2013 ANNUAL REVIEW

2013ANNUAL REVIEW

CEO’s Report 02People 05HSEQ 06

Australian Operations 12Overseas Operations 14

Strategic Projects 15Pipelines 16

Tunnel & Underground 17Company Profile 18

Focus on Rail 21Built Environs 22

Electrix 23Summarised Financial Statements 24

Contents

Our year included the completion of Australia’s longest large-diameter submarine pipe pull and mobilisation of the Southern Hemisphere’s largest ever tunnel boring machine. Major achievements such as these provide us with a real sense of impetus as we look positively towards the future.

MOMENTUM

CEO’s Report

32

Financial PerformanceThis year’s large revenue increase was mainly due to the contribution of a number of major projects previously secured such as the Hay Point Berth, Gold Coast Light Rail PPP and the LNG projects in Queensland QCLNG, APLNG and GLNG. The stronger profit outcome was the result of good contributions from our Electrix and Singapore businesses, the marine business in Australia and our defence building project in South Australia. Our financial results included making significant and disappointing loss provisions on a small number of projects.

The company is well positioned with A$2.6 billion work in hand and a good level of the 2013/14 budget secured, although the market remains challenging. Key sectors, such as Australian resources, are experiencing a significant retraction. This, coupled with increasing regulatory red tape, has led to the cancellation or deferment of a number of major projects. As a result we expect the 2014 revenue levels to retract from the high level of activity in the 2012/2013 year.

Our business is diverse in both market sectors and geographies. In Australia we are focused on replacing resources work with public infrastructure opportunities. We also continue our focus on growing the contribution from our overseas businesses, particularly Asia.

Operational PerformanceOur Australian Operations continued their strong revenue performance this year contributing A$1,299 million. Major contributors were the Hay Point Berth and Gold Coast Light Rail projects in Queensland. A commercial settlement was agreed on Hay Point removing significant downside risk on this previously problematic project. Other highlights include the completion of the Adelaide Desalination Project, which received a Distinction Award at the Global Water Awards held in Spain, and a breakthrough win in Victoria with the awarding of an alliance contract with VicRoads, the state government road authority. We continue to target opportunities in the resources sector, however the overall level of capital development going forward is expected to be reduced from previous highs. With the slowing of this market the company has shifted its focus to transport infrastructure opportunities in NSW, Western Australia, Victoria and Queensland. A restructure of the Australian operations has also occurred to drive better client and market focus, and improve executive governance and risk management across all projects.

Our Overseas Operations business unit performed satisfactorily in difficult conditions although revenues were below expectations reflecting the competitive nature of our markets. The South East Asian market remains patchy with significant work won in Indonesia and Singapore. In contrast, Hong Kong, Thailand and Philippines remain a

Overall the Group’s financial performance for the 2012/13 reporting year was a significant improvement on the previous year with revenue and EBIT both up 38% and profit after tax up 18%. While this year’s results are positive, the forward market is concerning and will present some major challenges for maintaining growth. Consequently we expect reduced revenue for the next reporting period.

challenge for securing projects. In New Zealand work on major developments such as the Waterview Connection Alliance and the Te Mihi Geothermal Power Station are progressing well. Opportunities in New Zealand and the Pacific will continue to come from the transport, power and water sectors. Winning new work remains a challenge in the Middle East however there are some positive signs going forward and the focus remains on growing revenue in Qatar and Saudi Arabia.

While Pipelines’ revenue was well above the forecast at A$876 million, the overall 2012/13 result was below expectations. This was primarily due to the losses taken on the QCLNG project, with significant executive effort being applied to completing these projects and securing our commercial entitlements. The QCLNG project will remain a significant risk until completion which is expected by December 2013 and until we resolve our commercial negotiations.

Total Revenue A$ billion

2011 2012 20132010

$2.02$1.94

$2.15

$2.97

Work on the GLNG and APLNG pipelines in Queensland is on track, and the Komo Airport project in PNG was completed with a good commercial outcome achieved. A number of key changes were made to the business unit’s structure during the year to improve performance and better position the company for the changes occurring in the industry. The Oil & Gas sector is active both in Australia and the other regions where we operate, providing a good list of opportunities. Revenue for 2014 will reduce as we complete these current major projects however there are a number of good new pipeline opportunities going forward.

The Tunnelling and Underground business unit revenue was below target however the team continued its strong execution performance. Winning new major projects however, has proved a challenge. In New Zealand, manufacture of the massive tunnel boring machine for the NZD1.3 billion Waterview project was completed and it is currently being assembled on site in Auckland. In Singapore, work on the Beauty World MRT Station & Tunnels project is moving towards substantial completion ahead of time. Strong performances on these projects places the group in a good position to secure future infrastructure transport projects across Australia, Singapore and New Zealand. The underground mining sector is committed to productivity and technology improvements to ensure long term sustainable mining and we are well placed to work with leading mining groups to develop innovative tunnelling solutions.

Built Environs’ revenue was A$230 million and grew strongly on the previous year. The company achieved a record award of new work which bodes well for improved revenues again next year. Performance was very strong in Western Australia, the highlight being the awarding of the Perth Airport terminal project. In South Australia work continues on the upgrade of the Centro Arndale Shopping Centre and Whyalla Regional Cancer Centre, with both projects on target for completion. Built Environs was awarded Australian Institute of Building Awards for their work on the Noarlunga to Seaford Railway Extension and University of Adelaide Capital Management Plan. Both projects now go through to the national awards. In Queensland Built Environs’ teams continue their partnership with McConnell Dowell on the Gold Coast Light Rail public-private partnership. This project provides a springboard for Built Environs to pursue a range of new opportunities in that state.

Electrix has further consolidated its position as a leading service provider to the utilities sector and a strong contributor to the McConnell Dowell Group with strong revenue (A$283 million) and profit growth. In New Zealand, business remains strong underpinned by long term maintenance contracts in transmission lines and substations. Work levels in the gas business remain high and good growth has been experienced in the distribution sector on the back of the Vector contract and work secured with new customers. Electrix Australia has experienced growth through significant contracts with Powerco,

SP Ausnet and Western Power, including the extension of existing term contracts. In Queensland, Electrix has positioned itself as a major player in the industrial and resources sector with work being done for GLNG, QGC and Boral in its own right, and in conjunction with McConnell Dowell. The focus on gas and high voltage substations in Australia has paid off with contracts secured with APA for gas mains refurbishment in South Australia and Western Power for substation construction. Electrix goes into the new financial year with a record level of work on hand and excellent prospects to expand in the distribution, gas, transport and water sectors.

SafetyMcConnell Dowell’s lead indicators for safety have improved significantly in 2012/13 with near miss reports up by 25% and the Potential for Harm Observations doubling the target. These indicators look to the future and help us focus on injury prevention. In terms of lag indicators, the LTIFR improved this year to 0.63 (per million manhours), compared with 0.68 last year. Our ongoing target is to improve performance against rolling three year indicators by 10% annually. The major initiative undertaken this year was the centralisation of the HSEQ function in Melbourne to drive efficiency, consistency and improvement in risk management and performance across these key business disciplines.

Work in Hand by Business Unit

Revenue by Business Unit

Australian ConstructionOverseas Construction

PipelineTunnel

Electrix

41% 43%

14%

29%

4%10%

21%

13%

10%

15%

Work in Hand by Revenue Type

Work in Hand by Revenue Type

Revenue by Revenue Type

Revenue by Revenue Type

Alliance D&C

Construct OnlyManaging Contractor

Services

30%

53%

16%

8%11%

24%36%

17%

4%

16%18%

29%

7% 14%

29%

10%2%

6%

34%

20%

15%1%

BuildingPower

Mining & MetalOil & GasTransport

Water

People

In today’s global economy, leading strategically is critical to our growth, execution and ultimate success. By continuing to build an inclusive, high performance culture based on accountability and collaboration we will strengthen our people’s commitment and continue to attract and retain key talent.

Over the past 12 months one of our key people focuses has been in the area of leadership.

To drive a consistent culture of great leadership we have developed a leadership framework and added a Senior Leadership Program to our suite of Leadership development programs.

In our experience, people work best when they know what is expected of them. Our Leadership Framework sets out what we expect of leaders at each leadership level across all business units and the key behaviours which will drive our success.

The introduction of our Senior Leadership Program ‘Stepping Up’ ensures that our future senior leaders are equipped to successfully lead and manage a diverse workforce in a global marketplace. A key focus of the Program is the development of strategic and commercial leadership capability, a key requirement in today’s complex and competitive business environment to win business and execute work successfully.

This Program is testament to our commitment and our ongoing investment in our people who are the foundation of our success.

Recruitment & RetentionDemand for key talent continues and our streamlined recruitment processes have assisted us in securing the appointment of a number of key positions during the year.

Throughout the year we have also continued to have as a priority the ability to ‘grow our own’ from within our talented workforce and a number of key internal promotions have occurred.

We have continued to engage with indigenous consultants and suppliers to assist us in providing employment and training opportunities and on-site services for Aboriginal and Torres Strait Islanders as part of our Indigenous Participation Program.

Our annual Graduate intake remains strong with significant interest in our Program. We have maintained attracting women into our Program with a 30% intake again this year. We are currently undertaking a review of our Program to further enhance both the tailored training modules and the on-the-job learning experience.

Our 2013 Employee Opinion Survey overall satisfaction score of 70%

confirmed that our employees continue to see us as an Employer of Choice and indicated that some of the best things about working for the Company is our teamwork and our ability to provide challenging work and job satisfaction.

Learning and DevelopmentWe continue to provide first class L&D opportunities.

Of particular note was the delivery of our 8th Emerging Leaders Program. This Program now in its 6th year continues to achieve excellent results. This year there was a significant increase in the number of high potential women attending the Program which supports our gender diversity plan to increase the number of women in management roles.

Safety training remained a key focus and we rolled out an additional three new Programs: The Workplace Health and Safety Program is an 18 module Program and throughout the year a variety of Project Management staff have commenced working their way through the modules; Leading Safety for Managers and Leading Safety for Supervisors are Programs to equip leaders with the knowledge, skills and techniques to build a strong safety culture and drive positive safety performance.

Our international and domestic workforce continues to show steady growth, with 12,000 people working across our projects including a permanent base of around 3,000 staff.

CEO’s Report

54

QCLNG Narrows Crossing

EnvironmentThere was a slight increase in the total environmental incident frequency rate for the year due to some storm water, erosion and sediment management incidents recorded on the larger pipeline projects. Each of these areas has undergone significant procedural improvements with good progress made. A positive sign of this progress was the company receiving the inaugural Australian Pipeline Industry Association Environment Award for its erosion and sediment control practices on the QCLNG pipeline projects. We also received an Australian Biosecurity Award in recognition of our environmental management on the APLNG project.

Human CapitalOur workforce numbers remained steady during the year with over 12,000 people across our various geographic locations. The business continues to focus on strong engagement with our employees and living our values. We believe in ethical behaviour, empowering leadership, training and development, open communication and performance management.

Looking AheadDespite the forecast downturn in key markets, we enter the period of uncertainty with significant opportunities across our markets. Competition remains intense in all markets and margins are tight.

In the short term we will continue to focus on our core competencies and current geographic footprint. The Asian and Middle East markets represent important growth opportunities for the company and these will be pursued to their fullest extent.

With the reduction in resources investment in Australia, we will apply greater resources to securing transport projects, especially larger opportunities in NSW. Additional strategies in Australia will include stronger marketing of the company’s rail and industrial capabilities.

We will continue to focus on the adherence to the corporate management systems with particular emphasis and attention on risk management, operational efficiency and cost control to ensure timely corporate intervention in underperforming businesses and projects.

I would like to thank our clients and business partners for their continued custom. We look forward to our continued association and finding innovative, economic and sustainable ways to deliver your projects.

Finally, thank you to all our employees for continuing to rise to the challenges we face in our industry. We acknowledge your commitment to the company and your passion for creative construction.

David Robinson Chief Executive Officer

Environment

Our environmental management performance throughout the year was good; however there was a slight increase in the total environmental incident frequency rate compared to 2011/12.

This can be attributed to an increase in environmental incidents recorded on our larger pipeline projects, specifically in the management and control of storm water, erosion and sediment during periods of significant rainfall. Considerable focus has been applied to improve these areas, with good progress already being made. A positive sign of this was the company receiving the inaugural Australian Pipeline Industry Association Environment Award for our erosion and sediment control practices on the QCLNG pipeline projects.

We continued to grow our capabilities in environmental performance with a focus on bringing in new managerial skills and experience, and the continued development of our workforce through training.

Health & Safety Performance

Safety is paramount to the success of the business. The company is committed to providing a safe working environment so that everyone goes home without harm at the end of every day and that this is not just a lip service set of words, i.e. we walk the talk with visible leadership.

2012/2013 ProgressThe company’s safety statistics were similar to last year with a slight improvement in LTIFR and RIFR as shown in the graph below.

Our results for hazard and near miss reporting have shown substantial improvements this year increasing by 151% percent. Improved results in the lead indicators are welcome as they assist the company in finding and rectifying any safety issues before they become accidents.

Seven Pillars of SafetyOur Seven Pillars of Safety remains at the core of our safety management program:

1. Committed and visible safety leadership at all levels of the business

2. All persons take ownership of safety and are held accountable by their manager for breaches

3. Consistent understanding and application of systems

4. An effective safety structure

5. Risks arising from changed circumstances are recognised and controlled

6. All risks associated with high consequence activities are eliminated or reduced by application of physical controls

7. A one team approach on safety with clients, joint venture partners and subcontractors

Developed and driven by senior management, these actions are focussed on delivering a step change in safety performance.

Health & Safety, Environment and Quality

At the start of Q3 FY13, the company commenced a new centralised structure called HSEQ, which runs the functions of health & safety, environment, sustainability, quality, management systems, tendering and training support to operations, and internal audit function for the Group.

Headed by an executive of the group, the structure has been centralised to drive a one company, one culture approach to our responsibilities in these areas. The aim of the new structure is to improve performance and provide; clearer direction, a risk and project focus, greater assurance, enhanced systems, better knowledge management, stream-lined management systems and to ensure operational understanding and application throughout the business.The leadership team consists of:

• Executive General Manager – HSEQ

• Group Safety Manager

• Group Environment Manager

• Group Quality Manager

• Group Management Systems & Knowledge Manager

• Group Audit Manager

• Group Tendering & Training Manager.

To support the Seven Pillars, a range of initiatives were implemented or continued throughout the year, including:

• Safety leadership education program for managers and supervisors

• Visiting leadership project safety visit reports for off-site management, 172 reported for the year

• STOP THINK ASSESS campaign to assist workers to recognise when changes affecting safety occur

• Use of START cards and ‘See Say Do’ books for individual hazard identification and reporting

• Personal safety plans for all staff

• Increased emphasis on high consequence activities in risk management and internal auditing

• Increased emphasis on accountability for safety and the use of a just culture model

• Trend analysis on incidents and campaigns launched around critical risk areas

• Early engagement with clients, joint venture partners on safety standards and systems

• Greater sub-contractor engagement in safety in our procurement systems

• Increased awareness of the hierarchy of control in managing high risk work

Type Award Project

Winner Australian Biosecurity Award APLNG

WinnerInaugural APIA Environmental Award

APLNG, QCLNG Export Pipeline, QCLNG Narrows Crossing and GLNG

Certificate of MeritMajor Category for Environmental Management

Upgrading Underground Link between Orchard MRT and Tangs Plaza

Certificate of MeritMajor Category for Environmental Management

C916 Beauty World Station

Jul 2010 Dec 2010 May 2011 Oct 2011 Mar 2012 Aug 2012 Jan 2013 Jun 2013

Rolling Recordable Injury Frequency Rate Rolling Lost Time Injury Frequency Rate R

ollin

g Lo

st T

ime

Inju

ry F

req

uenc

y R

ate

Rol

ling

Rec

ord

able

Inju

ry F

req

uenc

y R

ate

Dec 2010 Oct 2011 Aug 2012 Jun 2013Jul 2010 May 2011 Mar 2012 Jan 2013

Group Safety Performance 2010 – 2013

0.25

0.20

0.15

0.10

0.05

0.002009/10 2010/11 2011/12 2012/13

Serious environmental incident frequency rate. All frequency rates calculated to a base of 1,000,000 hours worked.

Australian Biosecurity Award

Six Pillars of Environmental ManagementDuring the year the company adopted Six Pillars of Environmental Management. The pillars are:

1. Emissions – reduce emissions resulting from our operations

2. Energy – minimise energy use throughout all operations

3. Water – minimise water use and effectively manage the quality of water used and released

4. Waste – minimise waste through adoption of the waste hierarchy and emphasis on the principles of prevention, reuse and recycling

5. Materials – optimise material usage through the implementation of green procurement strategies that increase the efficiency of resource use and produce an environmentally beneficial outcome

6. Biodiversity – avoid, minimise and mitigate negative impacts on biodiversity while optimising positive impacts

Similar to the Seven Pillars of Safety, they will provide the framework for all environmental management activities across the McConnell Dowell Group.

Recent Awards

76

The company has focused on several areas to drive quality and management systems improvements during 2012/13:

1. Project Management Plan Development – centralised tendering support to the business to provide appropriate responses at tender stage or at award for operations providing rapid embedment of project systems on new projects.

2. Project start-up training – smoother start-up execution and higher compliance levels are evidence of the effectiveness of this initiative.

3. Project Management Systems refinement – working to improve our systems and embracing smarter technology.

Sustainability

One the company’s core values is ‘Sustainability’. This value sees that we ‘act today with the future in mind’. 2012/2013 saw McConnell Dowell continue its sustainable development with initiatives including:

• Embedded the sustainability team into the Group HSEQ re-structure to ensure sustainability in the way we operate and within our systems;

• Integration of sustainability into project on-boarding and staff induction modules;

• Increased number of internally accredited Infrastructure Sustainability (IS) Assessors to 11 with targeted training for key influential personnel;

•

• Systems improvement through integration of sustainability principles predominantly aligning to industry demands from the peak body of Infrastructure Sustainability, ISCA (Infrastructure Sustainability Council of Australia), ensuring we further develop sustainability as core aspect of our operations;

• Applying for an ISCA IS rating for the Gold Coast Rapid Transit Project; and

• Becoming a founding member of the Supply Chain Sustainability School Australia.

Progress and performance on these and other initiatives is measured in the context of our six themes of sustainability: Economic; Governance & Risk; Health & Safety; Our People – Employees; Community & Social Investment; and Environmental Impact.

We will continue to integrate sustainability into our business planning and decision making process thereby building a robust, resilient and learning business that behaves ethically, protects our people and communities, and creates long term value for our stakeholders.

Sustainability Themes

EconomicBuild and maintain a robust and enduring business, and provide

acceptable economic and financial return to our shareholders.

Health & safetyEnsure the well-being and protection

of our workforce, and encourage behaviour and practices that entrench the McConnell Dowell Group’s safety

vision ‘Home Without Harm, Everyone Everyday’.

Environmental impactMinimise the environmental impact of our

activities through the efficient use of resources including energy, water and construction materials, and provide responsible waste

management. Promote innovative thinking and practices to achieve positive environmental and

sustainability outcomes.

Governance & riskMeet statutory obligations and ensure responsible governance with transparent reporting by operating in accordance with our third-party certified integrated management system. Mitigate risk to acceptable levels through adherence to McConnell Dowell Group Risk Management practices.

Our people – employeesEnhance the wellbeing of our workforce through skills and professional development, lifelong learning, increased ability to deliver sustainable outcomes, and participation in the direction of the organisation.

Community & social investmentMake a positive and meaningful difference to the health and well-being of the community through stakeholder engagement, social support and investment. Provide industry leadership through the participation in peak industry associations.

Construction of the Narrows Crossing cofferdam within a world class wetland used by migratory shorebird species and Mt Larcom in the background.

4. Lessons Learned Workshops at various stages of project life cycle. Facilitating these workshops has provided a greater understanding of areas to focus on for continuous improvement of our processes and management systems.

Looking forward, the centralisation of the HSEQ functions into one team provides the opportunity to better align the quality expectations and initiatives across the organisation. We remain focused on continuous improvement in all aspects of business and project delivery for the benefit of our clients, partners and employees.

Audits and AccreditationThe company’s management system was audited by Lloyds Register Quality Assurance and ISO accreditation maintained. The results were pleasing with the audit encompassing a large sample of our projects, fabrication yards and offices.

Internally, we audited all our projects and regions using our risk based approach. Feedback from these audits is an important input into our Lessons Learnt database and continuous improvement activities.

Initiatives in the coming year will include a continued focus on audit improvement, including looking at a range of new audit tools to examine high risks, and consideration of a scoring system for audits to drive improved quantitative analysis.

Quality & Systems

Health & Safety, Environment and Quality

98

DIVERSITY

Australian Operations 12Overseas Operations 14

Strategic Projects 15Pipelines 16

Tunnel & Underground 17Company Profile 18

Focus on Rail 21Built Environs 22

Electrix 23

Lower Hatea Bridge Crossing, New Zealand

Much of our success is due to the range of geographies we operate in and the variety of projects we undertake.

Operations

Australian Operations

QueenslandConstruction of the Gold Coast Light Rail system is progressing well with over half of the 13.5 kilometre track and overhead traction power lines completed. The first two trams have left Germany and are enroute to the Gold Coast with arrival expected late August. The Depot building is now substantially complete with our partners, Bombardier Transport installing the communications and controls equipment to the Operations Control Centre. Three of the six High Voltage Traction Power Stations have been installed with one of the Stations being energized. Commissioning works with the first vehicles will commence late September 2013 operating between the Depot and Southport Station.

After successfully completing Australia’s longest large-diameter submarine pipe pull (twin 1050 millimetre diameter pipes, each string length 3.9km, weighing a total of 13,000 tonnes) the project team at Gladstone has now turned their focus to completing the Horizontal Directionally Drilled Pipelines on the Mainland and conventional Pipelay works on Curtis Island. The 2.3km underwater pipe trench is also being filled with aggregate and rock armour to protect the pipelines. Construction of the Delivery Station on Curtis Island is well underway.

At Hay Point, Mackay, works continue on the new Trestle and third Berth for BHPB Mitsubishi Alliance (BMA) in collaboration with EPCM Contractor Bechtel. Inclement weather continues to hamper progress, however with alternate access to the offshore works via the existing Trestle we look forward to improved productivity for the remainder of the works.

New South WalesWork at the newly awarded Patrick Container Terminal Redevelopment at Port Botany has commenced. This project involves the construction of bulk earthworks, underground services and various pavements over a 17 hectare area of reclaimed fill.

Works continued at the Hume Dam Upgrade Project at Albury. Good progress was made with the successful completion of concrete foundation works below the Murray River bed. The project is on schedule for completion in October 2013.

Victoria and South Australia In South Australia, the Seaford Rail project was completed marking the construction of the longest incrementally launched bridge (1,100 metres) in the Southern Hemisphere. This project also won the Civil Contractors Federation South Australian Earth Award Category 5 for projects over $75 million.

We have also been awarded the contract to construct an architectural pedestrian bridge linking the Adelaide CBD on the Southern bank of the Torrens River with Adelaide Oval on the northern bank, as well as the Wayville Railway Station comprising a centre platform station and a pedestrian overpass providing access to the Adelaide Showgrounds. The Seaford Rail Works were also completed on the Adelaide Living Beaches project allowing us to commence the 10 year Operational and Maintenance contract to ensure the Glenelg beaches are maintained in pristine condition.

In Victoria the APAC Drive bridge was completed creating an additional exit for vehicles leaving Melbourne Airport for the CBD. The 60 metre long spans over the busy Tullamarine Freeway were jacked into place using a hydraulic gantry system reducing the closure time of the Freeway.

Our works at Melbourne Airport continue with award of a contract to replace 34,000 sqm of Air Side apron pavements over the next three years.

Works have also commenced on the Balaclava Rail Station Upgrade for Metro Trains Melbourne (MTM) transforming Balaclava Station to premium station level. We look forward to further work with MTM.

Springvale Level Crossing Removal Project was awarded in May with a 12 month construction period during which the intersection of the busy Springvale Road and Dandenong railway line is grade separated. The works also provide a new railway station, increasing the connectivity for the commuters and pedestrians in the area.

Western AustraliaDespite the challenging market conditions, we have continued to strengthen our relationship with existing clients such as BHPBIO, Rio Tinto and FMG in our traditional marine sector. Our service offering has been increased with the successful delivery of 240 kilometres of heavy haul rail for FMG from their Solomon mine site to Port Hedland.

2013 has also been a year of opportunity and growth with the award of the Quick Mud Creek Bridge with Bechtel on the Wheatstone LNG Project, the first in the oil and gas sector.

Australian Operations continued its strong revenue performance. With the slowing in the resources sector we are strengthening our focus on transport infrastructure opportunities. We have also restructured operations to improve performance across all projects.

FMG Berth 4, Western Australia

12

Overseas Operations Strategic Projects

The financial results for 2012/2013 reflected the more difficult trading conditions. Revenue and EBIT were 15% below budget. New work won for the period was also behind plan in most regions.

Safety performance was very good. The new corporate HSEQ has made a very positive impact on how we manage safety efficiently and consistently across all our operating regions.

New ZealandOur New Zealand and the Pacific Island operations have three significant projects underway.

Construction activity on the Waterview Connection Alliance is gathering pace with the preparatory works for the arrival of the TBM well advanced. The Te Mihi Geothermal Power Station is in commissioning and handover phase. Our project team on the Christchurch Earthquake Repairs alliance has grown as more projects are moving to the implementation phase.

Notable awards include further road and bridge works for the NZ Transport Authority and a large road construction project in Kiribati.

South East AsiaSingapore has produced another good result despite a decline in public and private investment. Work on three major underpasses is progressing well and the Jurong Aromatics marine project is scheduled to be complete in 2013. Major awards include civil projects for Lanxess, marine facilities for Oiltanking, and mechanical works on the new Sentosa Cableway.

In Malaysia work on the Vale Jetty is on schedule and we have been awarded further work associated with the project. We are also pursuing a number of civil and mechanical projects through existing relationships with clients.

Indonesia has maintained revenue and EBIT levels. Work on existing projects is proceeding well. The country certainly appears to have the best growth prospects in the region and there are a number of large projects that present significant opportunities based on our capability and experience.

Thailand, Philippines and Laos remain very challenging markets and we have fallen well short of our financial targets. Our operations in these countries are being reviewed to correct this underperformance.

Achievements2012/13 was a milestone year for SPG. In partnership with our joint venture partners, the group successfully delivered the $1.2 billion Adelaide Desalination Project, the largest infrastructure project completed in that state and one of the most technically advanced desalination plants in the world. The project was a showcase of McConnell Dowell’s multidiscipline capability from underground construction to architectural buildings, and everything in between. The facility received a Distinction Award at the Global Water Awards held in Seville, Spain in April 2013. This prestigious accolade sits alongside a host of local and national industry awards for technical and delivery excellence.

SPG continued the successful execution of the $1 billion Gold Coast Rapid Transit Public Private Partnership (PPP), Queensland’s first light rail system. To minimise disruption and inconvenience to the community, this complex urban project has required extensive communications and stakeholder engagement, and flexible construction planning and execution. On track for completion in 2014, the project has injected $170 million into the local economy in its first 18 months of construction. SPG continues its positioning for participation in potential extensions of the system.

Future OutlookLooking to future prospects, SPG recently managed McConnell Dowell’s positioning, partnering and successful shortlisting for the North West Rail Link OTS (Operations, Trains and Systems) PPP project in NSW. The OTS is the major component of the largest transport infrastructure project

ever undertaken in Australia. The two shortlisted consortia will now prepare offers to the Government, with the successful proponent scheduled to be announced in late 2014.

SPG has also completed or is progressing long term positioning and partner development on a number of other large government transport projects, and across a range of rail/port and industrial

developments throughout Australia.SPG’s application of deep market,

relationship and process knowledge is driving innovative commercial and partnering propositions in both public and private infrastructure markets. As a result, McConnell Dowell is now recognised as a preferred partner for many local and overseas companies.

The Strategic Projects Group (SPG) is responsible for identifying, winning and, in partnership with our operational business units, executing long lead, large scale, technically and commercially complex infrastructure projects.

In Hong Kong we have made significant progress on our project for Towngas to install submarine gas pipelines under the harbour. There are a number of good prospects that should result in further work for the operation.

The Middle EastThe outlook in our Middle East markets has improved significantly. We are nearing completion of the Ma’aden Aluminium Smelter project in Saudi Arabia. During the year we were awarded new projects at Qatalum in Qatar for a new pot relining facility and for the erection of pot handling machines for ECL at Emal in Abu Dhabi.

FabricationOur fabrication businesses in Batam and Thailand have operated at full capacity for the year. We have secured major export orders for both facilities to deliver modules, plate work and specialised steel items to Australia, Africa and regionally in Asia.

1 Vale Jetty, Malaysia 2 Jurong Cement Unloader, Singapore

New tram for the Gold Coast light rail system, Australia

1

2

14

2012 Achievements The 2012/13 year continued the development of McConnell Dowell’s major infrastructure capacity in the tunnels and underground sector. In New Zealand construction of the massive tunnel boring machine for the NZD1.3 billion Waterview project has been completed and it is currently being mobilised to site in Auckland. The statistics of this enormous tunnelling machine are staggering:

• Diameter 14.5m

• Installed power 11,600kW

• Weight 3,600t

• Thrust 205,000kN

Work on the DTL2 Rail Programme in Singapore is moving towards substantial completion ahead of time. In Abu Dhabi we continue with the tunnelling works program for the national power supplier Transco, and in the Philippines we have successfully completed a rehabilitation works program for our long term hydro power client SNAP-B.

All these projects offer significant complexity, scale and diversity and are well aligned to our strategic goals in the transport, utility and hydropower markets. The Tunnelling and Underground business continues to perform impressively in QSE and maintains industry leading indicators in health and safety through strong, visible and committed safety leadership.

The Year Ahead Strong performances on these projects, places the group in a strong position to secure future infrastructure transport projects across several regions. Australia, Singapore and New Zealand have commenced rolling out a range of infrastructure works programmes, due to come to market in 2013/14. McConnell Dowell possesses the key experience and expertise in underground transport technologies that will be critical in securing and delivering these massive projects.

Further Opportunities While conditions in the mining and resource sector remain demanding, the underground mining sector is committed to productivity and technology improvements to ensure long term sustainability. We continue to pursue a number of tunnelling opportunities in the sector and are well placed to work with the mining groups to develop these improvements.

Pipelines Tunnel & Underground

The majority of this activity occurred in the LNG sector in Queensland where McConnell Dowell have secured a dominant market share of pipeline construction activity including construction works on the QCLNG, GLNG and APLNG projects. Work on the Komo airfield project in PNG was also completed during the year.

QCLNG ProjectThe McConnell Dowell involvement in the QCLNG project comprises three primary elements of scope delivered in a joint venture arrangement. The QCLNG Gas Collection Header is a 197 km, 42 inch pipeline. The team is targeting mechanical completion by August 2013. The Export Pipeline is a 334 km, 42 inch pipeline to connect the Gas Collection Header, near Chinchilla, to the Narrows Crossing in Gladstone. The Export Pipeline team has exceeded 75% progress in field welding and is targeting a November 2013 completion of works. The Narrows Crossing includes the subsea pipeline between the mainland and Curtis Island. This team has excelled in managing the significant safety, environmental and construction challenges associated with this project that spans particularly sensitive mangrove areas. The Narrows project has assembled a world class specialist Horizontal Directional Drilling (HDD) team that has successfully completed the installation of the first of

two 1.5km, 42 inch pipelines. Installed in reactive clays, these are some of the most challenging, longest and largest diameter HDD installations to be completed in Australia.

The GLNG Roma Hub project is an upstream construct only contract involving earthworks, civil works, structural, mechanical and piping works and main and flowline pipeline installations. The GLNG team are approaching peak construction activity with solid progress having been achieved.

The APLNG Export pipeline from Miles to the Narrows Crossing in Gladstone is a 357 km, 42 inch diameter pipeline and the Condabri Lateral is a 56km, 36 inch diameter pipeline. The Condabri Lateral has been completed and the team continues to progress well with Export pipeline with the majority of pipe having been strung. The team will also mobilise to Curtis Island during July 2013.

Two MilestonesDuring the year we also celebrated two significant milestones. The Komo airfield project for the Exxon PNG LNG project was successfully completed having achieved a milestone of over 7 million person hours without a lost time injury. The first Antonov landed at this asset in May 2013. Secondly, we celebrated the successful commissioning of the Adelaide Desalination Plant Transfer Pipeline.

The Forward OutlookThe Pipelines business enters financial year 2014 with in excess $300 million of work in hand including the recently awarded Mereenie Pipelines and Flow Lines construction contract in the Northern Territory with Santos Ltd. The market opportunities that present to the business are more diverse than in recent years. In addition to further upstream opportunities on the APLNG project and potential work associated with the Arrow Energy LNG project, we see upstream works and gas transmission pipeline opportunities across Australia with a diverse range of potential customers. We remain alert to water and slurry pipeline opportunities and are actively pursuing SE Asian and Middle East pipeline projects.

The Pipelines team is well positioned to maintain and enhance the McConnell Dowell position as a leading pipeline EPC contractor recognised for our capabilities and customer focus. We emerge from the year with enhanced capabilities, unrivalled capacity and an energised management team. We look forward to working with our customers and partners to add value and provide assistance through project development and delivery phases.

Increased Capability, Capitalising on Infrastructure Rollout

Financial year 2013 saw a record level of project construction activity for the Pipelines business unit.

1 Waterview Tunnel Project, New Zealand Image courtesy of the Well-Connected Alliance

2 Rail Tunnel, Beauty World Project, Singapore 3 Site overview, Beauty World Project, Singapore

QCLNG Narrows Crossing

1 2

3

17

AUSTRALIA

ASIA

Shanghai

Hong Kong

Qatar DubaiAbu Dhabi

Saudi Arabia

PhilippinesLaos

Thailand

Malaysia

Singapore

IndonesiaPapua New Guinea

Brisbane

Sydney

Melbourne

AdelaidePerth

Auckland

Christchurch

New Caledonia

American Samoa

Solomon Islands

NEW ZEALAND

THE PACIFIC

MIDDLE EAST

Kiribati

DEPTH REACHCAPACITY EXPERTISE

We are a major engineering, construction, maintenance and building company, established in

1961. The key features of our development include working on major complex projects, entering

emerging markets and expanding into new regions.

CIVIL

FABRICATION

MAINTENANCE

PIPELINES

TUNNELLING

BUILDING

ELECTRICAL

MARINE

MECHANICAL

RAIL

MARKETSInfrastructure

PowerWater

Transport

ResourcesMining

Oil & GasPetrochem

BuildingCommercial

SocialDefence

Retail

COMPANY STRUCTURE

Part of the McConnell Dowell Group

Focus on Rail

During the year, we continued to expand our rail capability and capacity in Australia with the acquisition of key rail plant assets from Macmahon. The purchase included all Macmahon’s rolling stock and their extensive array of rail tools, spares, equipment and inventory.

The acquisition is a strong demonstration of the company’s long term commitment to growing its rail business, and builds on the success of the close relationship between McConnell Dowell and Aveng Rail in South Africa.

With the acquisition, McConnell Dowell’s major rolling stock fleet has grown to encompass:

• 7 Hi-Rail Excavators

• 4 Ballast Regulators

• 4 Tampers

• 3 Flash Butt Welders

Our Rail Safety Accreditation, which is held across Australia, has been updated to reflect this increase in rolling stock.

To support the expanded rail business, the company also increased the number of operators, fitters, electricians, supervisors and managers. We are committed to providing our rail clients with a competent, reliable, available and stable workforce. Further investment has also been made in a dedicated rail workshop for maintenance and servicing of the entire rail fleet.

Our fleet of rolling stock, rail equipment and personnel provides us with the capacity and capability to undertake major track renewals and maintenance works, in addition to our standard rail and civil construction projects across the country.

McConnell Dowell is committed to supporting the growth in rail infrastructure in Australia, and this year’s initiatives enhance our reputation as a safe, sustainable, innovative and reliable contractor to the rail industry.

Approx 17 words

We continue to look for opportunities to strengthen our capability and utilise our expertise in new market sectors.

OPPORTUNITIES

FMG Rail, Mainline Upgrade & Solomon Spur Western Australia

Gold Coast Light Rail, Queensland

Our service offering has been expanded with the successful delivery of 240 km of heavy haul rail for FMG from their Solomon mine site to Port Hedland.

21

Built Environs Electrix

Contracts were awarded in SA and WA in the Government, health, retail and transport sectors, including:

• Coles Beeliar Village, WA.

• Mount Gambier Hospital Redevelopment, SA.

• Myer Centre Adelaide Upgrade, SA.

• Ocean Keys Shopping Centre Expansion, WA.

• Parks Community Centre Redevelopment, SA.

• Perth Airport Terminal 1 Domestic Pier and International Departures Expansion, WA.

• Perth Airport Combined Logistics Facility and Terminal 1 Forward Works, WA.

Work also continues on the upgrade of the Centro Arndale Shopping Centre in SA and Whyalla Regional Cancer Centre in SA, with both on target for delivery as this report goes to press.

Built Environs teams also continue to work with McConnell Dowell on the Gold Coast Light Rail public-private partnership (PPP) in Queensland, as well as the tendering of other large-scale public infrastructure projects.

During the financial year, Built Environs successfully completed:

• 79 Squadron RAAF HQ at RAAF Base Pearce, WA.

• McCourt Street Medical Centre, WA.

• Noarlunga to Seaford Railway Extension (as part of the McConnell Dowell-Thiess joint venture), SA.

• RAAF Base Edinburgh Single LEAP Stage 2, SA.

• University of Adelaide Capital Management Plan building works, SA.

• Woolworths Walkerville, SA.

New ZealandElectrix New Zealand has had another solid year with most Divisions performing well. The Transmission business remains strong underpinned by the long term maintenance contracts in transmission lines and substations. This year in particular has seen a number of large substation projects successfully completed.

Work levels in the Gas business remain high and good growth has been experienced in the Distribution sector on the back of the Vector contract and work secured with new customers.

Ongoing work has been secured as part of the Auckland rail upgrade and whilst the commercial sector remains relatively quiet, the purchase of Action Electric in Christchurch has positioned the Company to capitalise on the earthquake rebuild programme.

Built Environs teams were awarded SA Australian Institute of Building (AIB) Awards for their work on the Noarlunga to Seaford Railway Extension and University of Adelaide Capital Management Plan, with both going through to the national awards; the 79 Squadron RAAF HQ project was also nominated for a yet-to-be-announced WA AIB Award.

At a time of considerable upheaval in the Australian commercial building industry, Built Environs continues to grow and improve its financial performance, with further growth planned this financial year.

Part of the McConnell Dowell Group

1 Transpower Nga Awa Parua substation 2 MRP Nga Tamariki mono pole transmission line 3 Auckland Harbour Bridge gas pipeline maintenance

AustraliaElectrix Australia has experienced significant growth through strong performance across all regional operations. Securing significant contracts with Powerco and SP Ausnet has provided a solid platform going forward for the Southern Region.

The Western Region continues to expand on the back of work secured with Western Power, including the extension of existing term contracts.

The Northern Region has positioned itself as a major player in the industrial and resource sector with work being done for GLNG, QGC and Boral in its own right and in conjunction with McConnell Dowell.

The investment in establishing in both Gas and High Voltage Substations in Australia has paid off with contracts secured with APA for gas mains refurbishment in South Australia and Western Power for substation construction.

Electrix goes into 2014 with a record level of work on hand and excellent prospects to expand in the Distribution, Gas, Transport and Water sectors.

1

1

2

2

2

3

3

Electrix has further consolidated its position as a leading provider of construction and maintenance services to asset owners in the utility, resources and infrastructure sectors with continued growth across all its operations.

The McConnell Dowell Group’s commercial building brand achieved a record award of new work and work-in-hand this financial year.

1 Perth Airport Terminal 1 expansion 2 Ocean Keys Shopping Centre 3 University of Adelaide Capital Management Plan

23

Consolidated

All figures are in A$ 000’s 2013 2012

Revenue and income (Note 1) 2,966,672 2,150,748

Operating expenses (2,895,636) (2,105,373)

Share of associate profit / (loss) (514) 5,742

Finance income 6,192 11,138

Finance costs (8,564) (6,087)

Profit before tax 68,150 56,168

Income tax expense (17,260) (13,088)

Profit after tax for the year 50,890 43,080

ATTRIBUTABLE TO:

Members of the parent entity 50,919 42,982

Non-controlling interest (29) 98

Profit after tax for the year 50,890 43,080

NOTE 1 Consolidated

All figures are in A$ 000’s 2013 2012

Construction contract revenue 2,944,940 2,137,332

Other income 21,732 13,416

Revenue and income – Group 2,966,672 2,150,748

Revenue – Associate 23,366 19,352

Revenue and income – Group and Associate 2,990,038 2,170,100

Income Statementfor the year ended 30 June 2013

Statement of Financial Positionas at 30 June 2013

Consolidated

All figures are in A$ 000's 2013 2012

ASSETS

Current assets

Cash & cash equivalents 274,179 323,813

Inventories 1,886 1,713

Trade and other receivables 774,303 526,629

Other current assets 2,555 5,885

Total current assets 1,052,923 858,040

Non-current assets

Property, plant and equipment 126,898 133,586

Investment in associates 5,434 9,449

Intangible assets and goodwill 31,591 31,591

Deferred tax assets 43,179 51,106

Total non-current assets 207,102 225,732

Total assets 1,260,025 1,083,772

LIABILITIES

Current liabilities

Trade and other payables 689,803 610,902

Interest bearing loans and borrowings 5,318 3,380

Provisions 88,278 94,792

Income tax payable 9,659 15,469

Total current liabilities 793,058 724,543

Non-current liabilities

Interest bearing loans and borrowings 73,040 22,241

Provisions 8,921 10,202

Other liabilities 134 165

Total non-current liabilities 82,095 32,608

Total liabilities 875,153 757,151

Net assets 384,872 326,621

EQUITY

Contributed equity 70,765 70,765

Reserves (9,799) (17,486)

Retained earnings 323,696 273,027

Parent interests 384,662 326,306

Non-controlling interests 210 315

Total equity 384,872 326,621

2524

Statement of Cash Flowsfor the year ended 30 June 2013

Consolidated

All figures are in A$ 000's 2013 2012

Cash flows from operating activities

Receipts from customers 2,710,864 1,987,100

Payments to suppliers and employees (2,768,520) (1,880,812)

Interest received 6,192 11,138

Other finance costs (5,761) (5,974)

Income tax paid (19,934) (8,358)

Net cash inflows / (outflows) from operating activities (77,159) 103,094

Cash flows from investing activities

Purchase of property, plant and equipment (42,248) (72,641)

Proceeds from the disposal of property, plant and equipment 9,618 5,482

Repayments from associates 1,507 773

Dividends received from associate 1,336 2,517

Acquisition of subsidiary - (213)

Net cash used in investing activities (29,787) (64,082)

Cash flows from financing activities

Proceeds from borrowings 56,085 25,000

Repayment of borrowings (3,348) (4,087)

Interest paid (2,803) (113)

Equity dividends paid (338) (64,029)

Net cash from / (used in) financing activities 49,596 (43,229)

Net decrease in cash and cash equivalents (57,350) (4,217)

Cash and cash equivalents at the beginning of the period 323,813 326,499

Exchange movements on cash 7,716 1,531

Cash and cash equivalents at the end of the period 274,179 323,813

Independent Auditor’s Reportfor the year ended 30 June 2013

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

Report on the Summarised Financial Statements We have audited the accompanying summarised financial statements of McConnell Dowell Corporation Limited comprising the summary consolidated statement of financial position as at 30 June 2013, the summary consolidated income statement and summary consolidated statement of cash flows for the year then ended, which was derived from the financial report of McConnell Dowell Corporation Limited for the year ended 30 June 2013. We expressed an unmodified auditor’s opinion on that financial report in our auditor’s report dated 19 August 2013. The Responsibility of the Directors for the Summarised Financial Statements The directors of the company are responsible for the preparation and presentation of the summarised financial statements in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. Auditor’s Responsibility Our responsibility is to express an opinion on the summarised financial statements based on our procedures, which were conducted in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. Auditor’s Opinion In our opinion, the information reported in the summarised financial statements is consistent, in all material respects, with the financial report from which it was derived. For a better understanding of the scope of our audit, this auditor’s report should be read in conjunction with our audit report on the financial report.

Ernst & Young

Michael Collins Partner Melbourne 19 August 2013

Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001

Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au

2726

Shareholder’s Information

AVENG LIMITED FINANCIAL SUMMARY FOR THE YEAR ENDED 30 JUNE 2013

All figures are in 000,000's ZAR AUD

Revenue 51,704.0 5,692.3

Profit before tax (PBT) 626.0 68.9

Net profit after tax (PAT) 459.0 50.5

Total assets 30,413.0 3,368.4

Shareholders’ funds 13,305.0 1,473.6

Cash flow from operating activities (288.0) (31.7)

Market capitalisation 11,656.0 1,283.3

No of countries 35

Total workforce 28,296

Number of shareholders 4,749

Latest Fitch Rating A

The ultimate parent company of McConnell Dowell Corporation Limited is Aveng Limited (“Aveng SA”), a company listed on the Johannesburg Stock Exchange (JSE) in South Africa.As at 10 September 2013:

RESULTS RELEASED TO MARKET ON 10 SEPTEMBER 2013

Extracted from the audited accounts based on exchange rate

ZAR / AUD of 9.0831 for P&L and ZAR / AUD of 9.0289 for the balance sheet.

We’ll continue to develop innovative, economic and sustainable solutions in order to meet our clients’ needs.

CHALLENGE

Beauty World Project, Singapore

28

Construction Head OfficeLevel 3, 109 Burwood Road Hawthorn Vic 3122 AustraliaPO Box 6065 Hawthorn West Vic 3122 Australia

P: +61 3 9816 2400 F: +61 3 9818 3553 E: [email protected]

ABN 11 008 444 880

Other Office Locations

Australia Sydney Brisbane Adelaide Perth Papua New Guinea

New Zealand & the Pacific Auckland American Samoa Christchurch Solomon Islands

Asia Singapore Jakarta, Indonesia Batam, Indonesia Bangkok, Thailand Manila, Philippines Hong Kong Shanghai, China Kuala Lumpur, Malaysia

Middle East Dubai Abu Dhabi Qatar Saudi Arabia

Angus Band Chairman The Aveng Group

Neil Cain Executive General Manager Strategic Projects

Jim Frith General Manager Pipelines

Charles Hall Executive General Manager Australia

John Hearst Executive General Manager Overseas

Gavan Jackson Managing Director Electrix

Angeleen Jenkins Executive General Manager HSEQ

Dale Morrison Chief Financial Officer

David Robinson Chief Executive Officer

Russell Rooney General Manager Tunnels and Underground

Kobus Verster Finance Director The Aveng Group

Directory Directors

Certification by Lloyd’s Registered Quality Assurance(LRQA) to standards provides certainty to clients that our systems and risks are effectively managed, and to maintain and improve the performance of our company.

www.mcconnelldowell.com

This document is printed on an environmentally responsible paper produced using Elementally Chlorine Free (ECF) pulp sourced from Sustainable and Legally Harvested Farmed Trees and manufactured under the strict ISO14001 Environmental Management System.