Condensed Interim Financial Statements for the Half Year ended 31 December 2025

(ACN 672 407 171)

AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2025

The Directors present their report to the members together with the Condensed Interim Consolidated Financial Statements of Civmec Limited (the 'Company') and its subsidiaries (collectively referred to as the 'Group') for the half year ended 31 December 2025.

Directors

The names of the Directors of the Company who held office during and since the end of the half year are:

Operating and financial review

A summary of the consolidated revenue and results for the current and previous financial period is as follows:

6 months ended

Revenue and other income were 24.2% lower than the previous year, primarily due to the reduced level of activities and lower interest income earned from bank balances. The gross profit margin improved to 11.8%.

The 19.3% decline in EBT compared to the previous year was mainly driven by a reduction in revenue, increased administrative costs and higher depreciation expenses.

The Group's cash balance increased by 136.7%. The positive operating cash flow supported the funding of working capital requirements, consistent dividend payments, and capital expenditure in property, plant and equipment.

Dividends

Information on dividends paid during the year can be found under Note 19 of this report.

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 12 for more information.

Joint auditor's independence declaration

The independence declaration from both Moore Stephens LLP and Moore Australia Audit (WA), as required under section 307C of the Corporations Act 2001 (as amended), is included on page 3 of this report.

Rounding of amounts

The amounts contained in these Condensed Interim Consolidated Financial Statements have been rounded to the nearest million dollars, except where otherwise indicated, as permitted by ASIC Corporations Instrument 2016/191.

Significant events since reporting date

There have been no subsequent material events that would require disclosure in the financial statements.

Signed in accordance with a resolution of the Directors.

James Finbarr Fitzgerald Executive Chairman Civmec Limited

12 February 2026

Patrick John Tallon Chief Executive Officer Civmec Limited

12 February 2026

Moore Stephens LLP

10 Anson Road#29-15 International Plaza Singapore 079903

T +65 6221 3771

E email@mooresingapore.com

https://www.mooresingapore.com

Moore Australia Audit (WA)

Level 15, Exchange Tower,

2 The Esplanade, Perth, WA 6000

PO Box 5785, St Georges Terrace, WA 6831

T +61 8 9225 5355

https://www.moore-australia.com.au

AUDITOR'S INDEPENDENCE DECLARATION

UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF CIVMEC LIMITED

As joint lead auditors of Civmec Limited's interim financial statements for the half-year ended 31 December 2025, we declare that to the best of our knowledge and belief, there have been:

1. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review of the interim financial statements, and

2. no contraventions of any applicable code of professional conduct in relation to the review of the interim financial statements.

MICHELLE CHONG MOORE STEPHENS LLP

PARTNER PUBLIC ACCOUNTANTS AND

CHARTERED ACCOUNTANTS

Singapore 12th February 2026

SUAN-LEE TAN PARTNER

Perth 12th February 2026

MOORE AUSTRALIA AUDIT (WA) CHARTERED ACCOUNTANTS

CONDENSE D INT E RIM CONS O L IDAT ED FINANCIAL ST AT EMENT S

31 DECEM BER 2025

Moore Australia Audit (WA) - ABN 16 874 357 907.

An independent member of Moore Global Network Limited - members in principal cities throughout the world. Liability limited by a scheme approved under Professional Standards Legislation.

Consolidated Income Statement

For the half year ended 31 December 2025

6 months ended

The accompanying notes form an integral part of the financial statements.

Consolidated Statement of Financial Position

As at 31 December 2025

As at

The accompanying notes form an integral part of the financial statements.

Share

capital Treasury shares

AS'000

A8'000

earnings

A!J'000

A8'000

inPeres:

A$'000

A8'000

Consolidated Statement of Changes in Equity

For the half year ended 31 December 2025

Civmec

31 December 2025

C 0 N D E N S E D IN T E R IM C 0 N S O LIDAT E D FIN A N C IAL STATE ME N TS 3 1 D E C E MB E R 2 0 2 5

0lflC9ll0t ION Of tF90SLI ShOFGS

Balance as at II Decei nber 202a

Note:

*Other Comprehensive income/(loss)

(1) Reclassification of previously vested equity-settled employee benefits relating to prior financial years. The accompanying notes form an integral part of the financial statements.

6 months ended

The accompanying notes form an integral part of the financial statements.

(continued)

6 months ended

The reconciliation of movements of liabilities to cash flows arising from financing activities is presented below:

1 July

31 December

The accompanying notes form an integral part of the financial statements.

These notes form an integral part of and should be read in conjunction with the accompanying condensed interim consolidated financial statements.

1. Material accounting policies

   1. Basis of preparation

      These condensed interim consolidated financial statements of Civmec Limited (the 'Company') and its subsidiaries (the 'Group') for the six-month period ended 31 December 2025:

      • have been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting and Singapore Financial Reporting standards (International) SFRS(I) 1-34: Interim Financial Reporting.

      • do not include all the information and disclosures required in the annual financial statements.

      • should be read in conjunction with the Group's audited consolidated financial statements for the year ended 30 June 2025.

      • presented in Australian dollars (AUD or A$) unless otherwise stated.

      • were approved by the Board of Directors on 11 February 2026.

   2. Accounting policies

      The same accounting policies and methods of computation have been followed in these condensed interim consolidated financial statements as were applied in the 2025 Civmec Annual Report. The Group has considered the implications of new and amended Accounting Standards, but determined that their application to the financial statements is either not relevant or not material.

   3. Use of estimates, assumptions and judgments

      The preparation of the condensed interim consolidated financial statements requires management to make judgements, estimates and assumption that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

      The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 30 June 2025, except the below:

      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 at 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.

2. Revenue and other income

6 months ended

Note:

1. 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.

2. The Group received Wage Subsidy and Jobs and Skills WA Employer Incentives from the Government for hiring eligible participants.

3. Profit before income tax

   The following items have been included in arriving at profit before income tax:

   6 months ended

   31 December

   2025

   A$'000

Included in cost of sales:

1. Finance costs

   6 months ended

   Corporate market loan and line fees	31 December 20M A$'000	31 December 2024 A$'000
   	1,960	2,505
   Lease liabilities (Note 17)	403	384
   Other finance costs	147	100
   	2,510	2,989

   1,960

Included in cost of sales: Lease liabilities (Note 17)

1,822

1. Income tax expense

   The Group calculates the period income tax expense using the currently enacted tax rates that are applicable to the total earnings. The major components of income tax expense in the condensed interim consolidated statement of profit or loss are:

   6 months ended

   Current income tax expense	31 December 2025 A$'000	31 December 2024 A$'000
   	9,948	10,756
   Deferred income tax expense relating to origination and reversal of temporary differences	(1,166)	218
   Total income tax expense	8,782	10,974

2. Earnings per share

   6 months ended

   Profit attributable to the owners of the Company (A$'000)	31 December 2025	31 December 2024
   	21,448	26,493
   Share capital (A$'000)	33,402	32,358
   Weighted average number of ordinary share issued Basic	509,082,462	508,023,408
   Diluted	511,912,462	514,112,408
   Earnings per ordinary share (A$ cents) Basic	4.21	5.21
   Diluted	4.20	5.15

   Basic earnings per share is calculated by dividing the consolidated profit after tax attributable to the equity holders of the Company, by the weighted average number of ordinary shares outstanding during the financial period. 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 31 December 2025, the diluted earnings per share includes the effect of 1,463,000 unissued ordinary shares granted under 2024 Civmec Performance Rights Plan due to the performance targets are likely to be met. The effect of the inclusion is dilutive. (31 December 2024: 6,089,000, dilutive).

3. Trade and other receivables

   As at

   Current: Trade receivables	31 December 20M A$'000	30 June A$'000
   Third parties	76,688	51,609
   Retention sum receivables	12	12
   Other receivables	76,700 570	51,621 707
   Pre-acquisition contract milestone payments receivable from Commonwealth of Australia'	99,750
   Receivable from Naval Vessels Lurssen ('NVL')	25,528
   	202,548	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 31 December 2025 (30 June 2025: Nil).

   The Group's internal credit evaluation practices and basis for recognition and measurement for expected credit losses were consistent with those disclosed in the 30 June 2025 Civmec Limited's Annual Report.

4. Contract assets and liabilities

   As at

   Contract assets	31 December 20M A$'000	30 June A$'000
   	178,812	154,969
   Contract liabilities	(62,243)	(71,447)
   Contract liabilities assumed from business combination	(22,195)

   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, which 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 Group has received advances from customers for construction contracts and progress billings issued in excess of the Group's rights to the consideration in respect of construction contract revenue.

   (i) Significant changes in contract balances

   As at

   Contract assets: Contract assets reclassified to trade receivables	31 December 2025 A$'000	30 June 2025 A$'000
   	(23,037)	(103,474)
   Changes in measurement of progress	46,880	84,855
   Contract liabilities: Revenue recognised in the current period that was included in the contract liability balance at the beginning of the period/year	26,427	40,199
   Increase due to cash received, excluding amounts recognised as revenue during the period/year	(17,222)	(62,354)
   Amount recognised in business combination	(22,195)

5. Cash and cash equivalents

   As at

   31 December 2025 A$'000	30 June 2025 A$'000
   87,579	102,940

   Cash at bank and on hand A floating charge over cash and cash equivalents has been provided for certain debt.

   14 Civmec

   C ONDE N SED IN TER IM CO NSO LIDATE D FIN AN CIAL STATE MENTS

   31 December 2025 Cost or 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	-	-	-	380	120	-	80	28	448	1,056
   Additions - ROU	-	3,082	-	2,949	-	46	-	66	-	6,143
   Additions via business combination	-	1,803	-	2,596	-	-	255	421	92	5,167
   Adjustment to lease liabilities		(1,803)	-	-	-	-	-	-	-	(1,803)
   Transfer	-	-	430	-	-	415	-	-	(845)	-
   Disposals	-	-	-	(434)	-	(363)	-	-	-	(797)
   At cost at 31 December2025	-	44,014	-	132,148	11,216	13,461	1,201	4,318	3,963	210,321
   At valuation at 31 December 2025	735	-	426,338		-					461,073
   At 31 December 2025	34,735	44,014	426,338	132,148	11,216	13,461	1,201	4,318	3,963	671,394
   Accumulated depreciation
   At 1 July 2025	-	(6,950)	-	(65,997)	(8,581)	(7,754)	(801)	(3,375)	-	(93,458)
   Depreciation for the period	-	(584)	(5,572)	(3,827)	(536)	(656)	(17)	(51)	-	(11,243)
   Disposals	-	-	-	317	-	363	-	-	-	680
   At 31 December 2025	-	(7,534)	(5,572)	(69,507)	(9,117)	(8,047)	(818)	(3,426)	-	(104,021)
   Net carrying amount
   At cost		- 36,480	-	62,641	2,099	5,414	383	892	3,963	111,872
   At valuation	34,735	-	420,766	-	-	-	-	-	-	455,501
   At 31 December 2025	34,735	36,480	420,766	62,641	2,099	5,414	383	892	3,963	567,373

   
   
   
   
   
   
   
   
   
   
   
   
   

   Total

   A$'000

   
   
   
   
   
   
   
   
   
   
   

   2025

   
   
   

   Cost or valuation At 1 July 2024 Additions Additions - ROU Transfer

   Revaluation increase Disposals

   At cost at

   30 June 2025 At valuation at

   30 June 2025

   At 30 June 2025

   Accumulated depreciation

   At 1 July 2024 Depreciation for the period Revaluation

   Transfer Disposals

   At 30 June 2025

   Net carrying amount

   At cost

   At valuation

   At 30 June 2025

   Total A$'000

   29,485	37,650	391,331	118,835	11,454	11,339	860	3,440	11,852	616,246
   -	-	1,050	1,222	212	-	6	141	2,184	4,815
   -	3,282	-	3,222	-	2,110	-	222	620	9,456
   2,606	-	3,914	3,918	(50)	-	-	-	(10,388)	-
   2,644	-	29,613	-	-	-	-	-	-	32,257
   -	-	-	(540)	(520)	(86)	-	-	-	(1,146)
   -	40,932	-	126,657	11,096	13,363	866	3,803	4,268	200,985
   	-	425,908		-	-	-	-	-	460,643
   34,735	40,932	425,908	126,657	11,096	13,363	866	3,803	4,268	661,628
   -	(5,971)	-	(58,840)	(7,928)	(6,600)	(769)	(3,298)	-	(83,406)
   -	(979)	(10,244)	(7,651)	(1,205)	(1,184)	(32)	(77)	-	(21,372)
   -	-	10,244	-	-	-	-	-	-	10,244
   -	-	-	(32)	32	-	-	-	-	-
   -	-	-	526	520	30	-	-	-	1,076
   -	(6,950)	-	(65,997)	(8,581)	(7,754)	(801)	(3,375)	-	(93,458)
   -	33,982	-	60,660	2,515	5,609	65	428	4,268	107,527
   34,735	-	425,908	-	-	-	-	-	-	460,643
   34,735	33,982	425,908	60,660	2,515	5,609	65	428	4,268	568,170

   
   
   

6. Property, plant and equipment (continued)

Depreciation expenses are classified as follows:

6 months ended

At the balance sheet date, the details of the Group's freehold land and buildings are as follows:

17 Civmec

C OND E N S E D IN TE R IM CO NSO LI DATE D FI N AN C IAL STATE ME NTS

1. Property, plant and equipment (continued) Freehold land and buildings carried at fair value

   The latest valuation of the fair value of the freehold land and buildings of the Group was carried out by Asset Valuation Advisory at 30 June 2025. The fair value is determined by the valuer on the highest and best use approach of each asset. Such valuation was determined using the 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. No revaluation was performed during the current period.

   If the freehold land and building were stated on the historical cost basis, the carrying amount would be as follows:

   As at

   Freehold land*	31 December 2025 A$'000	30 June 2025 A$'000
   	22,648	22,648
   Buildings	231,887	231,887
   Accumulated depreciation	(52,485)	(48,763)
   Net book value	202,050	205,772

   *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 17.

   As at the balance sheet date, the net book value of property, plant and equipment that were under lease liabilities was A$76,046,000 (30 June 2025: A$72,306,000) (Note 17).

   The carrying amount of property, plant and equipment that are pledged for security are as follows:

   As at

   Description Borrowings Lease plant and equipment Lease liabilities	31 December 2025 A$'000	30 June 2025 A$'000
   	39,645	38,393
   Remaining property, plant and Multi-option facility equipment	527,728	529,777
   	567,373	568,170

   The details of the borrowings are disclosed in Note 15.

2. Investment properties

31 December 2025 Cost or valuation

Accumulated depreciation

Buildings carried at fair value

The latest valuation of the fair value of the buildings was carried out by Asset Valuation Advisory as at 30 June 2025. 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:

No revaluation was performed during the period. The fair value measurement for the investment properties of A$17,140,000 (30 June 2025: A$17,140,000) has been categorised as a level 3 fair value based on the inputs to the valuation technique used.

1. Investment properties (continued)

   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%.

   1. Investment properties are leased to non-related parties under operating leases.

      Amounts recognised in profit or loss for investment properties

      6 months ended

      Rental income	31 December 20M A$'000	31 December 2024 A$'000
      	175	175
      Direct operating expenses from investment property that generate rental income	(200)	(221)

   2. The carrying amount of investment properties that are pledged for security is as follows:

      As at

      Description Borrowings Investment properties Multi-option facility	31 December 2025 A$'000	30 June 2025 A$'000
      	20,086	19,706

2. 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 became 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 Group had 12 months from the transaction completion date to make adjustments to the fair value of net identifiable assets acquired. The following table summaries the consideration paid for and the fair value of assets acquired and liabilities assumed at the acquisition date. These balances are provisional and subject to change within the 12 month measurement period, and any resulting changes will be reflected in the Group's financial statements as at 30 June 2026.

   Acquisition cost Cash consideration	Fair value A$'000
   	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 period, the Group has recognised external consultant costs amounting to A$60,000. These acquisition-related costs have been included in the Administrative Expenses.

   Amortisation

   The Contract liability will be amortised on a straight-line basis over its estimated useful life of 4 years being the length of the contract, starting from the acquisition date.

   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 the Group. It forms part of the Segmentation reporting contained in Note 26.

3. Joint operations

   The Group has material interests in the following joint operation which is proportionately consolidated:

   Country of Name of entity Principal activities incorporation	Ownership interest held by the Group
   	31 Dec 2025 %	30 June 2025 °/

   Held by Civmec Construction & Engineering Pty Ltd

   Black & Veatch CivmeC JV ('BCJV')°	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')'	Engineering and construction services	Australia	53.78	53.78
   Aurecon Australasia Pty Ltd &
   Civmec Construction &
   Engineering Pty Ltd & Seymour Whyte Constructions Pty Ltd"	Engineering and construction services	Australia	10.304

   Notes:

   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 metropolitan 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.

4. Trade and other payables

   As at

   Trade creditors	31 December 2025 A$'000	30 June 2025 A$'000
   	64,168	35,228
   Accruals and sundry payables	54,051	46,244
   Payable to Naval Vessels Lurssen ('NVL')'	92,807
   Goods and services tax payable	3,494	1,263
   Other taxes payable	2,685	4,100
   	217,205	86,835

   Note:

   1. Recognition of outstanding pre-acquisition contract milestones payments payable to NVL Australia GmBH, through the acquisition of Luerssen Australia Pty Ltd (now known as Oivmec Defence Industries Pty Ltd). This amount is adjusted by any pre-acquisition related cost made by the Group.

   Trade and other payables are usually paid within 45 days.

5. Borrowings

   As at

   Non-current: Corporate market loan - secured	31 December 20M A$'000	30 June A$'000
   	60,000	60,000
   	60,000	60,000

   Multi-option facility

   During the current financial period, the existing bank facilities have been renegotiated and consolidated into a revolving multi-option facility. Therefore, the quarterly limit reduction is no longer in effect. The facility can be used for revolving Corporate Market Loan, Letter of Credit and Bank Guarantee.

   As at 31 December 2025, the Group has a bank facility limit amounting to A$160 million (30 June 2025: A$156 million), which was 39.2% utilised (30 June 2025: 40.5% utilised). Interest rates are variable and ranged between 4.49% to 4.98% (31 December 2024: 5.53% to 5.55%) per annum during the current financial period.

   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 31 December 2025, 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 10 and Note 11 to the financial statements.

6. Provisions for employee benefits

   As at

   Current: Provision for short-term employee benefits	31 December 20M A$'000	30 June A$'000
   	16,255	13,659
   Non-current: Provision for long-term employee benefits	528	379
   	16,783	4,038

   The movements in provisions are as follows: Current:

   At the beginning of the year Provisions made during the year

   Included in employee benefits

   13,659

   21,244

   18,455

   25,948

   Adjustment due to change in probability %	87
   Provisions utilised during the year	(18,703)	(31,165)
   Reclassified from non-current	(32)	421
   At the end of the year	16,255	13,659
   Non-current: At the beginning of the year	379	493
   Provisions made during the year
   Included in employee benefits	50	91
   Adjustment due to change in probability %	93	340
   Provisions utilised/reversed during the year	(26)	(124)
   Reclassified to current	32	(421)
   At the end of the year	528	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 employees 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 and the discount rate used ranges from 3.95% to 4.52% (30 June 2025: 3.59% to 3.95%).

7. Leases

   1. The Group as lessee

      Nature of the Group's leasing activities

      1. Leased properties

         The Group has entered into lease agreements for land and buildings in respect of its offices, facilities and workshops. The Group has the following long-term 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 originally entered in July 2022 has been extended for a further 2 years with a second further 3-year option. Rent increases 2.5% on each anniversary of the lease, with a market rent review at the commencement of each further term.

         • An office-warehouse lease at Unit 4, 120 Blair Street, Bunbury, Western Australia is a 2-year lease commencing in May 2024, with a first further 2-year option and a second further 2-year option. Rent is subject to market rent review and CPI indexation applied alternately on each anniversary of the lease.

         • The office lease at Part of level 3, 200 Adelaide Terrace, Perth, Western Australia is a 2-year term lease commencing in April 2025, with a further 2-year option. Rent increases by 4.5% on each the lease anniversary, with a market rent review at the commencement of the option period.

      2. Leased equipment

The Group also leases motor vehicles, workshop equipment, and office fit-outs from unrelated parties under recognized lease liabilities. Upon completion of the lease term, 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 ranges between 4 and 5 years.

The present values of overall lease liabilities are analysed as follows:

31 December 2025 Current:

1. Leases (continued)

   1. The Group as lessee (continued)

Nature of the Group's leasing activities (continued)

(ii) Leased equipment (continued)

The present values of overall lease liabilities are analysed as follows: (continued)

Current:

Lease liabilities are presented in the statement of financial position as follows:

As at

The effective interest rates range from 2.14% to 8.60% (31 December 2024: 2.14% to 8.60%) per annum.

1. Leases (continued)

   1. The Group as lessee (continued)

      Carrying amount of right-of-use assets within Property, Plant and Equipment

      As at

      Leasehold land & buildings	31 December 20M A$'000	30 June A$'000
      	36,480	33,982
      Small tools	528	579
      Plant and equipment	33,197	31,840
      Motor vehicles	4,960	5,063
      Office & IT equipment	261	222
      Asset under construction	620	620
      	76,046	72,306

      There was an addition of A$6,143,000 to right-of-use assets during the current financial period (Note 10).

      Carrying amount of right-of-use assets within Investment Properties

      As at

      Leasehold land & buildings	31 December 20M A$'000	30 June A$'000
      	2,946	2,566

      There was an addition of A$411,000 to right-of-use assets during the current financial period (Note 11).

      Amounts recognised in profit or loss

      6 months ended

      Depreciation charged for the year: Small tools	31 December 20M A$'000	31 December 2024 A$'000
      	51	51
      Plant and equipment	1,592	1,478
      Motor vehicles	564	452
      IT equipment	27
      Leasehold land & building	584	463
      Interest on lease liabilities (Note 4)	2,363	2,206
      Expenses relating to short-term leases	148	169
      Other disclosures - total cash flow for leases	3,392	3,657

      17. Leases (continued)

   2. 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 build 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 and rewards incidental to ownership of the assets are not substantially transferred.

Rental income from investment properties is disclosed in Note 11.

Future minimum rental receivables under non-cancellable operating leases as at the end of the reporting period are as follows:

As at

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 trimmed mean CPI was 3.3% to the quarter ended 31 December 2025 (30 June 2025: 2.7%).