half year report - calibre group

CALIBRE GROUP LIMITED ABN 44 100 255 623

Half Year Report for the half-year ended 31 December 2015

CALIBRE GROUP LIMITED

CONTENTS

CORPORATE INFORMATION 1

DIRECTORS’ REPORT 2

DIRECTORS’ DECLARATION 5

AUDITOR’S INDEPENDANCE DECLARATION 6

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 7

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 8

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 9

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 10

NOTES TO FINANCIAL STATEMENTS 11

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF CALIBRE GROUP LIMITED 20

CALIBRE GROUP LIMITED 1

CORPORATE INFORMATION

Calibre Group Limited ABN 44 100 255 623 Directors Geoff Tomlinson (Chairman) Alex Krueger Brian MacDonald Anne McIntyre Ray Munro Peter Reichler Graham Smith Dod Wales Company Secretary Peter Massey Registered Office Calibre Group Limited Level 2, 50 St Georges Terrace Perth Western Australia 6000 Principal Place of Business Calibre Group Limited Level 2, 50 St Georges Terrace Perth Western Australia 6000 Share Registry Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 Auditors Deloitte Touche Tohmatsu Grosvenor Place 225 George Street Sydney NSW 2000 Solicitors Herbert Smith Freehills GPO Box U1942 Perth Western Australia 6845 Bankers Australia and New Zealand Banking Group Limited 18/100 Queen Street Melbourne Victoria 3000


DIRECTORS’ REPORT

The Directors of Calibre Group Limited present their report and consolidated financial report for the half year ended 31 December 2015 as follows:

The names of Directors in office at any time during or since the end of the half-year are: Geoff Tomlinson Non-Executive Director – Chairman from 4 January 2016 Paul Dougas Non-Executive Director – resigned, effective 1 January 2016 Ray Horsburgh A.M. Chairman – resigned, effective 1 January 2016 Peter Housden Non-Executive Director– resigned, effective 1 January 2016 Alex Krueger Non-Executive Director Brian MacDonald Non-Executive Director – appointed 4 January 2016 Anne McIntyre Non-Executive Director – appointed 4 January 2016 Ray Munro Non-Executive Director Peter Reichler Managing Director Graham Smith Non-Executive Director – appointed 4 January 2016 Dod Wales Non-Executive Director

The above Directors were in office for this entire period unless otherwise stated.

Review of Operations Revenue for the period was $295.2m, largely in line with the prior period. Revenue for the Company’s Resources segment declined during the period, which was offset by an increase in revenue in the Company’s Consulting and Infrastructure segments and the addition of a new Utilities segment in the period.

Infrastructure Revenue in Calibre’s Infrastructure segment increased by 13.8% to $164.3m during the period (December 2014: $144.3m). Increased revenue is as a result of the contribution received from construction projects at Roy Hill, in Western Australia. The segment’s increased revenue was also driven by work from BHP Mitsubishi Alliance’s (BMA’s) Blackwater and BMA Saraji permanent maintenance contracts in Queensland.

Consulting Revenue in Calibre’s Consulting segment business grew by 12% to $48.7m compared to prior period (December 2014: $43.5m), driven by both strong organic growth throughout the east coast of Australia and through the contribution made from the integration of the TME business in WA (acquired in February 2015), and the acquisition of the Newell business in Qld (acquired July 2015).

Resources The Company’s Resources segment reported revenue of $66.9m down by 37.6% compared to the same period last year (December 2014: $107.2m).

This significant drop in revenues is principally due to the winding down and completion of a number of large Rio Tinto Iron Ore Expansion projects in WA.

Revenue reduction in the Resources division was partly offset by increased revenue contribution from BHP in relation to the Company’s Industrial Technology (ITEC) subdivision’s projects for a range of clients across Australia and Samsung projects in Western Australia.

Utilities The Company’s new Utilities business was formed during the period with the acquisition of Diona Pty Ltd which operates in NSW, South Australia, Queensland and Victoria. The new Utilities business contributed $16.3m to the total revenue of the Group. Projects undertaken during the period include services to a range of established clients, including Queensland Urban Utilities, APA Group and Sydney Water.

DIRECTORS’ REPORT

(continued)


Financial Position

Taxation The $0.4m tax benefit position in the period is primarily due to a tax refund received during the period.

Liquidity and Indebtedness Calibre had cash and cash equivalents of $33.3m at 31 December 2015 (June 2015: $32.5m). The Group’s net debt position as at 31 December 2015 was $32m (June 2015: net cash of $6.6m).

At 31 December 2015, the Group’s debt consisted of bank borrowings of $60.0m (June 2015: $25.0m) and deferred acquisition consideration of $43.4m (June 2015: $0.9m). The increase in bank borrowings was due to Calibre’s draw down of its current acquisition facility to fund the purchase of Diona Pty Ltd.

The Company has a balance sheet that enables it to continue to explore growth opportunities which expand revenue streams and end markets.

The deferred acquisition consideration liabilities represent deferred payments for the acquisitions of the various acquired businesses. They comprise both fixed and contingent components. The contingent components are based on the achievement of financial hurdles and, as such, these payments have been accounted for as liabilities. Since these deferred acquisition consideration payments are in part linked to the achievement of KPI’s by the subject entities, the full contingent amount may not be payable when those KPI’s are measured in the future.

Significant changes in the state of affairs On July 2015, Calibre Consulting (Aust) Pty Ltd, Calibre’s consultancy business, acquired the 100% share capital of Newell Engineering Group Pty Ltd for a total consideration of $1.1m.

On 16 November 2015, Calibre Group completed the acquisition of Diona Pty Ltd (Diona) for a cash consideration of $45m and potential additional payment up to $45m, contingent on performance during FY16 and FY17.

On 28 October 2015, in its Notice of Annual General Meeting, the Company proposed two resolutions to be considered by shareholders:

(i) A proposition to delist the Company from the Australian Securities Exchange (ASX); and

(ii) an open-access off-market share buy-back of up to 59,842,520 shares, capped at $7.2m.

On 30 November 2015, at the Company’s Annual General Meeting, both the above resolutions were passed. Subsequently, under the terms of the buy-back, Company bought back 13,960,949 shares at $0.12 each, for a total consideration of $1.7m; and on 31 December 2015, Calibre Group Limited was removed from the official list of the ASX.

Other than the above, there was no significant change in the state of affairs during the half year.

Auditor’s independence declaration The auditor’s independence declaration is included on page 6 of the half-year report.

Dividends No dividend has been declared in respect of the half year ended 31 December 2015.

Capital Management Under the share buy-back of up to 59,842,520 shares, capped at $7.2m which was approved by shareholders on 30 November 2015, the Company bought back 13,960,949 shares for a total consideration of $1.7m.

DIRECTORS’ REPORT

(continued)


Rounding off of amounts The Company is a company of the kind referred to in ASIC Class Order 98/100, and in accordance with that Class Order amounts in this Directors’ Report and the half-year financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

This Directors’ Report is signed in accordance with a resolution of Directors made pursuant to s.306(3) of the Corporations Act 2001.

On behalf of the Directors

Geoff Tomlinson Chairman 25 February 2016


DIRECTORS’ DECLARATION

The Directors declare that:

(a) in the Directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and

(b) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.

Signed in accordance with a resolution of the Directors made pursuant to s.303 (5) of the Corporations Act 2001.

On behalf of the Directors

Geoff Tomlinson Chairman 25 February 2016

Liability limited by a scheme approved under Professional Standards Legislation

Member of Deloitte Touche Tohmatsu Limited 6

25 February 2016

Dear Board Members

Calibre Group Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following

declaration of independence to the directors of Calibre Group Limited.

As lead audit partner for the review of the financial statements of Calibre Group Limited for the half-

year ended 31 December 2015, I declare that to the best of my knowledge and belief, there have been no

contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the

review; and

(ii) any applicable code of professional conduct in relation to the review.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Sarah Avis

Partner

Chartered Accountants

Deloitte Touche Tohmatsu

ABN 74 490 121 060

Grosvenor Place

225 George Street

Sydney NSW 2000

PO Box N250 Grosvenor Place

Sydney NSW 1220 Australia

DX: 10307SSE

Tel: +61 2 9322 7000

Fax: +61 2 9322 7001

www.deloitte.com.au

The Board of Directors

Calibre Group Limited

Level 2, 50 St Georges Terrace

Perth WA 6000


CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

Note 31 Dec 2015 31 Dec 2014 Continuing operations $000 $000 Revenue 295,194 295,054 Cost of providing services (240,032) (226,541) Gross profit 55,162 68,513 Other gains 118 1,048 Marketing expenses (423) (859) Occupancy expenses (5,321) (4,866) Administration expenses (45,716) (55,487) Restructuring and impairment expenses 3 (266) (186,948) Finance costs (2,248) (2,346) Profit/(loss) before tax 3 1,306 (180,945) Income tax benefit 4 407 25,937 Profit/(loss) for the period 1,713 (155,008) Other comprehensive income, net of income tax Items that may be reclassified subsequently to profit or loss Movement in fair value in available for sale investments (613) 82 Exchange differences on translation of foreign operations 232 201 Total other comprehensive (loss)/ income (381) 283 Total comprehensive income/(loss) for the period 1,332 (154,725) Profit /(loss) for the period attributable to: Owners of the parent 1,623 (155,116) Non-controlling interests 90 108 1,713 (155,008) Total comprehensive income/(loss) income attributable to:

Owners of the parent 1,242 (154,833) Non-controlling interests 90 108 1,332 (154,725) Earnings per share from continuing operations Cents Cents Basic earnings /(loss) per share (cents per share) 0.47 (46.07) Diluted earnings /(loss) per share (cents per share) 0.47 (46.07)

The above condensed consolidated statement of profit and loss and other comprehensive income should be read in conjunction with the accompanying notes.


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

Note 31 Dec 2015 30 June 2015 $000 $000 ASSETS Current assets Cash and cash equivalents 33,282 32,510 Trade and other receivables 71,857 85,339 Work in progress 15,384 12,354 Other assets 3,789 3,164 Total current assets 124,312 133,367 Non-current assets Other receivables 64 166 Property, plant and equipment 6 37,990 23,304 Goodwill 7 134,878 78,010 Other intangible assets 7 18,259 10,485 Investments 301 1,175 Deferred tax assets 16,896 15,512 Total non-current assets 208,388 128,652 TOTAL ASSETS 332,700 262,019 LIABILITIES Current liabilities Trade and other payables 65,834 74,914 Bank borrowings 8 10,791 566 Deferred acquisition consideration 8 18,655 912 Derivative financial instruments 204 322 Provisions 33,254 36,714 Current tax liabilities 689 213 Total current liabilities 129,427 113,641 Non-current liabilities Bank borrowings 8 54,806 25,334 Deferred acquisition consideration 8 24,760 - Deferred tax liabilities 8,504 4,768 Provisions 45,338 48,515 Total non-current liabilities 133,408 78,617 TOTAL LIABILITIES 262,835 192,258 NET ASSETS 69,865 69,761

EQUITY Issued capital 9 148,145 149,738 Reserves 2,955 2,971 Retained earnings (81,623) (83,246) Equity attributable to owners of the parent 69,477 69,463 Non-controlling interests 388 298 TOTAL EQUITY 69,865 69,761

The above condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


Attributable to owners of the parent

Ordinary

Shares

$000

Retained earnings

$000

Foreign currency translation

reserve $000

Contribution by equity participants

reserve $000

Share based payments

reserve $000

Available for sale reserve

$000

Non-controlling

interests $000

Total

$000

Balance at 1 July 2014 143,388 85,310 319 948 2,011 - 180 232,156

(Loss)/profit for the period - (155,116) - - - - 108 (155,008) Other comprehensive income - - 201 - - 82 - 283

Total comprehensive income for the period - (155,116) 201 - - 82 108 (154,725)

Issue of share capital 7,774 - - - - - - 7,774 Dividend paid - (8,403) - - - - (107) (8,510) Share based payment transactions - - - - 215 - - 215

Subtotal 7,774 (8,403) - - 215 - (107) (521)

Balance at 31 December 2014 151,162 (78,209) 520 948 2,226 82 181 76,910

Balance at 1 July 2015 149,738 (83,246) 379 948 2,199 (555) 298 69,761

Profit for the period - 1,623 - - - - 90 1,713 Other comprehensive income 232 - - (613) - (381)

Total comprehensive income for the period - 1,623 232 - - (613) 90 1,332

Issue of share capital 82 - - - - - - 82 Share buy-back (1,675) - - - - - (1,675) Share based payment transactions - - - - 365 - - 365

Subtotal (1,593) - - - 365 - - (1,228)

Balance at 31 December 2015 148,145 (81,623) 611 948 2,564 (1,168) 388 69,865

The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


31 Dec 2015 31 Dec 2014 Note $000 $000 Cash flows from operating activities Receipts from customers 359,222 336,921 Payments to suppliers and employees (333,125) (311,856) Interest paid (1,898) (2,459) GST paid (17,937) (18,406) Income tax (paid)/refund (458) 14,988 Net cash provided by operating activities 5,804 19,188 Cash flows from investing activities Payment for business combinations, net of cash received 11 (45,309) (1,425) Payment of deferred acquisition consideration (430) (170) Payment for investments - (1,667) Repayment of loans/other assets from related parties 8,337 - Interest received 284 312 Purchase of property, plant, equipment and software (3,707) (5,613) Proceeds from sale of property, plant, equipment and software 1,395 213 Net cash used in investing activities (39,430) (8,350) Cash flows from financing activities Proceeds from issue of shares 82 - Proceeds from borrowings 35,000 Repayment of borrowings (684) (18,014) Dividend paid - (1,744) Net cash used in financing activities 34,398 (19,758) Net (decrease)/increase in cash and cash equivalents 772 (8,920) Cash and cash equivalents at beginning of period 32,510 46,403

Cash and cash equivalents at the end of the period 33,282 37,483

The above condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.


NOTES TO FINANCIAL STATEMENTS


1 Summary of Significant Accounting Policies

Statement of compliance The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 ‘Interim Financial Reporting’. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’. The half-year report does not include all of the notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

Basis of preparation The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

Calibre Group Limited (the Company) is a company of the kind referred to in ASIC Class Order 98/100, and in accordance with that Class Order amounts in the Directors’ Report and the half-year financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

The accounting policies and methods of computation adopted in the preparation of the half year financial report are consistent with those adopted and disclosed in the Company’s 2015 annual financial report for the financial year ended 30 June 2015, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. Going concern The Company is in a net current liabilities position of $5.1m at 31 December 2015 (June 2015: net current assets of $19.7m). The Directors have concluded that these accounts should be prepared on a going concern basis. In making this determination the Directors have considered that the current liability position includes deferred consideration of $18.7m that is contingent on the performance from the acquisition of Diona Pty Ltd.

Amendments to AASBs and the new Interpretation that are mandatorily effective for the current reporting period The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year.

New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Company include:

• AASB 2015-3 ‘Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality’

• AASB 2015-4 ‘Amendments to Australian Accounting Standards – Financial Reporting Requirements for Australia Groups with a Foreign Parent’

Impact of the application of AASB 2015-3 ‘Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality’

Completes the withdrawal of references to AASB 1031 in all Australian Accounting Standards and Interpretations.

Impact of the application of AASB 2015-4 ‘ Amendments to Australian Accounting Standards – Financial Reporting Requirements for Australian Groups with a Foreign Parent’

The amendments to AASB 128 align the relief available in AASB 10 and AASB 128 in respect of the financial reporting requirements for Australian groups with a foreign parent. The amendments require that the ultimate Australian entity shall apply the equity method in accounting for interests in associates and joint ventures if either the entity or the group is a reporting entity, or both the entity and group are reporting entities.

The adoption of amending Standards does not have any impact on the disclosures or the amounts recognised in the Company’s condensed consolidated financial statements.

NOTES TO FINANCIAL STATEMENTS (continued)



2 Segment Information The Company’s operating segments are based on the information that is available to the chief operating decision maker and the Directors. Segment results are reviewed regularly by the chief operating decision maker and the Directors.

The segment results and segment assets include all items directly attributable to each of the segments and any transaction, asset or liability that can be allocated on a reasonable basis. Unallocated items comprise predominantly of expenses that are not specific to the performance of an individual operating segment.

All intercompany and related transactions are made at arm’s length at what is considered by the Directors to be commercial rates.

The following are the reportable segments: Infrastructure This segment provides construction, operations maintenance and asset management services to the resources, energy and infrastructure sectors. Resources This segment provides an engineering, project delivery and asset management services to the minerals & metals, coal and energy, rail transportation and infrastructure sectors.

Consulting This segment consists of services to specialist urban development, civil, structural and environmental engineering consultancy to the public and private infrastructure sectors.

Utilities This segment provides engineering services across the three core utilities markets of water/waste water, gas and electricity. The following items and associated assets and liabilities are not allocated to the operating segments as they are not considered part of the core operations: • Restructuring and impairment expenses; • Interest income and expenses; • Amortisation of intangible assets.

Following is an analysis of the Group’s revenue, results from continuing operations and assets by reportable segment.

Reportable Segment Revenues and Results

Segment Revenue Segment Profit /(loss) 31 Dec 2015

$000 31 Dec 2014 $000 31 Dec 2015

$000 31 Dec 2014 $000

Resources 66,916 107,174 4,372 8,331 Consulting 48,710 43,508 2,582 2,344 Infrastructure 164,285 144,314 1,171 2,977 Utilities 16,256 - 172 - Other (973) 58 (2,099) (1,074) Segment revenue and results for the period 295,194 295,054 6,198 12,578 Restructuring and impairment expenses (266) (186,948) Other gains 118 1,048 Amortisation of intangible assets (2,746) (5,723) Interest income 250 312 Interest expense (2,248) (2,212) Profit /(loss) before tax for the year 1,306 (180,945)

Segment Assets 31 Dec 2015 $000 30 June 2015

$000 Resources 100,853 102,005 Consulting 46,762 42,029 Infrastructure 66,631 86,585 Utilities 48,774 - Other 69,680 31,400 Consolidated total assets 332,700 262,019




3 Expenses

Loss before tax includes the following specific expenses: 31 Dec 2015 31 Dec 2014 $000 $000 Depreciation and amortisation Depreciation and software amortisation 5,285 5,511 Amortisation of customer relationship intangible assets 2,746 5,723

8,031 11,234 Restructuring and impairment expenses Impairment of goodwill and intangible assets - 103,554 Onerous lease provision - 59,606 Impairment of other assets - 19,740 Restructuring expense 266 4,048 266 186,948

4 Income Tax The income tax benefit for the period can be reconciled to the accounting profit as follows: 31 Dec 2015 31 Dec 2014 $000 $000

Profit/(loss) before income tax for the period 1,306 (180,945)

Income tax expense calculated at rate of 30% (2014: 30%) (392) 54,284

Effect of research and development expenditure in relation to prior years - 2,581

Impairment of goodwill - (30,816)

Tax refund received in respect of prior years 495 -

Other 304 (112)

Income tax benefit recognised in profit or loss 407 25,937

5 Dividends No dividend has been declared in respect of half year ended 31 December 2015.




6 Property, Plant & Equipment

Plant & Equipment

Computer Hardware

Motor vehicles

Leasehold improvements

Assets under construction Total

$000 $000 $000 $000 $000 $000 Balance at 1 July 2014 13,588 2,889 6,466 4,987 1,277 29,207 Additions 1,775 2,340 238 1,622 920 6,895 Disposals (331) (36) (271) (86) - (724) Acquisitions through business combinations 316 38 353 100 - 807

Impairment expense (950) (63) - (1,996) (1,237) (4,246) Depreciation expense (3,541) (2,006) (2,041) (1,018) - (8,606) Effect of foreign exchange differences - (11) (10) (8) - (29) Balance at 30 June 2015 10,857 3,151 4,735 3,601 960 23,304 Cost 33,026 15,040 11,489 8,253 960 68,768 Accumulated depreciation (22,169) (11,889) (6,754) (4,652) - (45,464) Net carrying amount 10,857 3,151 4,735 3,601 960 23,304 Balance at 1 July 2015 10,857 3,151 4,735 3,601 960 23,304 Additions 1,335 679 2,117 34 1221 5,386 Disposals (401) - (627) (22) - (1,050) Acquisitions through business combinations 724 108 11,380 1,679 584 14,475

Impairment expense - - - - - - Depreciation expense (1,593) (998) (1,192) (410) - (4,193) Effect of foreign exchange differences 25 26 9 8 - 68 Balance at 31 December 2015 10,947 2,966 16,422 4,890 2,765 37,990 Cost 34,374 16,344 30,030 10,144 2,765 93,657 Accumulated depreciation (23,427) (13,378) (13,608) (5,254) - (55,667) Net carrying amount 10,947 2,966 16,422 4,890 2,765 37,990




7 Intangible Assets and Goodwill

Software Licenses Customer

Relationship Goodwill Total $000 $000 $000 $000 $000 Balance at 1 July 2014 8,448 81 10,815 179,624 198,968 Additions 1,446 94 - - 1,540 Disposals - - - - - Acquisitions through business combinations - - 3,604 1,107 4,711

Impairment (1,390) - (833) (102,721) (104,944) Amortisation expense (2,147) (9,633) - (11,780) Balance at 30 June 2015 6,357 175 3,953 78,010 88,495 Cost 16,741 175 85,220 78,010 180,146 Accumulated amortisation (10,384) - (81,267) - (91,651) Net carrying amount 6,357 175 3,953 78,010 88,495 Balance at 1 July 2015 6,357 175 3,953 78,010 88,495 Additions 26 54 - - 80 Disposals (493) - - - (493) Acquisitions through business combinations - - 12,025 56,868 68,893

Amortisation expense (1,092) - (2,746) - (3,838) Balance at 31 December 2015 4,798 229 13,232 134,878 153,137 Cost 15,476 229 97,245 134,878 247,828 Accumulated amortisation (10,678) - (84,013) - (94,691) Net carrying amount 4,798 229 13,232 134,878 153,137




8 Borrowings

31 Dec 2015 30 June 2015 Unsecured - at amortised cost $000 $000 Deferred acquisition consideration (i) 43,415 912 Secured - at amortised cost Bank loans 60,000 25,000 Finance leases and hire purchase liabilities 5,597 900 65,597 25,900 Total borrowings 109,012 26,812 Current Deferred acquisition consideration 18,655 912 Bank borrowings 8,750 - Finance leases and hire purchase liabilities 2,041 566 Total bank borrowings 10,791 566 Non-current Deferred acquisition consideration 24,760 - Bank borrowings 51,250 25,000 Finance leases and hire purchase liabilities 3,556 334 Total bank borrowings 54,806 25,334 (i) Deferred acquisition consideration movements: 31 Dec 2015

$000 30 June 2015 $000

Balance at 1 July 912 1,538 Additional deferred consideration from acquisitions 42,448 984 Finance costs 184 63 Payments (129) (645) Change in fair value of deferred consideration - (1,028) Balances at 31 December/30 June 43,415 912

Financing facilities available At the reporting date, the following financing facilities had been negotiated and were available:

31 Dec 2015

$000 30 June 2015 $000

Acquisition facility 125,000 125,000 Working capital facility 20,000 20,000 Bank guarantee facility 55,000 55,000 Assets finance facility 5,946 899 Total facilities available 205,946 200,899 Acquisition facility (60,000) (25,000) Bank guarantee facility (49,684) (34,317) Assets finance facility (5,519) (899) Facilities used at reporting date (115,203) (60,216) Facilities unused at reporting date 90,743 140,683




9 Issued capital

31 Dec 2015 30 June 2015 $000 $000

330,929,278 fully paid ordinary shares (June 2015: 343,448,833) 148,145 149,738

Number of Shares Share capital

$000 Fully paid ordinary shares Balance at 1 July 2014 331,463,407 143,388 Issue of shares 27,889,210 7,962 Treasury shares (8,903,784) - Share buybacks (7,000,000) (1,612) Balance at 30 June 2015 343,448,833 149,738 Issue of shares 1,441,394 82 Share buy-back (13,960,949) (1,675) Balance at 31 December 2015 330,929,278 148,145

10 Financial Instruments The fair value of the Group’s financial assets and liabilities are determined on the following basis:

Financial assets and financial liabilities that are measured at fair value on a recurring basis

Subsequent to initial recognition, at fair value financial instruments are grouped into levels 1 to 3 based on the degree to which the fair value is observable. Levels are defined as follows:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included with level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

At 31 December 2015 and December 2014 the Group had no material financial assets and liabilities that are measured on a recurring basis.

Financial assets and financial liabilities that are not measured at fair value on a recurring basis (but where fair value disclosures are required)

At 31 December 2015 and 31 December 2014, the carrying amount of financial assets and financial liabilities for the Group is considered to approximate their fair values.




11 Business combinations

Businesses acquired 31 December 2015 Principal activity

Date of acquisition

Proportion of shares acquired

Consideration transferred

$000 Diona Pty Ltd Engineering Services Oct 15 100% 93,959 Newell Engineering Engineering Services July 15 100% 1,108

95,067

These companies were acquired as part of the Group’s growth strategy. Consideration transferred 31 December 2015 $000

Cash 52,619 Contingent consideration arrangement (i) 42,448

Total 95,067

(i) These payments are payable if certain acquisition metrics are met. Based on the past history the Directors consider it probable that these payments will be paid.

Assets acquired and liabilities assumed at the date of acquisition 31 December 2015 $000

Cash and cash equivalents 7,310 Trade and other receivables 12,946 Other current assets 15,170 Property, plant and equipment 14,475 Fair value of identifiable intangible assets acquired (customer relationship) 12,025 Deferred tax assets 902 Trade and other payables (12,762) Provisions (2,934) Borrowings (4,116) Current tax liability (1,210) Deferred tax liability (3,607) 38,199

The initial accounting for the acquisitions has only been provisionally determined at the end of the reporting period. For tax purposes, the tax values of the assets of the businesses acquired are required to be reset based on the market values of the assets. At the date of finalisation of these consolidated half year financial statements, the necessary market valuations and other calculations had not been finalised and they have therefore only been provisionally determined based on the directors’ best estimate of the likely tax values. Goodwill arising on acquisition 31 December 2015 $000

Consideration transferred 95,067 Less: Fair value of identifiable net assets acquired (38,199) Goodwill arising on acquisition 56,868

Goodwill arising on acquisition in the period comprises the value of expected in-sourced specialist capabilities and new market opportunities. Net cash outflow on acquisition of subsidiaries $000

Consideration paid in cash 52,619 Less: cash and cash equivalent balances acquired (7,310) Payment for business combinations, net of cash received (45,309)




12 Key Management Personnel Remuneration arrangements of key management personnel (KMP) are disclosed in the annual financial report for the year ended 30 June 2015.

13 Events after balance sheet date No matters or events have arisen since the end of the financial period which 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 periods.

Liability limited by a scheme approved under Professional Standards Legislation

Member of Deloitte Touche Tohmatsu Limited 20

Independent Auditor’s Review Report

to the members of Calibre Group Limited

We have reviewed the accompanying half-year financial report of Calibre Group Limited which

comprises the condensed consolidated statement of financial position as at 31 December 2015, and

the condensed consolidated statement of profit or loss and other comprehensive income, the

condensed consolidated statement of cash flows and the condensed consolidated statement of changes in equity for the half-year ended on that date, notes comprising a summary of significant

accounting policies and other explanatory information, and the directors’ declaration of the

consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 5 to 19.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that

gives a true and fair view in accordance with Australian Accounting Standards and the Corporations

Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material

misstatement, whether due to fraud or error.

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 a Financial Report 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 half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Calibre Group Limited’s financial position as at 31

December 2015 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 Calibre Group 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 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.

Deloitte Touche Tohmatsu

ABN 74 490 121 060

Grosvenor Place

225 George Street

Sydney NSW 2000

PO Box N250 Grosvenor Place

Sydney NSW 1220 Australia

DX: 10307SSE

Tel: +61 2 9322 7000

Fax: +61 2 9322 7001

www.deloitte.com.au

21

Auditor’s Independence Declaration

In conducting our review, we have complied with the independence requirements of the

Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Calibre Group Limited, would be in the same

terms if given to the directors as at the time of this auditor’s review report.

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 Calibre Group Limited is not in accordance with the

Corporations Act 2001, including:

(a) giving a true and fair view of the company’s financial position as at 31 December 2015 and of its performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

DELOITTE TOUCHE TOHMATSU

Sarah Avis

Partner

Chartered Accountants Perth, 25 February 2016

half year report - calibre group

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