client partners. It is this partnership approach that will continue to drive our international expansion program.

We delivered the world's largest and most complex dam anchors to stabilise the Hazelmere Dam in South Africa as well as delivering crusher pockets in Panama for First Quantum.

Looking ahead, we are well positioned in Hong Kong to secure contracts for

2018. Further to our Kuwait win, we are refocusing in the Middle East and are starting to look more closely at a number of opportunities which exist in the North America market.

During FY17, the international business represented approximately 9% of overall revenues. This number will increase

as we continue grow our international operations as a key plank of the Development Phase of our strategy.

We continue to evaluate M&A opportunities that complement what we do or provide vehicles for our international expansion and anticipate further activity in this area in FY18.

We will continue to take a disciplined and strategic approach to the assessment of M&A opportunities

to ensure that they add value to shareholders.

GROWING SHAREHOLDER RETURNS

The full year saw a 25% increase in our

Net Profit Before Tax (NPBT) result to

$11.6 million, compared with the NPBT of $9.2 million in the prior period. The Board has declared a final fully franked dividend of 4 cents per share (cps), with a record date of 13 September 2017 and payment date of 13 October 2017. This brings the total dividends declared for FY17 to 7 cps (up 16.7% on the 6 cps in FY16.)

PERFORMANCE AND INCREASED OUTREACH LEADS TO STRONGER INVESTOR RELATIONSHIPS

During the year, the market again recognised SRG's strong performance with the share price increasing 33% from $0.98 per share on 1 July 2016

to a close of $1.30 per share on 30 June 2017. We have significantly outperformed the market in terms of growing SRG's value. Looking back three years from 30 June 2017, our market capitalisation had grown 2.3 times to $83.4m.

FOUNDATION 2015	DEVELOPMENT 2016-2019	MARKET LEADERSHIP 2020+
Develop vision / strategy  Drive Zero Harm  Right structure / capability  Develop brand / value proposition  Rigorous review mechanisms in place  Formalise relationships with key stakeholders  Drive improvement / efficiency  Resolve legacy issues 	Execute strategy Projects delivered above green sheet Secure specialised civil projects of scale Organic growth in target markets Growth in complementary services / markets Selective acquisitions to accelerate growth Brand recognition	Zero Harm industry leader Global complex service partner of choice Strong brand Employer of choice ASX top 200 Consistent performance Above market returns Diversified international specialist contractor

02 SRG Annual Report 2017