Bisalloy Steel : Financial Report FY21

2021 Financial Report

Bisalloy Steel Group Limited 2021 Financial Report

Directors' Report

for the year ended 30 June 2021

Your Directors submit their report for the year ended 30 June 2021.

Directors

The names and details of the Company's Directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Mr Phillip Cave AM

B.BUS, FCPA

CHAIRMAN

Skills and Experience: Mr Cave is an experienced Director, Chairman and Chief Executive Officer with a career in major corporate turnaround projects, structured finance and corporate advisory service. Over a 38 year career, Mr Cave's experience has combined a mixture of operational management expertise across a wide variety of industries with an in depth knowledge of finance and banking.

Term of office: A founding Director of the Company. Mr Cave left Bisalloy on 27 August 2020.

Mr Richard Grellman AM

FCA

CHAIRMAN

Skills and Experience: Mr Grellman brings significant accounting and finance skills to the Company, having had over 34 years experience in the accounting profession. He was a partner at KPMG from 1982 to 2000 and a member of KPMG's National Board from 1995 to 1997 and National Executive from 1997 to 2000.

Term of office: Appointed as Director in February 2003 and as Chairman in August 2020. Mr Grellman left Bisalloy on 27 November 2020.

Mr David Balkin AM

CHAIRMAN

Skills and Experience: Mr Balkin brings extensive knowledge and understanding of global basic materials industries through 25 years as a consultant, senior partner and leader of McKinsey & Company's global basic materials practice. He is also an experienced director and chairman of a number of private companies where he actively advises and supports management to improve shareholder returns and build more sustainable businesses.

Term of office: Appointed as Director and Chairman on 27 November 2020. Mr Balkin is subject to election in November 2021.

Board Committees:

• Audit and Risk Committee
• Nominations and Remuneration Committee

Other Directorships:

• RIS Safety Pty Ltd, Chairman
• Root Partnership Pty Ltd, Chairman
• Commitworks Pty Ltd, Director

Mr Greg Albert

MBA

MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

Skills and Experience: Mr Albert has professional qualifications in Mechanical Engineering, Marketing and has an MBA. Mr Albert brings a wealth of experience in the steel, mining and construction industries, as well as solid knowledge of international markets, having held postings in Asia and Europe. Mr Albert was a Director of Bisalloy Steel Group's majority owned businesses

• PT Bima Bisalloy and Bisalloy Thailand. Mr Albert was also Vice-Chairman of the Group's Co‑operative Joint Venture, Bisalloy Shangang (Shandong) Steel Plate Co., Limited.

Term of office: Appointed in January 2016. Mr Albert left Bisalloy on 6 July 2020.

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Mr Glenn Cooper

MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

Skills and Experience: Mr Cooper has an engineering background and over 25 years experience as a senior executive in the mining, construction, transport and quarrying industries. He is an experienced senior executive across all business functions including sales, aftermarket, distribution and market development. Glenn has held previous senior executive roles at regional and global levels for major global OEM's and manufacturers. Mr Cooper is a Director of Bisalloy Steel Group's majority owned businesses - PT Bima Bisalloy and Bisalloy Thailand. Mr Cooper is also Vice-Chairman of the Group's Co-operative Joint Venture, Bisalloy Shangang (Shandong) Steel Plate Co., Limited.

Term of office: Mr Cooper was appointed CEO Australia in November 2019 before being appointed as Managing Director and Chief Executive Officer on 6 July 2020. As the Managing Director he is not subject to re-election by rotation.

Board Committees:

• Audit and Risk Committee
• Nominations and Remuneration Committee

Other Directorships:

Nil

Mr Kym Godson

DIP TECH (BUS ADMIN), FAICD, FAIM

NON-EXECUTIVE DIRECTOR

Skills and Experience: Mr Godson is an experienced public company Director and has extensive experience in the management of industrial businesses, particularly within the steel industry. He is a former Managing Director and CEO of the Company having retired from the position in November 2008.

Term of office: A founding Director of the Company. Mr Godson left Bisalloy on 27 November 2020.

Mr Barry Morris	Skills and Experience: Mr Morris is a former interim Bisalloy Chief Financial Officer and
NON-EXECUTIVE DIRECTOR	Company Secretary.
	Term of office: Appointed in August 2020. Mr Morris left Bisalloy on 27 November 2020.

Mr Ian Greenyer

NON-EXECUTIVE DIRECTOR

Skills and Experience: Mr Greenyer brings significant financial and business analysis and improvement skills, through 27 years as an independent consultant, actively identifying and effecting change in small and medium sized companies operating in a broad range of business sectors based in Australia. These activities flowed from a background as an actuary, investment analyst and stockbroker.

Term of office: Appointed as Director on 27 November 2020. Mr Greenyer is subject to election in November 2021.

Board Committees:

• Audit and Risk Committee
• Nominations and Remuneration Committee

Other Directorships:

• Greenyer & Co, Director

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Directors' Report (continued)

for the year ended 30 June 2021

Mr Michael Gundy

MBA, B Bus, Assoc Dip Metallurgy

NON-EXECUTIVE DIRECTOR

Skills and Experience: Mr Gundy is an experienced executive with 34 years of steel industry experience spread across Australia, S.E. Asia, New Zealand, and the United States. In his career Mr Gundy has been involved in profitably growing businesses, opening new markets, developing distribution channels and business restructuring.

Term of office: Appointed as Director on 27 November 2020. Mr Gundy is subject to election in November 2021.

Board Committees:

• Audit and Risk Committee
• Nominations and Remuneration Committee

Other Directorships:

Nil

Company Secretary

Mr Luke Beale

B COMM, MBA, ACA, GAICD

COMPANY SECRETARY AND CHIEF FINANCIAL OFFICER

Skills and Experience: Appointed in April 2018. Mr Beale is a Chartered Accountant with

21 years professional experience working in senior financial positions with listed companies in Australia, New Zealand and Asia. Mr Beale is a Director of Bisalloy Steel Group's majority owned businesses - PT Bima Bisalloy and Bisalloy Thailand. Mr Beale is also Financial Supervisor of the Group's Co-operative Joint Venture, Bisalloy Shangang (Shandong) Steel Plate Co., Limited. Mr Beale resigned on 21 July 2021 and his last day with Bisalloy will be 12 October 2021.

Interests in shares of the company and related bodies corporate

As at the date of this report, the interests of the Directors in the shares of Bisalloy Steel Group Limited were:

	Number of
	ordinary shares
P Cave	Nil
R Grellman	Nil
D Balkin	7,781,095
G Albert	Nil
G Cooper	5,813
K Godson	Nil
B Morris	Nil
I Greenyer	100,000
M Gundy	500

Dividends

	Cents	$'000
Final dividend recommended on ordinary shares (fully franked)	9.0	4,137
Dividends paid in the year	5.0	2,271

Principal activities

The principal activity of the Group during the financial year was the manufacture and sale of quenched and tempered, high-tensile, and abrasion resistant steel plates ("Q&T plate").

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Operating and Financial Review

Operations

Group

Bisalloy Steel Group comprises Bisalloy Steels Pty Ltd in Australia, the majority owned distribution businesses in Indonesia (PT Bima Bisalloy) and Thailand (Bisalloy Thailand) and the investment in the Chinese Co-Operative Joint Venture (CJV) - Bisalloy Shangang (Shandong) Steel Plate Co, Ltd.

Bisalloy continues to prioritise the journey to zero harm to our people, stakeholders and the environment. In FY21, the Group sustained a period through H1 of 12 months LTI free. The focus for the year was to continue to address risk, improve our internal audit compliance, and safety education to our frontline workforce.

Bisalloy Steels is Australia's only processor of quenched and tempered high strength, abrasion resistant and armour grade alloyed steel plates. Bisalloy distributes wear and structural grade plates through distributors and directly to select manufacturers and end users in Australia and internationally. For armour grade steels, Bisalloy deals directly with select companies.

Bisalloy's unique stand-alone heat treatment facility at Unanderra near Wollongong is a highly automated and efficient operation providing a relatively low-cost base, allowing it to compete with a variety of imported products. During the 12 months ended

30 June 2021, Bisalloy utilised greenfeed steel supply mainly from neighbouring BlueScope Steel in Wollongong, complemented with selected supply from international greenfeed suppliers, including the CJV.

Financial review

Operating results

The Group's net profit for the year after income tax was $8,954,000 (2020: $6,828,000).

The profit increase was primarily driven by an increase in domestic Australian margins offset by a loss in domestic market share. Export sales from Australia were strong, as were domestic sales in China. Overhead savings relative to the previous year were also achieved.

Operating results are summarised as follows:

	2021
		Profit
	Revenue	after tax
Operating Segments
Australia	92,357	9,674
Overseas	17,920	2,136
	110,277	11,810
Consolidated entity adjustments	(5,450)	(2,856)
Consolidated entity revenue and profit after tax for the year	104,827	8,954

Bisalloy Steel Group Limited 2021 Financial Report

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