Annual financial statement
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CIVMEC LIMITED (ACN 672 407 171) AND ITS SUBSIDIARIES FINANCIAL REPORT 30 JUNE 2026
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2 CIVMEC FINANCIAL REPORT 2026 Content PAGE Directors’ Report 1 - 20 Remuneration Report 7 – 19 Auditor’s Independence Declaration (Financial Report) 21 Report on Corporate Governance 22 - 46 Consolidated Statement of Profit or Loss and Other Comprehensive Income 47 Consolidated Statement of Financial Position 48 Consolidated Statement of Changes in Equity 49 Consolidated Statement of Cash Flows 50 – 51 Notes to the Consolidated Financial Statements 52 – 115 Consolidated Entity Disclosure Statement 116 Directors’ Declaration (on Financial Report) 117 Independent Auditor’s Report on Financial Report 118 – 12 5 Sustainability Report 126 – 151 Directors’ Declaration (on Sustainability Report) 152 Auditor’s Independence Declaration (Sustainability Assurance Engagement) 153 Independent Auditor’s Review Report on Specified Sustainability Disclosures 154 - 156
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CIVMEC FINANCIAL REPORT 2026 1 Directors’ report The Directors present their report to the members together with the audited consolidated financial statements of Civmec Limited (the ‘Company’) and its subsidiaries (collectively referred to as the ‘Group’) for the financial year ended 30 June 2026 . Directors The names and details of the directors of the Company in office during the financial year and until the date of this report a re as follows. Directors were in office for this entire period unless otherwise stated. Names , qualifications, experience and special responsibilities James Finbarr Fitzgerald Executive Chairman Appointed 4 September 2024 . James joined the Civmec Board on 27 March 2012. He is a co - founder of Civmec. A dedicated leader with over 41 years industry experience, he guides the corporate direction of the company, oversees overall business and financial performance, and ensures comp liance with corporate governance guidelines. James has contributed to several national industry initiatives, including roles with the Centre for Defence Industry Capability and the AusIndustry Modern Manufacturing Initiative. A strong advocate for skills development and inclusion, he promotes training pathways, diversity, and equal opportunity across the business. His leadership continues to guide Civmec’s growth while reinforcing its role in s upporting Australia’s industrial capabilities. Current directorships of listed entities: Nil Other directorships of listed entities within the past three years: Nil Patrick John Tallon Chief Executive Officer Appointed 4 September 2024 . Patrick was appointed to the Board on 27 March 2012. He is a co - founder of Civmec. Patrick Tallon has 38 years of experience in the construction, engineering and manufacturing sectors. As the CEO, he leads the implementation of the company’s strategic obje ctives, with a focus on operational excellence, workforce engagement, and sustainable growth across all business units. He is committed to fostering a strong safety culture and driving innovation through continuous improvement. Patrick maintains regular en gagement with clients, partners, and staff, and is particularly involved with the direct workforce – those on the workshop floors and project sites who carry out the physical work. His leadership style promotes collaboration and a values driven approach in all aspects of the business. A dedicated supporter of a few charities, he has taken part in seven Vinnies CEO Sleepout events, raising more than A$500,000 in total for homelessness. Current directorships of listed entities: Nil Other directorships of listed entities within the past three years: Nil Kevin James Deery Chief Operating Officer Appointed 4 September 2024, retired 13 May 2026 . Kevin joined the Civmec Board on 27 March 2012. With a Bachelor of Engineering (Mechanical) degree, he has more than 31 years of experience managing major Australian manufacturing and construction projects. A key part of Civmec’s leadership since its inception, he oversees the Group’s operations, with responsibility for project delivery, safety performance, and financial control. Kevin also plays a central role in ensuring Civmec’s operational and financial strategies are closely aligned, enabling continued growth while maintaining quality and efficiency across all areas of the business. Current directorships of listed entities: Nil Other directorships of listed entities within the past three years: Nil
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2 CIVMEC FINANCIAL REPORT 2026 Directors’ report Directors (continued) The names and details of the directors of the Company in office during the financial year and until the date of this report a re as follows. Directors were in office for this entire period unless otherwise stated. (continued) Ambrose Law Lead Independent Director Chairman of Audit and Risk and Conflicts Committee Member of Nominating Committee Member of Remuneration Committee Appointed 30 October 2024. A seasoned Chartered Accountant with extensive experience in senior financial roles across multiple countries. Ambrose brings to the Board extensive experience in corporate governance and risk management. He holds a Bachelor of Commerce from Victoria Unive rsity of Wellington, New Zealand, and is a Chartered Accountant with extensive experience in senior financial roles in the Banking and Finance industry and in public accounting. Ambrose’s appointment aligns with Civmec’s commitment to maintaining a diverse and skilled Board, ensuring robust oversight and strategic guidance as the company continues its growth trajectory. Degrees & qualifications: Chartered Accountant in New Zealand and Singapore , Bachelor of Commerce Other directorships of listed entities within the past three years: Global Testing Corporation (SGX listed) Ong Beng Hong Independent Director Chairman of Remuneration Committee Member of Audit Risks and Conflicts Committee Member of Nominating Committee Appointed 30 October 2024. Ong Beng Hong has a Bachelor of Laws (Honours) from Kings College, London, and is a practicing advocate and solicitor of the Supreme Court of Singapore. She is also a Joint Managing Director of Wong Tan & Molly Lim LLC, specialising in corporate, banking, finance, and capital markets law. Beng Hong brings a wealth of experience in legal and corporate advisory roles, contributing valuable insights to the Board’s deliberations. Her expertise supports Civmec’s focus on strong governance practices and strategic decision making, reinforcing the company’s position in the industry. Degrees & qualifications: LL.B (Hons) , Advocate & Solicitor of the Supreme Court of Singapore Other directorships of listed entities within the past three years: Intraco Limited (SGX listed) , Moneymax Financials Services Ltd (SGX Listed) Other directorships*: Wong Tan & Molly Lim LLC , WTML Management Services Pte Ltd * Companies in which Ong Beng Hong was appointed as a director for the purposes of incorporation or nominee director only and in the course of her professional practice have not been included.
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CIVMEC FINANCIAL REPORT 2026 3 Directors’ report Directors (continued) The names and details of the directors of the Company in office during the financial year and until the date of this report a re as follows. Directors were in office for this entire period unless otherwise stated. (continued) Gary Gray Independent Director Chairman of Nominating Committee Member of Audit, Risks and Conflicts Committee Member of Remuneration Committee Appointed 30 October 2024. Mr. Gray AO brings extensive public policy, political, and commercial experience, he has held senior roles across both the public and private sectors. Mr. Gray’s previous appointments include as Australia’s Ambassador to Ireland, Director of the Australian Submarine Corporation, Director of the Perth Astronomical Observatory, a Trustee of Telethon, Australia’s largest charity, Director of Corporate Affairs at Woodside Energy, General Manager of External Affairs at Mineral Resources Ltd and as Executive Dire ctor of the WA Institute of Medical Research. In Government, Mr. Gray was Federal Parliamentary Member for Brand and held ministerial portfolios including Minister for Resources, Energy and Minister for the Public Service and Federal Integrity Agencies. Mr. Gray has been a member of the Independent Pa rliamentary Expenses Authority since 2016. In 2024 , Mr. Gray was appointed as a Non - Executive Director of Amplitude Energy Limited (ASX: AEL). Mr. Gray GAICD was awarded a Centenary Medal in 2001 and an AO in 2003 . Degrees & qualifications: Bachelor of Economics ANU Other directorships of listed entities within the past three years: Amplitude Energy (ASX listed) Other appointments: Non - executive Director Amplitude Energy and Member of the Independent Parliamentary Expenses Authority Group Company Secretary Bojan Cica Chief Financial Officer Appointed 1 September 2024. He holds a Master of Business Administration, a Bachelor of Laws, is a Certified Practising Accountant, and is currently completing a Master of Applied Finance. Prior to his appointment as CFO, Bojan was the Group Manager Commercial and Operational Risk. B ojan brings a sound understanding of operations and commercial strategy. He works closely with the operational EGMs while managing the company’s financial team, ensuring compliance and guiding the company’s strategic direction to ensure consistent and sust ainable fiscal growth. Other directorships of listed entities within the past three years: Nil Other directorships: Nil
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4 CIVMEC FINANCIAL REPORT 2026 Directors’ report Corporate information Civmec Limited is a publicly listed company that is incorporated and domiciled in Australia. The Company has been listed on the Australian Securities Exchange (‘ASX’) and Singapore Exchange Limited (‘SGX’). The registered office of the Company and its principal place of business is at: 16 Nautical Drive, Henderson Western Australian 6166 Principal activities The consolidated group operates as an integrated construction and engineering enterprise, specialising in: Manufacturing The Group offers a comprehensive range of manufacturing capabilities, including heavy engineering, offsite modular assembly and testing. Additionally, it also specialises in supplying OEM material handling equipment and offers expertise in naval shipbuildi ng. Construction The Group delivers comprehensive on - site services, including module installation, SMPE&I (structural, mechanical, piping, electrical & instrumentation), EIC (electrical, instrumentation and control), structural concrete works, and site earthworks. Maintenance and capital works The Group delivers comprehensive on - site services, including module installation, SMPE&I (structural, mechanical, piping, electrical & instrumentation), EIC (electrical, instrumentation and control), structural concrete works, and site earthworks. No significant change in the nature of these activities occurred during the current financial year. Operating and financial review A summary of the consolidated revenue and results for the current and previous financial years is as follows: 2026 2025 Variance % A$’000 Revenue and other income 906,771 814,138 11.4 Total depreciation (23, 729 ) (21,433) 10. 7 Total finance cost (9,44 6 ) (9,681) (2.4) Earnings before interest, tax and amortisation (EBITDA) 107,32 3 91,689 1 7. 0 Earnings before interest and tax (EBIT) 83,59 4 70,256 1 9.0 Earnings before tax (EBT) 74,14 8 60,575 2 2.4 Net profit after tax (NPAT) 52,09 6 42,536 2 2.5 Cash position 54,629 102,940 (46.9) Operating cash flow before working capital changes 107,1 58 89,267 20.0 Earnings per share (cents) 10. 23 8.37 22.2 Net profit margin % 5. 8 % 5.2% 11.5 Revenue and other income were 11. 4 % higher than the previous year, primarily due to the increased level of activities within the infrastructure , Marine and Defence division following the acquisition of Luerssen Australia (now known as ‘Civmec Defence Industries’) and Energy division. The gross profit margin remain ed at 11.5%. The 22.4 % increase in EBT compared to the previous year was primarily driven by higher gross profit , coupled with slightly lower administrative expenses and reduced finance costs. The 46. 9 % reduction in the Group’s cash balance was mainly attributable to increased working capital requirements arising from higher unbilled work in progress, together with capital expenditure in property, plant and equipment .
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CIVMEC FINANCIAL REPORT 2026 5 Directors’ report Likely developments and expected results The Group continues to focus on sustainable growth and profitability, with tendering activity remaining strong and well distributed across all sectors. Activity levels increased materially during FY26, supported by recent contract awards and a record order book, which provides forward revenue visibility into FY27. The Group is actively deploying its growth strategy, including within the maintenance and defence sectors. The Group remains committed to delivering profitability and shareholder returns by priori tising the conversion of profitable work and maintaining disciplined project execution. The Group has experienced a significant increase in early contractor involvement (ECI) engagements across multiple commodities, locations and divisions, positioning it to convert opportunities as they come to market. Further information about likely developments in the operations of the Group and the expected results of those operations in future financial years has not been included in this report because disclosure of the information would be likely to resul t in unre asonable prejudice to the Group. Significant changes in the state of affairs Luerssen Australia acquisition On 1 July 2025, the Group has completed the acquisition of 100% of the shares in Luerssen Australia Pty Ltd (now rebranded as Civmec Defence Industries Pty Ltd ‘CDI’). The transaction has been accounted for as a business combination. Refer to Note 18 for more information. Environmental regulations The consolidated group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory. The Group is committed to responsible environmental management and sustainability practices. Furth er details of the Company’s environmental policy are available on the Company’s corporate website. Dividends Information on dividends made during the year can be found under Note 25 of this report. Arrangements to enable directors to acquire shares or debentures Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than as disclosed under ’ Performance Rights Plan ’ in this report.
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6 CIVMEC FINANCIAL REPORT 2026 Directors’ report Shares under option and unvested equity performance rights Options There are no outstanding share options at the date of this report. Performance rights As at the date of this report, the Company had outstanding performance rights granted under the 2024 Civmec Key Senior Executives Performance Rights Plan as follows: Year of award No. of rights granted No. of unvested rights Unvested rights held by KMP FY2023/24: Tranche 7 1,817,000 1,542,000 153,000 FY2024 /25: Tranche 8 2,283,000 2,091,000 137,000 FY2025/26: Tranche 9 1,599,000 971,000 185,000 FY2025/26: Retention plan 7,376,000 5,371,000 901,000 These rights entitle the holder to receive shares upon vesting, subject to the satisfaction of the relevant conditions. No amounts are payable by the recipients upon vesting. Further information can be found under Remuneration Report and Note 26 of this report. Directors’ shareholdings As at the date of this report, the interests of the directors in the shares of Civmec Limited were: Directors Shareholdings in the Company James Fitzgerald 84,238,077 Patrick Tallon 84,138,077 Ambrose Law Nil Ong Beng Hong Nil Gary Gray 100,000 Directors’ meetings The number of Board and standing Board Committee meetings held during the year, and the number of meetings each Director attended is below: Extraordinary Board Meetings Board Board committee Audit committee Remuneration committee Nominating committee Risks and conflicts committee No. of meetings held 1 4 4 2 2 4 No. of meeting attended James Fitzgerald 1 4 4 * 2 * 2 * 4 * Patrick Tallon 1 4 4 * 2 * 2 * 4 * Kevin Deery 1 1 4 4 * 2 * 2 * 4 * Ambrose Law 1 4 4 2 2 4 Ong Beng Hong 1 4 4 2 2 4 Gary Gray 1 4 4 2 2 4 Note: * By Invitation 1. retired on 13 May 2026
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CIVMEC FINANCIAL REPORT 2026 7 Directors’ report Corporate governance Civmec Limited maintains a high level of corporate governance in accordance with the ASX Corporate Governance Principles and recommendations (4th Edition) and Principles and Provisions of the Singapore Code of Corporate Governance 2018 (the ‘Code’). For mo re comprehensive information, refer to Corporate Governance section in this report. Remuneration report (audited) The Directors of Civmec Limited present this Remuneration Report for the consolidated group for the year ended 30 June 2026 . It has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (‘Act’), applicable regulations and the Company’s policies regarding Key Management Personnel (‘KMP’) remuneration governance. The remuneration report has been audite d as required by section 308(3C) of the Act. The remuneration report is presented under the following sections: 1 Introduction 2 Highlights for FY2 6 3 Remuneration governance 4 Executive remuneration arrangements A. Remuneration strategy and objectives B. Approach to setting remuneration and details of incentive plans C. Executive contracts 5 Executive remuneration outcomes for FY2 6 (including link to performance) 6 Non - executive director remuneration arrangements 7 Statutory Executive KMP remuneration 8 Additional disclosures relating to performance rights and shares 9 Loans to key management personnel and their related parties 10 Other transactions and balances with key management personnel and their related parties
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8 CIVMEC FINANCIAL REPORT 2026 Directors’ report Remuneration report (audited) (continued) 1 Introduction The remuneration report details the remuneration arrangements for KMP who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, inclu ding any di rector (whether executive or otherwise) of the Company. The table below details the KMP of the Company during FY2 6 . Each was a KMP for the entire period unless otherwise stated. For the purposes of this report, the term ‘ non - executive director ’ refers to the Independent Directors of the company. The term ' executive KMP ’ includes the Executive Chairman and other senior executives of the Company. Non - Executive Directors (NEDs) Ambrose Law Lead Independent Director Ong Beng Hong Independent Director Gary Gray Independent Director Executive KMP James Fitzgerald Executive Chairman Patrick Tallon Chief Executive Officer Kevin Derry 1 Chief Operating Officer Bojan Cica Chief Financial Officer Note: 1. r etired on 13 May 2026 There were no other changes to KMP after the reporting date and before the date the financial report was authorised for issue. 2 Highlights for FY26 Executive fixed remuneration 5.0 % Average increase A review of the Chief Financial Officer's fixed remuneration was undertaken during FY26, benchmarking the role against relevant external market comparators. The Chief Financial Officer was newly appointed in the prior reporting period, during which the res ponsibilities of the role were also adjusted. Following this review, the Chief Financial Officer's fixed remuneration was increased to align with market peers and reflect the current scope of the role. No changes were made to the fixed remuneration of the Executive Chairman or the Chief Executive Officer during FY26. Across executive KMP as a whole, fixed remuneration increased by an average of 5%. A breakdown of executive KMP remuneration is provided in the statutory table contained in Section 7 of this re muneration report . Short - term incentive – Group outcomes 100 % awarded The company’s Short - Term Incentive Plan (STIP) is structured around both group and individual performance targets. Group targets account for 75% of the total STIP pool available to executive directors. For FY26, STIP measures related to company turnover, EBIT, Work - in - Hand and Total Recordable Injury Frequency Rate (TRIFR) were successfully achieved. These outcomes reflect the company’s ongoing focus on operational execution and safety performance which was successfully delivered by the Company. Long - term incentive (‘LTI’) outcomes 66.16 % awarded The three - year performance period for the FY26 LTI award ended on 30 June 2026. Vesting under this award is determined solely by absolute earnings per share (aEPS) performance, measured against targets set by the Remuneration Committee at the commencement of the period. aEPS achievement averaged 96.5% of target across the three - year period, which, applied to the vesting schedule, resulted in the Board approving vesting of 66.16% of the award. The remaining 33.84% lapsed.
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CIVMEC FINANCIAL REPORT 2026 9 Directors’ report Remuneration report (audited) (continued) 2 Highlights for FY26 (continued) FY2 6 Non - Executive directors remuneration 3.58 % increase During FY26 the Board reviewed the NED fee structure in light of relevant external benchmarking. As a result, NED fees were increased by an average of 3.58% to align remuneration with the market. The agreed NED fee pool of SGD$400,000 (as approved by shareholders at the 2024 AGM) remains unchanged. 3 Remuneration governance The following sets out the Company’s governance framework for remuneration setting and decision making, and responsibilities of various parties. Board The Board takes an active role in the governance and oversight of the Company’s KMP remuneration strategies and has overall responsibility for ensuring the effectiveness of remuneration arrangements. This is in consideration of remuneration outcomes that a lign with the Company’s strategic objectives and risk management framework, and shareholder value over the long term. Remuneration Committee (‘RC’ or ‘the Committee’) The Company has established an RC to make recommendations to the Board on remuneration packages of individual NEDs and executive KMP to attract and retain talent to drive long - term sustainable results. The Company has developed a remuneration policy for se tting the remuneration packages of NEDs and executive KMP. The RC considers all aspects of remuneration, including termination terms, to ensure they are fair. The RC has established a framework of remuneration for the NEDs and executive KMP covering all aspects of remuneration but not limited to NED fees, executiv e KMP salaries, allowances, bonuses, incentive schemes and benefits - in - kind. This framework considers business context, remuneration guiding principles and external market conditions when setting appropriate remuneration levels. The RC also oversees remune ration governance matters including delegations, disclosures, conflicts of interest and independence. The recommendations of the RC are submitted for endorsement by the entire Board. Each member of the RC abstains from voting on any resolutions in respect of their own remuneration package. Also, in the event that a member of the RC is related to the employ ee under review, they will abstain from participating in that review. Directors are not involved in the discussion and in deciding their own remuneration. External Remuneration Advisors To ensure the Board and the RC are fully informed when making remuneration decisions, it may seek additional market insights and advice from external independent remuneration consultants (as endorsed by the RC and approved by the Board). No external independent remuneration consultants were engaged during FY26. Share Trading Policy The Company has a policy that governs the Directors and senior management personnel dealing in securities trading. The securities trading policy reflects the Corporations Act 2001 prohibition on KMP and their closely related parties from hedging the KMP’s incentive remuneration. The KMP, and their immediate family and controlled entities are prohibited from entering into any arrangement that would have the effect of limiting the KMP’s exposure to risk relating to an element of the KMP’s remuneration that is unvested, or is vested but remains subject to a holding lock. The securities trading policy sets out closed periods for trading in securities by KMP including for four weeks prior to and 48 hours after release of half yearly and annual financial results. The policy also restricts KMP from engaging in short term trading of securities. The Company’s Securities Trading Policy is available at https://www.civmec.com.au/approach/policies/ .
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10 CIVMEC FINANCIAL REPORT 2026 Directors’ report Remuneration report (audited)(continued) 4 Executive remuneration arrangements 4 A Remuneration strategy and objectives Civmec aims to remunerate fairly and responsibly and in accordance with the region, markets, skills, experience, individual performance and the applicable corporate governance principles, such as the Principles and Provisions of the Singapore Code of Corpo rate Governance 2018 and the 4th edition of the Australian Securities Exchange Corporate Governance Principles and Recommendations. The objectives of Civmec’s Remuneration Policy are: to ensure the remuneration framework is appropriate to attract, retain and motivate the executive KMP, provide good stewardship of the Company and successfully manage the Company for the long term; to ensure the short - term incentives and long - term incentives align with the achievement of Civmec’s short - term and long - term strategic goals that support the interests of shareholders and other stakeholders and promote Civmec’s long - term success; to ensure the share and equity - based plans comply with the applicable corporate governance principles; to ensure effective benchmarking of remuneration packages for executive KMP is in accordance with market movements for a clearly defined peer group of similar companies to ensure fair and competitive remuneration; and to set performance goals and reward performance for key stages of the Company’s development in a way which is sustainable, including in respect of health and safety - based objective. The executive KMP remuneration structure for FY26 remains consistent with prior years and comprises a base salary, superannuation and performance incentives (consisting of short and long - term incentive opportunities). The following table provides an overview of the remuneration structure. Fixed remuneration (FR) Short - term Incentive (STI) Long - term Incentive (LTI) Purpose Attract and retain high - quality executives through market competitive and fair remuneration. Ensure a portion of remuneration is variable, at - risk and linked to the delivery of agreed plan targets for financial and non - financial measures that support strategic priorities. Designed to retain and reward executives, whilst setting an incentive structure that aligns with overall company performance and shareholder value and ensures that rewards are contingent on the achievement of long - term financial goals such as absolute earn ings per share (aEPS) over a multi - year period. Delivery Base salary, superannuation as per the Superannuation Guarantee (Administration) Act 1992. Awarded in cash based on an assessment of performance against a mix of individual and group KPIs and measures over the preceding year. Awarded in performance rights which potentially vest after three years. To the extent gateway hurdles are satisfied, vesting is based on absolute earnings per share (“aEPS ”) over a three - year performance period. Vested LTIs are satisfied in either Civmec shares or the cash equivalent. Alignment to performance Set with reference to comparable industry market benchmarks as well as the size, responsibilities, and complexity of the role, and skills and experience. Individual performance impacts fixed remuneration adjustments. Performance is assessed using a scorecard comprising financial and non - financial measures linked to the key strategic priorities for the performance year. Performance is assessed against aEPS which is aligned to shareholder wealth creation over the long term. Underperformance over the longer - term may also result in no vesting of long - term incentive awards (e.g., performance rights).
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CIVMEC FINANCIAL REPORT 2026 11 Directors’ report Remuneration report (audited)(continued) 4 Executive remuneration arrangements (continued) 4 B Approach to setting remuneration and details of incentive plans In FY2 6 , the executive remuneration framework consisted of base salary and short and long - term incentives as outlined below. Overall remuneration level and mix How is overall remuneration and mix determined? Executive KMP remuneration comprises a fixed and a variable component, the latter of which is in the form of a bonus linked to the performance of the individual as well as the Group. In addition, short - term and long - term incentives are in place to strength en the pay - for - performance framework by rewarding and recognising the key executives’ contributions to the growth of the Group. This is designed to align remuneration with the interests of shareholders and link rewards to corporate and individual performance to promote long - term sustainability of the Group. The remuneration of the executive KMP is reviewed based on benchmarking against comparable peer companies using survey data sourced from external data providers and are reviewed annually by the RC to ensure market competitiveness. In making its recommendations to the Board on the level and mix of remuneration, the RC strives to be competitive, linking rewards with performance. It takes into consideration the essential factors to attract, retain and motivate the executive KMP needed to run the Company successfully, linking rewards to corporate and individual performance, and aligning their interest with those of the shareholders. Base salary and other benefits How is base salary and other benefits reviewed and approved? Base salary and other benefits are reviewed annually utilising benchmarked remuneration data. Any changes in remuneration for executive KMP are subject to approval from the Board considering recommendations from the RC. 57% 52% 46% 25% 24% 27% 24% 27% CHIEF FINANCIAL OFFICER CHIEF EXECUTIVE OFFICER CHAIRMAN REMUNERATION MIX Fixed STI LTI 18%
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12 CIVMEC FINANCIAL REPORT 2026 Directors’ report Remuneration report (audited)(continued) 4 Executive remuneration arrangements (continued) 4 B Approach to setting remuneration and details of incentive plans (continued) Short - Term Incentives (STI) What is the STI plan? The STI ensures a portion of remuneration is variable, at - risk and linked to individual performance and the delivery of agreed plan targets for financial and non - financial measures that support the Company’s strategic priorities over a twelve - month perform ance period. The STI is awarded in cash on completion of the external audit, approval by the RC and Board and subsequent release of the Annual Report. What are the performance criteria and how do they align with business performance? STI payments are not guaranteed and are linked to the achievement of a mix of company and individual performance metrics as approved by the Board for the year. The performance measures relating to the Executive Chairman are shown below. Corporate Measures (75%) Key Performance Indicator Weighting Turnover – The Groups Annual Revenue 30% EBIT – Earnings Before Interest and Tax 40% Work in Hand [WIH] Order Book 20% Total recordable injury frequency rate per 1 million hours worked [TRIFR*] 10% *12 month rolling figure (annualised) Individual Measures ( 2 5%) The Executive Chairman’s individual measure relevant to STI award is at risk against personal objectives set at the beginning of the financial year. Key Performance Indicator Weighting Leadership and Succession 50% Growth and Strategy 30% Corporate Structure 10% Sustainability and Reporting 10% What is the value of the STI award opportunity? The executive KMP FY2 6 STI maximum opportunity is shown below. Executive KMP Position Total STI max opportunity (Cash) James Fitzgerald Executive Chairman A$400,000 Patrick Tallon Chief Executive Officer A$400,000 Bojan Cica Chief Financial Officer A$ 3 50,000 How are STI payouts determined? The STI award is determined after the end of the financial year and release of financial statements and individual and group performance, over the year against the KPIs set by the RC. What happens to STI awards in the event of employment cessation? STI awards will lapse on cessation of employment .
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CIVMEC FINANCIAL REPORT 2026 13 Directors’ report Remuneration report (audited)(continued) 4 Executive remuneration arrangements (continued) 4 B Approach to setting remuneration and details of incentive plans (continued) Long - Term Incentive (LTI) What is the LTI plan? The LTI plan is delivered in cash and performance rights, granted at the discretion of the RC. The original Civmec Limited Performance Rights Plan (the ‘CPRP’) was replaced by the ‘ 2024 Civmec Key Senior Executives Performance Rights Plan’, which was approved and adopted at the Extraordinary General Meeting (‘EGM’) held on 1 August 2024 . This new plan is designed to reinforce the vital equity culture at the top management level and to further align the interests of the Company’s top management with those of shareholders. How much can executives earn? The grant of awards may be made on an annual basis at the discretion of the Committee. When considering the value of the award to be provided, the Committee primarily considers the number of performance rights and the performance condition within the perfo rmance period. The suggested number of performance rights allocated to each participant is based on the values agreed in by the RC and the share price at 1 July of each year. The number of performance rights allocated are recalculated every year at the time of issuing. T he number of performance rights by groups are noted below: Role LTIP Incentive Value Executive Chairman / CEO A$350,000 CFO A$ 30 0 ,000 ** The Civmec Performance Rights Plan places restrictions on the grant of performance rights under the plan to Controlling Share Holders (directly or indirectly holds 15% or more total number of issued shares). Based on this rule, Civmec issues benefits un der the LTI plan to Controlling Share Holders on a cash basis. ** How is performance measured? The Performance Rights vest subject to the following criteria: 1. Satisfaction of gateway hurdles 2. Achievement of company performance measures Gateway Hurdles The following two gateway hurdles need to be satisfied for any vesting, regardless of achievement of company performance measures. personal performance reviews have been received over the performance period at a satisfactory level (as determined by the RC); and the participant remains employed with Civmec Company Performance Measures To the extent the gateway hurdles are satisfied, 100% of the vesting will be based on the absolute earnings per share (aEPS) outcome. The aEPS is based on the achievement of certain predetermined performance targets determined by the RC. The vesting schedule is as follows: LTI proportion vesting aEPS (100%) 50% Target =90% of three - year average annual result Pro - rata between 50% and 100% Outcome achieved between target and stretch 100% Stretch >110% of three - year average annual result The RC has the discretion to determine whether the performance targets have been met. When is performance measured? After the end of each performance period, the RC will review the performance targets specified in respect of the Award and if they have been satisfied, will release awards to Participants. What happens if an executive leaves? For all participants, termination of employment will trigger a forfeiture of all unvested awards except under certain limited circumstances defined in the Plan Rules (e.g., good leavers). What happens if there is a change in control? If a change of control event occurs with respect to the Company, the RC may determine, in its discretion, whether the rights immediately vest and if so, what proportion shall vest.
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14 CIVMEC FINANCIAL REPORT 2026 Directors’ report Remuneration report (audited)(continued) 4 Executive remuneration arrangements (continued) 4 C Executive contracts Remuneration arrangements for KMP are formalised in employment agreements. The following outlines the details of contracts with the executive KMP (including the Executive Chairman): Notice period Payment in lieu of notice Treatment of STI on termination Treatment of LTI on termination Resignation 6 months Yes Unvested awards forfeited Unvested awards forfeited Termination for cause None None Unvested awards forfeited Unvested awards forfeited Termination in cases of death, disablement, redundancy or notice without cause* 6 months ** There are no provisions in the contract RC discretion under Good Leaver requirements RC discretion under Good Leaver requirements *Special provisions in the incentive plan rules deal with termination in the case of death, in addition to income protection and insurance impacts. **Notice period provisions do not apply to death. 5 Executive remuneration outcomes for FY2 6 (including link to performance) A summary of the company’s performance over the year s is shown below. FY2 6 A$’000 FY25 A$’000 FY24 A$’000 FY23 A$’000 FY22 A$’000 Revenue from continuing operations 902,984 810,586 1,033,473 830,866 809,295 Profit before income tax from continuing operations 74,148 60,575 91,491 82,571 69,983 Profit after income tax: 1. continuing operations 52,096 42,536 64,409 57,673 50,741 2. discontinued operations - - - - - Profit after income tax 52,096 42,536 64,409 57,673 50,741 Share price (A$ cent) – ASX 3. beginning of the year 1.11 0.94 0.82 0.60 0.65 4. end of the year 1.95 1.11 0.94 0.82 0.60 Change in share price 0.84 0.17 0.12 0.22 (0.05) Fully franked dividend (cents per share) 5. interim 0.025 0.025 0.025 0.020 0.010 6. final 0.035 0.035 0.035 0.030 0.020 Change in Shareholder Wealth 0.060 0.060 0.060 0.050 0.030 Share price change + dividend 0.900 0.230 0.180 0.270 (0.020) Earnings per share from continuing and discontinued operations – basic (A$ cent) 10.23 8.37 12.70 11.42 10.11 Short - Term Incentives Company performance and its link to short - term incentives The table below outlines the general STI outcomes for KMP. It highlights the portion of STI earned relative to target, reflec ting individual and company performance. This linkage underscores the alignment between remuneration outcomes and the achievement o f strategic and financial objectives. Name STI opportunity % of Total Fixed Remuneration STI opportunity $ (max) Proportion of maximum STI earned in FY2 6 Proportion of maximum STI forfeited in FY2 6 James Fitzgerald 50% A $400,000 100 % 0 % Patrick Tallon 50% A $400,000 100 % 0 % Bojan Cica 50% A $250,000 100 % 0 %
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CIVMEC FINANCIAL REPORT 2026 15 Directors’ report Remuneration report (audited)(continued) 5 Executive remuneration outcomes for FY26 (including link to performance) (continued) Short - Term Incentives (continued) KPI and weighting Weighting Performance outcomes Further details Turnover – Group FY revenue Group FY revenue vs budget revenue for FY set by board. 30% The Company successfully achieve d its FY26 turnover target. Earnings Before Interest and Tax - Group FY EBIT vs budget EBIT for FY set by board. 40% The Company successfully achieved its FY26 EBIT target. Work in Hand [WIH] – Order Book Group has secured in excess of 50% of contracts relating to its future year budget. 20% The Company has exceeded the WIH target and has achieved the KPI. Total recordable injury frequency rate per 1 million hours worked [TRIFR*]. Group safety performance for the year based on a TRIFR calculation is below 3.5. 10% The company had a TRIFR of 2.95 for the year. Resulting KPI payout (corporate KPI component) 30% Long - Term Incentives Company performance and its link to long - term incentives The LTI outcomes for FY26 are directly tied to the company’s performance, measured through the achievement of predetermined absolute earnings per share (aEPS ) targets. Vesting of performance rights occurs only when gateway hurdles — such as satisfactory personal performance reviews and continued employment — are met. Once these are satisfied, 100% of the LTI vesting is based on aEPS results over a three - year avera ge annual result. LTI Hurdle (FY2 6 ) Performance outcomes Vesting outcome Further details Absolute EPS (100% weighting) 96.5% of target 66.16 % Both gateway hurdles were satisfied. aEPS achievement against target was 116.2%, 61.4% and 111.8% for FY24, FY25 and FY26 respectively, giving a three - year average of 96.5%. Under the vesting schedule ( 50% vesting at 90% of target, 100% at 110% of target, and pro - rata in between ) an average outcome of 96.5% produces vesting of 66.16%. Total vesting outcome 66.16 %
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16 CIVMEC FINANCIAL REPORT 2026 Directors’ report Remuneration report (audited)(continued) 6 Non - executive Director remuneration arrangements The remuneration of the Independent Directors is in the form of a fixed fee which is subject to shareholders’ approval at the AGM in accordance with any listing rules . Each member of the RC abstains from voting on any resolution, participating in any deliberation of the RC, and making any recommendation in respect of their own remuneration. The Executive Directors do not receive Director’s fees. Remuneration policy The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually against fees paid to Non - Executive Directors of comparable ASX listed companies with similar market capitalisation of the Company, as well as similar sized industry comparators. The Board considers advice from external consultants when undertaking the annual review process. Civmec has adopted the following approach for the non - executive directors’ remuneration: The non - executive directors are remunerated at a fixed fee for their time, commitment and responsibilities. The non - executive directors are prohibited from involvement in the decision making of their individual remuneration. The maximum aggregate amount of the non - executive director’ fees that the Company can pay to nonexecutive directors is subject to approval by shareholders at Annual General Meeting. The remuneration for the non - executive directors is not linked to individual performance. The non - executive directors are not part of any equity - based remuneration schemes. The non - executive directors are not entitled to any retirement benefits. The Company’s constitution and the ASX listing rules specify that the NED fee pool shall be determined from time to time by a general meeting . The latest determination was at the 2024 AGM when shareholders approved an aggregate fee pool of SGD$400,000 per annum. Structure The remuneration of NEDs consists solely of Director fees. NED fees are inclusive of duties relating to holding the position of a committee chair. All NEDs participate as a member of all committees. The Chair (Lead Independent Director) chairs two committees and the other NEDs chair one committee each. To ensure independence, NEDs do not participate in any incentive schemes. The table below summarises the NED fee policy (SGD) for FY2 5 and FY2 6 . All fees are inclusive of any applicable superannuation. Non - Executive Directors Fees FY2 5 FY2 6 Chair (Lead Independent Director) S$101,000 S$105,000 Member (Independent Directors) S$89,000 S$92,000
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CIVMEC FINANCIAL REPORT 2026 17 Directors’ report Remuneration report (audited)(continued) 6 Non - executive Director remuneration arrangements (continued) NED statutory remuneration for FY2 6 The figures presented in the table below reflect the remuneration paid to NEDs for FY26 and FY25 . All payments (including committee fees and superannuation) were made in Singapore Dollars (SGD), and the amounts shown are denominated in the payment currency. Non - Executive Directors Year Director fees Total Ambrose Law FY2 6 S$105,000 S$105,000 FY2 5 1 S$75,750 S$75, 75 0 Gary Gray FY2 6 S$92,000 S$92,000 FY2 5 1 S$66,750 S$66,750 Ong Beng Hong FY2 6 S$92,000 S$92,000 FY2 5 1 S$66,750 S$66,750 Chong Teck Sin FY26 Nil Nil FY2 5 1 S$33,667 S$33,667 Wong Fook Choy Sunny FY26 Nil Nil FY2 5 1 S$29,667 S$29,667 Douglas Owen Chester FY26 Nil Nil FY2 5 1 S$29,667 S$29,667 Totals FY2 6 S$289,000 S$289,000 FY2 5 S$302,251 S$302,251 Note: 1. On 30 October 2024, Mr. Chong Teck Sin, Mr. Wong Fook Choy Sunny and Mr. Douglas Owen Chester retired from the Board to ensure compliance with tenure requirements under the SGX Listing Rules. Mr. Ambrose Law, Mr. Gary Gray and Ms. Ong Beng Hong were appoin ted to the Board prior to those departures, providing a transition period during which both groups of directors served. FY25 fees for the current NEDs therefore reflect a part - year of service, and the FY25 total of S$302,251 includes fees paid to the retir ing directors during that period. 7 Statutory Executive KMP remuneration Year Short - term benefits Long - term benefits Post employ - ment benefits Share - based payments Total A$ Total per - fo r m ance Rela - ted Salary and fees A$ Leave* A$ Cash awards (STI) A$ Other short - term benefits A$ Long service leave * A$ Super - annuat - ion A$ Equity settled A$ Cash settled A$ J Fitzgerald FY26 780,665 (91,428) 400,000 20,000 (60,548) 30,000 - 397,681 1,476, 370 54% FY25 811,250 21,842 190,000 20,000 (33,543) 29,932 - 382,517 1,421,998 40% P Tallon FY26 806,270 (7,594) 400,000 23,024 16,461 30,000 - 397,681 1,665,84 2 48% FY25 806,250 (9,303) 190,000 22,603 13,179 29,932 - 382,517 1,435,178 40% K Deery FY26 1 641,045 (139,314) - 17,538 (113,074) 30,000 - 130,571 566,766 23% FY25 731,000 16,870 175,000 20,000 (55,529) 29,932 (74,107) 371,302 1,214,46 8 39% B Cica FY26 650,000 81,861 350,000 - 41,671 30,000 184,533 78,793 1,416,85 8 43% FY25 2 458,333 (7,692) 162,500 - 8,173 27,438 21,593 8,156 678,501 28% Amount are presented in whole dollars. Individual components are rounded, and totals are calculated from unrounded amounts; accordingly, components may not sum precisely to the totals shown. Note: 1. Mr Kevin Deery retired from his KMP position from 13 May 2026. 2. Mr Bojan Cica commenced in the role of Chief Financial Officer (‘CFO’) effective from 1 September 2024. * N egative balances denoted within the Leave and Long Service leave provisions outline instances where leave taken during the pe riod exceeds leave accrued during the period creating a negative value.
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18 CIVMEC FINANCIAL REPORT 2026 Directors’ report Remuneration report (audited)(continued) 8 Additional disclosures relating to performance rights and shares There are no current, unexpired Civmec options awards. Table 1: Executive KMP Performance Rights Performance rights awarded, vested and lapsed during the year The following table sets out the Rights held by Executive KMP, including the movements in Rights held during FY2 6 . Executive KMP Balance at start of period 1 July 2025 Granted as remuneration Performance rights exercised Performance rights lapsed/ forfeited Balance at end of period 30 June 2026 Number of performance rights not vested at 30 June 2026 J Fitzgerald - - - - - - P Tallon - - - - - - K Deery 1 996,000 - - 417,000 579,000 579,000 B Cica 332,000 1,086,000 29,000 13,000 1,376,000 1,376,000 Total 1,328,000 1,086,000 29,000 430,000 1,955,000 1,955,000 Note: 1. Kevin Deery retired on 13 May 2026. The balance is displayed as at this date. Table 2: KMP shareholdings The following table sets out the Ordinary Shares held by KMP, including the movements in Shares held during FY2 6 . Balance at start of period 1 July 2025 Shares allocated under remuneration framework 1 Net change Other Balance 3 at end of period 30 June 2026 Non - Executive Directors Ambrose Law - - - - Gary Gray 78,000 - 22,000 100,000 Ong Beng Hong - - - - Total Non - Executive Directors 78,000 - 22,000 100,000
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CIVMEC FINANCIAL REPORT 2026 19 Directors’ report Remuneration report (audited)(continued) 8 Additional disclosures relating to performance rights and shares (continued) Table 2: KMP shareholdings (continued) Balance at start of period 1 July 2025 Shares allocated under remuneration framework 1 Net change Other Balance 3 at end of period 30 June 2026 Executive KMP James Fitzgerald 2 97,720,806 - (13,482,729) 84,238,077 Patrick Tallon 2 97,620,806 - (13,482,729) 84,138,077 Kevin Deery 4 10,193,250 - (1,418,000) 8,775,250 Bojan Cica 204,000 29,000 - 233,000 Total Executive KMP 205,738,862 29,000 (28,383,458) 177,384,404 Note: 1. All shares were issued for nil consideration. 2. The Civmec Performance Rights Plan places restrictions on the grant of performance rights under the plan to Controlling Share Holders (directly or indirectly holds 15% or more total number of issued shares). Based on this rule, Civmec issues benefits under the LTI plan to Controlling Share Holders on a cash basis. 3. Includes Ordinary Shares held directly, indirectly and beneficially by KMP. 4. Kevin Deery retired on 13 May 2026. The balance is displayed as at this date. 9 Loans to key management personnel and their related parties During the financial year and to the date of this report, the Company made no loans to directors and other KMP and none were outstanding as of 30 June 2026 ( 2025 : nil) . 10 Other transactions and balances with key management personnel and their related parties There were no other transactions with key management personnel or their related parties during the financial year , and up to the date of this report (2025: A$142,000). This directors’ report is signed in accordance with a resolution of directors made pursuant to s298(2) of the Corporations Act 2001 . END OF REMUNERATION REPORT (AUDITED) Indemnification of and insurance of Officers and Auditors The C ompany has paid premiums to insure the directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director of the company, other than conduct involvi ng a wilful breach of duty in relation to the C ompany. In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to insurers has not been disclosed. No other insurance premiums have been paid or indemnities given during or since the financial year, for any person who is or has been an officer or auditor of the consolidated entity.
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CIVMEC FINANCIAL REPORT 2026 21 Auditor’s Independence Declaration
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22 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Introduction The Board of Directors (the ‘Board’) and the senior management of Civmec Limited (‘Civmec’ or the ‘Company’) together with its subsidiaries (the ‘Group’), recognise the importance of good corporate governance in ensuring greater transparency and protecting the interests of shareholders, as well as strengthening investors’ confidence in its management and financial reporting and are, accordingly, committed to maintaining a high standard of corporate governance throughout the Group. This corporate governance report (‘Report’) describes the Company’s corporate governance framework and practices that were in place during the financial year ended 30 June 2026 ( ‘ FY 2026 ’) with specific reference to the Principles and Provisions of the Singapore Code of Corporate Governance 2018 (the ‘Code’) and the 4th edition of the Australian Securities Exchange (‘ASX’) Corporate Governance Principles and Recommendations (‘ASX Principles and Recommendations’), which is also available on the Company’s corporate website. In line with the commitment of the Company to maintaining high standards of corporate governance, the Company continually reviews its corporate governance processes to strive to comply with the Code. To the extent the Company’s practices may vary from the provisions of the Code for FY 202 6 , the Company has explained how its practices are consistent with the intent of the relevant principles of the Code. The Board is pleased to report compliance of the Company with the Code, the Listing Manual of the Singapore Exchange Securities Limited (the ‘SGX - ST’), and the Listing Rules of the ASX, where applicable, except where otherwise stated. Board m atters The Board’s Conduct of Affairs Principle 1: The company is headed by an effective Board which is collectively responsible and works with Management for the long - term success of the company. Provision 1.1 Directors are fiduciaries who act objectively in the best interests of the company and hold Management accountable for performance. The Board puts in place a code of conduct and ethics, sets appropriate tone - from - the - top and desired organisat ional culture, and ensures proper accountability within the company. Directors facing conflicts of interest recuse themselves from discussions and decisions involving the issues of conflict. Apart from its statutory duties and responsibilities, the Board’s functions include: overseeing the management and affairs of the Group and approving the Group’s corporate strategy and directions; implementing policies in relation to financial matters, which include risk management and internal control and compliance; reviewing the financial performance of the Group, approving investment proposals and setting values and standards, including ethical standards for the Company and the Group; ensuring that the Group has in place an appropriate risk management framework and setting the risk appetite within which the Board expects senior management to operate; approving the appointment, and when necessary replacement, of the senior management personnel; and developing and reviewing corporate governance principles and policies. All Directors are aware of their fiduciary duties and exercise due diligence and independent judgement in ensuring that their decisions are objective and in the best interests of the Company. Directors who face conflicts of interest disclose their interest s and voluntarily recuse themselves from discussions and decisions involving the issues of conflict.
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CIVMEC FINANCIAL REPORT 2026 23 Report on Corporate Governance Board matters (continued) The Board’s Conduct of Affairs (continued) Principle 1 (continued) Provision 1.2 Directors understand the company’s business as well as their directorship duties (including their roles as executive, non - executive and independent directors). Directors are provided with opportunities to develop and maintain their skills and knowledge at the company’s expense. The induction, training and development provided to new and existing directors are disclosed in the company’s annual report. The Company encourages the Directors to learn and develop their directorship skills. The Directors may attend training, conferences and seminars which may have a bearing on their duties and contribution to the Board, organised by professional bodies, regul atory institutions and corporations at the Company’s expense, to keep themselves updated on the latest developments concerning the Group and to keep abreast of the latest regulatory changes. Each quarter, the Board was briefed and/or updated on recent changes to the accounting standards and industry developments and business initiatives. These briefings were provided by the Company’s independent auditors. All the Board members are actively engaged and play an important role in ensuring good corporate governance within the Company. Visits to the Company’s business premises are arranged to acquaint the Non - Executive Directors with the Company’s operations and ensure that all the Directors are familiar with the Company’s business, policies and governance practices. Prior to their respective appointments to the Board, each Director was given an orientation and induction programme to familiarise themselves with the Company’s business activities, strategic directions, policies and key new projects and have undertaken al l appropriate checks (including the person’s character, experience, education, criminal record and bankruptcy history). In addition, newly appointed senior management personnel are subject to the same orientation and induction programme including performin g appropriate checks in accordance with the Company’s onboarding policies and procedures before the personnel are introduced to the senior management team. Upon appointment of each Director and key management personnel, (senior executive), the Company prov ides a Services Agreement to the Director and key management personnel (senior executive) setting out their duties and obligations. During FY2026, the Lead Independent Director, Mr. Ambrose Law, completed training on AASB S2 Climate - related Disclosures, covering the requirements of the standard and the responsibilities of boards in overseeing climate - related financial disclosure. The t raining was undertaken at the Company's expense and supports the Board's oversight of the Group's first - year mandatory climate reporting obligations. Provision 1.3 The Board decides on matters that require its approval and clearly communicates this to Management in writing. Matters requiring board approval are disclosed in the company’s annual report. The Board has delegated the day - to - day management of the Group to the senior management, headed by the Executive Chairman - Mr. James Finbarr Fitzgerald, the Chief Executive Officer - Mr. Patrick Tallon, the Chief Financial Officer - Mr. Bojan Cica. The Board has reviewed and adopted the delegation of authority (‘DOA’) during FY2026 regarding the signing authority and limits. The DOA sets out the authorisation levels required for specific transactions, including tho se requiring Board approval. Matters that are specifically reserved for the approval of the Board include, among others: reviewing the adequacy and integrity of the Group’s internal controls, risk management systems, compliance and financial reporting systems; approving the annual budgets and business plans; approving major investment or expenditure; approving material acquisitions and disposal of assets; approving the Company’s periodic and full - year results announcements for release to the SGX - ST and ASX; approving the annual report and audited financial statements; monitoring senior management’s performance; recommending share issuance, dividend payments and other returns to shareholders; ensuring accurate, adequate and timely reporting to, and communication with shareholders; and assuming responsibility for corporate governance.
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24 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Board m atters (continued) The Board’s Conduct of Affairs (continued) Principle 1 (continued) Provision 1.4 Board committees, including Executive Committees (if any), are formed with clear written terms of reference setting out their compositions, authorities and duties, including reporting back to the Board. The names of the committee members, the terms of reference, any delegation of the Board’s authority to make decisions, and a summary of each committee’s activities, are disclosed in the company’s annual report. To assist in the execution of its responsibilities, the Board has established several Board Committees namely; Audit Committee (‘AC’), Nominating Committee (‘NC’), Remuneration Committee (‘RC’) and Risks and Conflicts Committee (‘RCC’). These committees fu nction within clearly defined terms of references and operating procedures, which are reviewed on a regular basis. The effectiveness of these committees is also regularly monitored and reviewed by the Board. The roles and responsibilities of these committe es are described in the following sections of this report. Provision 1.5 Directors attend and actively participate in Board and board committee meetings. The number of such meetings and each individual director’s attendances at such meetings are disclosed in the company’s annual report. Directors with multiple boa rd representations ensure that sufficient time and attention are given to the affairs of each company. The Board meets on a regular basis and when necessary, to address any specific significant matters that may arise. Board meetings are scheduled in advance. The Constitution of the Company provides for Directors to conduct meetings by teleconferencing or vi deoconferencing or other similar means of communication whereby all persons participating in the meeting are able to hear each other. The Board and Board Committees may also make decisions by way of circulating resolutions. The number of Board and Board Committee meetings held and attended by each Board member during the financial year ended 30 June 2026 is set out below: Board committee Extraordinary Board Meetings Board Audit committee Remuneration committee Nominating committee Risks and conflicts committee No. of meetings held 1 4 4 2 2 4 No. of meeting s attended James Fitzgerald 1 4 4* 2* 2* 4* Patrick Tallon 1 4 4* 2* 2* 4* Kevin Deery 1 1 4 4* 2* 2* 4* Ambrose Law 1 4 4 2 2 4 Ong Beng Hong 1 4 4 2 2 4 Gary Gray 1 4 4 2 2 4 Note: * By invitation 1. retired on 13 May 2026
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CIVMEC FINANCIAL REPORT 2026 25 Report on Corporate Governance Board m atters (continued) The Board’s Conduct of Affairs (continued) Principle 1 (continued) Provision 1.6 Management provides directors with complete, adequate and timely information prior to meetings and on an on - going basis to enable them to make informed decisions and discharge their duties and responsibilities. The Board is informed of all material events and transactions as and when they occur. The senior management consults Board members as necessary and appropriate. Detailed Board papers, agenda and related material, background or explanatory information relat ing to matters to be discussed are sent out to the Directors, at least a week prior to each meeting, so all Directors may better understand the issues beforehand, allowing more time for discussions and deliberations. Directors are provided with a copy of documents containing a wide range of relevant information, including but not limited to quarterly and annual financial results, progress reports of the Group’s operations, corporate and business developments, managemen t information, sector performance, budgets, forecast, capital expenditure and personnel statistics, reports from both external and internal auditors, significant project updates, business strategies, risk analysis and assessments and relevant regulatory up dates. The senior management’s proposals to the Board for approval include background and explanatory information such as, resources needed, risk analysis and mitigation strategies, financial impact, regulatory implications, expected outcomes, conclusions and rec ommendations. Employees who can provide additional insight into matters to be discussed will be present at the relevant time during the Board and Board Committee meetings. To keep Directors abreast of the Group’s operations, the Directors are also updated on initiatives and developments on the Group’s business as soon as practicable and/or possible and on an ongoing basis. The Company Secretar y administer and are available to attend Board meetings and assist the Chairman in implementing appropriate Board procedures to facilitate compliance with the Company’s Constitution. The Company Secretar y also ensure that the requirements of the SGX - ST Listing Manual, ASX Listing Rules and other governance matters applicable to the Company are complied with. The Company Secretar y work together with the Company to ensure compliance with all relevant rules and regulations. All Directors are updated regularly on changes to the Company’s policies and are kept updated on relevant new laws and regulations including Directors’ duties and responsibilities, corporate governance and financial reporting standards. Newly appointed Dir ectors are given briefings by the Management on the business activities of the Group. Provision 1.7 Directors have separate and independent access to Management, the company secretary, and external advisers (where necessary) at the company’s expense. The appointment and removal of the company secretary is a decision of the Board as a whole. The Board has separate and independent access to the senior management of the Company and the Company Secretar y at all times. Requests for information are dealt with promptly by senior management or the Company Secretar y . The Company Secretar y is appointed by the Board and are accountable to the Board, through the Chairman, on all matters to do with the proper functioning of the Board. The removal of the Company Secretar y is subject to the approval of the Board. The Company Secretar y work closely with the Chairman to manage the flow of information between the Board, its committees and senior management across the Company. The Board in fulfilling its responsibilities can, as a collective body or individually as Board members, when deemed fit, dir ect the Company and at the Company’s expense, appoint independent professionals to render advice.
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26 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Board m atters (continued) Board c omposition and g uidance Principle 2: The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company. Provision 2.1 An ‘independent’ director is one who is independent in conduct, character and judgement, and has no relationship with the company, its related corporations, its substantial shareholders or its officers that could interfere, o r be reasonably p erceived to interfere, with the exercise of the director's independent business judgement in the best interests of the company The independence of each Director is reviewed annually by the NC in accordance with the Code’s definition of independence. Each independent director is required to declare their independence by duly completing and submitting a ‘Confirmation of Independence ’ form. The declaration requires each Director to assess whether they consider themselves independent and not having any form of relationships identified in the Code. Each Director is required to declare any circumstances in which they may be considered no n - independent. The NC reviews the Confirmation of Independence to determine whether a Director is independent. The NC also considers the actions and conduct of the independent directors, including in formal Board meetings, to assess their independence. Provision 2.2 Independent directors make up a majority of the Board where the Chairman is not independent Independent directors make up a majority of the Board where the Chairman is not independent. As at the date of this Report, the Board comprises five (5) Directors, two (2) of whom are Executive Directors and three (3) of whom are Independent Directors. Ind ependent Directors therefore make up a majority of the Board. The Executive Chairman is not independent. Consistent with Provision 2.2, Independent Directors constitute a majority of the Board, and accordingly no individual or group of individuals dominates the Board's decision - making. For the majority of FY2026 the Board comprised six (6) Directors, three (3) of whom were Executive Directors and three (3) of whom were Independent Directors. Following the retirement of Mr. Kevin James Deery on 13 May 2026, the Board comprises five (5) Di rectors and Independent Directors have formed a majority from that date. Collectively, the Executive Directors and Independent Directors bring a wide range of experience and expertise, having occupied senior positions in industry and government, and each contributes significantly to Board decisions. To further strengthen the independence of the Board, the Company has appointed a Lead Independent Director, Mr. Ambrose Law, to co - ordinate and lead the Independent Directors, providing non - executive perspectives and a balanced viewpoint. The Lead Independ ent Director represents the Independent Directors in responding to shareholders' questions and comments directed to them as a group. Provision 2.3 Non - executive directors make up a majority of the Board Non - executive directors make up a majority of the Board. As at the date of this Report, the Board comprises five (5) Directors, two (2) of whom are Executive Directors and three (3) of whom are Non - Executive Directors. Non - Executive Directors therefore mak e up a majority of the Board. Following the retirement of Mr. Kevin James Deery on 13 May 2026, Non - Executive Directors have formed a majority of the Board from that date. The Non - Executive Directors provide constructive review, assist the Board in developing proposals on strategy, and monitor the performance of senior management in meeting agreed objectives. They have full access to, and co - operation from, the Company's sen ior management and officers, and may hold separate meetings without the presence of senior management.
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CIVMEC FINANCIAL REPORT 2026 27 Report on Corporate Governance Board m atters (continued) Board c omposition and g uidance (continued) Principle 2 (continued) Provision 2.4 The Board and board committees are of an appropriate size and comprise directors who as a group provide the appropriate balance and mix of skills, knowledge, experience, and other aspects of diversity such as gender and age, so as to avoid gr oupthink and foster constructive debate. The board diversity policy and progress made towards implementing the board diversity policy, including objectives, are disclosed in the company’s annual report The Board, in concurrence with the NC, is of the view that the current Board and the Board Committees comprise an appropriate balance and diversity of skills, experience and knowledge of the Company, which provides broad diversity of expertise such as acco unting or finance, business or management experience, industry knowledge, strategic planning experience and customer - based experience and knowledge who, as a group, provide core competencies necessary to meet the Company’s requirements. Further details on the key information and the profile of the Directors including their academic and professional qualifications, and other directorships in other listed companies are set out on related pages of this annual report. The current Board composition provides a diversity of skill, experience, and knowledge to the Company as follows: Balance and Diversity of the Board Core competencies Number of Directors Proportion of Board Business management 5 100% Accounting and finance 5 100% Legal or corporate governance 5 100% Strategic planning experience 5 100% Relevant industry knowledge or experience 4 80 % Gender: Male 4 80 % Female 1 20 % The composition and renewal of the Board, including the need for progressive refreshment of the Board, is reviewed on an annual basis by the NC to ensure that the Board has the appropriate balance and mix of skills, knowledge, expertise, experience and other aspects of diversity such as gender and age, so as to avoid group think and foster con structive debate and possesses the necessary competencies for effective decision making. The Company’s Annual Sustainability Report clearly articulates it’s strategy, targets, performance, and future focus in relation to diversity of the Company as a whole . If a vacancy arises under any circumstances, or where it is considered that the Board would benefit from the services of a new director, the NC, in consultation with the Board, will consider the range of diversity perspectives, including, but not limite d to, those described in the Company’s Diversity Policy and select the appropriate candidate for the position. The selection of the Directors will be based on merit and potential contribution to the Board, and candidates will be considered against objectiv e criteria that complements and expands the skills and experience of the Board as a whole, and having given due regard to the overall balance and effectiveness of a diverse Board. The main objective is to continue to maintain the appropriate balance of pe rspectives, skills and experience on the Board to support the attainment of the Company's strategic objectives and its sustainable development. The Company has a Diversity Policy which is applied in Board renewal and succession planning. The NC has not set a numerical target for Board diversity, as it considers that a target may detract from the fundamental requirement that each candidate is the r ight fit for the Board and meets the needs and vision of the Company. The NC reviews the composition and diversity of the Board annually and reports the outcome of that review to the Board. Progress on diversity across the Group as a whole, including objec tives and performance, is set out in the Company's Annual Sustainability Report.
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28 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Board matters (continued) Board c omposition and g uidance (continued) Principle 2 (continued) Provision 2.5 Non - executive directors and/or independent directors, led by the independent Chairman or other independent director as appropriate, meet regularly without the presence of Management. The chairman of such meetings provides feedback to the Boar d and/or Chairman as appropriate. To strengthen the independence of the Board, the Company has appointed a Lead Independent Director, Mr. Ambrose Law, to co - ordinate and lead the Independent Directors, providing a non - executive perspective and balanced viewpoint. The Independent Directors communicate regularly without the presence of the other Executive Directors and senior management, to discuss matters such as succession and leadership development planning, board processes and corporate governance matters. Feedba ck on the outcomes of these discussions is provided to the Executive Chairman. To facilitate an effective review of the senior management, the Non - Executive Directors meet as and when necessary at least once a year with Auditors without the presence of the senior management. The Board and senior management fully appreciate that the fundamentals of good corporate governance comprise of an effective and robust Board whose members engage in open and constructive debate and challenge senior management on its assumptions and propos als. The Independent Directors met three (3) times during FY2026 without the presence of the Executive Directors and senior management. These meetings were led by the Lead Independent Director, Mr. Ambrose Law, and addressed matters including succession and leadership development planning, Board pro cesses and corporate governance. Chairman and Chief Executive Officer Principle 3: There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision - making. Provision 3.1 The Chairman and the Chief Executive Officer (‘CEO’) are separate persons to ensure an appropriate balance of power, increased accountability, and greater capacity of the Board for independent decision making. Mr. James Finbarr Fitzgerald is the Executive Chairman of the Company, while Mr. Patrick John Tallon is an Executive Director and Chief Executive Officer (‘CEO’). The Executive Chairman and the Chief Executive Officer are not related. Provision 3.2 The Board establishes and sets out in writing the division of responsibilities between the Chairman and the CEO The roles of the Executive Chairman and the CEO are separate and clearly delineated, and the division of responsibilities between them has been established and set out in writing. The Executive Chairman is responsible for providing leadership to the Board and guidance on the corporate direction of the Group. The CEO has executive responsibility for the Company's day - to - day business and for implementing the strategy approved by the B oard. The delegation of authority adopted by the Board (as described under Provision 1.3) sets out the authorisation levels required for specific transactions, including those reserved for Board approval, so that no individual has unfettered powers of decision - m aking.
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CIVMEC FINANCIAL REPORT 2026 29 Report on Corporate Governance Board m atters (continued) Chairman and Chief Executive Officer (continued) Principle 3 (continued) Provision 3.3 The Board has a lead independent director to provide leadership in situations where the Chairman is conflicted, and especially when the Chairman is not independent. The lead independent director is available to shareholders where they have co ncerns and for which contact through the normal channels of communication with the Chairman or Management are inappropriate or inadequate. The Board has a lead independent director to provide leadership in situations where the Chairman is conflicted, and especially when the Chairman is not independent. The lead independent director is available to shareholders where they have concerns, and fo r which contact through the normal channels of communication with the Chairman or Management are inappropriate or inadequate. As the Executive Chairman is not independent, the Board has appointed Mr. Ambrose Law as Lead Independent Director. He co - ordinates and leads the Independent Directors, provides a non - executive perspective and a balanced viewpoint, and provides leadership in any situation in which the Executive Chairman is conflicted. The Lead Independent Director represents the views of the Independent Directors and is available to shareholders who have concerns which cannot be resolved, or for which contact would be inappropriate or inadequate, through the normal channels of communica tion with the Executive Chairman or Management. Shareholders may contact the Lead Independent Director via the Company Secretary using the shareholder contact form accessible from the Company website. Board m embership Principle 4: The Board has a formal and transparent process for the appointment and re - appointment of directors, taking into account the need for progressive renewal of the Board. Provision 4.1 The Board establishes a Nominating Committee (‘NC’) to make recommendations to the Board on relevant matters relating to: (a) the review of succession plans for directors, in particular the appointment and/or replacement of the Chairman, the CEO and key management personnel; (b) the process and criteria for evaluation of the performance of the Board, its board committees and directors; (c) the review of training and professional development programmes for the Board and its directors; and (d) the appointment and re - appointment of directors (including alternate directors, if any). The Company ha s established an NC to make recommendations to the Board on all board appointments. The formal terms of reference of the NC are to: nominate senior management personnel, Directors (including Independent Directors) taking into consideration their competencies, contribution, performance and ability to commit sufficient time and attention to the affairs of the Group and considering their respective commitments outside the Group; review and recommend to the Board the composition of the Audit Committee, Remuneration Committee and Risks and Conflicts Committee; re - nominate Directors for re - election in accordance with the Constitution at each AGM and having regard to the Director’s contribution and performance; determine annually whether or not a Director of the Company is independent; decide whether or not a Director is able to and has been adequately carrying out their duties as a Director; assess the performance of the Board annually as a whole and the individual contribution of each Director and senior management personnel to the effectiveness of the Board; review and recommend succession plans for Directors and senior management, in particular the Executive Chairman and the CEO; and review and recommend training and professional development programmes for the Board and senior management personnel. The Company does not have a practice of appointing alternate Directors.
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30 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Board matters (continued) Board m embership (continued) Principle 4 (continued) Provision 4.1 (continued) During the reporting period of the year, the NC has: reviewed the structure, size and composition of the Board and Board Committees; reviewed the independence of Directors; reviewed and undertaken the process for evaluating the Board, individual Directors, and senior management personnel performance; reviewed results of performance evaluation and provided feedback to the Chairman and Board Committees; reviewed the need for progressive refreshing of the Board and provided feedback to the Chairman and Board Committees; reviewed succession planning for the Chairman, CEO and senior management personnel and notified the Board; and discussed information required to be reported under the 2018 Code or Listing Manual. Provision 4.2 The NC comprises at least three directors, the majority of whom, including the NC Chairman, are independent. The lead independent director, if any, is a member of the NC The NC comprises three members, all of whom including the NC Chairman are Independent Non - Executive Directors: Name Position Gary Gray NC Chairman Ambrose Law Member and Lead independent Director Ong Beng Hong Member Provision 4.3 The company discloses the process for the selection, appointment and re - appointment of directors to the Board, including the criteria used to identify and evaluate potential new directors and channels used in searching for appropriate candida tes in the company’s annual report The process for the selection and appointment (or re - appointment) of Board members is as follows: the NC evaluates the balance of skills, knowledge and experience of the Board and, in light of such evaluation and in consultation with the Board, prepares a description of the role and the essential and desirable competencies for a particular appointment (or re - appointment); if required, the NC may engage consultants to undertake research on, or assess, candidates for new positions on the Board; the NC meets with short - listed candidates to assess their suitability and ensure that the candidates are aware of the expectations; and the NC makes recommendations to the Board for approval. Under Article 55 of the Company’s Constitution, a Director must submit for re - election if they have held office continuously for more than three years or beyond the third annual general meeting following their last election or re - election — whichever is long er. If no Director is otherwise due for election or re - election at an annual general meeting, but the SGX or ASX Listing Rules require that an election be held, the Director who has served the longest since their last election will retire. If multiple Director s were last elected on the same day, the retiring Director will be determined by mutual agreement or, failing that, by lot. After due review, the Board has accepted the recommendation of the NC and, accordingly, independent director, [XXX] will be offering [himself/herself] himself up for re - election at the forthcoming AGM.
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CIVMEC FINANCIAL REPORT 2026 31 Report on Corporate Governance Board m atters (continued) Board m embership (continued) Principle 4 (continued) Provision 4.4 The NC determines annually, and as and when circumstances require, if a director is independent, having regard to the circumstances set forth in Provision 2.1. Directors disclose their relationships with the company, its related corporations, its substantial shareholders or its officers, if any, which may affect their independence, to the Board. If the Board, having taken into account the views of the NC, determines that such directors are independent notwithstanding the existence of such rela tionships, the company discloses the relationships and its reasons in its annual report. The independence of each Director is reviewed annually by the NC in accordance with the Code’s definition of independence. Each Independent Director is required to declare their independence by duly completing and submitting a ‘Confirmation of Independence ’ form. The declaration requires each Director to assess whether they consider themselves independent and not having any of the relationships identified in the Code. Each Director is required to declare any circumstances in which they may be considered non - independent. The NC reviews the Confirmation of Independence to determine whether a Director is independent. The NC also considers the actions and conducts of the Independent Directors, including in formal Board meetings, to assess their independence. The NC has carefully reviewed and subsequently determined that the Independent Directors namely Mr. Ambrose Law, Mr. Gary Gray and Ms. Ong Beng Hong, are independent. Provision 4.5 The NC ensures that new directors are aware of their duties and obligations. The NC also decides if a director is able to and has been adequately carrying out his or her duties as a director of the company. The company discloses in its annual report the listed company directorships and principal commitments of each director, and where a director holds a significant number of such directorships and commitments, it provides the NC’s and Board’s reasoned assessment of the ability of the director to diligently discharge his or her duties The dates of Director’s initial appointment, last re - election and their directorships are set out below: Name of Director Date of initial appointment Date of last re - election Present directorships in listed companies Past directorships in listed companies 1 James Fitzgerald 27 Mar 2012 30 Oct 2025 - - Patrick Tallon 27 Mar 2012 30 Oct 2025 - - Kevin Deery 4 27 Mar 2012 30 Oct 2025 - - Ambrose Law 30 Oct 2024 30 Oct 2025 Global Testing Corporation 2 - Gary Gray 30 Oct 2024 30 Oct 2025 Amplitude Energy 3 - Ong Beng Hong 30 Oct 2024 30 Oct 2025 Intraco Limited 2 Moneymax Financial Services Ltd 2 - Notes: 1. reflects the past directorships held in listed companies in the last three (3) years. 2. SGX listed 3. ASX listed 4. retired 13 May 2026 The NC has considered and taken the view that it would not be appropriate at this time to set a limit on the number of listed company directorships that a Director may hold. Directors have different capabilities, the nature of the organisations in which th ey hold appointments and the committees on which they serve are of different complexities, and accordingly, each Director would personally determine the demands of their competing directorships and obligations and assess the number of listed company direct orships they could hold and serve effectively. Currently, none of the Directors hold more than two (2) directorships in other listed companies. In addition, the NC also determines annually whether a Director with multiple board representations is able to and has been adequately carrying out their duties as a Director of the Company. The NC takes into account the results of the assessment of the ef fectiveness of the individual Director and the respective Directors’ actual conduct on the Board. The NC is satisfied that for FY202 6 sufficient time and attention have been devoted by the Directors to the affairs of the Company and the Group. As such, there is presently no need to implement internal guidelines to address their competing time commitments notwithstanding that some of the Directors have multiple board representations. The NC will, however, continue to review, from time to time, the Board representations and other principal commitments to ensure that Directors continue to meet the demands of the Group and are able to discharge their duties adequately.
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32 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Board m atters (continued) Board p erformance Principle 5: The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its board committees and individual directors. Provision 5.1 The NC recommends for the Board’s approval the objective performance criteria and process for the evaluation of the effectiveness of the Board as a whole, and of each board committee separately, as well as the contribution by the Chairman and each individual director to the Board For the year under review, the NC held two (2) meetings and evaluated the Board’s performance as a whole and the contribution of each director to the effectiveness of the Board. The NC has adopted a formal process and criteria to assess the effectiveness o f the Board and each of the Directors. The evaluation is carried out annually. The NC has adopted formal processes and criteria to assess the effectiveness of the Board as a whole, each Board Committee separately, and the contribution of the Executive Chairman and each individual Director Provision 5.2 The company discloses in its annual report how the assessments of the Board, its board committees and each director have been conducted, including the identity of any external facilitator and its connection, if any, with the company or any of its directors The NC undertakes an annual formal review and evaluation of both the Board’s performance as a whole, as well as individual Director’s performance, such as Board commitment, standard of conduct, competency, training and development and interaction with other Directors, senior management and stakeholders. All Directors complete an evaluation questionnaire designed to seek their view s on the various aspects of their individual and Board performance so as to assess the overall effectiveness of the Board. The completed questionnaire is collated, and the results of the evaluation exercise are subsequently considered by the NC, before making recommendations to the Board. The Chairman of the Board may take actions as may be appropriate according to the results of the performance evaluation, which will be based on objective performance criteria proposed by the NC and approved by the Board. The performance of individual Directors is assessed based on factors which include their attendance, participation at the Board and Board committee meetings and contributions to the Board in long range planning and the business strategies as well as their industry and business knowledge. Each member of the NC abstains from voting on any resolutions and making any recommendations and/or participating in any deliberations of the NC in respect of the assessment of their performance and re - nomination as a Director. The NC conducted a performance evaluation of the Board and Board Committees for FY 202 6 consistent with this process and determined that all D irectors have demonstrated full commitment to their roles and contributed effectively in the discharge of their duties. Both the NC and the Board are of the view that the Board has met its performance objectives for FY 202 6 .
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CIVMEC FINANCIAL REPORT 2026 33 Report on Corporate Governance Remuneration matters Procedures for d eveloping r emuneration p olicies Principle 6: The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration. Provision 6.1 The Board establishes a Remuneration Committee (‘RC’) to review and make recommendations to the Board on: (a) a framework of remuneration for the Board and key management personnel; and (b) the specific remuneration packages for each director as well as for the key management personnel. The Company has established a RC to make recommendations to the Board on remuneration packages of individual Directors and key senior management personnel. The Company has developed a remuneration policy for fixing the remuneration packages of Directors an d senior executives. The formal terms of reference of the RC, are to: recommend to the Board a framework of remuneration for the Directors and key senior management personnel; determine specific remuneration packages for each Executive Director; review annually the remuneration of employees related to the Directors and substantial shareholders to ensure that their remuneration packages are in line with the staff remuneration guidelines and commensurate with their respective job scopes and level of responsibilities; and perform such other acts as may be required by the SGX - ST and the Code, or ASX, from time to time. The recommendations of the RC are submitted for endorsement by the entire Board. Each member of the RC abstains from voting on any resolutions in respect of their own remuneration package. Also, in the event that a member of the RC is related to the employ ee under review, they will abstain from participating in that review. Directors are not involved in the discussion and in deciding their own remuneration. Provision 6.2 The RC comprises at least three directors. All members of the RC are non - executive directors, the majority of whom, including the RC Chairman, are independent. The RC comprises three members, all of whom including the RC Chairman are Independent Non - Executive Directors: Name Position Ong Beng Hong RC Chairman Ambrose Law Member and Lead Independent Director Gary Gray Member
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34 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Remuneration matters (continued) Procedures for d eveloping r emuneration p olicies (continued) Provision 6.3 The RC considers all aspects of remuneration, including termination terms, to ensure they are fair. The RC has established a framework of remuneration for the Board and key senior management personnel covering all aspects of remuneration but not limited to Directors’ fees, salaries, allowances, bonuses, incentive schemes and benefits - in - kind. The RC also oversees the administration of the Civmec Key Executives Performance Rights 2024 established on 1 August 2024 , with a 10 - year tenure commencing on the establishment date. The Company has a policy that governs the Directors and senior management personnel dealing in securities trading. The securities trading policy reflects the Corporations Act 2001 prohibition on senior management personnel and their closely related parties from hedging the senior management personnel’s incentive remuneration. The senior management personnel, and their immediate family and controlled entities are prohibited from entering into any arrangement that would have the effect of limiting the senior management personnel’s exposure to risk relating to an element of the senior management personnel’s remuneration that is unvested or is vested but remains subject to a holding lock. The securities trading policy sets out closed periods for trading in securities by KMP including for one month prior to and 48 hours after release of half yearly and annual financial results. The policy a lso restricts KMP from engaging in short term trading of securities. The RC reviews the fairness and reasonableness of the termination clauses of the service agreements of Executive Directors to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly generous, with an aim t o be fair and avoid rewarding poor performance. The RC is of the view that it is currently not necessary to use contractual provisions to allow the Company to reclaim incentive components of remuneration from the Executive Directors and key senior management personnel in exceptional circumstances of mis statement of financial statements, or of misconduct resulting in financial loss to the Company and the Group. The Executive Directors owe a fiduciary duty to the Company and the Company should be able to avail itself to remedies against the Executive Direc tors and key senior management personnel in the event of such exceptional circumstances of breach of fiduciary duty. During the reporting period of the year, the RC has: reviewed and approved remuneration for Executives which includes salary, Short Term and Long Term incentives; reviewed benchmarking of fees for directors; reviewed the remuneration packages of employees in the Group which includes salary adjustments and bonus; and reviewed the remuneration package of the Executive Directors and CEO which includes salary, Short Term and Long Term incentives. Provision 6.4 The company discloses the engagement of any remuneration consultants and their independence in the company’s annual report. The RC has access to expert professional advice on human resource and remuneration matters whenever there is a need to consult externally. No remuneration consultants were engaged by the Company during FY2026, and accordingly no remuneration recommendations, as defined in section 9B of the Corporations Act 2001 (Cth), were provided to the Company during the year. During the financial year, the fixed remuneration of executives was benchmarked against peers based on the industry salary surveys sourced from AON Mining, Infrastructure & Engineering Remuneration Report and other available data sources.
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CIVMEC FINANCIAL REPORT 2026 35 Report on Corporate Governance Remuneration matters (continued) Level and m ix of r emuneration Principle 7: The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the company. Provision 7.1: A significant and appropriate proportion of executive directors’ and key management personnel’s remuneration is structured so as to link rewards to corporate and individual performance. Performance - related remuneration is aligned with the in terests of shareholders and other stakeholders and promotes the long - term success of the company Executive Directors and key senior management personnel remuneration comprises a fixed and a variable component, the latter of which is in the form of a bonus linked to the performance of the individual as well as the Group. In addition, shor t - term and lon g - term incentives, such as the 2024 Civmec Key Senior Executives Performance Rights Plan, are in place to strengthen the pay - for - performance framework by rewarding and recognising the key executives’ contributions to the growth of the Group. This is designed to align remuneration with the in terests of shareholders and link rewards to corporate and individual performance to promote long - term sustainability of the Group. Details of Performance Rights granted to Executive Directors and key senior management personnel, along with further information on fixed and variable remuneration components, are outlined in the Remuneration Report. Provision 7.2 The remuneration of non - executive directors is appropriate to the level of contribution, taking into account factors such as effort, time spent, and responsibilities. The remuneration of the Independent Directors is in the form of a fixed fee which is subject to shareholders’ approval at the AGM. Each member of the RC abstains from voting on any resolution, participating in any deliberation of the RC, and making any rec ommendation in respect of their own remuneration. At the 202 4 AGM the shareholders approved an aggregate fee pool of SGD$400,000 per annum. The Independent Directors’ fees were derived using the fee structure as follows: Position Annual fees (S$) Independent Director who is the Chairman of the Audit Committee 10 7 ,000 Other Independent Director 9 3 ,000 Provision 7.3 Remuneration is appropriate to attract, retain and motivate the directors to provide good stewardship of the company and key management personnel to successfully manage the company for the long term In making its recommendations to the Board on the level and mix of remuneration, the RC strives to be competitive, linking rewards with performance. It takes into consideration the essential factors to attract, retain and motivate the Directors and senior management needed to run the Company successfully, linking rewards to corporate and individual performance, and aligning their interest with those of the shareholders. The Company has renewed the service agreements with the Executive Directors, Mr. James Finbarr Fitzgerald and Mr. Patrick John Tallon in August 2026. Each service agreement is valid for a period of three (3) years with effect from the date of expiry of the previous period. During the renewal period of three (3) years, either party may terminate the Service Agreement at any time by giving to the other party not less than six (6) months’ notice in writing, or in lieu of notice, pay ment of amount equivalent to six (6) months’ salary. The Executive Directors do not receive Director’s fees.
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36 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Remuneration matters (continued) Disclosure on r emuneration Principle 8 The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation. Provision 8.1 The company discloses in its annual report the policy and criteria for setting remuneration, as well as names, amounts and breakdown of remuneration of: (a) each individual director and the CEO; and (b) at least the top five key management personnel (who are not directors or the CEO) in bands no wider than S$250,000 and in aggregate the total remuneration paid to these key management personnel. Provision 8.1 of the Code states that the Company should disclose the names, amounts and breakdown of remuneration of at least the top five (5) Key Management Personnel (who are not directors or the CEO) in bands of S$250,000, and in aggregate the total remuneration paid to them. For FY2 6 , the Company identified Mr . Bojan Cica as the only Key Management Personnel who is not a director or the CEO. Information on the remuneration of its Key Management Personnel (including the Executive Directors and Mr. Bojan Cica) is duly disclosed in the Remuneration Report of this R eport. Provision 8.2 The company discloses the names and remuneration of employees who are substantial shareholders of the company, or are immediate family members of a director, the CEO or a substantial shareholder of the company, and whose remuneration exceeds S$100,000 during the year, in bands no wider than S$100,000, in its annual report. The disclosure states clearly the employee's relationship with the relevant director or the CEO or substantial shareholder. For the year ended 30 June 2026 A$115,000 to A$210,000 Designation Relationship Thomas Tallon Supervisor Brother of CEO Patrick Tallon The RC is of the view that the remuneration of these family members is in line with the C ompany ’s remuneration guidelines and commensurate with their job scope and level of responsibilities. Provision 8.3 The company discloses in its annual report all forms of remuneration and other payments and benefits, paid by the company and its subsidiaries to directors and key management personnel of the company. It also discloses details of employee sha re schemes. More details in relation to this can be found in the Remuneration Report duly disclosed in this Report.
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CIVMEC FINANCIAL REPORT 2026 37 Report on Corporate Governance Accountability and a udit Risk m anagement and i nternal c ontrols Principle 9: The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders. Provision 9.1 The Board determines the nature and extent of the significant risks which the company is willing to take in achieving its strategic objectives and value creation. The Board sets up a Board Risk Committee to specifically address this, if appro priate. The Company has established the RCC to advise and make recommendations to the Board on risk and conflict matters. The RCC is guided by its Terms of Reference which highlights its primary responsibilities are to: review and monitor the Group’s risk management framework and activities, including the Group’s levels of risk tolerance and risk policies; report to the Board regarding the Group’s risk exposures, including the review of the risk assessment model used to monitor the risk exposures and senior management’s views on the acceptable and appropriate level of risk faced by the Group’s Business Units; recommend and adopt appropriate measures to control and mitigate the business risks of the Group, as and when these may arise; perform any other functions as may be agreed by the Board; review the Risk Register and Risk Management Framework; requested revisions to the Risk Mitigation Plan presented by senior management to mitigate and monitor the risk exposure ; oversee the identification, assessment and management of climate - related and other sustainability - related risks and opportunities affecting the Group, including management's processes, controls, scenario analysis, metrics, targets and transition plans, and the measurement of Scope 1, Scope 2 and (when required) Scope 3 greenhouse gas emissions; oversee the preparation of the Company's sustainability report, including the climate statement and notes, for compliance with the Corporations Act 2001 (Cth) and AASB S2, including related audit requirements ; and satisfy itself that the Committee collectively has appropriate skills, knowledge and experience, or access to such expertise, to discharge its sustainability oversight role . During the reporting period of the year, the RCC has: reviewed the Company’s overarching governance framework, risk management policies, and approaches to identifying and mitigating risk; evaluated the Company’s risk governance structure, including strategies to embed a strong risk culture, define risk appetite, and implement effective processes and procedures; assessed quarterly reports from management detailing the Company’s risk profile and major exposures (including key technology and cybersecurity risks) and the actions taken to monitor, control, and mitigate these risks; reviewed and recommended to the Board an amended RCC Charter, expanding the Committee's terms of reference to include oversight of climate - related and other sustainability - related risks and opportunities, and oversight of the preparation, integrity and lod gement of the Company's sustainability report under Chapter 2M of the Corporations Act 2001 (Cth) and the Australian Sustainability Reporting Standards, including AASB S2 Climate - related Disclosures; and reviewed quarterly compliance reports from management regarding adherence to applicable laws, regulations, and listing requirements. The RCC reviews all significant control policies and procedures and highlights all significant risk matters to the Board for discussion and to take appropriate actions, if required. The RCC comprises three members, all of whom, including the RCC Chairman are Independent Non - Executive Directors: Name Position Ambrose Law RCC Chairman and Lead Independent Director Ong Beng Hong Member Gary Gray Member
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38 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Accountability and a udit (continued) Risk m anagement and i nternal c ontrols (continued) Principle 9 (continued) Provision 9.2 The Board requires and discloses in the company’s annual report that it has received assurance from: (a) the CEO and the Chief Financial Officer (‘CFO’) that the financial records have been properly maintained and the financia l statements give a true and fair view of the company's operations and finances; and (b) the CEO and other key management personnel who are responsible, regarding the adequacy and effectiveness of the company's risk management and internal control systems. The Group’s internal controls and systems are designed to provide reasonable assurance on the integrity and reliability of the financial information and to safeguard and maintain accountability of its assets. Procedures are in place to identify maj or busin ess risks and evaluate potential financial effects, as well as the authorisation of capital expenditure and investments. The external auditors carry out, in the course of their statutory audit, an annual review of the effectiveness of the Group’s key internal controls, including financial, operational, compliance, information technology controls as well as risk management sy stems to the extent of their scope as laid out in their audit plan. Any material weaknesses in internal controls, together with recommendations for improvement, are reported to the AC and RCC. The Company’s internal audit function prepares an annual internal audit plan, which takes account of the Company’s key risks and other assurance activities performed, enabling internal audit resources to be targeted to areas of greatest value across the Co mpany’s operations, including group and subsidiary structures. Processes subject to internal audit include financial, administrative, operational and project specific activities and systems. The internal audit function provides advi ce on the effectiveness of risk management processes and material internal controls, recommends corrective actions and control improvements and follows up on the implementation of action plans designed by management to address any control deficiencies or improvement opportunities . Internal audit reports containing internal audit results, recommendations and agreed action plans are presented to the AC on a quarterly basis. The Company appoints internal auditors to carry out a review of the adequacy and effectiveness of the Group’s key internal controls, including financial, operational, compliance and information technology controls as well as risk management systems to the extent of their scope as laid out in their audit plan. In the absence of evidence to the contrary, the Board is satisfied the system of internal controls maintained by the Company and that was in place throughout the financial year and up to the date of this report provides reasonable, but not absolute, assura nce against material financial misstatements or losses, and includes the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislation, regulations and best practices , and the identification and containment of financial, operational and compliance risks. Based on the risk management and internal control systems established and implemented by the Group, and work conducted by the internal auditors, external auditors and our internal audit team, the Board, with the concurrence of the AC, is satisfied the Company’s system of internal controls and risk management procedures maintained by the Group are adequate and effective to meet the needs of the Company in addressing the financial, operational, compliance, information technology controls and risk management systems in the Group’s current business environment, with no material weaknesses identified. The Board has received assurances from the CEO and Chief Financial Officer that: (i) the financial records have been properly maintained (and the financial statements comply with the appropriate accounting standards) and the financial statements give a true and fair view of the Company’s operations and finances; and (ii) the Company’s risk management and internal control systems are adequate and effective. The Board notes that all internal control systems are designed to manage rather than eliminate risks and no system of internal controls could provide absolute assurance against the occurrence of material errors, poor judgment in decision - making, human erro r losses, fraud or other irregularities.
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CIVMEC FINANCIAL REPORT 2026 39 Report on Corporate Governance Accountability and a udit (continued) Audit c ommittee Principle 10: The Board has an Audit Committee (‘AC’) which discharges its duties objectively. Provision 10.1 The duties of the AC include: (a) reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial statem ents of the company and any announcements relating to the company's financial performance; (b) reviewing at least annually the adeq uacy and effectiveness of the company's internal controls and risk management systems; (c) reviewing the assurance from the CEO and the CFO on the financial records and financial statements; (d) making recommendations to the Board on: (i ) the proposals to the shareholders on the appointment and removal of external auditors; and (ii) the remuneration and terms of engagement of the external auditors; (e) reviewing the adequacy, effectiveness, independence, scope and results of the external audit and the company’s internal audit function; and (f) reviewing the policy and arrangements for concerns about possible improprieties in financial reporting or other matters to be safely raised, independently investigated and appropriately followed up o n. The company publicly discloses, and clearly communicates to employees, the existence of a whistle - blowing policy and procedures for raising such concerns. The AC is governed by terms of reference with its primary responsibilities as follows: to assist the Board in discharging its responsibility to safeguard the Group’s assets, maintain adequate accounting records, and develop and maintain effective systems of internal control with the overall objective of ensuring that our management creates a nd maintains an effective control environment in the Group; to provide a channel of communication between the Board, the management team, the external auditors and internal auditors on matters relating to audit; to monitor senior management’s commitment to the establishment and maintenance of a satisfactory control environment and an effective system of internal control (including any arrangements for internal audit); to monitor and review the scope and results of external audit and its cost effectiveness and the independence and objectivity of the external auditors; and to monitor and review the scope and results of internal audit and the cost effectiveness of the internal auditors. In addition , the functions of the AC are to: review with the external auditors the audit plans, their evaluation of the system of internal controls, their management letter and the management’s response thereto; review with the internal auditors the internal audit plans and their evaluation of the adequacy of the internal control and accounting system before submission of the results of such review to the Board for approval; review the half - yearly and annual financial statements and any formal announcements relating to the Group’s financial performance before submission to the Board for approval, focusing in particular, on changes in accounting policies and practices, major risk areas, significant a djustments resulting from the audit, compliance with accounting standards and compliance with the SGX - ST Listing Manual, ASX Listing Rules and any other relevant and statutory or regulatory requirements; review the internal control and procedures and ensure co - ordination between the external auditors and the management, review the assistance given by the management to the auditors, and discuss problems and concerns, if any, arising from the interim and fin al audits, and any matters which the auditors may wish to discuss (in the absence of our management where necessary); review and consider the appointment or re - appointment of the external auditors and matters relating to resignation or dismissal of the auditors; review and consider the appointment or re - appointment of the internal auditors and matters relating to resignation or dismissal of the auditors; review interested person transactions (if any); review the Group’s hedging policies, procedures and activities (if any) and monitor the implementation of the hedging procedure/policies, including reviewing the instruments, processes and practices in accordance with any hedging polices approved by the Bo ard; review potential conflicts of interest, if any, and to set out a framework to resolve or mitigate such potential conflicts of interests; undertake such other reviews and projects as may be requested by the Board and report to the Board its findings from time to time on matters arising and requiring the attention of the Audit Committee;
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40 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Accountability and a udit (continued) Audit c ommittee (continued) Principle 10 (continued) Provision 10.1 (continued) In addition, the functions of the AC are to: (continued) review and discuss with investigators, any suspected fraud, irregularity, or infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on the Group’s operating results or financial position, and the managemen t’s response thereto; generally to undertake such other functions and duties as may be required by statute or the SGX - ST Listing Manual and ASX Listing Rules, and by such amendments made thereto from time to time; review the effectiveness and adequacy of the administrative, operating, internal accounting and financial control procedures; review the findings of internal investigation into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any law, rule or regulation which has or is likely to have a material impact on the Group’s op erating results and/or financial position; review key financial risk areas, with a view to providing an independent oversight on the Group’s financial reporting, the outcome of such review to be disclosed in the annual reports or if the findings are material, to be immediately announced via SGXNET and ASX Online; and review the Group’s compliance with such functions and duties as may be required under the relevant statutes or the SGX - ST Listing Manual and ASX Listing Rules, including such amendments made thereto from time to time. The AC has the power to conduct or authorise investigations into any matters within its scope of responsibility. The AC is authorised to obtain independent professional advice whenever deemed necessary to discharge of its responsibilities at the Company’s expenses. The AC has the co - operation of and complete access to the Company’s management. It has full discretion to invite any Director or Executive Officer to attend the meetings and has been given reasonable resources to enable the discharge of its functions. During the year, the AC has: reviewed the scope of work of the external auditors; reviewed the scope of work of the internal auditors; reviewed audit plans and discussed the results of the respective findings and their evaluation of the Company’s system of internal accounting controls; reviewed interested person transactions of the Company; met with the Company’s external auditors and internal auditors without the presence of the management; reviewed the external auditors’ independence and objectivity; reviewed the Company’s procedures for detecting fraud and whistle - blowing matters and to ensure that arrangements are in place by which any employee, may in confidence, raise concerns about improprieties in matters of financial reporting, financial control , or any other matters. A report is presented to the AC on a quarterly basis whenever there is a whistle - blowing issue; and reviewed and recommended the implementation of the tax internal controls testing plan and the results from the testing undertaken.
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CIVMEC FINANCIAL REPORT 2026 41 Report on Corporate Governance Accountability and a udit (continued) Audit c ommittee (continued) Principle 10 (continued) Provision 10.1 (continued) The AC, having reviewed the external auditors’ non - audit services, is satisfied there were no non - audit services rendered that would affect the independence of the external auditors. The AC recognises the need to maintain a balance between the independence and objectivity of the external auditors and the work carried out by the external auditors based on monetary consideration. Following the change of domicile of the head company, Moore Australia Audit (WA) and Moore Stephens LLP have been appointed as joint auditors for the Group. The aggregate amount of agreed fees to be paid for FY 202 6 is A$ 353 ,000 which comprises the cost of performing a joint audit of A$ 25 7 ,000 and audit related fee of A$ 96 ,000. Furt her information can be found in Note 39 of this report. The AC is kept abreast by the external auditors of changes to accounting standards, SGX - ST Listing Manual and ASX Listing Rules, and other regulations which could have an impact on the Group’s business and financial statements. The Company has a whistle - blowing policy where people may, in confidence, raise concerns about possible improprieties in matters of financial reporting, fraudulent acts, bribery/corruption conduct, breach of code of conduct and other matters, and has ensur ed that arrangements are in place for independent investigations of such matters and for appropriate follow up actions. All whistle - blowing reports will be addressed to the AC Chairman, either directly or through STOPline , the independent third - party whistle - blowing service provider. The AC is directly notified of any whistle - blowing reports by the third - party service provider. Staff are regularly informed of the existence of the whistle - blowing mechanism and encouraged to report relevant matters. The identity of persons using this facility is kept confidential unless the person(s) indicate otherwise and the Company does not tolerate any victimisation of a whistleblower. There were no reports received through the whistle - blowing system during FY 202 6 . Provision 10.2 The AC comprises at least three directors, all of whom are non - executive and the majority of whom, including the AC Chairman, are independent. At least two members, including the AC Chairman, have recent and relevant accounting or related fi nancial management expertise or experience. The Audit Committee comprises the following three members, all of whom, including the AC Chairman, are Non - Executive Independent Directors: Name Position Ambrose Law AC Chairman and Lead Independent Director Ong Beng Hong Member Gary Gray Member The Board ensures that the members of the AC are appropriately qualified to discharge their responsibilities and they possess the requisite accounting and/or financial management expertise and experience. Provision 10.3 The AC does not comprise former partners or directors of the company's existing auditing firm or auditing corporation: (a) within a period of two years commencing on the date of their ceasing to be a partner of the auditing firm or director of the auditing corporation; and in any case, (b) for as long as they have any financial interest in the auditing firm or auditi ng cor poration. None of the AC members are previous partners or directors of the Group’s joint auditors, Moore Australia Audit (WA) / Moore Stephens LLP and none of the AC members hold any financial interest in, Moore Australia Audit (WA) or Moore Stephens LLP. Following the change of domicile of the head company, Moore Australia Audit (WA) and Moore Stephens LLP have been appointed as joint auditors.
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42 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Accountability and audit (continued) Audit c ommittee (continued) Provision 10.4 The primary reporting line of the internal audit function is to the AC, which also decides on the appointment, termination and remuneration of the head of the internal audit function. The internal audit function has unfettered access to all the company's documents, records, properties and personnel, including the AC, and has appropriate standing within the company. The Board recognises the importance of maintaining an internal audit function, independent of the activities it audits, to maintain a sound system of internal control within the Company to safeguard shareholders’ investments and the Company’s assets. During FY26, t he Company’s internal audit function is outsourced to Deloitte, which is one of the Big Four multinational accounting organisations and it is independent of the Company’s business activities. The engagement team provides expertise and industry insights to strengthen the Company’s governance and risk management on an annual basis and comprises a director, a senior manager and supported by other staff, which have more than 30 years of relevant experience combi ned. The internal auditors conduct the audit based on the standards set by internationally recognised professional bodies. The annual internal audit plan is submitted to the AC for approval prior to the commencement of the internal audit work. The internal auditors review the effectiveness of key internal controls in accordance with the internal audit plan. T he internal auditors have unrestricted direct access to the AC and unfettered access to all the Company’s documents, properties and personnel. The internal auditors have a direct and primary reporting line to the AC and assist the AC in overseeing and moni toring the implementation and improvements required on internal control weaknesses identified. The AC reviews the adequacy and effectiveness of the internal audit function quarterly. The role of the internal auditors is to support the AC in ensuring that the Group maintains a sound system of internal contro ls by monitoring and assessing the effectiveness of key controls and procedures, conducting in - depth audits of high - risk areas and undertaking investigations as directed by the AC. The AC regularly reviews the performance of the internal auditors and determines their reappointment and level of remuneration. The AC reviews the adequacy of the function of the internal audit annually and based on this review is satisfied that the internal auditors have adequate resources to perform their function effectively and objectively and have unfettered access to the Company's documents, records, properties and personnel. The AC is satisfied with the effectiveness of the existing internal control systems put in place by senior management to meet the needs of the Group in its current business environment. As part of this review, the AC has determined that the provision of internal audit services will be market tested, and a revi ew will be undertaken during FY2027. The outcome of that review will be reported to the AC, which will make a recommendation to the Board.
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CIVMEC FINANCIAL REPORT 2026 43 Report on Corporate Governance Shareholder r ights and e ngagement Shareholder r ights and c onduct of g eneral m eetings Principle 11 The company treats all shareholders fairly and equitably in order to enable them to exercise shareholders' right s and have the opportunity to communicate their views on matters affecting the company. The company gives shareholders a balanced a nd understandable assessment of its performance, position and prospects. Provision 11.1 The company provides shareholders with the opportunity to participate effectively in and vote at general meetings of shareholders and informs them of the rules governing general meetings of shareholders. The AGM and other shareholders’ meetings will always be held at a reasonable place and time. The Company ensures that shareholders have the opportunity to participate effectively and to vote at shareholders’ meetings. In this regard, shareholders are infor med of shareholders’ meetings through notices contained in annual reports or a circular sent to all shareholders. These notices are also published in the Business Times newspaper (Singapore) and posted on SGXNET and ASX Online. Shareholders are able to send and receive communications electronically with the Company through its respective share registries platform in Singapore and Australia, details for doing so are available on the corporate w ebsite at www.civmec.com.au. At AGM and other shareholders’ meetings, the Executive Chairman ensures constructive dialogue between the Board and shareholders and upholds high standards of corporate governance. Shareholders are invited and given the opportunity to voice their views, p ut forth any questions and seek clarification on questions they may have regarding the Company. Shareholders are also informed of the rules and voting procedures governing such meetings under the relevant notice of meeting. For greater transparency, the Company has adopted the voting of all its resolutions by poll at the general meetings and an announcement of the detailed results of the number of votes cast for and against each resolution and the respective percentages are a nnounced at the meeting and via announcements on SGXNET and ASX Online made on the same day. Provision 11.2 The company tables separate resolutions at general meetings of shareholders on each substantially separate issue unless the issues are interdependent and linked so as to form one significant proposal. Where the resolutions are ‘bundled’, the company explains the reasons and material implications in the notice of meeting. Resolutions are, as far as possible, structured separately and may be voted on independently. Provision 11.3 All directors attend general meetings of shareholders, and the external auditors are also present to address shareholders’ queries about the conduct of audit and the preparation and content of the auditors’ report. Directors’ attendance at s uch meetings held during the financial year is disclosed in the company’s annual report. The Directors and the external auditors are available at the AGM to answer shareholders’ queries. In FY 202 5 , all Directors and the external auditor attended the AGM. Provision 11.4 The company’s Constitution (or other constitutive documents) allow for absentia voting at general meetings of shareholders. The Group fully supports the Code’s principle to encourage shareholders’ participation in and vote at all the general meetings. The Company's Constitution allows the appointment of a proxy by a shareholder to attend and vote at the AGM on his/her behalf. Shareholders who hold shares through nominees are allowed, upon prior request through their nominees, to attend the general meetings as proxies without being constrained by the two - proxy requirement. The Company constitution allows the board to implemented measures to allow shareholders who are unable to vote in person at the Company’s AGM the option to vote in absentia, such as via mail, electronic mail or facsimile transactions. The board will exerci se these measures when it is satisfied that the authentication of shareholder identity information and other related security issues are addressed. The Company will inform shareholders of voting options as part of the relevant notice of meeting. Where an amendment to its Constitution is required to align the relevant provisions with the requirements of the SGX - ST Listing Manual and the ASX Listing Rules, shareholders’ approval will be obtained.
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44 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Shareholder rights and engagement (continued) Shareholder r ights and c onduct of g eneral m eetings (continued) Provision 11.5 The company publishes minutes of general meetings of shareholders on its corporate website as soon as practicable. The minutes record substantial and relevant comments or queries from shareholders relating to the agenda of the general meetin g, and responses from the Board and Management. The Company Secretar y prepares minutes of general meetings that include substantial and relevant comments or queries from shareholders relating to the agenda of the meetings and responses from the Board and the senior management, and makes these minutes available to shareholde rs at the registered office of the Company at 16 Nautical Drive, Henderson, WA 6166 Australia during normal business hours upon written request. Minutes of general meetings will be published on the Company’s corporate website within 30 days of the date of the meeting. Provision 11.6 The company has a dividend policy and communicates it to shareholders Civmec Limited is committed to providing excellent returns to its shareholders through a combination of longer - term capital growth and regular dividend payments. The Board considers a range of factors in determining the dividend payable in any year, includ ing the business environment, balance sheet, working capital requirements of the business and potential investment opportunities. The form, frequency and amount of dividends declared each year will take into consideration the Group’s profit growth, cash po sition, positive cash flow generated from operations, projected capital requirements for business growth and other factors as the Board may deem appropriate. Any payouts are clearly communicated to shareholders in public announcements and via announcements on SGXNET and ASX Online when the Company discloses its financial results. The Company’s dividend policy is published on the Company’s corporate website at www.civmec.com.au. The Company has proposed a tax exempt (foreign source) Final Dividend of A$0.035 per ordinary share for the financial year ended 30 June 2026 . This dividend is fully franked for Australian tax resident shareholders.
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CIVMEC FINANCIAL REPORT 2026 45 Report on Corporate Governance Shareholder rights and engagement (continued) Engagement with s hareholders Principle 12 The company communicates regularly with its shareholders and facilitates the participation of shareholders during general meetings and other dialogues to allow shareholders to communicate their views on various matters affecting the company Provision 12.1 The company provides avenues for communication between the Board and all shareholders and discloses in its annual report the steps taken to solicit and understand the views of shareholders. The Board is mindful of its obligations to furnish timely information to its shareholders, the public and regulators and to ensure full disclosure of material information to its shareholders in compliance with the statutory requirements and the SGX - ST List ing Manual and ASX Listing Rules. In this respect the Board is responsible for the release of half yearly and full year results, price sensitive information, t he annual report and other material corporate developments in a timely manner and within the legally prescribed period. The Company does not practise selective disclosure. In line with continuous disclosure obligations of the Company pursuant to the SGX - ST Listing Manual, the Australian Corporations Act 2001 (Cth) and the ASX Listing Rules, it is the Company’s policy that all the shareholders should be equally informed, on a timely basis via SGXNET and ASX Online, of all major developments that will or expect to have an impact on the Company or the Group. The Board will also receive copies of all material market announcements promptly after they have been made by the Company. The Company also updates shareholders of its corporate developments and Continuous Disclosure Policy through its corporate website at www.civm ec.com.au. In addition, all price sensitive information was publicly released either before the Company met with any of the Company’s investors or analysts or simultaneously with such meetings. Financial results and other corporate announcements of the Company are di sseminated through announcements via SGXNET and ASX Online. Provision 12.2 The company has in place an investor relations policy which allows for an ongoing exchange of views so as to actively engage and promote regular, effective and fair communication with shareholders. The Company has in place an Investor Relations Policy which sets out the principles and practices that the Company applies in order to provide shareholders and prospective investors with information necessary to make well informed investment decisions and to ensure a level playing field. In addition, the Group has in - house professionals that support the Company to promote relations with, and act as liaison for, institutional investors and public shareholders. Provision 12.3 The company’s investor relations policy sets out the mechanism through which shareholders may contact the company with questions and through which the company may respond to such questions. Relevant contact information through which shareholders may contact the Company are published on its corporate website at https://www.civmec.com.au/investors/shareholder - services/.
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46 CIVMEC FINANCIAL REPORT 2026 Report on Corporate Governance Managing stakeholders relationships Engagement with shareholders (continued) Principle 13 The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served Provision 13.1 The company has arrangements in place to identify and engage with its material stakeholder groups and to manage its relationships with such groups. Provision 13.2 The company discloses in its annual report its strategy and key areas of focus in relation to the management of stakeholder relationships during the reporting period. Provision 13.3 The company maintains a current corporate website to communicate and engage with stakeholders. The Company engages its stakeholders through different channels to establish, address and monitor the material environmental, social and governance (ESG) factors of the Company’s operations and its impact on the various stakeholders. Such stakeholders incl ude employees, community, government, regulators, shareholders and investors. The Company engages stakeholders through the various channels that are already in place, understanding its stakeholders’ concerns better, and addressing any issues that they may face. In addition, engagement channels and frequencies are reviewed periodical ly to ensure that they are sufficient to deal with current identified stakeholders’ ESG - related issues. The Company is committed to enhance and improve the current engagement initiatives, while staying abreast of new trends or developments that may affect the sustainability standing of the Company, and eventually devise corresponding measures to resolve the new ESG issues. The Company’s website can be found at www.civmec.com.au. and includes a tab labelled ‘Investors’ which provides investors with all the information they may require. Other Governance Practices Material Contracts There were no material contracts of the Company and its subsidiaries, including loans, involving the interests of any Directo r, the CEO or the controlling shareholders during FY 202 6 . Interested Person Transactions The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the AC and these interested persons’ transactions are conducted on an arm’s length basis and are not prejudicial to the intere sts of the shareholders. Other than those disclosed in Note 31, there were no other material interested person transactions for FY 202 6 .
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CIVMEC FINANCIAL REPORT 2026 47 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2026 Note 2026 A$’000 2025 A$’000 Revenue 4 (a) 902,984 810,586 Cost of sales 6 ( 798,299 ) (717,646) Gross profit 104,685 92,940 Other income 5 3,787 3,552 Administrative expenses 6 ( 28,87 1 ) (30,033) Finance costs 8 (5,453) (5,884) Profit before income tax 74,14 8 60,575 Income tax expense 9 ( 22,052 ) (18,039) Profit for the year 5 2,09 6 42,536 Other comprehensive income/(loss): Items that will not be reclassified subsequently to profit or loss Gain on revaluation of freehold land & buildings 5 4,844 42,501 Income tax relating to this item (16, 453 ) (12,586) Total comprehensive income for the year 9 0,48 7 72,451 Profit attributable to: Owners of the Company 52,09 6 42,536 Non - controlling interest - - 52,09 6 42,536 Total comprehensive income attributable to: Owners of the Company 9 0,48 7 72,451 Non - controlling interest - - 9 0,48 7 72,451 Earnings per share attributable to equity holders of the Company (cents per share): - Basic 10 10. 23 8.37 - Diluted 10 10. 10 8.27 The accompanying notes form an integral part of the financial statements.
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48 CIVMEC FINANCIAL REPORT 2026 Consolidated Statement of Financial Position As at 30 June 202 6 Note 2026 A$’000 2025 A$’000 ASSETS Current assets Cash and cash equivalents 13 54,629 102,940 Trade and other receivables 11 237,186 52,328 Contract assets 4 (b) 277,668 154,969 Other current assets 12 4,643 4,001 Income tax receivable - 8,697 574,126 322,935 Non - current assets Property, plant and equipment 14 6 19,55 5 568,170 Investment properties 1 5 21,082 19,706 Intangible assets 1 6 10 10 Deferred tax assets 9 5, 145 1,078 645,79 2 588,964 TOTAL ASSETS 1,219,918 911,899 LIABILITIES AND EQUITY Current liabilities Trade and other payables 20 267,788 86,835 Contract liabilities 4 (b) 102,817 71,447 Lease liabilities 23 6,365 5,442 Income tax payable 9, 433 - Provisions 22 1 6,662 13,659 403,065 177,383 Non - current liabilities Lease liabilities 23 59,996 55,069 Borrowings 21 60,000 60,000 Provisions 22 1,550 379 Deferred tax liabilities 9 104, 111 88,556 225,657 204,004 TOTAL LIABILITIES 628,722 381,387 Capital and reserves Share capital 24 33,402 3 2 ,812 Asset revaluation reserve 27 22 8,525 190,134 Other reserves 28 9,256 9,071 Retained earnings 3 20, 27 4 298,756 Total equity attributable to the Owners of the Company 59 1,45 7 530,773 Non - controlling interest (261) (261) TOTAL EQUITY 59 1,19 6 530,512 TOTAL LIABILITIES AND EQUITY 1,219,918 911,899 The accompanying notes form an integral part of the financial statements.
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CIVMEC FINANCIAL REPORT 2026 49 Consolidated Statement of Changes in Equity For the year ended 30 June 202 6 Share capital A$’000 Asset revaluation reserve A$’000 Other reserves A$’000 Retained earnings A$’000 Total A$’000 Non - controlling interest A$'000 Total A$’000 2026 Balance as at 1 July 2025 32,812 190,134 9,071 298,756 530,773 (261) 530,512 Profit for the year - - - 52,09 6 52,09 6 - 52,09 6 OCI* for the year: Gain on revaluation of freehold land & buildings - 54,844 - - 54,844 - 54,844 Income tax relating to this item - ( 16, 453 ) - - (16, 453 ) - (16, 453 ) Total comprehensive income for the year - 38,391 - 52,09 6 90,48 7 - 90,487 Recognition of share based payment - - 775 - 775 - 775 Employee share awards vested 590 - (590) - - - - Dividends paid (Note 25) - - - (30, 578 ) (30, 578 ) - (30, 578 ) Balance as at 30 June 2026 33,402 228,525 9,256 320, 27 4 59 1,45 7 (261) 591,196 Share capital A$’000 Treasury shares A$’000 Asset revaluation reserve A$’000 Other reserves A$’000 Retained earnings A$’000 Total A$’000 Non - controlling interest A$'000 Total A$’000 2025 Balance as at 1 July 2024 32,358 (10) 160,219 9,422 286,490 488,479 (261) 488,218 Profit for the year - - - - 42,536 42,536 - 42,536 OCI* for the year: Gain on revaluation of freehold land & buildings - - 42,501 - - 42,501 - 42,501 Income tax relating to this item - - (12,58 6 ) - - (12,58 6 ) - (12,58 6 ) Total comprehensive income for the year - - 29,915 - 42,536 72,451 - 72,451 Recognition of share based payment - - - 354 - 354 - 354 Employee share awards vested 464 - - (464) - - - - Lapsed of share options - - - (241) 241 - - - Cancellation of treasury shares (10) 10 - - - - - - Dividends paid (Note 25) - - - - (30,511) (30,511) - (30,511) Balance as at 30 June 2025 32,812 - 190,134 9,071 298,756 530,773 (261) 530,512 *OCI – Other Comprehensive Income The accompanying notes form an integral part of the financial statements.
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50 CIVMEC FINANCIAL REPORT 2026 Consolidated Statement of Cash Flows For the year ended 30 June 202 6 Note 2026 A$’000 2025 A$’000 Cash Flows from Operating Activities Profit before income tax 74,14 8 60,575 Adjustments for: Depreciation of property, plant and equipment and investment properties – leasehold land 1 4 ,1 5 23,729 21,433 Gain on disposal of property, plant and equipment 5 (459) (9) Fair value gain on investment property recognised in profit or loss 15 (1,030) (1,150) Loss allowance on contract assets 4(b) 788 - Finance cost 6,8 9,44 6 9,681 Interest income 5 (1,815) (1,725) Equity - settled share based payment 775 354 Foreign exchange differences 1,576 108 Operating cash flow before working capital changes 107,1 5 8 89,267 Changes in working capital: (Increase)/d ecrease in trade and other receivables ( 184,858 ) 42,274 (Increase)/d ecrease in contract assets (1 22,699 ) 18,619 ( Increase ) in other current assets ( 642 ) (2,608) Increase/ ( d ecrease) in trade and other payables 157,342 (66,983) Increase in contract liabilities 31,370 22,155 Increase/ ( d ecrease) in provisions 4, 174 (4,910) Cash (used in)/ generated from operations ( 8, 155 ) 97,814 Interest received 1,815 1,725 Finance cost paid ( 7,890 ) (8,338) Income tax refund 6,861 347 Income tax paid (15,748) (30,636) Net cash (used in)/ generated from operating activities ( 23,1 17 ) 60,912 Cash Flows from Investing Activities Proceeds from disposal of property, plant and equipment 559 79 Purchase of property, plant and equipmen t 1 4 (5, 400 ) (4,815) Acquisition of subsidiary, net of cash paid 18 16,533 - Net cash generated from/( used in ) investing activities 11, 692 (4,736) Cash Flows from Financing Activities Proceeds from borrowings 132,760 37,800 Repayment of borrowings (132,299) (41,800) Repayment of principal lease liabilities (6, 769 ) (7 , 182) Dividends paid 25 (30, 578 ) (30,511) Net cash used in financing activities (36, 886 ) (41,693) Net (decrease)/ increase in cash and cash equivalents (48,311) 14,483 Cash and cash equivalent at the beginning of the year 102,940 88,457 Cash and cash equivalent at the end of the year 54,629 102,940 The accompanying notes form an integral part of the financial statements.
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CIVMEC FINANCIAL REPORT 2026 51 Consolidated Statement of Cash Flows For the year ended 30 June 202 6 (continued) The reconciliation of movements of liabilities to cash flows arising from financing activities is presented below: Cash flows Non - cash changes Opening A$’000 Proceeds A$’000 Repayment A$’000 Addition A$’000 Others A$’000 Closing A$’000 2026 Borrowings 60,000 132,760 (132,299) - (461) 60,000 Lease liabilities 60,511 - (6, 769 ) 9,064 3, 555 66,361 2025 Borrowings 64,000 37,800 (41,800) - - 60,000 Lease liabilities 57,297 - (7,182) 6,652 3,744 60,511 The accompanying notes form an integral part of the financial statements.
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52 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 These notes form an integral part of and should be read in conjunction with the accompanying financial statements. 1. General information These are the consolidated financial statements for Civmec Limited (the ‘ Company ’ ) and its controlled entities (collectively referred to as the ‘Group’) for the financial year ended 30 June 2026 . The Company is a publicly listed company incorporated and domiciled in Australia. The Company has been listed on the Australian Securities Exchange (‘ASX’) and the Singapore Exchange Limited (‘SGX’). The registered office of the Company and its principal place of business is at 16 Nautical Drive, Henderson, WA 6166 Australia. The principal activity of the Company is that of an investment holding company. The principal activities of its subsidiaries, joint ventures, associate, and joint operations are set out in Notes 1 7 and 19 respectively. The financial statements for the financial year ended 30 June 2026 were approved and authorised for issue on the date of the statement by the board of directors in accordance with a resolution of the directors on the date of the Directors’ Declaration . 2. Material accounting policies (a) Basis of preparation These general - purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, the Corporations Act 2001 as applicable for for - profit entiti es. They also comply with Singapore Financial Reporting Standards (International) (‘SFRS(I)’). The consolidated financial statements have been prepared under the historical cost convention, except for the revaluation on freehold land and buildings and investment properties. They are presented in Australian Dollar (A$), which is the functional and p resentation currency of the Group. All amounts are rounded to the nearest thousand Australian Dollar (A$’000) unless otherwise specified. The Group have rounded values to the nearest thousand dollars (A$’000), unless otherwise stated, as allowed under the ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 20 2 6/ 183 . (b) Basis of consolidation (i) Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when 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 over 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. The Company reassesses 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 listed above. When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give power, including: the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; potential voting rights held by the Company, other vote holders or other parties; rights arising from other contractual agreements; and any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.
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CIVMEC FINANCIAL REPORT 2026 53 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (b) Basis of consolidation (continued) (i) Subsidiaries (continued) The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of th e acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assume d in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non - controlling interest in the acquiree on an acquisition - by - acquisition basis, either at fair value or at the non - controlling inte rest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. Acquisition - related costs are expensed as incurred. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equi ty interest in the acquiree is re - measured to fair value at the acquisition date; any gains or losses arising from such re - measurem ent are recognised in profit or loss. Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or lia bility are recognised in accordance with AASB 9/SFRS(I) 9 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re - measured, and its subsequent settlement is accounted for within equity. The excess of the consideration transferred, the amount of any non - controlling interest in the acquiree and the acquisition - date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired i s recor ded as goodwill. If the total of consideration transferred, non - controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the differenc e is recognised directly in profit or loss. Inter - company transactions, balances and unrealised gains on transactions between Group companies have been eliminated. Unrealised losses have also been eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Gro up’s accounting policies. Change in ownership interests in subsidiaries without change of control Transactions with non - controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid a nd the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non - controlling interests are also recorded in equity. Disposal of subsidiaries When the Group ceases to have control any retained interest in the entity is re - measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amou nt for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group ha d directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
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54 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (b) Basis of consolidation (continued) (ii) Joint arrangements A joint arrangement is a contractual arrangement whereby two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unan imous consent of the parties sharing control. A joint arrangement is classified either as joint operation or joint venture, based on the rights and obligations of the part ies to the arrangement. To the extent the joint arrangement provides the Group with rights to the net assets of the arrangement, the arrangement is a joint venture. The Group reassesses whether the type of joint arrangement in which it is involved has changed when facts and circumstances change. Joint venture The Group recognises its interest in a joint venture as an investment and accounts for the investment using the equity method. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. Joint operations The Group’s joint operations are joint arrangements whereby the parties (the joint operators) that have joint control of the arrangement have rights to the assets, and obligations to the liabilities, relating to the arrangement. The Group recognises, in relation to its interest in the joint operation: its assets, including its share of any assets held jointly; its liabilities, including its share of any liabilities incurred jointly; its revenue from the sale of its share of the output arising from the joint operation; its share of the revenue from the sale of the output by the joint operation; and its expenses, including its share of any expenses incurred jointly. When the Group sells or contributes assets to a joint operation, the Group recognises gains or losses on the sale or contribution of assets that are attributable to the interest of the other joint operations. The Group recognises the full amo unt of any los s when the sale or contribution of assets provides evidence of a reduction in the net realisable value, or an impairment loss, of those assets. When the Group purchases assets from a joint operation, it does not recognise its share of the gains and losses until it resells the assets to an independent party. However, a loss on the transaction is recognised immediately if the loss provides evidence of a reduction in the net realisable value of the assets to be purchased or and impairment loss. The accounting policies of the assets, liabilities, revenues and expenses relating to the Group’s interest in a joint operati on have been changed where necessary to ensure consistency with the accounting policies adopted by the Group.
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CIVMEC FINANCIAL REPORT 2026 55 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (c) Investment in subsidiary companies Investments in subsidiary companies are carried at cost less accumulated impairment losses in the statement of financial position of the Company. On disposal of investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments are recognised in profit or loss. (d) Investment in associate The Group recognises its interest in an associate as an investment and accounts for the investment using the equity method. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. If the Group’s share of losses of an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of further losses. If the associate subsequently reports profits, the Group resumes recognising its sha re of those profits only after its share of the profits equals the share of losses not recognised. (e) Revenue recognition Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good or service to the customer, which is when the customer obtains control of the good or service. A performance obligation may be satisfied at a point in t ime or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation. Construction contract revenue The Group provides engineering and construction services to customers through contracts. Contract revenue is recognised when the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced. For these contracts, revenue is recognised over time by reference to the Group’s progress towards the completion of the contract. The measure of progress is determined based on the proportion of contract costs incurred to date to the estimated total contra ct costs (‘input method’). Costs incurred that are not related to the contract or that do not contribute towards satisfying a performance obligation (‘PO’) are excluded from the measurement of progress and instead are expensed as incurred. In some circumstances, such as in the early stages of a contract where the Group may not be able to reasonably measure its progress but expects to recover the contract costs incurred, contract revenue is recognised only to the extent of the contract costs incurred until such time when the Group can reasonably measure its progress. Contract modifications that do not add distinct goods or services are accounted for as a continuation of the original contract and the change is recognised as a cumulative adjustment to revenue at the date of modification. The amount of revenue recognised is based on the estimated transaction price, which comprises the contractual price, adjusted for expected returns. Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. An y resulting increases or decreases in estimated revenues or costs are reflected in the profit or loss in the period in which the circumstances that give rise to the revision become known by management and included in the transaction only to the extent that is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Estimates of revenues, costs or the extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that gi ve rise to the revision become known by management.
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56 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (e) Revenue recognition (continued) At the end of each reporting date, the Group updates its assessment of the estimated transaction price, including its assessment of whether an estimate of variable consideration is constrained. The corresponding amounts are adjusted against revenue in the period in which the transaction price changes. The period between the transfer of the promised services and customer payment may exceed one year. For such contracts, there is no significant financing component present as the payment terms are an industry practice to protect the customers from the perform ing entity’s failure to adequately complete some or all of its obligations under the contract. As a consequence, the Group does not adjust any of the transaction prices for the time value of money. The customer is invoiced on a milestone payment schedule. If the value of the goods transferred by the Group exceeds the payments, a contract asset is recognised. If the payments exceed the value of the goods transferred, a contract liability is recognised . For costs incurred in fulfilling the contract which is within the scope of another AASB/SFRS(I) (e.g. Inventories), these have been accounted for in accordance with those other AASB/SFRS(I). If these are not within the scope of another AASB/SFRS(I), the Gro up will capitalise these as contract cost assets only if (a) these costs relate directly to a contract or an anticipated contract which the Group can specifically identify; (b) these costs generate or enhance resources of the Group that will be used in sati sfying (or in continuing to satisfy) performance obligations in the future; and (c) these costs are expected to be recovered. Otherwise, such costs are recognised as an expense immediately. Sale of goods and services Revenue from the sale of goods and services in the ordinary course of business are recognised when the Group satisfies a PO by transferring control of a promised good or service to the customer. The amount of revenue recognised is the amount of the transac tion price allocated to the satisfied PO. The transaction price is allocated to each PO in the contract on the basis of the relative stand - alone selling prices of the promised goods or services. The individual standalone selling price of a good or service that has not previously been sold on a sta nd - alone basis, or has a highly variable selling price, is determined based on the residual portion of the transaction price after allocating the transaction price to goods and/or services with observable stand - alone selling prices. A discount or variable consideration is allocated to one or more, but not all, of the performance obligations if it relates specifically to those performance obligations. The transaction price is the amount of consideration in the contract to which the Group expects to be entitled in exchange for transferring the promised goods or services. The transaction price may be fixed or variable and is adjusted for the time value of money if the contract includes a significant financing component. The consideration payable to a customer is deducted from the transaction price if the Group does not receive a separate identifiable benefit from the customer. When consideration is variabl e, the estimated amount is included in the transaction price to the extent that it is highly probable that a significant reversal of the cumulative revenue will not occur when the uncertainty associated with the variable consideration is subsequently resol ved. Revenue may be recognised at a point in time or over time following the timing of satisfaction of the PO. If a PO is satisfie d over time, revenue is recognised based on the percentage of completion reflecting the progress towards complete satisfaction of t hat PO. The Group considers certain services to be a distinct service as it is both regularly supplied by the Group to other customer s on a stand - alone basis and is available for customers from other providers in the market. A portion of the transaction price is t herefore allocated to the maintenance services based on the stand - alone selling price of those services. Discounts are not considered as they are only given in rare circumstances and are never material. Revenue from the maintenance services is recognised o ver time. The transaction price allocated to these services is recognised as a contract liability at the time of the initial sales transaction and is released on a straight - line basis over the period of service.
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CIVMEC FINANCIAL REPORT 2026 57 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (e) Revenue recognition (continued) Rental income Rent revenue from investment properties is recognised on a straight - line basis over the lease term. Lease incentives granted are recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned. (f) Government grants Government grants are recognised when there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to R&D expenditure already incurred it is recognised in the income statement in th e period it became receivable. (g) Contract assets and contract liabilities A contract asset is recognised when the Group recognises revenue as set out in Note 2 (e) before being unconditionally entitled to the consideration under the payment terms set out in the contract. Contract assets are assessed for expected credit losses (‘ECLs’) in accordance with the policy set out in Note 2 (j) and are reclassified to receivables when the right to the consideration has become unconditional. A contract liability is recognised when the customer pays consideration before the Group recognises the related revenue as set out in Note 2 (e). A contract liability would also be recognised if the Group has an unconditional right to receive consideration before the Group recognises the related revenue. In such cases, a corresponding receivable would also be recognised. For a single contract with the customer, either a net contract asset or a net contract liability is presented. For multiple contracts, contract assets and contract liabilities of unrelated contracts are not presented on a net basis. (h) Income tax Income tax expense represents the sum of current tax expense and deferred tax expense. Current income tax is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwi ll or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax liabilities are recognised on all temporary differences except for taxable temporary differences associated with investments in subsidiaries and joint venture, where the Group is able to control the timing of the reversal of the temporary diff erence and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that future taxable profit will be available against which the deductible tempo rary di fferences, and the carry forward of unused tax credits and unused tax losses can be utilised except where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction t hat is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of deductible temporary differences associated with investments in subsidiaries and intere st in joint ventur e, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilise d.
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58 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (h) Income tax (continued) Deferred tax assets and liabilities are measured: at the tax rates that are expected to apply when the related deferred tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and based on the tax consequence that would follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to b e utilise d. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Current income taxes are recognised in profit and loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in th e tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred tax relating to items recognised outside profit and loss is recognised outside profit and loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition. Sales tax Revenues, expenses and assets are recognised net of the amount of sales tax except: Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sale tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and Receivables and payables that are stated with the amount of sales tax included. The net amount of sales tax recoverable from or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position. Relevance of tax consolidation to the Group On 1 July 20 1 4 , Civmec Singapore Limited (the former parent entity) and its wholly - owned Australian tax resident entities formed a tax consolidated group under Australian Taxation Law, with Civmec Singapore Limited as head entity of the tax consolidated group. From 4 September 2024 , the Company and its wholly - owned Australian tax resident entities, including Civmec Singapore Limited, continued the tax consolidated group under Australian Taxation Law with the Company replacing Civmec Singapore Limited as the new head entity of the ta x consolidated group. The member of the tax consolidated group are identified in Note 1 7 . Under tax consolidation, the Company and its wholly - owned Australian tax resident entity are taxed as a single entity. Tax expense or benefit, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial statements of the members of the tax consolidated group using the ‘stand - alone taxpayer’ approach by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and deferred tax asset s arising from unused tax losses and tax credits of the members of the tax consolidated group are recognised by the Company (as head entity in the tax consolidated group). Due to the existence of a tax funding agreement between the entities in the tax consolidated group, amoun ts are recognised as payable to, or receivable by, the Company and each member of the Group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax consolidated group in accordance with the agr eement.
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CIVMEC FINANCIAL REPORT 2026 59 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (h) Income tax (continued) Nature of Tax Funding Arrangements and Tax Sharing Agreements Entities within the tax consolidated group have entered into a tax funding agreement and a tax sharing agreement with the head entity (previously with Civmec Singapore Limited and now with the Company). Under the terms of the tax funding agreement, the Com pany and each of the entities in the tax consolidated group have agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity. The tax sharing agreement entered into between member s of the tax consolidated group provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations or if an entity should leave t he tax consolidated group. (i) Foreign currency translation Functional and presentation currency The financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to each entity (the ‘functional currency’). The financial statements are pres ented in Australian Dollars (‘A$’), which is the functional currency of the Company. Transactions and balances In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s function al currency (‘foreign currencies’) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Currency translation differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in pro fit or los s, unless they arise from borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations. Those currency translation differences are recognised in the currency tra nslation reserve in the consolidated financial statements and transferred to profit or loss as part of the gain or loss on disposal of the foreign operation. Non - monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Group companies The consolidated results and financial position of foreign operations whose functional currency is different from the Group’s presentation currency are translated into the presentation currency as follows: Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement; Income or expense for each statements presenting profit or loss and other comprehensive income (i.e. including comparatives) are translated at exchange rates at the dates of the transactions; and All resulting currency translation differences are recognised in other comprehensive income and accumulated in the currency translation reserve. Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve in the statement of financial position. These differences are recognised in other comprehensive income in the per iod in which they are incurred. On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation or loss of joint control over a jointly control led en tity that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributabl e to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non - controlling interests are derecognised, but they are not reclassified to profit or loss.
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60 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (j) Financial assets Classification and measurement The Group classifies its financial assets in the following measurement categories: Amortised cost; Fair value through other comprehensive income (‘FVOCI’); and Fair value through profit or loss (‘FVPL’). The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial asset. Financial assets with embedded derivatives, if any, are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. The Group reclassifies debt instruments when and only when its business model for managing those assets changes. Initial recognition At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Tra n saction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Subsequent measurement Debt instruments mainly comprise cash and cash equivalents, trade and other receivables and contract assets. There are three subsequent measurement categories, depending on the Group’s business model for managing the asset and the cash flow characteristics of the asset: Amortised cost: Debt instruments that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt instrument that is subsequently meas ured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in interest income using the effective interest rate method . FVOCI: Debt instruments that are held for collection of contractual cash flows and for sale, and where the assets’ cash flows represent solely payments of principal and interest, are classified as FVOCI. Movements in fair values are recognised in Other Com prehensive Income (‘OCI’) and accumulated in fair value reserve, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognised in profit and loss. When the financial asset is derecogni sed, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and presented in ‘other income / other expenses’. Interest income from these financial assets is recognised using the effective interest rate method and presented in ‘interest income’, if any. FVPL: Debt instruments that are held for trading as well as those that do not meet the criteria for classification as amortised cost or FVOCI are classified as FVPL. Movement in fair values and interest income is recognised in profit or loss in the period in which it arises and presented in ‘other income / other expenses’, if any.
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CIVMEC FINANCIAL REPORT 2026 61 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (j) Financial assets (continued) Recognition and derecognition Regular way purchases and sales of financial assets are recognised on trade date - the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a debt instrument, the difference between the carrying amount and the sale proceeds is recognised in profit or loss. Any amount previously recognised in other comprehensive income relating to that asset is reclassified to profit or loss. Impairment The Group assesses on a forward - looking basis the expected credit loss (‘ECL’) associated with its debt financial assets carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in cre dit risk. ECL are probability - weighted estimates of credit losses. Credit losses are measured at the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract an d the cash flows that the Group expects to receive). ECL are discounted at the effective interest rate of the financial asset. For trade receivables and contract assets, the Group applies the simplified approach permitted by AASB 9/SFRS(I) 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. For other receivables, the Group applies the general approach. For the purpose of impairment assessment for other receivables, the loss allowance is measured at an amount equal to 12 - month ECL, which reflects the low credit risk of the exposures. Credit - impaired financial assets A financial asset is credit - impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. At each reporting date, the Group assesses whether financial assets carried at amortised co st are credit - impaired. Evidence that a financial asset is credit - impaired includes the observable data about the following events: Significant financial difficulty of the borrower or issuer; A breach of contract such as a default or past due; The lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower or a concession(s) that the lender(s) would not other consider (e.g. the restructuring of a loan or advance b y the Group on terms that the Group would not consider otherwise); It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or The disappearance of an active market for a security because of financial difficulties. Write - off policy The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial diff iculty and there is no realistic prospect of recovery. Financial assets written off may still be subject to recovery efforts under the Group’s recovery procedures. Any recoveries made are recognised in profit or loss.
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62 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (k) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short - term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short - term borrowings in cu rrent liabilities on the statement of financial position. (l) Property, plant and equipment Recognition and measurement Freehold land and buildings The Group is using the revaluation model for this class of property. Under the revaluation model, freehold land and buildings are initially recognised at cost. Such costs, including the construction costs and borrowing costs that are eligible for capitalis ation, are subsequently carried at their revalued amount, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount do not differ materially from those that would be determined using fair values at the end of the reporting period. Freehold land and buildings are revalued annually by an independent valuer, with fair values assessed through desktop valuation each year and a comprehensive physical valuation undertaken at least every three years. When an asset is revalued, any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset. The net amount is then restated to the revalued amount of the asset. Increases in carrying amounts arising from revaluation are recognised in other comprehensive income, unless they offset previous decreases in the carrying amounts of the same asset, in which case, they are recognised in profit or loss. Decreases in carryin g amounts that offset previous increases of the same asset are recognised in other comprehensive income. All other decreases in carrying amounts are recognised in profit or loss. Other property, plant and equipment All other items of property are measured at cost less accumulated depreciation and accumulated impairment losses. In the event the carrying amount of plant and equipment is greater than its estimated recoverable amount, the carrying amount is written down immediately to its estimated recoverable amount and impairment losses recogni s ed either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 3 for details of critical judgements of impairment of property, plant and equipment). The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
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CIVMEC FINANCIAL REPORT 2026 63 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (l) Property, plant and equipment (continued) Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight - line basis over the asset’s useful life from the time the asset is held ready for use. Leasehold improve ments are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Assets under construction are not depreciated as they are not yet ready for their intended use as at the end of the report ing period. The depreciation rates used for each class of depreciable assets are: Class of Fixed Assets Depreciation Rate Buildings 2% - 33% Plant and equipment 3% - 33% Leasehold land 1% - 2% Leased assets 5% - 33% Small tools 5% - 33% Motor vehicles 5% - 20% Office and IT equipment 5% - 33% 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 than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in profit or loss. (m) Investment properties Investment properties, which are properties held to earn rental income and/or for capital appreciation (including property under construction for such purposes and land under operating leases that is held for long - term capital appreciation or for a current indeterminate use), are measured initially at its cost, including transaction costs. Buildings Subsequent to initial recognition, investment properties are measured at fair value, determined annually by independent professional valuers on the highest - and - best use basis. Gains and losses arising from changes in the fair value of investment properties are included in profit or loss in the period in which they arise. Leasehold land Subsequent to initial recognition, investment properties are accounted for in accordance with the cost model that is cost less accumulated depreciation and less accumulated impairment losses. The depreciation is calculated on a straight - line basis over its lease term. Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements are capitalised and the carrying amounts of the replaced components are recognised in profit or loss. The cost of maintena nce, repairs and minor improvements are recognised in profit or loss when incurred.
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64 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (m) Investment properties (continued) Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in profit or loss in the year of retirement or disposal. Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. When the use of a property changes from owner - occupied to investment property, the property is remeasured to fair value and reclassified accordingly. Any gain arising on remeasurement is recognised in profit or loss to the extent that it reverse s a previou s impairment loss on the specific property, with any remaining gain recognised in other comprehensive income and presented in the revaluation reserve in equity. Any loss is recognised immediately in profit or loss. When the property is sold, the related amount in the revaluation reserve is transferred to retained earnings. (n) Impairment of non - financial assets Non - financial assets are tested for impairment whenever there is any indication that these assets may be impaired. At the end of each reporting period, the Group reviews the carrying amounts of its non - financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount o f the asset is estimated in order to determine the extent of the impairment loss (if any), on an individual asset. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash - generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash - generating units, or otherwise they are allocated to the smallest group of cash - generating units for which a reasonable and consistent allocation basis can be identified. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre - tax discount rate that reflects current market assessments of t he time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash - generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash - generating unit) is reduced to its recoverable amount. The difference between the carrying amount an d recoverable amount is recognised as an impairment loss in profit or loss. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash - generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that wo uld have been determined had no impairment loss been recognised for the asset (or cash - generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
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CIVMEC FINANCIAL REPORT 2026 65 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (o) Provisions Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, for which it is more likely than not that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the prov ision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre - tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. (p) Financial liability and equity instruments issued by the Group Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of t he contractual arrangement. Financial liabilities An entity shall recognise a financial liability on its statement of financial position when, and only when, the entity become s a party to the contractual provisions of the instrument. Financial liability is recognised initially at fair value plus, in the case of a financial liability not at fair value throug h profit or loss, transaction costs that are directly attributable to the acquisition or issue. After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rat e method. Gains and losses are recognised in profit and loss when the liabilities are derecognised, and through amortisation proces s. Borrowings Borrowings are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating intere st expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying amount on initial recognition. Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the reporting date. Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired.
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66 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (q) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of these assets, until such time as the asset s are substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (r) Leases The Group as Lessee At the inception of the contract, the Group assesses if the contract contains a lease. A contract contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Reassessment is only required when the terms and conditions of the contract are changed. The Group recognises right - of - use assets and lease liabilities at the date which the underlying assets become available for use. Right - of - use assets are measured at cost, which comprises the initial measurement of lease liabilities adjusted for any lease p ayments made at or before the commencement dates, plus any initial direct costs incurred, less any lease incentives received. Any initial direct costs that would not have been incurred if the lease had not been obtained are added to the carrying amount of the right - of - use assets. Right - of - use assets are subsequently depreciated using the straight - line method from the commencement dates to the earlier of the end of the useful lives of the right - of - use assets or the end of the lease terms. The estimated useful lives of right - of - use a ssets are determined on the same basis as those of property, plant and equipment. In addition, the right - of - use assets are periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the corresponding lease liabilities. Th e Group presents its right - of - use assets in ‘Property, plant and equipment’ , ‘Investment properties’ and lease liabilities in ‘Lease liabilities’ in the consolidated statement of financial position. The initial measurement of lease liabilities is measured at the present value of the lease payments discounted using the implicit rate in the lease, if the rate can be readily determined. If that rate cannot be readily determined, the Group uses its increm ental borrowing rate. Lease payments included in the measurement of the lease liability comprise the following: Fixed payments (including in - substance fixed payments), less any lease incentives receivables; Variable lease payments that are based on an index or rate, initially measured using the index or rate as at the commencement date; Amounts expected to be payable under residual value guarantees; The exercise price of a purchase option if it is reasonably certain to exercise the option; and Payment of penalties for terminating the lease, if the lease term reflects the Group exercising that option. For contracts that contain both lease and non - lease components, the Group allocates the consideration to each lease component on the basis of the relative stand - alone price of the lease and non - lease components. The Group has elected not to separate lease and non - lease components for property leases; instead, these are accounted for as one single lease component. Lease liabilities are measured at amortised cost, and are remeasured when: There is a change in future lease payments arising from changes in an index or rate; There is a change in the Group’s assessment of whether it will exercise lease extension and termination options; There is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or There is a modification to the lease term.
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CIVMEC FINANCIAL REPORT 2026 67 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (r) Leases (continued) The Group as Lessee (continued) When lease liabilities are remeasured, corresponding adjustments are made against the right - of - use assets. If the carrying amounts of the right - of - use assets have been reduced to zero, the adjustments are recorded in profit or loss. The Group has elected n ot to recognise right - of - use assets and lease liabilities for short - term leases that have lease terms of 12 months or less, as well as leases of low value assets. Variable lease payments that are based on an index or a rate are included in the measurement of the corresponding right - of - use assets and lease liabilities. Other variable lease payments are recognised in profit or loss when incurred. The Group as Lessor Leases of investment properties where the Group retains substantially all risks and rewards incidental to ownership are classified as operating leases. Rental income from operating leases (net of any incentives given to the lessees) is recognize d in income on a straight - line basis over the lease term. (s) Employee benefits Defined contribution plans The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is perf ormed. The Group has no further payment obligations once the contributions have been paid. Provision for employee benefits Provisions are made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to em ployee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash flows are discounted using the market yields on high quality corporate bonds with terms to maturity that match the expected timing of cash flows. Share - based payments Equity - settled share - based payments The g rant date fair value of equity - settled share - based payments is recognised as an expense over the period when the associated service is rendered (the vesting period), with a corresponding increase in equity. Vesting conditions, other than market conditions are used to determine the number of awards that are expected to vest, the estimate being adjusted at each period as necessary. If these conditions are not met, the cumulative expense recognised in relation to these awards will be nil. At each balance sheet date, the Group revises its estimates of the number of shares under rights that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding adjustment to the Equ ity - settled employee benefits reserve over the remaining vesting period. When an award is cancelled the remaining amount of the grant date fair value that has not already been recognised, will be recognised immediately as an expense in the income statement.
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68 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) ( s ) Employee benefits (continued) Share - based payments (continued) Cash - settled share - based payments For the cash - settled share - based payments, a liability for the fair value of services received is recognised and remeasured at each reporting dated over the ve s ting period and right up to the date of settlement, with changes recognised in profit or loss. At settlement, the value is based on the five - day weighted average share price of ASX following the release of audited financial statements. No expense is recognised for rights that do not ultimately vest, except for rights where vesting is conditional upon a market condition, which are treated as vested irrespective of whether or not the market condition is satisfied, provided that all ot her p erformance and/or service conditions are satisfied. In situations where equity instruments are issued and some or all of the goods or services received by the entity as consideration cannot be specifically identified, the unidentified goods or services received (or to be received) are measured as the differ ence between the fair value of the share - based payment and the fair value of any identifiable goods or services received at the grant date. This is then capitalised or expensed as appropriate. (t) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating resources and assessing performance of the operating segments. (u) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account. Treasury shares When any entity within the Group purchases the Company’s ordinary shares (‘treasury shares’), the consideration paid including any directly attributable incremental cost is presented as a component within equity attributable to the Company’s equity holders , until they are cancelled, sold or re - issued. When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share capital account if the shares are purchased out of capital of the Company, or against the retained earnings of the Company if the shares are purchas ed out of the earnings of the Company. When treasury shares are subsequently sold or re - issued pursuant to the employee share option scheme, the cost of treasury shares is reversed from the treasury share account and the realised gain or loss on sale or re - issue, net of any directly attributabl e incremental transaction costs and related income tax, is recognised in the capital reserve.
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CIVMEC FINANCIAL REPORT 2026 69 Notes to the Consolidated Financial Statements 30 June 202 6 2. Material accounting policies (continued) (v) Related parties A related party is defined as follows: A related party is a person or entity that is related to the entity that is preparing its financial statements (referred to a s the ‘reporting entity’). a. A person or a close member of that person’s family is related to a reporting entity if that person: has control or joint control over the reporting entity; has significant influence over the reporting entity; or is a member of the key management personnel of the reporting entity or of a parent of the reporting entity. b. An entity is related to a reporting entity if any of the following conditions applies: the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others); one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member); both entities are joint ventures of the same third party; one entity is a joint venture of a third entity and the other entity is an associate of the third entity; the entity is a post - employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity; the entity is controlled or jointly controlled by a person identified in (a); a person identified in (a)(i ) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); or the entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.
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70 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 3. Critical accounting estimates and judgments In preparing the consolidated financial statements, management is required to make judgments, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assum ptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the re vision and future periods if the revision affects both current and future periods. (a) Critical judgments in applying the Group’s accounting policies In the process of applying the Group’s accounting policies, the application of judgements that are expected to have a significant effect on the amounts recognised in the financial statements are discussed as follows. (i) Impairment of trade and other receivables and contract assets As at 30 June 2026 , the Group’s trade and other receivables and contract assets amounted to A$ 237,186 ,000 ( 2025 : A$ 52,328 ,000 ) and A$ 277,668 ,000 ( 2025 : A$ 154,969 ,000) respectively, net of allowance for impairment, if any, arising from the Group’s different revenue segments as disclosed in Note 32 to the financial statements. The Group applies the simplified approach to provide for the ECL (‘Expected Credit Losses’) for all trade receivables and contract assets at an amount equal to the lifetime ECL. ECLs are a probability weighted estimate (based on the Group’s historical expe rience) measured as the present value of all cash shortfalls on default financial assets considering both quantitative and qualitative information and analysis. Factors considered in individual assessment are geographical regions in Australia for each segm ent, payment history, past due status and term. No allowance of impairment for trade and other receivables were recognised as at 30 June 2026 ( 2025 : Nil). The Group has recognised an amount of A$788,000 impairment of contract assets under the Group’s internal credit evaluation as at 30 June 2026 ( 2025 : Nil). Notwithstanding the above, the Group evaluates the expected credit loss on customers in financial difficulties separately. So far as management is aware, there is no major customer in financial difficulties during the financial year except for thos e custom ers with impairment loss being recognised. The Group’s and the Company’s credit risk exposure for trade receivables by different revenue segment are set out in Note 33(a). (ii) Judgement and method used in estimating construction contract revenue As discussed in Note 2 (e) to the financial statements, construction contract revenue is recognised over time by reference to the Group’s progress towards completion of the contract. The measure of progress is determined based on the proportion of contract costs incurred to date to the estimated total contract costs (‘input method’). Costs incurred that are not related to the contract or that do not contribute towards satisfying a performance obligation (‘PO’) are excluded from the measure of progress and instead are expensed as incurred. Construction contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work to the extent that is highly probable that a significant reversal in the amount of the cumulative revenue will not occur . In estimating the variable consideration for contract revenue, the Group uses the expected value amount method to estimate the transaction price. The expected value is the sum of probability - weighted amounts in a range of possible consideration amounts. Ma nagement has relied on historical experience from similar projects, the work of experts, and the status of discussions and agreements with customers, taking into consideration the nature and scope of work. Management has exercised judgement in applying the constraint on the estimated variable consideration that can be included in the transaction price. For variations claims, management has determined that a portion of the estimated variable consideration is subject to the constraint as, based on past experience with the customers, it is highly probable that a significant reversal in the cumulative amount of revenue recognised will occur, and therefore will not be recognised as revenue.
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CIVMEC FINANCIAL REPORT 2026 71 Notes to the Consolidated Financial Statements 30 June 202 6 3 . Critical accounting estimates and judgments (continued) (a) Critical judgments in applying the Group’s accounting policies (continued) (iii) Legal proceedings The Group is exposed to the risk of claims and litigation which can arise for various reasons, including changes in scope of work, delay and disputes etc. Given the nature of the business, variation orders, additional works and prolongation costs are commo n. As some of these items could be subjective and hence contentious in nature, the Group may from time to time be involved in adjudication or legal processes. In making its judgment as to whether it is probable that any such adjudication decisions or litigation will result in a liabi lity and whether any such liability can be measured reliably, management relies on past experience and the opinion of legal advisor s and technical experts. In making that overall judgment, management has included in its consideration the likely outcome of the claims. Although an adverse outcome of those claims could have a material adverse impact on the financial position of the Group, management have taken t he view that such a material adverse outcome is very unlikely. (iv) Impairment of property, plant and equipment and valuation investment properties The Group assesses at each reporting date whether there is any indication that property, plant and equipment may be impaired. Indicators of impairment include significant changes in asset usage, significant declines in market value, obsolescence or physical damage of an asse t, significant underperformance relative to expected historical or future operating results and significant adverse industry or economic trends. When such indicators exist, the recoverable amount of the asset is estimated, and an impairment loss is recognised when the carrying amount exceeds the recoverable amount. Investment properties are measured at fair value, with changes in fair value recognised in profit or loss. Accordingly, investment properties are not subject to a separate impairment assessment. No impairment loss on property, plant and equipment and investment properties was recorded for the financial years ended 30 June 2026 and 2025 . The carrying amount of property, plant and equipment and investment properties at 30 June 2026 is A$ 619,55 5 ,000 ( 2025 : A$ 568,170 ,000) and A$ 21,082 ,000 ( 2025 : A$ 19,706 ,000) , respectively. (v) Determination of the lease term In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. Extension options (or periods after termination option s) are only in cluded in the lease term if the lease term is reasonably certain to be extended (or not terminated). The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise ) it. The asses sment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects the assessment, and that is within the control of the lessee. For leases of the leasehold land and buildings, the following factors are normally the most relevant: If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or not terminate). If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain to extend (or not terminate). Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset.
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72 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 3 . Critical accounting estimates and judgments (continued) (a) Critical judgments in applying the Group’s accounting policies (continued) (vi) Valuation of freehold land and buildings and investment properties The Group carries its freehold land and buildings and investment properties at fair values which are determined by an independent real estate valuation expert using the highest - and - best use approach which is generally the sales comparison approach (i.e. th e basis of market value). In arriving at the valuation figure, the valuer has taken into consideration the prevailing market conditions and differences between the freehold land and building and investment properties and the comparables in terms of locatio n, tenure, size, shape, design and layout, age and condition of the buildings, dates of transactions and other factors affecting their values. The most significant inputs in this valuation approach are the selling price per square meter and the usage of th e properties. The estimates are based on local market conditions existing at the reporting date. Fair values of buildings with no available market information are determined by the independent real estate valuation expert using the depreciated replacement cost method, which involves estimating the current replacement cost of the buildings and from whi ch deductions are made to allow for depreciation due to age, condition and functional obsolescence. The replacement cost is then added to the land value to derive the fair value. The land value is determined based on the direct comparison method with trans actions of comparable plots of land within the vicinity and elsewhere. In arriving at the valuation figure, the valuation expert has taken into consideration the prevailing market condition and differences between the freehold land and buildings and the co mparable in terms of location, tenure, size, shape, design and layout, age and condition, dates of transactions and other factors affecting their values. The most significant inputs into this valuation approach are the estimated construction costs, depreci ation rates and developer profit margin. The carrying amount of the freehold land and buildings and investment properties at the reporting date is disclosed in Note 14 and Note 15 . If the selling prices and price per unit measurement of the freehold land and buildings determined by valuation experts had been 5% higher/lower, the carrying amount of the freehold land and buildings and investment properties would have been A$ 26,250 ,000 ( 2025 : A$ 23,899 ,000) higher/lower. (vii) Business acquisition Judgement is required in determining the fair value of assets acquired and liabilities assumed in a business combination, which can have material impact on the net identifiable assets. Employee leave provisions assumed at acquisition have been recognised a t the carrying amount of employee entitlements as at the acquisition date. Judgement is also required in determining the fair value of the contingent consideration which includes consideration on the construction progress, estimates to complete compared to the schedule and performance guarantees. These judgments have been applied, where relevant, in accounting for the acquisition of Luerssen Australia Pty Ltd (now known as Civmec Defence Industries Pty Ltd) which was effective on 1 July 2025.
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CIVMEC FINANCIAL REPORT 2026 73 Notes to the Consolidated Financial Statements 30 June 202 6 3 . Critical accounting estimates and judgments (continued) (b) Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. (i) Estimation of total contract costs for contracts The Group has significant ongoing construction contracts as at 30 June 2026 that are non - cancellable. For these contracts, revenue is recognised over time by reference to the Group’s progress towards completion of the contract. The measure of progress is determined based on the proportion of contract costs incurred to date to the estimated total contract costs (‘input method’). Management has to estimate the total contract costs to complete, which are used in the input method to determine the Group’s recognition of construction revenue. When it is probable that the total contract costs will exceed the total construction revenue, a provision for onerous contracts is recognised immediately. Significant assumptions are used to estimate the total contract sum and the total contract costs which affect the accuracy of revenue recognition based on the percentage - of - completion and completeness of provision for onerous contracts recognised. In making these estimates, management has relied on past experience and the work of specialists. The Group includes incremental costs of fulfilling the contracts which are the cost of materials and labour required to construct the projects. In estimating the forecast costs, the management exercised judgement in considering costs that relate directly t o the contracts. If the estimated total contract sum decreases by 1% from management’s estimates, the Group’s profit before income tax will decrease by approximately A$ 9,030 ,000 ( 2025 : A$ 8,106 ,000). If the remaining estimated contract costs increase by 1% from management’s estimates, the Group’s profit before income tax will decrease by approximately A$7, 983 ,000 ( 2025 : A$ 7,176 ,000). (ii) Estimation of useful lives of property, plant and equipment and investment properties – leasehold land The useful lives of assets have been based on historical experience, lease terms and best available information for similar items in the industry. These estimations will affect the depreciation expense recognised in the financial year. There is no change i n the estimated useful lives of plant and equipment and investment properties – leasehold land during the current financial year. The carrying amount of the Group’s property, plant and equipment and investment properties – leasehold land as at 30 June 2026 was A$ 619,55 5 ,000 ( 2025 : A$ 568,170 ,000) and A$2, 912 ,000 ( 2025 : A$2, 566 ,000) respectively. A 10% difference in the expected useful lives of these assets from management’s estimate would result in an approximately A$2, 373 ,000 ( 2025 : A$ 2,143 ,000) variance in the Group’s profit before tax.
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74 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 3 . Critical accounting estimates and judgments (continued) (b) Key sources of estimation uncertainty (continued) (iii) Income taxes The Group has exposure to income taxes of which a portion of these taxes arose from certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises receivables or liab ilities on expected tax issues based on their best estimates of the likely taxes recoverable or due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax positions in the period in which such determination is made. The carrying amounts of the Group’s current income tax positions as at 30 June 2026 were income tax payable of A$ 9,433 ,000 ( 202 5 : A$ 8,697 ,000 receivable ). The carrying amounts of the Group’s deferred tax assets and deferred tax liabilities as at 30 June 2026 are disclosed in Note 9 to the financial statements. (iv) Employee performance rights The Group measures the cost of equity - settled transactions with employees with reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share - based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the performance rights, volatility and dividend yield and making assumptions about them. 4. Revenue from contracts with customers (a) Disaggregation of revenue from contracts with customers The Group derives revenue from the transfer of goods and services over time and at a point in time as follows: 2026 A$’000 2025 A$’000 Over time: Revenue from construction contracts 786,764 710,883 Revenue from the rendering of services 114,024 96,560 900,788 807,443 At a point in time: Revenue from the rendering of services 1,052 1,718 Revenue from sale of goods 1,144 1,425 2,196 3,143 902,984 810,586 Revenue from the rendering of services Contracts where payment is made for the provision of labour and materials without any risk or penalty for performance is classified as revenue from the rendering of services. Segment analysis The segment analysis of the Group is disclosed in Note 32 to the financial statements.
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CIVMEC FINANCIAL REPORT 2026 75 Notes to the Consolidated Financial Statements 30 June 202 6 4 . Revenue from contracts with customers (continued) (b) Contract assets and liabilities 2026 A$’000 2025 A$’000 1 July 2024 A$’000 Contract assets 277,668 154,969 173,588 Contract liabilities (102,817) (71,447) (49,292) Contract assets primarily relate to the Group’s right to consideration for work completed but not yet billed at the reporting date on construction contracts. The contract assets are transferred to trade receivables when the rights become unconditional, whi ch usually occurs when the customer certifies the progress claims. Contract liabilities primarily relate to the Group’s obligation to transfer goods or services to customers for which the Grou p has received advances from customers for construction contracts and progress billings issued in excess of the Group’s rights to t he consideration in respect of construction contract revenue. (i) Significant changes in contract balances 2026 A$’000 2025 A$’000 Contract assets: Contract assets reclassified to trade receivables (23,091) (103,474) Changes in measurement of progress 146,578 84,855 Loss allowance on contract assets (788) - Contract liabilities: Revenue recognised in the current year that was included in the contract liability balance at the beginning of the year 36,50 1 40,199 Increase due to cash received, excluding amounts recognised as revenue during the year (45,676) (62,354) Increase due to acquisition of a subsidiary (Note 18) (22,195) - In accordance with Note 2 (e) to the financial statements, contract assets adjustments relating to changes in the estimated transaction price were made following receipt of revised independent legal and expert advice on completed contracts. An amount of A$788,000 loss allowance of contract assets was provided under the Group’s internal credit evaluation as at 30 June 2026 ( 2025 : Nil). (ii) Unsatisfied performance obligations 2026 A$’000 2025 A$’000 Aggregate amount of the transaction price allocated to contracts that are partially or fully unsatisfied as at 30 June 1,493,387 621,673 The Group expects that the aggregate amount of the transaction price allocated to unsatisfied performance obligations as of 30 June 2026 will be recognised as revenue as the Group continues to perform to complete the obligations, which is expected to occur over the next few years up to 2029. The amount disclosed above does not include variable consideration which is subject to constraint. As permitted under the AASB 15/SFRS(I) 15, the aggregated transaction price allocated to unsatisfied contracts of periods of one year or less, or are billed based on time incurred, is not disclosed.
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76 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 5. Other income 2026 A$’000 2025 A$’000 Insurance recoveries 11 12 Fuel tax rebate 280 584 Interest income: - Bank balances 1,814 1,702 - Tax authorities 1 23 1,815 1,725 Gain on disposal of property, plant and equipment 459 9 Gain on lease termination 88 - Fair value gain on investment property at fair value through profit or loss 1,030 1,150 Subsidies and incentives 16 40 Miscellaneous income 88 32 3,787 3,552 Subsidies and incentives The Group received Wage Subsidy and Jobs and Skills WA Employer Incentives from the Government for hiring eligible participants.
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CIVMEC FINANCIAL REPORT 2026 77 Notes to the Consolidated Financial Statements 30 June 202 6 6. Profit before income tax The following items have been included in arriving at profit before income tax: Note 2026 A$’000 2025 A$’000 Included in cost of sales: Direct materials 102, 334 89,146 Employee benefits 7 381,840 421,675 Subcontract works 201,909 82,784 Workshop and other overheads 84,63 6 98,906 Depreciation of property, plant and equipment and investment properties – leasehold land 14,15 23,58 7 21,338 Finance costs on lease liabilities 8 3, 993 3,797 798,299 717,646 Included in administrative expenses: Audit and review fees : Auditors of the Company 353 313 Non - audit fees: Other auditors 84 155 Business development 258 609 Communications 3,501 3,086 Depreciation of property, plant and equipment 14 142 95 Non - executive Directors’ fees 332 354 Employee benefits 7 18, 181 17,651 Occupancy expenses 572 563 Company and office costs 732 2,122 Impairment loss on contract assets 788 - Other administrative expenses 4 29 663 Tax and other professional fees 1,923 4,314 Net foreign exchange loss 1,576 108 28,87 1 30,033
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78 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 7. Employee benefits e xpenses Note 2026 A$’000 2025 A$’000 Included in cost of sales 6 Wages and salaries 358,229 397,412 Contributions to defined contribution plans 20,724 21,825 Other employee benefits 2,887 2,438 381,840 421,675 Included in administrative expenses 6 Wages and salaries 13, 307 14,416 Contributions to defined contribution plans 1,644 1,446 Other employee benefits 327 336 Share based payment 2,903 1,453 18, 181 17,651 8. Finance costs Note 2026 A$’000 2025 A$’000 Corporate market loan and line fees 4,156 4,633 Lease liabilities 879 805 Other finance costs 418 446 5,453 5,884 Included in cost of sales Lease liabilities 6 3,993 3,797 Total finance costs 9,446 9,681 9. Income tax expense 2026 A$’000 2025 A$’000 Current income tax 27, 317 14,126 Deferred income tax ( 5,272 ) 4,391 22, 045 18,517 Under/(over) provision in prior years Current income tax (300) 4 Deferred income tax 307 (482) 7 (478) 22,052 18,039 Deferred income tax expense on revaluation of freehold land and buildings recognised in other comprehensive income 16, 453 12,586
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CIVMEC FINANCIAL REPORT 2026 79 Notes to the Consolidated Financial Statements 30 June 202 6 9 . Income tax expense (continued) The Group’s tax on profit before income tax differs from the amount that would arise using the Australian standard rate of income tax as follows: 2026 A$’000 2025 A$’000 Profit before income tax 74,14 8 60,575 Income tax at 30% 22, 244 18,173 Add/(deduct) the tax effects of: Under provision of current tax expense in prior years 6 4 Over provision of deferred tax expense in prior years 1 (482) Non - deductible expenses (199) 344 22,052 18,039 Weighted average effective tax rates 29. 7 % 29.8% As at 30 June 2026 , the Group has capital tax losses of approximately A$ 2,079,658 ( 2 025 : A$2, 079,658 ) that are available for offset against future capital gains of the companies in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of its recoverability. The use of these capital tax losses is subject to the agreement of tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operate. The deferred tax assets arising from these capital losses amounted to A$ 623,897 ( 2025 : A$ 623,897 ) and are not recognised as there is no reasonable certainty that future capital gains will be available to utilise the capital tax losses. The tax rate used for the 2026 and 2025 reconciliations above is the corporate tax rate of 30% payable by corporate entities in Australia on taxable profits under the tax law in that jurisdiction. The Group’s operations are primarily located in Austr alia. Deferred taxes Opening A$’000 Charged to profit & loss A$’000 Charged to OCI* A$’000 Closing A$’000 2026 Property, plant and equipment (96,815) 2,84 1 ( 16, 453 ) (110, 427 ) Receivables (197) 213 - 16 Trade and other payables 1,614 874 - 2,488 Provisions 4,565 1,086 - 5,651 Leases liabilities 2,738 157 - 2,895 Others 617 (206) - 411 (87,478) 4,96 5 (16, 453 ) (9 8,966 ) 2025 Property, plant and equipment (82,931) (1,298) (12,586) (96,815) Receivables (210) 13 - (197) Trade and other payables 2,305 (691) - 1,614 Provisions 6,908 (2,343) - 4,565 Leases liabilities 2,606 132 - 2,738 Others 339 278 - 617 (70,983) (3,909) (12,586) (87,478) * Other Comprehensive Income
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80 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 10. Earnings per share 2026 2025 Profit attributable to the owners of the Company (A$’000) 52,09 6 42,536 Share capital (A$’000) 33,402 32,812 Weighted average number of ordinary share issued - Basic 509,350,750 508,273,630 - Diluted 515,926,953 512,079,630 Earnings per ordinary share (A$ cents) - Basic 10. 23 8.37 - Diluted 10. 10 8.27 Basic earnings per share is calculated by dividing the consolidated profit after tax attributable to the equity holders of th e Company, by the weighted average number of ordinary shares outstanding during the financial year. Diluted earnings per share amounts are calculated by adjusting basic earnings per share by the weighted average number of shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. As at 30 June 2026 , the diluted earnings per share includes the effect of 6,576,203 unissued ordinary shares granted under 2024 Civmec Performance Rights Plan due to the performance targets are likely to be met (Note 26). The effect of the inclusion is dilutive. ( 2025 : 6,089 ,000, dilutive). 11. Trade and other receivables 2026 A$’000 2025 A$’000 Current: Trade receivables - Third parties 110,597 51,609 - Retention sum receivables 51 12 Total trade receivables 110,648 51,621 Other receivables 1,260 707 Pre - acquisition contract milestone payments receivable from Commonwealth of Australia 1 125,278 - Total trade and other receivables 237,186 52,328 Note: 1. Amount recognised through the acquisition of Luerssen Australia Pty Ltd (now known as Civmec Defence Industries Pty Ltd). No impairment loss of trade and other receivables were provided as at 30 June 2026 ( 2025 : Nil). The Group’s internal credit evaluation practices and basis for recognition and measurement for expected credit losses are disclosed in Note 33(a) to the financial statements.
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CIVMEC FINANCIAL REPORT 2026 81 Notes to the Consolidated Financial Statements 30 June 202 6 12. Other current assets 2026 A$’000 2025 A$’000 Prepayment 3,589 3,343 Consumables inventory 1,054 658 4,643 4,001 13. Cash and cash equivalents 2026 A$’000 2025 A$’000 Cash at bank and on hand 54,629 102,940 Cash at bank earn interest at floating rates ranging from 0.01% to 4. 20 % ( 2025 : 0.01% to 4.00% ) per annum. A floating charge over cash and cash equivalents has been provided for certain debt.
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82 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 14. Property, plant and equipment Freehold land A$’000 Lease - hold land and buildings A$’000 Buildings A$’000 Plant and equip - ment A$’000 Small tools A$’000 Motor vehicles A$’000 Office equip - ment A$'000 IT equip - ment A$’000 Assets under construc - tion A$’000 Total A$’000 2026 Cost o r valuation At 1 July 2025 34,735 40,932 425,908 126,657 11,096 13,363 866 3,803 4,268 661,628 Additions 39 - 460 3,19 2 157 - 80 2 1,470 5,400 Additions – ROU - 2, 400 - 7,815 139 1, 048 - 101 39 11,542 Additions via business combination - - - 2,689 - - 255 420 - 3,364 Transfer - - 1,998 71 - - - - (2,069) - Revaluation increase 5,776 - 37,513 - - - - - - 43,289 Disposals - - - (1,278) - (830) - - - (2,108) At cost at 30 June 2026 - 43, 332 - 139,146 11,392 13, 581 1,201 4,326 3,708 216,686 At valuation at 30 June 2026 40,550 - 465,879 - - - - - - 506,429 At 30 June 2026 40,550 43,3 32 465,879 139,146 11,392 13, 581 1,201 4,326 3,708 723,115 Accumulated depreciation At 1 July 2025 - (6,950) - (65,997) (8,581) (7,754) (801) (3,375) - (93,458) Depreciation for the year - (1, 022 ) (11, 555 ) (8, 357 ) (1,043) (1,315) (102) (271) - (23,665) Revaluation - - 11, 555 - - - - - - 11, 555 Disposals - - - 1,187 - 821 - - - 2,008 At 30 June 2026 - (7,9 72 ) - (73, 16 7 ) (9,624) (8,24 8 ) (903) (3,646) - (103, 560 ) Net carrying amount At cost - 35, 360 - 65, 979 1,768 5, 333 298 680 3,708 113,12 6 At valuation 40,550 - 465,879 - - - - - - 506,429 At 30 June 2026 40,550 35,3 60 465,879 65, 979 1,768 5, 333 298 680 3,708 619,55 5
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CIVMEC FINANCIAL REPORT 2026 83 Notes to the Consolidated Financial Statements 30 June 202 6 14 . Property, plant and equipment (continued) Freehold land A$’000 Lease - hold land and buildings A$’000 Buildings A$’000 Plant and equip - ment A$’000 Small tools A$’000 Motor vehicles A$’000 Office equip - ment A$'000 IT equip - ment A$’000 Assets under construc - tion A$’000 Total A$’000 202 5 Cost o r valuation At 1 July 2024 29,485 37,650 391,331 118,835 11,454 11,339 860 3,440 11,852 616,246 Additions - - 1,050 1,222 212 - 6 141 2,184 4,815 Additions – ROU - 3,282 - 3,222 - 2,110 - 222 620 9,456 Transfer 2,606 - 3,914 3,918 (50) - - - (10,388) - Revaluation increase 2,644 - 29,613 - - - - - - 32,257 Disposals - - - (540) (520) (86) - - - (1,146) At cost at 30 June 2025 - 40,932 - 126,657 11,096 13,363 866 3,803 4,268 200,985 At valuation at 30 June 2025 34,735 - 425,908 - - - - - - 460,643 At 30 June 2025 34,735 40,932 425,908 126,657 11,096 13,363 866 3,803 4,268 661,628 Accumulated depreciation At 1 July 2024 - (5,971) - (58,840) (7,928) (6,600) (769) (3,298) - (83,406) Depreciation for the year - (979) (10,244) (7,651) (1,205) (1,184) (32) (77) - (21,372) Revaluation - - 10,244 - - - - - - 10,244 Transfer - - - (32) 32 - - - - - Disposals - - - 526 520 30 - - - 1,076 At 30 June 2025 - (6,950) - (65,997) (8,581) (7,754) (801) (3,375) - (93,458) Net carrying amount At cost - 33,982 - 60,660 2,515 5,609 65 428 4,268 107,527 At valuation 34,735 - 425,908 - - - - - - 460,643 At 30 June 2025 34,735 33,982 425,908 60,660 2,515 5,609 65 428 4,268 568,170
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84 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 1 4 . Property, plant and equipment (continued) Depreciation expenses are classified as follows: 2026 A$’000 2025 A$’000 Included in cost of sales 23,523 21,277 Included in administrative expenses 142 95 23,665 21,372 At the balance sheet date, the details of the Group’s freehold land and buildings are as follows: Location Description / Existing use Tenure 2 - 8 Stuart Drive, Henderson, Western Australia Land and buildings / Operational readiness and logistics support facility Freehold 16 Nautical Drive, Henderson, Western Australia Buildings on leasehold land / Undercover waterfront, manufacturing, modularisation and maintenance facility Leasehold land leases: a) 34 - year lease from August 2010, with further 35 years option b) 30 - year lease from March 2014, with further 35 years option c) 28 - year lease from December 2016, with further 45 years option 35 - 39 Old Punt Road, Tomago, New South Wales Land and buildings / Manufacturing facility and modular assembly laydown area Freehold Lot 324 Hematite Drive & Lot 325 Furnace Road, Wedgefield, Port Hedland Western Australia Land and buildings / Manufacturing workshop and office facility Freehold 10 Eucla Close, South Hedland, Western Australia Land and buildings / Accommodation support Freehold 45 Bensted Road, Callemondah , Gladstone, Queensland Land / New facility to be constructed Freehold 2 George Mamalis, Callemondah, Gladstone, Queensland Land and building / Workshop and office facility Freehold 38A Old Punt Road, Tomago, New South Wales Land / New road to be constructed Freehold Freehold land and buildings carried at fair value At 30 June 2026 , an independent valuation was carried out by Asset Valuation Advisory on all the freehold land and buildings of the Group. The fair value is determined by the valuer on the highest and best use approach of each asset. Such valuation was determined using t he Sales Comparison approach (to market - type properties), Hypothetical Development approach, Income Capitalisation approach and Depreciated Replacement Cost (‘DRC’) approach (to non - market - type properties). The fair value has been derived through a mix of Level 2 inputs where applicable and Level 3 inputs where the Valuer has deemed Level 2 inputs to be not applicable.
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CIVMEC FINANCIAL REPORT 2026 85 Notes to the Consolidated Financial Statements 30 June 202 6 14 . Property, plant and equipment (continued) Freehold land and buildings carried at fair value (continued) Details of the Group’s freehold land and buildings and information about the fair value hierarchy as at 30 June 2026 and 30 June 2025 are as follows: Level 1 A$’000 Level 2 A$’000 Level 3 A$’000 Fair value as at 30 June 2026 A$’000 Freehold land - 40,550 - 40,550 Buildings - 12,050 453,829 465,879 Level 1 A$’000 Level 2 A$’000 Level 3 A$’000 Fair value as at 30 June 2025 A$’000 Freehold land - 34,735 - 34,735 Buildings - 11,945 413,963 425,908 Level 2 fair value of the Group’s freehold land and building have been derived using the market data approach. Sales prices of comparable properties in close proximity are adjusted for differences in key attributes as disclosed in Note 3 (a)(vi) to the financial statements. The most significant input in this valuation approach is the selling price per square meter and the usa ge of the property. Valuation techniques used to derive Level 3 fair values The following table shows the information about fair value measurements using significant unobservable inputs (Level 3) as at 30 June 2026 and 2025 : Description Fair value as at 30 June 2026 A$’000 Valuation technique Unobservable inputs Range of inputs Relationship of unobservable inputs to fair value Buildings 453,829 Depreciated Replacement Cost (DRC) Depreciation rates 2% to 33% The higher the depreciation rates, the lower the fair value Estimated construction costs per square metre A$895 to $7,643 The higher the construction costs, the higher the fair value. Developer profit margin 5% to 10% The higher the profit margin, the higher the fair value. Description Fair value as at 30 June 2025 A$’000 Valuation technique Unobservable inputs Range of inputs Relationship of unobservable inputs to fair value Buildings 413,963 Depreciated Replacement Cost (DRC) Depreciation rates 2% to 33% The higher the depreciation rates, the lower the fair value Estimated construction costs per square metre A$1,365 to A$7,071 The higher the construction costs, the higher the fair value. Developer profit margin 5% to 10% The higher the profit margin, the higher the fair value.
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86 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 14 . Property, plant and equipment (continued) Freehold land and buildings carried at fair value (continued) Valuation techniques used to derive Level 3 fair values (continued) The following table represents the changes in level 3 items for the financial year s ended 30 June 2026 and 30 June 2025 : 2026 A$’000 2025 A$’000 At the beginning of the year 413,963 384,786 Acquisition 2,458 1,050 Depreciation ( 11,081 ) (9,840) Gain on revaluation of buildings 48,489 37,967 Closing balance 453,829 413,963 There were no transfers between Level 1 and Level 2 during the year. If the freehold land and building were stated on the historical cost basis, the carrying amount would be as follows: 2026 A$’000 2025 A$’000 Freehold land* 22,687 22,648 Buildings 234,457 231, 999 Accumulated depreciation ( 56,150 ) (48,763) Net book value 200,994 205, 884 * exclude freehold land under Asset under construction Right - of - use assets Right - of - use assets acquired under leasing arrangements are presented together with the owned assets of the same class. Details of such leased assets are also disclosed in Note 23. As at the balance sheet date, the net book value of property, plant and equipment that were under lease liabilities was A$ 78,230 ,000 ( 2025 : A$ 72,306 ,000) (Note 23). The carrying amount of property, plant and equipment that are pledged for security are as follows: Description Borrowings 2026 A$’000 2025 A$’000 Lease hold plant and equipment Lease liabilities 42,8 59 38,393 Remaining property, plant and equipment Multi - option facility 576,696 529,777 619,555 568,170 The details of the borrowings are disclosed in Note 21.
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CIVMEC FINANCIAL REPORT 2026 87 Notes to the Consolidated Financial Statements 30 June 202 6 15. Investment properties Buildings A$’000 Leasehold land A$’000 Total A$’000 2026 Cost or valuation At 1 July 2025 17,140 2,755 19,895 Addition – ROU - 410 410 Revaluation increase – recognise in profit or loss 1,030 - 1,030 At 30 June 2026 18,170 3,165 21,335 Accumulated depreciation At 1 July 2025 - (189) (189) Depreciation for the year - (64) (64) At 30 June 2026 - (253) (253) Net carrying amount At 30 June 2026 18,170 2,912 21,082 2025 Cost or valuation At 1 July 2024 15,990 2,597 18,587 Addition – ROU - 158 158 Revaluation increase – recognise in profit or loss 1,150 - 1,150 As 30 June 2025 17,140 2,755 19,895 Accumulated depreciation At 1 July 2024 - (128) (128) Depreciation for the year - (61) (61) At 30 June 2025 - (189) (189) Net carrying amount At 30 June 2025 17,140 2,566 19,706 Buildings carried at fair value At 30 June 2026 , an independent valuation was carried out by Asset Valuation Advisory on the investment properties of the Group. The fair value is determined based on significant unobservable inputs and is categorised under Level 3 of the fair value measurement hierarchy due to its specialised nature which is not readily traded in the marketplace. At the balance sheet date, the investment properties held by the Group is as follows: Location Description / Existing use Tenure 1 Welding Pass, Henderson, Western Australia Buildings on leasehold land / Submarine rescue facility Leasehold land leases: 28 - year lease from April 2020, with further 22 years option Leasehold land sub - lease: 26 - year and 4 months lease from July 2021, with 2 options to renew for a further 3 years each The fair value measurement for the investment properties of A $ 18,170 ,000 (2025 : A$ 17,140 ,000) has been categori s ed as a level 3 fair value based on the inputs to the valuation technique used.
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88 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 15 . Investment properties (continued) Buildings carried at fair value (continued) Valuation techniques used to derive Level 3 fair values The following table shows the information about fair value measurements using significant unobservable inputs (Level 3): Description Fair value as at 30 June 2026 A$’000 Valuation technique Unobservable inputs Range of inputs Relationship of unobservable inputs to fair value Buildings 18,170 Depreciated Replacement Cost (DRC) Depreciation rates 2% The higher the depreciation rates, the lower the fair value . Estimated construction costs per square metre A$1,764 The higher the construction costs, the higher the fair value. Developer profit margin 5% to 8% The higher the profit margin, the higher the fair value. Description Fair value as at 30 June 2025 A$’000 Valuation technique Unobservable inputs Range of inputs Relationship of unobservable inputs to fair value Buildings 17,140 Depreciated Replacement Cost (DRC) Depreciation rates 2% The higher the depreciation rates, the lower the fair value . Estimated construction costs per square metre A$1,636 The higher the construction costs, the higher the fair value. Developer profit margin 5% to 8% The higher the profit margin, the higher the fair value. Leasehold land carried at cost The asset is depreciated on a straight - line basis over its lease term. The depreciation rate used is 2.1%. (a) Investment properties is leased to non - related parties under operating leases Amounts recognised in profit or loss for investment properties 2026 A$’000 2025 A$’000 Rental income 351 351 Direct operating expenses from investment property that generate rental income (445) (419) (b) The carrying amount of investment properties that are pledged for security is as follows: Description Borrowings 2026 A$’000 2025 A$’000 Investment properties Multi - option facility 21,082 19,706
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CIVMEC FINANCIAL REPORT 2026 89 Notes to the Consolidated Financial Statements 30 June 202 6 16. Intangible assets 2026 A$’000 2025 A$’000 Goodwill 10 10 Goodwill has been allocated to the cash - generating unit, Metals and Minerals division. Management is of the opinion that the recoverable amount will exceed the carrying amount on the basis that this cash generating unit has been generating profit since acquisition and management forecasts the results of this subsidiary to be in a net profit position for the financial year ended 30 June 2026 . In arriving at this assessment, management has determined the recoverable amount using a two ( 2025 : two) years forecasting process based on the current order book, projected orders and a consumer price index on direct costs and overhead costs. 17. Investment in subsidiaries The Group’s material subsidiaries are listed below. The ownership interests reflect the Group’s direct interest in the ordina ry shares of the entity. The proportion of ownership interests held also equals the voting rights held by the Group. The country of incorporation is also the principal place of business unless noted otherwise. Equity held by the Group Name of entity Principal activities Country of incorporation 2026 % 2025 % Held by the Company Civmec Singapore Limited (1) Asset holding company Singapore 100 100 Civmec Defence Industries Pty Ltd (3) (4) Marine and defence services Australia 100 - Held by Civmec Singapore Limited Civmec Construction & Engineering Pty Ltd (1) (4) Engineering and construction services Australia 100 100 Held by Civmec Construction & Engineering Pty Ltd Civmec Holdings Pty Ltd (1) Asset holding company Australia 100 100 Multidiscipline Solutions Pty Ltd (1) Labour supply Australia 100 100 Civmec Pipe Products Pty Ltd (2) Asset holding company Australia - 83.5 Civmec Electrical and Instrumentation Pty Ltd (1) Electrical services Australia 100 100 Forgacs Marine and Defence Pty Ltd ( 1) Marine and defence services Australia 100 100 Note: (1) Included in Australia tax consolidated group. (2) The company was deregistered during the current financial year. (3) Acquired on 1 July 2025. Previously known as Luerssen Australia Pty Ltd. (4) These entities have entered into Deed of Cross Guarantee with the Company (Note 40) .
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90 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 18. Acquisition Luerssen Australia Pty Ltd (now known as Civmec Defence Industries Pty Ltd (‘CDI’ ) ) On 1 July 2025, the Group acquired 100% of the shares in Luerssen Australia Pty Ltd, a company engaged in shipbuilding activities primarily for the Arafura - class Offshore Patrol Vessel (‘OPV’) program under SEA1180. Following the acquisition, the company b ecame a consolidated subsidiary of the Group from the acquisition date. As a result of the acquisition, the Group is expected to strengthen its role in Australia’s naval shipbuilding sector and remain in place to support the ongoing delivery of the SEA1180 OPV program, which is established to replace the ageing Armidale - class patrol boats and to deliver new generation of Offshore Patrol Vessels. The acquisition is accounted for as a business combination. The following table summaries the consideration paid for and the fair value of assets acquired and liabilities assumed at the acquisition date. Fair value A$000 Acquisition cost Cash consideration 20,000 Less: Contribution to Civmec from CoA Recovered Claim (2,500) Net value of consideration 17,500 Assets acquired and liabilities assumed Cash and cash equivalents 36,533 Trade and other receivables 128,315 Other current asset 12 Property, plant and equipment 3,364 Right - of - use assets 1,803 Trade and other payables (128,315) Contract liability (22,195) Lease liabilities (2,017) Total identifiable assets and liabilities 17,500 During the current financial year , the Group has recognised external consultant costs amounting to A$60,000. These acquisition - related costs have been included in the Administrative Expenses. Amorti s ation The contract liability recognised on acquisition arose from the fair value adjustment recorded as part of the purchase price allocation relating to the SEA1180 contract. Management has assessed the relevant facts and circumstances at the reporting date and concluded that no release of the acquired contract liability should be recognised during the current financial year. Accordingly, the carrying amount of the contract lia bility remains unchanged as at 30 June 2026. Management will continue to assess the appropriate timing and pattern of release of the contract liability as the contract progresses. Contingent liabilities Under the terms of the Share Sale Deed, the Vendor has indemnified the Group with respect to all such liabilities with retention amounts of A$5 million to January 2028 and A$2.5 million to January 2029 being held back from the Outstanding Milestone Payment. This has not been included in the balance sheet at acquisition date. Contribution to the Group Due to contracted confidentiality obligations, we are unable to specifically disclose the financial contribution of CDI to th e Group. It forms part of the Segmentation reporting contained in Note 32 .
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CIVMEC FINANCIAL REPORT 2026 91 Notes to the Consolidated Financial Statements 30 June 202 6 19. Joint operations The Group has interests in the following joint operation which is proportionately consolidated: Ownership interest held by the Group Name of entity Principal activities Country of incorporation 2026 % 2025 % Held by Civmec Construction & Engineering Pt y Ltd Black & Veatch Civmec JV (‘BCJV’) 1 Engineering and construction services Australia 50 50 Civmec Construction & Engineering Pty Ltd and Seymour Whyte Constructions Pty Ltd and WSP Australia Pty Ltd (‘Causeway Link Alliance’) 2 Engineering and construction services Australia 53.78 53.78 Aurecon Australasia Pty Ltd & Civmec Construction & Engineering Pty Ltd & Seymour Whyte Constructions Pty Ltd 3 Engineering and construction services Australia 2 0 .00 4 - Note: 1. BCJV project is for the design and construction of a wastewater treatment plant upgrade. 2. Causeway Link Alliance is for the design and construction of the Causeway Pedestrian and Cyclist Bridges in the Perth metropo litan area. 3. The alliance is for the planning and design development of the Perth Sporting and Entertainment Precinct Project. 4. The proportion of corporate overhead and profit at Phase 1. The proportion changes across different phases. 20. Trade and other payables 2026 A$’000 2025 A$’000 Trade creditors 79,455 35,228 Sundry payables and accruals 98, 213 46,244 Goods and services tax payable 5,588 1,263 Other taxes payable 3,161 4,100 Payable to Naval Vessels Luerssen (‘NVL’) 81,371 267,788 86,835 Trade and other payables are usually paid within 45 days (2025: 45 days) .
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92 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 21. Borrowings 2026 A$’000 2025 A$’000 Non - current: Multi - option facility – secured 60,000 60,000 60,000 60,000 Multi - option facility During the current financial year, the existing bank facilities have been renegotiated and consolidated into a revolving mult i - option facility. Therefore, the quarterly limit reduction is no longer in effect. The facility can be used for revolving Corp orat e Market Loan, Letter of Credit and Bank Guarantee. The facility expiry date is 31 January 2028 and the facility agreement includes a provision allowing the bank to extend the facility. As at 30 June 2026, the Group has a bank facility limit amounting to A$160 million (2025: A$156 million), w hich was 39. 0 % utilised ( 2025: 40.5% utilised). Interest rates are variable and ranged between 4.49% to 5.34 % (2025: 4.98% to 5.55%) per annum during the current financial year. The Group is required by the banks to maintain certain financial ratios such as leverage ratio, tangible net worth and debt service cover ratio. As at 30 June 2026, the Group met all these financial covenants. General security deed The facility is secured by certain property, plant and equipment and investment properties as disclosed in Note 14 and Note 15 to the financial statements.
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CIVMEC FINANCIAL REPORT 2026 93 Notes to the Consolidated Financial Statements 30 June 202 6 22. Provisions for employee benefits 2026 A$’000 2025 A$’000 Current: Provision for short - term employee benefits 16,662 13,659 Non - current: Provision for long - term employee benefits 1,550 379 18,212 14,038 The movements in provisions are as follows: 2026 A$’000 2025 A$’000 Current: At the beginning of the year 13,659 18,455 Provisions made during the year : - Included in employee benefits 23,6 98 25,948 Provisions utilised during the year (20,889) (31,165) Reclassified from non - current 194 421 At the end of the year 16,662 13,659 Non - current: At the beginning of the year 379 493 Provisions made during the year - Included in employee benefits 641 91 Adjustment due to change in probability % 902 340 Provisions reversed during the year (178) (124) Reclassified to current (194) (421) At the end of the year 1,550 379 Short - term benefits The provisions pertain to employee benefits for annual leave, rostered days off and non - vesting personal leave that are expected to be settled within 12 months of the reporting date. The liability of long service leave that is payable to employe es who have completed at least 7 years of continuous employment is also classified as current. They are measured at the amounts expected to be paid when the liability is settled. Long - term benefits The provisions mainly pertain to employee benefits relating to long service leave. The liability is measured as the present value of the expected future payments to be made. The probability of long service leave being taken is based upon historical data an d the discount rate of 4.83% used ( 2025 : 3.95% ) .
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94 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 23. Leases (a) The Group as lessee Nature of the Group’s leasing activities The Group has entered into leases of land and buildings in respect of its offices, facilities and workshops. The Group has the following leases: The Henderson land lease at Lot 804 (16) Nautical Drive, Henderson, Western Australia is for a 34 - year period from August 2010 with an option to renew for a further 35 years (reasonably certain to be exercised). Rent increases as per the CPI Index. The Henderson land lease on extended area at Lot 804 (16) Nautical Drive, Henderson, Western Australia is for a 28 - year period from December 2016 with an option to renew for a further 45 years (reasonably certain to be exercised). Rent increases as per the CPI Index. The Henderson land lease at Lot 101 (1) Welding Pass, Henderson, Western Australia is 28 - year lease from November 2019 with further 22 years option (reasonably certain to be exercised). Rent increases as per the CPI Index. A workshop lease at 4/379 Spearwood Avenue, Bibra Lake, Western Australia is for 3 - year lease from July 2022 with a first further 2 years option and a second further 3 years option (reasonably certain to be exercised). Rent increases 2.5% on each anniversa ry of the start date on the initial lease term and subsequently increases as per CPI index. The Group also leases motor vehicles, workshop equipment and office fitout from non - related parties under lease liabilities. The Group will obtain the ownership of the leased assets from the lessor at no extra cost at the end of the lease term. The average lease term is between 4 and 5 years. The present values of lease liabilities are analysed as follows: Minimum lease payments A$’000 Future finance charges A$’000 Net present value of minimum lease payments A$’000 2026 Current: Within one year 11,529 (5,164) 6,365 Non - current: Between two and five years 31,413 (17,043) 14,370 Later than five years 207,458 (161,832) 45,626 238,871 (178,875) 59,996 250,400 (184,039) 66,361 2025 Current: Within one year 9,939 (4,497) 5,442 Non - current: Between two and five years 27,386 (16,022) 11,364 Later than five years 199,573 (155,868) 43,705 226,959 (171,890) 55,069 236,898 (176,387) 60,511
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CIVMEC FINANCIAL REPORT 2026 95 Notes to the Consolidated Financial Statements 30 June 202 6 23. Leases (continued) (a) The Group as lessee (continued) Nature of the Group’s leasing activities (continued) Lease liabilities are presented in the statement of financial position as follows: 2026 A$’000 2025 A$’000 Present value of lease liabilities Current: Within one year 6,365 5,442 Non - current: Between two and five years 14,370 11,364 Later than five years 45,626 43,705 59,996 55,069 66,361 60,511 The effective interest rates range from 2.14% to 8.60% ( 2025 : 2.14% to 8.60%) per annum. Carrying amount of right - of - use assets within Property, Plant and Equipment 2026 A$’000 2025 A$’000 Leasehold land & buildings 35, 360 33,982 Small tools 610 579 Plant and equipment 36,338 31,840 Motor vehicles 4,996 5,063 Office & IT equipment 256 222 Asset under construction 659 620 78, 219 72,306 Carrying amount of right - of - use assets within Investment Properties 2026 A$’000 2025 A$’000 Leasehold land & buildings 2,912 2,566 During the current financial year, t here was an addition of A$ 11, 542 ,000 to right - of - use assets within Property, Plant and Equipment and A$410,000 within Investment Properties (Note 14 and Note 15 ).
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96 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 23. Leases (continued) (a) The Group as lessee (continued) Amounts recognised in profit or loss Note 2026 A$’000 2025 A$’000 Depreciation charged for the year: - Leasehold land & building 1,022 1,040 - Small tools 108 101 - Plant and equipment 3, 317 2,917 - Motor vehicles 1,115 977 - Office & IT equipment 67 13 Interest on lease liabilities 8 4,872 4,602 Expenses relating to short - term leases 523 304 (b) The Group as lessor The Group sub - leased its investment property under an operating lease which also included pay to build and occupy conditions. A net amount of A$9,236,000 was received in advance during the year ended 30 June 2021 from the sub - lessee as part of the pay to b uild conditions. Revenue from the advance is being recognised over the tenure of the land. The sub - lessee does not have an option to purchase the property at the expiry of the lease period. This lease is classified as an operating lease because the risk an d rewards incidental to ownership of the assets are not substantially transferred. Rental income from investment properties is disclosed in Note 15 . Future minimum rental receivables under non - cancellable operating leases as at the end of the reporting period are as follows: 2026 A$’000 2025 A$’000 Present value of rental receivables: Within one year 343 346 Between one year and two years 343 346 Between two years and three years 330 336 Between three years and four years 330 336 Between four years and five years 330 336 Later than five years 3,301 4,112 4,977 5,81 2 The present value of rental receivables changes due to the change in CPI. When the CPI rises, indicating higher inflation, the present value decreases. Conversely, a drop in CPI indicating lower inflation, which increases the present value. The annual trim med mean CPI was 4.0 % to the quarter ended 30 June 2026 ( 2025 : 2.7 %).
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CIVMEC FINANCIAL REPORT 2026 97 Notes to the Consolidated Financial Statements 30 June 202 6 24. Share capital Fully paid ordinary shares 30 June 2026 30 June 2025 No. of shares A$’000 No. of shares A$’000 At the beginning of the year 508,528,000 32,812 507,606,000 32,358* Share issued during the year - Conversion of performance rights 1,097,000 590 937,000 464 Cancellation of treasury shares - - (15,000) (10) At the end of the year 509,625,000 33,402 508,528,000 32,812 * Reclassification of previously vested equity - settled employee benefits relating to prior financial years. The ordinary shares of the Company have no par value. All issued ordinary shares are fully paid. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share without restrictions at m eetings of the Company. All shares rank equally with regard to the Company’s residual assets. During the current financial year, 1,097 ,000 shares were i ssued pursuant to vesting and conversion of performance rights held by key management personnel (‘KMP’) and other management. 25. Dividends Dividends are recognised as a liability at the time the Directors resolve to pay or declare the dividend. (a) Dividends recognised during the year Franked / unfranked Dividend per share (Australia cents) Total A$’000 2026 2025 Final ordinary dividend: paid on 24 Oct 2025 Franked 3.5 17,8 37 2026 Interim ordinary dividend paid on 10 Apr 2026 Franked 2.5 12,741 30, 578 2025 2024 Final ordinary dividend: paid on 25 Oct 2024 Franked 3.5 17,798 2025 Interim ordinary dividend paid on 11 Apr 2025 Franked 2.5 12,713 30,511 (b) Unrecognised amounts 2026 A$’000 2025 A$’000 Final franked dividends of 3.5 Australia cents per ordinary share for the financial year ended 30 June 202 6 ( 2025 : 3.5 Australia cents) 17,837 17, 837
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98 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 25. Dividends (continued) (c) Franking credit balance 2026 A$’000 2025 A$’000 Franking credits available for subsequent reporting periods based on a tax rate of 30% ( 2025 : 30%) 65,531 69,668 Impact on the franking account of dividends declared by the Board (7,644) (7,628) 57,887 62,040 Tax rates The tax rate at which paid dividends have been franked is 30% ( 2025 : 30%). Dividends payable will be franked at the rate of 30% ( 2025 : 30%). Recognition and measurement A provision for dividends is not recognised as a liability unless the dividends are declared on or before the reporting date.
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CIVMEC FINANCIAL REPORT 2026 99 Notes to the Consolidated Financial Statements 30 June 202 6 26. Share - based payments Performance rights plan T he 2024 Civmec Key Senior Executives Performance Rights Plan was approved and adopted at the Extraordinary General Meeting (‘EGM’) held on 1 August 2024 . A Performance Right refers to a right to one issued ordinary share of the Company granted under the scheme for no consideration. To the extent the gateway hurdles are satisfied, 100% of the vesting will be based on the absolute earnings per share (aEPS) ou tcome. aEPS is based on the achievement of certain predetermined performance targets determined by the Committee. The Committee has the discretion to determine whether the performance targets have been met. The balances of outstanding Performance Rights are as follows: Issued Vested Forfeited/ Lapsed/ Expired Balance Fair value per right (AUD) 1 Tranche 6: Performance period 1 July 2022 to 30 June 2025 (Granted in FY202 3) 2,134,000 (1,097,000) ( 1,037 ,000) - $0.51 Tranche 7: Performance period 1 July 2023 to 30 June 2026 (Granted in FY2024 ) 1,817,000 - ( 275 ,000) 1, 542 ,000 $0.63 Tranche 8: Performance period 1 July 2024 to 30 June 2027 (Granted in FY2025 ) 2,283,000 - (192,000) 2, 091 ,000 $0.69 Tranche 9: Performance period 1 July 2025 to 30 June 2028 (Granted in FY2026) 1,599 ,000 - ( 628,000 ) 971 ,000 $0.85 Retention plan : Performance period 1 July 2025 to 30 June 2030 7,376,000 - (2,005,000) 5,371,000 $0.76 - $1.15 Balance as at 30 June 2026 9,975 ,000 Note: 1. The fair value per right at grant for all tranches is determined using the Black - Scholes Model. This takes into account the share price at the grant date, the term of the right, the exercise price, expected price volatility, exercise probability, the risk - free interest rate over the term of the right, and the expected dividend yield. During the current financial year , the Group has recognised A$ 775 ,000 of equity - settled share - based payment expense ( 2025 : A$ 354 ,000).
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100 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 27. Asset revaluation reserve Note 2026 A$’000 2025 A$’000 At the beginning of the year 190,134 160,219 Gain on revaluation of freehold land and buildings 54,844 42,501 Deferred tax liability arising on revaluation 9 (16, 453 ) (12,586) At the end of the year 228,525 190,134 28. Other reserves 2026 A$’000 2025 A$’000 Merger reserve 7,578 7,578 Waiver of loan payable to a related party 277 277 Equity - settled employee benefits reserve 1,401 1,216 9,256 9,071 (a) Merger reserve Pursuant to the completion of the previous Restructuring Exercise in financial year 2012, the share capital of Civmec Construction & Engineering Pty Ltd and Controlled Entities was adjusted to merger reserve based on the ‘pooling of interest method’. (b) Equity - settled employee benefits The equity - settled employee benefits reserve relates to share options granted to employees under the employee share option plan and performance rights. Following the expiry of employee share option plan, the associated reserve balance was transferred to re tained earnings, reflecting the lapse of the related equity instruments. 29. Capital expenditure commitments The Group has contracted capital expenditure commitments at the reporting date but not recognised in the financial statement as follows: 2026 A$’000 2025 A$’000 Plant and equipment purchases 1,752 254 Capital projects - 39 1,752 293
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CIVMEC FINANCIAL REPORT 2026 101 Notes to the Consolidated Financial Statements 30 June 202 6 30. Contingent liabilities The Group is, in the normal course of business, required to provide guarantees in respect of their contractual performance related obligations. These guarantees and indemnities only give rise to a liability in the event that it is unable to perform its con tractual obligations. As at 30 June 2026 , the Group has given the following: 2026 A$’000 2025 A$’000 Bank guarantees 2,397 2,442 Surety bond facility 282,339 183,608 284,736 186,050 The surety bond facility is provided for the provision of performance bonds to customers of the Group. It has a limit of A$ 417 million ( 2025 : A$40 0 million) as at 30 June 2026 . There were no contingent assets recognised as at 30 June 2026 or 30 June 2025 . 31. Related party transactions The Group’s main related parties are as follows: Entities exercising control over the Group The largest shareholders are James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as trustees for the JF & OT Fitzgerald Family Trust) ( 16.53 %) and Goldfirm Pty Ltd (acting as trustee for the Kariong Investment Trust) ( 16.51 %). Patrick John Tallon is a beneficiary of the Kariong Investment Trust. Key management personnel Any person having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity is considered key management personnel. Disc losures relating to Key Management Personnel is included in the Remuneration Report that is audited and forms part of the Directors’ report. The aggregate remuneration provided, excluding statutory cost, to key management personnel is as follows: 2026 A$’000 2025 A$’000 Short - term employee benefits 3,932 3,609 Long term benefits (115) 1 (68) 1 Post - employment benefits 120 117 Share - based payments 1,189 1,092 Non - executive Directors’ fees 332 354 5,458 5,104 Note: 1. Negative amount represents leave taken value greater than leave accrued during the year.
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102 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 31. Related party transactions (continued) Directors’ interest in employee share benefit plans At the end of the reporting date, the total number of outstanding share options and performance rights that were issued/allocated to the directors and key management personnel under existing employee benefit schemes is given below: 2026 2025 Performance rights Directors - 996,000 Key management personnel 1,376 ,000 332,000 Other related parties Other related parties include immediate family members of key management personnel and entities that are controlled or significantly influenced by those key management personnel, individually or collectively with their immediate family members. Transactions with related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. There were no transactions with related parties during the current financial year ( 2025 : A$142,000 ). 32. Financial information by segments Management has determined the operating segments based on the internal reports which are regularly reviewed by the Operations Management that are used to make strategic decisions. The Operations Management comprises of the Executive Chairman, Chief Executive Officer, Chief Financial Officer and the department heads of each operating segment. The business is managed primarily on the basis of different products and services as the diversification of the Group’s operations inherently have notably different risk profiles and performance assessment criteria. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following: the products sold and/or services provided by the segment; the manufacturing process; the type or class of customer for the products or services; the distribution method; and any external regulatory requirements.
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CIVMEC FINANCIAL REPORT 2026 103 Notes to the Consolidated Financial Statements 30 June 202 6 32. Financial information by segments (continued) The Group is organised into the following main business segments: Energy Resources Infrastructure, Marine & Defence The business activities include heavy engineering, shipbuilding, modularisation, SMP (structural, mechanical, piping), EIC (electrical, instrumentation and control), precast concrete, site civil works, industrial insulation, maintenance, surface treatment, refractory and access solutions. Although the Operations Management receives separate reports for each project in the Energy, Resources, and Infrastructure, Marine & Defence businesses, these have been aggregated into the respective reportable segments as they have similar long - term avera ge gross margins. Basis of accounting for purpose of reporting by operating segments (i) Accounting policies adopted Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision makers with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the consolidated fina ncial statements of the Group. (ii) Inter - segment transactions An internally determined transfer price is set for all inter - segment sales. This price is reviewed quarterly and is based on what would be realised in the event the sale was made to an external party at arm’s length. All such transactions are eliminated on consolidation of the Group’s financial statements. Inter - segment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. (iii) Segment assets and liabilities The Group does not identify nor segregate its assets and liabilities in operating segments as these are managed on a ‘group basis’. Geographical segments (secondary reporting) Revenue is based on the location of customers regardless of where the services are rendered. Non - current assets are based on the location of those assets: Revenue Non - current assets 2026 A$’000 2025 A$’000 2026 A$’000 2025 A$’000 Australia 902,984 810,586 645,792 588,964 Major customers The Group has a number of customers to whom it provides both products and services. For the year ended 30 June 2026 , the Group supplies to three ( 2025 : three , Resources) major external customers in the Resources and Infrastructure, Marine and Defence segment s . The major customers account for approximately 50.09 % ( 2025 : 51.4 %) of external revenue.
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104 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 32. Financial information by segments (continued) 2026 2025 Energy A$’000 Resour - ces A$’000 Infra - structure, Marine and Defence A$’000 Total A$’000 Energy A$’000 Resour - ces A$’000 Infra - structure, Marine and Defence A$’000 Total A$’000 Revenue 105,690 587,112 210,182 902,984 65,188 641,231 104,167 810,586 Cost of sales (excluding depn ) * (89,061) (503,10 3 ) (182,548) (774,71 2 ) (55,710) (574,602) (65,996) (696,308) Depreciation expenses (2,297) (16,72 1 ) (4,569) ( 23,58 7 ) (1,403) (17,693) (2,242) (21,338) Segment results 14,332 67,288 23,065 104,685 8,075 48,936 35,929 92,940 Other income 3,787 3,552 Unallocated costs: Admin expenses ** (28,72 9 ) (29,938) Depn in admin expenses ** (142) (95) Finance costs (5,453) (5,884) Profit before income tax 74,14 8 60,575 Income tax expense (22,052) (18,039) Profit for the year 52,09 6 42,536 As at 30 June 2026 As at 30 June 2025 Energy A$’000 Resour - ces A$’000 Infra - structure, Marine and Defence A$’000 Total A$’000 Energy A$’000 Resour - ces A$’000 Infra - structure, Marine and Defence A$’000 Total A$’000 Segment assets Intangible assets - 10 - 10 - 10 - 10 Unallocated assets: Assets 1, 210,120 906,810 Other current assets 4,643 4,001 Deferred tax assets 5,145 1,078 Total assets 1,219,918 911,899 Segment liabilities Unallocated liabilities: Liabilities 550,510 307,349 Borrowings 60,000 60,000 Provisions 18,212 14,038 Total liabilities 628,722 381,387 Other segment information Capital expenditure during the year 5,400 4,815 * Depn stands for depreciation. * * Administrative expenses above exclude depreciation which is disclosed separately above.
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CIVMEC FINANCIAL REPORT 2026 105 Notes to the Consolidated Financial Statements 30 June 202 6 33. Financial risk management objectives and policies The Group and the Company financial risk management policies set out the Group’s and the Company’s overall business strategies and its risk management philosophy. The Group and the Company are exposed to financial risks arising from its operations and the us e of financial instruments. The key financial risks include credit risk, interest rate risk and liquidity risk. The Group’s and the Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise adverse effects from the unpredictability of financial markets on the Group’s and the Company’s financial performance. The Board of Directors reviews and agrees policies and procedures for the management of these risks. The Audit Committee provides independent oversight to the effectiveness of the risk management process. The Group and the Company do not hold or issue derivative financial instruments for speculative purposes. As at 30 June 2026 , the Group’s and the Company’s financial instruments mainly consisted of cash and cash equivalents, trade and other receivables, contract assets, trade and other payables, contract liabilities, lease liabilities and borrowing s. There has been no change to the Group’s and the Company’s exposures to these financial risks or the manner in which it manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below. (a) Credit risk Credit risk is the risk that a counterparty will default on its contractual obligations under a financial instrument or customer contract, resulting to a financial loss to the Group. The Group is exposed to credit risk primarily from trade and other receivables, contract assets and cash and cash equivalents . As the Group and the Company do not hold any collateral, the Group’s maximum exposure to credit risk is the carrying amount of that class of financial instruments on the consolidated Statement of Financial Position amounting to A$573,685,000 at 30 June 2026 (2025: A$ 310,237,000), except for financial guarantees as disclosed in Note 30 to the financial statements. The Group adopts the policy of dealing only with: Customers of appropriate credit standing and history, and obtaining sufficient collateral or buying credit insurance where appropriate to mitigate credit risk; and High credit quality counterparties of at least an ‘A’ rating by external credit rating companies. The Group assess es the probability of default at initial recognition of a financial asset and continuously monitors whether there has been a significant increase in credit risk throughout the reporting period. In assessing whether there has been a significant increase in credit risk, the Group compares the risk of default at the reporting date with the risk of default at the date of initial recognition. The following sets out the Group’s internal credit evaluation practices and basis for recognition and measurement for expected credit losses (‘ECL’): Internal rating grades Definition Basis for recognition and measurement of ECL i. Performing The counterparty has a low risk of default and does not have any past - due amounts. 12 - month ECL ii. Under - performing There has been a significant increase in credit risk since initial recognition (>60 days past due). Lifetime ECL (not credit - impaired) iii. Non - performing There is evidence indicating that the asset is credit - impaired (>90 days past due). Lifetime ECL (credit - impaired) iv. Write - off There is evidence indicating that there is no reasonable expectation of recovery as the debtor is in severe financial difficulty. Asset is written off
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106 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 33. Financial risk management objectives and policies (continued) (a) Credit risk (continued) Trade receivables and contract assets The Group’s objective is to achieve sustainable revenue growth while minimising losses arising from credit risk exposure. Credit evaluation s, which incorporates both q ualitative and quantitative assessments of each customer , are performed and approved by management before credit is granted. The Group also closely monitors customers’ payment pattern s and credit exposures on an on - going basis. The Group applies the simplified approach in determining the ECL allowance f or all trade receivables and contract assets. Under t he simplified approach , the loss allowance is measured at an amount equal to the lifetime ECL. The Group uses a provision matrix to measure the lifetime ECL for trade receivables and contract assets. Balances subject to ECL assessment are grouped based on shared credit risk characteristics and days past due. The ECL rates are determined based on the credit risk profile of each counterparty and are adjusted for historical loss experience and forward - looking macroeconomic infor mation. C ontract assets relate mainly to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the same type of contracts. The Group has therefore concluded that the expected loss rates applied to trade receivables are a reasonable approximation of those applied to contract assets. Financial assets are written off when there is no reasonable expectation of recovering the contractual cash flow, such as where a debtor has failed to engage in a repayment plan with the Group and it is considered probable that the debtor will enter bankruptcy or other financial reorganisation. Where receivables have been written off, the Group continues to pursue recovery actions where appropriate. Any subsequent recoveries are recognised in profit or loss. As at 30 June 2026 , the Group has a concentration of credit risk on two debtors ( 2025 : two debtors) that individually represents 35.4% and 21.0% ( 2025 : 43.7% and 14.3% ) of total trade and other receivables and contract assets. The Group’s credit risk exposure in relation to trade receivables and contract assets under AASB/SFRS(I) 9 as at 30 June 2026 and 2025 are set out in the provision matrix as follows: Days past due Current A$’000 Within 60 days A$’000 61 to 90 days A$’000 More than 90 days A$’000 Total A$’000 2026 Trade receivables 97,581 13,067 - - 110,648 Contract assets 277,668 - - - 277,668 Carrying amount 375,249 13,067 - - 388,316 Total estimated gross carrying amount at default * 245,812 - - - 245,812 Weighted average ECL rate ** 0.32 % - - - 0.32% Loss allowance for ECL 788 - - - 788 By segment: Resources 220 - - - 220 Infrastructure, Marine & Defence 568 - - - 568 * represents the balance that was subject to the Group’s expected credit loss assessment at the reporting date. ** Expected credit loss rates ranging from 0.30% to 0.41% were applied based on the credit risk profile of the respective counte rparties. The weighted average ECL rate of 0.32% represents the blended rate derived from these individual assessments.
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CIVMEC FINANCIAL REPORT 2026 107 Notes to the Consolidated Financial Statements 30 June 202 6 33. Financial risk management objectives and policies (continued) (a) Credit risk (continued) Trade receivables and contract assets (continued) The Group’s credit risk exposure in relation to trade receivables and contract assets under AASB/SFRS(I) 9 as at 30 June 2026 and 2025 are set out in the provision matrix as follows : (continued) Days past due Current A$’000 Within 60 days A$’000 61 to 90 days A$’000 More than 90 days A$’000 Total A$’000 2025 Trade receivables 49,726 1,895 - - 51,621 Contract assets 154,969 - - - 154,969 Carrying amount 204,695 1,895 - - 206,590 No loss allowances were provided for 30 June 2025. There is no ageing analysis for contract assets as these mainly relate to variable considerations which have yet to be invoiced. The Group has assessed and concluded that trade receivables are subject to immaterial credit loss. There has been no change in the estimation techniques or significant assumptions made during the current reporting year. Other receivables The Group applies the general approach to provide for the ECL for other receivables. Under the general approach, the loss allowance is measured at an amount equal to the 12 - month ECL at initial recognition. At each reporting date, the Group assesses whether the credit risk of a financial instrument has increased significantly sinc e initial recognition. When credit risk has increased significantly since initial recognition, loss allowance is measured at an amo unt equal to lifetime ECL. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or ef fort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and includes forward - looking information. If credit risk has not increased significantly since initial recognition or if the credit quality of the financial instrument s improves such that there is no longer a significant increase in credit risk since initial recognition, loss allowance is measured at an amount equal to 12 - month ECL. Impairment of these balances have been measured on the 12 - month ECL basis which reflects the low credit risk of exposures. These amounts are subject to immaterial credit loss. Cash and cash equivalents The cash and bank balances are entered into with bank and financial institution counterparties, which are rated at least AA, based on international credit rating agencies. For the purpose of impairment, cash and cash equivalents has been measured on the 12 - month expected loss basis and reflects the short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit risk based on the exte rnal credit ratings of the counterparties.
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108 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 33. Financial risk management objectives and policies (continued) (b) Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting pe riod whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments . The Group is also exposed to earnings volatility on floating rate instruments. Interest rate risk is managed using a mix of fixed and floating rate debt. At 30 June 2026 , approximately 16. 7 % ( 2025 : 21 .7%) of the Group’s debt is fixed. The Group’s borrowings at variable rates are denominated mainly in A$. If the A$ interest rates increase/decrease by 1% ( 2025 : 1%) with all other variables remain constant, the Group’s profit before tax will be approximately lower/ higher by A$ 6 00 ,000 ( 2025 : A$ 600 ,000) as a result of higher/lower interest expenses on these borrowings. The Group has cash balances placed with reputable banks and financial institutions. Such balances are placed on varying maturities and generate interest income for the Group and the Company. The Group obtains additional financing through bank borrowings and leasing arrangements. Information relating to the Group’s interest rate exposure is also disclosed in the notes on the Group’s borrowings and leasing obligations. They are both fixed and fl oating rates of interest. The policy is to retain flexibility in selecting borrowings at both fixed and floating rates interest. Variable rates Fixed rates Within 1 year A$’000 Between 2 to 5 years A$’000 Within 1 year A$’000 Between 2 to 5 years A$’000 Non - interest bearing A$’000 Total A$’000 2026 Financial assets Cash and cash equivalents 54,629 - - - - 54,629 Trade and other receivables - - - - 237,186 237,186 54,629 - - - 237,186 291,815 Financial liabilities Trade and other payables - - - - 267,788 267,788 Lease liabilities - - 6,365 59,996 - 66,361 Borrowings - 60,000 - - - 60,000 - 60,000 6,365 59,996 267,788 394,149 2025 Financial assets Cash and cash equivalents 102,940 - - - - 102,940 Trade and other receivables - - - - 52,328 52,328 102,940 - - - 52,328 155,268 Financial liabilities Trade and other payables - - - - 86,835 86,835 Lease liabilities - - 5,442 55,069 - 60,511 Borrowings - 60,000 - - - 60,000 - 60,000 5,442 55,069 86,835 207,346
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CIVMEC FINANCIAL REPORT 2026 109 Notes to the Consolidated Financial Statements 30 June 202 6 33. Financial risk management objectives and policies (continued) (c) Liquidity risk Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting its commitments concerning its financial liabilities. The Group and the Company manages this risk through the following mechanism: Preparing forward - looking cash flow analysis in relation to its operational, investing and financing activities; Monitoring undrawn credit facilities; Maintaining credit risk related to financial assets; Obtaining funding from a variety of sources; Only investing surplus cash with major financial institutions; and Comparing the maturity profile of financial liabilities with the realisation profile of financial assets. Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect the earliest contractual settlement dates and do not reflect management’s expectations that banking facilities will be rolled forward. Balances due within 12 months equal their carrying amount as the impact of discounting is not significant. The table below reflects an undiscounted contractual maturity analysis for financial liabilities (exclude contract liabilitie s) Contracted undiscounted cash flows Carrying amount A$’000 Within 1 year A$’000 Between 2 to 5 years A$’000 More than 5 years A$’000 Total A$’000 2026 Financial liabilities Trade and other payables 267,788 267,788 - - 267,788 Lease liabilities 66,361 11,529 31,413 207,458 250,400 Borrowings 60,000 3,307 66,79 5 - 70,102 394,149 282,624 98,208 207,458 588,290 2025 Financial liabilities Trade and other payables 86,835 86,835 - - 86,835 Lease liabilities 60,511 9,939 27,386 199,573 236,898 Borrowings 60,000 3,198 63,368 - 66,566 207,346 99,972 90,754 199,573 390,299 Borrowings facilities The Group’s undrawn borrowings facilities and guarantees are disclosed in Notes 21 and 30 to the financial statements respectively. Credit card facilities The Group maintains corporate credit card facilities with its major financial institutions. These facilities support travel a nd operational expenditure across the Group. As of 30 June 2026, the total approved limit was A$ 10 . 8 million (2025: A$0.5 million) , of which A$ 6.0 million had been utilised (A$0.1 million utilised) . Outstanding credit card balances are included in Trade and Other Payables as they are short - term in nature and are payable within normal commercial terms.
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110 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 33. Financial risk management objectives and policies (continued) (d) Capital management Management controls the capital of the Group in order to maintain a good debt - to - equity ratio, provide the shareholders with adequate returns and to ensure that the Group can fund its operations and continue as a going concern. The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. The Group and the Company have no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distribution to shareholders and share issues. The net debt - to - equity ratio is calculated as net debt divided by total equity. Net debt is calculated as total financial liabilities less cash and cash equivalents. 2026 A$’000 2025 A$’000 Net debt 339,520 104,406 Total equity 591,196 530,512 Net debt - to - equity ratio 0.57 0.20 (e) Fair value estimation Financial instruments The fair values of financial assets and financial liabilities can be compared to their carrying values as presented in the consolidated statement of financial position. Fair values are those amounts at which an asset could be exchanged, or liability settled, between knowledgeable, willing parties in an arm’s length transaction. Fair values derived may be based on information that is estimated or subject to judgement, where changes in assumptions may have a material impact on the amounts estimated. The fair value of current financial assets and financial liabilities approximate the carrying value due to the liquid nature of these assets and/or the short - term nature of these financial rights and obligations. The fair value of non - current borrowings are calculated based on discounted expected future principal and interest cash flows. The discount rates used are based on market rates for similar instruments at the reporting date. The carrying amounts of financia l assets and financial liabilities are assumed to approximate their respective fair values. The Group does not anticipate that the carrying amounts recorded at the balance sheet date would be significantly different from the values that would eventually be received or settled. Fair value hierarchy The Group categories fair value measurement using a fair value hierarchy that is depend on the valuation inputs used as follows: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date; Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 – Unobservable inputs for the asset or liability Fair value measurements that use inputs of different hierarchy levels are categorised in its entirety in the same level of th e fair value hierarchy as the lowest level input that is significant to the entire measurement.
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CIVMEC FINANCIAL REPORT 2026 111 Notes to the Consolidated Financial Statements 30 June 202 6 34. Litigation Perth stadium project In February 2019, the Group lodged a writ in the Supreme Court of Western Australia against Brookfield Multiplex Engineering and Infrastructure Pty Ltd (‘Brookfield Multiplex’), in relation to the valuation of additional time and changes to the works under taken in the delivery of the new Perth Stadium project in Western Australia. The Group is seeking a determination from the Supreme Court to recover costs associated with the changes in scope and nature of the works required to be completed and for the granting of Practical Completion. The proceedings are ongoing as at the date of t his report. 35. Adoption of new and revised standards The accounting policies adopted are consistent with those of the previous financial year except that in the current financial year, the Group has adopted all the new and revised standards which are relevant to the Group and effective for annual financial periods beginning on or after 1 July 2025 . The adoption of these standards and interpretations did not have any material effect on the financial statements of the Group. 36. New standards and interpretations not yet adopted A number of new standards and interpretations and amendments to standards are effective for annual periods beginning on or after 1 July 2026 and earlier application is permitted; however, the Group has not early adopted the new or amended standards and interpretations in preparing these financial statements. Applicable to 202 8 financial statements: AASB 18/SFRS(I) 18: Presentation and Disclosure in Financial Statements This standard will replace AASB 101/SFRS(I) 1 - 1 Presentation of Financial Statements. Whilst many of the requirements will remain consistent, the new standard will have an impact on the presentation of the Consolidated Statement of Comprehensive Income and a consequential impact on the Consolidated Statement of Cash Flows. It will also require the disclosure of non - AASB/SFRS(I) management performance measures and may impact the level of aggregation and disaggregation throughout the primary financial stateme nts and the notes. An entity is required to apply the amendments to AASB 101/SFRS(I) 1 - 1 for annual reporting periods beginning on or after 1 January 2027. Earlier application is permitted. AASB 18/SFRS(I) 18 requires retrospective application with specific transition provis ions. The directors will determine the impact on the presentation of the Consolidated Statement of Comprehensive Income and Consolidated Statement of Cash Flows when effective. SFRS(I) 19: Subsidiaries without Public Accountability: Disclosures Amendments to AASB 121/SFRS(I) 1 - 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency Amendments to AASB 128/SFRS(I) 1 - 28 Investments in Associates and Joint Ventures: Fair Value Option for Investments in Associates and Joint Ventures Unspecified effective date, early adoption permitted: Amendments to AASB 10 and AASB 128 / SFRS(I) 10 and SFRS(I) 1 - 28: Investments in Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The directors of the Company expect that the adoption of the new and revised standards above will have no material impact on the financial statements in the year of initial application.
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112 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 37. Subsequent events There have been no subsequent material events that would require disclosure in the financial statements. 38. Other disclosures There were no significant seasonal factors affecting the business during the current financial year. 39. Remuneration of auditors During the financial year, the following fees were paid or payable for services provided by the Auditor of the Group: 2026 A$’000 2025 A$’000 Audit or review of the financial statements and sustainability report - Moore Australia Audit (WA) 207 171 - Moore Stephens LLP* 146 142 Total Auditors’ remuneration 353 313 * Equivalent to S$ 1 27 ,000 for current financial year ( 2025 : S$11 8 ,000)
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CIVMEC FINANCIAL REPORT 2026 113 Notes to the Consolidated Financial Statements 30 June 202 6 40. Deed of Cross Guarantee The Company and its wholly - owned subsidiaries noted below entered into a Deed of Cross Guarantee (Deed) on 30 June 2026. Under the Deed, each Group Entity, including the Parent and its subsidiaries, guarantees payment in full of the debts of every other Group Entity to its creditors. The guarantees become enforceable upon certain winding - up events specified in the Corporations Act, or, in other winding - up events, if any creditor remains unpaid six months after the commencement of the winding up. The following entities are party to the Deed under which each member guarantees the debts of the others: Civmec Limited Civmec Construction & Engineering Pty Ltd Civmec Defence Industries Pty Ltd (‘CDI’) By entering into the Deed, the wholly - owned subsidiaries have been relieved from the requirement for preparation, audit and lodgement of their financial statements and Directors’ Report under Corporations Instrument 2016/785 issued by the Australian Securi ties and Investments Commission. Set out below is a consolidated statement of profit or loss and other comprehensive income, summary of movements in consolidated retained earnings and consolidated statement of financial position, comprising the Company and its wholly - owned entities ( Extended Closed Group) which are a party to the Deed, after eliminating transactions between parties of the Deed: Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2026 Closed Group 2026 A$’000 2025 * A$’000 Revenue 886,535 776,849 Cost of sales (783,593) (695,896) Gross profit 102,942 80,953 Other income 33,462 37,636 Administrative expenses (29,430) (31,243) Finance costs (2,179) (2,501) Profit before income tax 104,795 84,84 5 Income tax expense (30,653) (14,523) Profit for the year 74,142 70,322 Other comprehensive income/(loss) - - Total comprehensive income for the year 74,142 70,322 Profit and Total comprehensive income attributable to: Owners of the Company 74,142 70,322 Non - controlling interest - - 74,142 70,322 *Comparative information includes only Civmec Limited and Civmec Construction & Engineering Pty Ltd prior to the acquisition of CDI on 1 July 2025.
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114 CIVMEC FINANCIAL REPORT 2026 Notes to the Consolidated Financial Statements 30 June 202 6 40. Deed of Cross Guarantee (continued) Statement of Financial Position As at 30 June 2026 2026 A$’000 2025 * A$’000 ASSETS Current assets Cash and cash equivalents 52,875 101,254 Trade and other receivables 350,175 162,554 Contract assets 248,375 154,954 Other current assets 4,546 3,845 Income tax receivable - 8,563 655,971 431,170 Non - current assets Investment in subsidiaries 32,198 32,198 Properties, plant and equipment 64,108 65,761 Intangible assets 10 10 Deferred tax assets 4,239 693 100,555 98,662 TOTAL ASSETS 756,526 529,832 LIABILITIES AND EQUITY Current liabilities Trade and other payables 266,550 83,786 Contract liabilities 71,423 63,007 Lease liabilities 7,079 6,605 Income tax payable 18,616 - Provisions 15,197 13,427 378,865 166,825 Non - current liabilities Lease liabilities 12,803 16,095 Provisions 1,543 377 14,346 16,472 TOTAL LIABILITIES 393,211 183 ,297 Capital and reserves Share capital 33,402 32,813 Other reserves 12,203 8,967 Retained earnings 317, 710 304,755 TOTAL EQUITY 363, 315 346,535 TOTAL LIABILITIES AND EQUITY 756,526 529,832 *Comparative information includes only Civmec Limited and Civmec Construction & Engineering Pty Ltd prior to the acquisition of CDI on 1 July 2025.
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CIVMEC FINANCIAL REPORT 2026 115 Notes to the Consolidated Financial Statements 30 June 202 6 41. Parent Entity Summary financial information 2026 A$’000 2025 A$’000 Current assets 44,213 51,704 Total assets 101 ,742 89,246 Current liabilities 6 3,361 48,750 Total liabilities 6 3,361 48,750 Issued capital 33,402 32,812 Retained earnings 81 2,971 Share - based payments reserve 1,401 1,216 Other reserves 3,497 3,497 Total shareholder equity 38,381 40,496 Profit for the year 27,688 14,877 Total comprehensive income for the year 27,688 14,877 Material accounting policies The accounting policies of the Parent are consistent with those of the Group. Parent entity’s contractual commitments for property, plant and equipment The Company has no contractual commitments to acquire property, plant and equipment. Guarantees entered into by the Parent entity in relation to the debts of its subsidiaries The parent has entered into a Deed with the effect that the Parent guarantees the debt of members of the Extended Closed Group. Further details of the Deed and the Extended Closed Group are disclosed in Note 40. Subsidiary Guarantees The Company provides parent company guarantee (PCG) to clients from time to time when a subsidiary enters into a contractual agreement. These guarantees and indemnities only give rise to a liability in the event that the subsidiary is una ble to perform its contractual obligations. During the course of business, the Company also provides letters of credit for international trading when required. Contingent liabilities There are no other known contingent liabilities of the Company. Refer to Note 30 for details of contingent liabilities of Gro up entities.
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116 CIVMEC FINANCIAL REPORT 2026 Consolidated Entity Disclosure Statement As at 30 June 202 6 Entity name Entity type Country of incorporation Equity held % Australian tax residency status Foreign countries tax residency Civmec Limited Body corporate Australia N/A Australian N/A Civmec Singapore Limited Body corporate Singapore 100 .00 Australian N/A Civmec Construction & Engineering Pty Ltd Body corporate Australia 100 .00 Australian N/A Civmec Defence Industries Pty Ltd Body corporate Australia 100 .00 Australian N/A Civmec Holdings Pty Ltd Body corporate Australia 100 .00 Australian N/A Multidiscipline Solutions Pty Ltd Body corporate Australia 100 .00 Australian N/A Civmec Electrical and Instrumentation Pty Ltd Body corporate Australia 100 .00 Australian N/A Forgacs Maring and Defence Pty Ltd Body corporate Australia 100 .00 Australian N/A Black & Veatch Civmec JV (‘BCJV’) Participant in joint operations Australia 50 .00 Australian N/A Civmec Construction & Engineering Pty Ltd and Seymour Whyte Constructions Pty Ltd and WSP Australia Pty Ltd (‘Causeway Link Alliance’) Participant in joint operations Australia 53.78 Australian N/A Aurecon Australasia Pty Ltd & Civmec Construction & Engineering Pty Ltd & Seymour Whyte Constructions Pty Ltd Participant in joint operations Australia 20 .00 * Australian N/A * The proportion of corporate overhead and profit changes across different phases.
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118 CIVMEC FINANCIAL REPORT 2026 Independent Auditor’s Report (on F inancial R eport)
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126 CIVMEC FINANCIAL REPORT 2026 Sustainability report For the year ended 30 June 2026 About this report This report has been prepared for Civmec Limited (the ‘Company’) and its controlled entities (collectively referred to as the ‘Group’) for the financial year ended 30 June 2026, which is consistent with that of the financial statements. The Company is a pu blicly listed company incorporated and domiciled in Australia. The Company is dually listed on the Australian Securities Exchange (‘ASX’) and the Singapore Exchange Limited (‘SGX’). This report represents the Company’s climate - related financial disclosures. The climate - related financial disclosures have been prepared in accordance with the Australian Accounting Standards Board (AASB)’s S2 Climate - related Disclosures , which is the mandatory Australian Sustainability Reporting Standard (ASRS) and prepared in compliance with the climate reporting requirements under c hapter 2M of the Australian Corporations Act 2001 . The standard’s requirements are based on the recommendations of the former Task Force on Climate - related Financial Disclosure s (TCFD), which the Group has reported against since FY23. G iven the alignment between TCFD and AASB S2 (which is based on the IFRS S2 standard), this report is also consistent with the recommendations of the TCFD . As this is the first year in which the Group has applied AASB S2, the Group has elected to not disclose Scope 3 greenhouse gas (GHG) emissions information, consistent with transitional relief under AASB S2. In some instances, the Group has also elected not to present comparative information in this report, also consistent with the transitional relief provisions. Any monetary amounts are presented in Australian Dollar (A$), which is the functional and presentation currency of the Group. Significant judgements and uncertainties In preparing this report, the Group has exercised judgement in determining what information is relevant and material. The preparation of climate - related disclosures requires the use of estimates in areas where amounts cannot be measured directly. Estimates and assumptions have been applied where information relates to the value chain, involves forward - looking assessments or subject to data limitations. As a result, the climate - related disclosures are subject to inherent uncertainty and rely on a range of as sumptions, professional judgement, methodologies and inputs as at the reporting date. Judgements and assumptions applied include the us e and interpretation of climate - related data (including forward - looking information), the estimation and quantification of greenhouse gas emissions, the analysis and modelling undertaken to assess potential scenario outcomes and the us e of data from third part ies , amongst other factors. In addition to the factors described above, there are additional inherent limitations with scenario analysis, and i t i s difficult to predict which, if any, of the scenarios might eventuate. Scenario analysis does not indicat e probable outcomes and relies on assumptions that may or may not prove to be correct or eventuate. Scenarios do not constitute definitive outcomes or probabilities and should be interpreted with caution. F orward - looking statements regarding climate change includ e scenario analysis, energy transition pathways and the Group’s strategies and plans relating to climate change are inherently uncertain and may change over time . Statements are based on current expectations and reflect judgements, assumptions and estimates, however a range of variables, including legislative and policy changes, technological developments, market conditions and environmental factors, may cause actu al outcomes to differ materially.
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CIVMEC FINANCIAL REPORT 2026 127 Sustainability report 1. Governance 1.1 Board oversight The Board of Directors (the ‘Board’) is responsible for the oversight of climate - related risks and opportunities, as outlined in the Board Charter. The Group maintains a clearly defined risk appetite statement, supported by comprehensive risk management and compliance frameworks that align operational activities with the strategic plan. These frameworks help guide the level of risk the company is prepared to accept in pursuit of its objectives. The Board approves the Group’s risk appetite and oversees its principal risks. The Board is supported in monitoring a range of current and emerging climate - related risks by the Risk & Conflicts Committee (RCC). The skills and core competencies of the Board are set out in the Report on Corporate Governance, Board Composition and Guidance (Principle 2.4). The Board has completed a climate skills assessment, assessing Directors’ experience, knowledge and qualifications in relation to climate - related matters. The assessment shows any competency gaps in relation to climate knowledge and informs the determinati on of any training needs. This identified that four out of five members have experience related to climate - related matters. The Group considers that the Board’s broad professional and extensive experience, industry exposure and existing governance capabilities provide the necessary skills and competencies to oversee the Group’s approach to climate - related matters. The Board regularly reviews emerging sustainability and climate - related risks and opportunities through updates from management and other insights gained through wider industry involvement , with training provided as required . The Board is responsible for setting and overseeing the progress of climate related targets. I n FY2 6 , the Group continue d to strengthen its oversight of climate - related matters. The Board maintained its resolution to receive quarterly updates on the development of climate - related risks, opportunities, and business impacts , with particular focus on long - term resilience, capital allocation, and exposure to regulatory and market transitions . These updates are compiled and reported with the support from executive management. As part of this ongoing process, the Board was kept informed of the rapidly evolving climate - related financial disclosure requirements for both the SGX and ASX. This included updates on forward - looking reporting areas, the timing of new disclosure obligations, assurance schedules, and directors’ responsibilities reg arding compliance . C limate - related considerations are incorporated into strategic decisions, major transactions, capital allocation, and risk policies. Examples of key climate topics considered by the Board in FY26 include : the C ompany’s obligations under the Australian Sustainability Reporting Standard Climate - related Disclosures Standard S2 (AASB S2) ; climate - related performance metrics, including progress towards emissions - reduction targets and resilience objectives; results from the climate scenario analysis and climate related risks and opportunities resilience workshop conducted in April 2026; emerging trends and opportunities arising from the energy transition; and information on the cost and feasibility of potential decarbonisation initiatives. No material trade - offs between climate - related risks or opportunities were considered in the financial year. In FY26, the Group introduced climate - related conside rations to form part of director remuneration. Compliance and implementation of the AASB S2 standard was introduced to make up 10% of the individual short - term incentives into director renumeration, which will be forfeited if the Company is unable to successfully implement AASB S2 reporting requirements . See the Remuneration Report for further details on remuneration. 1.2 Risk & Conflicts Committee (RCC) Oversight of business risks and opportunities , including those related to climate , is delegated to the Risk & Conflicts Committee (RCC ). This committee, comprising of three independent directors and convening quarterly, is responsible for overseeing the Group’s risk strategy. Its duties include monitoring risk exposure, reviewing internal audit findings on the effectiveness of control measures, and assessing management’s perspective on acceptable risk levels across business units . To support its duties in overseeing climate risk, the chair completed additional training in relation to the climate transition in May 2026. A consistent methodology is used to compile the Group Risk Report, which highlights key risks for the RCC to review , including climate related risks and opportunities . In FY26, the RCC endorsed the updated climate risk and opportunities register. The RCC evaluates these risks and provides feedback to the Board on the Group’s overall risk position and exposure.
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128 CIVMEC FINANCIAL REPORT 2026 Sustainability report 1. Governance (continued) 1.3 Management roles Sustainability, including climate - related issues, is driven by the Group’s executive team and chaired by the CEO. The CEO has responsibility and accountability for the implementation of risk management throughout Civmec, as outlined in the Risk Management Framework. C limate - related risks and opportunities are integrated in to the Group’s enterprise - wide risk management framework. Risks and opportunities are identified by management and supporting function s through the climate risk and resilience workshop, which included the CFO and key management personnel and subject matter experts spanning across operations, sustainability, human resources and finance . Management integrates climate considerations into project planning, asset management, procurement, and client engagement. Climate - related risks and opportunities are monitored through scenario planning and incorporated into operational decision - making . The Group’s governance framework establishes a comprehensive suite of policies, procedures and guidelines that embed climate - related considerations across the business and influence multiple aspects of operations, from strategic planning to project delivery. M anagement applies this framework to ensure robust due diligence, regulatory compliance and the consistent delivery of sustainable value for stakeholders. To support effective oversight, the Group utilises internal software and business intelligence tools to collect, analyse and review climate - related data. These controls are monitored and continue to be strengthened through continuous improvement . 1.4 Sustainability Committee (SC) Since its establishment in FY23, the Sustainability Committee has provided an additional management structure to support the development of the Group’s sustainability governance and further integrate sustainability issues across the business. Members of the SC include the CFO and representatives from various business units, including Sustainability, HSEQ, HR, Finance, and Proposals. The SC is responsible for developing the climate - related risks and opportunities register and reports directly to the executive team and CEO, recommending climate - related strategies, actions, and targets. The SC continues to report to the executive team on outcomes from committee meetings, including climate - related issues and the progress against targets .
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CIVMEC FINANCIAL REPORT 2026 129 Sustainability report 2. Strategy 2.1 Climate - related risks and opportunities Climate - related risks and opportunities are identified and assessed in line with the Group’s enterprise risk management process. The Group considers transition risks, such as policy and legal risks, technology risks, market risks, reputational risks as well as acute and chronic physical climate risks when identifying which climate related risks which could have a material impact on the Group’s business model, strategy, or financial statements. Climate risks and opportunities are considered material when they could reasonably be expected to influence decisions made by primary users of general - purpose financial reports. In April 2026, the Group held a climate resilience workshop with select subject matter experts (SMEs) from across the business, with the goal to identify and analyse climate related risks and opportunities that could reasonably affect the Grou p in the shor t, medium and long term. SMEs examined potential impacts on the Group’s operations, strategy , business model and value chain. Participants were encouraged to explore areas of the business that may be vulnerable to climate related impacts. This included identifying locations more prone to physical impacts of climate change and functional areas of the business and value chain at greater risk from transitional impacts . Participants identified current and future mitigation/adaption measures and assessed the maximum reasonable consequence and likelihood of occurrence for risks and opportunities identified. Coinciding with the workshop, the Group engaged an external consultant to conduct a scenario analysis to support the identification and assessment of climate - related risks and opportunities that may affect the Group’s operations in the short, medium and long term. The analysis , completed in May 2026, wa s informed by the Climate Risk and Opportunities Register , developed from the FY2 6 climate resilience workshop. The risks and opportunities outlined below present key information on the types of climate - related risks and opportunities which are reasonably expected to impact the Group in the foreseeable future, informed by the scenario analysis, Climate Risk and Opportunities Register and climate resilience workshop. Risk and opportunities assessment scope and parameters: The Group considered the following time horizons; short (0 - 3 years), medium (3 - 10 years) and long (10+years), aligned to the Group’s project - based planning cycles. All the Group’s current locations and sectors were included. The Group operates across four sites and multiple segments. Impacts within the Group’s current operations and value chain were assessed. Based on the Group’s climate - related risk and opportunities assessment and scenario analysis, no climate - related matters had a material impact on recognised assets, liabilities, revenue, expenses or cashflows in the financial year. The Group’s current oper ations and strategy are resilient to the risks identified. This assessment considered the diverse nature of operations, the geographic spread of operational locations, and the short, medium and long - term time horizons over which climate - related impacts may reasonably be expected to arise. The assessment also reflects the mitigation and adaptation measures embedded within the business and strategic planning processes. Based on the analysis, the Group is resilient to the risks and that arise from the effects of climate change and the climate transition.
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130 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.1 Climate - related risks and opportunities (continued) Risks that could reasonably affect the Group Risk description Risk type Time horizon Current and anticipated effects on business model and value chain Mitigation and adaption strategy Current and anticipated financial impacts Cyclone & storm surge damage Increased frequency and severity of tropical cyclones and associated storm surge damage to port - adjacent facilities. Physical Acute Short to medium Extreme weather events result in business interruption from lost workdays and potential damage to infrastructure affecting energy supply to the Group’s sites which may cause project delays. Storms, heavy rainfall and floods may lead to a disruption of the electricity network, and supply of significant materials including steel. Other impacts include disruption of access to facilities and construction sites and the transportation routes to support projects. Locations more vulnerable to this risk include Henderson and Newcastle facilities, remote site locations and land - and sea - based supply routes for projects. The Group maintains an up - to - date Business Continuity Plan which guides actions in the instances of any physical disruptions. Back - up generators are at key facilities in the case of any disruption to the electricity network. The Group has appropriate design ratings on buildings and infrastructure, such as Port Hedland being cyclone rated and assets are covered by insurance. The Group has identified a flood risk at Newcastle and are monitoring this specific risk to assess if a storm water and flood risk assessment and response plan should be scoped in the future. Current: The Group has not identified any material financial impacts in the current reporting period that are directly attributable to this risk. Cyclone and weather - related events experienced during the year did not result in a material financial impact. Anticipated: Increased business interruption days from lost workdays and potential damage to energy infrastructure resulting in project delay costs. Insurance premiums are expected to increase under all scenarios. Insurance availability at Port Hedland is of most concern under a high emissions scenario. Increased capital expenditure to support upgrades in facilities and for more climate - resilient assets. Rising temperatures Extended periods of high temperatures (i.e. heatwaves) may lead to heat stress affecting the health, safety and productivity of workers. Areas vulnerable to this risk include facilities and projects located in the Pilbara and Gladstone. Physical Acute Short to medium Heat stress may lead to an increased potential for injury, heat related illness and require additional health monitoring and PPE requirements. The Group has existing heat stress management procedures, PPE, weather monitoring and stop work triggers. Inclement weather provisions are in project contracts and weather contingencies in tender preparations. The Group monitor prior weather patterns to ensure management procedures and provisions are relevant with changing weather patterns in operational areas. Current: The Group has not identified any material financial impacts in the current reporting period that are directly attributable to this risk. Heat stress impacts experienced during the year did not result in a material financial impact. Anticipated: Extreme heat increases the number of business interruption days and reduces productivity which can detrimentally affect project schedules and increase project costs. Increased frequency of heat - related illness can increase workers compensation claims and d rive - up insurance costs.
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CIVMEC FINANCIAL REPORT 2026 131 Sustainability report 2. Strategy (continued) 2.1 Climate - related risks and opportunities (continued) Risk description Risk type Time horizon Current and anticipated effects on business model and value chain Mitigation and adaption strategy Current and anticipated financial impacts Sea level rise Long - term sea level rise and coastal inundation, particularly threatening Henderson and Newcastle sites. Physical Chronic Long On a long - term time horizon, its expected rising sea levels to increase flooding at coastal facilities which disrupts land and sea - based transportation causing supply - chain delays, increased maintenance costs to infrastructure and higher insurance premiums . The Group conducts 3 - yearly reviews of government coastal inundation models for Henderson. A long - term facility adaptation plan will be developed, if required, noting that development in the area will contemplate these requirements. The Group use modelling to monitor and understand resilience of locations. The Group use local sourcing alternatives where appropriate. The Group will consider mapping critical supply chain points against climate hazard exposure, if deemed necessary. This risk is long term in nature and has not yet had a financial impact on the Group. The Group is monitoring this long - term risk, which could require long term site hardening capital investment if it materialises. Anticipated financial impact has not been quantified due to there being a high level of measurement uncertainty and the resulting estimated financial impacts would not be useful. Policy and regulatory change Government policies that support the transition or enforce emissions reduction. For example, Australia introduces a carbon tax, a carbon border adjustments mechanism, or sector - specific targets. Transition Policy and legal Short to medium The Group monitors the regulatory landscape for any changes to current policies. The introduction of any regulated change would come with significant warning. The Group must ensure that contracts respond to new laws or the introduction of new taxes. Associ ated costs are expected to be recoverable through project pricing, with clients also passing through their own carbon pricing costs. In addition to monitoring the regulatory landscape, the Group is monitoring the role internal carbon pricing could play in planning and investment decisions. Current: The Group has not identified any financial impacts in the current reporting period that are directly attributable to this risk. Anticipated: Increased taxation if Australia introduces a carbon tax. Increased compliance costs. Additionally, the cost of compliance for clients increases which may lead to clients seeking to cut costs in other parts of their business or to slow the development of new projects and/or cutting maintenance costs. This could r esult in negative impacts on revenue and cash flow to the Company.
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132 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.1 Climate - related risks and opportunities (continued) Risk description Risk type Time horizon Current and anticipated effects on business model and value chain Mitigation and adaption strategy Current and anticipated financial impacts Change in Engineering Standards Climate - adjusted Australian Standards for wind loading, flood levels, and fire ratings may require redesign or upgrade of existing and new infrastructure as a result of the physical impacts of climate change. Transition Policy and legal Medium Increased technical specifications and compliance requirements impacting the Company and the value chain. The Group monitors Standards Australia updates for climate - adjusted codes. In the instance of any changes to existing standards, the Group will assess existing facilities against standard changes and make necessary upgrades to remain compliant. Current: The Group has not identified any material financial impacts in the current reporting period that are directly attributable to this risk. Anticipated: Engineering standards are assessed in the design phase, therefore there is an incremental design cost risk in the case of any changes to existing standards. Additionally, there are increased costs associated with upgrades, repairs and increased compliance costs. The anticipated financial impact has not been quantified due to there being a high level of measurement uncertainty and the resulting estimated financial impacts would not be useful. Client sector structural shift Downturn in fossil fuel industries resulting in reduced demand for work, coinciding with an uplift in renewables and critical minerals sectors which the Group may not have the right expertise to meet demand. Transition Market Medium The energy transition reduces demand in fossil fuel - related projects which renders specific resources, skills, and equipment, creating stranded asset and workforce redundancy risks. Simultaneously, the energy transition requires new technical skills in critical minerals, hydrogen, electrification, carbon capture and storage and green fabrication not present in the current workforce, reducing competitiveness for emerging project types. The Group has a diverse sector portfolio and ensures a sector diversification strategy is in place which includes scenario planning for technology and market transitions. Most core skills that personnel have are transferrable and not directly linked to any given commodity. The Group actively monitors the project opportunity pipeline to ensure the Group has the right resources to match shifts in client demands and maps current capabilities against transition infrastructure requirements. As a registered training organisation (RTO) the Group has internal training capabilities to ensure a skilled and relevant workforce. Current: The Group has not identified any material financial impacts in the current reporting period that are directly attributable to this risk. Anticipated: Without alternative revenue sources, a downturn in fossil fuel related projects could result in a reduction in revenue and reduce cash flow. The Group’s revenue from coal related revenue is expected to decline. In FY26, coal related revenue represented app roximately A$24.9 M , or 3% of total revenue.
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CIVMEC FINANCIAL REPORT 2026 133 Sustainability report 2. Strategy (continued) 2.1 Climate - related risks and opportunities (continued) Risk description Risk type Time horizon Current and anticipated effects on business model and value chain Mitigation and adaption strategy Current and anticipated financial impacts Unstable input costs Energy transition drives volatility in energy, fuel, steel, and materials costs, eroding margins on fixed - price contracts and making long - duration project pricing unreliable. Transition Market Short to medium A number of projects are sensitive to energy, transport and materials costs, and rising prices can create operational instability that ripples through project delivery. Volatility in key inputs may disrupt supply chains, lead to delays and reduce productiv ity. Rising energy and input pressures can also contribute to broader supply chain instability, as suppliers adjust operations, reduce capacity or alter delivery schedules in response to resource constraints. Clients are likely to pass through their own cost pr essures. Rising energy costs accelerate investment in renewable self - generation capabilities and more energy - efficient technologies which influence long - term strategic planning. Expanding solar PV assets as a safeguard against increasing electricity prices. The Group has cost escalation provisions in contracts and may develop input cost volatility scenarios for tender pricing if appropriate. Current: The Group has not identified any material financial impacts in the current reporting period that are directly attributable to this risk. Whilst there has been an increase in costs due to volatile fuel prices, this has been driven by geo - political events ra ther than climate change. Anticipated: Project price increases from volatile input costs and pressure on project margins. Volatility in the electricity market will lead to increasing electricity costs for facilities, impacting costs and cash flow on the Group. Capital expenditure in additional solar PV assets at the Henderson facility is expected in FY27. Further expansion of solar is expected in the medium - long term. Whilst there is upfront capital investment, it is expected to have cost savings from reduced el ectricity purchases and a positive return on investment.
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134 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.1 Climate - related risks and opportunities (continued) Risk description Risk type Time horizon Current and anticipated effects on business model and value chain Mitigation and adaption strategy Current and anticipated financial impacts Client expectations and technology adaption Inability to meet evolving client expectations for low carbon solutions and climate risk management, including timely adoption of emerging low carbon technologies (e.g., green steel, low carbon concrete, hydrogen welding, electric cranes) leading to loss o f contracts and preferred contractor status. Transition Technology and reputation Short to medium Late technology adoption could make the Group less competitive in tenders, increase project delivery risk, strain supplier relationships and potentially exclude us from major future infrastructure and energy projects. The Group’s prominence as a Tier 1 contractor makes it a primary target for client supply chain decarbonisation programs, increasing compliance burden and audit obligations. Growing community concern about climate change shifts public sentiment against heavy industry contractors, affecting social licence, workforce attraction, and ESG - sensitive client relationships. Scenario planning for technology outcomes and tracking emerging technology developments. The Group to develop a technology adoption roadmap aligned with client timelines. AASB S2 disclosure requirements including GHG emission disclosures and additional sustainability communications ensures reporting obligations and expectations are met. Continuous community engagement at the site level. State government commitment to local manufacturing. Current: Whilst the Group has not identified any material impacts in the current reporting period that are directly attributable to this risk, the Group has invested in decarbonisation and electrification technology. See capital deployment metric in 4.2 Risk and opportunity adaption section for details. Anticipated: It is expected that new low - carbon materials will come at a price, which will be passed onto the client. However, procuring supplies of these new materials will be challenging due to the high demand. An inability to acquire the new materials could affect t he Group’s competitiveness, thus resulting in loss of revenue. It is expected that capital investment in emerging technology and low - carbon infrastructure in future years will grow as technology becomes more readily available and commercially viable. For example, the Group is planning to install a ~900 - kW solar PV sys tem at the Henderson facility in FY27.
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CIVMEC FINANCIAL REPORT 2026 135 Sustainability report 2. Strategy (continued) 2.1 Climate - related risks and opportunities (continued) Opportunities that could reasonably affect the Group Opportunities description Risk type Time horizon Current and anticipated effects on business model and value chain Mitigation and adaption strategy Current and anticipated financial impacts Energy Transition Infrastructure The energy transition drives substantial investment in infrastructure requiring the Group’s heavy engineering and fabrication capabilities. Market Short to medium With a growing offshore oil and gas decommissioning market, there is an opportunity to focus on manufacturing equipment to help support effective decommissioning. Henderson is ideally positioned for WA decommissioning work, with some work already completed . Australia’s offshore wind sector is also developing rapidly, and the Group’s heavy fabrication capabilities at Henderson is well suited to manufacturing offshore wind foundations, jackets and topsides. The broader energy transition is also driving demand for engineered components such as electrolysers, heat exchangers and pressure vessels to original equipment manufacturer specifications. Other energy transition infrastructure opportunities are emerging, such as installation of charging facilities and other low - carbon infrastructure, which is expected to grow more in the medium to long term. Positioning the Group as a progressive leader in energy transition activities expands market opportunities and attracts growing and emerging industries seeking credible Australian heavy engineering partners. The Group continues to monitor opportunities to ensure that the pipeline of work is identified and the Group is part of the consideration process. The Group may look to map capabilities against energy transition infrastructure requirements and develop a ta rgeted business development strategy for focus sectors if required. Periodic review and refinement of the Company’s corporate strategy ensures that opportunities aligned with the Company’s business model are identified. Current: The Group’s current revenue includes energy transition infrastructure such as installation of charging facilities and oil and gas decommissioning. See Assets or business activities aligned with climate - related opportunities metric in 4.2 Risk and Opportunity adaption section for details. Anticipated: With a growing offshore oil and gas decommissioning market there are increased opportunities to support decommissioning activities, positively impacting revenue. The Group is well positioned to capture higher margin clean energy equipment opportunities whi ch supports long term revenue growth. It is anticipated that revenue related to decommissioning activities and offshore wind will grow in the medium to long term. Expansion of Critical Minerals The volume of critical minerals needed to support low emissions technology will increase substantially up to 2050. For mineral rich areas such as Western Australia, this will lead to a dramatic increase in the mining and processing of critical minerals. Market Short to medium The Group currently engages in projects related to critical mineral extraction for transitioning to a low - carbon economy. Mineral extraction is expected to grow to support the demand required to produce clean energy technology. Construction projects tend t o be more susceptible to impacts of commodity price volatility, however critical mineral projects are expected to remain a stable revenue stream. The Group is already positioned as a key partner for many critical mineral mining companies. Positioning the Group as a leader attracts new market opportunities. Current: The Group is already supporting a number of critical mineral related projects in its construction and manufacturing division. See Assets or business activities aligned with climate - related opportunities metric in 4.2 Risk and Opportunity adaption section for details. Anticipated: Revenue related to critical minerals extraction is expected to grow to support growing low - carbon and green technology industries.
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136 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.1 Climate - related risks and opportunities (continued) Opportunities description Risk type Time horizon Current and anticipated effects on business model and value chain Mitigation and adaption strategy Current and anticipated financial impacts Energy sources Increasing volatility of the electricity grid will likely occur simultaneously with the decrease in costs of solar PV and battery storage. Energy source Short The Group has already successfully installed a 600 - kW solar PV system at the Newcastle facility, with plans to install another ~900 - kW system at Henderson, hedging against future electricity prices. Opportunities exist for additional battery storage and energy efficiency measures at manufacturing facilities to reduce the impact of electricity costs and Scope 2 emissions. The Group believes reducing gross GHG emissions delivers more direct, measurable, and long - term environmental benefits than relying on external mechanisms such as carbon credits, so proactively reducing the Group’s own fossil fuel consumption through fleet electrification and on - site renewables is expected. This reduces operating costs, lowers Scope 1 emissions, and strengthens ESG credentials with clients. Current: Greater energy independence through the use of solar PV and batteries at the Group’s Henderson and Newcastle facilities reduces costs associated with electricity price spikes. Australian Government funding programs provide substantial grant and concessional finance opportunities for industrial decarbonisation, renewable energy self - generation, facility resilience upgrades, and clean energy manufacturing capability. Anticipated: Capital investment in additional solar PV assets at the Henderson facility is expected in FY27. Further expansion of solar is expected in the medium - long term. Whilst there is upfront capital investment, it is expected to have cost savings from reduced ele ctricity purchases and a positive return on investment.
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CIVMEC FINANCIAL REPORT 2026 137 Sustainability report 2. Strategy (continued) 2.2 Strategy and decision making As part of the Group’s corporate strategy, the Board has endorsed a net zero by 2050 target, with an interim target of 50% reduction in Scope 1 and 2 emissions intensity by 2030, relative to 2022 levels. The Group’s climate strategy focuses on being flexib le and adaptable to market shifts and emerging technologies, while reducing absolute carbon reductions through targeted carbon reduction initiatives. The Group is committed to reducing GHG emissions, adapting to evolving climate conditions, and supporting a low - carbon future, including the delivery of projects that are critical to enabling this transition. The Group’s climate transition and adaption plan, together with the 2030 and 2050 emissions targets, prioritises commercially viable solutions, supports a just and orderly transition and enables the production of materials essential to th e global energy tr ansition. The Board provides strategic oversight of the transition plan, while executive management leads its implementation across the organisation. The Group’s climate transition pathway focuses on four pillars, which are aimed to enable success across the decarbonisation journey, resilience, and long term transition to a low - carbon economy: Process Recognising that the energy transition may be rapid and nonlinear, the Group’s processes and strategies will remain agile and flexible to adjust to changes in market and climate forces. Technology Acknowledging that current technologies are insufficient for achieving net zero emissions, The Group will seek to utilise proven technology to decarbonise. Collaboration Understanding that climate challenges require collective effort, the Group will collaborate with clients, suppliers, experts in the field, and interested parties to enhance mutual benefits. Knowledge Emphasising the importance of informed decision - making, the Group will invest in generating knowledge to anticipate future trajectories, risks and opportunities. Maintaining a flexible approach and adoption strategy allows the Group to respond to climate risks and opportunities as they materialise. For example, key mitigation and adaption measures include: Capital allocation Climate related considerations are embedded into the Group’s capital allocation process to ensure investments enhance the resilience and long term performance of the asset base. This includes prioritising climate resilient infrastructure, such as the cyclo ne rated Port Hedland facility, as well as funding emissions reduction initiatives such as solar PV installation and hybrid vehicle trials across the Group’s operations. By integrating these factors into investment decisions, the Group prioritises assets a nd projects that support operational continuity and broader decarbonisation objectives. It is anticipated that the funding required to realise opportunities and mitigate the identified risks will be fully supported by revenues generated from standard busin ess activities. Resource allocation The Group has a flexible and adaptable workforce and a broad portfolio, allowing the Group to respond to demand and sectoral shifts. The Group monitors the pipeline of work to ensure the Group has the right workforce to meet the demand of expected projects and allocate resources appropriately to maximise delivery efficiency, maintain capability across priority areas, and ensure teams are deployed where they can create the greatest value. This approach enables the Group to stay responsive to emerging opportu nities, manage risks proactively, and sustain a workforce that is both resilient and future ready. Responding to market preferences and emerging technologies The Group assess evolving market expectations, the growing shift toward low carbon solutions, and emerging technologies to identify practical opportunities that strengthen climate resilience and support long term emissions reductions to ensure that climate risks are mitigated and opportunities are maximised. This ensures investment and operational decisions remain aligned with current market expectations in the transition to a lower carbon economy. Insurance The Group maintains comprehensive insurance coverage to safeguard assets and mitigate the financial impact of any physical risks that may materialise and affect assets and operations.
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138 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.2 Strategy and decision making (continued) The Group plans to meet GHG reduction targets through a range of carbon reduction initiatives. The Group’s carbon reduction strategy currently focuses on reducing absolute emissions. The Group believes reducing gross GHG emissions delivers more direct, mea surable, and long - term environmental benefits, strengthens operational efficiency, and better positions the business for a low carbon transition, rather than relying on external mechanisms to compensate for emissions. Key carbon reduction initiatives inclu de: Low - carbon energy alternatives During FY25 the Group installed a 600 - kW solar photovoltaic (PV) system at the Newcastle facility, which was fully up and running from January 2025. This combined with already existing solar PV system at Henderson reduced Scope 2 GHGs by approximately 135 tCO 2 e in FY26. The Group is currently exploring opportunities to further increase renewable solar generation at the Henderson facility, where the Group is hoping to install another ~900 - kW solar PV system, further reducing Scope 2 GHGs and safeguard against po tential electricity price increases. The Group has ordered solar lighting towers, further strengthening the transition to renewable energy alternatives and remains open to adopting other renewable energy assets as they become available. The Group continues to investigate suitable low - carbon e nergy alternatives as part of the broader transition towards cleaner, more efficient operations and to further reduce GHG emissions. Energy and resource efficiency Energy efficiency initiatives focus on improving the performance of equipment and processes so that the same operational output can be achieved using less energy. The Group has undergone upgrades to replace traditional lighting with more energy - efficient L ED lighting and uses smart building controls such as set timers for lighting to improve the energy efficiency of assets. Electrification of assets During FY26, the Group expanded electrical machinery assets through the acquisition of electric side loaders and electric forklifts. For the first time, the Group also purchased the first fleet of light hybrid vehicles, with wider adoption being explored. It is expected that investing in hybrid and electric assets will increase in future years, particularly as technology becomes more available in the heavy machinery industry. Indirect mitigation and adaption The Group supports the transition to a low carbon economy through supporting rare earth mineral projects and client’s decarbonisation projects. The Group has become a significant contributor to supporting local lithium miners and refiners to expand their o perations to meet global lithium demand. In FY26, the Group delivered construction on Fortescue’s Green Iron Metal Project at the Christmas Creek Green Energy Hub, to support decarbonisation in the steel making industry. As the Group aim to reduce the impact in the value chain, the Group look to procure lower carbon impact alternatives such as Green Steel and Green Concrete. By integrating lower impact materials into projects and operations, the Group aim to support the gr owth of emerging low carbon industries and accelerate the transition to more sustainable construction practices. Business model adaptability The Group’s business model is contract - based rather than asset - ownership based. The Group does not own or operate the long - lived, emissions - intensive assets that the Group’s clients may own, does not hold commodity reserves, and revenue is not dependent on the continued operation of any single asset, commodity or client. The short - term duration of contracts enables the Group to implement operational changes in response to increasing physical impacts of climate change and developments in the transition to a low - carbon economy. Having a multi - site presence across WA, NSW, and QLD reduces the impact of any single climate event on total operations, providing natural geographic hedging. Having established, purpose - built facilities across multiple sites reduces climate disruption ris k and differentiates the Group in client prequalification and tender responses. The Group’s capital is invested in general - purpose heavy engineering, fabrication, assembly and maintenance capability, which is not specific to any one sector or commodity. The same facilities and workforce that deliver resources infrastructure also deliv er defence, energy and public infrastructure work. The Group’s large - scale manufacturing capacity enables vertical integration, skipping supply chain intermediaries to improve margins and reduce exposure to climate - driven supply disruption. Using a localised workforce reduces exposure to travel and logisti cs disruption during climate events, maintaining site productivity when remote FIFO arrangements are compromised. Furthermore, supply chain reliability is enhanced by the Group’s limited use of suppliers outside of Australia. The Group’s contract portfolio turns over continuously and the order book is progressively replaced through ongoing tendering activity. Pricing, contract terms, risk allocation and sector mix are therefore reset frequently rather than being fixed for the l ife of an asset. Where climate - related cost pressures emerge in energy, insurance, carbon or weather - related productivity, the Group are able to reflect these in the pricing and risk allocation of subsequent tenders, and to reweight t he sectors pursued, ov er a period measured in years rather than decades. The Group’s progressive shift towards Defence, Energy and long - term maintenance work demonstrates this capability in practice. The Group’s strategy continues to embrace adaptability through expansion into diverse sectors. The Group’s exposure in any reporting period is therefore a function of the contracts already in progress, and this is reflec ted in the cost and margin impacts modelled in the 2.3 C limate R esilience section.
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CIVMEC FINANCIAL REPORT 2026 139 Sustainability report 2. Strategy (continued) 2.3 Climate resilience The Group has undertaken climate scenario analysis since FY24 to assess its climate resilience. This year, the Group strengthened its approach by engaging an external consultant to assess six scenarios and ensure alignment with the specific requirements of AASB S2. The six scenarios cover a diverse range of scenarios (1.5°C to 3.5°C warming scenarios) and reflect the Group’s operations, with Australian policy directions, dual - listing disclosure requirements and materiality of client - sector decarbonisation p athways. The six scenarios assessed were: Low emission scenarios High emission scenarios Industry and Civmec specific scenarios S1: Australian Treasury (2025) Net Zero Transformation — Baseline Orderly scenario. Key assumptions: Emission reductions consistent with keeping average temperature increases to less than 2°C, in line with the Paris Agreement. Australia builds on existing climate and energy policies, to achieve emissions reduction targets and net zero by 2050 via and orderly and efficient transition pathway. Australia achieves 65% emissions reductions by 2035. Exports of clean energy embedded products commence but new, globally competitive export industries do not rapidly build to scale. S3: IPCC AR6 — SSP1 - 2.6 (Low Physical Risk). Key assumptions: 1.8°C average global warming at 2100, associated with early and aggressive global mitigation, aligned with the Paris Agreement. Stringent policies and technological innovation help reach Net Zero after 2050. S2: Australian Treasury (2025) Net Zero Transformation — Disorderly Transition scenario. Key assumptions: Australia delays further climate action, resulting in increased costs over time from a transition path that is more uncertain and disorderly. Existing climate policies remain in place, but Australia does not set a 2035 emissions target and does not undertake further climate policy action until the 2040s. Australia makes minimal progress on economy - wide emission reduction throughout the 2030s, needing to accelerate emission reductions from 2040 to achieve net zero by 2050. Prior to 2040, policy uncertainty is heightened, resulting in lower and misallocated investment. S4: IPCC AR6 — SSP3 - 7.0 (High Physical Risk scenario). Key assumptions: 2.8°C to 4.6°C of global warming at 2100. Weak climate policy. Sever physical impacts affecting Civmec including long - term (2100+) estimates 2m Sea Level Rish (SLR) at Henderson, >50 o C extreme heat at Port Hedland, Hunter River flooding at Newcastle and severe heatwave frequency at Gladstone. S5: Sector Demand Upside scenario drawing on Treasury Renewable Exports pathway and Department of Industry, Science and Resources (DISR) sector plans. Key assumptions Revenue upside from clean energy export growth (Green iron, hydrogen, ammonia), critical minerals processing, offshore decommissioning, defence shipbuilding growth and offshore wind fabrication. The Group captures a proportional share of the transition - era pipeline. S6: Client Decarbonisation Pressure scenario. Key assumptions: Market - led scenario from Tier 1 clients accelerating their own decarbonisation. Tier 1 clients embedding carbon - costs pass - through, low - carbon procurement criteria, Scope 3 reporting, and contract repricing. Qualitative and quantitative analysis has been performed to assess the resilience of the Company’s business model and strategy under the six scenarios across short, medium and long - term horizons.
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140 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.3 Climate resilience (continued) 2.3.1 Qualitative scenario analysis Physical risk Physical risks are minor in the near term across all four sites. Port Hedland, Gladstone and Newcastle carry the greatest near - term exposure with cyclone intensification and extreme heat at Port Hedland, increased heatwave frequency and drought at Gladston e, and Hunter River flooding at Newcastle. Under low emission scenarios, physical risk remains modest but includes progressive heat stress at Port Hedland and Gladstone, as well as residual coastal exposure at Henderson. Under high emission scenarios, busi ness interruption days is expected to increase alongside elevated insurance premiums, potential insurer withdrawal from exposed regions and higher site hardening capital expenditure is expected. Direct physical climate damage to the Group’s sites, remains comparatively modest in absolute cost terms even under the high - physical - risk pathway due to the short - term nature of the Group’s contacts and the ability to renew assumptions. Existing site controls and current weather interruption contract provisions are adequate to manage near - term, plausible events under all scenarios. Long - term exposure may increase incrementally under high - warming pathways, particularly at Henderson, where sea - level rise projections of 2m or more by 2100 under SSP3 - 7.0 (S4) present a potential risk, however facilities will be engineered appropriately into the future to manage these conditions. Transition risk Across the range of climate scenarios, the Group faces a mix of transition risks, with the scale and timing varying depending on policy alignment and client shift. In low emission environments, the Group encounters tightening carbon policies, evolving clie nt requirements and resource sector compression. High emission pathways introduce greater volatility, including unpredictable electricity prices and misaligned client investment cycles. A sector demand upside scenario (S5) presents an execution risk on cap turing the pipeline of work. Market led decarbonisation pressure (S6) adds another layer of risk, as Tier 1 clients increasingly require robust emissions data, low carbon procurement and credible abatement pathways. Opportunities Every scenario presents meaningful opportunities for the Group. An orderly transition (S1) supports long - term capital planning and unlocks strong pipelines in energy, critical minerals and climate - resilient infrastructure. A high - physical risk scenario (S4 ) creates additional demand for climate adapted design, coastal resilience and infrastructure hardening. The upside scenario (S5) highlights a substantial multi decade opportunity across green iron, hydrogen, critical minerals and offshore decommissioning. Across all scenarios, the qualitative analysis indicates that transition exposures, particularly sector demand shifts and client decarbonisation pressure, are the primary drivers of long - term value for the Group. Policy, market, technology and client shift around decarbonisation have a greater influence on future revenue, margins and growth. 2.3.2 Quantitative scenario analysis The Group’s commercial financial model has been used to assess the directional financial impact of the six climate scenarios on the business across the four modelled time horizons. The analysis applies six scenario rules as overlay adjustments to the FY202 6 half - year baseline (annualised). It generates estimates of the incremental impact on cost, revenue, margin, and EBITDA under each pathway. Results are presented on an unmitigated (gross) basis to illustrate the full potential financial exposure. Electricity cost impacts The Group estimated the incremental costs to electricity by applying an electricity price uplift to current annualised electr icity spend. This yields the following incremental electricity cost exposure by time horizon, rounded to the nearest thousand Austr alian Dollars (A$’000): FY2027 A$ FY2030 A$ FY2035 A$ FY2040 A$ 0 - 140, 000 0 - 298, 00 0 8 8 , 000 - 43 9 , 000 175, 000 - 94 8 , 000 Exposure and Adaptation Measures The Group’s electricity exposure is modest in absolute terms, approximately 1.0% of estimated EBITDA at peak under a high emissions scenario, and a material portion of the incremental cost is expected to be recoverable through project tender pricing, where electricity is a disclosed input cost (particularly for energy - intensive fabrication work at Henderson). Renewable energy self - generation opportunities at Henderson, Newcastle and Gladstone provide an additional offset by reducing exposure to grid price v olatility.
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CIVMEC FINANCIAL REPORT 2026 141 Sustainability report 2. Strategy (continued) 2.3 Climate resilience (continued) 2.3.2 Quantitative scenario analysis (continued) Insurance premium impacts Under the low emissions scenarios (S1 and S3) and the high - physical risk scenario (S4), the Group have applied an insurance premium uplift to the current annual premium. The results projected the following range of incremental premium cost increases rounde d to the nearest thousand Australian Dollars (A$’000): FY2027 A$ FY2030 A$ FY2035 A$ FY2040 A$ 0 - 446,000 89, 000 - 459 , 000 14 9 , 000 - 4 68 , 000 23 8 , 000 - 594, 000 Exposure and Adaptation Measures Insurance premium exposure is notable despite small absolute values, due to availability concerns. The high - physical risk scenario also carries a qualitative risk of selective insurer withdrawal from cyclone - exposed assets at Port Hedland, which would requ ire alternative risk transfer arrangements (captive insurance, parametric products, co - insurance). A material proportion of insurance premium escalation is expected to be recoverable through project overhead pricing and through CPI - linked contract escalation provisions. Physical site hardening investments (cyclone - rated infrastructure at Port Hedland an d stormwater drainage at coastal sites) directly reduce the actuarial risk and are expected to moderate premium growth. Newcastle flood risk has been identified as a risk which the Group are monitoring, with potential for a site specific flood risk study a nd response plan to be carried out, if deemed necessary, with any subsequent adaptation investments at Newcastle expected to provide additional risk mitigation once implemented. Business interruption Physical climate risk has been quantified using a business interruption days methodology calibrated to the Group’s current operational footprint. The methodology converts scenario - driven hazard intensity into additional aggregate business interruption cost s. Amounts are rounded to the nearest thousand Australian Dollars (A$’000): FY2027 A$ FY2030 A$ FY2035 A$ FY2040 A$ 141,000 - 236,000 236,000 - 472,000 330,000 - 707,000 377,000 - 943,000 Exposure and Adaptation Measures The largest site - level exposure to these increments is in Port Hedland, where cyclone intensification and extreme heat (projected to exceed 50°C under SSP3 - 7.0) drive the bulk of the projected business interruption days. The Group has implemented a range of adaptation responses that reduce business interruption days below the modelled levels, including: site hardening and cyclone - rated infrastructure at Port Hedland; contract provisions for cyclone interruptions; monitoring weather patterns including cyclone, stormwater and flood risks; shaded and cooled work areas, hydration protocols and rescheduled shift patterns at Port Hedland and Gladstone to manage heat stress; and updated emergency response and business continuity procedures across all sites.
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142 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.3 Climate resilience (continued) 2.3.2 Quantitative scenario analysis (continued) Project margin sensitivity The Group has applied a percentage adjustment to the Group’s current gross project margins by sector, to analyse the impact on revenue under the different scenarios. Applying sector - level margin - point adjustments to the Group’s current sector revenue mix a nd baseline margins yields the following net margin impact across the portfolio rounded to the nearest thousand Australian Dollars (A$’000): Scenario FY2027 A$ FY2030 A$ FY2035 A$ FY2040 A$ Orderly (S1) - (215,000) (322,000) (430,000) Disorderly (S2) - (665,000) (1,105,000) (1,585,000) Sector upside (S5) - 39,531,000 75,924,000 - Client decarbonisation pressure (S6) - (1,209,000) (992,000) - Exposure and Adaptation Measures Under the orderly pathway, Resource margins tighten progressively and Energy margins improve. Under the disorderly pathway, all sectors except Defence face margin compression. The impact is modest relative to the Group’s EBITDA, because Defence margins rem ain stable across all scenarios. Portfolio pivot towards Defence, Energy and Maintenance mitigates exposure to margin compressions. The Group can also respond to the changes in assumptions and incorporate the changes into future contract tenders. Carbon costs The Group has modelled carbon costs for resilience testing purposes. These costs do not represent internal carbon prices used as part of formal capital allocation or operational decision - making processes. Applying a modelled carbon price to the Group’s FY2 6 Scope 1 and Scope 2 emissions of 7,15 6 tCO 2 e per annum yields the following carbon cost exposure: Scenario Carbon costs FY2027 A$ FY2030 A$ FY2035 A$ FY2040 A$ Orderly (S1) Carbon cost exposure 232, 570 322 , 020 465, 140 629, 728 Disorderly (S2) Carbon cost exposure 157, 432 214, 680 701, 288 1,431, 200 Exposure and Adaptation Measures The Group is not currently captured under the Safeguard Mechanism, with its annual emissions remaining well below the 100,000 tCO 2 e threshold for covered facilities. The modelled carbon price exposure is therefore not a direct compliance cost but rather an internal model price reflecting: The cost of voluntary abatement investments that the Group may choose to make. The carbon cost that Tier 1 clients are expected to pass through in contracts. The tender - pricing premium or discount associated with high - versus low - emissions service offerings. A material portion of carbon cost exposure is expected to be recoverable through project pricing, with clients passing through their own Safeguard Mechanism or carbon pricing costs. The Group’s own decarbonisation actions, including renewable energy self - g eneration at Henderson and Newcastle, electrification of mobile plant, and energy efficiency in fabrication processes, are expected to reduce the emissions base against which the shadow price is applied, partially offsetting the gross cost trajectory.
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CIVMEC FINANCIAL REPORT 2026 143 Sustainability report 2. Strategy (continued) 2.3 Climate resilience (continued) 2.3.2 Quantitative scenario analysis (continued) Sector demand and pipeline volume This is the single most material driver of scenario - driven financial variance. Applying sector demand multipliers to the forward pipeline produces the following incremental revenue impacts under each scenario. All amounts are rounded to the nearest thousan d Australian Dollars (A$’000): Scenario FY2027 A$ FY2030 A$ FY2035 A$ FY2040 A$ Commentary Orderly (S1) 30,867,000 19,744,000 19,785,000 19,588,000 Sustained revenue uplift driven by Defence and Energy sectors, net of Resources sector contraction. Disorderly (S2) 49,079,000 43,552,000 27,337,000 ( 9,550,000 ) Near - term upside from persistent fossil demand; post - 2035 reversal as the Resources cliff hits outweighing Defence and Energy growth. Sector Upside (S5) - 329,708,000 658,824,000 - Full pipeline capture scenario: green metals, offshore wind, critical minerals, Hay Point, AUKUS expansion. Client Decarbonisation pressure (S6) - (8,064,000) (7,672,000) - Tier 1 client decarbonisation - driven tender reshaping reduces Resources sector pipeline. Exposure and Adaptation Measures The Resources sector faces the greatest exposure to transition risks, notably from hydrocarbon demand revenue which is expected to contract despite the rising demand for critical minerals. Coal is the most vulnerable resource, with coal - related activities being exposed to a higher transitional risk. This contraction is partially offset by positive revenue contributions from energy transition projects (such as rare earths), Defence and Energy sectors. The Group has a diverse project portfolio and provided the Group execute a pivot into transition - aligned sectors, it is well positioned to capture a proportional share of the emerging pipeline. For example, diversification into critical minerals, offshore decommissioning, green metals, offshore wind, AUKUS, Hunter - class frigates and climate - proofing infrastructure.
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144 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.3 Climate resilience (continued) 2.3.3 Resilience conclusion Based on the Group’s climate - related risk and opportunities assessment and scenario analysis, current operations and strategy are resilient to the risks identified. The Group’s strategic pivot toward transition aligned sectors, combined with early investme nt in emissions data, low carbon materials and site resilience, positions the business to remain resilient across all scenarios, with resilience ranging from very high in upside conditions to medium low in the most challenging high emissions environment. O verall resilience for the Group is assessed as moderate to high over the next 10 – 15 years, supported by the diversified four - site and multi segment footprint, a project - based business model that allows pricing to reset every 2 – 3 years, an active sustainabi lity program, strong governance, and substantial financial headroom between current EBITDA and modelled peak climate - related cost impacts. - The quantitative analysis shows the Group’s resilience to the financial impacts of climate change across all time horizons. The Group’s diversified assets and proactive approach to climate governance supports long - term financial stability. A diversified fo ur - site, multi segment heavy engineering and manufacturing portfolio shows moderate - to - high resilience across all scenarios tested. The quantitative analysis reinforces that the climate transition presents materially more upside than downside for the Group . The primary resilience challenge emerges in later decades under the compounding worst - case scenario, where resilience could weaken if the pivot into transition - aligned sectors does not keep up with tightening policy settings and increasing physical hazards . This risk is actively managed through the strategic plan and forward capacity allocation. Residual unmitigated exposures are concentrated in: Insurance availability risk in the disorderly and high physical pathway (a risk that is actively monitored) Resources - sector revenue contraction in the disorderly pathway post - FY2035 (mitigated through sector pivot and growth in Defence, energy transition, infrastructure and maintenance) The residual physical climate risk at coastal sites in the high physical risk pathway (mitigated through site hardening and long - term capacity planning). Given existing mitigations, adaptable business structure and continued strategic pivot into transition - aligned sectors, the Group is well positioned to capture emerging opportunities in the years ahead. 2.3.4 Methodology and assumptions The Group’s scenario analysis considers the following time horizons; short (0 - 3 years), medium (3 - 10 years) and long (10+years), aligned to the Group’s project - based planning cycles, with financial modelled snap shots at FY2027, FY2030, FY2035 and FY2040. All of the Group’s current locations and sectors are considered. Impacts within the Group’s current operations and value chain are considered. Climate scenario analysis was conducted using a risk assessment methodology aligned with the potential materiality of climate related risks and grounded in sound scientific and technical principles by using information. The Group’s commercial financial mod el has been used to assess the directional financial impact of the six climate scenarios on the business across the four modelled time horizons. The analysis applies the six scenario rules as overlay adjustments to the FY2026 half - year baseline (annualised ). It generates estimates of the incremental impact on cost, revenue, margin, and EBITDA under selected pathways. Rule parameters have been derived from credible and publicly available sources. These include Australian Treasury Net Zero Plan transition modelling, the Treasury Renewable Energy Superpower export analysis, the International Panel Climate Change (IPCC) Si xth Assessment Report pathways (Shared Socioeconomic Pathway (SSP) SSP1 - 2.6 and SSP3 - 7.0), NGFS transition scenarios, the Department of Industry, Science and Resources Industry and Resources Sector Plans, the Department of Climate Change, Energy, the Envir onment and Water (DCCEEW) policy publications, Australian Energy Market Operator (AEMO) Integrated System Plan assumptions, the Critical Minerals Strategy 2023 – 2030, published AUKUS Pillar 1 and Pillar 2 implementation pathways, and the Group’s own operati onal and financial data for FY2026 H1.
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CIVMEC FINANCIAL REPORT 2026 145 Sustainability report 2. Strategy (continued) 2.3 Climate resilience (continued) 2.3. 4 Methodology and assumptions (continued) The quantitative scenario analysis is based on a number of assumptions that are considered to have the greatest influence on estimated financial impacts. Actual outcomes may differ materially from these assumptions. These assumptions include: Electricity costs : Scenario FY2027 FY2030 FY2035 FY2040 Orderly (S1) 0% 0 % +5% +10% Disorderly (S2) +8% +17% +25% +54% Electricity price increases were applied to FY26 half - year (annualised) electricity expenditure to estimate future cost exposure. Electricity price increases reflect the differing policy responses, generation mix transitions and market volatility under eac h scenario. Insurance premiums: Scenario FY2027 FY2030 FY2035 FY2040 Orderly (S1) 0% +3% +5% +8% Disorderly (S2) +5% +10% +15% +20% SSP3 - 7.0 High Physical Risk (S4 ) +15% +15% +15% +15% Percentage increases are applied to the Group’s FY2 6 half - year (annualised) insurance premiums. Insurance premium assumptions reflect the Group's exposure to cyclone, flood and heat - related risks at Port Hedland, Gladstone and Newcastle, together with expected insurer repricing of exposed assets. Business interruption : Business interruption days has been quantified using a business interruption days methodology calibrated to the Group’s current operational footprint. The methodology converts scenario - driven hazard intensity into additional aggregate business interruption days per annum, appl ying a daily cost of A$47,150 (41 workers × 10 - hour day × $115/hour direct labour). This cost basis is deliberately conservative. It captures direct lost labour productivity only and excludes indirect costs (project delay penalties, demobilisation/remobili sation, equipment downtime, client liquidated damages) that would materialise in a real - world extended business interruption event. Number of business interruption days assumptions under each scenario: Scenario FY2027 FY2030 FY2035 FY2040 Orderly (S1) + 3 days +5 days +7 days +8 days Disorderly (S2) +5 days +10 days +15 days +20 days Business interruption day increases reflect the anticipated increase in frequency and severity of extreme weather events, particularly in Port Hedland and Gladstone, including increases to heatwaves, cyclones, and disruptions to coastal and remote area ope rations. Project Margin Sensitivity adjustments: Scenario FY2027 FY2030 FY2035 FY2040 Orderly (S1) - Resource sector - 0.5% and Energy sector +0.5% Resource sector - 0.75% and Energy sector +0.75% Resource sector - 1% and Energy sector +1% Disorderly (S2) - Resource sector - 1%, Energy sector - 0.5% and Maintenance sector - 0.5% Resource sector - 1.75%, Energy sector - 0.5% and Maintenance sector - 0.5% Resource sector - 2.5%, Energy sector - 0.75% and Maintenance sector - 1% Project margin sensitivity by sector assumptions have been constructed by triangulating the directionality of Treasury and IPCC scenarios with sector - specific policy pipelines, observed procurement behaviour and reasoned judgement.
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146 CIVMEC FINANCIAL REPORT 2026 Sustainability report 2. Strategy (continued) 2.3 Climate resilience (continued) 2.3. 4 Methodology and assumptions (continued) Model Carbon Cost prices: Scenario FY2027 A$ FY2030 A$ FY2035 A$ FY2040 A$ Orderly (S1) 32.50 45.00 65.00 88.00 Disorderly (S2) 22.00 30.00 98.00 200.00 Model carbon costs are applied to the FY26 Scope 1 and Scope 2 GHG emissions. Under both scenarios modelled costs are expected to increase in line with tightening climate - related policies and emissions - reduction targets . Sector demand and pipeline volume: Scenario FY2027 FY2030 FY2035 FY2040 Orderly (S1) Defence sector +8%, Resources sector +0% and Energy sector +10% Defence sector +15%, Resources sector - 8% and Energy sector +20% Defence sector +23%, Resources sector - 15% and Energy sector +33% Defence sector +30%, Resources sector - 20% and Energy sector +40% Disorderly (S2) Defence sector +8%, Resources sector +5% and Energy sector +5% Defence sector +15%, Resources sector +0% and Energy sector +8% Defence sector +23%, Resources sector - 10% and Energy sector +20% Defence sector +30%, Resources sector - 28% and Energy sector +48% Upside (S5) and Client decarbonisation pressure (S6) is only calculated for FY2030 and FY2035 timeframes. Under the upside scenario (S5), the Group is assumed to capture a proportionate share of forecast growth in offshore wind, critical minerals, green me tals, AUKUS and energy - transition infrastructure projects. Under the client decarbonisation pressure scenario (S6), the Group assumes a contraction in Resources revenue. Sector demand and pipeline volumes assumptions have been constructed by triangulating the directionality of Treasury and IPCC scenarios with sector - specific policy pipelines, observed procurement behaviour and reasoned judgement. The analysis assumes conti nued growth in Defence, energy transition, offshore decommissioning, critical minerals and infrastructure markets. Under the disorderly transition scenario, revenue related to hydrocarbon projects is assumed to decline progressively beyond FY2035, while De fence and energy - transition sectors continue to expand. These scenarios consider the technological developments which are assumed to progress in line with industry trends, including advances in clean energy, low carbon steel and concrete, improvements in electrified heavy equipment and emerging hydrogen and ren ewable energy infrastructure that may influence the project pipeline, operational footprint and technology adoption.
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CIVMEC FINANCIAL REPORT 2026 147 Sustainability report 3. Risk Management 3.1 Climate - related risk management process The Group maintains a clearly defined risk appetite statement, supported by comprehensive risk management and compliance frameworks that align operational activities with the strategic plan. These frameworks help guide the level of risk the Group is prepar ed to accept in pursuit of its objectives. The Group’s risk assessment and treatment process aligns with the ISO 31000 Risk Management standard. The Group assesses and discloses the current and anticipated climate - related risks and opportunities that could reasonably impact the business including physical risks, transition risks, and associated opportunities. The Board and executive management cont ributed to the design of this process and reviewed its outcomes. Risks and opportunities were assessed against potential effects on the business model, strategy, or financial statements over the short, medium and long term. Where sufficient information is available, the Group has undertaken an assessment of the potential financial impact of these risks and opportunities. Climate change poses both risks and opportunities across environmental, economic, and social dimensions. The Group recognises its responsibility to address these challenges proactively. The Group recognises that climate - related risks and opportunities have the potential to influence financial position, performance, and cash flows over time. Consistent with the Group’s enterprise - wide Risk Management Framework, the Group identifies, manages, prioritises and monitors climate - related risks throughout all areas of the business, alongside other strategic, operational and financial risks. The Group continues to monitor the impacts of climate change on the business and the Group’s ability to remain resilient, with a formal review of risks and opportunities conducte d on an annual basis. Quantification of the financial impact of climate - risk and opportunities enables the Group to perform cost - benefit analyses on the implementation of related action plans. This process also helps determine the level of risk the Group is willing to accept, w ith sound risk acceptance supporting competitive advantage at both the Group and project levels. Risks with the largest potential consequences are prioritised and the Group applies appropriate responses to mitigate them. Identified opportunities are assess ed and prioritised based on their financial potential, likelihood of realisation, commercial viability and alignment with strategic objectives. The Group’s climate risk register is reviewed on an annual basis. In FY26, an external consultant was engaged for the first time to support a comprehensive assessment of climate - related risks and opportunities. This included the scenario analysis and resil ience testing to evaluate the potential impacts of different climate futures on the Groups operations and strategic outlook. The updated climate risk and opportunity register was further refined through a workshop involving subject matter experts from acro ss the business, ensuring that insights reflect both operational realities and emerging industry expectations. The climate risk and opportunity register was endorsed by the Risk and Conflicts Committee (RCC) and communicated with the Board.
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148 CIVMEC FINANCIAL REPORT 2026 Sustainability report 4. Metrics and targets 4.1 GHG emissions The Group is committed to achieving net zero emissions throughout its entire operations by 2050, as well as an interim target to reduce Scope 1 and Scope 2 emissions intensity by 50%, to 5.67 tCO 2 e/A$m revenue, by 2030 (compared to a 2022 base year). The long - term target was set in FY24, and near - term target in FY25, as recommended by the Sustainability Committee, endorsed by the executive team and finally approved by the Board. The long - term target is consistent with the Paris Agreement which is aimed to limit global warming to well below 2 o C. The near - term target provides a clear goal of driving immediate action and preventing delaying decarbonisation to help the Group achieve its long - term target. Targets are reviewed against globally accepted initiatives and targets, and the Group remains alert for any changes that would prompt a review of set targets. The Group’s progress towards targets is monitored through tracking Scope 1, Scope 2 (location - based), and Scope 1 and Scope 2 GHG intensity metrics. The Group’s GHGs are reviewed by the Sustainability Committee, Executive team and the Board to monitor and track progress against targets. The tracking and monitoring of the Group’s progress towards achieving its target metrics were established after the end of FY26. GHG emissions Performance Metric Unit FY26 FY26 Target Target met? FY27 Target Scope 1 tCO 2 e 1,83 8 <1,566* < 1,772 Scope 2 (location - based) tCO 2 e 5,318 <4,896* <5,114 Scope 1+2 GHG intensity tCO 2 e/A$m revenue 7. 92 <8.5** <7.79 Note: * FY26 targets have been restated and calculated based on a linear pathway, from the FY25 results, to achieve the long - term target. ** FY26 target has been restated and calculated based on a linear pathway, from the FY22 base year, to achieve the near - term target. While the Group’s Scope 1 and Scope 2 GHG emissions increased by 1 3 % and 4%, respectively, the combined Scope 1 and 2 GHG emissions intensity fell by 5 %, remaining on track to meet the 2030 target. Scope 2 emissions are calculated using the location - based approach, which the Group believes most accurately represents the physical realities of the energy delivered to site locations. Currently, the Group do es not acquire unbundled or bundled green attribute certificates, nor does the Group purchase carbon credits. The Group plans to meet the GHG reduction targets through a range of carbon reduction initiatives to reduce absolute emissions. See 2.2 Strategy and Decision Making section for details on how the Group intends to meet set targets. In the future, the Group may consider the use of contractual arrangements, such as green energy contracts and carbon credits, to reduce net emissions and environ mental impact, in line with the 2050 net zero target and commitment to limiting global warming to 1.5°C. A key factor in implementing the Group’s strategy and achieving targets is the investment in solar PV at operational faciliti es. The summary below outlines the estimated impact of the current investment in onsite solar PV to date: Performance Metric Unit FY23 FY24 FY25 FY26 Solar PV electricity consumed kWh 1,364 14,059 112,645 213,397 GHGs avoided tCO 2 e 1 7 73 135
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CIVMEC FINANCIAL REPORT 2026 149 Sustainability report 4. Metrics and targets (continued) 4.2 Risk and opportunity adaption The Group has assessed its assets and business activities exposed to climate physical and transition risks, and climate opportunities. The Group identified contraction in hydrocarbon demand, with coal expected to experience the greatest impact. As a result, the Group considers coal - related revenue to be materially vulnerable to climate transition risks associated with the shift to a lower - carbon economy. Despite this, the Group identified the upside from transition revenue is significantly greater than any potential modelled downside. The sector demand growth driven by AUKUS and continuous naval shipbuilding in Defence, and by renewable en ergy infrastructure, grid, hydrogen and critical minerals investment in energy generates positive EBITDA uplift across all orderly scenarios throughout the modelled horizon. See 2.3 C limate R esilience section for further details. The Group’s project - based model, with typical contract durations of 2 – 3 years, allows pricing to reset at each tender cycle, enabling climate cost pass - through and portfolio rebalancing at a cadence faster than most t ransition or physical risk pathways materialise. The four - site and multi segment footprint distributes exposure across geographies and demand drivers. Defence providing a structurally growing, climate - policy - independent revenue base. The Group did not identify assets or business activities with material vulnerability to climate physical risks. Physical risk s don’t threaten the Group financially in the near or medium term. Whilst Port Hedland, Gladstone and Newcastle have the most expos ure over the long - term time horizon, the Group do not assess these to be material and will engineer facilities appropriately into the future to manage future conditions. The Group’s insurance regime hedges against the financial consequence of acute physica l events, further reducing the potential impacts of climate - related physical risks on the Group’s operations and financial performance. Inclement weather provisions are in project contracts and weather contingencies in tender preparations mitigating the fi nancial impact of any business interruption days. Refer to the 2.3 C limate R esilience section for more details. The Group’s order book covers work tailored towards climate - related projects and transition opportunities. Climate related projects include work related to critical mineral extraction and client decarbonisation projects. Demand for climate - related transiti on opportunities is expected to grow in the near - term as government policy tightens and clients prioritise their own decarbonisation targets. All amounts are rounded to the nearest thousand Australian Dollars (A$’000). Metric description AUD$ % Assets or business activities vulnerable to climate - related transition risks 1 24,900,000 3 Assets or business activities vulnerable to climate - related physical risks - - Assets or business activities aligned with climate - related opportunities 2 334,006,000 23 Note: 1. Calculated as revenue from coal industry related projects. The percentage is calculated as total revenue from the coal indust ry divided by total revenue. 2. Calculated as the value of order book of projects directly related to transition activities, primarily being critical mineral extraction and client decarbonisation projects. The percentage is calculated as the total value of order book of projects directly related to transition activities divided by the total order book amount. The Group is currently investing in assets and infrastructure to support the transition to a low - carbon economy. In FY26, this primarily included purchasing the first fleet of hybrid light weight vehicles and electrical heavy machinery such as sid e loaders and forklifts. Capital deployment, rounded to the nearest thousand Australian Dollars (A$’000): Metric description AUD$ Capital expenditure, financing or investment deployed towards climate - related risks and opportunities 613,000 4.3 Internal carbon pricing The Group has not yet adopted an internal carbon price. The Group are assessing the role internal carbon pricing could play in supporting decarbonisation planning, investment evaluation and performance monitoring, and may look at developing an approach tha t is appropriate and useful for the Group in the future.
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150 CIVMEC FINANCIAL REPORT 2026 Sustainability report 4. Metrics and targets (continued) 4.4 Carbon credits Currently, the Group doesn’t engage in a carbon offsetting program. While the Group’s current focus is on reducing gross Scope 1 and Scope 2 GHGs, it may explore the option of purchasing carbon offsets in the future if this is deemed necessary to achieve s et targets. The Group continues to focus on reducing absolute GHGs from operations as it believes they deliver more direct, measurable, and long - term environmental benefits, strengthen operational efficiency, and better position the business for a low carb on transition, rather than relying on external mechanisms to compensate for emissions. 4.5 Basis of preparation The basis of reporting defines the Group’s reporting methodologies, criteria and assumptions for Scope 1 and Scope 2 (location - based) Greenhouse Gas (GHG) emissions and GHG emissions intensity. The Group’s GHG emissions accounting methodologies are consist ent with AASB S2 and the World Resource Institute/World Business Council for Sustainable Development Greenhouse Gas (GHG) Protocol: A Corporate Accounting and Reporting Standard, including the Scope 2 Guidance. Scope and boundary The scope of the Group’s GHG emissions includes Civmec and all its subsidiaries and joint ventures, which is consistent with the financial statements. The organisational boundary for emissions accounting includes all Group entities. Although one controlled entity exists outside of Australia (i.e. Civmec Singapore Ltd), there are no established emission sources associated with the entity (i.e. no corporate offices or operational activities). The Group does not disaggregate emissions associated with subsidiaries due to data limitations, since all activities are managed through the Civmec Head Office, not per subsidiary. Joint venture emiss ions will be disaggregated and disclosed when applicable. The Group applies the operational control approach when determining Scope 1 and Scope 2 GHG emissions. This means the Group account for 100% of emissions from operations over which it has operational control. An operation is defined as having operational c ontrol when it has the authority to introduce and implement any or all of the following for the operations in which it conducts its activities: operating policies health and safety policies environmental policies On an annual basis, the Group undertakes a comprehensive review of projects and joint ventures to assess whether the Group has operational control or not, to ensure GHG emissions reporting is complete. Where the Group is performing duties at a client’s sit e, though the Group will have its own policies as listed above, those polices must abide by the client’s policies foremost, and therefore the client has the greatest authority. For example, this includes the Group’s construction and shutdown maintenance pr ojects where emission associated with these activities falls outside the Group’s operating boundary. For joint ventures, it is assumed the lead contractor has operational control. All UNFCCC/Kyoto Protocol GHGs are included in the calculations, reported in tCO 2 e.
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CIVMEC FINANCIAL REPORT 2026 151 Sustainability report 4. Metrics and targets (continued) 4.5 Basis of preparation (continued) GHG emissions calculation methodology Where possible, the Group uses direct measurement, or primary data associated with energy consumption to measure Scope 1 and 2 emissions. Consumption of energy is measured at the delivery point of that energy to the Group, not at the point of combustion. T his approach is a more accurate and consistent approach to monitoring emissions. Key inputs include energy consumption sourced from suppliers, contractors, and project teams and emission factors sourced from reliable and the most relevant emission factor d atabase available. Scope 1 GHG Emissions: Sources: Liquid fuels (diesel, unleaded petrol, E10) and gases (acetylene, LPG and carbon dioxide) used in direct sources such as combustion in machinery, vehicles, and generators as well as any refrigerant top ups in the reporting period. Emission factors: The annual Australian Government Department of Climate Change, Energy, the Environment and Water (DCCEEW), Australian National Greenhouse Accounts Factors and for Acetylene; the supplier energy content factor and the California Energy Commission emission factor. The relevant emission factor for the fuel type or refrigerant type is applied. Unit: Metric tonnes of carbon dioxide equivalents (tCO 2 e) Method: Civmec records fuel purchase quantities based on primary data such as invoices. The fuel quantity is combined with the relevant energy content factor to determine the calorific value (for example, to convert Liters of diesel to GJ) and the relevant emissi on factor is applied to determine the associated GHG emissions. If there are any refrigerant top ups in the reporting period, maintenance reports are used as the source for the refrigerant type and quantity, which is then multiplied by the relevant emissio n factor. Scope 2 (location - based) GHG Emissions: Sources : Purchased electricity used to power the Group’s fabrication facilities, offices and construction sites. Civmec does not purchase any steam, heating or cooling. Emission factors: The annual Australian Government Department of Climate Change, Energy, the Environment and Water (DCCEEW), Australian National Greenhouse Accounts Factors. The most relevant grid average emission factor for the region and reporting period is applied. Unit: Metric tonnes of carbon dioxide equivalents (tCO 2 e) Method: Civmec records electricity quantities (kwh) based on primary data such as invoices. Where primary data is not available by the end of the reporting period, a monthly average will be used. The electricity quantity is combined with the relevant regional gri d average emission factor. Scope 1 and 2 GHG Emissions Intensity: Sources: Scope 1 and Scope 2 (location - based) GHGs as defined above. Revenue from the financial statements. Unit: Metric tonnes of carbon dioxide equivalents (tCO 2 e) per AUD $ million revenue. Base year: The Company’s Scope 1 and Scope 2 GHG Emissions Intensity in 2022 was 11.33 tCO 2 e/A$m. 2022 was selected as the base year as it provides complete, high quality emissions data and represents a typical year of operations. Method: The total combined absolute gross Scope 1 and Scope 2 GHGs is divided by total revenue, expressed per AUD $ million.
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CIVMEC FINANCIAL REPORT 2026 153 Auditor’s Independence Declaration (Sustainability Assurance Engagement)
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154 CIVMEC FINANCIAL REPORT 2026 Independent Auditor’s Review Report (on Speci fied Sustain a bility Disclosures )
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CIVMEC FINANCIAL REPORT 2026 155 Independent Au di tor's Review Report (on Speci fied Sustain a bility Disclosures )
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156 CIVMEC FINANCIAL REPORT 2026 Independent Au di tor's Review Report (on Speci fied Sustain a bility Disclosures )