Global Construction Services Limited Interim Financial ... · Global Construction Services Limited Interim Financial Report 31 December 2008 Page 3 Corporate Directory

Global Construction Services Limited

Interim Financial Report

31 December 2008

Global Construction Services Limited Interim Financial Report 31 December 2008

Table of Contents Page Corporate Directory 3

Directors’ Report 4

Auditors’ Independence Declaration 7

Consolidated Interim Income Statement 8

Consolidated Interim Balance Sheet 9

Consolidated Interim Statement of Changes in Equity 10

Consolidated Interim Statement of Cash Flows 11

Notes to the Half Year Financial Statements 12

Directors’ Declaration 23

Independent Review Report to the Members of Global Constructions Services Limited 24


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Corporate Directory Directors Neil Kidd Non-Executive Chairman Enzo Gullotti Managing Director Sam Mangione Non-Executive Director David Macoboy Non-Executive Director Company Secretary Gabriel Chiappini Registered Office 2 Redcliffe Road, Redcliffe Western Australia Telephone 61 8 9479 7990 Facsimile 61 8 9479 7789 Website www.gcs-group.com.au Share Registry Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace Perth Western Australia 6000 Telephone +61 8 9323 2000 1300 55 70 10 (within Australia) For any change in personal details, please contact Computershare. Auditors BDO Kendalls Audit & Assurance (WA) Pty Ltd 128 Hay Street Subiaco Western Australia 6008

Bankers Westpac Banking Corporation 109 St Georges Terrace Perth Western Australia 6000

Solicitors

Kitto & Kitto Barristers & Solicitors 19 Howard Street Perth Western Australia 6000

Price Sierakowski Pty Ltd Lawyers Level 24, St Martins Tower 44 St Georges Terrace Perth WA 6000

Stock Exchange The Company’s securities are quoted on the Official List of the Australian Stock Exchange Ltd, the home exchange being Australian Stock Exchange (Perth) Limited. 2 The Esplanade Perth, Western Australia 6000 ASX Code GCS ABN 81 104 662 259


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Directors’ Report The Directors present their report on the consolidated entity consisting of Global Construction Services Limited and the entities it controlled at the end of, or during, the half year ended 31 December 2008. Directors The names and details of the Company’s Directors in office during the half year and until the date of this report are as follows: Neil Kidd (Non-Executive Chairman) Enzo Gullotti (Managing Director) David Macoboy (Non-Executive Director) Sam Mangione (Non-Executive Director) Review and Results of Operations Results The net profit after tax for the consolidated entity for the half year ended 31 December 2008 was $5.4m, compared to a net profit after tax of $4.7m in the previous corresponding period. Group revenues from operations remained strong in the half year to 31 December 2008 at $44.2m (half year December 2007 $28.4m). The key financial results over the past three half years are set out in the following table.

FY09 H1 FY08 H2 FY08 H1 $000 $000 $000 Total Revenue from Operations 44,230 40,642 28,411 Gross Profit 25,518 20,615 16,280 Gross Profit % 57.7% 50.7% 57.3% Other Income 263 455 574 Operating Expenses 6,913 5,484 3,224 Administration & other expenses 6,937 5,176 4,474 Total Expenses 13,850 10,660 7,698 EBITDA 11,931 10,238 9,156 27.0% 25.2% 32.2% Depreciation 2,473 1,864 1,771 EBIT 9,458 8,374 7,385 21.4% 20.6% 26.0% Interest Costs 1,750 1,105 549 Profit Before Tax 7,708 7,269 6,836 17.4% 17.9% 24.1% Tax Expense 2,285 2,182 2,116 Net Profit after Tax 5,423 5,087 4,720 12.3% 12.5% 16.6% EPS 8.0c 8.0c 8.0c


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Operational Review GCS Group’s (GCS) business divisions have performed well through the first half of FY09. During the period GCS has focused its operational activities on its core business and has continued building its position in the Western Australian market. In keeping with its strategy the Group has expanded the company’s product offering, entering new industry sectors and geographical markets within Western Australia:

• GCS expanded into the South West of WA with the acquisition of 75% interest in Coastal Hire Pty Ltd, a well established and recognised hire and sales provider, with the balance of 25% to be acquired over the next two years. With branches in Bunbury, Busselton, Dunsborough and Margaret River, Coastal Hire provides the Group with an excellent entry into this high growth region and into the event rent market.

• In September 2008, GCS launched a new business division in the Perth metropolitan market,

operating as GCS Hire and offering general plant hire and temporary fencing. GCS Hire was launched initially to satisfy demand from existing customers of the group and the customer base has quickly grown beyond this. The business complements the operations of Coastal Hire, which also offers a similar suite of services to customers in the South West.

• GCS has established a strong position in the North West and the business division in Karratha

continues to deliver a solid performance with awarded contracts for provision of products and services to companies such as Rio Tinto, Monadelphous, Clough, Leighton Contracting and John Holland Construction.

Highlights from the commercial division include the award of a major formwork and concrete contract at Brookfield Multiplex’s City Square Project – the new BHP headquarters in the Perth CBD – valued at $24 million. The Group is also contracted to undertake Stage 2 of Brookfield Multiplex’s Claremont Quarter shopping centre redevelopment project which forms part of the initial $44 million contract awarded to GCS. Stage 2 has a value of approximately $18 million. The directors are very pleased with the performance of the Group’s concrete contracting business which was acquired in FY08. The purchase price included an earn-out payment that was conditional on the business achieving set results over two years. It has outperformed initial expectations and has achieved its earn-out requirement after only 10 months of trading under GCS ownership. We are delighted to welcome David Kiggins to the role of Chief Financial Officer. David commenced with us in September 2008 and his experience in the listed market, particularly business development, will be invaluable as we continue to grow the Company. The GCS Group continues to evaluate and consider a range of opportunities including diversifying into related industries and industry sectors and acquiring new businesses that create value for shareholders. A number of opportunities were considered during the first half of FY09 however these did not satisfy our acquisition criteria and were not pursued. Dividends to be Paid The directors have recommended the payment of a fully franked interim dividend of 3.0 cents per share, which compares to an interim dividend of 3.25 cents per share for the previous corresponding period. The GCS Dividend Reinvestment Plan will apply to this dividend and the directors have determined that a


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discount of 5.0% to the 5 day Volume Weighted Average Price will be used to determine the reinvestment price. The record date is 2 April 2009 and the dividend will be paid on 28 April 2009. Auditors Independence Declaration The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set on page 7 and forms part of the Directors’ Report for the half year ended 31 December 2008. Rounding The parent entity is a company of the kind specified in Australian Securities and Investments Commission class order 98/0100. In accordance with that class order, amounts contained in the interim consolidated financial report have been rounded to the nearest thousand dollars unless specifically stated otherwise. This report has been made in accordance with a resolution of the Directors.

Enzo Gullotti Managing Director Perth, 19 February 2009


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BDO Kendalls Audit & Assurance (WA) Pty Ltd 128 Hay Street SUBIACO WA 6008 PO Box 700 SUBIACO WA 6872 Phone 61 8 9380 8400 Fax 61 8 9380 8499 [email protected] www.bdo.com.au ABN 79 112 284 787

19th February 2009 The Directors Global Construction Services Limited 2 Redcliffe Road REDCLIFFE WA 6104 Dear Sirs DECLARATION OF INDEPENDENCE BY GLYN O’BRIEN TO THE DIRECTORS OF GLOBAL CONSTRUCTION SERVICES LIMITED As lead auditor of Global Construction Services Limited for the half year ended 31 December 2008, I declare that, to the best of my knowledge and belief, there have been no contraventions of: • the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and • any applicable code of professional conduct in relation to the audit. This declaration is in respect of Global Construction Services Limited and the entities it controlled during the period.

Glyn O’Brien Director

BDO Kendalls Audit & Assurance (WA) Pty Ltd Perth, Western Australia.


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Consolidated Interim Income Statement For the Half Year Ended 31 December 2008 Note 2008

$’000 2007 $’000

Revenue from continuing operations 2 44,230 28,411 Other income 3 262 574 Servicing costs (4,605) (2,510) Contracting costs (9,377) (7,009) Cost of sales (4,730) (2,612) Operating costs (6,912) (3,224) Administration (6,937) (4,474) Depreciation and amortisation expenses 3 (2,473) (1,771) Financing costs 3 (1,750) (549)

Profit before income tax expense 7,708 6,836

Income tax expense (2,285) (2,116)

Profit attributable to members of the entity 5,423 4,720

Profit is attributed to:

Equity holders of Global Construction Services Limited 5,423 4,720

Minority interest - -

5,423 4,720

Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the company Cents Cents

Basic earnings per share 8.0 8.0

Diluted earnings per share 8.0 8.0 The above Consolidated Interim Income Statement should be read in conjunction with the accompanying notes


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Consolidated Interim Balance Sheet As at 31 December 2008

Note 31 December 2008 $’000

30 June 2008 $’000

ASSETS Current Assets Cash and cash equivalents 8 2,216 2,153 Trade and other receivables 14,041 19,335 Prepayments 859 1,054 Inventories 4,936 1,777 Total Current Assets 22,052 24,319

Non-Current Assets

Other financial assets 53 124 Property, plant and equipment 7 75,674 55,930 Intangible assets 24,364 21,922 Deferred tax assets 1,866 982 Total Non-Current Assets 101,957 78,958

Total Assets 124,099 103,277

LIABILITIES

Current Liabilities Trade and other payables 9,983 10,533 Borrowings 7,297 6,034 Unearned Income 450 - Provisions 1,100 - Current tax liabilities (208) 255 Total Current Liabilities 18,622 16,822

Non-Current Liabilities

Borrowings 43,444 29,179 Deferred tax liabilities 4,290 2,632 Provisions 280 1,882 Total Non-Current Liabilities 48,014 33,693

Total Liabilities 66,636 50,515

NET ASSETS 57,373 52,762

EQUITY Capital and reserves attributable to equity holders of Global Construction Services Limited 42,102 41,072 Reserves 114 114 Retained earnings 13,837 11,041 Parent entity interest 56,053 52,227 Minority interest 1,320 535 TOTAL EQUITY 57,373 52,762 The above Consolidated Interim Balance Sheet should be read in conjunction with the accompanying notes


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Consolidated Interim Statement of Changes in Equity For the Half year ended 31 December 2008

Issued Capital $’000

Retained Earnings

$’000 Reserves

$’000

Total

$’000

Minority Interest

$’000

Total Equity $’000

At 1 July 2007 23,015 3,365 - 26,380 802 27,182 Discount on acquisition of subsidiary - 12 - 12 - 12 Profit for the period - 4,720 - 4,720 - 4,720 Shares issued 18,700 - - 18,700 - 18,700 Share issue costs (1,564) - - (1,564) - (1,564) Tax effect of share based transaction expenses 506 - - 506 - 506 Dividends paid - - - - - - At 31 December 2007 40,657 8,097 - 48,754 802 49,556 At 1 January 2008 40,657 8,097 - 48,754 802 49,556 Profit for the period - 5,078 - 5,078 - 5,078 Shares issued 501 - - 501 - 501 Share issue costs - - - - - - Tax effect of share based transaction expenses (86) - - (86) - (86) Share option reserve - - 114 114 - 114 Acquisition of minority interest - - - - (267) (267) Dividends paid - (2,134) - (2,134) - (2,134) At 30 June 2008 41,072 11,041 114 52,227 535 52,762 At 1 July 2008 41,072 11,041 114 52,227 535 52,762 Profit for the period - 5,423 - 5,423 - 5,423 Shares Issued for no consideration per dividend reinvestment plan 1,089 - - 1,089 - 1,089 Share issue costs (60) - - (60) - (60) Tax effect of share based transaction expenses - - - - - - Interest in equity of minority interest - - - - 785 785 Dividends paid - (2,626) - (2,626) - (2,626) At 31 December 2008 42,101 13,838 114 56,053 1,320 57,373

The above Consolidated Interim Statement of Changes in Equity should be read in conjunction with the accompanying notes.


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Consolidated Interim Statement of Cash Flows For the Half year ended 31 December 2008 Half Year

Note 2008 2007 $'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 50,928 25,746 Payments to suppliers and employees (36,585) (21,216) Interest received 95 243 Interest and other costs of finance paid (1,731) (549) Income taxes paid (2,083) (2,395)

Net cash inflows/(outflows) from operating activities 10,624 1,829

CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment (9,179) (12,285) Purchases of subsidiaries & businesses net of cash acquired (5,025) (11,065) Proceeds from sale of equipment 164 1,295

Net cash inflows/(outflows) from investing activities (14,040) (22,055)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of ordinary shares - 18,700 Transaction costs from issue of shares (60) (1,564) Proceeds from borrowings 9,700 2,083 Repayment of borrowings (4,623) (5,124) Dividends paid to group shareholders (1,537) -

Net cash inflows/(outflows) from financing activities 3,480 14,095

Net increase/(decrease) in cash and cash equivalents 63 (6,131)

Cash and cash equivalents at the beginning of period 2,153 3,279 Effects of exchange rate changes on the balances of cash held in foreign currencies at the beginning of the period - -

Cash and cash equivalents at end of period 8 2,216 (2,852) The above Consolidated Interim Statement of Cash Flows should be read in conjunction with the accompanying notes.


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NOTES TO THE HALF YEAR FINANCIAL STATEMENTS Note 1. Significant Accounting Policies

Global Construction Services Limited is a company domiciled in Australia. The consolidated interim financial report for the half year ended 31 December 2008 comprises the company and its subsidiaries.

Statement of compliance

This general purpose financial report for the interim half year reporting period ended 31 December 2008 has been prepared in accordance with Australian Accounting Standard 134 "Interim Financial Reporting" and the Corporations Act 2001.

Basis of preparation

This interim report does not include all the notes of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. Accordingly, this interim financial report is to be read in conjunction with the annual report for the year ended 30 June 2008 and any public announcements made by Global Construction Services Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The same accounting policies and methods of computation have generally been followed in this interim financial report as compared with the most recent annual financial report. The financial report is presented in Australian dollars unless otherwise stated. (i) Critical Accounting Estimates and Judgements In preparing the interim financial report, the significant judgements made by management in applying the Group’s accounting policies and key sources of estimation uncertainty were the same as those that applied to the annual financial report for the year ended 30 June 2008 with the exception of the following: Estimated Impairment of Property Plant and Equipment and Goodwill In accordance with AASB 136 Impairment of Assets, the Group assesses at each reporting date where there is an indication that an asset may be impaired. An asset is impaired if its carrying amount exceeds its recoverable amount which is the amount to be recovered through use or sale of the asset. The recoverable amount of the Group’s various cash generating units (CGUs) have been determined based on value-in-use calculations for these units.


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No impairment charge has been recorded during the half-year period.

(a) Key assumptions used for value-in-use calculations Value-in-use calculations use cash flow projections based on financial budgets approved by management covering a 5 year period to determine a unit’s recoverable amount that is then compared with the carrying value of the assets of that unit. Calculating value-in-use for each CGU, the following key assumptions were used: • a pre-tax discount rate of 12.4% is applied, which represents the Group’s weighted

average cost of capital. • Gross margin sustained at 58% • Growth rate 6%

(b) Impact of possible changes in key assumptions

As indicated above, the impairment testing process utilised a range of key assumptions. Given the volatility of the current economic climate, it is possible that market conditions could occur that fall outside the range of sensitivity analysis conducted, The impact of which will continue to be monitored.


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NOTES TO THE HALF YEAR FINANCIAL STATEMENTS Note 2. Segment Information Business segments The consolidated entity markets its products and services to the following customer segments. These customer segments are Commercial, Industrial and Residential.

Half year ended Commercial Industrial Residential

Total Continuing Operations

31 December 2008 $'000 $'000 $’000 $'000

Total segment revenue 35,343 4,584 13,243 53,170 Intersegment Elimination (8,940)

Consolidated revenue 44,230

Segment result before tax 6,605 721 1,655 8,981

Intersegment Elimination (1,273)

Profit before income tax 7,708

Half year ended Commercial Industrial Residential

Total Continuing Operations

31 December 2007 $'000 $'000 $’000 $'000

Total segment revenue 20,186 - 10,173 30,989 Intersegment Elimination (2,578)

Consolidated revenue 28,411

Segment result before tax 4,208 - 2,628 6,836

Intersegment Elimination -

Profit before income tax 6,836


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NOTES TO THE HALF YEAR FINANCIAL STATEMENTS Note 3. Significant Items Profit before income tax expense includes the following revenues and expenses whose disclosure is relevant in explaining the performance of the reporting entity.

Half Year Ended

Revenue and expenses of continuing operations

31 December 2008 $’000

31 December 2007 $’000

(i) Other Income

Interest income 95 243 Profit on disposal of plant and equipment 108 184 Management fees - 134 Rental Income 13 - Other 46 13 262 574

(ii) Expenses

Depreciation 2,473 1,771 Finance costs 1,750 549 Salaries and wages 13,751 9,550 Repairs, maintenance and consumables 811 493 Occupancy costs 1,387 709 20,172 13,072


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NOTES TO THE HALF YEAR FINANCIAL STATEMENTS

Note 4. Equity Securities Issued

On 17 August 2007 Global Construction Services Limited listed on the Australian Securities Exchange through an initial public offering of 20,000,000 shares, consisting of an issue of 18,700,000 shares at $1.00 plus a vendor sell down of 1,300,000, resulting in funds of $18,700,000. 2008

Shares 2007

Shares 2008 $000

2007 $000

Ordinary Shares Share issue on initial listing on Australian Securities Exchange -

18,700,000 -

18,700

Shares issued for no consideration: - - - - Dividend reinvestment plan issues 1,171,861 - - -

1,171,861 18,700,000 - 18,700 Note 5. Dividends Half Year Ended 31 December

2008 $’000

31 December 2007 $’000

Ordinary Shares A final dividend fully franked dividend of $0.04 per share was paid for the year ended 30 June 2008. 1,537 - Dividends applied to dividend reinvestment plan 1,089 - 2,626 -


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NOTES TO THE HALF YEAR FINANCIAL STATEMENTS Note 6. Business Combinations Acquisition of Coastal Hire Pty Ltd The shareholders of Global Construction Services Limited approved the purchase of a 75 per cent interest in Coastal Hire Pty Ltd. The transaction was effective 1 July 2008 for a cash consideration of $4.5m. The remaining 25% will be acquired over the next two years. The acquired business contributed revenues of $2.24m and a net profit of $154k to the group for the half year ended 31 December 2008. Details of net assets acquired and goodwill are as follows $’000 Cash 4,500 Direct cost relating to Acquisition 37 Total Purchased Consideration 4,537 Fair value of net identifiable assets 2,363 Goodwill 2,174 The assets and liabilities arising from the acquisition are as follows: Acquiree’s

carrying amount $’000

Fair value $’000

Cash 706 706 Trade Receivables 712 712 Plant and equipment 2,741 2,741 Trade payables (182) (182) Other payables (122) (122) Current tax liability (106) (106) Non Current borrowings (601) (601) 3,148 3,148 Minority interests 785 Net identifiable assets acquired 2,363 The initial accounting for this business combination was determined on a provisional basis due to a small number of plant and equipment assets requiring fair valuation.


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NOTES TO THE HALF YEAR FINANCIAL STATEMENTS For the comparative prior period ended 31 December 2007. Acquisition of Budget Portables On 1 November 2007 Budget Portables Pty Ltd, an incorporated subsidiary of Global Construction Services Limited purchased the business of Reg Pty Ltd (trading as Budget Portables) for a consideration of $10m. Reg Pty Ltd operated a temporary site accommodation business, providing transportable units and chemical toilets predominately to the commercial construction industry in the Western Australian market. The acquired business contributed revenues of $3.75m and a net profit of $915k. Details of net assets acquired and goodwill are as follows;

$000

Cash 10,000 Direct costs relating to acquisition 582 Total purchase consideration 10,582 Fair Value of Net Identifiable Assets 7,019 Goodwill 3,563

Acquirer’s carrying amount $’000

Fair Value $’000

Property Plant & Equipment 2,619 7,019 Net assets 2,619 7,019


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NOTES TO THE HALF YEAR FINANCIAL STATEMENTS Note 7. Fixed Asset Reconciliation Land Buildings Leasehold

ImprovementPlant & Rental

Equipment

Motor Vehicles

Office & Computer Equipment

Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 As at 1 July 2008

Cost or fair value 1,239 1,151 287 57,132 3,448 874 64,131 Accumulated depreciation - (16) (80) (6,912) (840) (353) (8,201)Net book amount 1,239 1,135 207 50,220 2,608 521 55,930 Half your ended 30 December 2008 Opening net book amount 1,239 1,135 207 50,220 2,608 521 55,930 Acquisitions of business assets - - - 1,972 763 6 2,741 Additions 3,169 - 384 14,992 1,788 109 20,442 Disposals - - - (613) (344) (9) (966)Depreciation charge - (18) (23) (1,895) (432) (105) (2,473)Net book amount 4,408 1,117 568 64,676 4,383 522 75,674


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Land Buildings Leasehold

ImprovementPlant & Rental

Equipment

Motor Vehicles

Office & Computer Equipment

Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 As at 1 July 2007

Cost or fair value - - 160 29,157 1,396 565 31,278 Accumulated depreciation - - (62) (6,291) (457) (183) (6,993) Net book amount - - 98 22,866 939 382 24,285 Half your ended 30 December 2007 Opening net book amount - - 98 22,866 939 382 24,285 Acquisitions of business assets - - - 6,600 - - 6,600 Additions - - 2 15,146 761 95 16,004 Disposals - - - (1,838) (19) (2) (1,859) Depreciation charge - - (8) (1,535) (156) (71) (1,770) Net book amount - - 92 41,239 1,525 404 43,260 (1) Capital Commitments Global Construction Services Limited has ongoing commitments as at 31 December 2008 to purchase various items of plant and equipment. During the six months ended 31 December 2008 the Group has entered into contracts to purchase plant and equipment for $970k. These purchases are in the normal course of business in renewing and expanding the group’s asset base of hire equipment. Note 8. Cash and Cash Equivalents For the purposes of the Consolidated Interim Statement of Cash Flows, cash and cash equivalents comprise the following as at 31 December 2008. Half Year Ended 31 December

2008 $’000

31 December 2007 $’000

Cash at Bank 2,216 2,596 Bank Overdraft Facility - (5,447) Total Cash and Cash Equivalents 2,216 (2,851)


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NOTES TO THE HALF YEAR FINANCIAL STATEMENTS Note 9. Contingent Liabilities Brookfield Multiplex Contract – City Square; 125 St Georges Terrace, Perth CASC Constructions Pty Ltd (CASC) has been contracted by Brookfield Multiplex to undertake formwork and concrete installation for a new multi-storey office building. The contract is a fixed sum contract for the amount of $24,000,000 plus GST and is estimated to be undertaken over 18 months. CASC may not increase the price for fluctuations in the cost for labour and/or materials except for agreed variations. The terms of the contract are favorable to Multiplex and impose strict terms and conditions on CASC and significant liabilities should it not perform in accordance with the contract. Brookfield Multiplex Contract – Claremont Quarter Project CASC Constructions Pty Ltd (CASC) has been awarded the contract by Brookfield Multiplex to undertake formwork for the Claremont Quarter Project, a large retail and residential development in Claremont, Western Australia. The contract is a fixed sum contract for the amount of $44,070,000 plus GST and is scheduled to be completed by 21 February 2011. CASC may not increase the price for fluctuations in the cost for labour and/or materials except for agreed variations. The terms of the contract are favorable to Multiplex and impose strict terms and conditions on CASC and significant liabilities should it not perform in accordance with the contract. There has been no material change of any contingent liabilities during the year. No other matter or circumstance has arisen since the end of the year to the date of this report which has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity. Note 10. Transactions with Key Management Personnel Unsecured loans were provided to Global Constructions Services Limited from key management personnel during the six months ended 31 December 2008 amounted to $1.2m. Interest is charged at 10% per annum.


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Note 11. Events after Balance Date Group Taxation Arrangements Global Construction Services Limited (GCS) and its wholly owned subsidiaries have implemented the tax consolidation legislation. This will enable GCS to utilise tax losses within the Group. The 2007/2008 Group tax returns are in progress and it is envisaged a significant tax refund will be forthcoming to GCS subsequent to finalisation and lodgement of the return. Placement of Shares On 6 February 2009, Global Construction Services Limited (GCS) completed the placement of 6.9 million shares at 40 cents per share to raise $2.76 million marketed to a range of sophisticated investors. Additionally, GCS has commitments from GCS directors to raise a further $1.90 million via the issue of 4.75 million shares at 40 cents per share. This is subject to shareholder approval at a general meeting scheduled for March 2009. GCS has also announced the launch of a Share Purchase Plan in which eligible GCS shareholders will be entitled to purchase up to $5,000 of ordinary fully paid shares at 40 cents per share. GCS Concrete Pumping Pty Ltd On 23 December 2008 GCS Concrete Pumping Pty Ltd was incorporated. Global Construction Services Limited has a 50% stake in this entity. Dividend Declared The directors have recommended the payment of a fully franked interim dividend of 3.0 cents per share, which compares to an interim dividend of 3.25 cents per share for the previous corresponding period. The GCS Dividend Reinvestment Plan will apply to this dividend and the directors have determined that a discount of 5.0% to the 5 day Volume Weighted Average Price will be used to determine the reinvestment price. The record date is 2 April 2009 and the dividend will be paid on 28 April 2009.


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Directors’ Declaration To the Members of Global Construction Services Limited In accordance with a resolution of the Directors of Global Construction Services Limited, I state that: In the opinion of the Directors: The financial statement and notes of the consolidated entity are in accordance with the Corporations Act 2001, including: 1. Giving a true and fair view of the consolidated entity’s financial position as at

31 December 2008 and of it’s performance for the half year ended on that date; and 2. Complying with Accounting Standards and Corporation Regulations 2001. There are reasonable grounds to believe that Global Construction Services Limited will be able to pay its debts as and when they become due and payable. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the financial period ended 31 December 2008. On behalf of the Board

Enzo Gullotti Managing Director 19 February 2009


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BDO Kendalls Audit & Assurance (WA) Pty Ltd 128 Hay Street SUBIACO WA 6008 PO Box 700 SUBIACO WA 6872 Phone 61 8 9380 8400 Fax 61 8 9380 8499 [email protected] www.bdo.com.au ABN 79 112 284 787

INDEPENDENT AUDITOR’S REVIEW REPORT To the members of Global Construction Services Limited Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of Global Construction Services Limited, which comprises the balance sheet as at 31 December 2008, and the income statement, statement of changes in equity and cash flow statement for the half-year ended on that date, a summary of accounting policies, other selected explanatory notes and the directors’ declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year end or from time to time during the half-year. Directors’ Responsibility for the Half-Year Financial Report The directors of the disclosing entity are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the disclosing entity’s financial position as at 31 December 2008 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Global Construction Services Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is


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substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Global Construction Services Limited is not in accordance with the Corporations Act 2001 including: (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2008 and

of its performance for the half-year ended on that date; and (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations

Regulations 2001. BDO Kendalls Audit & Assurance (WA) Pty Ltd

Glyn O’Brien Director Perth, Western Australia 19th of February 2009

Documents

Global Construction Services Limited Interim Financial ... · Global Construction Services Limited Interim Financial Report 31 December 2008 Page 3 Corporate Directory