Annual Report to shareholders

Pag e 1 o f 1

12 August 2021


Company Announcements Office
ASX Limited
Exchange Centre
Level 4, 20 Bridge Street
SYDNEY NSW 2000



Dear Sir/Madam

Please find attached the following documents:
1. Appendix 4E – results for announcement to the market for the year ended 30 June 2021;
2. 2021 Annual Report;
3. Market release dated 12 August 2021;
4. Investor Presentation; and
5. Appendix 4G – Key to Disclosures Corporate Governance Principles and
Recommendations.

Yours sincerely,
Downer EDI Limited

Robert Regan
Company Secretary

Downer EDI Limited
ABN 97 003 872 848
Triniti Business Campus
39 Delhi Road
North Ryde NSW 2113
1800 DOWNER
www.downergroup.com

Results for announcement to the market
for the year ended 30 June 2021
Appendix 4E
2021
2020
%
$'m
$'m
change
Revenue from ordinary activities11,530.2 12,669.4
Other income53.9 73.3
Total revenue and other income from ordinary activities11,584.1 12,742.7 (9.1%)
Total revenue including joint ventures and other income 12,234.2 13,417.9 (8.8%)
334.8 (41.3)>100.0%
401.0 30.0 >100.0%
181.6 (150.3) >100.0%
230.0 (105.8) >100.0%
2021
2020
%
cents
cents
change
Basic earnings per share

(i)
25.4
(26.1) >100.0%
Diluted earnings per share
(i) (ii)
24.8
(26.1) >100.0%
Net tangible asset backing per ordinary share37.1 (26.3)>100.0%
Dividend20212020
FinalFinal
12.0 -
- -
100%-
26/08/2021-
23/09/2021-
2.88 3.75
Dividend per share (cents)
Franked amount per share (cents)
Conduit foreign income (CFI) (%)
Dividend record date
Dividend payable date
Redeemable Optionally Adjustable Distributing Securities (ROADS)
Dividend per ROADS (in Australian cents)
New Zealand imputation credit percentage per ROADS
100%100%
ROADS payment dateQuarter 1Quarter 2Quarter 3Quarter 4
Instalment date FY202115/09/202015/12/202015/03/202115/06/2021
Instalment date FY202016/09/201916/12/201916/03/202015/06/2020
For commentary on the results for the year and review of operations, please refer to the Directors' Report and separate
media release.
Earnings before interest and tax
Profit / (loss) from ordinary activities after tax before amortisation of
acquired intangible assets (NPATA)
Downer EDI's Dividend Reinvestment Plan (DRP) has been suspended.
Earnings before interest and tax and amortisation of acquired intangible
assets (EBITA)
Profit / (loss) from ordinary activities after tax attributable to members of
the parent entity
(i)
Basic and diluted EPS calculation for June 2020 were restated as a result of 106.6 million shares issued from the capital raising as part
of the acquisition of the remaining shares in Spotless. Under the entitlement offer, 1 new share for each 5.58 outstanding shares were
issued at a discounted price of $3.75 per share. As a result of the new shares issued, the weighted average number of ordinary shares
(WANOS) to calculate EPS needs to be adjusted by a theoretical ex-rights price (TERP) factor. The adjustment factor of 0.9817 was
utilised to restate the 30 June 2020 WANOS for the basic and diluted EPS calculations.
(ii)
At 30 June 2020, the ROADS were deemed anti-dilutive and consequently, diluted EPS remained at (26.1) cents per share.

Annual
Report2021

This Annual Report includes the
Downer EDI Limited Directors’ Report,
the Annual Financial Report and
Independent Audit Report for the
financial year ended 30 June 2021.
The Annual Report is available
on the Downer website
www.downergroup.com.
The Waratah fleet is the pride
of Sydney’s network, delivering
unprecedented reliability, availability,
safety and comfort.
Downer has delivered a total of
119 Waratah trains for the New
South Wales Government, across
Series 1 and Series 2 trains, making
the combined fleet the largest of
passenger trains in Australia, serving
the largest suburban network.
In 2019, Downer achieved the fastest
rollout of a passenger train fleet
in Australia’s history, delivering
24 world class Waratah Series 2
trains in 31 months. In July 2021,
on the 10th anniversary of the first
Waratah Series 1 train entering
passenger service, the final Series 2
entered passenger service.
Downer is also responsible for
the through-life-support of the
Waratah trains at the purpose-built
Auburn Maintenance Centre.
Downer EDI Limited

CONTENTS
Annual Report 2021
Directors’ Report
Page 4
Auditor’s signed reports
Page 52 Auditor’s Independence Declaration
Page 53 Independent Auditor’s Report
Financial Statements
Page 61 Consolidated Statement of Profit or Loss and Other Comprehensive Income
Page 62 Consolidated Statement of Financial Position
Page 63 Consolidated Statement of Changes in Equity
Page 64 Consolidated Statement of Cash Flows
Notes to the consolidated financial statements
A
About this
report
Page 65–66
B
Business
performance
Page 67–80
C
Operating assets
and liabilities
Page 81–96
D
Employee
benefits
Page 97–99
E
Capital structure
and financing
Page 100–108
F
Group
structure
Page 109–119
G
Other
Page 120–130
B1
Segment
information
C1
Reconciliation of
cash and cash
equivalents
D1
Employee benefits
E1
Borrowings
F1
Joint arrangements
and associate
entities
G1
New accounting
standards
B2
Revenue
C2
Trade receivables
and contract assets
D2
Defined benefit
plan
E2
Financing facilities
F2
Controlled entities
G2
Capital and
financial risk
management
B3
Individually
significant items
C3
Inventories
D3
Key management
personnel
compensation
E3
Lease liabilities
F3
Related party
information
G3
Other financial
assets and liabilities
B4
Earnings per share
C4
Trade payables and
contract liabilities
D4
Employee discount
share plan
E4
Commitments
F4
Parent entity
disclosures
B5
Taxation
C5
Property, plant and
equipment
E5
Issued capital
F5
Acquisition and
disposals of
businesses
B6
Remuneration
of auditor
C6
Right-of-use assets
E6
Non-controlling
interest (NCI)
F6
Disposal group
held for sale
B7
Subsequent events
C7
Intangible assets
E7
Reserves
C8
Lease receivables
E8
Dividends
C9
Other provisions
C10
Contingent liabilities
Page 131 Directors’ Declaration
Other information
Page 132 Sustainability Performance Summary 2021
Page 136 Corporate Governance
Page 146 Information for Investors
Contents

2 Downer EDI Limited
Highlights
Total
Revenue
1
$12,234.2m
Downer’s Urban Services businesses performed well during the 2021 financial year,
demonstrating their strength and resilience during a year of COVID-19 disruption.
Total revenue was lower than the previous year, primarily due to the divestment of
Mining and Laundries businesses, however Downer delivered an increase in earnings,
with improved margins, and a very strong cash performance.
Downer reported a statutory net profit after tax of $183.7 million.
This strong overall performance resulted in the Board declaring a final dividend of
12 cents per share, taking total dividends for the year to 21 cents per share, unfranked.
1 Total revenue is a non-statutory disclosure and includes revenue from joint ventures, other alliances and other income.
2 Underlying EBITA and NPATA are non-IFRS measures that are used by Management to assess the performance of the business. They have been calculated from the statutory
measures by adding back the impact of ISIs net of tax. Non-IFRS measures have not been subject to audit or review.
Underlying
2

EBITA Margin3.8%
Underlying
2

NPATA$261.2m
HIGHLIGHTS
8.8%
decrease
EBITDA Cash
Conversion92.0%
0.7pp
increase
21.4%
increase
54.9pp
increase

Annual Report 2021 3
HIGHLIGHTS
Downer’s strategy is to focus on its core Urban Services businesses.
These businesses have:
– demonstrated strength and resilience
– leading market positions and attractive
medium and long-term growth opportunities
– a high proportion of government and government-related contracts
– a capital light, services-based business model generating lower risk,
more predictable revenues and cash flows.
Transport
Divested
Road Services
Rail and Transit Systems
Projects
Mining
Laundries (Facilities)
Downer brand guidelines Section: 02
33
Section: 01Section: 02Section: 03
Contents Introduction Brandmark Tool kit Photography Contact
Icon set
We have a series of icons in our tool kit which can be used
across different applications to add interest to the overall brand.
These can be downloaded from the ‘Our Brand’ section of
iDowner. The icons are coloured using only the approved tint
values from our Primary colour palette. Note that these icons
have been modified slightly from our previous style to remove
the black box to provide greater flexibility and a ‘cleaner’ design.
They should only be used sparingly.
All icons displayed are sample only
Utilities
Telecommunications
Water
Power and Gas
Facilities
Government
Health and Education
Defence
Building
Asset Services
Power and Energy
Industrial and Marine
Downer brand guidelines Section: 02
33
Section: 01Section: 02Section: 03
Contents Introduction Brandmark Tool kit Photography Contact
Icon set
We have a series of icons in our tool kit which can be used
across different applications to add interest to the overall brand.
These can be downloaded from the ‘Our Brand’ section of
iDowner. The icons are coloured using only the approved tint
values from our Primary colour palette. Note that these icons
have been modified slightly from our previous style to remove
the black box to provide greater flexibility and a ‘cleaner’ design.
They should only be used sparingly.
All icons displayed are sample only
Downer brand guidelines Section: 02
33
Section: 01Section: 02Section: 03
Contents Introduction Brandmark Tool kit Photography Contact
Icon set
We have a series of icons in our tool kit which can be used
across different applications to add interest to the overall brand.
These can be downloaded from the ‘Our Brand’ section of
iDowner. The icons are coloured using only the approved tint
values from our Primary colour palette. Note that these icons
have been modified slightly from our previous style to remove
the black box to provide greater flexibility and a ‘cleaner’ design.
They should only be used sparingly.
All icons displayed are sample only
Downer brand guidelines Section: 02
33
Section: 01Section: 02Section: 03
Contents Introduction Brandmark Tool kit Photography Contact
Icon set
We have a series of icons in our tool kit which can be used
across different applications to add interest to the overall brand.
These can be downloaded from the ‘Our Brand’ section of
iDowner. The icons are coloured using only the approved tint
values from our Primary colour palette. Note that these icons
have been modified slightly from our previous style to remove
the black box to provide greater flexibility and a ‘cleaner’ design.
They should only be used sparingly.
All icons displayed are sample only
Downer’s Operating Model

4 Downer EDI Limited
DIRECTORS’ REPORT
Directors’ Report
for the year ended 30 June 2021
The Directors of Downer EDI Limited submit the Annual Financial Report of the Company for the financial year ended 30 June 2021.
In compliance with the provisions of the Corporations Act 2001 (Cth), the Directors’ Report is set out below.
Board of Directors
RICHARD MICHAEL HARDING (72)
Chairman since November 2010, Independent Non-executive Director since July 2008
Mr Harding has held management positions around the world with British Petroleum (BP), including President
and General Manager of BP Exploration Australia.
Mr Harding is currently the Chairman of Horizon Oil Limited and a Director of Cleanaway Waste Management
Limited. He is a former Chairman of Lynas Limited, Roc Oil Company Limited, Clough Limited and ARC Energy
Limited and a former Director of Santos Limited.
Mr Harding will retire from the Board on 30 September 2021.
Mr Harding holds a Masters in Science, majoring in Mechanical Engineering.
Mr Harding lives in Sydney.
GRANT ANTHONY FENN (56)
Managing Director and Chief Executive Officer since July 2010
Mr Fenn has over 30 years’ experience in operational management, strategic development and financial
management. He joined Downer in October 2009 as Chief Financial Officer and was appointed Chief Executive
Officer in July 2010.
He was previously a member of the Qantas Executive Committee, holding a number of senior roles over 14
years, as well as Chairman of Star Track Express and a Director of Australian Air Express. He worked at KPMG
for eight years before he joined Qantas.
Mr Fenn is currently a Director of Sydney Airport Limited and Spotless Group Holdings Limited and a Member
of the UTS Engineering and IT Industry Advisory Board.
Mr Fenn holds a Bachelor of Economics from Macquarie University and is a member of the Australian Institute
of Chartered Accountants.
Mr Fenn lives in Sydney.
PHILIP STUART GARLING (67)
Independent Non-executive Director since November 2011
Mr Garling has over 40 years’ experience in the infrastructure, construction, development and investment
sectors. He was the Global Head of Infrastructure at AMP Capital Investors, a role he held for nine years.
Prior to this, Mr Garling was CEO of Tenix Infrastructure and a long-term senior executive at the Lend Lease
Group, including five years as CEO of Lend Lease Capital Services.
Mr Garling is currently the Chairman of Tellus Holdings Limited, Energy Queensland Limited and Newcastle
Coal Infrastructure Group and a Director of Charter Hall Limited. He is a former Director of Spotless Group
Holdings Limited and the NSW electricity distributor, Essential Energy and a past President of Water Polo
Australia Limited.
Mr Garling holds a Bachelor of Building from the University of New South Wales and the Advanced Diploma
from the Australian Institute of Company Directors. He is a Fellow of the Australian Institute of Building,
Australian Institute of Company Directors and Institution of Engineers Australia.
Mr Garling lives in Sydney.

DIRECTORS’ REPORT
Annual Report 2021 5
TERESA GAYLE HANDICOTT (58)
Independent Non-executive Director since September 2016
Ms Handicott is a former corporate lawyer with over 30 years’ experience in mergers and acquisitions, capital
markets and corporate governance. She was a partner of national law firm Corrs Chambers Westgarth for 22
years, serving as a member of its National Board for seven years including four years as National Chairman.
She also has extensive experience in governance of local and State government organisations.
Ms Handicott is currently the Chairman of listed company PWR Holdings Limited and of Peak Services
Holdings Pty Ltd, which is the subsidiary of the Local Government Association of Queensland that is
responsible for its commercial operations. Ms Handicott is also a Divisional Councillor of the Queensland
Division of the Australian Institute of Company Directors.
Ms Handicott is a former Director of CS Energy Limited, a former member of the Queensland University of
Technology (QUT) Council, the Takeovers Panel and Corporations and Markets Advisory Committee and a
former Associate Member of the Australian Competition and Consumer Commission.
A Senior Fellow of FINSIA, Fellow of the Australian Institute of Company Directors and Member of Chief Executive
Women, Ms Handicott holds a Bachelor of Laws (Hons) degree from the Queensland University of Technology.
Ms Handicott lives in Brisbane.
NICOLE MAREE HOLLOWS (50)
Independent Non-executive Director since June 2018
Ms Hollows has over 20 years’ experience in the resources sector in a number of senior managerial
roles across both the public and private sectors, including in mining, utilities and rail. Her experience
spans operational management, accounting and finance, mergers and acquisitions, capital management
and corporate governance.
Ms Hollows is the Non-executive Chair of Jameson Resources Limited, a Non-executive Director of Qube
Holdings Limited and a member of the CEO Advisory Committee for Dean of Queensland University of
Technology (QUT) Business School.
She was formerly the Chief Executive Officer of SunWater Limited, a Queensland Government owned
corporation, the Chief Financial Officer and subsequently Chief Executive Officer of Macarthur Coal Limited
and Managing Director of AMCI Australia and South East Asia.
A Fellow of the Australian Institute of Company Directors and a Member of Chief Executive Women and the
Institute of Chartered Accountants, Ms Hollows holds a Bachelor of Business – Accounting and a Graduate
Diploma in Advanced Accounting (Distinction) from the Queensland University of Technology and is a
Graduate of Harvard Business School’s Program for Management Development.
Ms Hollows lives in Brisbane.
PETER LAWRENCE WATSON (64)
Independent Non-executive Director since May 2019
Mr Watson has extensive experience in the construction and engineering sectors in senior executive and
governance roles, including in the industrial, transport, defence, health, justice and utilities sectors. He was
Chief Executive Officer and Managing Director of Transfield Services Limited (now known as Broadspectrum
which is owned by Ventia) for 10 years. During this period, he led the business through a successful transition,
cultivating a sustainable and successful public company. He also has considerable experience in various
Non-executive Director roles.
Mr Watson is currently a Consultant of Schiavello Group, BG&E Group Limited and Stephenson Mansell Group
where he provides coaching and mentoring to senior executives.
Mr Watson is a former Chairman of LogiCamms Limited (now known as Verbrec), Watpac Limited, Regional
Rail Link Authority in Victoria and AssetCo Management which managed PPP assets, a former Director of the
Major Transport Infrastructure Board in Victoria, Yarra Trams and Save the Children Australia and was a Board
member of Infrastructure Australia and independent Chair of Ross River Solar Farm.
A Fellow of the Australian Academy of Technological Sciences and Engineering and member of the
Institute of Engineers Australia and Australian Institute of Company Directors, Mr Watson holds a Diploma
of Civil Engineering from the Caulfield Institute of Technology and is a Graduate of the Wharton Advanced
Management Program of the University of Pennsylvania.
Mr Watson lives in Melbourne.

6 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
Directors’ Shareholdings
The following table sets out each Director’s relevant interest (direct and indirect) in shares, debentures, and rights or options in shares
or debentures (if any) of the Company at the date of this report. No Director has any relevant interest in shares, debentures and rights
or options in shares or debentures, of a related body corporate as at the date of this report.
Director
Number of Fully Paid
Ordinary Shares
Number of Fully Paid
Performance Rights
Number of Fully Paid
Performance Options
R M Harding34,028––
G A Fenn
1
2,049,772625,748–
P S Garling23,540––
T G Handicott20,047––
N M Hollows15,538––
P L Watson17,93 3––
1 Performance rights granted to Mr Fenn are subject to performance and/or service period conditions over the period 2018 to 2023. Further details regarding the conditions
relating to these restricted shares and performance rights are outlined in sections 6.4 and 9.2 of the Remuneration Report.
Company Secretary
The Company Secretarial function is responsible for ensuring
that the Company complies with its statutory duties and
maintains proper documentation, registers and records. It also
provides advice to Directors and officers about corporate
governance and gives practical effect to any decisions made
by the Board.
Mr Robert Regan was appointed Group General Counsel and
Company Secretary in January 2019. He has qualifications in
law from the University of Sydney and is an admitted solicitor
in New South Wales. Mr Regan was formerly a partner of Corrs
Chambers Westgarth and has over 30 years of experience
in legal practice.
Mr Peter Lyons was appointed joint Company Secretary in
July 2011. A member of CPA Australia and the Governance
Institute of Australia, he has qualifications in commerce from the
University of Western Sydney and corporate governance from
the Governance Institute of Australia. Mr Lyons was previously
Deputy Company Secretary and has been in financial and
secretarial roles at Downer for over 20 years.
Review of Operations
COVID-19
Downer continues to comply with all Government regulations
and advice in relation to the COVID-19 pandemic and has
robust Business Continuity Plans in place. Senior managers
communicate regularly with their teams to ensure they
are fully informed about the evolving situation and putting
in place appropriate strategies. Downer is committed to
working closely with its customers and partners to minimise
the impact on operations while keeping its employees and
communities safe.
Detailed and up-to-date information about Downer’s response
to COVID-19 is provided on the home page of the company’s
website (www.downergroup.com).
During the 12 months to 30 June 2021, there was no material
impact on demand for the businesses within the Group’s
Transport, Utilities and Mining service lines. The Hospitality
business within the Facilities service line continues to be
significantly affected by COVID-19 regulations and some Asset
Services customers continue to defer non-essential work.
Principal Activities
Downer EDI Limited (Downer) is a leading provider of
integrated services in Australia and New Zealand. Downer
employs approximately 44,000 people, mostly in Australia
and New Zealand.
Downer’s strategy is to focus on its core Urban Services
businesses: Transport, Utilities, Facilities and Asset Services.
These core Urban Services businesses have:
–Demonstrated strength and resilience
–Leading market positions and attractive medium-
and long-term growth opportunities
–A high proportion of government and government-related
contracts
–A capital light, services-based business model generating
lower risk, more predictable revenues and cash flows.
As part of its Urban Services strategy, Downer has made
significant progress exiting its capital-intensive Mining businesses.
Downer has completed the divestment of its Open Cut Mining
West, Underground, Downer Blasting Services and Snowden
businesses as well as its share of the RTL JV. It has also entered
into a binding sale agreement in relation to its Otraco business,
with this divestment expected to complete in FY22. Downer’s
remaining mining business, Open Cut East, comprises four
profitable contracts which are scheduled to complete between
2022 and 2024, in the event that the business is not sold.

DIRECTORS’ REPORT
Annual Report 2021 7
On 2 December 2020, Downer announced it had entered an
agreement to sell 70% of its Laundries business.
For the 2021 financial year, an overview of Downer’s five service
lines is set out below.
Transport
Transport comprises Downer’s Road Services, Rollingstock
Services and Projects businesses.
Total revenue
1
(FY21)
Transport
EBITA
2
(FY21)
43.4%43.9%
1 Total revenue is a non-statutory disclosure and includes revenue, other income
and notional revenue from joint ventures and other alliances not proportionately
consolidated.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles
amortisation expense. Due to rounding, divisional percentages do not add up
precisely to 100%.
Road Services
Downer manages and maintains road networks across Australia
and New Zealand and manufactures and supplies products
and services to create safe, efficient and reliable journeys.
Downer offers one of the largest non-government owned road
infrastructure services businesses in Australia and New Zealand,
maintaining more than 33,000 kilometres of road in Australia and
more than 25,000 kilometres in New Zealand.
Downer creates and delivers solutions to our customers’
challenges through strategic asset management and a
leading portfolio of products and services. Downer is a leading
manufacturer and supplier of bitumen-based products and
an innovator in the sustainable asphalt industry and circular
economy, using recycled products and environmentally
sustainable methods to produce asphalt.
Downer’s road network solutions are underpinned by
industry-leading research, development and innovation,
unique asset management tools and a commitment to safety,
environment and sustainability through industry awarded
Zero Harm programs.
Downer has formed a number of strategic partnerships to meet
the changing needs of our customers and markets. Downer has
long-term asset stewardship and road management contracts
through DM Roads in Australia, and a number of alliances in
New Zealand such as the Infrastructure Alliance in Hamilton,
Whanganui Alliance, Tararua Alliance, Waikato District Alliance
and the Milford Road Alliance.
Downer works for all of Australia’s State road authorities,
the New Zealand Transport Agency and a large number of
local government councils and authorities in both countries.
Customers also include road owners and businesses operating
in a wide range of industries.
Rail and Transit Systems
Downer has over 100 years’ rail experience providing
end-to -end, innovative transport solutions. Downer is a
leading provider of rollingstock asset management services
in Australia, with expertise in delivering whole-of-life asset
management support to our customers. Downer’s capability
spans all sectors, from rollingstock to infrastructure, and
every project phase, from design and manufacture to
through-life-support, fleet maintenance, operations and
comprehensive overhaul of assets.
Downer sets industry best practice with forward-looking
technology solutions to deliver safe, efficient and reliable
services for the public transport sector.
Downer has formed strategic joint ventures and relationships
with leading technology and knowledge providers including
Keolis, CRRC, Hitachi and Bombardier.
The Keolis Downer joint venture is Australia’s largest private
provider of multi-modal public transport solutions, with
contracts to operate and maintain Yarra Trams in Melbourne,
the Gold Coast light rail system in Queensland, Adelaide
Metro and an integrated public transport system for the city
of Newcastle in New South Wales. Keolis Downer is also one
of Australia’s most significant bus operators.
Downer’s rollingstock customers include Sydney Trains,
Transport for NSW, Public Transport Authority (WA),
Metro Trains Melbourne, Public Transport Victoria, and
Queensland Rail.
Projects
Downer delivers multi-disciplined infrastructure solutions to
customers within the transport sector. The services provided by
Downer include the design and construction of light rail, heavy
rail, signalling, track and station works, rail safety technology,
bridges and roads.
Downer has a long history of delivering transport
infrastructure projects under a variety of contracting
models. Downer’s integrated capabilities enable intelligent
transport solutions, road network management and
maintenance, facility maintenance, utilities services and
renewable energy technologies.

8 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
Utilities
Downer offers a range of services to customers across the power
and gas, water, telecommunications and renewables sectors.
Total revenue
1
(FY21)
Utilities
EBITA
2
(FY21)
17.2%20.2%
1 Total revenue is a non-statutory disclosure and includes revenue, other
income and notional revenue from joint ventures and other alliances not
proportionately consolidated.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles
amortisation expense. Due to rounding, divisional percentages do not add up
precisely to 100%.
Power and Gas
Downer’s services include planning, designing, constructing,
operating, maintaining, managing and decommissioning power
and gas network assets. A collaborative approach has made
Downer a benchmark end-to-end service provider to owners
of utility assets.
Downer designs and constructs steel lattice transmission
towers, designs and builds substations, constructs and maintains
electricity and gas networks, provides asset inspection and
monitoring services, connects tens of thousands of new
power and gas customers each year and provides meter,
energy and water efficiency services for governments,
utilities and corporations.
Our performance on the network is benchmarked at activity unit
level, repeatedly demonstrable and assessed against continually
improving key performance indicators.
Water
Downer is dedicated to delivering complete water lifecycle
solutions for municipal and industrial water users. Downer’s
expertise includes water treatment, wastewater treatment,
water and wastewater network construction and rehabilitation,
desalination and biosolids treatment.
As a leading provider of asset management services, Downer
supports its customers across the full asset lifecycle from
conceptual development through to design, construction,
commissioning and into operations and maintenance.
Downer collaborates with customers to manage their assets, so
they create community benefits that are sustainable, innovative,
cost-effective and provide value to all stakeholders.
Telecommunications
Downer is a leading provider of end-to-end technology and
communications service solutions, offering integrated civil
construction, electrical, fibre, copper and radio network
deployment capability throughout Australia and New Zealand.
Key capabilities include:
–Design, engineering and network construction of fixed
and wireless networks
–Mobile deployment, site acquisition, environmental
and design services
–Network operations and help desk outsourcing
–Network maintenance
–Warehousing and logistics
–Smart metering
–Network security
–Remedial works and proactive maintenance
–Customer connections, in-premise installations
and service activations.
Facilities
The Facilities service line operates in Australia and New Zealand
across a range of industry sectors including defence, education,
health, government and hospitality.
Total revenue
1
(FY21)
Facilities
EBITA
2
(FY21)
23.3%25.5%
1 Total revenue is a non-statutory disclosure and includes revenue, other
income and notional revenue from joint ventures and other alliances not
proportionately consolidated.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles
amortisation expense. Due to rounding, divisional percentages do not add up
precisely to 100%.
Spotless, a Downer company, is the largest integrated facilities
management services provider in Australia and New Zealand,
delivering property and facilities management services to
government departments, agencies and authorities at the
Federal, State and municipal level. With around 21 Public
Private Partnership projects across the defence, education,
health and leisure sectors, Spotless provides innovative
management of its customers’ assets across their lifecycle.

DIRECTORS’ REPORT
Annual Report 2021 9
Spotless has a 40-year history of supporting the daily
operations of hospitals across Australia and New Zealand,
delivering a range of services that create a safe environment
for hospital staff, patients and their guests. At leading schools
and tertiary institutions, Spotless helps to create world-class
learning environments through integrated services such as
catering, building and grounds maintenance, conserving energy
with air-conditioning and lighting solutions and ensuring a
secure environment.
The Facilities services line also includes Hawkins, New Zealand’s
leading construction business. Hawkins delivers unique
transformational projects across a variety of sectors including
education, health, airports, commercial office buildings and
heritage restorations.
Engineering, Construction and Maintenance (EC&M)
Total revenue
1
(FY21)
EC&M
EBITA
2
(FY21)
7.1%2.3%
1 Total revenue is a non-statutory disclosure and includes revenue, other
income and notional revenue from joint ventures and other alliances not
proportionately consolidated.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles
amortisation expense. Due to rounding, divisional percentages do not add up
precisely to 100%.
Asset Services
Downer is a leading provider of asset maintenance and specialist
services to Australia’s critical economic infrastructure including
the oil and gas, power generation and industrial sectors. As a
trusted partner with a leading safety record, Downer optimises
the reliability, efficiency and whole-of-life costs of its customers’
assets through long-term relationship-based contracts.
Oil and gas
Downer’s state-of-the art equipment and technology, and
its people’s expertise, support customers through the full
asset lifecycle. Downer is a major provider of maintenance,
shutdown and field development services to Coal Seam Gas
and Liquefied Natural Gas producers in Australia including
Santos, Origin and Chevron.
Power Generation
Downer is one of the largest providers of power generation
asset management services in Australia, offering the full range
of maintenance, shutdown, turnaround, outage and sustaining
capital works. This includes maintenance and shutdown services
for over 18GW of Australia’s power generation for customers
who supply approximately 60% of the National Energy Market,
including CS Energy, Origin, AGL, Synergy and Energy Australia.
Industrial and Marine
Downer provides maintenance, turnaround, shutdown and
sustaining capital programs for industrial operations across
Australia’s iron ore, minerals and metals, petrochemical, bulk
materials handling and processing sectors. Heavy industrial
customers include BHP, Queensland Alumina Limited, Bluescope,
Orica and CSBP while Downer provides a range of services
at major ports including Gladstone Ports, Port Hedland, Port
Waratah, Newcastle Coal Infrastructure Group and Kooragang
Bulk Facilities.
Mineral Technologies
Downer’s Mineral Technologies business is the world leader
in fine physical mineral separation solutions, including spiral
gravity concentrators and magnetic and electrostatic separation
technology. Mineral Technologies delivers innovative process
solutions for iron ore, mineral sands, silica sands, coal, chromite,
gold, tin, tungsten, tantalum and several other fine materials.
Engineering and Construction
Downer announced in February 2020 that it will focus its
construction efforts on areas where it has a competitive
differentiation. As a result, Downer will no longer tender for ‘hard
dollar’ construction contracts in the coal, iron ore and industrial
E&I (Electrical and Instrumentation) and SMP (Structural,
Mechanical, and Piping) sectors.
Mining
An important part of Downer’s Urban Services strategy is to exit
its capital-intensive Mining business. Downer has completed the
divestment of its Open Cut Mining West, Underground, Downer
Blasting Services and Snowden businesses as well as its share
of the RTL JV. It has also entered into a binding sale agreement
in relation to its Otraco business, with this divestment expected
to complete in FY22. Downer’s remaining mining business,
Open Cut East, comprises four profitable contracts which are
scheduled to complete between 2022 and 2024, in the event
that the business is not sold.
Total revenue
1
(FY21)
Mining
EBITA
2
(FY21)
9.0%8.2%
1 Total revenue is a non-statutory disclosure and includes revenue, other
income and notional revenue from joint ventures and other alliances not
proportionately consolidated.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles
amortisation expense. Due to rounding, divisional percentages do not add up
precisely to 100%.

10 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
Group Financial Performance
For the 12 months ended 30 June 2021, Downer reported
a decrease in total revenue driven by the loss of revenue
contribution from the Mining and Laundries businesses
disposed during the year while earnings before interest, tax and
amortisation of acquired intangibles (EBITA) and statutory net
profit after tax (NPAT) were both higher. Gearing has decreased
by 16.7 percentage points (pp) since June 2020, from 35.7%
to 19.0%, and statutory EBITA margin has improved from 3.2%
at 31 December 2020 to 3.3%.
The main features of the result for the 12 months ended
30 June 2021 were:
–Total revenue of $12.2 billion, down 8.8%
–Statutory EBITA of $401.0 million, up $371.0 million
–EBITA margin of 3.3%, up from 3.2% at 31 December 2020
–Statutory earnings before interest and tax (EBIT)
of $334.8 million, up $376.1 million
–Statutory net profit after tax and before amortisation
of acquired intangible assets (NPATA) of
$230.0 million, up from a loss of $105.8 million
–Statutory net profit after tax (NPAT) of $183.7 million,
up from a loss of $155.7 million.
Gearing has decreased by 16.7pp to 19.0% since June 2020
reflecting the strong operating cash flows and a material
reduction in debt levels as proceeds from divestments and
capital raising in July 2020 were partially utilised to repay
borrowings. Gearing also reduced despite $83.3 million
deferred interim FY20 dividend paid in the period and a
$134.5 million payment made to acquire the remaining
12.2% interest in Spotless.
Cash conversion for the year of 92.0% and 100.8% once
adjusted for $79.0 million of cash outflows relating to Individually
Significant Items (ISIs) recognised in FY20, has significantly
improved from prior year.
ISIs totalled $66.3 million loss before interest and tax for the year,
($31.2 million after tax and interest). These ISIs relate to:
–the fair value movement of the Downer Contingent Share
Option (DCSO) as part of the consideration to acquire the
remaining 12.2% interest in Spotless
–the impact of derecognition of unamortised deferred
financing costs following the termination of the Spotless
financing arrangement
–impairment of non-current assets
–the net loss recognised on divestments made during
the year (including transaction costs)
–the impact of the adoption of Cloud Computing –
Software-as-a-Service (SaaS) interpretations.
Refer to Note B3 to the Financial Report for further details.
The table below provides a comparison of the underlying
1

earnings for FY21 versus the results for FY20 and a reconciliation
to statutory NPAT.
Underlying
1
E B I TA
(A$m)
Reporting
Segment FY21 FY20
Variance
(%)
TransportTransport250.2235.66.2%
UtilitiesUtilities115.1114.60.4%
Facilities
2
Facilities140.0124.912.1%
Asset Services
3
EC&M18.327.1(32.5%)
Core Urban Services
Businesses523.6502.24.3%
Engineering and
Construction
3
EC&M(5.1)(69. 2)92.6%
Businesses in
wind down(5.1)(69.2)92.6%
MiningMining46.679.0(41 .0%)
Laundries
2
Facilities5.09.1(4 5 .1%)
Hospitality
2
Facilities0.4(19.7)>100%
Businesses under
review or to be sold52.068.4(24.0%)
CorporateUnallocated(103.2)(8 5 .4)(20.8%)
Group Underlying
E B I TA
4
467. 3416.012.3%
Amortisation of
acquired intangibles
(pre-tax)(66. 2)(71.3)7. 2%
Underlying EBIT401.1344.716.4%
Net interest expense(100.6)(112.0)10.2%
Tax expense(85.6)(67. 5)(26.8%)
Underlying NPAT214.9165.230.1%
Amortisation of
acquired intangibles
(post-tax)46.349.9( 7. 2%)
U n d e r l y i n g N PATA
4
261.2215.121.4%
Items outside of
u n d e r l y i n g N PATA(70.6)(386.0)81.7%
Tax effect on items
outside NPATA39.465.1(39.5%)
Statutory NPATA230.0(105.8)>100%
Amortisation of
acquired intangibles
(post-tax)(4 6 . 3)(4 9 . 9)7. 2%
Statutory NPAT183.7(155.7)>100%
1 The underlying result is a non-IFRS measure that is used by management to
assess the performance of the business. Non-IFRS measures have not been
subject to audit or review.
2 Total underlying EBITA for the Facilities segment was $145.4m (FY20: $114.3m).
Refer to Note B1.
3 Total underlying EBITA for the EC&M segment was $13.2m (FY20: loss of
$42.1m). Refer to Note B1.
4 Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back
acquired intangible assets amortisation expense. Group FY21: $66.2 million,
$46.3 million after-tax. (FY20: $71.3 million, $49.9 million after tax).

DIRECTORS’ REPORT
Annual Report 2021 11
Revenue
Total revenue for the Group decreased by $1.2 billion or 8.8%,
to $12.2 billion.
Transport revenue increased by 12.8%, or $602.9 million, to
$5.3 billion due to strong performance in the Projects business,
both in Australia and New Zealand, and continuing strong
performance in the Road Services business particularly in
Australia. These increases were partially offset by lower revenue
from Rollingstock Services due to completion of Waratah bogie
overhaul activities.
Utilities revenue decreased by 21.6%, or $581.7 million, to
$2.1 billion largely due to the continued wind-down of nbn™
contracts and completion of Murra Warra. This was partially offset
by increased activities in Power and Gas and Water services.
Facilities revenue decreased by 14.1%, or $466.0 million, to
$2.8 billion largely due to the impact of COVID-19 on Hospitality,
loss of revenue contribution from the disposal of Laundries and
projects completions in both Australia and New Zealand.
EC&M revenue decreased by 25.9%, or $302.7 million, to
$0.9 billion as a result of project completions and reduced
construction activity in line with Downer’s strategy. The Asset
Services business continued to be impacted by COVID-19
resulting in customers deferring non-essential maintenance.
Mining revenue decreased by 29.3%, or $453.7 million, to
$1.1 billion as a result of contract completions and the cessation
of revenue from those Mining businesses disposed during the
year as part of the Group’s Urban Services strategy.
Expenses
Total expenses decreased by 12.0% compared to the pcp and
includes $77.0 million of Individually Significant Items (ISIs) outside
the underlying result, while the pcp included $367.2 million of ISIs.
Excluding the impact of ISIs, total expenses decreased by 10.0%
or $1,241.7 million.
Employee benefits expenses decreased by 8.5%, or
$357.8 million, to $3.9 billion and represent 34.2% of Downer’s
cost base. The decrease is mainly driven by lower costs due
to disposal of businesses, contract completions, reduced
activities in Hospitality and the benefit of restructuring
activities made in FY20.
Subcontractor costs decreased by 6.2%, or $273.3 million,
to $4.1 billion and represent 36.7% of Downer’s cost
base. This decrease is a result of contract completions
during the year particularly in Utilities, disposal of Mining
businesses and reduced activities in Hospitality due to
COVID-19. This was partially offset by increased contract
activities in Transport.
Raw materials and consumables costs decreased by 26.1%, or
$563.1 million, to $1.6 billion and represent 14.1% of Downer’s
cost base. The decrease is mainly due to contract completions,
particularly in the Utilities and EC&M segments, as well as
completion of Waratah bogie overhaul activities in Rollingstock
Services and the disposal of Mining and Laundries businesses
during the year.
Plant and equipment costs decreased by 10.7%, or $70.4 million,
to $590.2 million and represent 5.2% of Downer’s cost base. The
decrease in plant and equipment costs is attributed to a less
capital-intensive business following the disposal of Laundries
and Mining as well as from initiatives to drive efficient plant and
equipment utilisation and maintenance practices.
Depreciation and amortisation on leased assets increased by
19.0%, or $28.8 million, to $180.6 million and represent 1.6% of
Downer’s cost base. This increase is a result of investment in
equipment on a lease basis.
Other depreciation and amortisation decreased by 14.1%, or
$51.7 million, to $313.8 million and represent 2.8% of Downer’s
cost base. The decrease is driven by assets disposed as part of
the Laundries and Mining divestments together with the normal
run-off of assets useful life.
Included in Other depreciation and amortisation is $3.6 million
of pre-tax ISIs benefit in relation to the implementation of SaaS
arrangements as described in Note B3 to the Financial Report.
Impairment of non-current assets of $20.2 million represents
impairment recognised to adjust the carrying value of the
Property, plant and equipment and other assets of the Open
Cut Mining West business to its expected recoverable value
as described in Note B3 to the Financial Report.
Other expenses, which include communication, travel,
occupancy and professional fees costs, decreased by 8.3%,
or $52.6 million and represent 5.1% of Downer’s cost base.
The decrease is mainly due to reduced travel and discretionary
expenses across the Group.
Included in Other expenses is $60.4 million of pre-tax ISIs in
relation to SaaS arrangements, fair value movement on DCSO
liability and divestment results (including transaction and
divestments costs) in relation to the Laundries and Mining
divestments as described in Note B3 to the Financial Report.
Earnings
Statutory earnings before interest and tax (EBIT) of
$334.8 million up from loss of $41.3 million in pcp.
Statutory EBITA of $401.0 million up from $30.0 million in pcp.
Underlying EBITA for the Group increased by 12.3%, or
$51.3 million, to $467.3 million.

12 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
A reconciliation of the FY21 underlying result to the statutory result is provided in the table below:
E B I TA
Net
Interest
expense
Ta x
expenseN PATA
Deduct
Amortisation
of acquired
intangibles
(post-tax)N PAT
Underlying results467. 3(100.6)(105.5)261.2(46.3)214.9
Fair value on Downer Contingent Share Option (DCSO)
1
(16.6)––(16.6)–(16.6)
Termination of Spotless financing arrangements–(4 . 3)1.3(3.0)–(3.0)
Mining divestments (net of transaction costs)(19.5)–17. 5(2.0)–(2.0)
Laundries divestment (net of transaction costs)(16.2)–16.50.3–0.3
SaaS arrangements(14.0)–4.1(9.9)–(9.9)
Total items outside underlying performance(66.3)(4.3)39.4(31.2)–(31.2)
Statutory result – Profit/(loss)401.0(104.9)(66.1)230.0(46.3)183.7
1 The initial recognition of the fair value of the Downer Contingent Share Option (DCSO) was $16.7 million as at 12 August 2020 and recorded as a current financial liability.
The fair value of the DCSO issued as at the date the transaction completed was determined using an option pricing model. The key assumptions used in this assessment
were a TERP adjusted share price of $5.59, option volatility of 40%, interest of 0.51% and dividend yield of 4.1%. The DCSO was remeasured to fair value at 30 June 2021, with
any fair value movements recognised through the income statement. As the Downer share price has increased from $4.30 to $5.59 at 30 June 2021 this has resulted in a fair
value movement of $16.6 million.
Transport EBITA increased by 6.2% to $250.2 million due to
continued strong contribution from Australia and New Zealand
operations. In Australia, driven by strong contribution from
Roads Services, partially offset by lower Rollingstock Services
contribution following completion of the construction phase of
the Sydney Growth Trains project and completion of Waratah
bogie overhaul activities. In New Zealand, from new contracts
and higher activities within the Project business.
Utilities EBITA increased by 0.4% to $115.1 million as
increased contributions from Water services in Australia and
from telecommunications in New Zealand were offset by
the wind-down of nbn™ contracts.
Facilities EBITA increased by 39.3% to $145.4 million mainly
driven by increased contribution from Government services,
including COVID-19 cleaning activities, a recovery of activity
levels within the Hospitality sector due to fewer COVID-19
restrictions in 2H21; and a higher contribution from projects
in New Zealand.
EC&M EBITA increased by 125.9% to $13.2 million as the pcp
included non-recurring contract losses within the Engineering
and Construction business that are now complete. This was
partially offset by lower contribution from the Asset Services
business due to COVID-19 resulting in customers deferring
non-essential maintenance activities.
Mining EBITA decreased by 41.0% to $46.6 million due to loss
of earnings as a result of divestments made during the year.
Corporate costs increased by $17.8 million to $103.2 million
mainly due to higher information technology and insurance costs
and from FY21 short-term incentive expense recognised.
Net finance costs decreased by $7.1 million, or 6.3%, to
$104.9 million driven by lower levels of debt throughout the
year and lower interest rates. Included in net finance costs
is $4.3 million of pre-tax ISIs in relation to termination of
Spotless financing arrangements as described in Note B3
to the Financial Report. Excluding ISIs, net finance costs
would have been $11.4 million lower than pcp.
Effective tax rate is 20.1% which is lower than the statutory
corporate tax rate of 30% due to the impact of items including
non-taxable gains on divestments, recognition of previously
unrecognised capital losses, non-taxable distributions from
joint ventures and lower tax rates in overseas jurisdictions
(e.g. New Zealand).
Operating Cash Flow
Operating cash flow was strong at $708.7 million, a major
improvement from the $158.6
1
 million inflow in the pcp and
represents a cash conversion of 92.0% of adjusted earnings
before interest, tax, depreciation and amortisation (EBITDA).
The improvement in cash was driven by a strong contract
performance across the Group including the completion of
loss-making contracts in Engineering and Construction.
Included within the operating cash flow is $79.0 million in ISIs
recognised in FY20 (mainly restructuring cost and shareholder
class action settlement) being the cash outflow incurred during
the current period. Excluding the cash outflows for FY20 ISIs,
cash conversion would be 100.8%.
Investing Cash
Total investing cash inflow of $35.9 million was driven by
$447.8 million of proceeds from disposal activities during
the year, partially offset by $134.5 million paid in relation to
the acquisition of the remaining 12.2% interest in Spotless.
Total proceeds from disposal activities includes $395.9 million
proceeds from the sale of businesses, $10.9 million
net proceeds from the disposal of RTL JV and $41.0 million
from sale of Mining’s property plant and equipment.

DIRECTORS’ REPORT
Annual Report 2021 13
Excluding the cash flow from the major transactions, investing
cash flow would have been an outflow of $277.4 million;
$100.3 million or 26.6% lower than prior year
1
, driven by lower
capex requirements following Laundries and Mining businesses
divestments, and by $13.1 million lower payments for intangibles.
Debt and Bonding
The Group’s performance bonding facilities totalled
$2,009.3 million at 30 June 2021 with $633.0 million undrawn.
As at 30 June 2021, the Group had liquidity of $2.2 billion
comprising cash balances of $811.4 million and undrawn
committed debt facilities of $1.4 billion.
During the year, the Group raised $390.4 million (net of costs)
from the issue of new shares in order to rebalance the Group’s
gearing and overall liquidity positions, and in anticipation of
the payments for the purchase of the Spotless shares it did not
already own. In December 2020, the Group established a new
$1.4 billion syndicated sustainability linked loan facility. This
new facility replaces the Spotless $888.7 million and Downer
$400 million syndicated bank loan facilities as the Group’s
primary source of financing. In addition, $145 million of Spotless
bilateral bank loan facilities were refinanced at the Downer level.
A buy-back of Downer’s shares was announced to the market
on 27 April 2021 and the buy-back commenced on 8 June 2021.
As of 30 June 2021, a total of 4,363,398 shares were purchased
for total consideration of $24.8 million.
The Group continues to be rated BBB (Stable) by Fitch Ratings.
Balance Sheet
The net assets of Downer increased by $362.4 million, or 14.0%
to $3.0 billion, mainly as a result of capital raising funds received
in the period.
Net debt is calculated as borrowings (excluding lease liabilities)
less the cash and cash equivalents. Net debt has decreased
$792.6 million to $670.2 million mainly driven by $569.7 million
lower borrowings following debt repayments made as a result
of capital raising funds and $222.9 million higher cash position
since 30 June 2020. The strong operating cash flow and lower
capital expenditure compared to the pcp further contributed
to a lower net debt position.
Group gearing at 30 June 2021 was 19.0% (calculated on a
pre-AASB 16 basis) which is 16.7pp lower than 30 June 2020.
This reduction was achieved despite the payment of the
deferred FY20 interim dividend ($83.3 million) and payment
of $134.5 million for the remaining 12.2% interest in Spotless.
Total trade receivables and contract assets decreased by 7.5%,
or $180.9 million, to $2,230.2 million reflecting the impact of the
trade receivables disposed, contract completions and strong
cash collections during the year. The decrease also reflects
$24.2 million that has been classified as Assets held for sale in
relation to the Otraco divestment described in Note F6 to the
Financial Report.
Inventories decreased by 23.9%, or $79.8 million, to $254.2 million
largely driven by the disposal of Mining and Laundries businesses
while $1.8 million was reclassified to Assets held for sale.
Current tax assets decreased by 25.5%, or $16.6 million, to
$48.6 million reflecting tax refund received and timing of
tax payments.
Assets held for sale of $41.5 million represent the assets that will
be disposed as part of the sale of Otraco business as described
in Note F6 to the Financial Report. The completion of the sale
of Otraco within 12 months is considered highly probable, and
as such the recoverable value of the assets and liabilities is
presented separately as Assets/Liabilities held for sale.
Interest in equity accounted investments increased by 40.2%,
or $44.5 million, to $155.1 million mainly reflecting $33.4 million
for the remaining 30% interest in Laundries and $9.8 million
additional investment in Keolis Downer during the year, offset by
$8.1 million interest in RTL JV sold and the net impact of profit
and distributions received during the period.
Property, plant and equipment decreased by 26.3%, or
$355.5 million, to $994.7 million after $340.8 million was
disposed of as part of the Laundries and Mining divestments
while $9.4 million was transferred to Assets held for sale.
Excluding the disposals and transfers, Property, plant and
equipment would have decreased by $5.3 million largely from
additions of $309.7 million during the year being offset by
depreciation and impairment charges of $244.8 million and
disposals of $61.4 million.
Right-of-use assets decreased $46.1 million to $546.5 million.
The decrease includes $55.2 million that has been disposed
as part of Mining and Laundries divestments with $2.2 million
classified to Assets held for sale. Excluding these movements,
Right-of-use assets would have increased by $11.3 million,
reflecting new leases and extensions arrangements entered
into during the year.
Intangible assets
1
decreased by 2.7%, or $77.1 million, to
$2,782.9 million with $89.2 million of amortisation charges
during the year, $23.6 million disposed as part of the divestment
program and $0.5 million transferred to Assets held for sale.
This was partially offset by $28.4 million additional investment
in software during the year.
Net deferred tax balances (net of deferred tax assets and
liabilities) of $59.5 million increased by 3.3%, or $1.9 million
reflecting the net position of deferred tax, including the
consolidation of the Spotless tax consolidated group into
the Downer tax consolidated group.
1 2020 Consolidated Statement of Financial Position and Consolidated Statement of Cash Flows have been restated to reflect the Group’s change in accounting policy for
costs related to configuration and customisation of Software-as-a-Service (SaaS) arrangements. Refer to Note C7 for more details.

14 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
Total trade payables and contract liabilities decreased by 5.1%, or
$129.0 million, to $2,397.2 million primarily due to payment of the
deferred 2020 interim dividend ($83.3 million), and settlement
of the Spotless shareholder class action, while $27.4 million was
disposed as part of the divestment program and $5.9 million
has been reclassified to Liabilities held for sale as described in
Note F6 to the Financial Report. Trade payables and contract
liabilities represent 46.9% of Downer’s total liabilities.
Other financial liabilities increased by 11.8%, or $7.1 million, to
$67.3 million, representing 1.3% of Downer’s total liabilities.
The increase mainly reflects the recognition of the fair value
of the Downer Contingent Share Option (DCSO) arising from
the transaction to acquire the shares in Spotless that it did not
already own. Refer to Note B3 to the Financial Report.
Lease liabilities decreased by 13.2%, or $100.4 million, to
$662.8 million and represent 13.0% of Downer’s total liabilities.
The decrease mainly relates to $89.2 million of leases disposed
as part of the Laundries and Mining divestments, with
$2.4 million reclassified to Liabilities held for sale. Excluding the
disposal and reclassification impact, lease liabilities would have
decreased by $8.8 million largely reflecting lease arrangements
terminated during the year.
Liabilities held for sale of $17.2 million represent total liabilities
that will be disposed as part of the sale of Otraco as described
in Note F6 to the Financial Report.
Provisions decreased by 13.0%, or $70.7 million, to $474.9 million,
representing 9.3% of Downer’s total liabilities. The decrease
is mainly driven by $31.1 million of provisions disposed as
part of the divestment program and due to employee related
provisions utilised during the year. Employee related provisions
(annual leave and long service leave) made up 81.9% of this
balance with the remainder covering contract provisions,
decommissioning, restructuring and warranty obligations.
Total Equity increased by $362.4 million, driven by $393.2 million
from the equity raising (net of costs) and $183.7 million of
net profit after tax. This was partially offset by $140.9 million
derecognition of Non-Controlling Interest (NCI) in Spotless
following the acquisition of the remaining 12.2% interest,
$24.8 million in shares bought back and by dividends
declared during the year. Net foreign currency gains on
translation of foreign operations, particularly in New Zealand,
resulted in a movement in the foreign currency translation
reserve of $0.9 million.
Dividends
The Downer Board resolved to pay a final dividend of
12.0 cents per share, unfranked payable on 23 September 2021
to shareholders on the register at 26 August 2021.
The unfranked dividend will be paid out of Conduit Foreign
Income (CFI).
The Board also determined to continue to pay a fully imputed
dividend on the ROADS security, which having been reset on
15 June 2021 has a yield of 4.42% per annum payable quarterly
in arrears, with the next payment due on 15 September 2021.
As this dividend is fully imputed (the New Zealand equivalent
of being fully franked), the actual cash yield paid by Downer will
be 3.18% per annum until the next reset date.
Consistent with the prior year, the Company’s Dividend
Reinvestment Plan remains suspended.
Zero Harm
Downer’s
1
Lost Time Injury Frequency Rate (LTIFR) decreased
to 0.99 from 1.08 and its Total Recordable Injury Frequency Rate
(TRIFR) decreased to 2.60 from 3.10 per million hours worked
2
.
TRIFRLTIFR
TRIFR
LTIFR
Downer Group Safety Performance (12-month rolling frequency rates)
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Mar-21
Apr-21
May-21
Feb-21
Jan-21
Jun-21
2.0
2.5
3.0
3.5
0.5
1.0
1.5
2.0
2.5
3.10
2.60
1.08
0.99
1 Safety data includes Hawkins and Spotless (Note: Hawkins and Spotless were excluded in the FY20 Annual Report).
2 Lost time injuries (LTIs) are defined as injuries that cause the injured person (employee or contractor) to be unfit to perform any work duties for one whole day or shift, or
more, after the shift on which the injury occurred, and any injury that results, directly or indirectly, in the death of the person. The Lost Time Injury Frequency Rate (LTIFR)
is the number of LTIs per million hours worked. Total Recordable Injuries (TRIs) are the number of LTIs plus medically treated injuries (MTIs) for employees and contractors.
Total Recordable Injury Frequency Rate (TRIFR) is the number of TRIs per million hours worked.

DIRECTORS’ REPORT
Annual Report 2021 15
Group Business Strategies and Prospects for Future Financial Years
Downer’s Purpose is to create and sustain the modern environment by building trusted relationships with our customers.
Our Promise is to work closely with our customers to help them succeed, using world-leading insights and solutions.
Our business is founded on four Pillars:
–Safety: Zero Harm is embedded in Downer’s culture and is fundamental to the Company’s future success
–Delivery: we build trust by delivering on our promises with excellence while focusing on safety, value for money and efficiency
– Relationships: we collaborate to build and sustain enduring relationships based on trust and integrity
– Thought leadership: we remain at the forefront of our industry by employing the best people and having the courage to challenge
the status quo.
Downer’s strategic objectives, prospects, and the risks that could adversely affect the achievement of these objectives, are set out in
the table below.
Strategic ObjectiveProspects Risks and risk management
Maintain focus
on Zero Harm
Downer believes that a sustainable and embedded
Zero Harm culture is fundamental to the Company’s
ongoing success, and to building trusted
relationships with customers and business partners.
Downer’s approach to Zero Harm enables it to work
safely and environmentally responsibly in industry
sectors with inherently hazardous environments.
Zero Harm at Downer means a work environment
that supports the health and safety of its people
and allows it to deliver its business activities in an
environmentally sustainable manner and advance
the communities in which it operates.
This includes continuing to monitor all COVID-19
risks and controls, and supporting the Government’s
vaccination rollout strategy.
Downer has a robust Critical Risk program. Risks that
could cause serious injury to people or harm to the
environment, and the controls needed to eliminate or
manage those risks, are understood. This knowledge
forms the core of Downer’s risk management
processes, and the monitoring of its critical controls.
There is a strong commitment to Downer’s Zero Harm
objectives across all levels of the business.
A core objective of The Downer Standard program is
to unify the way we manage Zero Harm and perform
our work.
In an important step, Downer achieved centralised
third-party accreditation to the International
Standards ISO 45001 (Safety), ISO 9001 (Quality) and
ISO 14001 (Environment). This gives Downer a single
system of work for safety, quality and environment,
and a framework to develop, implement and monitor
The Downer Standard.
Establishing this consistent single platform means
Downer can deliver consistent best practice
information and work processes to our frontline
employees, helping them to better manage risk and
change in their dynamic workplaces.
Downer continues to be vigilant around the
management of COVID and maintaining the highest
levels of controls in line with expert advice and
Government guidance, providing our workforce with
relevant up-to -date information. Downer supports the
Government’s vaccination initiative and encourages
employees to have the vaccination when it is
available to them, once they have consulted a health
professional on the associated risks and benefits.

16 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
Strategic ObjectiveProspects Risks and risk management
Embed asset
management and
standardisation as a
cornerstone of the
Delivery pillar
Downer has developed extensive asset
management knowledge and expertise and also
adopts and implements world-leading insights
and solutions.
Downer strives for standardisation in its risk
management and project delivery to ensure
consistent quality outcomes for its customers.
The expectations of Downer’s customers, and their
customers, continue to grow with regards to reliable,
intuitive, and cost-effective assets and services.
Downer has invested in capability and talent to
improve asset management, standard processes,
data analytics and lifecycle performance
analytics. A number of these investments have
Group-wide application in addition to their bespoke
customer benefits.
Risks to be managed include: not delivering
value-added services to customers; scope reduction
by customers who elect to use pure maintenance/
blue collar services; and an inability to deliver
obligations in performance frameworks and service
outcome contracts.
Focus on engagement
with customers as a
cornerstone of the
Relationships pillar
Providing valuable and reliable products and
services to customers, and their customers,
is at the heart of Downer’s culture. It enables
Downer’s customers to focus more on their
core expertise while Downer delivers non-core
operational services.
Through ongoing analysis of markets, customers
and competitors, Downer is well positioned to
improve value and service for its customers and
their customers.
Relationships creating success continues to be
Downer’s core operating philosophy that drives
delivery of projects and services. It helps to ensure
investment as initiatives and activities are focused on
helping Downer’s customers to succeed.
Risks to be managed include: the threat of new
competitors and disruptors in traditional markets; not
keeping pace with changing customer expectations;
and the threat of commoditisation of core products
and services.
Utilise technology in
core service offerings
as a cornerstone
of our Thought
Leadership pillar
Technology is an inherent feature of today’s
world and there is therefore greater demand
for provision of cyber secure technology in the
services Downer provides.
Customer operations are growing in complexity
in an ever-changing threat landscape, and this
creates opportunities for Downer to connect
securely, manage, monitor and report on core
services and infrastructure.
Downer invests in a range of technology platforms
and partnerships to meet customer needs. Downer
focuses on selecting the right investments, for
example those that can be leveraged across a number
of service lines to maximise value for the greatest
number of customers.
Downer remains firmly focused on continuously
protecting against evolving cyber risks and threats,
demonstrating credibility and trust through secure
cyber stewardship and custody.
Risks to be managed include: intensification of
competition as customers converge into large single
market procurement channels; introduction of foreign
and technology-based competitors that bring a
different value proposition; and a need for greater
investment in technology and data services.

DIRECTORS’ REPORT
Annual Report 2021 17
The following table provides an overview of the key prospects relevant to each of Downer’s service lines and summarises Downer’s
intended strategic response across each sector to maximise the Company’s performance and realise future opportunities.
Service lineProspects Downer’s response
TransportThe multi-billion dollar market for transport
services continues to grow in both Australia and
New Zealand. Governments in both countries
continue to invest in a range of projects to reduce
congestion, improve mobility, and provide better
linkages between communities.
Downer is a market leader in road services in both
Australia and New Zealand, light rail construction
in Australia and heavy rail construction and
maintenance in Australia.
Downer maintains strong strategic partnerships
with leading global transport solutions providers
and, through this model, is pursuing opportunities
in rollingstock manufacture and maintenance, and
transport network operations and maintenance.
The Keolis Downer joint venture is a leading
Australian multi-modal transport operator.
UtilitiesGrowth across utility markets is multi-faceted with
a good pipeline of prospects in both Australia
and New Zealand.
Downer has market leading positions in the power,
gas, water and telecommunications sectors in both
Australia and New Zealand.
Downer is strongly positioned to take advantage of
the growth opportunities available in these sectors,
with a demonstrable track record of excellence in
service delivery, and a greater focus on introducing
operational technology to improve the value Downer
brings to customers.
FacilitiesLarge-scale and long-term outsourcing contracts
continue to come to market, however the long-term
nature of contracts in this sector means that a lot of
work is already under contract.
There is a strong pipeline of opportunities on the
short-to-medium-term horizon in both Australia
and New Zealand.
Through the acquisition of Spotless, Downer is a
major force in both Australia and New Zealand with
market leading positions across key sectors including
defence, health, education and government.
Government restrictions imposed to slow the spread
of COVID-19 have had a major impact on Spotless’
Hospitality business. Downer has reduced the
footprint of Hospitality to reflect the smaller scale of
operations and is reviewing the future of this business.
Asset ServicesThere are opportunities for growth in all areas in
which Asset Services operates: Oil and Gas, Power
Generation and Industrial. These opportunities
include the next generation of LNG maintenance
contracts and the need to upgrade ageing
industrial assets.
In addition, all Downer’s customers are actively
investing in decarbonisation projects and most are
investigating Hydrogen opportunities.
Downer has strong market positions across all these
areas and is well placed to secure at least its share of
new opportunities.
Downer is also investing in expertise and capability
to ensure we have the necessary skills to participate
wholly in the new Hydrogen economy.

18 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
Outlook
Downer expects its core Urban Services to continue to grow in
FY22 both in revenue and earnings. Given the changing nature
of the COVID pandemic and the ongoing restrictions Downer
will not provide specific earnings guidance.
Subsequent Events
Downer’s end markets relate to critical infrastructure and
essential services. Downer’s strength in those markets, and their
diversity, are a key advantage.
At the date of this report, Downer has not had a material
impact from the current COVID-19 lockdowns across Sydney
and other metropolitan areas in Australia and will continue
to monitor the changing nature of the pandemic and the
ongoing COVID-19 restrictions.
Outside the above, at the date of this report, there have been
no matters or circumstances other than those referred to in the
financial statements or notes thereto, that have arisen since
the end of the financial year, that have significantly affected,
or may significantly affect, the operations of the Group, the
results of those operations, or the state of affairs of the Group
in subsequent financial years.
Changes in state of affairs
During the financial year there was no significant change in the
state of affairs of the Group other than that referred to in the
financial statements or notes thereto.
Environmental management
Environmental management is an important component of
Downer’s Zero Harm philosophy and it places a strong emphasis
on meeting its environmental compliance obligations. Downer’s
environmental commitments are outlined in its Environmental
Sustainability Policy which can be found on the Downer website
at www.downergroup.com/board-policies.
Downer’s Urban Services focus delivers many environmental
and social benefits, including a move to lower capital intensive
and lower carbon activities, which supports Downer’s climate
change resilience and decarbonisation pathway. Downer is also
conscious of its social licence to operate – and responds to this
by improving the sustainability of the Company’s operations,
aiming to achieve Zero Harm to its people, minimise harm to the
environment, avoid legal liability and always strives to positively
impact Downer’s reputation, business value and ultimately
shareholder wealth.
Downer’s ability to manage the impacts of its activities on the
natural and built environment is fundamental to its long-term
success. Downer is committed to helping its customers succeed
by developing and delivering environmentally responsible
and sustainable solutions, so communities remain resilient
for the future.
Downer’s environmental management system is accredited to
AS/NZ ISO 14001:2015 and is integrated into its Group-wide
management system, The Downer Standard, which ensures a
consistent approach to identifying and controlling environmental
hazards and risks, and monitoring environmental performance
across the entire organisation. In addition, the environment
management system is audited, both internally and externally,
by independent third parties.
The effective management of Downer’s environmental aspects
and impacts is fundamental to the Company’s approach to
the delivery of its services. Significant emphasis is placed on
ensuring effective controls are implemented through the critical
risk program and continuous improvement through lessons
learned to sustain the natural environment for future generations.
Each Business Unit is required to have an Environment and
Sustainability Improvement Plan and strategies in place
supported by suitably qualified environment and sustainability
professionals. The Improvement Plans allocate internal
responsibilities for reducing the impact of its operations and
business activities on the environment.
Employee Discount Share Plan (ESP)
An ESP was instituted in June 2005. In accordance with the
provisions of the plan, as approved by shareholders at the
1998 Annual General Meeting, permanent full-time and part-time
employees of Downer EDI Limited and its subsidiary companies
who have completed six months service may be invited
to participate.
No shares were issued under the ESP during the years ended
30 June 2021 or 30 June 2020.
There are no performance rights or performance options,
in relation to unissued shares, that are outstanding.

DIRECTORS’ REPORT
Annual Report 2021 19
Directors’ meetings
The following table sets out the number of Directors’ meetings (including meetings of Board Committees) held during the 2021 financial
year and the number of meetings attended by each Director (while they were a Director or Board Committee member). During the year,
17 Board meetings, seven Audit and Risk Committee meetings, four Remuneration Committee meetings, three Zero Harm Committee
meetings and two Nominations and Corporate Governance Committee meetings were held. In addition, 29 ad hoc meetings (attended
by various Directors) were held in relation to various matters including tender reviews, major projects and due diligence for the
on-market share buy-back program and Spotless takeover offer and Entitlement Offer.
Board
Audit and Risk
Committee
Remuneration
Committee
DirectorHeld
1
AttendedHeld
1
AttendedHeld
1
Attended
R M Harding1717––44
G A Fenn1717––––
P S Garling
2
1717––44
T G Handicott
3,6
17167744
N M Hollows17177744
C G Thorne
5
11––––
P L Watson
4
171777––
Zero Harm
Committee
Nominations and Corporate
Governance Committee
DirectorHeld
1
AttendedHeld
1
Attended
R M Harding––22
G A Fenn33––
P S Garling
2
33––
T G Handicott
3
––22
N M Hollows––22
C G Thorne
5
––––
P L Watson
4
33––
1 These columns indicate the number of meetings held during the period each person listed was a Director or member of the relevant Board Committee.
2 Mr Garling was also Chairman of the Rail Projects Committee. The Rail Projects Committee ceased in April 2021.
3 Ms Handicott is also Chairman of the Disclosure Committee and the Buy-back Committee which meets on an unscheduled basis; and was Chair of the Due Diligence
Committee for the Spotless takeover offer and Entitlement Offer.
4 Mr Watson is also Chairman of the Tender Risk Evaluation Committee which meets on an unscheduled basis.
5 Mr Thorne retired as a Director on 13 July 2020.
6. Ms Handicott was unable to attend one unscheduled Board meeting which was convened at short notice.

20 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
Indemnification of officers and auditors
During the financial year, the Company paid a premium in
respect of a contract insuring the Directors of the Company, the
Company Secretary, and all officers of the Company and of any
related body corporate against a liability incurred as a Director,
secretary or executive officer to the extent permitted by the
Corporations Act 2001 (Cth).
The contract of insurance prohibits disclosure of the nature of
the liability and the amount of the premium.
Downer’s Constitution includes indemnities, to the extent
permitted by law, for each Director and Company Secretary
of Downer and its subsidiaries against liability incurred in the
performance of their roles as officers. The Directors and the
Company Secretaries listed on pages 4 to 6, individuals who act
as a Director or Company Secretary of Downer’s subsidiaries and
certain individuals who formerly held any of these roles also have
the benefit of the indemnity in the Constitution.
The Company has not otherwise, during or since the financial
year, indemnified or agreed to indemnify an officer or auditor of
the Company or of any related body corporate against a liability
incurred as such an officer or auditor.
Corporate Governance
In recognising the need for the highest standards of corporate
behaviour and accountability, the Board endorses the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations (ASX Principles). The Group’s
corporate governance statement is set out at pages 136 to 145
of this Annual Report.
Non-audit services
Downer is committed to audit independence. The Audit and
Risk Committee reviews the independence of the external
auditors on an annual basis. This process includes confirmation
from the auditors that, in their professional judgement, they are
independent of the Group. To ensure that there is no potential
conflict of interest in work undertaken by Downer’s external
auditor, KPMG, it may only provide services that are consistent
with the role of the Company’s auditor.
The Board has considered the position and, in accordance with
the advice from the Audit and Risk Committee, is satisfied that
the provision of non-audit services during the year is compatible
with the general standard of independence for auditors imposed
by the Corporations Act 2001 (Cth).
The Directors are of the opinion that the services as disclosed
below do not compromise the external auditor’s independence,
based on advice received from the Audit and Risk Committee,
for the following reasons:
–All non-audit services have been reviewed and approved to
ensure that they do not impact the integrity and objectivity
of the auditor
–None of the services undermine the general principles
relating to auditor independence as set out in the Institute
of Chartered Accountants in Australia and CPA Australia’s
Code of Conduct APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional and
Ethical Standards Board, including reviewing or auditing
the auditor’s own work, acting in a management or
decision-making capacity for the Company, acting as
advocate for the Company or jointly sharing economic
risks and rewards.
A copy of the Auditor’s Independence Declaration is set out on
page 52 of this Annual Report.
During the year, details of the fees paid or payable for non-audit
services provided by the auditor of the parent entity, its related
practices and related audit firms were as follows:
Non-audit services
2021
$
2020
$
Tax services205,795242,148
Advisory and due diligence services506,977468,318
712,772710,466
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ reports) Instrument 2016/191,
relating to the ‘rounding off’ of amounts in the Directors’ Report
and consolidated financial statements. Unless otherwise stated,
amounts have been rounded off to the nearest whole number
of millions of dollars and one place of decimals representing
hundreds of thousands of dollars.

DIRECTORS’ REPORT
Annual Report 2021 21
Remuneration Report
Chairman’s Letter
Dear Shareholders,
Downer’s 2021 Remuneration Report provides information about
the remuneration of its most senior executives and explains how
performance has been linked to reward outcomes at Downer for
the 2021 financial year.
At the last Annual General Meeting in November 2020, 99.3%
of all votes cast by shareholders were in favour of the 2020
Remuneration Report. The structure of the 2021 Remuneration
Report has been prepared with the same objective of providing
readers with a transparent view of key performance and
outcomes using the report structure adopted in previous years.
A strong future
Several decisions have been made since the last Chairman’s
Letter with a clear objective to create a stronger platform for
long-term, sustainable growth and position Downer as one of
the largest integrated providers of Urban Services in Australia
and New Zealand.
These include:
–Acquiring the remaining interests in Spotless
–Selling the RTL joint venture, Open Cut Mining West, Blasting
Services, Snowden, and Otraco businesses as well as exiting
the Underground Mining business and selling 70% of the
Laundries business, delivering on the strategy to exit the
capital-intensive Mining and Laundries businesses and
significantly decreasing the Group’s carbon emissions profile
–Exploring options to sell the Open Cut Mining East and
Hospitality businesses
–Commencing an on-market share buy-back to return surplus
funds from the divestment program to shareholders.
The acquisition of the remaining shares in Spotless continues
the reshaping of Downer as an Urban Services business with
resilient earnings, long-term customer relationships and more
predictable cash flows.
Many of the activities that Downer’s people perform every
day have potential risks and ensuring they remain safe is of
paramount importance. Downer’s Lost Time Injury Frequency
Rate at 30 June 2021 was 0.99 and the Total Recordable
Injury Frequency Rate was 2.60. Downer’s culture and our
commitment to continuous improvement in Zero Harm remain
core strategic objectives.
Key remuneration issues in 2021
Staff and management responded well to the COVID-19 pandemic
and, continued to work toward our Zero Harm objectives.
As outlined above, our executive team effected significant
transformation in 2021 that positions the Company for more
sustainable and less volatile revenues, earnings and cash flows
and which will maximize long term shareholder value.
The remaining core businesses are scalable, permitting our
balance sheet strength to be deployed for further investment,
including bolt-on acquisitions.
These transformative activities should position management
well for the 2021 long-term incentive (LTI) grant vesting in 2024.
While early into the performance period, current projections are
for vesting above 80%.
The Board also considered the base value for the EPS
component of the 2021 LTI plan, from which performance will be
measured. The Company’s policy is to add back any items that
were outside of the underlying statutory result when setting the
base value. The Board decided that this adjustment be increased
by an additional $10 million of earnings to ensure that any future
reward is appropriate.
The impact of major divestments or acquisitions on executive
remuneration can be significant. The Board’s overarching
concern is to ensure executives:
–Are accountable for delivery of the annual budget and
business plan; and
–Consider potential acquisition or divestment
opportunities without the influence of their impact
on remuneration outcomes.
For these and other reasons, where a transaction is both
material and unbudgeted, the Board’s policy is that it should
remove the impact of the transaction when calculating the key
performance indicators on which executive performance is
measured. This ensures that executives are ‘no better or worse
off’ as a result of the transaction.
In 2021, adjustments were made in respect of the acquisition
of the remaining interests in Spotless and the divestments,
in line with policy.

22 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
There were two items in 2021 which significantly affected
statutory results, which were the fair value adjustment on
the Downer Contingent Share Options issued as part of the
consideration for its acquisition of the remaining interests in
Spotless and the implementation of the International Financial
Reporting Standards Interpretations Committee (IFRIC)
decision on Configuration or Customisation Costs in a Cloud
Computing Arrangement which requires certain software
development costs to be expensed as they are incurred.
Link between Downer performance and
reward outcomes
Downer’s remuneration framework for key senior employees
has been very successful in aligning Downer’s strategy and
the creation of alignment between senior executives and
shareholders. As set out in this Remuneration Report, Downer’s
remuneration strategy continues to provide:
–A significant proportion of remuneration being ‘at risk’ linked
to clear, objective measures
–A profitability gateway as a precondition to any short-term
incentive entitlement
–For deferral of 50% of short-term incentive payments over
a further two-year period
–The delivery of a significant proportion of pay in equity.
We trust that this overview and the accompanying detailed
analysis are helpful when forming your own views on Downer’s
remuneration arrangements.

R M Harding T G Handicott
Chairman Remuneration Committee Chairman

DIRECTORS’ REPORT
Annual Report 2021 23
Remuneration Report – AUDITED
The Remuneration Report provides information about the remuneration arrangements for key management personnel (KMP), which
means Non-executive Directors and the Group’s most senior executives, for the year to 30 June 2021. The term ‘executive’ in this
Report means KMPs who are not Non-executive Directors.
The Report covers the following matters:
1. Year in Review
2. Details of Key Management Personnel
3. Remuneration Policy, Principles and Practices
4. Relationship Between Remuneration Policy and Company Performance
5. The Board’s Role in Remuneration
6. Description of Executive Remuneration
7. Details of Executive Remuneration
8. Executive Equity Ownership
9. Key Terms of Employment Contracts
10. Related Party Information
11. Description of Non-executive Director Remuneration.

24 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
1. Year in Review
1.1 Summary of changes to remuneration policy
Downer has continued to refine its remuneration policy during the period. The Board considered Company strategy and reward plans
based on performance measurement, competitive position and stakeholder feedback. Changes to policy are noted in the relevant
sections of this Report and are summarised in the table below.
PolicyEnhancements since 2020
Short-term incentive (STI) planThe environmental sustainability, critical risk and Zero Harm leadership measures for the Zero
Harm element have been further refined, building upon previous improvements to move with
and support growth in organisational maturity and ensure continual stretch and ongoing Zero
Harm improvement through requiring executives, in addition to achieving lagging indicator
performance, to:
–Undertake a materiality assessment and identify two material Sustainable Development
Goals, develop improvement plans for them and achieve their first-year targets
–Evidence that the relevant business unit is on track to achieve its science-based
decarbonisation target
–Review all critical controls for at least 2 critical risk activities amongst the top 5 critical risks
of the business unit and develop a plan to raise the effectiveness for the 5 least effective
critical controls for each of those activities
–Lead and finalise a Community of Practice to improve a critical control that has application
across the Group
–Achieve independent confirmation that critical control information is fully integrated into all
aspects of the operating management system and processes, including risk registers, and
the use of Bow Ties for investigations
–Complete all actions arising from high potential incidents within a defined timeframe
–Deliver Critical Control Verification Programs, perform a minimum number of critical
risk observations by senior executives within their business, across businesses, and in
partnership with clients and maintain an active program of audits and inspections
–Continuing from Downer’s implementation of an accredited Group-wide Zero Harm
management system, achieve independent confirmation of removal of legacy systems as
well as achievement of all certification requirements.
Long-term incentive (LTI) plan
– EPS component
The Company adds back any items that were outside of the underlying statutory result to the
earnings value when setting the base year value from which performance is measured over the
performance period. The Board recognised that the calculated starting value was impacted
by the events of 2020 and accordingly increased the base year earnings by an additional
$10 million to ensure that any future reward is appropriate.

DIRECTORS’ REPORT
Annual Report 2021 25
2. Details of Key Management Personnel
The following persons acted as Directors of the Company during or since the end of the most recent financial year:
DirectorRole
R M HardingChairman, Independent Non-executive Director
G A FennManaging Director and Chief Executive Officer
P S GarlingIndependent Non-executive Director
T G HandicottIndependent Non-executive Director
N M HollowsIndependent Non-executive Director
C G ThorneIndependent Non-executive Director (retired 13 July 2020)
P L WatsonIndependent Non-executive Director
The named persons held their current executive position for the whole of the most recent financial year, except as noted:
ExecutiveRole
S CinerariChief Operating Officer – Australian Operations
M J Ferguson Chief Financial Officer
S L KilleenChief Executive Officer – New Zealand
P J TompkinsChief Executive Officer – Spotless

26 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
3. Remuneration Policy, Principles and Practices
3.1 Executive remuneration policy
Downer’s executive remuneration policy and practices are summarised in the table below.
PolicyPractices aligned with policy
Retain experienced, proven
performers, and those
considered to have high
potential for succession
–Provide remuneration that is internally fair
–Ensure remuneration is competitive with the external market
–Defer a substantial part of pay contingent on continuing service and sustained performance.
Focus performance –Provide a substantial component of pay contingent on performance against targets
–Focus attention on the most important drivers of value by linking pay to their achievement
–Require profitability to reach a challenging level before any bonus payments can be made
–Provide a LTI plan component that rewards consistent Scorecard performance over multiple years
and over which executives have a clear line of sight.
Provide a Zero Harm
environment
–Incorporate measures that embody Zero Harm for Downer’s employees, contractors, communities
and the environment as a significant component of reward.
Manage risk –Encourage sustainability by balancing incentives for achieving both short-term and longer-term
results, and deferring equity-based reward vesting after performance has been initially tested
–Set stretch targets that finely balance returns with reasonable but not excessive risk taking and cap
maximum incentive payments
–Do not provide excessive ‘cliff’ reward vesting that may encourage excessive risk taking as a
performance threshold is approached
–Diversify risk and limit the prospects of unintended consequences from focusing on just one measure
in both short-term and long-term incentive plans
–Stagger vesting of deferred short-term incentive payments to encourage retention and allow
forfeiture of rewards that are the result of misconduct or material adjustments
–Retain full Board discretion to vary incentive payments, including in the event of excessive risk taking
–Restrict trading of vested equity rewards to ensure compliance with the Company’s Securities
Trading Policy.
Align executive interests
with those of shareholders
–Provide that a significant proportion of pay is delivered as equity so part of executive reward is linked
to shareholder value performance
–Provide a long-term incentive that is based on consistent Scorecard performance against challenging
targets set each year that reflect sector volatility and prevailing economic conditions as well as
relative TSR and earnings per share measures directly related to shareholder value
–Maintain a guideline minimum shareholding requirement for the Managing Director
–Exclude the short-term impact of unbudgeted and opportunistic acquisitions and divestments from
performance assessment to encourage agility and responsiveness
–Encourage holding of shares after vesting via a trading restriction for all executives and payment
of LTI components in shares
–Prohibit hedging of unvested equity and equity subject to a trading lock to ensure alignment with
shareholder outcomes.
Attract experienced,
proven performers
–Provide a total remuneration opportunity sufficient to attract proven and experienced executives
from secure positions in other companies and retain existing executives.

DIRECTORS’ REPORT
Annual Report 2021 27
4. Relationship Between Remuneration Policy
and Company Performance
4.1 Company strategy and remuneration
Downer’s business strategy includes:
–Maintaining focus on Zero Harm by continually improving
health, safety and environmental performance to achieve
Downer’s goal of zero work-related injuries and significant
environmental incidents
–Driving growth in core markets through focusing on serving
existing customers better across multiple products and
service offerings, growing capabilities and investing in
innovation, research and development and community
and Indigenous partnerships
–Creating new strategic positions through enhanced value
add services that improve propositions for customers and
exporting established core competencies into new overseas
markets with current customers of the Company
–Reducing risk and enhancing the Company’s capability
to withstand threats, take advantage of opportunities and
reduce cyclical volatility
–Obtaining better utilisation of assets and improved margins
through simplifying and driving efficiency
–Identifying opportunities to manage the Downer portfolio
through partnering, acquisition and divestment that deliver
long-term shareholder value
–Maintaining flexibility to be able to adapt to the changing
economic and competitive environment to ensure Downer
delivers shareholder value.
The Company’s remuneration policy complements this
strategy by:
–Incorporating Company-wide performance requirements
for both STI and LTI reward vesting for earnings (NPATA),
Free Cash Flow (FFO) and People measures to encourage
cross- divisional collaboration
–Incorporating performance metrics that focus on cash flow to
reduce working capital and debt exposure
–Setting NPATA, EBITA and FFO STI performance and
gateway requirements based on effective application of funds
employed to run the business for better capital efficiency
–Employing FFO as the cash measure for the STI to provide
more emphasis on control of capital expenditure
–Excluding the short-term impacts of opportunistic and
unbudgeted acquisitions and divestments on incentive
outcomes to encourage flexibility, responsiveness and
growth consistent with strategy
–Deferring 50% of STI awards to encourage sustainable
performance and a longer-term focus
–Incorporating consistent financial performance in the LTIP
Scorecard measure
–Emphasis on Zero Harm measures in the STI to maintain the
Company’s position as a Zero Harm leader and employer and
service provider of choice, thereby delivering a competitive
advantage
–Encouraging engagement with, and the development and
retention of, its people to help maintain a sustainable supply
of talent.
4.2 Remuneration linked to performance
The link to performance is provided by:
–Requiring a significant portion of executive remuneration to
vary with short-term and long-term performance
–Applying a profitability gateway to be achieved before an STI
calculation for executives is made
–Applying further Zero Harm gateways to be achieved
before calculating any reward for safety or environmental
performance
–Applying challenging financial and non-financial measures
to assess performance
–Ensuring that these measures focus management on
strategic business objectives that create shareholder value
–Delivering a significant proportion of payment in equity for
alignment with shareholder interests.
Downer measures performance on the following key corporate
measures:
–Earnings per share (EPS) growth
–Total shareholder return (TSR) relative to other ASX 100
companies (excluding ASX ‘Financials’ sector companies)
–G r o u p N PATA
–Divisional EBITA
–FFO
–Engagement with Downer’s people
–Zero Harm measures of safety and environmental
sustainability.
Remuneration for all executives varies with performance
on these key measures.

28 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
The following graph shows the Company’s performance compared to the median performance of the ASX 100 over the five-year period
to 30 June 2021.
Downer EDI TSR compared to S&P/ASX 100 median*
Jun
2016
Dec
2016
Jun
2017
Dec
2017
Jun
2018
Dec
2018
Jun
2021
Jun
2019
Dec
2019
Jun
2020
Dec
2020
S&P/ASX 100 median TSR
Downer EDI TSR
0
50
100
150
200
250
300
Total Shareholder Return (Indexed to 100)
* S&P/ASX 100 companies as at 30/06/2018
The graphs below illustrate Downer’s performance against key financial and non-financial performance indicators over the last five years.
Net profit after taxFree cash flow
-200
-100
0
100
200
300
235.5
1
181.5
247.8
1
258.3
2
(155.7)
$’m
2017
2018
2020
2019
2021
-300
-200
-100
0
100
200
300
400
500
431.5
3
203.0
3
178.3
3
185.7
4
(219.1)
$’m
2017
2018
2020
2019
2021
1 Adjusted for material unbudgeted transactions and individually
significant items.
2 Adjusted for material unbudgeted transactions.
3 Adjusted for material unbudgeted transactions, including payment for
Spotless shares.
4 Adjusted for material unbudgeted transactions.
Basic earnings per share
5
Safety
6
-30
-20
-10
0
10
20
30
40
50
25.4
35.1
10.5
42.1
(26.1)
Cents per share
2017
2018
2020
2019
2021
1000
1200
Lost Time Injuries per 1,000,000 hours
Total Recordable Injuries
per 1,000,000 hours
2017
2018
2020
2019
2021
0.0
0.2
0.4
0.6
0.8
1.0
1.2
0.55
0.99
0.57
0.78
0.67
0
2
4
6
8
10
12
TRIFRLTIFR
5 Historical basic earnings per share were restated as a result of 106.6 million
shares issued from the capital raising as part of the acquisition of the remaining
shares in Spotless. The weighted average number of shares (WANOS) to
calculate EPS was adjusted by an adjustment factor of 0.9817.
6 Safety data for 2021 includes Hawkins and Spotless. Safety data for 2017
to 2020 excludes Hawkins and Spotless.

DIRECTORS’ REPORT
Annual Report 2021 29
5. The Board’s Role in Remuneration
The Board engages with shareholders, management and other stakeholders as required, to continuously refine and improve executive
and Director remuneration policies and practices.
Two Board Committees deal with remuneration matters. They are the Remuneration Committee and the Nominations and Corporate
Governance Committee.
The role of the Remuneration Committee is to review and make recommendations to the Board in relation to executives in respect of:
–Executive remuneration and incentive policy
–Remuneration of senior executives of the Company
–Executive reward and its impact on risk management
–Executive incentive plans
–Equity-based incentive plans
–Superannuation arrangements
–Recruitment, retention, performance measurement and termination policies and procedures for all Key Management Personnel and
senior executives reporting directly to the Managing Director
–Disclosure of remuneration in the Company’s public materials including ASX filings and the Annual Report
–Retirement payments for all Key Management Personnel and senior executives reporting directly to the Managing Director.
The Nominations and Corporate Governance Committee is responsible for recommending and reviewing remuneration arrangements
for the Executive Director and Non-executive Directors of the Company.
Each Committee has the authority to engage external professional advisors without seeking approval of the Board or management.
During the reporting period, the Remuneration Committee retained Guerdon Associates Pty Ltd as its advisor. Guerdon Associates Pty
Ltd does not provide services to management and is considered to be independent.

30 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
6. Description of Executive Remuneration
6.1 Executive remuneration structure
Executive remuneration has a fixed component and a component that varies with performance.
The variable component ensures that a proportion of pay varies with performance. Performance is assessed annually for performance
periods covering one year and three years. Payment for performance assessed over one year is an STI. Payment for performance over a
three-year period is an LTI.
In order for maximum STIs to be awarded, performance must achieve a stretch goal that is a clear margin above the planned budget for
the period. This enables the Company to attract and retain better performing executives, and ensures pay outcomes are aligned with
shareholder returns.
Target STIs are less than the maximum STI. Target STI is payable on achievement of planned objectives. For executives, the target
STI is 75% of the maximum STI. The maximum total remuneration that can be earned by an executive is capped. The maximums are
determined as a percentage of fixed remuneration.
Executive position
Target STI
% of fixed
remuneration
Maximum STI
% of fixed
remuneration
M a x i m u m LT I
% of fixed
remuneration
Maximum total
performance
based pay as a
% of fixed
remuneration
Managing Director75100100200
Executives appointed prior to 20117510075175
Executives appointed from 201156.257550125
The proportions of STI to LTI take into account:
–Market practice
–The service period before executives can receive equity rewards
–The behaviours that the Board seeks to encourage through direct key performance indicators
–The guideline for the Managing Director to maintain a shareholding as a multiple of pay after long-term incentive rewards
have vested.
6.2 Fixed remuneration
Fixed remuneration is the sum of salary and the direct cost of providing employee benefits, including superannuation, motor vehicles,
car parking, living away from home expenses and fringe benefits tax.
The level of remuneration is set to be able to retain proven performers and when necessary to attract the most suitable external
candidates from secure employment elsewhere.
Remuneration is benchmarked against a peer group of direct competitors and a sector peer group. While market levels of remuneration
are monitored on a regular basis, there is no contractual requirement or expectation that any adjustments will be made.
No adjustment has been made to remuneration for the Managing Director since July 2012, other than a voluntarily reduction in
his fixed remuneration by 50% for the period 1 March 2020 to 30 June 2020 in recognition of the likely impact of the coronavirus
pandemic on Downer and its people. The funds from this voluntary remuneration reduction, along with contributions from Directors and
other executives, were used to establish a fund to provide financial assistance to Downer and Spotless employees experiencing severe
hardship.

DIRECTORS’ REPORT
Annual Report 2021 31
6.3 Short-term Incentive
6.3.1 STI tabular summary
The following table outlines the major features of the 2021 STI plan.
Purpose of STI plan –Focus performance on drivers of shareholder value over 12-month period
–Improve Zero Harm and people related results
–Ensure a part of remuneration costs varies with the Company’s 12-month performance.
Minimum performance ‘gateway’
before any payments can be made
Achievement of a gateway based on budgeted Group NPATA for corporate executives and
Division EBITA for divisional heads.
Maximum STI that can be earned –KMP appointed pre-2011: up to 100% of fixed remuneration
–KMP appointed from 2011: up to 75% of fixed remuneration.
Percentage of STI that can be
earned on achieving target
expectations
75% of the maximum. For an executive to receive more, performance in excess of target
expectations will be required.
Individual Performance Modifier
(IPM)
–An IPM may be applied based on an executive’s individual key performance indicators
and relative performance
–Moderate individual performance may result in an IPM of less than 1 or outstanding
performance may result in an IPM greater than 1. The IPM must average 1 across
all participants
–Application of an IPM cannot result in an award greater than the maximum STI% level set out
in Section 6.1.
Discretion to vary paymentsThe Board, in its discretion, may vary STI payments by up to + or – 100% from the payment
applicable to the level of performance achieved, up to the maximum for that executive.
Performance period1 July 2020 to 30 June 2021.
Performance assessedAugust 2021, following audit of accounts.
Additional service period after
performance period for payment
to be made
50% of the award is deferred with the first tranche of 25% vesting one year following award and
the second tranche of 25% vesting two years following award.
Payment timingSeptember 2021 for the first cash payment of 50% of the award. The deferred components of
the STI payments will be paid one and two years following the award, in equal tranches of 25%
of the award.
Form of paymentCash for initial payment.
The value of deferred components will be settled in cash or shares, net of personal tax. An
eligible leaver’s deferred components will be settled in shares or in cash in the sole and absolute
discretion of the Board.
Performance requirementsGroup NPATA and divisional EBITA, FFO, Zero Harm and people measures.
Board discretionThe Board may exercise discretion to:
–Reduce partly or fully the value of the deferred components that are due to vest in certain
circumstances, including where an executive has acted inappropriately or where the Board
considers that the financial results against which the STI performance measures were tested
were incorrect in a material respect or have been reversed or restated
–Settle deferred components in shares or cash.
New recruitsNew executives (either new starts or promoted employees) are eligible to participate in the STI
in the year in which they commence in their position with a pro-rata entitlement.
Terminating executivesThere is no STI entitlement where an executive’s employment terminates prior to the end of
the financial year. Where an executive’s employment terminates prior to the vesting date, the
unvested deferred components will be forfeited. However, the Board has retained discretion
to vest deferred awards, in the form of shares or cash, in their ordinary course where the
executive is judged to be an eligible leaver.

32 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
6.3.2 STI overview
The STI plan provides for an annual payment that varies with annual performance. This has been applied to performance measured
over the Company’s financial year to 30 June 2021.
The basis of the plan is designed to align STI outcomes with financial results. No STI is paid unless a minimum profit gateway is met.
For corporate executives, the gateway is based on the Group budgeted profit target. For Divisional executives, the gateway is based
on the Division budgeted profit target. Profit for this purpose is defined as NPATA for Corporate executives and EBITA for Divisional
executives. This minimum must be at a challenging level to justify the payment of STI to an executive and deliver an acceptable return
for the funds employed in running the business. Positive and negative impacts from material but unbudgeted and opportunistic
transactions are excluded from gateway assessment. Whether to exclude the impact of significant items (positive or negative) is
considered on a case by case basis.
As noted in Section 6.1, the maximum STI that can be earned is capped to minimise excessive risk taking.
Deferral is a key feature as part of the STI structure. Payment of 50% of the award is paid at the time of award in cash and the remaining
50% of the award earned is deferred over two years.
The first payment of 50% of the award will be in cash after finalisation of the annual audited results. The payment of the deferred
component of the award will be in the form of two tranches, each to the value of 25% of the award.
The deferred components represent an entitlement to cash or shares, subject to the satisfaction of a continued employment condition.
The first tranche will vest one year following award and the second tranche will vest two years following award, provided an executive
remains employed by the Group at the time of vesting.
The value of deferred components will generally be settled in shares, net of applicable personal tax. This is designed to encourage
executive share ownership, and not adversely impact executives who have to meet their taxation obligations arising from the vesting
of the deferred components. However, the Board retains the discretion to vest deferred awards, in the form of shares or cash, and will
generally have regard to an executive’s individual circumstances and existing level of equity ownership.
No dividend entitlements are attached to the deferred components during the vesting period.
Where an executive ceases employment with the Group prior to the vesting date, the deferred components will be forfeited. However,
the Board has retained the discretion to vest deferred awards, in the form of shares or cash, in their ordinary course where the executive
is judged to be an eligible leaver.
6.3.3 How STI payments are assessed
Target STI plan percentage of payAn individual’s target incentive under the STI plan is expressed as a percentage of fixed
remuneration. The STI plan percentage is set according to policy tabulated in Section 6.1.
Organisational or divisional
scorecard result
As a principle, ‘target’ achievement would be represented at budget. Thresholds and maximums
are also set.
Individual Performance Modifier
(IPM)
At the end of the plan year, eligible employees are provided with an IPM against their key
performance indicators and relative performance. Individual key performance indicators are set
between the individual and the Managing Director (if reporting to the Managing Director) or the
Board (if the Managing Director) at the start of the performance period. IPMs must average to 1.
STI plan incentive calculationFixed remuneration x maximum STI plan percentage x scorecard result x IPM.
6.3.4 STI performance requirements
Overall performance is assessed on Group NPATA, Divisional EBITA, FFO, Zero Harm and a measure of employee engagement.
NPATA and EBITA include joint ventures and associates and include, inter alia, changes in accounting policy. NPATA and EBITA provide
transparency on operational business performance, align with how Downer presents its results to the market and allow for easier
understanding of alignment between performance and remuneration outcomes. The Board considers this approach to be appropriate as:
–The Board is the ultimate decision maker for transactions that give rise to acquired intangibles that result in the amortisation expense
–The impact of amortisation of acquired intangibles, which in nature relate to long-term strategic decisions, remains reflected in
incentive outcomes through the EPS measure in the LTI plan.

DIRECTORS’ REPORT
Annual Report 2021 33
FFO is defined as net cash from operating activities (i.e. EBIT plus non-cash items in operating profit plus distributions received
from JVs or associates plus movements in working capital plus movements in operating assets less net interest less tax paid), less
investing cash flow.
Zero Harm reflects Downer’s commitment to safety and environmental, social and governance matters. The Zero Harm element
includes safety and environmental measures, underscoring Downer’s commitment to customers, employees, regulators and the
communities in which it operates.
The measures for the Zero Harm element of the scorecard are as follows:
MeasureTarget
Safety
Total Recordable Injury
Frequency Rate (TRIFR)
Lost Time Injury Frequency Rate
( LT I F R )
Achieve TRIFR and LTIFR below defined threshold for area of responsibility. TRIFR is calculated
as the number of recordable injuries per million hours calculated over 12 months.
LTIFR is calculated as the number of lost time injuries per million hours calculated over 12 months.
Environmental
Sustainability and GHG emissions
reduction
Undertake a materiality assessment and identify two material Sustainable Development Goals,
develop improvement plans for them and achieve their first-year targets.
Evidence that the relevant business unit is on track to achieve its science-based decarbonisation
target.
Critical RiskReview all critical controls for at least 2 critical risk activities amongst the top 5 critical risks of the
business unit and develop a plan to raise the effectiveness for the 5 least effective critical controls
for each of those activities.
Lead and finalise a Community of Practice to improve a critical control that has application
across the Group.
Achieve independent confirmation that critical control information is fully integrated into all
aspects of the operating management system and processes, including risk registers, and the
use of Bow Ties for investigations.
Zero Harm LeadershipCompletion of all actions arising from high potential incidents within a defined timeframe.
Delivery of Critical Control Verification Programs, performance of a minimum number of
critical risk observations by senior executives within their business, across businesses, and
in partnership with clients; and maintenance of an active program of audits and inspections.
Continuing from Downer’s implementation of a single accredited Group-wide Zero Harm
management system, achieve independent confirmation of removal of legacy systems as well
as achievement of all certification requirements.
Should a workplace fatality or serious environmental incident occur, the relevant safety or environmental portion of the STI is foregone.
Weightings applied to the 2021 STI scorecard measures for all executives, including the Managing Director, are set out in the table below.
ExecutiveG r o u p N PATADivisional EBITAFree cash flowZero HarmPeople
Corporate30%–30%30%10%
Business Unit7. 5%22.5%30%
( 7. 5% Group,
22.5% Division)
30%10%
(3% Group,
7% Division)
The Board has discretion to vary STI payments by up to + or – 100% from the payment applicable to the level of performance achieved,
up to the maximum for that executive.
Specific details of STI performance outcomes are set out in Section 7.3.
The Board retains the right to vary from policy in exceptional circumstances. However, any variation from policy and the reasons for it
will be disclosed.

34 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
6.4 Long-term Incentive
6.4.1 LTI tabular summary
The following table outlines the major features of the 2021 LTI plan.
Purpose of LTI plan –Focus performance on drivers of shareholder value over three-year period
–Manage risk by countering any tendency to over-emphasise short-term performance to the
detriment of longer-term growth and sustainability
–Ensure a part of remuneration costs varies with the Company’s longer-term performance.
Maximum value of equity
that can be granted
–Managing Director: 100% of fixed remuneration
–KMP appointed pre-2011: 75% of fixed remuneration
–KMP appointed from 2011: 50% of fixed remuneration.
Performance period1 July 2020 to 30 June 2023.
Performance assessedAugust 2023.
Additional service period
after performance period
for shares to vest
Performance rights for which the relevant performance vesting condition is satisfied will not vest unless
executives remain employed with the Group on 30 June 2024.
Performance rights vestJuly 2024.
Form of award and paymentPerformance rights.
Performance conditionsThere are three performance conditions. Each applies to one-third of the performance rights granted to
each executive.
Relative TSR
The relative TSR performance condition is based on the Company’s TSR performance relative to the
TSR of companies comprising the ASX 100 index, excluding financial services companies, at the start of
the performance period, measured over the three years to 30 June 2023.
The performance vesting scale that will apply to the performance rights subject to the relative TSR test
is shown in the table below:
Downer EDI Limited’s
TSR Ranking
Percentage of performance rights subject to TSR condition
that qualify for vesting
< 50th percentile0%
50th percentile30%
Above 50th and below
75th percentile
Pro-rata so that 2.8% of the performance rights in the tranche will
vest for every 1 percentile increase between the 50th percentile
and 75th percentile
75th percentile and above100%

DIRECTORS’ REPORT
Annual Report 2021 35
Performance conditionsEPS growth
The EPS growth performance condition is based on the Company’s compound annual EPS growth over
the three years to 30 June 2023.
The performance vesting scale that will apply to the performance rights subject to the EPS growth test
is shown in the table below:
Downer EDI Limited’s EPS
compound annual growth
Percentage of performance rights subject to EPS condition
that qualify for vesting
< 5%0%
5%30%
Above 5% to < 10%Pro-rata so that 14% of the performance rights in the tranche will vest
for every 1% increase in EPS growth between 5% and 10%
10% or more100%
Scorecard
The Scorecard performance condition is based on the Group’s NPATA and FFO for each of the
three years to 30 June 2023. These measures are considered to be key drivers of shareholder value.
Accordingly, they have been included in the LTI plan to reward sustainable financial performance.
The performance vesting scale that will apply to the performance rights subject to the Scorecard test
is shown in the table below:
Scorecard result
Percentage of performance rights subject to Scorecard condition
that qualify for vesting
< 90%0%
90%30%
Above 90% to < 110%Pro-rata so that 3.5% of the performance rights in the tranche will vest
for every 1% increase in the Scorecard result between 90% and 110%
110% or more100%
How performance rights and
shares are acquired
The rights are issued by the Company and held by the participant subject to the satisfaction of
the vesting conditions. The number of rights held may be adjusted pro-rata, consistent with ASX
adjustment factors, for any capital restructures.
If the rights vest, executives can exercise them to receive shares that are normally acquired on-market.
The Board retains the discretion to vest awards in the form of cash.
Treatment of dividends
and voting rights on
performance rights
Performance rights do not have voting rights or accrue dividends.
Restriction on hedgingHedging of entitlements under the plan by executives is not permitted.
Restriction on tradingVested shares arising from the rights may only be traded with the approval of the Remuneration
Committee. Approval requires that trading complies with the Company’s Securities Trading Policy.
New participantsNew executives (either new starters or promoted employees) are eligible to participate in the LTI on the
first grant date applicable to all executives after they commence in their position. An additional pro-rata
entitlement if their employment commenced after the grant date in the prior calendar year may be
made on a discretionary basis.
Ceasing executivesWhere an executive ceases employment with the Group prior to the vesting date, the rights will
be forfeited. However, the Board will retain the discretion to retain executives in the plan in certain
circumstances including the death, total and permanent disability or retirement of an executive.
In these circumstances, the Board will also retain the discretion to vest awards in the form of cash.
Change of controlOn the occurrence of a change of control event and providing at least 12 months of the grants’
performance period have elapsed, unvested performance rights pro-rated with the elapsed service
period are tested for vesting with performance against the relevant relative TSR, EPS growth or
Scorecard requirements for that relevant period. Vesting will occur to the extent the performance
conditions are met. Performance rights that have already been tested, have met performance
requirements and are subject to the completion of the service condition, fully vest.

36 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
6.4.2 LTI overview
Executives participate in a LTI plan. This is an equity-based
plan that provides for a reward that varies with Company
performance over three-year measures of performance.
Three-year measures of performance are considered to be the
maximum reasonable time period for setting incentive targets
for earnings per share and are generally consistent with market
practice in the Company’s sector.
The payment is in the form of performance rights. The
performance rights do not have any dividend entitlements or
voting rights. If all the vesting requirements are satisfied, the
performance rights will vest and the executives will receive
shares in the Company or cash at the discretion of the Board.
The 2021 LTI represents an entitlement to performance rights
to ordinary shares exercisable subject to satisfaction of both a
performance condition and a continued employment condition.
Grants will be in three equal tranches, with each tranche subject
to an independent performance requirement. The performance
requirements for each tranche will share two common features:
–Once minimum performance conditions are met, the
proportion of performance rights that qualify for vesting
commences at 30% and gradually increases pro-rata with
performance. This approach provides a strong motivation
for meeting minimum performance, but avoids a large ‘cliff’
which may encourage excessive risk taking
–The maximum reward is capped at a ‘stretch’ performance
level that is considered attainable without excessive
risk taking.
Performance for the 2021 LTI grants will be measured over the
three-year period to 30 June 2023.
The proportion of performance rights that can vest will be
calculated in August 2023, but executives will be required
to remain in service until 30 June 2024 to be eligible to
receive any shares.
Where an executive ceases employment with the Group prior to
the vesting date, the rights will be forfeited. However, the Board
will retain the discretion to retain executives in the plan in certain
circumstances such as the death, total and permanent disability
or retirement of an executive. In these circumstances, the Board
will also retain the discretion to vest awards in the form of cash.
After vesting, any shares will remain subject to a trading restriction
that is governed by the Company’s Securities Trading Policy.
All unvested performance rights will be forfeited if the Board
determines that an executive has committed an act of fraud,
defalcation or gross misconduct or in other circumstances at
the discretion of the Board.
6.4.3 Performance requirements
One tranche of performance rights in the 2021 LTI grant will
qualify for vesting subject to performance relative to other
companies, while the other two tranches of performance rights
will qualify for vesting subject to separate, independent absolute
performance requirements.
The relative performance requirement applicable to the first
tranche of performance rights is based on total shareholder
return (TSR). TSR is calculated as the difference in share
price over the performance period, plus the value of shares
earned from reinvesting dividends received over this period,
expressed as a percentage of the share price at the beginning
of the performance period. If the TSR for each company in the
comparator group is ranked from highest to lowest, the median
TSR is the percentage return to shareholders that exceeds the
TSR for half of the comparison companies. The 75th percentile
TSR is the percentage return required to exceed the TSR for
75% of the comparison companies.

DIRECTORS’ REPORT
Annual Report 2021 37
Performance rights in the tranche to which the relative TSR
performance requirement applies will vest pro-rata between the
median and 75th percentile. That is, 30% of the tranche vest at
the 50th percentile, 32.8% at the 51st percentile, 35.6% at the
52nd percentile and so on until 100% vest at the 75th percentile.
The comparator group for the 2021 LTI grants will be the
companies, excluding financial services companies, in the
ASX 100 index as at the start of the performance period on
1 July 2020. Consideration has been given to using a smaller
group of direct competitors for comparison, however:
–Limiting the comparator group to a small number of direct
competitors could result in very volatile outcomes from
period to period
–Management’s strong focus on improving the Company’s
ranking among ASX 100 companies has become embedded
in Company culture, so reinforcing this rather than trying to
dislodge it with another focus was considered desirable.
The absolute performance requirement applicable to the
second tranche of performance rights is based on Earnings per
Share (EPS) growth over the three-year performance period
to 30 June 2023. The EPS measure is based on AASB 133
Earnings per Share.
The tranche of performance rights dependent on the EPS
performance condition will vest pro-rata between 5% compound
annual EPS growth and 10% compound annual EPS growth.
Vesting applies on a pro-rata basis from 30% upon meeting the
minimum compound annual EPS growth performance level of 5%
to 100% at 10% compound annual EPS growth. Capping reduces
the tendency for excessive risk taking and volatility that may
be encouraged if the annual compound EPS growth bar is set
above 10%.
The absolute performance requirement applicable to the
third tranche of performance rights is based on the Scorecard
condition over the three-year performance period to
30 June 2023.
The Scorecard condition is designed to:
–Strengthen retention through the setting of challenging
targets on an annual basis that reflect prevailing market
conditions, for a portion of LTI awards
–Align with the STI plan to encourage a long-term approach
to achieving annual financial performance targets
–Improve the line of sight for executives so as to increase
motivation and focus on consistent performance
–Focus on performance sustainability through reward of
consistent achievement of absolute performance targets
over the long term.
The Scorecard condition is comprised of two independent
absolute components of equal weighting. These components
are based on Group NPATA and Group FFO.
The performance of each component will be measured over the
three-year period to 30 June 2023.
NPATA and FFO targets are set at the beginning of each of the
three financial years. The performance of each component will
be assessed each year relative to the targets. Performance of
each component will be determined as the average of the annual
performance assessments for the three years. The performance
rights will vest on a pro-rata basis from 30% upon meeting the
minimum three-year average component performance level
of 90% of target to 100% at the capped maximum three-year
average component performance level of 110% of target.
The processes and timing applicable for the Scorecard measure
are outlined below:
TimingActions
At the beginning
of the plan
Weighting of components is
determined. In 2021 the components
are equally weighted.
At the beginning of
each financial year
NPATA and FFO target performance
levels are set.
At the end of each
financial year
–Calculate actual performance
–Assess actual performance compared
to target to determine performance
percentage for the year.
At the end of
three years
–Calculate average annual performance
for each component
–Calculate award based on performance
against the vesting range.
At the end of
four years
Consider the continued service condition
and determine vesting.

38 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
6.4.4 Post-vesting shareholding guideline
The Managing Director is required to continue to hold shares
after they have vested until the shareholding guideline has been
attained. This guideline requires that the Managing Director
holds vested long-term incentive shares equal in value to 100%
of his fixed remuneration. The Managing Director’s shareholding
is currently well in excess of the guideline.
The guideline requirement has been developed to reinforce
alignment with shareholder interests. The Remuneration
Committee has discretion to allow variations from this
guideline requirement.
The Board retains the right to vary from policy in exceptional
circumstances. However, any variation from policy and the
reasons for it will be disclosed.
6.5 Treatment of major transactions
Downer has delivered significant shareholder value through a
long history of strategic mergers, acquisitions and divestments.
On each occasion, the Board considers the impact of these
transactions. Where a transaction is both material and
unbudgeted, the Board considers whether it is appropriate
to adjust for its impact on the key performance indicators on
which executive performance is measured. The objective of any
adjustment is to ensure that opportunities to add value through
an opportunistic divestment or acquisition should not be
fettered by consideration of the impact on incentive payments.
That is, executives should be ‘no better or worse off’ as a result
of the transaction. No adjustments are made for market reactions
to a transaction as the Board believes that management is
accountable for those outcomes.
The Board considers this approach to be appropriate as it:
–Ensures that executives and the Board consider these
transactions solely based on the best interests of Downer
–Means executives remain accountable for transaction
execution and post-transaction performance from the next
budget cycle
–Ensures that executives complete opportunistic transactions
that are in the long-term interests of shareholders
–Is consistent with the Board’s long-term view when
considering the value of major transactions to
Downer’s shareholders
–Ensures Downer remains agile and responsive in managing
its portfolio by pursuing opportunities as and when they
emerge rather than being constrained by the annual
budget process.
In assessing Zero Harm performance of executives, the results
of acquired businesses are excluded for a period of 12 months
post acquisition to ensure that management is accountable for
the objectives set in the annual business planning process and
in recognition that an integration period during which Downer’s
Zero Harm framework (including systems, processes, definitions
and measurement and reporting methods) is implemented
through the acquired business is appropriate. Where this
transition to Downer’s framework takes place over a longer
period due to the complexity of the implementation or the
maturity profile of the acquired business, the Board will consider
an extension to a more appropriate period. During 2021, the
integration of Hawkins and Spotless into the Downer Zero Harm
Framework reached an appropriate stage for their inclusion in
the Group’s lagging performance measures.
6.6 Treatment of significant items
From time to time, Downer’s performance is impacted by
significant items. Where these occur, the Board considers
whether to adjust for their impact (positive or negative) on a
case by case basis, having regard to the circumstances relevant
to each item.
The Board considers this approach to be appropriate as it
ensures that executives and the Board make decisions solely
based on the best interests of Downer.

DIRECTORS’ REPORT
Annual Report 2021 39
7. Details of Executive Remuneration
7.1 Remuneration received in relation to the 2021 financial year
Executives receive a mix of remuneration during the year, comprising fixed remuneration, an STI paid in cash, and a LTI in the form of
performance rights that vest four years later, subject to meeting performance and continued employment conditions.
The table below lists the remuneration actually received in relation to the 2021 financial year, comprising fixed remuneration, cash STIs
relating to 2021, deferred STIs payable in 2021 in respect of prior years and the value of LTI grants that vested during the 2021 financial
year. This information differs to that provided in the statutory remuneration table at Section 7.2 which shows the accounting expense
of LTIs and deferred STIs for 2021 determined in accordance with accounting standards rather than the value of LTI grants that vested
during the year.
Fixed
Remuneration
1
$
Cash Bonus
paid or
payable in
respect of
current year
2
$
Deferred Bonus
paid or payable
in respect of
prior years
4
$
To t a l
payments
$
Equity that
vested during
2021
3
$
To t a l
remuneration
received
$
G A Fenn2,084,302861,500373,4003,319,2021,195,7464,514,948
S Cinerari1,119,923473,825240,7901,834,538448,4002,282,938
M J Ferguson1,000,000323,063140,0251,463,088224,2041,687, 292
S L Killeen938,299306,360150,5731,395,232–1,395,232
P J Tompkins1,000,000321,22599,7791,421,004209,2511,630,255
6,142,5242,285,9731,004,5679,433,0642,077,60111,510,665
1 Fixed remuneration comprises salary and fees, payment of leave entitlements, non-monetary benefits and superannuation payments.
2 Cash Bonus paid or payable in respect of current year represents cash payments in relation to the 2021 financial year. These comprise the 50% cash component of the
award. The remaining 50% of the total award is deferred as described in Section 6.3.
3 Represents the value of performance rights granted in previous years that vested during the year, calculated as the number of performance rights that vested multiplied
by the closing market prices of Downer shares on the vesting date.
4 Deferred Bonus represents the deferred cash bonus amount to be paid in September 2021, being the second deferred component of the 2019 award, being 25% of the award.

40 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
7.2 Remuneration of executive key management personnel required under the Corporations Act 2001 (Cth)
2021Short-term employee benefitsPost-employment benefits
Salary
and fees
$
Cash
Bonus
paid or
payable
in respect
of current
year
1
$
Deferred
Bonus
paid or
payable
3
$
Non-
monetary
$
Super-
annuation
$
Other
benefits
$
Te r m -
ination
Benefits
$
Subtotal
$
Share-
based
payment
transac-
tions
2
$
To t a l
$
G A Fenn1,723,306861,500483,425339,30221,694––3,429,227(116,059)3,313,168
S Cinerari1,078,306473,82527 7,69115,56626,051––1,871,439(61,165)1,810, 274
M J Ferguson965,904323,063181,28412,40221,694––1,504,3474,0981,508,445
S L Killeen905,749306,36017 7, 8 417232 ,478––1,422,5001,7331,424,233
P J Tompkins959,525321,225167,10318,78121,694––1,488,32821,0391,509,367
5,632,7902,285,9731 , 287, 344386,123123,611––9,715,841(150,354)9,565,487
1 Cash Bonus paid or payable in respect of current year represents cash payments in relation to the 2021 financial year. These comprise the 50% cash component of the award.
2 Represents the value of vested and unvested equity expensed during the period including reversal for forfeited equity incentives and the probability of the incentives
vesting, in accordance with AASB 2 Share-based Payment, related to grants made to the executive, as outlined in Section 8.3. Vesting of the majority of securities remains
subject to significant performance and service conditions as outlined in Section 6.4.
3 Deferred Bonus represents the value of deferred components attributable to the 2021 financial year based on amortisation of deferred components over the period from the
commencement of the relevant performance year to the end of financial year to which payment of the relevant deferred component relates.
In recognition of the likely impact of COVID-19 on Downer and its people, the Managing Director, Chief Executive Officer – New Zealand
and Chief Executive Officer – Spotless decided to voluntarily reduce their fixed remuneration by 50% for the period 1 March 2020 to
30 June 2020 and the other KMP decided to voluntarily reduce their fixed remuneration by 30% for the same period.
2020Short-term employee benefitsPost-employment benefits
Salary
and fees
$
Cash
Bonus
paid or
payable
in respect
of current
year
2
$
Deferred
Bonus
paid or
payable
4
$
Non-
monetary
$
Super-
annuation
$
Other
benefits
$
Te r m -
ination
Benefits
$
Subtotal
$
Share-
based
payment
transac-
tions
3
$
To t a l
$
G A Fenn1,490,664–451,217316,82121,003––2,279,705793,5203,073,225
S Cinerari996,497–282,75516,30130,063––1,325,616332,5561,658,172
M J Ferguson891,596–161,32812,40221,003––1,086,329208,5781,294,907
S L Killeen804,223–161,745–37, 368––1,003,336278,3691,281,705
B C Petersen
1
162,430–30,976–3,162––196,56851,454248,022
P J Tompkins843,346–116 , 5 4113,27721,003––994,167213,7661, 207,93 3
5,188,756–1,204,562358,801133,602–-6,885,7211,878,2438,763,964
1 Amounts represent the expense relating to the period during which the individual was a KMP.
2 Cash Bonus paid or payable in respect of current year represents cash payments in relation to the 2020 financial year. These comprise the 50% cash component of the award.
3 Represents the value of vested and unvested equity expensed during the period including reversal for forfeited equity incentives and the probability of the incentives
vesting, in accordance with AASB 2 Share-based Payment, related to grants made to the executive, as outlined in Section 8.3 and an estimate of the fair value of grants to be
made in respect of the 2020 financial year attributable to the period. Vesting of the majority of securities remains subject to significant performance and service conditions
as outlined in Section 6.4.
4 Deferred Bonus represents the value of deferred components attributable to the 2020 financial year based on amortisation of deferred components over the period from the
commencement of the relevant performance year to the end of financial year to which payment of the relevant deferred component relates.

DIRECTORS’ REPORT
Annual Report 2021 41
7.3 Performance related remuneration
7.3.1 Performance outcomes required under the Corporations Act 2001 (Cth)
The table below lists the proportions of remuneration paid during the year ended 30 June 2021 that are performance and
non-performance related and the proportion of STIs that were earned during the year ended 30 June 2021 due to the
achievement of the relevant performance targets.
Proportion of 2021 remuneration2021 Short-term incentive
Performance
Related
%
Non-performance
Related
%
Paid
%
Forfeited
%
G A Fenn
1
37%63%86%14%
S Cinerari
1
38%62%86%14%
M J Ferguson34%66%86%14%
S L Killeen34%66%88%12%
P J Tompkins
1
34%66%86%14%
1 Performance related portion includes the reversal of expense for forfeited equity incentives described in Section 6.4.

42 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
7.3.2 STI performance outcomes
In order for an STI to be paid, a minimum of 90% of the budgeted profit target must be met. For Corporate executives, the hurdle is
90% of the Group budgeted profit target. Profit for this purpose is defined as NPATA. For Divisional executives, the hurdle is 90% of the
Division budgeted profit target. Profit for this purpose is defined as EBITA.
Specific STI financial and commercial targets remain commercially sensitive and so have not been reported.
The following table summarises the average performance achieved by the KMP across each element of the scorecard.
Group
N PATA
Divisional
E B I TA
Group
FFO
Divisional
FFO
Zero
HarmPeople
Weighting of scorecard elementCorporate30.030.030.010.0
Division7. 522.57. 522.530.010.0
Percentage of the element achievedCorporate7 7. 2100.0100.030.0
Division
1
7 7. 289.9100.0100.093.824.8
1 Performance includes the results for each Division for each element, even if the EBITA gateway was not achieved.
The following table sets out the performance achieved by each KMP across each element of the scorecard.
G A Fenn, M J Ferguson and S Cinerari
ElementMeasure
Below
ThresholdThresholdTargetMaximum
Zero HarmSafety and Environmental
PeopleEmployee engagement
FinancialP r o f i t ( N PATA )
FFO
S L Killeen
ElementMeasure
Below
ThresholdThresholdTargetMaximum
Zero HarmSafety and Environmental
PeopleEmployee engagement
FinancialP r o f i t ( N PATA / E B I TA )
FFO
P J Tompkins
ElementMeasure
Below
ThresholdThresholdTargetMaximum
Zero HarmSafety and Environmental
PeopleEmployee engagement
FinancialP r o f i t ( N PATA / E B I TA )
FFO
For 2021, the IPM applied to each member of the KMP remained at 1.

DIRECTORS’ REPORT
Annual Report 2021 43
7.3.3 LTI performance outcomes
The table below summarises LTI performance measures tested and the outcomes for each executive.
Relevant
executives
1
Relevant LTI measurePerformance outcome% LTI tranche that vested
G A Fenn,
S Cinerari,
M J Ferguson,
P J Tompkins
2018 plan – performance period 1 July 2017 to 30 June 2020
TSR tranche – percentile ranking of
Downer’s TSR relative to the constituents
of the ASX 100 over a three-year period.
Actual performance ranked
at the 18th percentile based
on a TSR result of –17.9%.
0% became provisionally qualified.
100% were forfeited.
EPS tranche – compound annual
earnings per share growth against
absolute targets over a three-year period.
Actual performance was
–186.6%.
0% became provisionally qualified.
100% were forfeited.
Scorecard tranche – sustained NPAT
and FFO performance against budget
over a three-year period.
Actual performance was 41.1%
for NPAT and 49.7% for FFO.
0% became provisionally qualified.
100% were forfeited.
G A Fenn,
S Cinerari,
M J Ferguson,
P J Tompkins
2019 plan – performance period 1 July 2018 to 30 June 2021
2
TSR tranche – percentile ranking of
Downer’s TSR relative to the constituents
of the ASX 100 over a three-year period.
Actual performance ranked
at the 30th percentile based
on a TSR result of –8.4%.
0% became provisionally qualified.
100% were forfeited.
EPS tranche – compound annual
earnings per share growth against
absolute targets over a three-year period.
Actual performance was
–4.3%.
0% became provisionally qualified.
100% were forfeited.
Scorecard tranche – sustained NPAT
and FFO performance against budget
over a three-year period.
Actual performance was 54.3%
for NPAT and 63.6% for FFO.
0% became provisionally qualified.
100% were forfeited.
1 Relevant executive refers to members of the KMP who are participants in the plan tested.
2 Test outcomes for the 2019 plan are provisional and will be confirmed following release of the Company’s audited 2021 results. Accordingly, the outcomes are not reflected
in the disclosures in Section 8.
7.4 Major transactions and significant items
7.4.1 Major transactions
In 2021 Downer continued to optimise its portfolio in keeping with its urban services strategy, creating efficient market positions to
deliver long-term shareholder value through restructuring, partnering, divestments and acquisitions.
Downer undertook three transactions during 2021. These transactions were the acquisition of the remaining interests in Spotless and
divestment of Mining businesses of Snowden, Downer Blasting Services, Open Cut Mining West and Downer’s 50% interest in the RTL
joint venture, and 70% of the Laundries business.
In accordance with its policy, the Board considered the impact of each transaction on incentive outcomes and determined that:
–The acquisition of the remaining interests in Spotless was a material, unbudgeted transaction for which it was appropriate to adjust
incentive outcomes
–The divestment of the Mining businesses of Snowden, Downer Blasting Services, Open Cut Mining West and 50% interest in the
RTL joint venture were material, unbudgeted transactions for which it was appropriate to adjust incentive outcomes
–The divestment of 70% of the Laundries business was a material, unbudgeted transaction for which it was appropriate to adjust
incentive outcomes.

44 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
7.4.2 Significant items
During the year, two items had a significant impact. The Board considers such items at the end of each performance period and
whether it is appropriate to adjust for their impact on incentive outcomes.
The Board considered it was appropriate to adjust incentive outcomes for the following items:
ItemDescription
Fair value adjustment on
the Downer Contingent
Share Options
In September 2020, Downer issued contingent share options as part of the consideration for its
acquisition of the remaining interests in Spotless.
The options are required to be remeasured to fair value at each reporting date. For 2021, the options
were revalued upwards by $16.6 million post-tax, resulting in an unbudgeted expense.
Issuing the securities in order to acquire the remaining interests in Spotless was considered to be in the
best interests of Downer.
It was determined that it was appropriate to adjust incentive outcomes for this item.
Software-as-a-Service
(SaaS) arrangements
In March 2021 the International Financial Reporting Standards Interpretations Committee (IFRIC) issued
a decision on Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 138
Intangible Assets). The decision requires that where a customer does not control a Software-as-a-Service
product, customisation costs are required to be expensed rather than capitalised.
Downer’s accounting policy has historically been to capitalise all costs related to SaaS arrangements
as intangible assets in the Statement of Financial Position. The adoption of the decision resulted in the
classification of costs incurred in the year as unbudgeted expense of $9.9 million post-tax.
It was determined that it was appropriate to adjust incentive outcomes for this item.

DIRECTORS’ REPORT
Annual Report 2021 45
7.4.3 Adjustments made to incentive calculations for major transactions and significant items
The Board determined that the following adjustments be made to KPI calculations for the impact of major transactions and significant
items. The adjustments mean that executives are ‘no better or worse off’ as a result of the transactions and significant items so that
performance is measured against delivery of the Company’s budget and business plan.
MeasureAdjustmentImpact on STIImpact on LTI
N PATANet increase of $51.8 million comprised of:
–Exclusion of $16.6 million of fair value movement on Downer
Contingent Share Option (DCSO) liability
–Exclusion of the costs of termination of Spotless financing
arrangement of $3.0 million (post-tax)
–Exclusion of net loss on divestment of Mining division,
including the loss of operating earnings since the
divestment net of interest expense of $20.6 million
(post-tax)
–Exclusion of net impact on divestment of Laundries
business, including the loss of operating earnings since the
divestment net of interest expense of $1.7 million (post-tax)
–Exclusion of customisation costs on SaaS arrangements as
a result of the change in accounting policy of $9.9 million
(post-tax).
For Corporate scorecard
participants:
–The gateway was met; and
–77.2% of the NPATA measure
was achieved.
For New Zealand scorecard
participants, a decrease from
100.0% to 90.0% of the measure
being achieved.
For Spotless scorecard
participants:
–The gateway was met; and
–89.8% of the NPATA measure
was achieved.
No change.
FFONet decrease of $313.1 million comprised of:
–Exclusion of $134.5 million payment of consideration for
Spotless acquisition and $4.4 million transaction costs paid
–Exclusion of $311.6 million proceeds from the divestment of
Mining businesses net of transaction costs and $2.9 million
net interest benefits
–Exclusion of $136.2 million proceeds from the divestment of
Laundries business net of transaction costs and $1.3 million
net interest benefits.
No change.No change.
EPSThe use of NPAT adjusted as set out above.Not applicable.No change.
TSRNo adjustments were made.Not applicable.Not applicable.
7.4.4 Future periods
For major transactions completed in 2021, the impact on operational performance is included in the 2022 budget and accordingly no
adjustments are expected in respect of FY22 operational performance.
7.5 Variances from policy
There was one variation from policy in 2021.
2021 Long-term Incentive plan EPS measure
The Company’s policy is to add back any items that were outside of the underlying statutory result to the earnings value when setting
the base value EPS from which performance will be measured. The Board recognised that the calculated starting value was impacted
by the events of 2020 and accordingly decided that this adjustment be increased by an additional $10 million of earnings when
calculating the base year EPS in order to ensure that any future reward is appropriate.

46 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
8. Executive Equity Ownership
8.1 Ordinary shares
KMP equity holdings in fully paid ordinary shares and performance rights issued by Downer EDI Limited are as follows:
Ordinary sharesPerformance rights
Balance at
1 July 2020
No.
Net Change
No.
Balance at
30 June 2021
No.
Balance at
1 July 2020
No.
Net Change
No.
Balance at
30 June 2021
No.
G A Fenn1,582,218467, 5 5 42,049,772923,646(297,898)625,748
S Cinerari263,219(9 0, 3 5 4)172,865358,823(112,237)246,586
M J Ferguson2,00090,69492,694196,577(43,986)152,591
S L Killeen15,52835,19850,726132,0459,430141,475
P J Tompkins185,511100,493286,004192,576(36,139)156,437
8.2 Preference shares
KMP equity holdings in fully paid preference shares issued by Works Finance (NZ) Limited, a wholly owned subsidiary of Downer EDI
Limited, are as follows:
Preference shares
Balance at
1 July 2020
No.
Net change
No.
Balance at
30 June 2021
No.
S L Killeen3,000–3,000
8.3 Options and rights
No performance options were granted by Downer EDI Limited or exercised during the 2021 financial year.
As foreshadowed in 2020, grants in relation to 2020 were made during the 2021 financial year.
As outlined in section 6.4.1, the LTI plan for the 2021 financial year is in the form of performance rights. Relief from certain regulatory
requirements was applied for and has been received from the Australian Securities and Investments Commission. During the year, the
LTI plan for the 2021 financial year was approved as outlined in section 6.4 of this report; however due to restructuring of the Group,
grants of performance rights have not yet been made to KMP, however they are expected to be made in early 2022. This means that
grants in relation to 2021 and 2022 are expected to be made during the 2022 financial year.
Consistent with the ASX Listing Rules for the adjustment of the quantity of rights and options on issue at the time of new share issues,
the quantity of unlapsed rights granted to executives under the 2018 and 2019 plans was adjusted by the ASX Adjustment Factor of
0.9812 in respect of the bonus element of the accelerated non-renounceable entitlement offer made during the year.
The following table shows the number of performance rights granted by Downer EDI Limited and percentage of performance rights
that vested or were forfeited during the year for each grant that affects compensation in this or future reporting periods.
2017 Plan2018 Plan
Number of
performance
rights
1
Vested
%
Forfeited
%
Number of
performance
rights
2
Vested
%
Forfeited
%
G A Fenn503,52657. 5–338,524–100
S Cinerari188,82257. 5–13 9,6 41–100
M J Ferguson94,41157. 5–71,936–100
S L Killeen–––67, 509–100
P J Tompkins88,11657. 5–67,705–100
1 Grant date 21 June 2017. Expiry date is 1 July 2020. The fair value of shares granted was $5.29 per share for the EPS and Scorecard tranches and $4.61 per share for the TSR tranche.
2 Grant date 21 June 2018. Expiry date is 1 July 2021. The fair value of shares granted was $6.12 per share for the EPS and Scorecard tranches and $3.38 per share for the TSR tranche.

DIRECTORS’ REPORT
Annual Report 2021 47
2019 Plan2020 Plan
Number of
performance
rights
1
Vested
%
Forfeited
%
Number of
performance
rights
2
Vested
%
Forfeited
%
G A Fenn307, 573––318,175––
S Cinerari115,340––131,246––
M J Ferguson73,048––79,543––
S L Killeen67,066––74,409––
P J Tompkins76,894––79,543––
1 Grant date 3 June 2019. Expiry date is 1 July 2022. The fair value of shares granted was $5.93 per share for the EPS and Scorecard tranches and $2.22 per share for the TSR tranche.
2 Grant date 21 October 2020. Expiry date is 1 July 2023. The fair value of shares granted was $4.36 per share for the EPS and Scorecard tranches and $1.14 per share for the TSR tranche.
The maximum number of performance options and rights that may vest in future years that will be recognised as share-based
payments in future years is set out in the table below:
Maximum number of shares for the vesting year
1
202220232024
G A Fenn–307, 573318,175
S Cinerari–115,340131,246
M J Ferguson–73,04879,543
S L Killeen–67,06674,409
P J Tompkins–76,89479,543
1 The quantity of performance rights that may vest in future years has been adjusted in the 2021 financial year to reflect the discount to the market price of the Company’s
shares offered to shareholders in the equity raising announced on 21 July 2020. The adjustment factor of 0.9812 is based on the theoretical ex-rights price (TERP) of $4.18
divided by the last share price prior to the announcement of the equity raising. The quantities in this table are after this adjustment.
The maximum expense for performance options and rights that may vest in future years that will be recognised as share-based
payments in future years is set out in the table below. The amount reported is the value of share-based payments calculated in
accordance with AASB 2 Share-based Payment over the vesting period. In respect of the 2021 plan an estimated expense has been
recognised that will be trued up following formal valuation after the grants have been made.
202220232024
G A Fenn885,059530,711269,277
S Cinerari351,796218,915111,075
M J Ferguson216,835132,67767, 319
S L Killeen201,377124,11262,973
P J Tompkins221,263132,67767, 319
8.4 Remuneration consultants
Guerdon Associates Pty Ltd was engaged by the Board Remuneration Committee to provide remuneration advice in relation to KMP,
but did not provide the Board Remuneration Committee with remuneration recommendations as defined under Division 1, Part 1.2,
9B (1) of the Corporations Act 2001 (Cth).
The Board was satisfied that advice received was free from any undue influence by KMP to whom the advice may relate, because strict
protocols were observed and complied with regarding any interaction between Guerdon Associates Pty Ltd and management, and
because all remuneration advice was provided to the Board Remuneration Committee chair.

48 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
9. Key Terms of Employment Contracts
9.1 Notice and termination payments
Executives are on contracts with no fixed end date.
The following table captures the notice periods applicable to termination of the employment of executives.
Termination notice
period by Downer
Termination notice
period by employee
Termination payments
payable under contract
Managing Director12 months6 months12 months
Other Executives12 months6 months12 months
Termination payments are calculated based upon total fixed remuneration at the date of termination. No payment is made for
termination due to gross misconduct.
9.2 Managing Director and Chief Executive Officer of Downer’s employment agreement
Mr Fenn was appointed as the Managing Director of Downer commencing on 30 July 2010. The following table sets out the key terms
of the Managing Director’s employment agreement.
Te r mUntil terminated by either party.
Fixed remuneration$2.0 million per annum. This has remained unchanged since July 2012.
Fixed remuneration includes superannuation and non-cash benefits but excludes entitlements to reimbursement
for Mr Fenn’s home telephone rental and call costs, home internet costs and medical, life and salary continuance
insurance. Mr Fenn may also be accompanied by his wife when travelling on business, at the Chairman’s discretion.
There was no such travel during the year.
STI opportunityMr Fenn is eligible to receive an annual STI and the maximum STI opportunity is 100% of fixed remuneration.
Any entitlement to an STI is at the discretion of the Board, having regard to performance measures and targets
developed in consultation with Mr Fenn including Downer’s financial performance, safety, people, environmental
and sustainability targets and adherence to risk management policies and practices. The Board also retains the
right to vary the STI by + or – 100% (up to the 100% maximum) based on its assessment of performance. The STI
deferral arrangements in place for KMP apply to Mr Fenn.
There is no STI entitlement where the Managing Director’s employment terminates prior to the end of the financial
year, other than in the event of a change in control or by mutual agreement.
LTI opportunityMr Fenn is eligible to participate in the annual LTI plan and the value of the award is 100% of fixed remuneration
calculated using the volume weighted average price after each year’s half yearly results announcement.
Mr Fenn’s performance requirements have been described in Section 6.4.
In the event of a change of control, providing at least 12 months of a grant’s performance period have elapsed,
unvested shares and performance rights pro-rated with the elapsed service period are tested for vesting with
performance against the relevant hurdles for that period and vest, as appropriate. Shares that have already been
tested, have met performance requirements, and are subject to the completion of the service condition, fully vest.

DIRECTORS’ REPORT
Annual Report 2021 49
Te r m i n a t i o nMr Fenn can resign:
(a) By providing six months’ written notice; or
(b) Immediately in circumstances where there is a fundamental change in his role or responsibilities.
In these circumstances, Mr Fenn is entitled to a payment in lieu of 12 months’ notice.
Downer can terminate Mr Fenn’s employment:
(a) Immediately for misconduct or other circumstances justifying summary dismissal; or
(b) By providing 12 months’ written notice.
When notice is required, Downer can make a payment in lieu of notice of all or part of any notice period
(calculated based on Mr Fenn’s fixed annual remuneration).
If Mr Fenn resigns because ill health prevents him from continuing his duties, he will receive a payment in
recognition of his past services equivalent to 12 months’ fixed remuneration. At the discretion of the Board,
his shares under the LTI plan may also vest.
If Downer terminates Mr Fenn’s employment on account of redundancy, in addition to the notice (or payment
in lieu of notice) required to be given by Downer, Mr Fenn will receive a payment in recognition of his past
services equivalent to 12 months’ fixed remuneration.
If Mr Fenn resigns he will be subject to a six-month post-employment restraint in certain areas where the
Downer Group operates, where he is restricted from working for competitive businesses.
OtherThe agreement contains provisions regarding leave entitlements, duties, confidentiality, intellectual property, moral
rights and other facilitative and ancillary clauses. It also contains provisions regarding corporate governance and a
provision dealing with the Corporations Act 2001 (Cth) limits on termination benefits to be made to Mr Fenn.

50 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2021
DIRECTORS’ REPORT
10. Related Party Information
10.1 Transactions with other related parties
Transactions entered into during the year with Directors of
Downer EDI Limited and the Group are within normal employee,
customer or supplier relationships on terms and conditions no
more favourable than dealings in the same circumstances on an
arm’s length basis and included:
–The receipt of dividends from Downer EDI Limited
–Participation in the Long-Term Incentive Plan
–Terms and conditions of employment
–Reimbursement of expenses.
A number of Directors of the Company hold directorships in
other entities. Several of these entities transacted with the Group
on terms and conditions no more favourable than those available
on an arm’s length basis.
11. Description of Non-executive Director
Remuneration
11.1 Non-executive Director remuneration policy
Downer’s Non-executive Director remuneration policy is to
provide fair remuneration that is sufficient to attract and retain
Directors with the experience, knowledge, skills and judgement
to steward the Company.
Fees for Non-executive Directors are fixed and are not linked to
the financial performance of the Company. The Board believes
this is necessary for Non-executive Directors to maintain their
independence.
There was no change to the level of Non-executive Director fees
since the prior reporting period.
Shareholders approved an annual aggregate cap of $2.0 million
for Non-executive Director fees at the 2008 AGM. The allocation
of fees to Non-executive Directors within this cap has been
determined after consideration of a number of factors, including
the time commitment of Directors, the size and scale of the
Company’s operations, the skill sets of Board members, the
quantum of fees paid to Non-executive Directors of comparable
companies and participation in Board Committee work.
The Chairman receives a base fee of $375,000 per annum
(inclusive of all Committee fees) plus superannuation. The other
Non-executive Directors each receive a base fee of $150,000
per annum plus superannuation. Additional fees are paid for
Committee duties: $35,000 for the chair of the Audit and Risk
Committee; and $15,000 for the chair of each of the Zero Harm
Committee, Remuneration Committee, Rail Projects Committee
and Tender Risk Evaluation Committee.
The basis of fees and the fee pool are reviewed when new
Directors are appointed to the Board, when the structure of
the Board changes, or at least every three years. Reference
is made to individual Non-executive Director fee levels and
workload (i.e. number of meetings and the number of Directors)
at comparably sized companies from all industries other than the
financial services sector, and the fee pools at these companies.
In addition, an assessment is made on the extent of flexibility
provided by the fee pool to recruit any additional Directors for
planned succession after allocation of fees to existing Directors.
A review of fees was conducted during the year. The review
found that base fees paid to the Chairman and Non-executive
Directors remained appropriate however fees paid for chairing or
serving as a member of a committee were below market levels.
Accordingly it was determined that the following changes in fees
apply from 1 July 2021:
– Fees be set at a fixed value inclusive of superannuation,
rather than a fee plus superannuation at the superannuation
guarantee rate
–Increase in the Chairman fees for the Remuneration
Committee to $27,000 from $16,425
–Increase in the Chairman fees for the Zero Harm Committee
to $27,000 from $16,425
–Increase in the Chairman fees for the Tender Risk Evaluation
Committee to $17,000 from $16,425
–Introducing of fees for committee members at the rate of
50% of the respective committee Chairman fee.
The impact of these changes based on the current configuration
of the Board is approximately $92,626 per annum.
Non-executive Directors are not entitled to retirement benefits.
All Non-executive Directors are entitled to payment of statutory
superannuation entitlements in addition to Directors’ fees.

DIRECTORS’ REPORT
Annual Report 2021 51
11.2 Non-executive Directors’ remuneration
The table below sets out the remuneration paid to Non-executive Directors for the 2021 and 2020 financial years.
In recognition of the impact of the coronavirus pandemic on the Company and its people, Directors’ fees were reduced for the period
1 April 2020 to 30 June 2020 by 50% for the Chairman and 30% for the other Non-executive Directors.
Ye a r
Short-term benefitsPost-employment benefits
Board fee
$
Chair fee
$
Total fees
$
Super-
annuation
$
Termination
benefits
$
To t a l
$
R M Harding2021375,000–375,00035,625–410,625
2020328,125–328,12531,172–359,297
P S Garling2021150,00013,750163,75015,556–179,306
2020138,75013,875152,62514,499–167,124
T G Handicott2021150,00015,000165,00015,675–180,675
2020138,75013,875152,62514,499–167,124
N M Hollows2021150,00035,000185,00017, 575–202,575
2020138,75032,375171,12516,257–187,382
C G Thorne
1
20215,766–5,766548–6,314
2020138,75019,167157,91715,002–172,919
P L Watson2021150,00028 , 3 47178 , 3 4716,943–195,290
2020138,7508,583147,33313,997–161,330
1 Amounts represent the payments relating to the period during which the individual was a Non-executive Director.
11.3 Equity held by Non-executive Directors
The table below sets out the equity in Downer held by Non-executive Directors for the 2021 and 2020 financial years.
20212020
Balance at
1 July 2020Net change
Balance at
30 June 2021
Balance at
1 July 2019Net change
Balance at
30 June 2020
R M Harding28,8565,17234,02828,856–28,856
P S Garling19,9623,57823,54019,962–19,962
T G Handicott17,0003 ,04720,04714,0003,00017,000
N M Hollows3,00012,53815,5383,000–3,000
P L Watson6,32911,60417,93 3–6,3296,329
Signed in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act 2001 (Cth).
On behalf of the Directors.
R M Harding
Chairman
Sydney, 12 August 2021

52 Downer EDI Limited
Auditor’s Independence Declaration
for the year ended 30 June 2021
AUDITOR’S INDEPENDENCE DECLARATION
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Downer EDI Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Downer EDI Limited for
the financial year ended 30 June 2021 there have been:
i.no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii.no contraventions of any applicable code of professional conduct in relation to the audit
.
KPMG
Nigel Virgo
Partner
Sydney
12 August 2021

INDEPENDENT AUDITOR’S REPORTINDEPENDENT AUDITOR’S REPORT
Annual Report 2021 53
Independent Auditor’s Report
for the year ended 30 June 2021

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.



Independent Auditor’s Report

To the shareholders of Downer EDI Limited
Report on the audit of the Financial Report

Opinion
We have audited the
Financial Report
of
Downer EDI Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:


giving a true and fair view of the
Group
’s financial position as at 30
June 2021 and of its financial
performance for the year ended on
that date; and


complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The
Financial Report
comprises:


Consolidated statement of financial position as at 30
June 2021


Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of
cash flows for the year then ended


Notes including a summary of significant accounting
policies


Directors’ Declaration.
The
Group
consists of the Company and the entities it
controlled at the year-end or from time to time during
the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with the Code.

54 Downer EDI Limited
Independent Auditor’s Report – continued
for the year ended 30 June 2021
INDEPENDENT AUDITOR’S REPORT



Key Audit Matters
The
Key Audit Matters
we identified are:


Recognition of revenue


Value of goodwill
Key Audit Matters
are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
Recognition of revenue
Refer to Note B2 ‘Revenue’ ($11,530.2m)
The key audit matter

How the matter was addressed in our audit

Recognition of revenue is a key audit matter
due to the:
•
Significance of revenue to the financial
statements; and
•
Large number of contracts with numerous
estimation events potentially occurring over
the course of the contract’s life. This
results in complex and judgemental
revenue recognition from rendering of
services and construction contracts and
therefore significant audit effort is required
to gather sufficient audit evidence for
revenue recognition.
We focused on the Group’s assessment of the
following elements of revenue recognition for
rendering of services and construction
contracts, as applicable:
•
Revisions to total expected costs for
certain events or conditions occurring
during the performance of the contract, or
are expected to occur to complete the
contract, which is difficult to estimate;
•
The Group’s assessment of when a
modification to the contract scope and/or
price for variations and claims is approved
and enforceable. The Group’s consideration
of the enforceability or approval may
include evidence that is written, oral or
implied by customary business practice and
therefore requires a degree of judgement.
The Group’s assessment of the
enforceability of variations and claims can
Our procedures included:
•
We obtained an understanding of the Group’s
process of accounting for rendering of
services and construction contract revenues.
We considered the appropriateness of the
Group’s accounting policy for rendering of
services and construction contract revenues,
including variations and claims and variable
consideration, against the requirements of the
accounting standards. We tested key controls
such as:
‒
Management’s review and approval of bid
information including estimated project
milestones, projected Earnings Before
Interest and Tax (EBIT), Net Present Value
(NPV), Return On Funds Employed
(ROFE), and potential legal risks;
‒
Management’s review of key contracts
where events or conditions have occurred
that require changes to revenue
recognition;
‒
The Group’s requirement to obtain
customer acceptance prior to billing an
invoice.
•
We selected a statistical sample of revenue
recognised and checked to customer approval
of the service being performed or cash
received.
•
We used data analytic routines to select a
sample of contracts for testing based on a
number of quantitative and qualitative factors.
These factors included contracts with

INDEPENDENT AUDITOR’S REPORT
Annual Report 2021 55



drive different accounting treatments,
increasing the risk of inappropriately
recognising revenue; and
•
The Group’s policy for the determination of
the amount of revenue recognised from
variable consideration which is highly
probable of not reversing. Variable
consideration is contingent on the Group’s
performance and includes key performance
payments, abatements offsetting revenue
under the contract and liquidated damages.
The Group's determination that variable
consideration is highly probable requires a
degree of estimation and judgement. This
increased the audit effort we applied to
gather sufficient audit evidence.

significant deterioration in margin, significant
variations and claims or variable consideration.
We also included factors which indicated to us
a greater level of judgement was required by
the Group when assessing the revenue
recognition based on the estimates developed
for current and forecast contract performance.
For the samples selected, where relevant:
‒
we read the selected contract terms and
conditions to evaluate the individual
characteristics of each contract reflected
in the Group’s estimate of revenue;
‒
we assessed the estimation of total
expected costs, including cost
contingencies for contracting risks, by
challenging the Group’s project and
finance managers on their estimations.
We also checked key forecast cost
assumptions to underlying documentation
such as Enterprise Bargaining
Agreements for wage rates, salary costs
and agreements with subcontractors;
‒
we assessed the Group’s ability to
forecast margins on contracts by
analysing the accuracy of previous margin
forecasts to actual outcomes;
‒
we evaluated the Group’s assessment of
when a modification to the contract scope
and/or price for variations and claims is
approved and enforceable. This included
assessing the underlying records, legal
documents, customer correspondence
and contracts. We recalculated the
amount of revenue using the modified
features of the contract. We compared
the recalculated amounts against the
amounts recorded by the Group;
‒
we assessed the Group’s estimation of
the highly probable amount of revenue for
variations and claims. This included
comparing underlying evidence such as
correspondence with customers, and
reports from objective time and cost claim
experts (where applicable) for consistency
with contract terms;
‒
we evaluated the Group’s legal and
external experts’ reports received on
contentious matters to identify conditions
indicating inappropriate recognition of
variations and claims. We checked the

56 Downer EDI Limited
Independent Auditor’s Report – continued
for the year ended 30 June 2021
INDEPENDENT AUDITOR’S REPORT



consistency of this to the inclusion or not
of an amount in the estimates used for
revenue recognition;
‒
we assessed the scope, competency and
objectivity of the legal and external
experts engaged by the Group; and
•
We evaluated the method applied by the
Group to estimate the highly probable amount
of the key performance payments, liquidated
damages and abatements against the specific
contract terms. This included gathering
underlying evidence in relation to the Group’s
performance against the terms of the
contract. We then recalculated the amount of
variable consideration. We compared the
recalculated amounts to the amounts
recorded by the Group as offsets to revenue.

Value of goodwill
Refer to Note C7 ‘Intangible assets’ ($2,280.8m)
The key audit matter

How the matter was addressed in our audit

The value of goodwill is a key audit matter due
to the size of the balance (being 28.3% of total
assets) and the significant audit effort arising
from:
•
The Group having 8 groups of Cash
Generating Units (CGUs) for which the
impairment of goodwill is assessed;
•
The Spotless CGU recorded an impairment
charge in the prior year, increasing the risk
that an unfavourable change in certain key
assumptions, in the absence of any
mitigating factors, may result in impairment
in the current year.
We focused on the following key forward
looking assumptions in the Group’s value in use
models and fair value less cost of disposal
model including:
•
Forecast cash flows including budgeted
EBIT – including the improvement in
forecast cash flows compared to the prior
year forecasts which contained a higher
degree of uncertainty due to the COVID-19
pandemic.
Our procedures included:
•
We obtained an understanding of the Group’s
goodwill impairment assessment process and
tested key controls such as the review and
approval of the budget by management and the
Board.
•
We considered the appropriateness of the value
in use and fair value less cost of disposal
(FVLCOD) methods applied by the Group to
perform the annual test of goodwill for
impairment against the requirements of the
accounting standards.
•
We considered independently prepared
valuations of the Spotless CGU prepared on a
FVLCOD basis during the year to identify any
contradictory evidence for further consideration
in our testing.
• We assessed the integrity of the value in use
and FVLCOD models used, including the
accuracy of the underlying calculation formulas.

•
We assessed the accuracy of previous Group
forecasting to inform our evaluation of forecasts