McConnell Dowell 2018 Annual Review

McConnell Dowell Financial Statements 2018 5 Likely developments and expected results of consolidated entity In the opinion of the directors, it would prejudice the interests of the consolidated entity if any further information on likely developments in the operations of the consolidated entity and the expected results of operations were included herein, and the omission of such information is hereby disclosed. Events subsequent to balance date No significant events have occurred subsequent to balance date. Rounding The amounts contained in this report and in the financial report have been rounded to the nearest thousand dollars (where rounding is applicable) and where noted ($’000’s) under the option available to the company under ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. The company is an entity to which the Corporations Instrument applies. Non-audit services The following non-audit services were provided by the entity’s auditor, Ernst & Young Australia. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised. Ernst & Young Australia has not received or are not due to receive any amounts for the provision of non-audit services. Auditor independence declaration The company has obtained an Auditor’s Independence Declaration from Ernst & Young Australia. The Auditor’s Independence Declaration is located on the following page. The annual financial statements which appear on pages 43-78 were approved by the directors by resolution dated 25 September 2018 and are signed on their behalf. Going concern and liquidity In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future. The company enters the 30 June 2019 financial year with a more sustainable Statement of Financial Position than at the previous year end, which has been recapitalised by its immediate parent company during the year. The Directors have reviewed business plans and detailed financial budgets for the year ending 30 June 2019 and beyond which indicate significant construction opportunities ahead. The company has more than $1.0bn worth of opportunities (based on contract value) that are in sole source negotiations or in Early Contractor Involvement stage and therefore it is probable that these will be converted to contracted projects in the year ending 30 June 2019 and subsequent years (this figure is provided as additional non-IFRS information). The Group has opportunities to further improve cash resources from claim settlements and seek external financial support if required. The Group has also confirmed financial support from its ultimate parent company, Aveng Limited covering a minimum of 12 months from the date of these financial statements subject to consents that the Directors do not consider would be unduly withheld if required. These detailed financial budgets and business plans that are being implemented by management indicate that the Group will have sufficient cash resources for the foreseeable future. The Company has met its banking covenants for 30 June 2018 resulting in no breaches at year-end and forecasts indicate no breaches in the upcoming financial quarters. The Group retains the support of its lenders, guarantee providers, and insurance bonding providers. In the opinion of the Directors, the market opportunities in all areas in which the Group operates are strong and provide the basis to grow the Group’s order book. The Directors have considered the business plans and detailed financial budgets, including all available information, and whilst significant estimates and judgements including the impacts of the wider economic environment are always required the Directors are of the opinion that the going concern assumption is appropriate in the preparation of the financial statements. D. J. Morrison Director 25 September 2018 S. V. Cummins Director 25 September 2018 McConnell Dowell Annual Revi w 2018 41