Coffey International Limited · 2015-08-09 · 4 | Coffey Annual Report 2015 Maintaining a strong...

Coffey International Limited

ABN 16 003 835 112

Appendix 4E

and

Annual Report

Year Ended 30 June 2015

Page | 2

COFFEY INTERNATIONAL LIMITED Results for announcement to the market For the year ended 30 June 2015 Financial Results

$A'000

Total revenue and other income^ Decreased

(7.8%)

to 579,138

Fee revenue^ Decreased

(2.1)%

to 372,554

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)^

Decreased (106.8%) to (1,578)

Earnings before interest and tax (EBIT)^

Decreased (174.5%) to (10,870)

Loss after income tax for the year^

Decreased (504.9%) to (18,048)

Loss after income tax for the year attributable to members^

Decreased (514.9%) to (18,128)

EBITDA before restructuring costs and impairment (underlying EBITDA)^

^ Includes both continuing and discontinued operations

Decreased (29.4%) to 18,542

Dividends

Amount per security

(cents)

Franked amount per

security (cents)

Interim dividend - Current year - Prior year

0 cents 0 cents

0 cents 0 cents

Final dividend - Current year - Prior year

0 cents 0 cents

0 cents 0 cents

NTA Backing

Jun-15 Jun-14 Net tangible asset backing per ordinary security 7.9 cents 11.5 cents Commentary on Results The commentary of the results for the year is contained in the 2015 Annual Report which should be read in conjunction with this Appendix 4E. The remainder of the information requiring disclosure to comply with ASX listing rules is contained in the attached Directors’ Report and audited Financial Report for the year ended 30 June 2015. Compliance Statement This report is based on audited accounts.

Page | 3

COFFEY INTERNATIONAL LIMITED Results for announcement to the market (continued) For the year ended 30 June 2015 EBITDA reconciliation

2015 2014

$'000 Continuing Discontinuing Total Continuing Discontinuing Total

Profit/(loss) for the year 5,370 (23,418) (18,048) 11,444 (6,987) 4,457

Add back:

Net interest expense 7,959 (10) 7,949 8,138 (8) 8,130

Income tax expense (962) 190 (772) 670 1,238 1,908

Depreciation and amortisation 8,685 608 9,293 8,477 722 9,199

EBITDA 21,052 (22,630) (1,578) 28,729 (5,035) 23,694

Add back:

Restructuring costs 2,496 5,411 7,907 2,468 - 2,468

Impairment - 12,213 12,213 - - -

Underlying EBITDA 23,548 (5,006) 18,542 31,197 (5,035) 26,162 Underlying EBITDA has been disclosed as it is the key measure used by the Chief Executive Officer (as Chief Operating Decision Maker) and management to monitor and assess the operating performance of the business. Underlying EBITDA is calculated as profit before net financing costs, depreciation, amortisation and taxation and excludes restructuring costs and impairment. The Underlying EBITDA measure has not been subject to audit or review.

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Annual Report2015

Smartsolutions areuncoveredwhen paceand purposecome together

2 | Coffey Annual Report 2015Coffey International Limited ACN 003 835 112

Every Coffey relationship is built on trust.

Trust that’s hard-earned through our proven expertise, our depth of global experience and our commitment to stay one step ahead.

Our specialists in geoservices, international development and project management work in partnership with our clients across the globe.

We create value throughout the asset lifecycle in the transport and property infrastructure, and energy and resources, sectors.

We deliver vital international aid projects for our clients.

Our united group of specialists take enormous pride in collaborating with our project partners. By digging deeper. Thinking smarter. And seeing further.

All so we can deliver the smartest solutions, every time.

Financial calendar

10 August 2015 15 October 2015 31 December 2015 8 February 2016* 11 March 2016* 25 March 2016* 30 June 2016 8 August 2016* 9 September 2016* 23 September 2016* 12 October 2016*

FY2015 full year results announcement Annual General Meeting Half year end FY2016 half year results announcement Record date FY2016 interim dividend Interim dividend for FY2016 payable Financial year end FY2016 full year results announcement Record date FY2016 final dividend Final dividend for FY2016 payable Annual General Meeting

* Dates subject to change

Coffey Annual Report 2015 | 1

Contents

Letter from Chairman and Managing Director

Financial performance

Our people and safety

Our operations

2

6

9

12

IngenuityEncourage and explore new thinking,

ask yourself ‘have I provided the smartest solution here?’

DeliveryDo what you say you will; our actions always speak

louder than words

IntegrityTake responsibility for your

own actions; do the right thing (even if nobody is looking).

Intelligent RiskThink differently; make informed decisions to ensure we’re one step ahead of the competition.

RespectValue and constructively engage with the contributions of others;

be mindful of your criticisms.

CollaborationShare our ideas and knowledge with

clients – and each other – with an open- minded and real generosity of spirit.

Safety

Our sectors

Investing in our future

Financial report

Shareholder information

16

20

21

115

Our behaviours

2 | Coffey Annual Report 2015

The 2015 Financial Year saw an encouraging first half before changing markets rapidly affected our target industries. We’ve taken decisive action, implemented quickly and effectively, to respond. With profitable continuing operations, we’re now well positioned to exploit emerging opportunities in the infrastructure sector.

Our reported net loss after tax of $18.1 million was in line with guidance, and reflected the impact of restructuring our Geoservices business in response to market conditions, and associated non-cash impairments. Importantly, our continuing operations recorded a net profit after tax of $5.3 million.

Our Geoservices business is now aligned strongly to our target markets, with a flexible workforce to respond to client demands.

Our Project Management and International Development businesses increased their order book for forward contracted work, with long term project wins supporting our sustainability.

With the infrastructure sector beginning to grow, we are well positioned to draw on our technical core to win and deliver key projects.


Managing Director John Douglas and Chairman John Mulcahy


Safety

We continued to deliver a strong safety performance with a Lost Time Injury Frequency Rate of 0.9 as at 30 June. While slightly up on the previous corresponding period (0.64), the result was below our external industry benchmark and reflected consistently strong safety performance across our operations.


Our underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was $18.5 million, 29% lower than the previous year. However, our underlying EBITDA for continuing businesses was higher at $23.5 million. Our reported EBITDA was ($1.6 million), affected by restructuring costs, non-cash impairments and discontinued operations.

We were pleased to report that our continuing operations delivered profitable results this year. This reflected the strength of our ongoing business as we focus on growth markets in the infrastructure sector in particular.

The strong disciplines already embedded across our operations allowed the company to absorb a range of non-recurring costs, including those associated with our restructure, the depreciating Australian dollar and our corporate bond issue during the year. Our net debt remained tightly controlled at $62.4 million, despite the impact of these costs. In addition, our working capital days remained at an industry leading level. Our ability to maintain this performance throughout a period of market and internal changes reflected the hard work to deliver the fundamentals of the business over the last four years.

Repositioning our Geoservices operations

Our strategy update in April outlined a plan to reposition our Geoservices business to respond to changing market conditions and further match capacity to markets. Your Board and Management Team recognised the need to move quickly and take decisive action to position the company for long term success. We are pleased to report that we have acted, and our restructure is already substantially complete.

We now have a consolidated and refocused management team to support emerging opportunities in transport and property infrastructure. This gives us the right focus to grow our Geoservices business, particularly in Australia.

We have refocused our mining strategy on the later stages of the asset lifecycle, moving from exploration work with junior operators to supporting mid-cap and major miners as they optimise existing operations. Our ability to manage risk in challenging environments ensures we have strong credentials to deliver this high value work to support our key mining clients. This refocused strategy led to the exit of our exploration management and resource delineation practices in Western Australia, South America and Ghana.

The rapid fall in the price of oil saw the company reduce our exposure to high cost oil and gas projects, particularly in Canada, where the Alberta oil sands industry had been significantly affected by market conditions. This decision led to our exit from a permanent presence in Canada more broadly, where our relatively small presence in Toronto did not have the scale to exist on its own. We continue to work with our partners on a major LNG project in British Columbia and will consider new opportunities in the Americas on a project by project basis.

Operational performance

The first half of the year saw the company continue to deliver profitable results, despite some signs of market changes beginning to emerge. By February, significant client market volatility impacted our work in the energy and resources sector, while transport infrastructure projects were slower to begin than expected on the east coast of Australia. The subsequent repositioning of our Geoservices operations saw the business deliver lower margins, off reduced revenue, for the full year. Pleasingly, recent state government elections on the east coast of Australia have resolved many of the issues causing project delays, and new projects are starting in this prospective market.

Our Project Management business continued to deliver a strong result, albeit on slightly lower revenue than the previous year, remaining a small but important part of the business. Key project wins saw its forward order book both strengthened and lengthened. This has allowed us to retain capability between projects and build our reputation for project management in the infrastructure sector.

International Development continued to deliver consistent returns throughout the year. Slightly lower revenue was the result of some key projects coming to an end, before new projects had begun. However, contracted work – and particularly contracted work beyond 12 months – has increased, providing a strong base on which to build our business in FY2016. International Development is firmly focused on delivering effective programs for our clients, with an emphasis on value for money outcomes.


Maintaining a strong client focus

Delivering on our clients’ expectations is vital to our success. We understand our clients’ opinions of us reflect the value we deliver and the likelihood of continuing strong relationships.

We were delighted to win again this year at the 2015 Financial Review Client Choice Awards. Coffey won the Best Provider to the Construction & Infrastructure Sector and the Best Queensland firm. These awards recognised our commitment to building the technical excellence for which we’re known, as well as developing a strong sales culture among our consulting staff. It was particularly pleasing to win for our work in the infrastructure sector given the strong opportunities for new work that exist within the Australian market. These wins followed our success in 2014, when we also won two awards for the Best Consulting Engineering Firm with revenue greater than $200 million and Best Provider to the Primary Industry Sector.

Our dedicated sales capability program has further enhanced this success. We’ve implemented new systems, processes and tools to support our technical staff in building lasting, productive client relationships. The program has seen good progress in building sales conversations throughout the business and creating a shared approach to winning work at Coffey. In addition, we’ve introduced a new client and project feedback program, improving response rates and providing stronger case management disciplines to better understand and improve our clients’ experience of us.

Dividend

The Board remains committed to delivering shareholder value and a return to the payment of dividends. However, at this time, we are focused on returning to profitability and continuing to reduce debt. We strongly believe this will support long term shareholder value as we work to exploit new market opportunities and build on our Geoservices operations.

Board changes

Stuart Black AM retired from the Board at our 2014 Annual General Meeting, after a 12 year tenure. Stuart chaired the Board Audit Committee until the formation of the combined Risk and Audit Committee in 2012. We would like to sincerely thank Stuart for his knowledge, advice and expertise during his time on the Board.

We have not sought to replace Stuart’s position. We believe the Board is currently the right size for Coffey, and our Directors have an appropriate combination of skills and experience to lead our strategy as we continue to manage changing markets.

Remuneration

Our remuneration policy seeks to ensure we attract and retain the right people to drive performance and deliver shareholder value. One Group Executive received a market adjustment to their fixed remuneration in October as part of this approach.

The Board decided that no Key Management Personnel would receive short term incentives this year due to the company’s performance not reaching minimum levels to trigger payments. This reflected the need to support our sustainable and profitable growth in changing market conditions.

The Board also undertook a review of Non-executive Directors’ fees during the year, taking into consideration the company’s current market capitalisation. As a result, we reduced Non-executive Directors’ fees by 20% as of 1 July 2015 to better align with our current market position. These changes, in addition to the reduction of the Board’s size this year, will see a 30% decrease in Directors’ fees in FY2016, relative to FY2014.




We continue to operate in a rapidly changing and competitive environment. So we’ve proactively invested in our future to support our long term success. We’ve recently created a digital innovation hub as the next step in our digital transformation. The hub will pursue disruptive digital technologies to boost client engagement and innovation.

We’ve also continued to invest in sales and marketing, strengthening our market positioning and building business development effectiveness. This is providing quality market intelligence at the early stages of project planning to support a more agile approach to responding to market conditions. These are essential capabilities to support our growth as we work closely with our clients across our five target industries.

Our people

We’d like to thank all of our people for their hard work and dedication throughout the year. Our strength is our people – and we rely on our staff to deliver smart solutions with agility in a competitive environment. We look forward to seeing the outcomes of their drive and initiative as we exploit new opportunities to win work on major projects with our clients over the year ahead.

Standing (left to right): Leeanne Bond, John Mulcahy and John DouglasSeated (left to right): Urs Meyerhans, Susan Oliver and Guy Cowan Coffey Annual Review 2013 05

All of our businesses have schedules of contracted work for FY2014. The declining value of the Australian dollar, relative to the US dollar, is likely to work in our favour in winning new offshore work.

During the year just ended, we refreshed the Coffey brand, retiring the nine separate brands that existed earlier. Now there is one Coffey brand, with the exception of MSI, one of our International Development units, which has high recognition in the US market.

We have backed the brand refresh with six behaviours – effectively a shift in the Company’s culture – which are aimed at ensuring we deliver value for clients, and maintain safety and security as top priorities.

We anticipate this brand overhaul will be well-received by our clients in the coming months.

Undoubtedly, the global economy continues to be sluggish. The Australian economy is undergoing a substantial transition from the boom years of the early 2000s. Under such conditions, no one can provide certainty about future returns.

However, business opportunities continue to exist, particularly offshore.

We have won some of those opportunities. We are pursuing others.

We are confident the Company is on a stronger financial footing. And it is positioned for the current market, and for an upturn in the business cycle when it comes.

Recognising the contribution of staffWe recognise and acknowledge the contribution of Coffey’s staff during the year. The tough trading conditions have tested all of us.

Our performance, in these circumstances, is a credit to the commitment and effort of all our employees.

John Mulcahy John DouglasChairman Managing Director

International Development provides about 45% of total revenue, and about 30% of fee revenue. The sources of revenue are diversified, with about 70% of fee revenue earned from sources offshore (i.e. sources other than Australia).

International Development enjoyed a good year. The US-based business performed well in a tough market. The UK-based business recovered steadily. The Australian unit continued performing well.

More detail on the respective businesses is on pages 08 – 13 of this report.

Looking ahead to 2014Overall, the Company ends the year in a sound position relative to tough trading conditions.

Our fixed costs and net debt are lower. Our cost of borrowing is lower, and it will fall further in FY2014 when fixed interest debt arrangements entered into in 2008 come to an end.

Urs MeyerhansFinance Director

Rebelle MoriartyGroup Executive Human Resources

Chantalle MeijerGroup Executive Marketing & Communications

Group Management

John DouglasManaging Director

Coffey Annual Review 2013 05

All of our businesses have schedules of contracted work for FY2014. The declining value of the Australian dollar, relative to the US dollar, is likely to work in our favour in winning new offshore work.

During the year just ended, we refreshed the Coffey brand, retiring the nine separate brands that existed earlier. Now there is one Coffey brand, with the exception of MSI, one of our International Development units, which has high recognition in the US market.

We have backed the brand refresh with six behaviours – effectively a shift in the Company’s culture – which are aimed at ensuring we deliver value for clients, and maintain safety and security as top priorities.

We anticipate this brand overhaul will be well-received by our clients in the coming months.

Undoubtedly, the global economy continues to be sluggish. The Australian economy is undergoing a substantial transition from the boom years of the early 2000s. Under such conditions, no one can provide certainty about future returns.

However, business opportunities continue to exist, particularly offshore.

We have won some of those opportunities. We are pursuing others.

We are confident the Company is on a stronger financial footing. And it is positioned for the current market, and for an upturn in the business cycle when it comes.

Recognising the contribution of staffWe recognise and acknowledge the contribution of Coffey’s staff during the year. The tough trading conditions have tested all of us.

Our performance, in these circumstances, is a credit to the commitment and effort of all our employees.

John Mulcahy John DouglasChairman Managing Director

International Development provides about 45% of total revenue, and about 30% of fee revenue. The sources of revenue are diversified, with about 70% of fee revenue earned from sources offshore (i.e. sources other than Australia).

International Development enjoyed a good year. The US-based business performed well in a tough market. The UK-based business recovered steadily. The Australian unit continued performing well.

More detail on the respective businesses is on pages 08 – 13 of this report.

Looking ahead to 2014Overall, the Company ends the year in a sound position relative to tough trading conditions.

Our fixed costs and net debt are lower. Our cost of borrowing is lower, and it will fall further in FY2014 when fixed interest debt arrangements entered into in 2008 come to an end.

Urs MeyerhansFinance Director

Rebelle MoriartyGroup Executive Human Resources

Chantalle MeijerGroup Executive Marketing & Communications

Group Management

John DouglasManaging Director

John Mulcahy Chairman

John Douglas Managing Director



We’ve made important changes to the business to drive growth in FY2016, and responded to changing market conditions to support our long term success.

Our revenue

Our total revenue was $579.1 million, down 8% on the previous year. Significant client market volatility saw project delays or cancellations in the energy and resources sector, while new infrastructure projects were slower to start than expected. Revenue for our continuing operations was $559.2 million.

Earnings performance

Our underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was $18.5 million. This compared to $26.2 million for FY2014. Underlying EBITDA for continuing operations was higher at $23.5 million, reflecting the stronger performance of the continuing business. Reported EBITDA, after restructuring and non-cash impairment costs, was ($1.6 million), in line with guidance.

The company’s restructure led to a net loss after tax of $18.1 million. This was in line with guidance and compared to a net profit after tax of $4.4 million in FY2014. Importantly, continuing operations were profitable, recording a net profit after tax of $5.3 million.

Diversified revenue

Our three businesses continued to deliver services to five target industries, supporting a diversified revenue base. In FY2015, International Development accounted for 55% of our revenue, characterised by longer term projects delivering stable and consistent margins. The infrastructure sector grew during the year to make up 30% of our total revenue, while the energy and resources sector contributed 13%.

* EBITDA - Earnings before interest, tax, depreciation and amortisation** Underlying EBITDA - Earnings before interest, tax, depreciation and amortisation, before vendor earn-out, restructuring costs and asset impairment. A reconciliation of underlying EBITDA to reported net profits is provided in the Directors’ Report - Review of Operations.

$ million unless otherwise stated FY09 FY10 FY11 FY12 FY13 FY14 FY15

Total revenue 808.7 769.8 680.6 678.1 688.4 628.1 579.1

Fee revenue 510.4 475.7 423.6 421.5 411.0 381.0 373.0

EBITDA * 53.3 44.0 (39.7) (0.5) 18.6 23.7 (1.6)

Underlying EBITDA ** 55.4 47.9 32.3 39.7 28.8 26.2 18.5

Earnings before interest and tax 41.1 33.7 (50.0) (9.6) 9.2 14.5 (10.8)

Net profit after tax 16.4 13.8 (69.7) (34.5) (1.0) 4.4 (18.1)

EPS – cents per share 14.5 11.9 (52.9) (16.3) (0.4) 1.8 (7.8)

Net debt 92.8 100.5 121.2 66.0 58.0 48.1 62.4

Equity 191.1 198.2 122.4 133.4 137.2 140.3 123.8

Net debt / equity 48.6% 50.7% 99.0% 49.5% 42.3% 34.3% 50.4%

Net debt / capital (equity + net debt) 32.7% 33.6% 49.6% 33.1% 29.7% 25.5% 33.5%

Seven year performance summary

Urs Meyerhans Finance Director

Total Revenue ($m)

808.

7

769.

8

680.

6

678.

1

688.

4

628.

1

579.

1

FY

11

FY

12

FY

13

FY

14

FY

15

FY

10

FY

09

Underlying EBITDA** ($m)

39.7

28.8

26.2

18.5

36.8

28.8 31

.2

23.5

29.5

17.1

11.3

5.0

(0.3

)

(1.8

)

0.8 2.

0 14.8

18.3 19

.1

16.3

FY

12

FY

12

FY

12

FY

12

FY

12

FY

13

FY

13

FY

13

FY

13

FY

13

FY

14

FY

15

FY

14

FY

15

FY

14

FY

15

FY

14 FY

15

FY

14

FY

15

Coffey Coffey Continuing Businesses

Geoservices Project Management

International Development

Total Revenue

Geoservices 41%

Project Management 4%

International Development 55%

Transport Infrastructure 19%

Property Infrastructure 11%

Oil and Gas 8%

Mining 5%

Other 2%

International Development 55%

Net Profit ($m)

16.4

13.8 4.

4

(18.

1)

FY

11(6

9.7)

(34.

5)

(1.0

)

FY

12

FY

13

FY

14

FY

15

FY

10

FY

09




Diversified, longer term debt

We completed a $40 million unsecured corporate bond offering in September to diversify our debt and increase its tenure. The offer was fully subscribed for a five year term, maturing in September 2019. At the same time, our bank facilities were extended to September 2017. The success of the bond offering was a strong endorsement of our strategy and has provided a more balanced debt profile over an extended period.

Our debt was tightly managed during the year, with net debt at $62.4 million at 30 June 2015. Total debt was $90.8 million. The work done to drive down debt in FY2014 allowed the company to absorb the impact of a number of non-recurring costs during the year. This included restructuring costs of $5 million in the second half, while EBITDA loss for discontinued operations also totalled $5 million. The depreciating Australian dollar increased total debt by $8.1 million, and bond issue refinancing and other costs were $2.4 million. Despite these costs, we maintained a positive net operating cash flow of

$0.9 million. We’re now focused on continuing our debt reduction focus to support the fundamentals of the business.

Our working capital days remained at industry leading levels, at just 53 days at 30 June 2015. Our continued ability to manage our working capital reflected strong disciplines within the business as we tightly managed work in progress and follow up on outstanding payments.

Risk management

As market conditions change, the Board and Management Team recognise the importance of managing financial, project and safety risks. The Board’s Risk and Audit Committee met four times during the year.

Our Risk Management Framework provides a structured and consistent process for identifying, assessing and managing risks to the achievement of our business outcomes. We review this annually to ensure it remains relevant, both to our business and in relation to external factors that might impact the company.

In FY2015, we managed financial and project risk through the repositioning of our Geoservices business to support our long term future. This included discontinuing operations that presented short term risks due to lack of client market demand. Our continuing operations represent a more focused, profitable business that is well positioned to capitalise on growth markets.

We’ve also maintained a diversified industry focus to ensure market conditions affecting specific sectors or geographies do not significantly impact our business. This has seen the company balance shorter term Geoservices work with the potential to deliver higher margins, with longer term work delivered by our International Development business.

Our HSSE framework has continued to be embedded in the business to maintain a strong approach to managing safety risk – and our safety performance remains at industry leading levels.

Operating Cash Flow ($m)

$0.9m

34.2

15.9

21.8

18.1

20.9

0.9

FY

11(4

.9)

FY

12

FY

13

FY

14

FY

15

FY

10

FY

09

Net Debt ($m)

$62.4m

92.8 10

0.5

121.

2

66.0

58.0

48.1

62.4

FY

11

FY

12

FY

13

FY

14

FY

15

FY

10

FY

09


Business 30 June 2014 30 June 2015 Variance

Geoservices 1570 1170* 400

Project Management 120 120 —

International Development 1970 1850** 120

Corporate and functions 170 160 10

TOTAL 3830 3300 530


Our people

A streamlined management team and more agile workforce has positioned Coffey to capitalise on new opportunities in the infrastructure sector. We had 3300 employees at 30 June.

Creating an agile workforce

Staff numbers declined during the year as we reduced our exposure to early stage mining and high cost oil and gas projects. A total of 210 employees were affected by the restructure of our Geoservices business. A further 150 non-transferrable Geoservices staff in our continuing operations were also affected as we took steps to match capacity to markets in the second half.

We’ve improved staff mobility, relocating key people to support the delivery of transport infrastructure work in New South Wales. An increased use of casual and contracted employees also created a more flexible Geoservices team – drawing on a model successfully used by our International Development business. We’ve better leveraged our industry experts, mobilising key senior technical staff to consult and add value to local teams on major projects.

This more agile workforce is providing the flexibility to direct our expertise to where it’s needed most. This is improving our client focus and supporting a responsive, market driven resourcing model.

Building internal capability

We implemented a new program to improve internal sales capability during the year. The program introduced new tools, processes and systems to support consulting staff in better understanding our clients’ needs and delivering client value. The program is now embedded in the organisation and will be further developed in FY2016.

Our innovation culture was also strengthened with innovation training for our senior leaders in November. The training showed how to apply rapid innovation and iterative design techniques to build a culture of innovation, and further leverage the technical excellence for which we are known, to help differentiate Coffey with our clients.

An improved performance planning and review process provided a stronger focus on our organisational capabilities. The new process is supporting more targeted, meaningful conversations about individual performance and strengthening development plans for our people.

Rebelle Moriarty Group Executive Human Resources

*Geoservices headcount includes 170 casual or contracted employees**International Development headcount includes 1500 contracted employees, compared to 1600 at June 2014


Safety remains at the core of what we do – and we continue to deliver a strong safety performance. We recorded a Lost Time Injury Frequency Rate (LTIFR) of 0.9 for FY2015, up slightly from 0.64 on the previous year.

Our International Development and Project Management businesses remained LTI free for the year, reflecting a strong focus on continuous safety improvement. In Western Australia, the Industrial Foundation of Accident Prevention Safeway Awards saw our local Environments team win the platinum award, and our Testing and Geomechanics teams win the gold

award. The awards recognised the safety performance of WA businesses that achieved an improved LTIFR or at least six months LTI free. In Queensland, we won BP’s High Achievement Award for Security, Health, Safety and Environmental Management for the FY2015 year.

Our safety focus this year included injury prevention, with new initiatives implemented to reduce the likelihood and severity of injuries. We introduced improved Backsafe training to target instruction on office ergonomics and workstation set up, and improved the workers’ compensation claims management process. We’ve also provided a strong focus on fatigue management as part of injury prevention. This has supported our safety performance and helped identify and remove potential hazards before incidents have occurred.

Our safety performance

7.0

6.0

5.0

4.0

0.9

3.0

2.0

1.0

0

LTIFR

LTIFR External Safety Benchmark

Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15


Scott Myles Group Manager Health, Safety, Environment and QualityScott joined Coffey in 2009. He’s led the HSSE team to drive safety improvements and implement a single HSSE management system across the business. Scott spent 20 years in the Royal Australian Engineers (Army), holding several command and operational positions, including on the UN Landmine Clearance Program in Mozambique and as the Chief Engineer North Queensland. In 1993, he was awarded the Conspicuous Service Medal in the Australia Day Honours List. Since leaving the military, he’s held a range of senior executive roles.


Recognising our talents

Principal Contaminant Hydrogeologist Casey O’Farrell was appointed Principal Adjunct Research Fellow at RMIT University. The appointment recognised Casey’s ongoing collaboration with RMIT as part of her work in the field of environmental site assessment and remediation.

Auckland Geotechnical Manager Chris Armstrong won the Asian Association of Management Organisations scholarship to represent New Zealand at its Young Managers Programme. Chris travelled to Macau and China in November as part of the scholarship to develop his leadership skills with other recipients from across Asia and Australia.

Team Leader for the Coffey-managed STAR-Ghana program Ibrahim-Tanko Amidu was awarded the GPSA Award for Leadership in Social Accountability for the Africa Region. The award is operated by the World Bank and the Global Partnership for Social Accountability, and recognises individuals for their contributions in the field of social accountability as a means to eradicate poverty.

MSI President Emeritus and Senior Advisor Larry Cooley was appointed to a three year term on the editorial board of the Public Administration Review. The board oversees the flagship journal of the American Society for Public Administration.

Managing Principal and Business Development Manager Sinead Magill won the Women of the Future business category award. The awards recognise the achievements of women working across a range of sectors in the UK. Sinead’s win highlighted her extensive work in the International Development industry, as well as her strong business acumen.

Sinead Magill

Casey O’Farrell Ibrahim-Tanko Amidu

Chris Armstrong Larry Cooley

General Manager Geomechanics Vic/SA Richard McKenna joined the Roads Australia Fellowship Program in recognition of his work in the transport infrastructure industry.

Richard McKenna


Geoservices and Project Management

We took swift action to respond to market changes and exploit emerging opportunities in the infrastructure sector. State elections on the east coast of Australia provided a clear transport infrastructure agenda, while operators in the energy and resources sector focused on driving value on existing projects.

While the prospective transport infrastructure industry provided signs of growth, new projects were slow to begin. Significant client market volatility in energy and resources also affected the business, as oil and commodity prices fell. Total revenue for the Geoservices business was $239.6 million, 10% lower than the previous year.

Margin pressure associated with market conditions and the restructuring of the business saw a Geoservices full year margin of 3%. However, margins for continuing operations were higher, at 6% for the full year.

Project Management continued to deliver profitably, despite revenue contracting slightly to $24.1 million for the year. The business retained capability as projects were completed in the second half to support major projects that have since been secured. This impacted EBITDA for the second half, but supported the growth of the order book.

Refocused management team

Our refocused management team created stronger alignment with our industry market positioning.

Rhett Duncan was appointed Group Executive Transport Infrastructure, expanding on his previous role overseeing our Testing operations. Rhett joined Coffey in August, and this expanded role reflected his track record for driving business improvement and supporting a winning work focus. He is now responsible for most of our Australian and New Zealand Geomechanics teams, in addition to our Testing operations. This will help drive the natural synergies between these service offerings in the Transport Infrastructure industry.

Rob Morris expanded his role overseeing our Environments services to become the Group Executive Energy and Resources. This also includes responsibility for integrated Geoservices teams in Western Australia and the Middle East, which are key geographies for our work in this sector. Rob’s immediate focus was on responding to market conditions as we repositioned the business.

Richard Biesheuvel was named Group Executive Property Infrastructure, building on his existing role overseeing our Project Management business. The role follows Richard’s success in returning the Project Management

business to profitability, and will ensure a strong focus on Property Infrastructure.

Transport Infrastructure opportunities

New transport infrastructure projects were slow to begin, with the cancellation of the East West Link in Victoria and a change of government in Queensland delaying the start of key projects. Victoria has since emerged as a growth market, as funds earmarked for the East West Link were reallocated to new projects.

The re-election of the New South Wales Government saw the endorsement of its State Infrastructure Strategy, with significant investment expected over the next four years. We’re well positioned to capitalise on this, with 50 years’ experience working on NSW road and rail projects.

In New Zealand, we worked on the SH16 Causeway Upgrade and Transmission Gully Motorway during the year, drawing on our expertise to manage New Zealand’s unique geological conditions. With continued transport infrastructure investment expected over the next four years, these projects are building our reputation on major road projects. Similarly, in the UK a strong transport agenda is emerging, with a commitment for significant investment in the country’s rail network over the next five years.

Ouroperations

Business FY2014 revenue FY2015 revenue FY2015 continuing operations

Geoservices $264.6 million $239.6 million $219.7 million

Project Management $27.1 million $24.1 million $24.1 million

International Development $336.4 million $315.4 million $315.4 million

TOTAL $628.1 million $579.1 million $559.2 million

Our businesses


Opportunities in urban renewal

The strong infrastructure focus in Australia, New Zealand and Africa has seen growing opportunities for urban renewal. Key upcoming urban development projects in Australia will include Bays Precinct in New South Wales and the Fishermans Bend Precinct Development in Victoria. These significant projects show the strong potential for the Property Infrastructure industry in Australia.

We’ve strengthened our Geoservices presence in Africa to leverage our infrastructure capability in the region. In New Zealand, the first phase of the Christchurch earthquake recovery work started to decline, as we continued to work on major projects such as the Christchurch Bus Interchange to support the rebuild. This highlighted our ability to work on complex projects in built environments.

Reducing our exposure to high cost oil and gas projects

The sharp fall in the price of oil saw our oil and gas clients defer or cancel new projects, as they sought to drive efficiencies on existing operations. With the Australian industry’s construction phase coming to an end, we worked with our clients to optimise their operations and develop health and safety programs to improve project outcomes. We also continued to deliver projects in the Middle East, where the softening Australian dollar has increased our competitiveness.

The decision to reduce our exposure to high cost oil and gas projects, and further match capacity to markets, also saw the company exit our permanent presence in Canada. This followed the significant impact of the falling oil price on the Alberta oil sands industry. As we responded with the closure of our Calgary office, our Toronto operations did not have the scale to operate independently and were also closed. We continue to work with our

partners to deliver a major LNG project in British Columbia.

We’ve also continued to actively target the oil and gas market in Papua New Guinea, drawing on our wealth of experience working on environmental impact assessment projects in the country. And we’ve started work to further develop our presence in the emerging Myanmar market.

A refocused mining strategy

We refocused our mining strategy on the later stages of the asset lifecycle, exiting our exploration management and resource delineation practices in Western Australia, South America and Ghana. We remain committed to continuing our mining presence in the operations phase of the lifecycle, supporting mid-cap and major operators on existing projects. Our work is helping optimise these projects at a time when commodity price pressure is affecting many operators.

Our Brazil operations continued to deliver geospatial technologies, including virtual reality, to our clients. We’ve taken steps to improve skills transfer between the Brazil team and our Australian operations to further leverage these skills in the resources sector.

Contracted revenue

With infrastructure projects still in their early stages, total contracted fee revenue for the Geoservices business was $83 million, compared to $114 million for the prior period. The restructure did not have a significant impact on contracted revenue, with $3.2 million taken out of the order book.

Project Management contracted revenue remained strong, with a strengthening and lengthening order book. Total contracted revenue was $35 million at 30 June 2015, which included $19 million contracted beyond the FY2016 year.

(Left to right): Group Executive Transport Infrastructure Rhett Duncan, Group Executive Energy and Resources Rob Morris, Group Executive Property Infrastructure Richard Biesheuvel


Ouroperations


As the International Development industry moved beyond the Millenium Development Goals and began new projects, we continued to work closely with our three key clients. The year saw a management transition for our American subsidiary MSI, while in Australia we repositioned our management team to support our business development priorities.

Some key projects came to an end during the year, leading to total revenue of $315.4 million. However, key project wins saw contracted revenue rise, as we worked closely with our clients to drive value for money outcomes.

International Development is now 57% of our continuing business (55% of total revenue), providing consistent and stable margins on longer-term projects. This is providing a strong and sustainable base as we implement critical projects across the globe.

Working closely with our clients

Our geographic diversification was maintained with a continued focus on our three key clients in the US, Australia and the UK during the year.

In the US, aid funding has reduced, although there has been increased commitment to health and food security programs. Our work with the US Agency for International Development continued in the governance, security and justice practice areas, as well as in research, monitoring and evaluation. Key project wins in Pakistan, Mexico and Columbia boosted our order book and provided a strong pipeline of work over the medium term.

In Australia, the transition of the aid budget to the Department of Foreign Affairs and Trade in FY2014 led to a shift in focus of aid priorities being implemented during the year. New development projects were more closely aligned with Australia’s national interest, with a strong emphasis on economic growth and gender equality. And as value for money continued to be an important area of focus, our research, monitoring and evaluation practice area has supported informed decision making on aid priorities.

In the UK, the national election in May confirmed bipartisan support for the foreign aid funding target of 0.7% of Gross National Income. The Department for International Development maintained its focus on effectiveness and value for money as it implemented its aid program.

Leadership transition

Our American subsidiary MSI undertook a key leadership transition in March, with founder and President Larry Cooley retiring from his role. Larry has taken on a new challenge as President Emeritus and Senior Advisor, providing valuable advisory support to both MSI staff and the broader International Development business. Larry founded MSI in 1981 and has pioneered the innovative Scaling Up methodology in the International Development industry. He’s now working across the business, supporting our teams on key projects worldwide.

Keith Brown succeeded Larry as President, building on the company’s history of having a highly respected technical expert leading MSI. Keith has held a range of positions with MSI over more than 10 years, and was Senior Vice President for the past four years. His appointment supports the company’s long term strategy as it continues the legacy set by Larry and Executive Vice President for Operations Marina Fanning.

Glen Simpson Group Executive International Development


Investing in business development capability

International Development’s Asia Pacific business saw its general manager seconded to a key country manager role during the year. Sam Spurrett’s new role, based in Papua New Guinea (PNG), is supporting the business’ winning work focus. Sam’s business development background and previous experience in PNG ensures he is well positioned to take on this role at an important time in the development funding agenda for the country.

Ben Ward was appointed Acting General Manager during Sam’s secondment. Having led our successful research, monitoring and evaluation practice area, Ben is ideally suited to take on the role to support our Asia Pacific operations.

Contracted revenue

Key project wins during the year saw total contracted revenue increase significantly. This strong, predictive pipeline provides a solid foundation for the business, both in the next 12 months and beyond. Total contracted revenue as at 30 June 2015 was $546 million, including $235 million for FY2016.

Larry Cooley President Emeritus and Senior Advisor US subsidiary MSI

Sam Spurrett General Manager (currently seconded to PNG) Asia Pacific

Kit Black General Manager Europe

Keith Brown President US subsidiary MSIKeith was appointed to his new role in March and is helping steer MSI’s focus on research, monitoring and evaluation. With more than 30 years of experience in the industry, he’s worked in Latin America, Eastern Europe, Southeast Asia, the Near East and the Balkans. Keith is focused on partnering with our clients to offer practical, effective and sustainable solutions to development problems.

Ben Ward Acting General Manager Asia PacificBen previously led our research, monitoring and evaluation practice in the Asia Pacific, and has also worked for our UK team, leading a team of more than 30 consultants. He’s completed more than 40 evaluation and research assignments including the Evaluation of DFID’s Girls’ Education Challenge and the European Union’s Health Program.


Our sectors

Infrastructure

Urban development is driving growth in the transport and property infrastructure sector, and is an increasing focus in our target geographies. Projects need to consider ground conditions, remediation requirements and the risks of development in a built environment to succeed.

We’ve invested $4 million in targeted sales capability in the transport and property infrastructure sector.

Transport Infrastructure

With a growing transport agenda in Australia, New Zealand and the UK, we’re currently pursuing a range of major projects with a total capex spend of $250 billion over the next five years. The available market for consultants is more than $2.5 billion, highlighting the strong potential in these markets for a company that can deliver real value on large and complex projects.

Australia and New Zealand

Infrastructure investment in Australia is rising. New South Wales is leading the charge, with the State Government allocating $68.6 billion over the next four years for infrastructure projects, including $38 billion for transport. And in New Zealand, major road projects currently underway are just the beginning, as the country improves its national transport network.

UK

The UK Government’s commitment to spend £38 billion on railways in the five years to 2019 will modernise its rail network. Our track record on previous rail projects means we’re well positioned to add value during this time of significant investment.

Network Rail Control Period 5

Projects listed do not amount to total Capex values and represent a selection of major projects only

*Multiple project opportunities

1 project with >$50b total project capex

Sydney Metro

WestConnex Sydney

Melbourne Metro

Western Distributor Melbourne

NZ Roads of National Significance

Multi Modal Connectivity Auckland

6 projects ranging from $10-20b total project capex


Energy and resources

We’ve shifted our focus in mining to the later stages of the asset lifecycle. It’s here we can draw on our expertise, including in geospatial technologies and virtual reality, to improve project outcomes. We’re continuing to target mid-cap and major operators that have the scale to continue developing the efficiencies of their existing operations, particularly in Australia and Africa where we have an established presence and strong client networks.

In the oil and gas industry, our strong local relationships with key clients in Australia and the Middle East have been maintained. As Australia transitions from the construction to operations phase, we’re supporting our clients to save costs and improve safety.

There are strong opportunities across the energy and resources sector in Papua New Guinea, where we have 40 years’ experience working with the local resources sector. Combined with our international development presence, we’re well positioned to support our clients as they establish their social licence to operate.

And in Myanmar, the relatively new local oil and gas industry represents new opportunities. We’re working with existing clients to identify new opportunities in this emerging market.

Papua New Guinea

While both the mining and oil and gas industries have been impacted by market conditions, there remains opportunities for consultants that deliver cost savings and minimise project risk.

Property Infrastructure

Major developments will lead the urban renewal of city centres and create new destinations in their own right. We’re currently pursuing property infrastructure projects across the globe. Projects with a total capex of $166 billion over the next year will provide an available market for consultants of about $1.75 billion.

Australia

Major property projects will transform city landscapes and create new destination locations as the Australian property industry grows. Property development is expected to be most prevalent on the east coast of Australia, where major projects will lead this industry trend.

New Zealand

With 60% of New Zealand’s population growth centred on Auckland, urban development is a major focus. Understanding the city’s unique geological conditions will be important, and developers may need to remediate once industrial land as it’s transformed to create new housing.

Africa

South Africa is the gateway to Africa, where demand for property development is growing. We’re strengthening our Geoservices capability to support our work in the infrastructure sector.

Auckland Council Seismic Upgrade Program

Lincoln University Redevelopment, Christchurch

Long Bay Residential Subdivision, Auckland

Avon River Precinct re-development, Christchurch*

Housing New Zealand Corporation Repair Program*

Christchurch Council Sports Facilities Portfolio, Christchurch*

Ormiston Town Centre, residential and mixed used land development project, Auckland*

Modderfontein*

$17b total project capex in Nigeria and South Africa

Federation Square East

Aquis Great Barrier Reef Resort

The Bays Precinct Development*

Fishermans Bend Precinct Development*

$122b total project capex in Australia

$26b total project capex in NZ


Our sectors

US

In the US, aid funding reduced during the year, although there has been growing commitments for health and food security projects. Our American subsidiary MSI is working closely with USAID to deliver on their development objectives.

Australia

UK / Europe

America

Overlap

International development office

Active in-country projects

The Millennium Development Goals come to an end in 2015, having been the world’s overarching development framework for the last 15 years. And there have been many successes during this time.

As the development community sets its post-2015 development agenda, contractors who can manage risk, deliver on expectations and provide value for money will have an important role to play. Our long term work with key clients in Australia, the UK and the US ensure we understand our clients’ needs as they implement these important programs.



Australia

In Australia, aid funding has been further aligned to the national interest, with a stronger focus on economic growth and value for money. Our work across the Asia Pacific is supporting this focus.

UK

Bipartisan support for aid funding was confirmed before the May 2015 UK election. We’re working closely with the Department for International Development, particularly in the areas of research, monitoring and evaluation and security and justice.


The market is demanding that businesses rapidly adjust to the dramatic advances in our industries, brought about by emerging technologies and shifting business models.

Investing in robust, scalable digital platforms for new, repeatable products and services will result in self-sustaining business transformation. Our commitment to building an end-to-end digital business that connects our data and expertise to our clients will deliver innovation, efficiencies and profit.

Digital Innovation Hub

In FY2015, our Board approved the establishment of Coffey’s Digital Innovation Hub. Partnering with digital specialists and our clients, the team will research and pursue disruptive digital technologies and processes aimed at unlocking untapped valuable data. This client-led approach to innovation is structured to boost client engagement and deliver mutually beneficial profit growth and efficiency gains.

Integrated geospatial, design management and visual technologies

Coffey is recognised for its well established geospatial technologies, virtual reality, and Building Information Modelling (BIM) capabilities. In Brazil we’ve worked extensively with the local mining industry for global key clients to provide virtual reality services that support mine planning and optimisation, and enhance safety practices. In FY2015, we mobilised key resources to transfer these skills to our Australian business as we refocused on the later stages of the mining asset lifecycle.

We’ve also further developed our focus on BIM as the technology is increasingly applied across the property and transport infrastructure sector. And our spatial data infrastructure solutions are also delivering results. This year we worked with the Environment Secretariat of Sao Paulo State to provide access to state-wide environmental data from one, web-based source.

Building industry capability

Our market positioning continues to take a strong industry focus to deliver client value across the asset lifecycle. As part of our restructure, we’ve refocused key resources on the growing infrastructure sector and invested in boosting sales capability to support our global industry positioning. These resources are spearheading our winning work focus for key global projects, connecting our business lines to provide an integrated client-led service offering across the whole asset lifecycle.


Chantalle Meijer Group Executive Markets



2015 Financial Report to Shareholders

Contents

Directors’ report 22 Notes to the financial statements

Directors’ report - Remuneration report 29 1 Summary of significant accounting policies 70

Lead auditor’s independence declaration 52 2 Critical accounting estimates and judgements 77

Corporate governance statement 53 3 Determination of fair value 78

Consolidated income statement 64 4 Operating segments 79

Consolidated statement of comprehensive income 65 5 Discontinued operations 82

Consolidated statement of financial position 66 6 Revenue and other income 83

Consolidated statement of changes in equity 67 7 Expenses 83

Consolidated statement of cash flows 69 8 Net finance costs 84

Notes to the financial statements 70 9 Income tax expense 84

Directors’ declaration 111 10 Trade and other receivables 85

Independent auditor’s report 112 11 Plant and equipment 85

Details of shareholders and shareholdings 114 12 Deferred tax assets and liabilities 86

13 Intangible assets 87

14 Trade and other payables 89

15 Provisions 89

16 Employee benefits 90

17 Loans and borrowings 90

18 Dividends 91

19 Issued and fully paid up share capital 91

20 Reconciliation of profit after income tax to net cash flow from operating activities 92

21 Financial instruments 92

22 Director and executive disclosures 98

23 Remuneration of auditors 99

24 Contingent liabilities 99

25 Commitments 100

26 Earnings per share 101

27 Events occurring after the reporting date 102

28 Deed of cross guarantee 103

29 Parent entity disclosures 105

30 Share-based payments 105

31 Subsidiaries 109


Coffey International Limited Directors’ report

Your Directors present their report on the consolidated entity consisting of Coffey International Limited, domiciled in Australia, and the entities it controlled (Coffey or the Group) at the end of, or during, the year ended 30 June 2015. Directors The names and details of the company's Directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Non-executive Directors John Mulcahy (Chairman) Stuart Black AM (retired on 4 November 2014) Leeanne Bond Guy Cowan Susan Oliver

Executive Directors

John Douglas (Managing Director) Urs Meyerhans (Finance Director)

Principal activities During the year the Group provided specialist consulting services across its three businesses. These activities are summarised below by each key business segment:

Geoservices The Geoservices business comprises specialised geotechnical, environmental and mining consulting services, as well as materials testing and analysis. The business delivers services to public and private sector clients across resources, infrastructure and property. Offices are located across Asia Pacific, the United Kingdom, South America, Africa and the Middle East. International Development The International Development business delivers consulting and training services alongside governments and donor agencies to strengthen governance, promote economic growth, and create conditions for sustainable development. The business operates from regional offices based in Australia, the United States of America and the United Kingdom. Project Management The Project Management business provides project management and advisory services to public and private sector clients across the property and infrastructure project lifecycles. Offices are located throughout Australia, New Zealand and South Africa. Dividends No dividends were declared or paid in the current or prior year. Review of operations Fee revenue from operations of $579.1 million ($559.2 million – continuing, $19.9 million – discontinued) was down 7.8% ($49.0 million) on last year. This reflected continued subdued conditions in the Australian market which adversely impacted Geoservices. The Group’s business units performed as follows: Geoservices’ fee revenue was down to $186 million – and $170.0 million for continuing operations – compared to $208.3

million for FY2014 Project Management continued to perform profitably with revenue of $24.1 million, slightly lower than $27.1 million in

FY2014, with a lengthening order book for contracted work International Development total revenue of $315.4 million, compared to $336.4 million for the previous year. Contracted

fee revenue rose significantly, with a lengthening order book Earnings before interest, tax, depreciation and amortisation (EBITDA) was a loss of $1.6 million for the year, including $7.9 million of restructuring costs and $12.2 million in impairment charges, resulting from the restructure of Geoservices in response to prevailing market conditions as announced to the market on 29 April 2015. Net loss after tax of $18.1 million ($5.3 million profit - continuing operations, $23.4 million loss – discontinued operations) was a decline on the prior year, which recorded a net profit after tax of $4.4 million.



Geoservices

Geoservices recorded fee revenue of $186 million. While overall margins for the full year were lower at 3% due to the repositioning of the business, the full year EBITDA margin for continuing businesses was 6%, comparable with the previous period.

Competitive conditions in Australia continued to result in margin pressure as infrastructure projects were slower to begin than expected in FY2015. Pleasingly however, there were early signs of growth in the sector towards the end of the financial year as Australian state government election outcomes were confirmed, and policies implemented.

Coffey exited its permanent presence in Canada, as the Calgary oil sands industry was impacted by falling oil prices. Its Toronto operations did not have the scale to continue independently and were also closed. The company continues to work closely with its partners on a major oil and gas project in British Colombia.

The company refocused its mining strategy on the later stages of the asset lifecycle, exiting its exploration management and resource delineation practices in Western Australia, South America and Ghana.

In Australia, the company further matched capacity to markets, reducing non-transferrable staff in the resources affected states.

Project Management

Project Management continued to deliver profitable results and remains a small but important part of the business.

Total revenue of $24.1 million was slightly lower than $27.1 million in FY2014. Longer term project wins saw its order book for contracted work strengthened and lengthened, with $35 million total contracted work now secured.


International Development again delivered a strong performance, with revenue at $315.4 million, compared with $336.4 million for FY2014. Slightly lower revenue was the result of some large projects coming to an end, before new projects had begun.

Contracted revenue increased significantly to record levels, with a range of long-term contracts secured. Total contracted revenue was $546 million, including $235 million for FY2016.

The business delivered consistent and stable margins throughout the year, recording 5% for FY2015.

Gross debt increased to $90.8 million (30 June 2014: $77.0 million) as a result of costs associated with the restructure, lower year-on-year profitability and the devaluation of the Australian dollar against the United States dollar ($8.1 million). The gearing ratio of net debt to equity plus net debt increased from 26% to 34%. Interest expense reduced by 2% compared with the prior year reflecting lower interest rates. In September 2014 the Group replaced $40.0 million of bank funding with longer term Corporate Bonds which mature in September 2019. Existing banking facilities were re-negotiated and remain in place through to September 2017. For additional commentary refer to the Letter to Shareholders from the Chairman and Managing Director, and the Financial Highlights section of this Annual Report. A reconciliation of net profit/(loss) after tax to EBITDA is shown below.

2015 2014

$'000 Continuing Discontinuing Total Continuing Discontinuing Total

Profit/(loss) for the year 5,370 (23,418) (18,048) 11,444 (6,987) 4,457 Add back:

Net interest expense 7,959 (10) 7,949 8,138 (8) 8,130 Income tax expense (962) 190 (772) 670 1,238 1,908 Depreciation and amortisation 8,685 608 9,293 8,477 722 9,199 EBITDA 21,052 (22,630) (1,578) 28,729 (5,035) 23,694 Add back:

Restructuring costs 2,496 5,411 7,907 2,468 - 2,468 Impairment - 12,213 12,213 - - - Underlying EBITDA 23,548 (5,006) 18,542 31,197 (5,035) 26,162



Earnings per share

2015 Cents

2014 Cents

Basic earnings per share (7.8)c 1.8c

Significant changes in the state of affairs In the opinion of the Directors, there were no significant changes in the state of affairs of Coffey International Limited that occurred during the year under review, that were not otherwise disclosed in this report or the financial statements. Matters subsequent to the end of the financial year There were no matters or circumstances specific to Coffey that have arisen since 30 June 2015 that have significantly affected or may significantly affect the:

Group’s operations in future financial years; Results of those operations in future financial years; Group’s state of affairs in future financial years; or Group’s financial report at 30 June 2015.

Likely developments and expected results of operations Further information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the Directors believe including this information would likely result in unreasonable prejudice to the consolidated entity. Environmental regulation Coffey International Limited is committed to the protection of the environment; to the health and safety of its employees, contractors, customers and the public at large; and to complying with all applicable environmental laws, rules and regulations in the jurisdictions in which it conducts its business. The consolidated entity is not subject to significant environmental regulation in respect of its operations. There are small disposals of waste from the consolidated entity’s soil science laboratories. This waste is disposed under licence to an appropriate disposal facility.



Directors’ qualifications, experience, other directorships and special responsibilities

John Mulcahy PhD, BE (Civil Eng) (Hons), FIEAust, MAICD Chairman, Age 65

Term: Non-executive Director since September 2009 (6 years), Chairman since November 2010

Independent: Yes

Committees: Chair Nomination Committee

Member Risk and Audit Committee Human Resources and Remuneration Committee

Directorships: Chairman of Mirvac Limited. Non-executive Director of ALS Limited and GWA Holdings Limited. Former Managing Director and Chief Executive Officer of Suncorp-Metway Limited and former Guardian of the Future Fund of Australia.

Experience: John is one of Australia’s most respected corporate leaders, with almost 30 years of senior management experience having worked extensively in financial services and property investment. Before joining Coffey, he was Managing Director and Chief Executive Officer of Suncorp-Metway Limited. John has also held a range of senior executive roles at the Commonwealth Bank and Lend Lease Corporation.

John Douglas, BEng (Hons), MBA, MAICD Managing Director, Age 53

Term: Managing Director since March 2011

Independent: No

Committees: No Committee membership

Directorships: No other listed company directorships

Experience: John has over 25 years’ international experience in strategic consulting and senior management, as well as hands-on experience as a geotechnical engineer. Before joining Coffey, John was Executive General Manager of Boral Limited’s Australian Construction Materials business. In this role, he managed a business with a turnover of more than $2 billion spread across four business streams. Prior to working at Boral, John was a Manager at Boston Consulting Group where he provided strategic advice to high profile companies across a wide range of industries and countries.

Urs Meyerhans CA (CH), MAICD Finance Director, Age 55

Term: Finance Director since February 2012

Independent: No

Committees: No Committee membership

Directorships: Former Finance Director of Wattyl Limited.

Experience: Urs joined Coffey as Chief Financial Officer (CFO) in early 2009 and was appointed Finance Director in early 2012. Urs has 30 years of senior finance and international general management experience in the resources, manufacturing, FMCG and professional services industries. His expertise includes capital management, strategic planning and restructuring, refinancing of debt requirements and merger and acquisitions. Urs also plays a key role in investor relationship management at Coffey as he did in his role at Wattyl Limited. Prior to joining Coffey, Urs was CFO of Swiss Aluminium Australia Limited, Group Financial Controller of WMC Resources Limited, CFO of United Group Limited and Wattyl Limited where he was appointed Finance Director in 2004.



Leeanne Bond BEng (Chem), MBA, FIEAust, RPEQ, GAICD Age 50 Term: Non-executive Director since February 2012 (3 years)

Independent: Yes

Committees: Member Risk and Audit Committee Human Resources and Remuneration Committee

Directorships: Deputy Chair of the Territory Generation Corporation and a Non-executive Director of Liquefied Natural Gas Limited and JK Tech Pty Ltd (a wholly owned subsidiary of The University of Queensland). Former Non-executive Director of Tarong Energy Corporation Limited, Queensland Bulk Water Supply Authority (Seqwater) and subsidiaries and Australian Water Recycling Centre of Excellence Ltd. Former chair of the Brisbane Water Advisory Board, Brisbane City Council.

Experience: Leeanne is an experienced senior manager and independent company Director with particular expertise in engineering, business strategy, risk and innovation. She has Board experience in the energy, minerals and water sectors. From 1996 to 2006, Leeanne worked with WorleyParsons and played a key role in establishing and growing the business in Queensland, PNG and Northern Territory within a global context. During this period, she was responsible for negotiating project alliances, supervising projects and delivering commercial outcomes across the energy, minerals, infrastructure and water resources sectors.

Guy Cowan, BSc (Eng) (Hons), FCA, MAICD Age 63 Term: Non-executive Director since February 2012 (3 years)

Independent: Yes

Committees: Chair Risk and Audit Committee

Member Human Resources and Remuneration Committee

Directorships: Non-executive Director of UGL Limited and Chairman of Queensland Sugar Limited. Chairman of Beak and Johnston PLC and Chairman of The Winson Group PLC Ltd. Former Non-executive Director of Ludowici Limited, Raisama Limited and Gold Oil PLC (UK).

Experience: Guy has worked extensively in the oil and gas industry, including more than 23 years working in senior international finance and commercial roles at Shell. Guy joined the Fonterra Co-operative Group Limited in 2005 as CFO and moved to Australia as an Independent Director in March 2009.

Susan Oliver, B Bldg (Melb Uni), FAICD Age 64 Term: Non-executive Director since October 2010 (5 years)

Independent: Yes

Committees: Chair Human Resources and Remuneration Committee

Member Risk and Audit Committee Nomination Committee

Directorships: Deputy chair and Non-executive Director of Simonds Homes, Non-executive Director of CNPR Limited and Chair of Scale Investors Limited. Former Chair of Fusion Retail Brands Pty Ltd and a former Non-executive Director of VLine Corporation, Programmed Maintenance Services Limited, Transurban Group Limited, Just Group Limited, Centro Properties Group and MBF Australia Limited.

Experience: Susan has been a company Director for more than 19 years and has expertise in building profitable enterprise, restructuring and turnarounds. She has senior management experience in both public and private sectors spanning construction, urban renewal, policy, professional services, innovation and industry development. With a background in strategy, marketing, technology and scenario planning, Susan also manages her own advisory practice and start-up information technology companies. Susan also serves on the Victorian government advisory panel for small technologies and is founding Chair of an angel investor group.



Directors’ interests The relevant interest of each Director in the share capital of the companies within the consolidated entity, as notified by the Directors to the ASX in accordance with section 205G of the Corporations Act, at the date of this report is:


Ordinary shares Loan shares

Non-executive Directors

J Mulcahy 1,639,286 – L Bond 150,000 – G Cowan 311,513 – S Oliver 320,000 –

Executive Directors J Douglas 7,294,707 5,679,978 U Meyerhans 1,000,000 2,969,665

Company Secretary Jennifer Waldegrave BBus, CA, GradDipACG, AGIA, MAICD Appointed Company Secretary of Coffey International Limited in March 2010. Jennifer is a member of the Governance Institute of Australia and the Australian Institute of Company Directors, and is a Chartered Accountant. She has over 25 years’ senior corporate experience in Australian and US listed companies and in her preceding role was Company Secretary for Australian listed company Wattyl Limited.



Meetings of Directors The number of meetings of the Board of Directors and of each Board Standing Committee held during the year ended 30 June 2015, and the number of meetings attended by each Director is detailed below.

Board

Committees

HR & Remuneration Risk & Audit Nomination

Director A1 B2 A B A B A B J Mulcahy 15 15 6 6 4 4 1 1 J Douglas 15 15 – 6 # – 4 # – 1 #

U Meyerhans 15 15 – 6 # – 4 # – 1 #

S Black AM^ 6 6 3 3 1 1 – – L Bond 15 15 6 6 4 4 – 1 G Cowan 15 15 6 6 4 4 – 1 S Oliver 15 15 6 6 4 4 1 1 1 “A” represents number of meetings eligible to attend and held while in office. 2 “B” represents number of meetings attended while in office. # Represents number of meetings attended although not a member of the Committee. ^ Retired as director on 4 November 2014.

Insurance of officers During the financial year, the Group paid a premium to insure the Directors and Secretaries of the company and Group entities, key Executives and the General Managers of each of the businesses of the consolidated entity. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the Directors and/or officers of entities in the consolidated entity, and any other payments arising from liabilities incurred by the Directors and/or officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the Directors and/or officers or the improper use by the Directors and/or officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. Proceedings on behalf of the company No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the company with leave of the Court under Section 237 of the Corporations Act 2001. Non-audit services The company may decide to employ the auditor on assignments additional to its statutory audit duties where the auditor’s expertise and experience with the company and/or the consolidated entity are important. Details of the amounts paid or payable to the auditor (KPMG) for non-audit services provided during the year was $258,000. The Board of Directors has considered the position and, in accordance with the advice received from the Risk and Audit Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporation Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out in Note 23 ‘Remuneration of auditors’ in the financial statements, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

All non-audit services have been reviewed by the Risk and Audit Committee to ensure they do not impact the impartiality and objectivity of the auditor; and

None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.


Coffey International Limited Directors’ report – Remuneration report

Remuneration Report FY2015 (audited) Executive Summary Key personnel changes in FY2015

Mr Stuart Black AM retired as a Non-executive Director on 4 November 2014, reducing the size of the Board from 7 to 6 Directors. The reduced Board provides the appropriate balance of skills and experience for Coffey at this time.

Mr Rhett Duncan was appointed to the role of Group Executive Testing on 25 August 2014. Mr Duncan joined Coffey following a successful career at Holcim Pty Ltd.

On 29 April 2015 a Group wide re-organisation was announced involving changes to Group Executive titles and areas of responsibility. There were no changes to remuneration for any of these Group Executive. The following changes were made:

Mr Rhett Duncan was appointed as Group Executive Transport Infrastructure, which includes the Testing business.

Mr Robert Morris was appointed as Group Executive Energy and Resources. Mr Morris joined Coffey on 3 December 2007 and was previously Group Executive Environments.

Mr Richard Biesheuvel was appointed as Group Executive Property Infrastructure. Mr Biesheuvel joined Coffey on 6 June 2011 and was previously Group Executive Project Management.

Mr Sukumar Pathmanandavel moved from the role of Group Executive Geomechanics to Business Development Manager Transport Infrastructure. Mr Pathmanandavel ceased to be a KMP on this date.

Key remuneration decisions in FY2015

Fixed remuneration for Executive Directors and Executives has remained unchanged during the year, other than a market-based adjustment for one Executive.

No STR payments were made due to Company performance not reaching minimum levels to trigger payment.

Nine Executives were awarded LTR grants in FY2015 with vesting subject to achievement of earnings per share (EPS) and total shareholder return (TSR) performance hurdles over three years, and continued service.

There was a 100% forfeiture of loan shares granted to all LTR participants under the FY2013 performance grant as performance hurdles were not achieved.

Non-executive Director fees have remained unchanged during the year. The aggregate Non-executive Director fee pool limit has also remained unchanged since the 2008 AGM.

Introduction This report provides an overview of Coffey’s Remuneration Policy and details Coffey’s Key Management Personnel (KMP) remuneration for the year ended 30 June 2015 (FY2015). For the purposes of this report, reference will be made to:

Key Management Personnel (KMP) – Non-executive Directors, Executive Directors and Executives

Non-executive Directors (NED) – Non-executive Directors

Executive Directors (ED) – Managing Director and Finance Director

Executives – Managing Director, Finance Director, Group Executive Service Lines and Group Executive Functions



The Remuneration Report is structured as: 1 Remuneration policy, practices and outcomes 2 Relationship between remuneration policy and Company performance 3 The Board’s role in remuneration 4 Description of Non-executive Director remuneration 5 Description of executive remuneration 6 Director and executive remuneration details 7 Executive employment contracts 8 Legacy equity-based remuneration 9 Transactions with Key Management Personnel

1 Remuneration policy, practices and outcomes 1.1 Remuneration policy and practices The objective of Coffey’s remuneration policy is to ensure its remuneration practices attract, motivate and retain employees from a diverse range of backgrounds with the experience, knowledge, skills and judgment to drive the Company’s performance. 1.2 Remuneration Summary in FY2015 The table on the following page compares an Executive’s contracted potential remuneration for FY2015 with the actual remuneration award for the year. The Contract TFR shows the fixed remuneration the Executive is entitled to receive for a full year of service under their employment contract, while the Actual TFR shows the fixed remuneration earned during FY2015 in the role of an Executive. The variable remuneration disclosures show the potential on-target and maximum STR and LTR awards for FY2015, compared with the actual STR and LTR award made during the year. The LTR awards are subject to performance hurdles measured over a three-year period and at risk of forfeiture if the hurdles are not met. The LTR awards are provided through a limited recourse loan, vested shares may only be exercised after repayment of this loan. As the LTR performance hurdles are measured over three years, the performance hurdles relating to the FY2013 LTR awards (measurement period 01 July 2012 to 30 June 2015) were measured during the year. 100% of the FY2013 performance shares were forfeited as the hurdles were not met. This disclosure is supplementary to the statutory remuneration reporting requirements which are contained in the Remuneration Summary Tables (shown in section 6.2 and onwards). The statutory remuneration table includes additional disclosures including non-monetary benefits related to car parking, long service leave accruals and termination payments. In addition, the impact of movements in LTR grants is shown at fair value in the statutory remuneration table rather the equivalent remuneration value.



Fixed Remuneration Short Term Reward Plan Long Term Reward Plan

Total Reward FY2015

Contract

TFR1 Actual

TFR2

On-target award

FY20153

Maximum award

Available FY20154

Award made

FY20155

On-target & Maximum

award FY20156

Forfeit of FY2013

LTR grant7 Executive Directors

J Douglas Managing Director $800,000 $800,000 $400,000 $600,000 $0 $400,000 $0 $800,000

U Meyerhans Finance Director $550,000 $550,000 $206,250 $309,375 $0 $206,250 $0 $550,000

Other Executives

R Duncan8 GE Transport Infrastructure

$340,0008 $268,302 8 $72,577 8 $108,865 8 $0 $85,000 8 n/a $268,279 8

R Morris9 GE Energy and Resources

$320,0009 $314,461 9 $80,000 9 $120,000 9 $0 $80,000 9 n/a $314,461 9

R Biesheuvel GE Property Infrastructure

$320,000 $320,000 $80,000 $120,000 $0 $80,000 $0 $320,000

G Simpson GE International Development

$400,000 $400,000 $100,000 $150,000 $0 $100,000 $0 $400,000

C Meijer GE Markets $285,000 $285,000 $71,250 $106,875 $0 $71,250 $0 $285,000

R Moriarty GE Human Resources $365,000 $365,000 $91,250 $136,875 $0 $91,250 $0 $365,000

Former Executives

S Pathmanandavel GE Geomechanics $400,000 $341,562 10 $100,000 $150,000 $0 $100,000 $0 $341,562 10

1The annual amount of fixed remuneration (base salary and fees plus superannuation) an Executive would receive for a full financial year of service. 2The amount of fixed remuneration actually received during FY2015 as an Executive. Differences between contract and actual TFR may reflect part service or remuneration changes for the reported financial year. 3The on-target dollar value of the STR Plan for FY2015, calculated by multiplying TFR by STR % (see table 5.3.2 for more detail). This value may be pro-rated due to part service or remuneration changes for the reported financial year. 4The maximum dollar value an Executive can receive through the STR Plan in FY2015, calculated as 150% of the on-target amount. 5The dollar value of the FY2015 STR Plan awarded to an Executive. Amounts are inclusive of superannuation. 6The dollar value of LTR Plan for FY2015, calculated by multiplying TFR by LTR % (see table 5.4.2 for more detail). This value is different to the accounting value and reflects the value of shares acquired through the limited recourse loan from the Company (see 5.4.1 for more detail). This value may be pro-rated due to part service or remuneration changes for the reported financial year. The shares granted are subject to the achievement of performance hurdles and are at risk of forfeiture in the future if these hurdles are not met. 7The dollar value of any vested shares following the three-year performance hurdle testing for LTR. As performance hurdles were not met, no FY2013 LTR grants vested. N/A signifies the Executive did not receive a grant under the FY2013 LTR scheme. 8 R Duncan was appointed as Group Executive Testing on 25 August 2014. He was subsequently appointed Group Executive Transport Infrastructure on 29 April 2015. 9 R Morris was awarded a market based increase in TFR on 1 October 2014. 10 S Pathmanandavel ceased to be a KMP on 29 April 2015.



2 Relationship between remuneration policy and company performance A key principle of Coffey’s approach to Executive remuneration is that it should demonstrate strong links with Company performance and Shareholder returns. Remuneration is aligned with Company performance by:

Requiring a significant portion of remuneration to vary with short-term and long-term performance; and Applying challenging financial measures of performance.

The graph below shows TSR since 1 July 2012, and the relative performance of Coffey against the S&P/ASX 300 Accumulation Index.

The table below shows the performance of Coffey against key indicators over the last five years, including those which impact on the vesting of long-term incentives. Further information regarding Coffey’s historical performance is provided in the Financial Highlights section of this report. Year ended 30 June ($ million unless otherwise stated) 2011 2012 2013 2014 2015 Revenue 680.6 678.1 688.4 628.1 579.1 EBITDA1 (39.7) (0.5) 18.6 23.7 (1.6) Profit/(loss) before tax and minority interests (65.4) (24.5) (0.8) 6.4 (18.8) Profit/(loss) after tax (69.7) (34.2) (0.9) 4.5 (18.0)

Restructure costs, impairment expense and vendor earn-out (72.0) (40.2) (10.2) (2.5) (20.1) EBITDA before restructure costs, impairment expense and vendor earn-out 32.3 39.7 28.8 26.2 18.5 Profit after tax before restructure costs, impairment expense and vendor earn-out 2.3 5.3 6.2 6.9 2.1

Share price at the start of the year $0.96 $0.60 $0.40 $0.115 $0.235 Share price at the end of the year $0.60 $0.40 $0.115 $0.235 $0.14 Interim dividend per share (cents) – – – – – Final dividend per share (cents) – – – – – Basic earnings per share (cents) (52.9)c (16.3)c (0.4)c 1.8c (7.8)c Diluted earnings per share (cents) (52.9)c (16.3)c (0.4)c 1.7c (7.8)c 1 Earnings before interest, tax, depreciation and amortisation.

Note: The information in the table above relates to both continuing and discontinued operations.



Both Short Term Reward (STR) and Long Term Reward (LTR) outcomes have reflected Coffey’s performance over the measurement periods for the respective plans. Consistent with the challenging conditions in some of the markets in which Coffey operates and disappointing financial results in recent years:

No STR payments were made due to Company performance not reaching the minimum required performance level. Coffey’s performance against both performance measures has resulted in 100% forfeiture of shares awarded under the

FY2013 LTR Plan. In addition, fixed remuneration for Executives has been held at levels previously set, with the exception of one

Executive who has received a market-based adjustment, and a new Executive.

3 The Board’s role in remuneration The Board engages with Shareholders, management, and other stakeholders as required to continuously refine and improve Executive and Non-executive Director remuneration policies. The Human Resources and Remuneration Committee was established by the Board to assist in discharging the Board’s responsibilities in relation to:

Establishing and implementing a human resources strategy that aligns to and achieves the business strategy; The remuneration of the Board within the scope of the Shareholder approved cap on Non-executive Director fees; The performance and remuneration of the Executive Directors and direct reports to the Managing Director

(Management Team) of the Company; Remuneration strategies, practices and disclosures generally; Employee share and option plans; Management succession, capability and talent development; Diversity (excluding Board diversity, which is a responsibility of the Nomination Committee); and Talent attraction,

retention and culture

Further details of the Committee’s responsibilities are outlined in the Corporate Governance Statement. The Committee reviews remuneration strategy and policy on an annual basis for all employees including the Executive Directors and the Management Team. The decisions of the Committee are subject to approval by the Board. The Committee has the authority to engage external professional advisers without seeking approval from the Board or management. During the year, the Board engaged Guerdon Associates as its independent consultant to provide specialist information on remuneration matters. The Chair of the Human Resources and Remuneration Committee oversees the engagement and payment of the independent consultant. All remuneration advice was provided directly to the Chair of the Human Resources and Remuneration Committee. On this basis, the Board was satisfied that advice received from Guerdon Associates was free from any undue influence by Executives to whom the advice related. No remuneration recommendations as defined under Division 1, Part 1.2.98 (1) of the Corporations Act, were made by Guerdon Associates.

4 Description of Non-executive Director remuneration There has been no change to the basis of Non-executive Director fees in FY2015. However, the Board has recognised that Coffey’s Market Capitalisation has reduced. Consequently, the Board has undertaken a review of Non-executive Directors fees and a 20% reduction in the current fee structure, effective 1 July 2015, will be applied to reflect and align with the organisation’s position. These changes, and a previous reduction in Board size, will ensure that Non-executive Directors fees for FY2016 are approximately 30% lower than those for FY2014. Fees paid to Non-executive Directors reflect the responsibilities of and the demands made on the Directors. Non-executive Director fees are determined within the aggregate Non-executive Director fee pool limit of $700,000 per annum which was approved by Shareholders in November 2008. In the current financial year, fees paid to Non-executive Directors totalled $604,000 (inclusive of superannuation). Non-executive Directors are remunerated by way of fixed fees in the form of cash and superannuation in accordance with Recommendation 8.2 of the ASX Corporate Governance Council’s Principles and Recommendations.



The following annual fee structure (inclusive of superannuation) has applied to Non-executive Directors during the year.

Chair Member Board base fees $190,000

1 $100,000 Committee fees Risk and Audit1 $30,000 $10,000 HR and Remuneration $20,000 $5,000 Nomination $Nil $Nil

1 The Chairman of the Board receives no standing Committee fees in addition to his Board fees. Remuneration tables for Non-executive Directors for the financial year ended 30 June 2015 are set out in section 6 of this Remuneration Report. Shareholdings of Non-executive Directors are set out in the Directors’ Report. The Company and each of the Non-executive Directors have agreed terms of appointment together with a Deed of Access, Insurance and Indemnity and a Disclosure Deed (as permitted under the ASX Listing Rules). Non-executive Directors are not appointed for a specific term and their appointment may be terminated by notice from the individual Director or otherwise pursuant to section 203B or 203D of the Corporations Act 2001. While there is no formal term of office for Non-executive Directors, the Board requires any Director with 10 or more years of service as a Director to offer themselves for re-election every year.

5 Description of executive remuneration 5.1 Executive remuneration structure Executive remuneration comprises a fixed component and an at-risk component, which is contingent on performance. Total remuneration is the sum of all reward components assuming performance is on-target (i.e. 100% of pre-determined objectives are achieved). A summary of reward components and their relative weighting is presented below:

Fixed remuneration On-target at-risk remuneration

TFR1 STR2 LTR3

Total on-target

at-risk component

Managing Director 50.0% 25.0% 25.0% 50.0%

Finance Director 57.2% 21.4% 21.4% 42.8%

Group Executives 66.6% 16.7% 16.7% 33.4% 1 TFR includes base salary and minimum legislated superannuation. 2 Cash-based incentive contingent on performance against objectives with a one year time-frame. 3 Share-based incentive contingent on performance against objectives with a three year time-frame. 5.2 Fixed remuneration Fixed remuneration (known as Total Fixed Remuneration or TFR) is the sum of base salary and fixed employee benefits such as superannuation. TFR is benchmarked against a peer group of direct competitors and a general industry peer group. Selection of the comparator group is based on the similarity of the roles in question (including but not limited to nature/comparability of the role itself, industry, revenue, headcount and complexity of operations). TFR is benchmarked against the market median, also known as the 50th percentile, which is inclusive of all fixed benefits (generally base salary, superannuation, benefits such as motor vehicles, car parking, insurances and related FBT costs). While comparative levels of remuneration are monitored on a periodic basis, there is no contractual requirement or expectation that any adjustments will be made.



5.3 Short-Term Reward (STR) cash-based incentive 5.3.1 STR overview Coffey’s STR Plan ensures that a proportion of remuneration is tied to Company performance measured annually in line with the financial year. Executives can only realise their STR at-risk component if challenging pre-determined objectives are achieved. In FY2015 the following changes were made to the STR Plan:

The introduction of an overall group gate-opener at 80% of budgeted EBIT and a minimum weighting on group performance increased to at least 20%

A revised split of 70% financial and 30% non-financial metrics for KMPs for FY2015 all subject to the group gate opener.

The capping of payments at 25% Business Unit EBIT (including STR payments) and the requirement for any payment to be out of free cash flow at Group level

The use of pro-rata calculations between threshold and target levels

This aligns Executive interests with Shareholder interests and focuses Executive on performance. The STR payment is made in cash (inclusive of any superannuation components) as part of the Annual Remuneration Review after finalisation of the Company’s audited results. 5.3.2 STR on-target and maximum levels On-target and maximum STR opportunities are expressed as a percentage of TFR. The maximum STR that can be earned is capped to control cost and limit the potential for excessive risk taking. These caps are presented below:

On-target STR as a percentage of TFR Maximum STR as a percentage of TFR

Managing Director 50% 75%

Finance Director 37.5% 56.25%

Group Executives 25% 37.5%

5.3.3 STR performance objectives Since FY2012 Executive Director performance was measured using financial and non-financial objectives. In FY2015 Group Executives were measured based on 70% financial measures and 30% non-financial measures (all subject to the Group gate-opener) to ensure a strong focus on company performance. A summary table of the breakdown of individual objectives and their respective weightings for Executives is presented below:

Financial objectives Non-financial objectives

Profitability NPAT and

EBIT

Working capital/Fee to Wage Ratio

Financial weighting

Step Up Leadership1

Strategy implementation

Non-financial

weighting

Managing Director 60% 10% 70% 20% 10% 30%

Finance Director 60% 10% 70% 20% 10% 30%

Group Executives (in aggregate)

50% 20% 70% 30% 0% 30%

1 Step Up is a change program launched in 2014 to improve sales performance In FY2015 the specific Safety Improvement non-financial objective was not identified as an objective for STR purposes, unlike previous years. The Board determined that managing safety performance is an inherent part of each KMPs role and should not be rewarded as part of the STR. Objective targets are based on the Executive’s area of responsibility such that those with whole-of-company responsibility (Executive Directors and Group Executive Functions) are measured at whole-of-company results, and those with Business Line responsibility (Group Executive Business Lines) are measured at Business Line level results.



Each year, the Human Resources and Remuneration Committee considers the appropriate targets and potential pay out before approving the scheme and establishing objective targets. 5.3.4 Calculating STR awards Individual STR awards are calculated once financial results are finalised based on performance against pre-determined objective targets. The Human Resources and Remuneration Committee determine the performance against each objective that represents minimum performance warranting reward, on-target performance and a maximum that can be awarded (including all points in-between). Awards relating to each individual objective are capped at 150% of individual objective on-target amount. The Board reviews performance and determines any award against each objective individually and separately in order to focus Executives performance across all objectives at all times. The Board determined that no Executives were eligible for an STR award for FY2015 based on company performance. The Board retains the right to vary from policy in exceptional circumstances. However, material variation from policy and the reasons for it will be disclosed. 5.3.5 Tabular STR cash based incentive summary The following table outlines the major features of the STR Plan in respect of performance for FY2015.

Purpose of STR incentive Focus performance on drivers of Shareholder value and align Executive interests with Shareholder interests over a one-year period; Ensure measurement of Executive performance is closely aligned to Executive span of control (where applicable); and Ensure a part of remuneration cost varies with the Company’s short-term performance.

Maximum value of STR that can be earned

Managing Director: 75% of fixed remuneration Finance Director: 56.25% of fixed remuneration Group Executives: 37.5% of fixed remuneration

Performance period 1 July 2014 to 30 June 2015

Performance assessed July 2015

Payment date October 2015

Payment vehicle Cash (inclusive of superannuation legislation requirements)

Performance objectives Broken into two groups: Financial and Non-financial. Financial objectives: NPAT, EBIT, Working Capital and Fee to Wage Non-financial objectives: Step Up Leadership and strategy implementation The measurement level of objectives is specific to the Executive’s span of control such that Executive Directors and Group Executives Functions are measured against whole-of-company results; Group Executive Business Lines are measured against their respective Business Line. STR awards are calculated based on performance against pre-determined targets where award increases as performance increases. Awards are capped (for each individual objective) at 150% of the on-target amount. The Human Resources and Remuneration Committee considers and recommends STR awards, which are then considered and approved by the Board.

Terminating Executives Eligibility for a STR payment is forfeited where an Executive’s employment terminates prior to payment in October 2015 unless the Board determines that the Executive will be treated as a Good Leaver, in which case the departing Executive may be considered for a pro-rated STR award.

Change of control The Board has discretion.



5.4 Long-Term Reward (LTR) share-based incentive 5.4.1 LTR performance incentive overview Coffey’s LTR Plan ensures that a proportion of Executive remuneration is tied to Company performance over a longer timeframe. Executives can only realise their LTR at-risk component if challenging pre-determined objectives are achieved. The Board believes the appropriate vehicle for such long-term remuneration is equity, further aligning Executive interests with Shareholders’ interests and managing risk. Performance is assessed over three years, which is considered to be the appropriate time period to measure performance against financial projections and detailed business plans, and is positioned within broader long-term planning. The grant is in the form of shares acquired by a limited recourse loan from the Company. The Directors determine allocations of shares and the loan incurred by the Executive is calculated as the market value of Coffey International Limited shares at the date of acquisition multiplied by the number of shares acquired on their behalf. The shares are purchased on market and held in a trust (or reallocated from forfeited shares held in the trust). Dividends on the shares held in trust are applied to pay down the Executive’s loan. The loan must be repaid by the Executive (either through dividend repayment or cash payment) before vested shares can be transferred into their name. An Executive may also instruct the Trustee to sell vested shares to which the loan is attached. The last option is only available if the net value of the shares is greater than the value of the loan. Due to their limited recourse nature, the arrangements are not considered a loan for related party disclosure purposes. All shares issued to the Coffey Rewards Share Plan rank equally with all other fully-paid ordinary shares on issue. The FY2015 LTR incentive represents an entitlement to ordinary shares, subject to satisfaction of LTR performance conditions and a continued employment condition. LTR incentive grants are in two equal tranches, with each tranche subject to an independent performance requirement. The performance requirements for both tranches share two common features:

Once minimum performance conditions are met, the proportion of shares that qualifies for vesting gradually increases pro-rata with performance. This approach avoids cliff vesting, where a large proportion of reward either vests or does not vest either side of a minimum performance requirement. It also reduces the incentive for excessive risk taking as the performance threshold for payment is reached.

The maximum reward is capped at a ‘stretch’ performance level that is considered attainable without excessive risk taking.

The FY2015 LTR incentive grant was made during the year, with performance conditions measured over the three-year period from 1 July 2014 to 30 June 2017. All shares held in the trust will be forfeited if the Board determines that an Executive has committed an act of fraud, dishonesty or gross misconduct or in other circumstances specified by the Board. 5.4.2 Maximum LTR performance incentive grant Maximum annual LTR performance incentive grants are expressed as a percentage of TFR. These are presented below:

LTR as a percentage of TFR

Managing Director 50%

Finance Director 37.5%

Group Executives 25%



5.4.3 Performance requirements One tranche of shares in the FY2015 LTR grant qualifies for vesting subject to performance relative to other companies, while the other tranche qualifies for vesting subject to a statutory profit measure. Each tranche is of equal value. The relative performance requirement is based on total shareholder return (TSR). Coffey’s TSR is calculated as the difference in share price over the performance period, plus the value of shares earned from reinvesting dividends received over this period, expressed as a percentage of the share price at the beginning of the performance period. The percentage change of Coffey’s TSR is compared to the percentage change in the S&P/ASX 300 Accumulation Index. Shares held in trust will not vest until Coffey’s TSR is greater than 3.75% above the Index. On exceeding the Index return, performance shares will start to vest on a pro-rated basis until 100% vest when Coffey’s TSR is 15% above the Index. The graduated rate of vesting after meeting the minimum TSR performance requirement is more conservative than most companies that have a relative TSR performance requirement. Coffey’s Directors believe that this more graduated vesting provides better risk management because it reduces the tendency for excessive risk taking stemming from Executives having very significant differences in reward outcomes either side of a performance cliff. The absolute statutory performance requirement applicable to the other tranche of shares is based on Earnings Per Share (EPS) growth over the three-year performance period to 30 June 2017. The level at which vesting of this tranche of shares will commence has been determined by reference to the underlying EPS of 1.8 cents per share for the financial year 2014. The vesting of this tranche of shares will be dependent on the EPS growth performance. The shares in this tranche will start to vest on a pro-rata basis if EPS compound annual growth exceeds 40% over the period, and fully vest at 60% compound annual EPS growth. Shares will vest on a pro-rata basis for compound annual EPS growth between 40% and 60%. 5.4.4 Tabular LTR performance incentive summary The following table outlines the major features of the LTR grant during the year in respect of performance for FY2015. Purpose of LTR performance incentive

Focus performance on drivers of Shareholder value and align Executive interests with Shareholder interests over a three-year period using the vehicle of equity; Manage risk by countering any tendency to over-emphasise short-term performance to the detriment of longer term growth and sustainability; and Ensure a part of remuneration cost varies with the Company’s longer term performance.

Maximum value of equity that can be granted

Managing Director: 50% of fixed remuneration Finance Director: 37.5% of fixed remuneration Group Executives: 25% of fixed remuneration

Performance period 1 July 2014 to 30 June 2017

Performance assessed July 2017

Shares vest November 2017

Payment vehicle Performance contingent shares subject to loan repayment.

Performance conditions In addition to the continued employment up to the vesting date, there are two performance conditions. Each applies to half the shares granted to each Executive.

Relative TSR The relative total shareholder return (TSR) performance condition is based on the Company's TSR performance relative to the TSR of companies comprising the S&P/ASX 300 Accumulation Index at the start of the performance period, measured over the three years to 30 June 2017.

The performance vesting scale applicable to the shares subject to the relative TSR test is set out below.

Coffey’s TSR ranking Percentage of shares subject to TSR condition that qualify for vesting

Less than or equal to 3.75% above the Index 0% Above 3.75% and less than 15% above the Index Pro-rata 15% or more above the Index 100%



EPS growth The Earnings Per Share (EPS) growth performance condition is based on the Company’s compound annual EPS growth over the three years to 30 June 2017 by reference to the FY2014 underlying EPS of 1.8 cents per share.

The performance vesting scale applicable to the shares subject to the EPS growth test is set out below.

Coffey’s EPS compound annual growth Percentage of shares subject to EPS condition that qualify for vesting

Less than or equal to 40% 0% Above 40% and less than 60% Pro-rata 60% or more 100%

Dilution and cash flow Shares are reallocated from forfeited holdings or bought on market.

Treatment of dividends and voting rights on performance-contingent shares

Dividends are received by the trust. The trust repays the loan provided by the Company to acquire the shares. Participants have the right to direct the Trustee as a Shareholder on how to vote with respect to the shares standing to their credit.

Restriction on hedging Hedging of entitlements under the Plan is not permitted. Coffey’s Securities Dealing Policy prohibits designated persons from hedging an exposure to unvested or vested Coffey securities held through Coffey’s reward plans.

Terminating Executives All shares in the FY2015 LTR grant will be forfeited where an Executive’s employment terminates prior to 30 November 2017 unless the termination is due to death. The Board may determine that the Executive will be eligible to be treated as a Good Leaver, in which case unvested shares remain held in trust until the performance period is completed. If performance hurdles are achieved and the shares vest, the Good Leaver will have two years from the date of termination or 30 days from vesting (whichever comes first) to repay the loan balance (either through cash repayment, or if the value of the vested shares is greater than the loan balance, by instructing the Trustee to sell the shares).

Change of control The Board has discretion on vesting.

The Board retains the right to vary from policy in exceptional circumstances. However, material variation from policy and the reasons for it will be disclosed. 5.5 Loyalty Shares The Trust Deed allows that Australian employees are offered annual grants of shares upon attaining five years’ service with Coffey, known as Loyalty Shares. The dollar value of each annual grant is determined based on the number of completed years of service. The grant is in the form of shares acquired by a limited recourse loan from the Company. The loan incurred by the employee is calculated as the market value of Coffey International Limited shares at the date of acquisition multiplied by the number of shares acquired on their behalf. The shares are held in trust with any dividends received applied to pay down the employee’s loan. The loan must be repaid by the employee (either through dividend repayment or cash payment) before vested shares can be transferred into their name. The Loyalty Shares vest three years after grant date, subject to the employee being continuously employed by Coffey for the full period. The Board may determine that an employee ceasing employment with Coffey may be eligible to be treated as a Good Leaver, in which case Loyalty Plan shares will vest on a pro-rata basis based on the completion of the service hurdle. Following a review of the Loyalty Share Plan during the year, on recommendation of the Human Resources and Remuneration Committee, the Board has approved that no grant of Loyalty shares will be made in FY2016. This is in line with the decision taken in the previous year. 5.6 Termination payments in addition to statutory payments to KMPs during the year There were no KMP termination payments made during FY2015.



6 Director and executive remuneration details 6.1 Nominated Executives The Nominated Executives are the Key Management Personnel (KMP) of Coffey International Limited comprising the Non-executive Directors, Executive Directors and other Executives, listed below: Non-executive Directors

J Mulcahy Chairman L Bond Non-executive Director G Cowan Non-executive Director S Oliver Non-executive Director

Executive Directors

J Douglas Managing Director U Meyerhans Finance Director

Other Executives

R Duncan Group Executive Transport Infrastructure R Morris Group Executive Energy and Resources R Biesheuvel Group Executive Property Infrastructure G Simpson Group Executive International Development C Meijer Group Executive Markets R Moriarty Group Executive Human Resources

This report contains information on the following former KMPs:

S Black AM Non-executive Director S Pathmanandavel Group Executive Geomechanics



6 Director and executive remuneration details 6.1 Nominated Executives The Nominated Executives are the Key Management Personnel (KMP) of Coffey International Limited comprising the Non-executive Directors, Executive Directors and other Executives, listed below: Non-executive Directors

J Mulcahy Chairman L Bond Non-executive Director G Cowan Non-executive Director S Oliver Non-executive Director

Executive Directors

J Douglas Managing Director U Meyerhans Finance Director

Other Executives

R Duncan Group Executive Transport Infrastructure R Morris Group Executive Energy and Resources R Biesheuvel Group Executive Property Infrastructure G Simpson Group Executive International Development C Meijer Group Executive Markets R Moriarty Group Executive Human Resources

This report contains information on the following former KMPs:

S Black AM Non-executive Director S Pathmanandavel Group Executive Geomechanics

Cof

fey

Inte

rnat

iona

l Lim

ited

Dire

ctor

s’ re

port

– R

emun

erat

ion

repo

rt

6.2

Rem

uner

atio

n su

mm

ary

tabl

es

Det

ails

of t

he re

mun

erat

ion

of th

e N

omin

ated

Exe

cutiv

es o

f Cof

fey

Inte

rnat

iona

l Lim

ited

and

the

Cof

fey

Inte

rnat

iona

l Lim

ited

Gro

up a

re s

et o

ut in

the

follo

win

g ta

bles

. Th

e sh

are-

base

d pa

ymen

ts in

clud

ed in

the

follo

win

g ta

bles

rela

te to

LTR

gra

nts

for p

erfo

rman

ce in

FY2

015

and

prio

r yea

rs.

Rem

uner

atio

n 20

15

Sh

ort-t

erm

em

ploy

men

t ben

efit

Post

-em

ploy

men

t ben

efit

Pe

rfor

man

ce-

rela

ted

pote

ntia

l re

mun

erat

ion

(%)

Valu

e re

mun

erat

ion

cons

istin

g of

lo

an s

hare

s (%

) N

ame

Sala

ry a

nd

fees

($)

Oth

er n

on-

mon

etar

y be

nefit

s ($

)

STR

cas

h bo

nus

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Supe

rann

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n/

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emen

t be

nefit

s ($

)

Long

ser

vice

le

ave

($)

Term

inat

ion

bene

fits

($)

Shar

e-ba

sed

paym

ents

+

($)

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l ($

) N

on-e

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tive

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ctor

s

J

Mul

cahy

17

3,51

6 -

- 16

,484

-

- -

190,

000

0%

0%

L B

ond

105,

023

- -

9,97

7 -

- -

115,

000

0%

0%

G C

owan

11

8,72

1 -

- 11

,279

-

- -

130,

000

0%

0%

S O

liver

11

4,15

5 -

- 10

,845

-

- -

125,

000

0%

0%

Exec

utiv

e D

irect

ors

J D

ougl

as

781,

217

- -

18,7

83

6,00

7 -

147,

365

953,

372

50%

15

%

U M

eyer

hans

53

1,21

7 5,

033

- 18

,783

10

,254

-

72,4

34

637,

721

43%

11

%

Oth

er E

xecu

tives

R

Dun

can1

253,

267

- -

15,0

36

325

- 4,

549

273,

177

33%

2%

R

Mor

ris

295,

678

- -

18,7

83

5,98

4 -

18,9

70

339,

415

33%

6%

R

Bie

sheu

vel

301,

217

- -

18,7

83

2,26

1 -

22,1

42

344,

403

33%

6%

G

Sim

pson

38

1,21

7 -

- 18

,783

15

,768

-

37,0

55

452,

823

33%

8%

C

Mei

jer

266,

217

- -

18,7

83

767

- 20

,266

30

6,03

3 33

%

7%

R M

oria

rty

346,

217

4,86

8 -

18,7

83

709

- 28

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39

9,48

2 33

%

7%

Form

er K

MP’

s

S

Bla

ck A

M2

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87

1,09

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3,72

3 -

- -

44,0

00

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0%

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athm

anan

dave

l3 32

5,52

4 4,

868

- 16

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5,

906

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38

2,42

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%

8%

1 R D

unca

n w

as a

ppoi

nted

Gro

up E

xecu

tive

Test

ing

on 2

5 A

ugus

t 201

4. H

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ppoi

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Gro

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spor

t Inf

rast

ruct

ure

on 2

9 A

pril

2015

. 2 S

Bla

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as

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n 4

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athm

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il 20

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alcu

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d as

set

out

in N

ote

30 ‘S

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ed p

aym

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the

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the

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cial

sta

tem

ents

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lloca

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to e

ach

repo

rting

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iod

even

ly o

ver t

he p

erio

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m g

rant

dat

e to

ves

ting

date

. Th

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lue

disc

lose

d is

the

porti

on o

f the

fair

valu

e of

the

shar

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paym

ents

reco

gnis

ed in

this

repo

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iod

net o

f the

impa

ct o

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alui

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ymen

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arke

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ave

been

take

n in

to a

ccou

nt.


Cof

fey

Inte

rnat

iona

l Lim

ited

Dire

ctor

s’ re

port

– R

emun

erat

ion

repo

rt

Rem

uner

atio

n 20

14

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ort-t

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ploy

men

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Pe

rfor

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pote

ntia

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mun

erat

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(%)

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mun

erat

ion

cons

istin

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lo

an s

hare

s (%

) N

ame

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ry a

nd

fees

($)

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on-

mon

etar

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nefit

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)

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h bo

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($)

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rann

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emen

t be

nefit

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)

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ser

vice

le

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($)

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inat

ion

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fits

($)

Shar

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paym

ents

+

($)

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l ($

) N

on-e

xecu

tive

Dire

ctor

s

J

Mul

cahy

17

3,92

1 -

- 16

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-

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190,

000

0%

0%

S B

lack

AM

10

5,26

8 -

- 9,

732

- -

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5,00

0 0%

0%

L

Bon

d 10

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8 -

- 9,

732

- -

- 11

5,00

0 0%

0%

G

Cow

an

118,

998

- -

11,0

01

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0 0%

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Oliv

er

114,

421

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ctor

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-

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%

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ns

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225

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7,24

2

44,3

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43%

7%

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ther

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cutiv

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-

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athm

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011

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%

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1 24

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33%

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pson

38

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10,6

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367,

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33%

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240,

302

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17,7

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1,60

4 -

10,6

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270,

325

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4%

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iarty

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%

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er K

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s

-

M

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2 22

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0 -

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-

104,

075

19,5

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364,

612

33%

5%

1 R M

orris

was

app

oint

ed G

roup

Exe

cutiv

e E

nviro

nmen

ts o

n 12

Aug

ust 2

013.

2 M

Ren

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cea

sed

empl

oym

ent o

n 28

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ruar

y 20

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ong

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vice

Lea

ve o

ver a

ccru

ed in

prio

r per

iods

resu

lting

in n

o ex

pens

e fo

r the

cur

rent

yea

r. +T

he fa

ir va

lue

of th

e sh

are-

base

d pa

ymen

ts is

cal

cula

ted

as s

et o

ut in

Not

e 30

‘Sha

re-b

ased

pay

men

ts’ i

n th

e no

tes

to th

e fin

anci

al s

tate

men

ts, a

nd is

allo

cate

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eac

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porti

ng p

erio

d ev

enly

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r the

per

iod

from

gra

nt d

ate

to v

estin

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te.

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valu

e di

sclo

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rtion

of t

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ir va

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are-

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ymen

ts re

cogn

ised

in th

is re

porti

ng p

erio

d ne

t of t

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pact

of f

orfe

iture

s. In

val

uing

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shar

e-ba

sed

paym

ents

, mar

ket c

ondi

tions

hav

e be

en ta

ken

into

acc

ount

. *C

ash

bonu

s w

as a

ccru

ed w

ith th

e ef

fect

ive

date

of 3

0 Ju

ne 2

014.


Coffey International Limited Directors’ report – Remuneration report 6.3 Relative proportions of Nominated Executive potential remuneration for the period that are fixed and those linked

to individual and Company performance

Fixed

remuneration (%) Performance related

potential remuneration (%) Value of remuneration

consisting of loan-shares (%)

At-risk – STR

On-target At-risk – LTR

Name 2015 2015 2015 2015 2014 Executive Directors

J Douglas 50.0 25.0 25.0 15 14

U Meyerhans 57.2 21.4 21.4 11 7

Other Executives

R Duncan1 66.6 16.7 16.7 2 n/a

R Morris 66.6 16.7 16.7 6 3

R Biesheuvel 66.6 16.7 16.7 6 3

G Simpson 66.6 16.7 16.7 8 5

C Meijer 66.6 16.7 16.7 7 4

R Moriarty 66.6 16.7 16.7 7 4

Former Executives

S Pathmanadavel2 66.6 16.7 16.7 7 5 1 R Duncan was appointed Group Executive Testing on 25 August 2014. He was subsequently appointed Group Executive Transport Infrastructure on 29 April 2015. 2 S Pathmanandavel ceased to be a KMP on 29 April 2015



6.4 Details of Nominated Executive remuneration: variable at-risk remuneration The percentage of the available STR and LTR that was paid with respect to the 2015 financial year and the percentage that was forfeited because the person did not meet the performance criteria are set out below. No part of the STR in the table below is payable in future years.

Short-Term Rewards Long-Term Rewards

(subject to vesting hurdles)

Name Paid (%) Forfeited (%)

FY2015 remuneration

granted (%)

FY2013 grant forfeited

based on measurement (%)

Executive Directors

J Douglas 0% 100% 100% 100%

U Meyerhans 0% 100% 100% 100%

Other Executives

R Duncan1 0% 100% 100% N/A

R Morris 0% 100% 100% N/A

R Biesheuvel 0% 100% 100% 100%

G Simpson 0% 100% 100% 100%

C Meijer 0% 100% 100% 100%

R Moriarty 0% 100% 100% 100%

Former Executives

S Pathmanandavel2 0% 100% 100% 100%

1 R Duncan was appointed Group Executive Testing on 25 August 2014. He was subsequently appointed Group Executive Transport Infrastructure on 29 April 2015. 2 S Pathmanandavel ceased to be a KMP on 29 April 2015.



6.5 Analysis of loan share movements in the Coffey Rewards Share Plan on behalf of the Nominated Executives The Non-executive Directors of Coffey International Limited do not participate in the Coffey Rewards Share Plan.

Plan name Granted

(no.) Vested

(no.) Forfeited#

(no.) Exercised

(no.) Executive Directors J Douglas Service – – – –

Performance 1,672,940 – 1,176,470 –

U Meyerhans Service – – – –

Performance 862,609 – 606,617 –

Other Executives R Duncan1 Service – – – –

Performance 355,499 – – –

R Morris Service – – – –

Performance 334,588 – – –

R Biesheuvel Service – – – –

Performance 334,588 – 96,847 –

G Simpson Service – 835 – –

Performance 418,235 – 294,117 –

C Meijer Service – – – –

Performance 297,992 – 183,823 –

R Moriarty Service – – – –

Performance 381,639 – 268,382 –

Former Executives

S Pathmanandavel2 Service – 835 – –

Performance 418,235 – 283,470 – 1 R Duncan was appointed Group Executive Testing on 25 August 2014. He was subsequently appointed Group Executive Transport Infrastructure on 29 April 2015. 2 S Pathmanandavel ceased as a KMP on 29 April 2015.

# Shares subject to the EPS hurdle were cancelled on 10 August 2015. The current year grant date was 27 November 2014, the exercise price was initially the value of the loan and the fair value at grant date is set out in the next table. The loan balance payable on exercising of the shares reduces by the dividends per share paid during periods from grant date to exercise date. The total fair value of shares granted to eligible employees under the Coffey Reward Share Plan was $862,975.25.



6.6 Grants under the Coffey Rewards Share Plan to Nominated Executives together with vesting details

Performance grants

Name Plan year

Loan-shares

granted (no.)

Vested (%)

Forfeited# (%)

Earliest vesting

date

Fair value at grant date

($) Exercise

price Expiry

date Executive Directors

J Douglas 2013 1,176,470 – 100% 1-Dec-15 241,176 $0.3939 1-Dec-22 2014 3,418,803 – – 30-Nov-16 564,103 $0.2825 30-Nov-23 2015 1,672,940 – – 27-Nov-17 284,400 $0.3370 27-Nov-24 U Meyerhans 2013 606,617 – 100% 1-Dec-15 124,356 $0.3939 1-Dec-22 2014 1,762,820 – – 30-Nov-16 290,865 $0.2825 30-Nov-23 2015 862,609 – – 27-Nov-17 146,644 $0.3370 27-Nov-24 Other Executives R Duncan1 2015 355,499 – – 27-Nov-17 60,435 $0.3370 27-Nov-24 R Morris 2014 641,025 – – 30-Nov-16 105,769 $0.2825 30-Nov-23 2015 334,588 – – 27-Nov-17 56,880 $0.3370 27-Nov-24 R Biesheuvel 2013 96,847 – 100% 13-Mar-16 22,759 $0.3850 13-Apr-23 2014 683,760 – – 30-Nov-16 112,820 $0.2825 30-Nov-23 2015 334,588 – – 27-Nov-17 56,880 $0.3370 27-Nov-24 G Simpson 2013 294,117 – 100% 1-Dec-15 60,294 $0.3939 1-Dec-22 2014 854,700 – – 30-Nov-16 141,026 $0.2825 30-Nov-23 2015 418,235 – – 27-Nov-17 71,100 $0.3370 27-Nov-24 C Meijer 2013 183,823 – 100% 1-Dec-15 37,684 $0.3939 1-Dec-22 2014 534,188 – – 30-Nov-16 88,141 $0.2825 30-Nov-23 2015 297,992 – – 27-Nov-17 50,659 $0.3370 27-Nov-24 R Moriarty 2013 268,382 – 100% 1-Dec-15 55,018 $0.3939 1-Dec-22 2014 779,914 – – 30-Nov-16 128,686 $0.2825 30-Nov-23 2015 381,639 – – 27-Nov-17 64,879 $0.3370 27-Nov-24 Former Executives S Pathmanandavel2 2013 275,735 – 100% 1-Dec-15 56,526 $0.3939 1-Dec-22 2014 854,700 – – 30-Nov-16 141,026 $0.2825 30-Nov-23 2015 418,235 – – 27-Nov-17 71,100 $0.3370 27-Nov-24 1 R Duncan was appointed Group Executive Testing on 25 August 2014. He was subsequently appointed Group Executive Transport Infrastructure on 29 April 2015. 2 S Pathmanandavel ceased as a KMP on 29 April 2015. # Shares subject to the EPS hurdle were cancelled on 10 August 2015.


Service grants

Name Plan year#

Loan-shares granted

(no.) Vested

(%) Forfeited

(%) Earliest vesting

date


($) Other Executives R Morris 2013 25,641 – – 30-Nov-16 4,103 2014 – – – – – G Simpson 2011 835 100% – 16-Mar-15 276 2012 1,470 – – 13-Dec-15 265 2013 4,273 – – 30-Nov-16 684 2014 – – – – – Former Executives S Pathmanandavel1 2011 835 100% – 16-Mar-15 276 2012 1,470 – – 13-Dec-15 265 2013 4,273 – – 30-Nov-16 684 2014 – – – – –

1 S Pathmanandavel ceased as a KMP on 29 April 2015. # No grant of Loyalty shares was made for 2014.

6.7 Loan share movements in the Coffey Rewards Share Plan on behalf of the Nominated Executives The movement during the financial year in the number of options (including loan shares) over ordinary shares in Coffey International Limited held directly, indirectly or beneficially by each Nominated Executive, including their related parties is:

Name

Held at 1 July

2014 Granted as

compensation Exercised Forfeited#

Held at 30 June

2015

Vested during

the year

Vested and exercisable at 30 June 2015

Executive Directors J Douglas 4,595,273 1,672,940 – (1,176,470) 5,091,743 – – U Meyerhans 2,410,364 862,609 – (606,617) 2,666,356 – 40,927 Other Executives R Duncan1 – 355,499 – – 355,499 – – R Morris 676,435 334,588 – – 1,011,023 – 9,769 R Biesheuvel 780,607 334,588 – (96,847) 1,018,348 – – G Simpson3 1,247,022 418,235 – (294,117) 1,371,140 835 92,462 C Meijer 718,011 297,992 – (183,823) 832,180 – – R Moriarty 1,048,296 381,639 – (268,382) 1,161,553 – – Former Other Executives S Pathmanandavel2 1,211,570 418,235 – (283,470) 1,346,335 835 67,657 1 R Duncan was appointed Group Executive Testing on 25 August 2014. He was subsequently appointed Group Executive Transport Infrastructure on 29 April 2015. 2 S Pathmanandavel ceased as a KMP on 29 April 2015. 3 835 vested shares relate to Coffey’s Loyalty Rewards Plan. # EPS shares cancelled 10 August 2015. No loan shares were vested and un-exercisable at 30 June 2015.



Service grants

Name Plan year#

Loan-shares granted

(no.) Vested

(%) Forfeited

(%) Earliest vesting

date


($) Other Executives R Morris 2013 25,641 – – 30-Nov-16 4,103 2014 – – – – – G Simpson 2011 835 100% – 16-Mar-15 276 2012 1,470 – – 13-Dec-15 265 2013 4,273 – – 30-Nov-16 684 2014 – – – – – Former Executives S Pathmanandavel1 2011 835 100% – 16-Mar-15 276 2012 1,470 – – 13-Dec-15 265 2013 4,273 – – 30-Nov-16 684 2014 – – – – –

1 S Pathmanandavel ceased as a KMP on 29 April 2015. # No grant of Loyalty shares was made for 2014.

6.7 Loan share movements in the Coffey Rewards Share Plan on behalf of the Nominated Executives The movement during the financial year in the number of options (including loan shares) over ordinary shares in Coffey International Limited held directly, indirectly or beneficially by each Nominated Executive, including their related parties is:

Name

Held at 1 July

2014 Granted as

compensation Exercised Forfeited#

Held at 30 June

2015

Vested during

the year

Vested and exercisable at 30 June 2015

Executive Directors J Douglas 4,595,273 1,672,940 – (1,176,470) 5,091,743 – – U Meyerhans 2,410,364 862,609 – (606,617) 2,666,356 – 40,927 Other Executives R Duncan1 – 355,499 – – 355,499 – – R Morris 676,435 334,588 – – 1,011,023 – 9,769 R Biesheuvel 780,607 334,588 – (96,847) 1,018,348 – – G Simpson3 1,247,022 418,235 – (294,117) 1,371,140 835 92,462 C Meijer 718,011 297,992 – (183,823) 832,180 – – R Moriarty 1,048,296 381,639 – (268,382) 1,161,553 – – Former Other Executives S Pathmanandavel2 1,211,570 418,235 – (283,470) 1,346,335 835 67,657 1 R Duncan was appointed Group Executive Testing on 25 August 2014. He was subsequently appointed Group Executive Transport Infrastructure on 29 April 2015. 2 S Pathmanandavel ceased as a KMP on 29 April 2015. 3 835 vested shares relate to Coffey’s Loyalty Rewards Plan. # EPS shares cancelled 10 August 2015. No loan shares were vested and un-exercisable at 30 June 2015.



Executive employment contracts Remuneration and other terms of employment for Executives are formalised in employment agreements. Employment agreements are unlimited in term but can be terminated at any time with at least three months’ notice and up to twelve months’ notice in the case of the Executive Directors. Employment agreements for Executives include a restriction on engaging in competitive behaviour when employment with Coffey comes to an end. Key substantive terms of employment are shown in the following table:

Name Position Term of agreement Termination notice Current Executives

J Douglas Managing Director No fixed term 6 months by employee 12 months by employer

U Meyerhans Finance Director No fixed term 6 months by employee 12 months by employer

R Duncan1 Group Executive Transport Infrastructure No fixed term 3 months

R Morris2 Group Executive Energy and Resources No fixed term 3 months

R Biesheuvel3 Group Executive Property Infrastructure No fixed term 3 months

G Simpson Group Executive International Development No fixed term 13 months^

C Meijer Group Executive Markets No fixed term 3 months

R Moriarty Group Executive Human Resources No fixed term 3 months

Former Executives

S Pathmanandavel4 Group Executive Geomechanics No fixed term 3 months

^ G Simpson’s current employment agreement is dated 26 October 2009, with no further change in remuneration. 1 R Duncan was appointed Group Executive Transport Infrastructure on 29 April 2015. He was previously Group Executive Testing. 2 R Morris was appointed Group Executive Energy and Resources on 29 April 2015. He was previously Group Executive Environments. 3 R Biesheuvel was appointed Group Executive Property Infrastructure on 29 April 2015. He was previously Group Executive Project Management. 4 S Pathmanandavel ceased to be a KMP on 29 April 2015 when he was appointed as Business Development Manager Transport Infrastructure.


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8 Transactions with key management personnel 9.1 Loans to key management personnel Loans outstanding from Nominated Executives at the end of the current and prior year are for the purchase of shares under the Coffey Rewards Share Plan (formerly Coffey International Limited Employee Leveraged Share Plan). The loan shares are issued on conditions no more favourable than those available to other participating employees. No interest is payable on the loan balances and the loans are limited-recourse to the executive. The terms and conditions of the Coffey Rewards Share Plan are described in Note 30. The limited-recourse loans are reduced over the life of the arrangement by the value of dividends paid per instrument. Due to its limited recourse nature, for accounting purposes the loan is not recognised as a receivable but rather is treated as an option to purchase shares in the Company and no loan balances are disclosed. No write-downs or allowances for doubtful receivables have been recognised in relation to any loans made to key management personnel. 9.2 Other transactions with key management personnel Transactions entered into with Nominated Executives are within normal employee relationships, on terms and conditions no more favourable than those available to other employees or Shareholders. They include:

share issues under the Coffey Rewards Share Plan (formerly Coffey International Limited Employee Leveraged Share Plan) (Note 30);

dividends from shares in Coffey International Limited; and terms of employment and reimbursement of expenses.

9.3 Movements in shares Movements in the number of ordinary shares in Coffey International Limited held, directly, indirectly or beneficially by each Nominated Executive, including their related parties is:

Name Held at

1 July 2014 Cash

Purchases

Received on exercise of

options and rights Sales

Held at 30 June 2015

Non-executive Directors J Mulcahy 1,639,286 – – – 1,639,286

L Bond 150,000 – – – 150,000

G Cowan 311,513 – – – 311,513

S Oliver 320,000 – – – 320,000

Executive Directors J Douglas 7,294,707 – – – 7,294,707 U Meyerhans 1,000,000 – – – 1,000,000 Other Executives R Morris 26,681 – – – 26,681 G Simpson 272,027 5,590 – – 277,617 C Meijer 68,000 – – – 68,000 Former KMP’s S Black AM1 287,027 – – – 287,027

S Pathmanandavel2 224,987 – – – 224,987 1 S Black AM retired as a Non-executive Director on 4 November 2014. 2 S Pathmanandavel ceased as a KMP on 29 April 2015. (End of Remuneration Report)



Auditor’s independence declaration A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on the following page. Rounding of amounts The company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the Directors’ Report. Amounts in the Directors’ Report and the Financial Report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar. Auditor KPMG continues in office in accordance with Section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of the Directors.

John F Mulcahy Chairman

John M Douglas Managing Director

Sydney 7 August 2015


Coffey International Limited Corporate governance statement

Coffey’s approach to corporate governance Coffey International Limited (Coffey or the Company) supports the Australian Securities Exchange (ASX) Corporate Governance Council’s Corporate Governance Principles and Recommendations (Principles or Recommendations). Coffey is committed to establishing governance systems that deliver best practice in corporate governance and transparency in reporting. This is an ongoing commitment, requiring continual review, modification and enhancement of governance systems. This statement explains how Coffey conforms to the Principles. Where to locate Coffey’s corporate governance information online The charters, codes and policies relating to Coffey’s corporate governance practices referred to in this statement are available on the corporate governance section of the Coffey website – www.coffey.com. Principle 1: Lay solid foundations for management and oversight Recommendation 1.1 – Companies should establish the functions reserved to the Board and those delegated to Senior Executives and disclose those functions Board responsibilities The Coffey Board (Board) is responsible for the overall corporate governance of Coffey. The Board Charter sets out the following objectives of the Board:

provide strategic guidance for Coffey and effective oversight of management;

optimise Coffey’s performance and Shareholder value within a framework of appropriate risk assessment and management; and

recognise Coffey’s legal and other obligations to all legitimate stakeholders.

The Board derives its authority to act from the Company’s Constitution and the Board’s responsibilities are encompassed in a formal Charter, which the Board is responsible for reviewing annually and amending as required. The Charter was most recently reviewed in November 2014. The matters that the Board has specifically reserved for its decision are: oversight of the Company,

including its control and accountability systems;

providing input into, reviewing and approving Coffey’s strategic plans and performance objectives, and monitoring performance against those plans;

approving and monitoring financial outcomes and the integrity of financial reporting;

protecting Coffey’s financial position and its ability to meet its debts as and when they fall due;

approving and monitoring the progress of major capital expenditure, capital management (including determining Coffey’s dividend policy and declaring dividends), and acquisitions and divestitures;

reviewing and monitoring the effectiveness of Coffey’s systems of risk management and internal control (including matters of health, safety, security and environment);

evaluating the performance of the Board, determining its size and composition and setting Non-executive Director remuneration within Shareholder approved limits;

appointing, approving terms of engagement and termination benefits, and monitoring the performance of the Managing Director (MD) and, if required, terminating the appointment of the MD;

ratifying the appointment and removal of any Executive Director, the Chief Financial Officer (CFO), any other member of the Management Team and the Company Secretary, approving their terms of engagement and termination

benefits, and monitoring their performance;

planning for Board, MD and Management Team succession;

establishing Coffey’s culture and values, and monitoring compliance with legislative and regulatory requirements (including continuous disclosure) and ethical standards, including reviewing and ratifying codes of conduct and compliance systems;

promoting diversity on the Board, reviewing and approving Coffey policies in relation to diversity, approving the measurable objectives and monitoring progress towards their achievement;

monitoring the timeliness and effectiveness of communications with Shareholders and other stakeholders;

approving and monitoring policies governing Coffey’s relationship with other stakeholders and the broader community, including policies in relation to environmental management and occupational health and safety; and

reviewing and recommending to Shareholders the appointment or, if appropriate, the termination of the appointment of the external auditor.

While at all times the Board retains full responsibility for guiding and monitoring Coffey, in discharging its responsibilities it makes use of Board Committees. Specialist committees can focus on a particular area of responsibility, and report and provide recommendations to the Board. The Board has established the following standing Committees: Risk and Audit Committee (see

Principles 4 and 7); Nomination Committee (see

Principle 2); and Human Resources and

Remuneration Committee (see Principle 8).



All Coffey Directors receive copies of all Board Committee papers, including minutes, and may attend meetings of all Board Committees whether or not they are Committee members, provided no conflict of interest exists. The Chair of each Committee reports back on the Committee matters, conclusions and recommendations to the Board at the next full meeting. Delegation to management The Board has delegated to the MD and, through the MD, to the Management Team responsibility for the day-to-day management and operations of Coffey and implementation of the Company’s strategy and policy initiatives. The MD and Management Team are accountable to the Board for performance of these duties, including: developing, implementing and

reviewing the effectiveness of Coffey’s Health, Safety, Security and Environment Management System;

developing and implementing corporate strategies and making recommendations to the Board on significant corporate strategic initiatives;

developing Coffey’s annual budget and managing day-to-day operations within the budget;

maintaining effective risk management and compliance management frameworks;

appointing senior management, including determining terms of appointment, evaluating performance, and developing and maintaining succession plans for senior management roles;

managing day-to-day operations in accordance with standards for social, ethical and environmental practices;

promoting equal opportunity and diversity within all levels of the organisation, developing and implementing policies and initiatives in relation to diversity, and monitoring and assessing progress towards achievement of the measurable objectives; and

keeping the Board fully informed about material continuous disclosure.

Specific limits on the authority delegated to the MD and the Management Team are set out in the Board-approved Delegation of Authority Policy. Management Team The Management Team comprises the MD and the direct reports to the MD from each service line and function. Each Management Team member is employed under a service agreement which sets out the terms on which the Executive is employed, including details of the Executive’s duties and responsibilities, rights and remuneration entitlements. The service agreement also sets out the circumstances in which the employment of the Executive may be terminated by either Coffey or the Executive, including details of the notice periods to be given by either party, and the amounts payable to the Executive as a consequence of the termination by Coffey of the Executive’s employment. Each member of the Management Team is employed by Coffey on a permanent basis. Key terms of these service agreements are detailed in the Remuneration Report in this Annual Financial Report. Recommendation 1.2 – Companies should undertake appropriate checks before appointing a new Director and provide Shareholders with all material information in relation to the election or re-election of a Director The Nomination Committee assists the Board with the selection and appointment of new Directors. The Nomination Committee considers candidates with a broad range of skills, experience and expertise from a diverse range of backgrounds, including gender. Candidates are considered on merit and against objective criteria, and with due regard for the benefits of diversity on the Board, including gender.

Prior to the appointment of a new Director, or putting forward to Shareholders a candidate for election or re-election as a Director, Coffey undertakes appropriate due diligence to verify a Director’s character, experience, education and criminal record and bankruptcy history including conducting background and reference checks and obtaining advice from external consultants. When the Board considers that a suitable candidate has been found, that person is appointed by the Board to fill a casual vacancy in accordance with Coffey’s Constitution, but must stand for election by Shareholders at the next Annual General Meeting (AGM). Coffey ensures that all material information in its possession relevant to a Shareholder’s decision whether to elect or re-elect a Director, is provided to Shareholders in Coffey’s Notice of AGM. Recommendation 1.3 – Companies should have a written agreement with each Director and Senior Executive setting out the terms of their appointment Each Director and Senior Executive of Coffey has an agreement in writing with Coffey which sets out the key terms and conditions of their appointment including their duties, rights and responsibilities and remuneration. Recommendation 1.4 – The Company Secretary should be accountable directly to the Board on all matters to do with proper functioning of the Board The appointment and removal of the Company Secretary, including the terms of engagement and monitoring of performance is a matter specifically reserved for the Board. The Company Secretary is responsible for:

advising the Board and its Committees on governance matters;

assisting the Board and its Committees to follow the relevant policies and procedures;



coordinate the completion and delivery of Board and Committee papers;

prepare minutes to ensure that business at Board and Committee meetings are accurately reflected; and

assist to organise and facilitate the induction and professional development of Directors.

While the Company Secretary reports to the Chair for all matters to do with the proper functioning of the Board, all Directors at Coffey have direct access to the Company Secretary on any matter relevant to their role as a Director. Recommendation 1.5 – Companies should have and disclose a diversity policy, including the measurable objectives set by the Board Coffey has considerable diversity in its workforce, including differences that relate to gender, age, ethnicity, disability, religious beliefs, sexual orientation and cultural background. Having a diverse workforce promotes ingenuity, strengthens problem solving, improves delivery to clients and enables better business results as well as reflecting the diversity in our clients. Building a business where people of different experiences and backgrounds can thrive encourages further diversity. That is why we ask our managers to focus on providing a work environment that is collaborative and where all employees are treated with dignity and respect. The Board has approved and published its policy on Board Diversity and Equal Opportunity. This provides the platform for an integrated diversity management policy across the Group. The Board has also established measurable objectives for improving gender diversity. The Management Team manages progress and reports at least annually to the Human Resources and Remuneration Committee on the effectiveness of diversity related initiatives.

Responsibility for diversity has been included in the Board Charter, the Nomination Committee Charter (Board diversity) and the Human Resources and Remuneration Committee Charter (diversity at all levels of the organisation below Board level). The Coffey Board has established the following diversity related measurable objective for the Group: “to increase the percentage of

women at all levels in the Company, including management and Executive levels; and

having already achieved a 33% proportion of women on the Board, to maintain a significant participation by women at Board level”.

The Board has monitored Remuneration and Performance Rating equity for four years. There is no evidence of gender bias in either of these areas. The Management Team, supported by the Board, is now focussed on improving talent mapping and succession processes over the coming year in support of its diversity program. Our efforts are having some impact, but not yet at a satisfactory level: This year, Coffey maintained

representation of women in our Management Team, complementing improved representation at Board level in prior reporting periods;

Like other companies operating in our fields, Coffey continue to have a lower level of female candidates applying for externally advertised vacancies in the geoservices and project management disciplines. Our data from the prior calendar year shows that females are, on average, slightly more likely to be the successful, merit-based candidate.

In previous years Coffey has published the percentages of women in management roles, however, as the definitions have changed slightly with the new corporate governance requirements, we will now report accordingly.

In Coffey, ‘Senior Executive’ is defined as “the direct reports to the CEO who are also classified as KMPs”. The table below shows the proportion of female employees across the Coffey Group as at 30 June 2015 (and prior year comparative). 2015 2014 Board members 33% 29% Senior Executives 29%

Not defined

Other Managers 23% Defined

differently Total Staff 35% 32%

Recommendation 1.6 – Companies should disclose the process for periodically evaluating the performance of the Board, its Committees and Directors Under the Board Charter, the Board is required to conduct a formal review of its effectiveness and the effectiveness of its Committees and individual Directors annually. During the financial year, the Board completed a review of its own performance, the performance of its Committees and the performance of individual Directors. That review involved each Director completing a questionnaire covering:

the role of the Board; Board composition; Board Committee structure and

Committee effectiveness; Board operations and

dynamics; Board meetings; Board member performance;

and Board Chair performance. The aggregate results of the questionnaire were discussed at a subsequent Board meeting. The Board Charter requires that every three years, the Board considers engaging an external consultant to conduct a comprehensive review of the effectiveness of the Board, its Committees and individual Directors.



After considering the financial performance of the Company, its limited resources and the potential distraction of a prolonged assessment process, the Board has deferred the engagement of an external consultant to be considered by the Board for the 2016 evaluation. During the financial year, both the Risk and Audit Committee and the Human Resources and Remuneration Committee also completed a detailed review of their own performance. That review involved each Committee member, the Executive Directors and the relevant Management Team members completing a questionnaire. The review found that each Committee had been effective in performing its responsibilities under the Committee Charter. The Committees set aside time at one of the scheduled meetings to discuss its performance over the financial year in achieving the objectives set out in its Charter and to consider areas to continue improving its effectiveness. The evaluation of the MD, FD and Management Team performance is discussed in the Remuneration Report in this Annual Financial Report. Recommendation 1.7 – Companies should have and disclose a process for periodically evaluating the performance of its Senior Executives The performance of Management Team members is reviewed annually against key performance measures as part of Coffey’s performance management system, which is in place for all managers and employees. The system includes processes for the setting of key performance measures at the commencement of the financial year and the annual assessment of performance against these measures. Some performance measures, such as Coffey’s overall financial performance, are common for the Management Team. Other performance measures are specifically set in line with the

individual role and responsibilities of the Management Team member. The following process for evaluating Management Team performance was undertaken in the reporting period: the Chairman and Non-

executive Directors, with the assistance of the Human Resources and Remuneration Committee, reviewed the performance of the MD and the Finance Director (FD); and

the Board, with the assistance of the Human Resources and Remuneration Committee, reviewed the performance of the other members of the Management Team.

Details of the evaluation process and the linkages between the result of performance evaluations and remuneration are disclosed in the Remuneration Report in this Annual Financial Report. An induction program is in place to enable newly appointed Management Team members to gain an understanding of: the Company’s financial

position, strategies, operations and risk management policies; and

the respective rights, duties, responsibilities and roles of the Board and the Management Team.

Principle 2: Structure the Board to add value Together, the Board members represent a diverse range of backgrounds. They have a broad range of financial and other skills and experience, and the expertise necessary to oversee Coffey’s business. The Board’s size and composition are subject to limits imposed by the Company’s Constitution, which provides for a minimum of three and a maximum of eight Directors (or such number within this range as the Board may determine from time to time). The Board currently comprises four Non-executive Directors and two Executive Directors. The Executive Directors include the MD who is the

Chief Executive Officer of Coffey and the FD who is the Chief Financial Officer of Coffey. The Directors of Coffey at any time during the financial year are listed with a brief description of their qualifications, experience and special responsibilities in the Directors’ Report of this Annual Financial Report. The Board met 15 times during the financial year. Directors’ attendances are set out in the Directors’ Report of this Annual Financial Report. The Non-executive Directors also met without the presence of management during the financial year. Recommendation 2.1 – The Board should have a Nomination Committee The Board has established a Nomination Committee comprising two independent Non-executive Directors: John Mulcahy (Chairman) and Susan Oliver (Human Resources and Remuneration Committee Chair). The MD is invited to attend meetings as required. The Committee Charter states that the role of the Committee is to assist and advise the Board on matters relating to: composition of the Board

(including Board diversity); Board and Chair succession

planning; Director independence; and Board performance. A copy of the Nomination Committee Charter is available at www.coffey.com/en/investors/corporate-governance/. The Committee collectively and its members individually have access to internal and external resources, including access to advice from external consultants or specialists.



After considering the financial performance of the Company, its limited resources and the potential distraction of a prolonged assessment process, the Board has deferred the engagement of an external consultant to be considered by the Board for the 2016 evaluation. During the financial year, both the Risk and Audit Committee and the Human Resources and Remuneration Committee also completed a detailed review of their own performance. That review involved each Committee member, the Executive Directors and the relevant Management Team members completing a questionnaire. The review found that each Committee had been effective in performing its responsibilities under the Committee Charter. The Committees set aside time at one of the scheduled meetings to discuss its performance over the financial year in achieving the objectives set out in its Charter and to consider areas to continue improving its effectiveness. The evaluation of the MD, FD and Management Team performance is discussed in the Remuneration Report in this Annual Financial Report. Recommendation 1.7 – Companies should have and disclose a process for periodically evaluating the performance of its Senior Executives The performance of Management Team members is reviewed annually against key performance measures as part of Coffey’s performance management system, which is in place for all managers and employees. The system includes processes for the setting of key performance measures at the commencement of the financial year and the annual assessment of performance against these measures. Some performance measures, such as Coffey’s overall financial performance, are common for the Management Team. Other performance measures are specifically set in line with the

individual role and responsibilities of the Management Team member. The following process for evaluating Management Team performance was undertaken in the reporting period: the Chairman and Non-

executive Directors, with the assistance of the Human Resources and Remuneration Committee, reviewed the performance of the MD and the Finance Director (FD); and

the Board, with the assistance of the Human Resources and Remuneration Committee, reviewed the performance of the other members of the Management Team.

Details of the evaluation process and the linkages between the result of performance evaluations and remuneration are disclosed in the Remuneration Report in this Annual Financial Report. An induction program is in place to enable newly appointed Management Team members to gain an understanding of: the Company’s financial

position, strategies, operations and risk management policies; and

the respective rights, duties, responsibilities and roles of the Board and the Management Team.

Principle 2: Structure the Board to add value Together, the Board members represent a diverse range of backgrounds. They have a broad range of financial and other skills and experience, and the expertise necessary to oversee Coffey’s business. The Board’s size and composition are subject to limits imposed by the Company’s Constitution, which provides for a minimum of three and a maximum of eight Directors (or such number within this range as the Board may determine from time to time). The Board currently comprises four Non-executive Directors and two Executive Directors. The Executive Directors include the MD who is the

Chief Executive Officer of Coffey and the FD who is the Chief Financial Officer of Coffey. The Directors of Coffey at any time during the financial year are listed with a brief description of their qualifications, experience and special responsibilities in the Directors’ Report of this Annual Financial Report. The Board met 15 times during the financial year. Directors’ attendances are set out in the Directors’ Report of this Annual Financial Report. The Non-executive Directors also met without the presence of management during the financial year. Recommendation 2.1 – The Board should have a Nomination Committee The Board has established a Nomination Committee comprising two independent Non-executive Directors: John Mulcahy (Chairman) and Susan Oliver (Human Resources and Remuneration Committee Chair). The MD is invited to attend meetings as required. The Committee Charter states that the role of the Committee is to assist and advise the Board on matters relating to: composition of the Board

(including Board diversity); Board and Chair succession

planning; Director independence; and Board performance. A copy of the Nomination Committee Charter is available at www.coffey.com/en/investors/corporate-governance/. The Committee collectively and its members individually have access to internal and external resources, including access to advice from external consultants or specialists.


The Committee has a formal Charter that is required to be reviewed annually. The Charter was most recently reviewed in June 2015. The Company Secretary is the secretary to the Committee. The Committee meets as required and at least annually and met once during the financial year. Details of Directors’ attendances are set out in the Directors’ Report of this Annual Financial Report. Recommendation 2.2 – Companies should have and disclose a Board skills matrix The Board regularly evaluates the mix of skills, experience and diversity at the Board level through performance evaluation questionnaires. The mix of skills comprised in the current Board includes:

technical expertise (including finance and engineering);

energy and resources industry expertise;

property infrastructure industry expertise; and

business and strategic planning, governance and managerial experience.

Recommendation 2.3 – Companies should disclose independence and length of service of Directors The Board annually assesses the independence of all Non-executive Directors in accordance with the principles set out below. Independent advice Under the Board Charter, the Board collectively, an individual Director, or a Committee, has the right to seek independent professional advice at Coffey’s expense to help them carry out their responsibilities.

Before the external advice is sought, consent, which cannot be unreasonably withheld, needs to be obtained as follows: the Board – from the Chair; individual Director – from the

Chair or the relevant Committee Chair;

Committee – from the Committee Chair; or

Chairman – from the Risk and Audit Committee Chair.

Directors have unfettered access to Coffey records and information reasonably necessary to fulfil their responsibilities. Directors also have access to the Company Secretary on any matter relevant to their role as a Director. In addition, the Board has access to other relevant employees or external parties, including external auditors and internal auditors, to seek additional information concerning Coffey’s business. Director independence

The Board Charter states that Coffey will regard a Non-executive Director as independent if the Director is not a member of management and is free of any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their judgement as a Director of the Company. In assessing Non-executive Director independence, the Board reviews the relationship that the Director, and the Director’s associates, have with Coffey. In determining whether a Non-executive Director is independent, the Board considers whether the Director:

is a substantial Shareholder of Coffey or an officer of, or otherwise associated directly with, a substantial Shareholder of Coffey;

within the last three years, has been employed in an Executive capacity by Coffey;

within the last three years, has been: o a principal of a material

professional adviser to Coffey;

o a material consultant to Coffey;

o an employee materially associated with the service provided by such an adviser or consultant to Coffey; or

o a material supplier to, or customer of, Coffey, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;

has a material contractual relationship with Coffey other than as a Director of Coffey;

has served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in Coffey’s best interests;

has any interest, or any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in Coffey’s best interests; or

has close family ties with any of the categories described above.

The Board has determined materiality thresholds for assessing the independence of Directors. Under those thresholds:

a person will be regarded as a substantial Shareholder if they hold more than 5% of Coffey’s voting shares;

an adviser will be a material professional adviser or consultant where the annual billings to Coffey are more than 5% of the adviser’s or consultant’s total annual revenues or in aggregate, for each adviser or consultant, equal or exceed $100,000;

a supplier to Coffey will be a material supplier where Coffey accounts for more than 5% of the supplier’s annual revenues; and



a customer of the Company will

be a material customer where the customer accounts for more than 5% of Coffey’s annual revenues, or Coffey accounts for more than 5% of the customer’s annual costs.

Whether or not a material contractual relationship exists will be determined, on a case-by-case basis, consistent with these thresholds. Where a Director has dealings with, or is involved in, other companies or relationships to which this section applies, such dealings are disclosed publicly in the Director and Executive disclosures note to the Annual Financial Report in accordance with law. Applying these criteria the Board has determined that save for Mr Douglas and Mr Meyerhans (who are Executive Directors), all other Directors are independent. The length of service of each Director is set out in the Directors’ Report section of the Annual Report. Recommendation 2.4 – A majority of the board should be independent Directors As required under the Board Charter and the Principles, the Board comprises a majority of independent Non-executive Directors. Four of the six Directors on the Board of Coffey are independent Directors. Recommendation 2.5 – The Chair should be an independent Director and should not be the same person as the CEO Under the Board Charter, the Board elects a Chairman from among the Non-executive Directors. It is a requirement of the Charter that the Chairman be independent. The requirement in the Board Charter that the Chairman be appointed from among the Non-executive Directors means that the roles of Chairman and MD are not exercised by the same individual.

The Chairman presides over Board meetings and Shareholder meetings. Under the Board Charter, the Chairman is also responsible for: leading the Board in reviewing

and discussing Board matters; managing the efficiency and

conduct of the Board’s function; briefing all Directors in relation

to key issues arising at Board meetings;

facilitating effective contribution by all Directors and monitoring Board performance;

guiding Board deliberations, free of undue bias;

promoting constructive relations between Directors and between the Board and Management;

overseeing that membership of the Board is skilled and appropriate for Coffey’s needs;

reviewing corporate governance matters with the Company Secretary and reporting on those matters to the Board; and

overseeing the implementation of policies and systems for Board performance review and renewal.

The Chairman must ensure that General Meetings are conducted efficiently, and that Shareholders have adequate opportunity to air their views and obtain answers to their queries. Recommendation 2.6 – Companies should have a program for inducting new Directors and provide appropriate professional development opportunities for the Directors New Directors are given a thorough briefing by the Chair and the Company Secretary on key Board issues and provided with appropriate induction documentation. These include:

Coffey’s financial, strategic, operational and risk management position;

their rights, duties and responsibilities; and

the role of the Board and the Board Committees.

The Nomination Committee is responsible for making recommendations to the Board on ongoing education of Directors, including designing induction and ongoing training and education programs for the Board to ensure that Directors are provided with adequate information regarding the operation of the business, the industry and their legal responsibilities and duties.

Principle 3: Promote ethical and responsible decision making

Recommendation 3.1 – Companies should establish and disclose a code of conduct The Board has approved a Code of Conduct that sets out the principles for ethical behaviour by all Coffey employees. Coffey’s Code of Conduct commits its Directors, employees, contractors and consultants (all of which are referred to as ‘employees’ in the Code) to not only comply with the law, but to conduct business in accordance with the highest ethical conduct and is structured to enhance Coffey’s core values and behaviours, which guide its policies, programs and training initiatives. Any breach of the Code of Conduct is a serious matter that may give rise to disciplinary action, including dismissal and legal action. Coffey is committed to the highest standards of integrity, fairness and ethical conduct, including full compliance with all relevant legal obligations in all jurisdictions in which we operate. There is no circumstance under which it is acceptable for Coffey or a person associated with Coffey to knowingly or deliberately not comply with the law or to act unethically in the course of performing or advancing Coffey’s business. Behaviour of this kind will lead to disciplinary measures that may include dismissal.



All new Coffey employees are provided with Coffey’s Code of Conduct on induction. A copy of the Code of Conduct policy is available at www.coffey.com/en/investors/corporate-governance. Principle 4: Safeguard integrity in financial reporting Recommendation 4.1 – The Board should establish an Audit Committee, ensure that the Audit Committee is structured appropriately and disclose the charter of the Committee The Board established a combined Risk and Audit Committee at the close of the 2012 AGM. The current members of the Risk and Audit Committee are the independent Non-executive Directors: Guy Cowan (Chairman), John Mulcahy, Leeanne Bond and Susan Oliver. The Committee assists the Board in the discharge of its responsibilities with regard to independently verifying and safeguarding the integrity of Coffey’s financial reporting and risk oversight and management of opportunities and threats. The Risk and Audit Committee has a formal Charter that is required to be reviewed annually. A copy of the Charter for the Risk and Audit Committee is available at www.coffey.com/en/investors/corporate-governance. The Charter sets out the roles and responsibilities, composition, structure and membership requirements of the Risk and Audit Committee. The Risk and Audit Committee’s primary responsibilities include:

monitoring the integrity of financial reporting;

monitoring the effectiveness of financial risk management processes;

monitoring the effectiveness of the internal controls environment;

monitoring and reviewing the effectiveness and performance of internal audit;

monitoring and reviewing the external auditor’s qualifications, performance and independence;

reviewing the Group’s risk management policy application and effectiveness; and

monitoring legislative and regulatory compliance.

Under its Charter, the Risk and Audit Committee must have at least three members, all of whom must be independent Non-executive Directors. The Chair of the Board is not permitted to chair this Committee. The Charter also requires that all members have a working familiarity with basic accounting and finance practices and that at least one member have relevant financial qualifications and expertise (Mr Cowan). The Committee must also include members with an understanding of the industry in which Coffey operates. Any Non-executive Director of the Board may attend a meeting, by providing reasonable notice to the Committee Chair. Further details of the qualifications and experience of all Risk and Audit Committee members are disclosed in the Directors’ Report of this Annual Financial Report. The Committee meets as required, and at least four times per year. The Committee met four times during the financial year. Directors’ attendances are set out in the Directors’ Report of this Annual Financial Report. The MD, FD, Group Financial Controller and external auditors have a standing invitation to attend Risk and Audit Committee meetings. The internal auditors attend meetings at the discretion of the Committee. The Company Secretary is the secretary to the Risk and Audit Committee.

The Risk and Audit Committee meets privately with the external auditor on general matters concerning the external audit and other related matters, including the half year and full year financial reports. The Risk and Audit Committee also meets privately with the internal auditor and in private session with management. The Risk and Audit Committee collectively, and its members individually, have access to internal and external resources, including access to advice from external consultants or specialists. Auditor independence Coffey’s External Auditor Independence Policy contains details of the procedures for the selection and appointment of the external auditor and for reviewing the independence of the external auditor. The External Auditor is precluded from providing any services that might threaten its independence, or conflict with its assurance and compliance role. The Directors have concluded that non-audit services provided during the financial year did not compromise the external auditor’s independence requirements under the Corporations Act 2001. The lead and signing external audit partners are required to rotate off the audit after a maximum of five years, unless exceptional circumstances arise. The internal audit function may not be performed by the external auditors. Recommendation 4.2 – CEO and CFO certification of financial statements In accordance with section 295A of the Corporations Act 2001, the MD and FD have provided a written certificate to the Board.



The certificate states that, in their opinion, Coffey’s financial reports present a true and fair view in all material respects, of the financial position and performance of Coffey, and that management’s risk management and internal controls over financial reporting, which implement the policies and procedures adopted by the Board, are operating effectively in all material respects. Recommendation 4.3 – External auditor to attend AGM Under the Risk and Audit Committee Charter, an external auditor is required to attend Coffey’s AGM and be available to answer Shareholder questions about the conduct of the audit and the preparation and content of the Audit Report.

Principle 5: Make timely and balanced disclosures Recommendation 5.1 – Companies should establish a continuous disclosure policy and disclose that policy Coffey complies with its disclosure obligations under the ASX Listing Rules and the Corporations Act 2001, and has in place established procedures for dealing with compliance. Coffey has a Continuous Disclosure Policy that establishes a framework to enable Coffey to provide Shareholders and the market generally with timely, direct and equal access to relevant information about the Company. The Policy sets out Coffey’s disclosure obligations, notification process and how Coffey communicates with financial markets. The Board is responsible for considering and approving ASX announcements containing Material Information, based on the recommendations of the Disclosure Committee. The Disclosure Committee – which comprises the Chairman (or another Non-executive Director), MD, FD and Company Secretary (the nominated Disclosure Officer) – is responsible for monitoring compliance with the Continuous Disclosure Policy.

The Company Secretary, or in its absence the FD, is the convenor of meetings of the Disclosure Committee. The Committee is responsible for administering the Continuous Disclosure Policy including overseeing preparation of proposed external announcements ensuring they contain material information that is both objective and factual, and are clearly written to allow investors to assess the impact of information on their investment decisions. The Committee is also responsible for recommending changes to the Continuous Disclosure Policy to the Board. The Company Secretary reports regularly to the Board on matters that were either notified or not notified to the ASX. Directors receive copies of all announcements immediately after notification to the ASX. All ASX announcements are available on the Coffey website. Communication with the financial market, investors and media is the responsibility of the Chairman, MD or FD. The Continuous Disclosure Policy covers briefings to investors and stock broking analysts, general briefings, one-on-one briefings, blackout periods, compliance and review, as well as media briefings. The Continuous Disclosure Policy was most recently reviewed and amended in April 2015. A copy of the Continuous Disclosure Policy is available at www.coffey.com/en/investors/corporate-governance/. Principle 6: Respect the rights of Shareholders Recommendation 6.1 – Companies should provide information about themselves on their website Coffey’s website allows Shareholders to access Board and Committee charters, corporate governance policies, ASX announcements, annual and half year reports, information related to Shareholder meetings, investor presentations, information about the Directors and Senior Executives and other corporate information.

Recommendation 6.2 – Companies should have an investor relations program to facilitate effective communication with investors Coffey has established a Shareholder Communication Policy to promote effective engagement with its Shareholders, both retail and institutional, and strives to keep Shareholders informed about the Company’s activities. The Shareholder Communication Policy was most recently reviewed and amended in April 2015. Coffey, on an ongoing basis, examines how best to take advantage of technology to enhance Shareholder communications and how to use General Meetings to enhance two-way communication. Coffey utilises the means of communication that is best suited to the information and audience at the time and most relevant and effective for our Shareholders. Coffey seeks to ensure that all investors have equal and timely access to price sensitive information. Prior to making a presentation to investors or stock broking analysts, Coffey will lodge the presentation material with the ASX so that all Shareholders can access the information. Coffey will not expressly or implicitly provide investors, stock broking analysts or the media with forecast profit guidance, unless that information has been disclosed previously to the ASX. Coffey is committed to ensuring that information released to the ASX is factual and is expressed in a balanced, objective and clear manner. Recommendation 6.3 – Companies should disclose policies and procedures it has in place to facilitate and encourage participation at meetings of Shareholders Coffey’s AGM is an important forum for our Shareholders. Shareholders are invited to submit questions before the meeting and, at the meeting, the Chairman attempts to answer as many of these as is practicable.



The Chairman encourages Shareholders at the meeting to ask questions and make comments about Coffey’s operations and the performance of the Board and senior management. The Chairman may respond directly to questions or, at his/her discretion, may refer a question to another Director, the MD, the FD or a member of the Management Team. New Directors or Directors seeking re-election are given the opportunity to address the meeting about why they should be elected. Shareholders can ask questions of any Director seeking re-election at the meeting. All Directors and members of the Management Team generally attend the AGM. Coffey has adopted the practice of conducting a poll on each remuneration related motion being considered at the meeting. The Chairman ensures each motion has been discussed and Shareholder questions have been answered prior to conducting the poll. Representatives of Coffey’s external auditor also attend the meeting and are available to respond to questions from Shareholders. Shareholders may submit written questions to the auditor, to be considered at the meeting in relation to the conduct of the audit and the preparation and content of the Independent Audit Report, by providing the questions to Coffey or to KPMG at least one week prior to the meeting. Shareholders who are unable to attend the AGM can watch and listen to the business of the meeting via a webcast that can be accessed from the Coffey website. Notices of meeting sent to Coffey’s Shareholders comply with the ‘Guidelines for notices of meeting’ issued by the ASX in August 2007.

Recommendation 6.4 – Companies should facilitate electronic communications Coffey encourages Shareholders to receive Company information electronically and advises Shareholders when the Annual Financial Report is available for viewing on the Coffey website. Coffey provides a printed copy of the Annual Financial Report only to those Shareholders who have specifically elected to receive a printed copy. Shareholders have the option of electing to receive all Shareholder communications, including dividend statements, by email. Coffey’s website allows Shareholders to view all ASX and media releases for the last three years; various investor presentations; a copy of the most recent Annual Financial Report and Annual Financial Reports for the two previous financial years; and the Notice of Meeting and accompanying explanatory material for the most recent AGM and the AGMs for the two previous financial years. Shareholder meetings and analyst/media briefings in relation to half year and full year financial results are webcast, and other significant events can be heard by teleconference. Principle 7: Recognise and manage risk The Board is responsible for the oversight of Coffey’s risk management and control framework. The Risk and Audit Committee assists the Board in fulfilling its responsibilities in this regard. The MD and Management Team are responsible for the design and implementation of risk management systems and managing the material business risks. Risk exposures stem from Coffey’s business risk profile which covers areas including operations, environment, brand and reputation, compliance, finance, information and strategy.

Coffey’s risk management practices are aimed at protecting the health and wellbeing of Coffey employees, ensuring that Coffey complies with its obligations at law and to the community, and protecting Shareholder value. Coffey recognises that risk management can also include identifying opportunities that create value for the business and Shareholders. Recommendation 7.1 – The Board should establish a Risk Committee, ensure that the Committee is structured appropriately and disclose the charter of the Committee The Board established a combined Risk and Audit Committee at the close of the 2012 AGM. Further details of this Committee are set out above at Recommendation 4.1. Recommendation 7.2 – The Board should undertake an annual review of the risk management framework The Board has approved a Risk Management Framework and supporting policies and processes to oversee and manage risk. The Risk Management Framework is designed to ensure that the Company’s material business risks are identified and that adequate controls are in place and function effectively. This framework incorporates the establishment of comprehensive policies, procedures and guidelines across the global business. This Framework acknowledges that all employees have a role in managing risk and in particular they are encouraged to report incidents, hazards and risks. The Board has approved a Risk Management Policy which is reviewed annually by the Board.



Recommendation 7.3 – Companies should disclose their internal audit function, how it is structured and the role it performs Internal audit is part of Coffey’s governance framework established by the Board and the Risk and Audit Committee to provide an independent and objective appraisal and advisory function for the Board and Management Team. Its function includes examining and evaluating the adequacy and effectiveness of internal controls, against Coffey’s risk framework, across specific components of or functions within the business, as directed by the FD or the Board. The Risk and Audit Committee determines the policy framework in which internal audit is to operate whilst the administrative responsibility for ensuring the performance of tasks is exercised by the FD. Internal audit reports administratively to the FD and functionally to the Board and the Risk and Audit Committee. The internal audit function may not be performed by the external auditors. Recommendation 7.4 – Companies should disclose whether they have any material exposures to economic, environmental and social sustainability risks As set out above, the Board is responsible for the oversight of Coffey’s risk management and control framework. The Risk and Audit Committee assists the Board in fulfilling its responsibilities in this regard. The Board has approved a Risk Management Policy which is reviewed annually by the Board. A copy of the Risk Management Policy is available at www.coffey.com/en/investors/corporate-governance.

The achievement of Coffey’s prospects in the short, medium and long term could be impacted by a number of risks, some of which are beyond Coffey’s control. The potential sustainability risks of Coffey are of a general nature and are risks that most global companies operating in the same industries as Coffey’s are facing. The Directors have identified the following as potential risk areas: Decreased demand for Coffey’s

services due to changes in economic and market conditions;

Coffey’s ability to attract and retain quality employees;

Global political risks; Availability of financing; Legislative and regulatory

changes globally; and Exchange rate risk.

Coffey is not subject to material environmental regulation in respect of its operations. There are small disposals of waste from the consolidated entity’s soil science laboratories. This waste is disposed under licence to an appropriate disposal facility. Principle 8: Remunerate fairly and responsibly Recommendation 8.1 – Companies should establish a Remuneration Committee The Board has established a Human Resources and Remuneration Committee comprising at least three independent Non-executive Directors: Susan Oliver (Chair), John Mulcahy, Leeanne Bond, and Guy Cowan. Any Non-executive Director of the Board may attend a meeting by providing reasonable notice to the Committee Chair. The MD and Group Executive Human Resources attend meetings of the Committee by invitation when required to report on and discuss senior management performance, and remuneration and related matters, but are not present at meetings when their own performance or remuneration is discussed.

Structure of the Committee Under its Charter, the Human Resources and Remuneration Committee must have at least three members, the majority of whom must be independent Non-executive Directors. A copy of the Charter is available at www.coffey.com/en/investors/corporate-governance/. The Committee Chair must be an independent Director. Further details of the qualifications and experience of all Committee members are disclosed in the Directors’ Report of this Annual Financial Report. The role of the Committee is to assist the Board in fulfilling its corporate governance responsibilities in regard to remuneration and strategic human resources matters, including:

establishing and implementing a human resources strategy to ensure that appropriately talented and trained people are available to achieve the business strategy;

undertaking the appropriate performance management, succession planning and talent development activities and programs; and

providing effective remuneration policies having regard to the creation of value for Shareholders and the external remuneration market.

The Committee is responsible for ensuring Coffey has and observes coherent remuneration policies and practices which enable it to attract and retain high calibre Executives, Directors and employees who will create value for Shareholders, generate sustained business performance and support Coffey’s objectives, goals and behaviours. The Committee has a formal Charter that is required to be reviewed annually. The Charter was most recently reviewed in May 2015. The Company Secretary is the secretary to the Committee.



The Committee may engage and/or terminate, at the expense of the Company, any independent external adviser which it considers may assist it in the full performance of its functions. The Committee meets as required, and at least four times per year. The Committee met six times during the year. Directors’ attendances are set out in the Directors’ Report of this Annual Financial Report. Recommendation 8.2 – Companies should disclose the Director and Senior Executive remuneration policy Coffey’s remuneration structure distinguishes between Non-executive Directors and that of the MD and Management Team. Remuneration for Non-executive Directors is fixed. Board and Committee fee rates are reviewed by the Human Resources and Remuneration Committee and approved by the Board (subject to the Shareholder approved fee pool) for each coming year. The Board has recognised that Coffey’s Market Capitalisation has reduced. Consequently, the Board has undertaken a review of Non-Executive Directors fees and a 20% reduction in the current fee structure, effective 1 July 2015, will be applied to align with the organisation’s position. These changes, and a previous reduction in Board size, will ensure that Non-Executive Directors fees for FY2016 are 30% lower than those for FY2014. Remuneration does not include any performance-based components and Non-executive Directors do not participate in any reward plans or bonus schemes. The Non-executive Directors receive statutory superannuation (and may salary sacrifice fees to superannuation). Coffey does not have a retirement benefits scheme for Non-executive Directors. Fees paid to the Non-executive Directors reflect the responsibilities and demands made on the Directors.

In the 2015 financial year, fees paid to Non-executive Directors totalled $604,000 well within the maximum Board remuneration pool of $700,000 per annum, inclusive of statutory entitlements. This pool was approved by Shareholders at the AGM held in November 2008. The remuneration of the Directors and other Senior Executives is detailed in the Remuneration Report. Recommendation 8.3 – Companies with equity-based remuneration scheme should have a policy on hedging equity incentive schemes and disclose it Coffey’s share trading policy prohibits Designated Persons from hedging an exposure to unvested or vested Coffey securities held through Coffey’s reward plans. A Remuneration Report required under section 300A(1) of the Corporations Act 2001 is provided in the Directors’ Report of this Annual Financial Report.



Consolidated income statement For the year ended 30 June 2015

2015 2014 $’000 $’000 Note (Restated) Continuing Operations Revenue 6 556,328 592,116 Other income 6 2,881 3,111 Raw materials, subcontractor costs and travel (208,429) (223,096) Employee benefits expense (272,581) (279,783) Depreciation and amortisation (8,685) (8,477) Occupancy costs (22,292) (26,956) Other expenses 7 (34,855) (36,679) Profit before interest and income tax 12,367 20,236 Net financing expenses 8 (7,959) (8,122) Profit before income tax 4,408 12,114 Income tax benefit/(expense) 9 962 (670) Profit from continuing operations 5,370 11,444 Discontinued operation Loss from discontinued operation, net of tax 5 (23,418) (6,987) (Loss)/profit for the year (18,048) 4,457 (Loss)/profit attributable to: Members of Coffey International Limited (18,128) 4,369 Non-controlling interest 80 88 (Loss)/profit for the year (18,048) 4,457 Earnings per share attributable to the ordinary equity Shareholders of the Company

Basic earnings per share (cents) 26 (7.8)c 1.8c Diluted earnings per share (cents) 26 (7.8)c 1.7c Earnings per share – continuing operations Basic earnings per share (cents) 26 2.3c 4.7c Diluted earnings per share (cents) 26 2.1c 4.4c

The above consolidated income statement should be read in conjunction with the accompanying notes.

The comparative financial information has been restated to remove the results of discontinued operations (refer note 5.)



Consolidated statement of comprehensive income For the year ended 30 June 2015

2015 2014 $’000 $’000 (Restated)

(Loss)/profit for the year (18,048) 4,457 Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations 2,303 (417) Effective portion of changes in fair value of cash flow hedges (1) 1,601 Income tax on other comprehensive income and expense (714) (704) Total items that may be reclassified subsequently to profit and loss 1,588 480 Total comprehensive income for the year (16,460) 4,937 Total comprehensive income attributable to: Members of Coffey International Limited (16,585) 4,916 Non-controlling interest 125 21 Total comprehensive income for the year (16,460) 4,937

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.



Consolidated statement of financial position As at 30 June 2015

2015 2014 Note $’000 $’000 ASSETS Current assets Cash and cash equivalents 27,372 26,757 Cash deposits 1,021 2,140 Trade and other receivables 10 62,030 77,079 Work in progress 37,597 36,698 Income tax receivables 2,467 2,509 Total current assets 130,487 145,183 Non-current assets Receivables 115 29 Property, plant and equipment 11 30,463 32,687 Deferred tax assets 12 26,258 22,021 Intangible assets 13 103,626 110,748 Total non-current assets 160,462 165,485 Total assets 290,949 310,668 LIABILITIES Current liabilities Trade and other payables 14 36,550 50,102 Provisions 15 2,792 928 Income tax payable 510 1,430 Loans and borrowings 17 10,750 7,097 Employee benefits 16 23,124 29,262 Total current liabilities 73,726 88,819 Non-current liabilities Loans and borrowings 17 80,030 69,875 Other financial liabilities 50 67 Deferred tax liabilities 12 46 599 Employee benefits 16 584 810 Lease incentives 12,724 10,243 Total non-current liabilities 93,434 81,594 Total liabilities 167,160 170,413 Net assets 123,789 140,255 EQUITY Share capital 19 127,045 127,607 Reserves (5,625) (7,724) Retained earnings 1,542 19,670 Equity attributable to ordinary equity holders of the Company 122,962 139,553 Non-controlling interest 827 702 Total equity 123,789 140,255

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


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Consolidated statement of cash flows For the year ended 30 June 2015

2015 2014 Note $'000 $'000 Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) 630,183 678,631 Payments to suppliers and employees (inclusive of goods and services tax) (619,076) (646,765)

11,107 31,866

Interest received 158 136 Interest paid (5,491) (7,437) Income taxes paid (4,897) (3,644) Net cash inflow from operating activities 20 877 20,921 Cash flows from investing activities Payments for plant and equipment (4,986) (9,414) Payments for intangible assets (144) (115) Proceeds from sale of plant and equipment 718 1,518 Discontinued operations 5 (306) - Net movement in restricted cash - 3,851 Net cash outflow from investing activities (4,718) (4,160) Cash flows from financing activities Repayments of borrowings (53,607) (12,799) Proceeds from borrowings 60,000 2,000 Payment of borrowing costs (2,384) (328) Payments for share buybacks (562) (2,292) Payments on finance lease and other liabilities (97) (47) Net cash inflow/(outflow) from financing activities 3,350 (13,466) Net (decrease)/increase in cash held (491) 3,295 Cash and cash equivalents at the beginning of the year 26,757 23,387 Effects of exchange rate changes on cash 1,106 75 Cash and cash equivalents at the end of the year 27,372 26,757

The cash deposits have not been included in the closing cash balance for the purposes of preparing the 30 June 2015 and the prior year comparative consolidated cash flow statement as this represents restricted cash.

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


Coffey International Limited Notes to the financial statements For the year ended 30 June 2015

1 Summary of significant accounting policies

The consolidated financial statements as at and for the year ended 30 June 2015 comprise Coffey International Limited and its subsidiaries (together referred to as the Group). Coffey International Limited (“the Company” or “the parent entity”) is a company domiciled in Australia. The address of the Company’s registered office is Level 19 Tower B, 799 Pacific Highway, Chatswood NSW 2067. The Group is a for-profit entity and is primarily involved in the provision of specialist consulting services. The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all years presented and have been applied consistently by the Group entities, unless otherwise stated. a) Basis of preparation (i) Statement of compliance The consolidated financial statements are a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (AAS) including Australian interpretations, adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB). (ii) New standards and interpretations not yet adopted At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective. They have not been adopted in preparing this Financial Report. The Company has not yet determined the potential effect of these standards on the Company’s future Financial Reports.

IFRS 15 Revenue from Contracts with Customers which will become effective 1 January 2017

IFRS 9 Financial Instruments which will become effective 1 January 2018

(iii) Historical cost basis These consolidated financial statements have been prepared under the historical cost basis except for those items noted in Note 3. The methods used to measure fair values are discussed in Note 3. (iv) Going concern basis The consolidated financial statements have been prepared on a going concern basis. b) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities and the results and cash flows of the Company and its controlled entities as at and for the year ended 30 June 2015. This includes employee share trusts established for certain share-based awards. Inter-company transactions, balances and unrealised gains on transactions between Group entities are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Consistent accounting policies have been applied across the Group in the preparation of these consolidated financial statements. The various types of entities that are consolidated and the Group’s accounting policy for acquisition of such entities are set out below. i) Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the

consolidated financial statements from the date on which control commences until the date on which control ceases. (ii) Employee share trusts The Group has formed trusts to administer the Group’s employee share schemes. These trusts are consolidated, as the substance of the relationship is that the trusts are controlled by the Group. c) Income tax The income tax expense/benefit for the year is the tax payable/receivable on the current year’s taxable income based on the national income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses and tax credits. The income tax expense excludes items which are recognised directly in equity. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are reviewed at each reporting date and are recognised for deductible temporary differences, unused tax losses and



1 Summary of significant accounting policies (continued) tax credits only if it is probable that future taxable amounts will be available to use those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised. (i)Tax consolidation Coffey International Limited and its wholly owned Australian entities have implemented the tax consolidation legislation as of 1 July 2003. The entities have entered into a tax funding arrangement under which the wholly owned entities fully compensate Coffey International Limited for any current tax payable assumed, and are compensated by Coffey International Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Coffey International Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ financial statements. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as inter-company receivables or payables.

d) Foreign currency (i) Functional and presentation

currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Australian dollars (AUD), which is the Company’s functional and presentation currency as Australia is the primary economic environment in which the Group operates. The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, all financial information presented in Australian dollars has been rounded to the nearest thousand unless otherwise stated. (ii) Foreign currency transactions

and balances Foreign currency transactions are translated into the respective functional currencies of Group entities using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on translation of such assets and liabilities are recognised in profit or loss, except for differences arising from equity instruments or a financial liability designated as a hedge of the net investment in a foreign operation or qualifying cash flow hedges (to the extent that the hedges are effective), which are recognised directly in other comprehensive income. Non-monetary items that are measured at historical cost in a

foreign currency are translated using the exchange rate at the date of the transaction. (iii) Foreign operations The results and financial position of all foreign operations (none of which has the currency of a hyperinflationary economy), are translated into Australian dollars as follows: assets and liabilities, including

goodwill and fair value adjustments arising on acquisition, are translated at the closing rate at the reporting date; and

income and expenses are translated at average monthly exchange rates for the year (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions).

All resulting exchange differences are recognised as a separate component of equity, the foreign currency translation reserve (FCTR). (iv) Hedge of net investment in

foreign operation The Group applies hedge accounting to foreign currency differences arising between the functional currency of the foreign operation and AUD, regardless of whether the net investment is held directly by the Company or through an intermediate parent. Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in other comprehensive income to the extent that the hedge is effective, and are presented within equity in the FCTR. To the extent that the hedge is ineffective, such differences are recognised in profit or loss. When the hedged part of a net investment is disposed of, the relevant amount in the FCTR is reclassified to profit or loss as part of the gain or loss on disposal.



1 Summary of significant accounting policies (continued) e) Segment reporting The Group determines and presents operating segments based on the information that internally is provided to the Managing Director (MD), who is the chief operating decision maker. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including those that relate to transactions with any of the Group’s other components. Segment results are regularly reviewed by the MD to assess their performance and to make decisions about resource allocation. Pricing on inter-segment transactions is determined on an arm’s length basis. Segment results that are reported to the MD include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The allocation of costs is undertaken to provide information on the business performance of the segment and costs are allocated on a basis that aligns the charge with the resources employed and revenue performance of the segment. Unallocated items mainly comprise central business support, corporate assets, corporate expenses, and income tax assets and liabilities. f) Revenue recognition Revenue is primarily derived from the rendering of services and is measured at the fair value of the consideration received and receivable. Revenue is recognised for the major business activities as follows: (i) Geoservices business Revenue from time and materials contracts is recognised at the contractual hourly rates as labour hours are delivered and the direct expenses are incurred. Where contracts stipulate a contract price ceiling, the rates used reflect the amounts that are expected to be

recoverable. Costs for such contracts are generally incurred in proportion to contracted billing schedules. This method is expected to result in reasonably consistent profit margins over the contract term. Key performance indicator (KPI) revenue is derived from contracts that have certain performance hurdles, as set out in the contract. KPI revenue is only recognised when it is probable that the economic benefits associated with the transaction will flow to the Group. The Group’s policy is to recognise KPI income on a pro-rata basis to the extent that the Group and its contractual partners are capable of achieving the desired outcomes under the terms of the contract and the value of the KPI revenue can be reliably estimated. The recognition of such revenue therefore is subject to management judgement. Where it is no longer probable that a contract will meet the agreed upon performance criteria, amounts previously recognised as revenue for that contract are reversed. (ii) International Development business Contract revenue and expenses are recognised in accordance with the percentage of completion method unless the outcome of the contract cannot be reliably estimated. Where the outcome of a contract cannot be reliably estimated, contract costs are recognised as an expense as incurred, and where it is probable that the costs will be recovered, revenue is recognised to the extent of costs incurred. For fixed price contracts, the stage of completion is measured by reference to costs incurred to date as a percentage of estimated total costs for each contract. Revenue from cost plus contracts is recognised by reference to the recoverable costs incurred during the reporting period plus the percentage of fees earned. Percentage of fees earned is measured by reference to the costs incurred to date as a proportion of

the estimated total costs of the contract. (iii) Project Management business Contract revenue is recognised in accordance with the percentage of completion method unless the outcome of the contract cannot be reliably estimated. Revenue from time and materials contracts is recognised at the contractual hourly rates as labour hours are delivered, and the direct expenses are incurred. Fixed price contracts are accounted for as noted in International Development above. Where the outcome of a contract cannot be reliably estimated, contract costs are recognised as an expense as incurred, and where it is probable that the costs will be recovered, revenue is recognised to the extent of costs incurred. (iv) Reimbursable revenue Reimbursable revenue exists across all businesses. For customer contracts where there exists the right to charge certain costs on to the customer relating to the delivery of the contract, revenue is recognised at the time the costs are incurred on a gross basis in the income statement in line with the transfer of risks and rewards. (v) Other income Other income is recognised when received or receivable. g) Finance income and finance expense Finance income comprises interest income, which is recognised as it accrues in profit or loss, using the effective interest method. Finance expense comprises interest expense on borrowings and bank overdrafts, amortisation of ancillary costs incurred in connection with the arrangement of borrowings, amortisation of discounts or premiums related to borrowings, unwinding of the discount on provisions, changes in fair value of financial liabilities at fair value through profit or loss, losses on hedging instruments that are recognised in profit or loss and finance lease charges. Borrowing



1 Summary of significant accounting policies (continued) costs are recognised in profit or loss using the effective interest method. h) Trade receivables All trade receivables are recognised initially at the value of the invoice sent to the customer and subsequently at the amount considered recoverable (amortised cost). Trade receivables are generally due for settlement between 30 and 60 days from the date of recognition. The carrying value of trade receivables is considered to approximate fair value. Receivables that are known to be uncollectible are written off with the associated expense recognised in other expenses in profit or loss. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. If amounts originally provided for are subsequently received, the reversal of the provision is also credited to other expenses. i) Work in progress (i) Geoservices business Work in progress represents the sales value of unbilled labour and disbursements, less provisions, for amounts considered non-recoverable. (ii) International Development

business and Project Management

Long-term contract work in progress is stated at the aggregate of contract costs incurred to date plus recognised profits, less recognised losses and progress billings. If there are contracts where progress billings exceed the aggregate costs incurred plus profits less losses, the net amounts are presented as unearned revenue. Contract costs include all costs directly related to specific contracts and costs that are specifically chargeable to the customer under the terms of the contract.

j) Impairment of non-financial assets The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are regularly reviewed to determine whether there is any indication of impairment. If any such indication exists, then the asset is tested for impairment. For goodwill, impairment testing is performed at least annually. In some cases assets cannot be tested for impairment on a standalone basis. In that case, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit). An impairment test is performed by assessing the recoverable amount of each asset, or for goodwill, the cash-generating unit (or group of cash generating units) (CGU’s) related to the goodwill, in comparison to its carrying value. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination. An impairment loss is recognised in the income statement if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to reduce the carrying amount of the other assets in the CGU on a pro-rata basis. An impairment loss in respect of goodwill is not reversed. k) Plant and equipment All plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly

attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis to allocate the net cost of each item of plant and equipment over its expected useful life to the Group. Estimates of residual values and remaining useful lives are made on a regular basis for all assets, with annual reassessments for major items. The expected useful lives of plant and equipment and motor vehicles held at the reporting date ranges from three to eight years. Gains and losses on disposals are determined by comparing proceeds with the carrying amount of the related asset. These are recognised in the income statement. l) Leasehold improvements The cost of improvements to or on leasehold properties is capitalised at historic cost and depreciated on a straight line basis over the unexpired period of the lease or the estimated useful life of the improvement to the Group, whichever is shorter. Options to extend premises leases are excluded when determining the period over which the cost is to be depreciated. Leasehold improvements held at the reporting date are being depreciated over three to fifteen years. The Group has a policy which requires providing for costs associated with making good leased premises. Such liabilities are recognised in other payables in the statement of financial position with the related debit recognised in leasehold improvement assets. This asset is amortised over the remaining term of the lease. m) Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on



1 Summary of significant accounting policies (continued) a straight line basis over the period of the lease. Incentives received on entering into operating leases are recognised as liabilities. The liability is reduced in line with the lease term. n) Intangible assets (i) Goodwill Goodwill represents the future economic benefits that arise from assets that are not capable of being individually identified and separately measured as cost less accumulated impairment losses following the acquisition of subsidiaries. (ii) Software Costs incurred in developing systems that will contribute to future period financial benefits through revenue generation and/or cost reductions are capitalised at cost and amortised on a straight-line basis over their estimated useful lives, which vary from between three and ten years, depending on the nature of the software. IT development costs include only those costs directly attributable to the development phase and are only recognised following completion of a technical feasibility study, and where the Group has an intention and ability to use the asset. o) Trade and other payables Trade payables represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. They are recognised at the value of the supplier invoice received. The amounts are unsecured and are usually paid within 45 days of recognition. The carrying value of trade payables is considered to approximate fair value. Included in other payables are accruals for liabilities that are not yet billed or due for payment and provisions. Provisions are recognised when the Group has a present legal or constructive obligation as a result of

past events, it is more likely than not that an outflow of resources will be required (normally cash) to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time from the unwinding of this discount is recognised as interest expense in the income statement. p) Loans and borrowings Loans and borrowings are initially recognised at fair value, net of directly attributable transaction costs incurred. Loans and borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the loans using the effective interest method. Fees paid on the establishment of loan facilities, which are incremental costs relating to the actual draw down of the facility, are capitalised as debt transaction costs and amortised on a straight-line basis over the term of the facility. Loans and borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liabilities for at least 12 months after the reporting date. q) Dividends Provision is made for the amount of any dividend declared, determined or publicly recommended by the Directors on or before the end of the financial year but not distributed at reporting date.

r) Classification of financial instruments The financial assets and liabilities of the Group are classified into the following financial statement captions in the statement of financial position in accordance with AASB 139: financial instruments: ‘Loans and receivables’ –

separately disclosed as cash and cash equivalents, cash deposits, trade and other receivables and work in progress;

‘Financial assets/liabilities at fair value through profit or loss’ – separately disclosed as other financial assets and other financial liabilities and includes derivative financial instruments and a non-controlling interest put option liability; and

‘Financial liabilities measured at amortised cost’ – separately disclosed as trade and other payables and loans and borrowings.

s) Other financial assets and liabilities – derivative financial instruments

The Group uses derivative instruments to hedge its foreign currency and interest rate risk exposures including forward foreign exchange contracts and interest rate swaps. The Group does not enter into derivative financial instruments for speculative trading purposes. Financial instruments entered into to hedge an underlying exposure that do not qualify for hedge accounting are accounted for as trading instruments. Derivatives are recognised at fair value in either other financial assets or liabilities; attributable transaction costs are recognised in the income statement when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes in the fair value, if designated as a hedge of the variability in cash flows or a recognised asset or liability, are recognised directly to other comprehensive income to the extent that the hedge is effective.



1 Summary of significant accounting policies (continued) To the extent that the hedge is ineffective, changes in fair value are recognised in net financing costs in the income statement. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then the hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in equity remains there until the forecast transaction occurs and is transferred to the income statement in the same period. t) Employee benefits (i) Wages and salaries, and sick leave Liabilities for wages and salaries expected to be settled within 12 months of the reporting date are recognised in current other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. (ii) Annual leave and long service leave The liabilities for annual leave and long service leave expected to be settled within 12 months of the reporting date are recognised in the current provision for employee benefits and are measured in accordance with (i) above. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised in the non-current provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, average employee service period

and periods of service. Expected future payments are discounted using interest rates on corporate bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows. (iii) Bonus plans A liability for employee benefits in the form of bonus plans is recognised in other payables when there is no realistic alternative but to settle the liability and at least one of the following conditions is met: there are formal terms in the

plan for determining the amount of the benefit;

the amounts to be paid can be reliably determined before the time of completion of the financial report; or

past practice gives clear evidence of the amount of the obligation.

Liabilities for bonus plans are settled within 12 months and are measured at amounts expected to be paid when they are settled. (iv) Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefits in profit or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. (v) Employee benefit on-costs Employee benefit on-costs, including superannuation, other retirement benefits, payroll tax and workers compensation, are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.

(vi) Ownership-based remuneration schemes and other share-based payments Ownership-based remuneration is provided to employees through the Coffey Rewards Share and Option Plans. Shares issued under these schemes are treated as options in accordance with AASB 2 Share-based Payments. Information relating to these share plans is set out in Note 30 ‘Share-based payments’. The fair value of shares granted under the Coffey Rewards Share and Option Plans are recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the shares. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest, except for those that fail to vest due to market conditions not being met. The fair value of the options granted excludes the impact of any non-market vesting conditions, such as operating earnings per share targets. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the income statement with a corresponding adjustment to equity. Where shares are issued to employees as compensation for the provision of services and receipt by the employee is subject to completion of a service period, the market value of shares issued is recognised as an employee benefit expense with a corresponding increase in equity when the employees become entitled to the shares.



1 Summary of significant accounting policies (continued) u) Cash and cash equivalents and cash deposits Cash and cash equivalents includes cash on hand; deposits held at call with financial institutions; other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value; and bank overdrafts. Cash deposits are recognised separately from cash and cash equivalents in the statement of financial position. These are cash advances received from customers for contract specific expenditure. For both cash and cash equivalents and cash deposits, carrying value is considered to approximate fair value. v) Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration. w) Earnings per share (i) Basic earnings per share Basic earnings per share is determined by dividing net profit/loss after income tax attributable to ordinary equity shareholders of the Company by the weighted average number of ordinary shares outstanding during the financial year. (ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in determining basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential

ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Options granted to employees, which are accounted for as share-based payments, are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share. The options have not been included in determining basic earnings per share. x) Goods and services tax (GST) and other transaction taxes Revenues, expenses and assets are recognised net of the amount of associated GST and other transactional taxes, unless the GST or other transactional tax incurred is not recoverable from the taxation authority. In this case, it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST or other transactional tax receivable or payable. The net amount recoverable from the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST and other transactional tax components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. y) Reserves (i) Foreign currency translation The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations, where their functional currency is different to the presentation currency of the reporting entity. The reserve is recognised in profit and loss when the net investment is disposed of.

(ii) Share-based payments reserve The share-based payments reserve comprises the fair value of share-based payments recognised as an expense in the income statement. Once a share option has lapsed, the Group no longer has any obligation to convert these options into share capital. The amount transferred to retained earnings represents the value of options previously recognised as an expense through the Statement of Comprehensive Income that have now lapsed. (iii) Hedging reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred. The cumulative deferred gain or loss on the hedge is recognised in profit and loss when the hedged transaction impacts the profit or loss, consistent with applicable accounting policy. z) Discontinued operation

A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

represents a separate major line of business or geographic area of operations;

is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or

is a subsidiary acquired exclusively with a view to re-sale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale. When an operation is classified as a discontinued operation, the comparative consolidated statement of comprehensive income and income statement is re-presented as if the operation had been discontinued from the start of the comparative year.



2 Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group that are believed to be reasonable under the circumstances. a) Critical accounting judgements (i) Revenue recognition in relation to long-term contracts The timing of revenue recognition in relation to long-term contracts, primarily in the International Development and Project Management businesses, is subject to significant judgement. Management ensures that the timing of revenue recognition in relation to these contracts is appropriate through regular reassessments of the percentage completion and the costs to completion of the projects. The recognition of key performance indicator (KPI) revenue is also subject to significant judgement. Management, together with the Group’s contract partners, ensure that revenue recognised is appropriate through regular reassessments of projects against performance criteria and contracted standards that need to be met for revenue to accrue to the Group. Where it is probable that these criteria will be met, management ensures that the timing of revenue recognition is appropriate through regular reassessments of the percentage completion and the costs to completion of the projects. b) Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (i) Impairment testing of goodwill The Group tests at least annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 1 (j). The recoverable amounts of cash-generating units have been determined by applying a value in use method, using future cash flow models involving a number of assumptions. Estimates are used in deriving the future cash flows and the discount rates used to calculate the present value of such cash flows. Such estimates are based on current approved budgets and forecasts, extrapolated for an appropriate period taking into account growth rates that are based on internal management estimates or industry growth rates. The impact of cost savings or restructurings is reflected in future cash flow estimates only if approved by the Board. The Directors then estimate an appropriate pre-tax discount rate to apply to the future cash flows. Such rates reflect current market assessments of such rates and the risks specific to the CGUs. The estimation process is complex due to inherent risks and uncertainties. If different estimates of the projected future cash flows or a different selection of an appropriate discount rate or long term growth rate were made, these changes could materially alter the projected value of the cash flows of the asset or CGU, and as a consequence materially different amounts would be reported in the financial statements. (ii) Income taxes The Group is subject to income taxes in Australia and in the foreign jurisdictions where it has operations. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on expectations of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which the determination is made. (iii) Recoverability of financial assets The Group continually assesses the recoverability of work in progress and trade and other receivables and recognises provisions where appropriate. Certain estimates and judgement need to be made with the recognition of such provisions relating to the probability of recoverable amounts. Assessment of the collectability of trade receivables involves the use of estimates in determining the level of receivables that will not be collected. These estimates are based on historical experience, the current state of the respective economies and industry operated in and customer specific factors. Recoverability of work in progress involves the use of estimates in determining the amounts that are not able to be billed to the customer. These estimates are based on historical experience and industry and customer specific factors.



2 Critical accounting estimates and judgements (continued) (iv) Provisions Provisions for restructuring are recognised when the Group has approved a detailed and formal restructuring plan and the restructuring has either commenced or has been announced to relevant stakeholders. Future operating losses are not provided for. Where provisions for making good the Group’s leased premises are recognised, the amount is determined on the basis of the best estimate of the likely payments required to be made to exit the premises. This can be based on agreed contractual amounts as set out in the lease agreement with the landlord or estimates formed on the basis of historical experience of rates paid per square metre on similar premises.

3 Determination of fair value A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair value has been determined for measurement and/or disclosure purposes based on the methods listed below. Where applicable, further information about the assumptions made in determining fair value is disclosed in the notes specific to that asset or liability. a) Derivatives The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds). The fair value of interest rate swaps is based on broker quotes. Fair value reflects the credit risk of the instrument and includes adjustments to take account of the credit risk of the Group entity and counterparty when appropriate. b) Non-derivative financial liabilities Fair value, which is determined for disclosure purposes only, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases, the market rate of interest is determined by reference to similar lease agreements. c) Share-based payment transactions The valuation methodology used to determine the share-based payment expense was the Monte Carlo simulation model in relation to both grants with only service (loyalty) or non-market performance conditions (EPS). The Monte Carlo simulation model was also used for grants with a performance condition, to create an estimate of the share price values which would generate the required Total Shareholder Return (TSR) at the end of the measurement period to meet the hurdle. As required by AASB 2, the model took into account the exercise price of the option, the life of the option, the current price of the underlying shares, the expected volatility of the share price, the dividends expected on the shares and the risk-free interest rate for the life of the option. The expected life of the instrument was deemed to be the period from grant date to first available date plus 24 months.


4 Operating segments During the year, the Group provided specialist consulting services across its three businesses. These activities are summarised below by each reportable segment:

a) Geoservices The Geoservices business comprises specialised geotechnical, environmental and mining consulting services, as well as materials testing and analysis. The business delivers services to public and private sector clients across resources, infrastructure and property. Offices are located across Asia Pacific, the United Kingdom, South America, Africa and the Middle East. b) International Development The International Development business delivers consulting and training services alongside governments and donor agencies to strengthen governance, promote economic growth, and create conditions for sustainable development. The business operates from regional offices based in Australia, the United States of America and the United Kingdom. c) Project Management Provides project management and advisory services to public and private sector clients across the property and infrastructure project lifecycles. Offices are located throughout Australia, New Zealand and South Africa. d) Unallocated corporate Unallocated corporate comprises Group corporate management and Group treasury activities. Understanding the segment results Sales between segments are carried out at arm’s length and are eliminated on consolidation. The revenue from external parties is measured the same way as in the consolidated income statement.



4 Operating segments During the year, the Group provided specialist consulting services across its three businesses. These activities are summarised below by each reportable segment:

a) Geoservices The Geoservices business comprises specialised geotechnical, environmental and mining consulting services, as well as materials testing and analysis. The business delivers services to public and private sector clients across resources, infrastructure and property. Offices are located across Asia Pacific, the United Kingdom, South America, Africa and the Middle East. b) International Development The International Development business delivers consulting and training services alongside governments and donor agencies to strengthen governance, promote economic growth, and create conditions for sustainable development. The business operates from regional offices based in Australia, the United States of America and the United Kingdom. c) Project Management Provides project management and advisory services to public and private sector clients across the property and infrastructure project lifecycles. Offices are located throughout Australia, New Zealand and South Africa. d) Unallocated corporate Unallocated corporate comprises Group corporate management and Group treasury activities. Understanding the segment results Sales between segments are carried out at arm’s length and are eliminated on consolidation. The revenue from external parties is measured the same way as in the consolidated income statement.


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4 Operating segments (continued)

2015 2015 2014 2014

Geographical Information Revenue and other income

Non-current assets⃰

Revenue and other income

Non-current assets⃰

$’000 $’000 $’000 $’000

Australia 326,175 71,742 322,284 82,662

New Zealand 24,929 9,558 30,642 8,350

Americas 133,734 39,895 159,671 36,366

United Kingdom 65,598 12,639 62,649 14,755

Middle East 3,877 85 15,366 1,059

Africa 4,896 285 4,615 272

Total 559,209 134,204 595,227 143,464 * Non-current assets exclusive of deferred tax assets of $26,258,000 (2014: $22,021,000).

5 Discontinued operations On 29 April 2015 the Group announced a restructure of operations in response to the prevailing market conditions. The restructure resulted in the closure of the Group’s Early Stage Mining capability and a closure of operations in Canada. The comparative statement of comprehensive income and income statement have been restated to show the discontinued operation separately from continuing operations.

a) Results of discontinued operations

Note 2015 '000

2014 '000


19,928 32,831 Operating expenses (30,943) (38,580) Impairment (12,213) - Loss before income tax

(23,228) (5,749)

Income tax 9 (190) (1,238)

Loss for the year

(23,418) (6,987) Basic earnings (loss) per share (AUD)

(10.1)c (2.9)c

Diluted earnings (loss) per share (AUD)

(10.1)c (2.7)c The loss from the discontinued operations of $23,418,000 (2014: loss of $6,987,000) is attributable entirely to the owners of the Company.

b) Cash outflows from discontinued operations

Note 2015 '000

2014 '000

Net cash used in operating activities

(4,829) (3,767) Net cash used in investing activities 5c (306) - Net cash outflow for the year (5,135) (3,767)



5 Discontinued operations (Continued)

c) Effect of discontinued operations on the financial position of the Group

2015 $'000

Trade, other receivables and work-in-progress (3,968) Property, plant and equipment

(572)

Goodwill (12,213) Deferred tax liabilities

(276)

Trade and other payables 3,030 Net assets and liabilities of discontinued operations (13,999)

Consideration received, satisfied in cash

-

Cash and cash equivalents disposed of (306)

Net cash outflow

(306)

6 Revenue and other income

2015 2014 $'000 $'000 (Restated) Fee revenue 356,966 353,559

Reimbursable revenue 199,362 238,557

Sub-total 556,328 592,116

Other income 2,881 3,111

Total revenue and other income 559,209 595,227

7 Expenses

2015 2014 $'000 $'000 (Restated)

Other expenses

Vehicle and equipment operating leases 4,620 5,535

Communication expense 2,838 3,998

Bad and doubtful debt expense (263) 1,995

Net gain on asset disposals (34) (663)

Audit fees 627 693 Net foreign exchange loss 513 440

Other expenses

26,554 24,681

Total other expenses 34,855 36,679

Defined contributions included in employee benefits expenses 12,013 11,763



8 Net finance costs

2015 2014 $'000 $'000 (Restated)

Interest income 158 136

Interest expense (8,117) (8,258)

Net finance costs (7,959) (8,122)

9 Income tax expense

2015 2014

$’000 $’000 (Restated)

a) Income tax expense

Current tax 2,498 2,208

Current tax prior period adjustments 212 131

Deferred tax (4,789) (469)

Deferred tax prior period adjustments 1,117 (1,200)

Total income tax (benefit)/expense (962) 670

Income tax from discontinued operations 190 1,238 Total income tax (benefit)/expense (772) 1,908

b) Numerical reconciliation of income tax expense to prima facie tax payable

Profit from continuing operations 4,408 12,114

Loss from discontinued operations (23,228) (5,749)

(Loss)/profit before tax (18,820) 6,365

Tax at the Australian tax rate of 30% (2014:30%) (5,646) 1,908 Tax effect of amounts which are not deductible/(taxable) in calculating taxable income Share-based payments, tax incentive allowances and non-deductible expenses 40 (2)

Current year losses for which no deferred tax asset was recognised 2,145 1,340

Recognition of previously unrecognised losses - (712)

Other 1,360 443

(2,101) 2,977

Prior period adjustments 1,329 (1,069)

Total income tax (benefit)/expense (772) 1,908 c) Amounts recognised directly in equity

Financial instruments 714 (704)



10 Trade and other receivables

2015 2014

$'000 $'000 Trade receivables 56,050 70,833

Less allowance for impairment losses (651) (1,604)

55,399 69,229

Prepayments 2,244 2,752

Project advances 3,991 4,758

Other receivables 396 340

Total 62,030 77,079 Effective interest rates and credit risk The Group’s exposure to credit and currency risk and impairment losses related to trade and other receivables are disclosed in Note 21.

11 Plant and equipment

Plant and equipment

Leasehold improvements Total

$'000 $'000 $'000 Year ended 30 June 2015 Opening net book amount 13,935 18,752 32,687 Additions 2,702 2,284 4,986 Disposals (623) (62) (685) Depreciation (5,362) (2,785) (8,147) Foreign exchange rate differences 42 1,580 1,622 Closing net book amount 10,694 19,769 30,463

At 30 June 2015 Cost 29,846 28,163 58,009 Accumulated depreciation (17,723) (8,394) (26,117) Accumulated impairment (1,429) - (1,429) Net book amount 10,694 19,769 30,463

Plant and equipment

Leasehold improvements Total

$'000 $'000 $'000 Year ended 30 June 2014 Opening net book amount 14,980 10,548 25,528

Additions1 4,891 10,761 15,652

Disposals (607) (249) (856)

Depreciation (5,408) (2,326) (7,734)

Foreign exchange rate differences 79 18 97

Closing net book amount 13,935 18,752 32,687

At 30 June 2014

Cost 38,534 31,170 69,704

Accumulated depreciation (23,439) (12,418) (35,857)

Accumulated impairment (1,160) - (1,160)

Net book amount 13,935 18,752 32,687 1 Additions to leasehold improvements include $6,173,000 in lease incentives.



12 Deferred tax assets and liabilities

2015 2014

$'000 $'000 The balance comprises temporary differences attributable to:

Impairment of receivables 287 106

Employee benefits 3,856 5,396

Amortisation of assets 2,965 3,028

Financial derivatives at fair value 20 20

Accrued expenses 2,868 3,452

Tax losses* 13,472 9,567

Unrealised foreign exchange 2,806 109

Other (62) (256)

Total 26,212 21,422 Movements:

Opening balance at 1 July 21,422 21,609

Credited/(charged) to the income statement 3,672 431

Credited to equity 714 (704)

Differences arising on translation of foreign controlled entities 404 86

Closing balance at 30 June 26,212 21,422 The balances above are recognised in the statement of financial position as:

Deferred tax asset 26,258 22,021

Deferred tax liability (46) (599)

Net deferred tax asset 26,212 21,422 The Group has recognised the benefit for tax losses as deferred tax assets only if:

the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised; or

the losses are transferred to an eligible entity within the Group; and the Group continues to comply with the conditions for deductibility imposed by tax legislation; and no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the losses.

The Group’s net tax losses for which no deferred tax asset has been recognised on the statement of financial position amounted to:

2015 2014 $'000 $'000

Tax losses not brought to account* 6,516 12,789

Potential tax benefit 1,827 3,246 * Tax losses relate to various jurisdictions in which the group operates. These tax losses have no expiry date.



12 Deferred tax assets and liabilities

2015 2014

$'000 $'000 The balance comprises temporary differences attributable to:

Impairment of receivables 287 106

Employee benefits 3,856 5,396

Amortisation of assets 2,965 3,028

Financial derivatives at fair value 20 20

Accrued expenses 2,868 3,452

Tax losses* 13,472 9,567

Unrealised foreign exchange 2,806 109

Other (62) (256)

Total 26,212 21,422 Movements:

Opening balance at 1 July 21,422 21,609

Credited/(charged) to the income statement 3,672 431

Credited to equity 714 (704)

Differences arising on translation of foreign controlled entities 404 86

Closing balance at 30 June 26,212 21,422 The balances above are recognised in the statement of financial position as:

Deferred tax asset 26,258 22,021

Deferred tax liability (46) (599)

Net deferred tax asset 26,212 21,422 The Group has recognised the benefit for tax losses as deferred tax assets only if:

the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised; or

the losses are transferred to an eligible entity within the Group; and the Group continues to comply with the conditions for deductibility imposed by tax legislation; and no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the losses.

The Group’s net tax losses for which no deferred tax asset has been recognised on the statement of financial position amounted to:

2015 2014 $'000 $'000

Tax losses not brought to account* 6,516 12,789

Potential tax benefit 1,827 3,246 * Tax losses relate to various jurisdictions in which the group operates. These tax losses have no expiry date.


13 Intangible assets

Goodwill Software

Other intangibles Total

Note $'000 $'000 $'000 $'000

Year ended 30 June 2015 Opening net book amount 108,699 2,049 - 110,748 Intangible additions - 144 - 144 Impairment 5 (12,213)* - - (12,213) Amortisation charge - (1,365) - (1,365) Foreign exchange rate differences 6,359 (47) - 6,312

Closing net book amount 102,845 781 - 103,626

At 30 June 2015 Cost or fair value 205,645 8,717 15,910 230,272 Accumulated amortisation - (7,865) (15,910) (23,775) Accumulated impairment (102,800) (71) - (102,871) Net book amount 102,845 781 - 103,626

Year ended 30 June 2014 Opening net book amount 107,731 3,430 - 111,161

Intangible additions - 115 - 115

Amortisation charge - (1,465) - (1,465) Foreign exchange rate differences 968 (31) - 937

Closing net book amount 108,699 2,049 - 110,748

At 30 June 2014

Cost or fair value 204,750 8,966 15,259 228,975

Accumulated amortisation - (6,846) (15,259) (22,105)

Accumulated impairment (96,051) (71) - (96,122)

Net book amount 108,699 2,049 - 110,748

* Impairment relates to the previous Geomechanics CGU.



13 Intangible assets (continued) a) Impairment tests for goodwill For purposes of goodwill impairment testing, goodwill is allocated to the Group’s cash-generating units (CGUs) or groups of CGUs identified on a service line basis. A summary of the goodwill allocation as at 30 June 2015 by CGU is presented below.

2015 2014

$'000 $'000 Transport Infrastructure 24,706 37,020

Energy and Resources 32,732 32,732

International Development 45,407 38,947

Total goodwill 102,845 108,699 b) Key assumptions used for calculations

As part of the restructuring exercise that was undertaken by the Company during the year, the Testing business was integrated into the Geomechanics business along with the reporting structure that manages these capabilities to form the Transport Infrastructure Cash Generating Unit (CGU). At the same time the mining capability managed by Geomechanics was transferred to Environments to form the Energy & Resources CGU. In accordance with AASB 136 Impairment of Assets, the goodwill allocated to the mining capability of Geomechanics was reallocated to the Energy & Resources CGU for testing goodwill for impairment at 30 June 2015 on the basis that this is the level at which this goodwill is monitored by management and is where the synergies are expected to be realised. A discrete assessment of the pre-restructure CGUs immediately prior to this change showed that the goodwill was not impaired at 30 June 2015. The Company’s updated groups of CGUs remain compliant with the requirements of AASB 8 Operating Segments. The recoverable amount of each CGU, or where applicable, groups of CGUs is determined based on value-in-use (VIU) calculations. The VIU calculations are based on 5 year cash-flow projections reflecting current trading conditions and do not take into account the strategic industry plans prepared by the business. After the fifth year, a long-term growth rate of 2.5% is used. The pre-tax discount rates used reflect the appropriate cost of capital for that CGU, adjusted for risks specific to the CGU such as the specialised service line and geographical region from which the cash flows of that CGU will be derived. The base year for the impairment VIU calculations, being FY2016, reflects an improvement on the FY 2015 results as a consequence of the restructure announced on 29 April 2015. Revenue growth in FY 2017 through to FY 2020 has been assumed at 0% for Transport Infrastructure and Energy & Resources, as we model based on current trading conditions, with International Development revenue forecast to grow at an annual rate of 2.5%. Operating margins are modelled to improve modestly in both Transport Infrastructure and Energy & Resources, reflecting the benefit of recent restructuring and stable revenues, while International Development margins remain stable. The margins range from 6-12% in FY2016 to 6-14% in FY2020 (2014: range of 6-9% in FY2015 to a range of 6-11% in FY 2019). The assumptions below have been used to analyse each CGU.

5 year Average

Revenue Growth Rate

5 year Average Revenue

Growth Rate Discount

rate pre-tax Discount

rate pre-tax Cash-generating unit 2015 2014 2015 2014 Energy and Resources 0.0% 3.5% 15.8% 16.2%

Transport Infrastructure 0.0% 2.4% 16.7% 16.5%^

International Development 2.5% 2.5% 15.0% 15.2% ^ Geomechanics rate in FY 2014 With respect to International Development sensitivity analyses performed indicate any reasonable change in any of the key assumptions would not result in impairment.

The recoverable amount of the Energy and Resources CGU exceeds its carrying value by 4.8%. An impairment would be recognised if revenue declined 3.0% from FY 2015 or the discount rate was increased to 16.4%.

The recoverable amount of the Transport Infrastructure CGU exceeds its carrying value by 5.2%. An impairment would be recognised if revenue declined 3.0% from FY 2015 or the discount rate was increased to 17.4%.



14 Trade and other payables

2015 2014

$'000 $'000

Trade payables 10,552 20,956

Unearned revenue 9,087 8,898

Other payables 16,911 20,248

Total 36,550 50,102

15 Provisions

2015 2014

$'000 $'000

Property 1,001 928

Employee 1,791 -

Total 2,792 928 Property 1 July 928 2,399

Expense arising/(released) during the year 143 71

Utilised during the year (70) (1,542)

30 June 1,001 928 Employee 1 July - 2,154

Expense arising/(released) during the year 1,791 -

Utilised during the year - (2,154)

30 June 1,791 - Property provision relate to onerous lease contracts and provisions for make good. Employee provisions relate to provision for redundancies.



16 Employee benefits

2015 2014

$'000 $'000 Current

Annual leave 6,485 7,180

Long service leave 7,674 7,831

Other employee benefit accruals 8,965 14,251

Current employee benefits 23,124 29,262

Non-current

Long service leave 584 810

Non-current employee benefits 584 810

Total employee benefits liabilities 23,708 30,072

17 Loans and borrowings

Credit standby arrangements Total facilities Bank loans and Corporate bonds 104,898 106,939 Guarantee facility 10,000 15,000

114,898 121,939 Used at balance date Bank loans and Corporate bonds 92,680 78,303 Guarantee facility 8,219 6,553

100,899 84,856 Unused at balance date Secured bill and bank overdraft facility 12,218 28,636 Guarantee facility 1,781 8,447

13,999 37,083 Bank loan facilities Total facilities 114,898 121,939 Used at balance date 100,899 84,856 Unused at balance date 13,999 37,083

2015 2014 $’000 $’000

Current Bank loans 10,750 7,000 Finance lease and other liabilities - 97 Total current loans and borrowings 10,750 7,097 Non-current Bank loans and Corporate bonds 81,930 71,303 Facility establishment fees (1,900) (1,428) Total non-current loans and borrowings 80,030 69,875

Total loans and borrowings 90,780 76,972



17 Loans and borrowings (continued) Group bank facility The Group cash advance and overdraft facilities of $104,898,000 are a combination of $40,000,000 in unsecured bonds, $56,598,000 in secured commercial bill facilities and secured overdraft facilities of $8,300,000. In addition, the Group has a general guarantee facility of $10,000,000. The $40,000,000 corporate bonds have a 5 year term ending September 2019 with redemption made on maturity. The commercial bill facilities of $56,898,000 have a three-year term ending September 2017. The facility includes a scheduled amortisation over the term of the facility, of which, $10,750,000 is payable within the next twelve months and is classified as current. In addition, the facility requires a certain percentage of future net free cash flows to be applied to debt reduction, consistent with the Group’s commitment to reducing debt levels. The overdraft and general guarantee facility are annual revolving facilities. The Group’s facilities are subject to security over certain assets of the Group. In addition to the above facilities, the Group has a $4,000,000 credit card facility and a $10,000,000 EFT payment facility.

18 Dividends There have been no dividends declared or paid in the current period or prior comparative period. Franking credits of the parent entity available for the payment of dividends in subsequent financial years is $13,951,606 (2014: $15,240,000) based on an Australia company tax rate of 30% (2014: 30%). This balance represents the franking account balance at reporting date adjusted for provisions for Australian income tax and franking debits that will arise from the payment of dividends recognised as a liability at reporting date. The Directors have recommended that no final ordinary dividend be paid in respect of the 2015 financial year. As such, the reduction in the franking account as a result of payments of dividends subsequent to year end will be $nil (2014: $nil).

19 Issued and fully paid up share capital a) Movements in share capital Date Details Shares $'000 Balance at the beginning of the year 255,833,165 127,607 Nov-14 Shares repurchased – (562)

Balance at the end of the year 255,833,165 127,045 b) Ordinary shares Ordinary shares entitle the holder to participate in dividends and proceeds on winding-up of the Company in proportion to the number of, and amounts paid on, the shares held. On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote. c) Shares Repurchased From time to time, the Group purchases its own shares on the market in compliance with the ASX Listing Rules. The purchased shares are used to satisfy the grant of shares under the Coffey Rewards Share Plan. Buy decisions are made on a specific transaction basis by the Coffey Board; the Group does not have a defined share buy-back plan.



20 Reconciliation of profit after income tax to net cash flow from operating activities 2015 2014 $'000 $'000

(Loss)/profit for the year (18,048) 4,457 Adjustments for: Depreciation and amortisation 9,512 9,199

Non-cash employee benefits – share-based payments 557 364

Impairment expense 12,213 -

Notional interest on put option agreements 36 26

Net foreign exchange differences 649 (2,794)

Net (profit)/loss on sale of non-current assets (34) (663)

Amortisation of facility establishment fees 1,912 783 Change in operating assets and liabilities

Decrease in trade debtors 13,830 18,355

(Increase) / Decrease in work in progress (899) (4,369)

Decrease / (Increase) in other current receivables 2,643 8,085

Decrease / (Increase) in non-current receivables (86) 65

Decrease in trade payables and employee benefits (18,530) (9,601)

Decrease / (Increase) in other non-current liabilities 2,238 (1,250)

Increase in tax balances (5,116) (1,736)

Net cash inflow from operating activities 877 20,921 21 Financial instruments The Group’s principal financial instruments comprise receivables, cash, cash deposits, payables, bank loans, overdrafts, finance leases and derivatives. The Group is exposed to the following risks from its use of financial instruments:

market risk, including interest rate risk and currency risk; liquidity risk; and credit risk.

This note presents both qualitative and quantitative information about the Group’s exposure to each of the above risks and its objectives, policies and processes for measuring and managing those risks. a) Market risk Interest rate risk The Group’s policy on managing interest rate risk is that fixed interest rate swaps are to be considered by the Board where net debt/EBITDA ratio is above a pre-defined value for a sustained period. During the year the Group entered into an interest rate swap based on a notional value of US$24,000,000 to manage its exposure to interest rates in the United States in relation to its US$30,000,000 loan. The Group designates qualifying derivatives (interest rate swaps) as cash flow hedges and applies hedge accounting in order to manage volatility in the income statement.



21 Financial instruments (continued) Exposure to interest rate risk At the reporting date, the interest rate profile of the Group’s interest bearing financial instruments was:

2015 2014 $'000 $'000

Fixed rate instruments

Financial liabilities1 (31,169) (25,628)

(31,169) (25,628)

Variable rate instruments

Financial assets2 28,284 28,768

Financial liabilities1 (61,511) (52,771)

(33,227) (24,003) 1 Excludes capitalised facility establishment fees of $1,900,000 (2014: $1,428,000). 2 Excludes cash on hand. Cash flow sensitivity analysis for interest rate risk A 100 basis point change in interest rates would have increased or decreased the Group’s profit and equity by the amounts shown below. This analysis assumes that all other variables, in particular foreign exchange rates, remain constant (for a foreign exchange rate sensitivity analysis, refer below). The analysis was performed on the same basis for 2014.

2015 2014

Profit/ (loss)

Increase/ (decrease)

equity Profit/ (loss)


equity

$'000 $'000 $'000 $'000 Interest rate increase 1% Variable rate loans and borrowings (431) (431) (369) (369)

Interest rate swaps - 45 - 40

Interest rate decrease 1% Variable rate loans and borrowings 431 431 369 369

Interest rate swaps - (45) - (40) Currency risk The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of Group entities. Interest on borrowings is denominated in currencies that match the cash flows generated by the underlying operations for the Group, primarily the Australian dollar (AUD) and United States dollar (USD). Exposure to currency risk The Group is exposed to the effect of changes in exchange rates on its operations. The Group has entered into forward exchange contracts and currency options to hedge against its currency risk on USD cash flows. The Group operates internationally and is exposed to foreign exchange risk arising from exposures to world currencies, principally the United States dollar, New Zealand dollar and Great British Pound. Foreign exchange risk on borrowings not denominated in Australian dollars is principally managed through natural hedges as borrowings are drawn in the currency of foreign operating subsidiaries.



21 Financial instruments (continued) The Group’s investment in its US subsidiary, Coffey International Inc. (US) is hedged by a US dollar denominated secured bank loan which mitigates the foreign currency translation risk arising from the subsidiary’s net assets. The fair value of the US loan is $39,179,835 (2014: $31,817,000). The fair values of the secured bank loans have been categorised as level 2 fair value on observable market data. The loan is designated as a net investment hedge. No ineffectiveness was recognised from the net investment hedge. The Group’s investments in other subsidiaries are not hedged. The Group’s year-end exposure to currency risk was as follows, based on notional amounts. The following are financial assets and liabilities in currencies other than the reporting currency of the Group.

2015 (Australian $'000)

United States Dollar

Great British Pound

New Zealand

Dollar Other

Currencies Non-derivative financial assets and liabilities

Cash and cash equivalents 7,052 1,273 1,945 5,414 Cash deposits 1,021 - - - Trade receivables 10,498 3,266 2,815 1,901 Trade payables (3,909) (1,921) (147) (65) Borrowings (39,180) - - -

Gross exposure (24,518) 2,618 4,613 7,250

2014 (Australian $'000)

United States Dollar

Great British Pound

New Zealand

Dollar Other

Currencies Non-derivative financial assets and liabilities

Cash and cash equivalents 6,629 2,107 837 6,071

Cash deposits 2,140 - - -

Trade receivables 12,698 4,341 3,888 8,865

Trade payables (6,301) (3,178) (463) (1,859)

Borrowings (31,817) - - (8,915)

Gross exposure (16,651) 3,270 4,262 4,162 The following significant exchange rates applied for the Group during the year.

Average rate Reporting date spot rate

2015 2014 2015 2014

Great British Pound 0.54 0.57 0.49 0.55

New Zealand dollar 1.07 1.12 1.12 1.07

South African Rand 9.59 9.49 9.41 9.98

United States dollar 0.85 0.92 0.77 0.94

Brazilian Real 2.20 2.10 2.41 2.08

Canadian dollar 0.98 0.98 0.95 1.01



21 Financial instruments (continued) Foreign exchange rate sensitivity analysis A 10% strengthening/(weakening) of the Australian dollar against all the currencies noted above at 30 June would have (decreased)/increased profit and equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant (for an interest rate sensitivity analysis, refer to part (a) of this Note). The analysis was performed on the same basis for 2014.

2015 2015 2014 2014

Profit/ (loss)


in equity Profit/ (loss)


in equity $'000 $'000 $'000 $'000

AUD strengthens by 10% (812) (164) (513) 48

AUD weakens by 10% 993 164 627 (48) b) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The lines of credit available to the Group at balance date are disclosed in Note 17. The following are the contractual maturities of the financial liabilities of the Group, including estimated interest.

Carrying amount

Contracted cash flows

6 months or less

6-12 months

1-2 years

2-5 years

2015 Notes $'000 $'000 $'000 $'000 $'000 $'000 Non-derivative financial liabilities Loans1 16 92,680 108,088 7,711 7,785 6,964 85,628 Trade and other payables 15 38,785 38,785 38,785 - - - Employee benefit accruals 15 23,708 23,717 16,044 7,080 237 356 Finance leases 16 - - - - - - Bank guarantees2 24 8,219 8,445 2,609 446 21 1,473

Derivative financial liabilities Interest rate swaps used for hedging3 69 266 73 72 121 -

2014 Non-derivative financial liabilities

Loans1 16 78,303 85,005 5,126 6,035 73,844 -

Trade and other payables 15 50,546 50,546 50,546 - - -

Employee benefit accruals 15 30,072 30,213 21,756 7,506 285 666

Finance leases 16 97 107 64 43 - -

Bank guarantees2 24 6,553 6,582 379 25 1,698 1,573

Derivative financial liabilities Interest rate swaps used for hedging3 67 226 62 61 103 - 1 Excludes capitalised facility establishment fees of $1,900,000 (2014: $1,428,000). Effective interest rate on loans is 5.4% (2014: 8.6%). 2 A number of bank guarantees have been issued with no maturity date. The contracted cash flows of these guarantees at 30 June 2015 is $3,086,000 (2014: $2,908,000). 3 Effective interest rate on interest rate swaps is 0.7% (2014: 0.7%).



21 Financial instruments (continued) Other financial liabilities (current) on the statement of financial position includes $537,759 (2014: $484,000) in respect of put option agreements that allow the Group’s minority interest equity partners to require the Group to purchase their non-controlling interest. The liability is recorded at fair value and has no contractual maturity date, fair value has been categorised as level 3 and is based on management calculations. c) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and work in progress. Exposure to credit risk The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. The Group has three major customers in its International Development business, USAID, DFAT and DFID, however there is minimal credit risk arising from these customers as they represent the United States, Australian and United Kingdom governments respectively. The Group has a credit procedure under which each new major customer is analysed for creditworthiness before the Group’s payment and delivery terms and conditions are offered. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group has recognised an allowance for impairment that represents the estimate of incurred losses in respect of trade receivables and work in progress. The main components of this allowance are a specific loss component that relates to individually significant exposures. The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was:

Carrying amount

2015 2014 $'000 $'000

Trade receivables 55,399 69,229

Other receivables and work in progress 41,985 46,021

Cash, cash equivalents and cash deposits 28,393 28,897

125,777 144,147

The Group's maximum exposure to credit risk for trade receivables at the reporting dates by geographical region was:

Carrying amount

2015 2014 $'000 $'000

Asia Pacific 38,123 43,335

Americas 10,192 19,182

Europe and Middle East 6,425 5,958

Africa 659 755

55,399 69,230



21 Financial instruments (continued) Impairment losses The ageing and impairment of the Group’s trade receivables at the reporting date was:

Gross Impairment Gross Impairment

2015 2015 2014 2014 $'000 $'000 $'000 $'000

Current 37,813 - 47,904 -

31-60 days 11,271 - 14,781 100

61-90 days 2,693 16 3,341 368

91-120 days 1,431 63 1,168 278

121 days – 1 year 2,225 222 2,314 356

More than 1 year 617 350 1,325 502

Balance at 30 June 56,050 651 70,833 1,604 The movement in the allowance for impairment losses in respect of trade receivables during the year was:

Carrying amount

2015 2014 $'000 $'000

Balance at 1 July 1,604 1,803

Recognised / (Reversed) (263) 1,995

Utilised (690) (2,194)

Balance at 30 June 651 1,604 Trade receivables have been aged according to their original due date in the above ageing analysis, including where certain long-outstanding trade receivables have been renegotiated as a result of the extended nature of some of the Group’s service provision. No collateral has been obtained for any amounts that have been identified as impaired or overdue but not impaired.



21 Financial instruments (continued) d) Fair value The fair value of financial assets and liabilities, together with the carrying amounts as shown in the statement of financial position, are:

2015 2015 2014 2014

Carrying amount Fair value


$'000 $'000 $'000 $'000

Non-derivative financial liabilities

Finance leases - - (97) (91)

Derivative financial liabilities Interest rate swaps used for hedging (50) (50) (67) (67) Except as detailed in the above table, the Directors consider that the carrying amounts of financial assets and liabilities recognised in the consolidated financial statements approximate their fair values. At 30 June 2015, the Group had $nil (2014: $95,000) of non-derivative financial liabilities classified as level 2 under the fair value hierarchy. Derivative financial liabilities total $50,000 (2014: $67,000) and have been classified as level 2. A risk premium of $32,000 has been applied to the interest rate swap. There are no indicators that the value is either impaired or above costs for any other financial assets and liabilities, and accordingly no other valuation adjustments have been recorded. There have been no transfers between levels in 2015. Further information on the basis for determining fair value is disclosed in Note 3. e) Capital management The Board’s policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors debt to profit ratios and the level of dividends to ordinary shareholders. The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Board closely monitors the relationship between earnings (Underlying EBITDA – earnings before interest, tax, depreciation and amortisation) and borrowings which at 30 June 2015 was 3.4 (2014: 1.8). At 30 June 2015, Group capital, defined as total shareholders’ equity, excluding non-controlling interests, was $122,962,000 (2014: $139,553,000). Management closely monitors the Group to ensure compliance with banking debt covenants. As at 30 June 2015, the Group was in compliance with all its banking debt covenants. Management monitor continuing covenant compliance by using approved budgets to forecast covenant positions. If shortfalls are forecast, management will consider a range of options to remedy the position, including resetting covenants with debt providers. 22 Director and executive disclosures Key Management Personnel compensation

2015 2014

$ $ Short-term employee benefits 4,048,232 4,129,114

Post-employment benefits 214,863 215,860


Termination benefits - 104,075

Share-based payments 381,780 289,012

Total Key Management Personnel compensation 4,692,856 4,781,947 Information regarding individual Directors’ and Executives’ remuneration and some equity instrument disclosures as permitted by section 300 A of the Corporations Act 2001 is provided in the Remuneration Report in the Directors Report.



21 Financial instruments (continued) d) Fair value The fair value of financial assets and liabilities, together with the carrying amounts as shown in the statement of financial position, are:

2015 2015 2014 2014



$'000 $'000 $'000 $'000

Non-derivative financial liabilities

Finance leases - - (97) (91)

Derivative financial liabilities Interest rate swaps used for hedging (50) (50) (67) (67) Except as detailed in the above table, the Directors consider that the carrying amounts of financial assets and liabilities recognised in the consolidated financial statements approximate their fair values. At 30 June 2015, the Group had $nil (2014: $95,000) of non-derivative financial liabilities classified as level 2 under the fair value hierarchy. Derivative financial liabilities total $50,000 (2014: $67,000) and have been classified as level 2. A risk premium of $32,000 has been applied to the interest rate swap. There are no indicators that the value is either impaired or above costs for any other financial assets and liabilities, and accordingly no other valuation adjustments have been recorded. There have been no transfers between levels in 2015. Further information on the basis for determining fair value is disclosed in Note 3. e) Capital management The Board’s policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors debt to profit ratios and the level of dividends to ordinary shareholders. The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Board closely monitors the relationship between earnings (Underlying EBITDA – earnings before interest, tax, depreciation and amortisation) and borrowings which at 30 June 2015 was 3.4 (2014: 1.8). At 30 June 2015, Group capital, defined as total shareholders’ equity, excluding non-controlling interests, was $122,962,000 (2014: $139,553,000). Management closely monitors the Group to ensure compliance with banking debt covenants. As at 30 June 2015, the Group was in compliance with all its banking debt covenants. Management monitor continuing covenant compliance by using approved budgets to forecast covenant positions. If shortfalls are forecast, management will consider a range of options to remedy the position, including resetting covenants with debt providers. 22 Director and executive disclosures Key Management Personnel compensation

2015 2014

$ $ Short-term employee benefits 4,048,232 4,129,114

Post-employment benefits 214,863 215,860


Termination benefits - 104,075

Share-based payments 381,780 289,012

Total Key Management Personnel compensation 4,692,856 4,781,947 Information regarding individual Directors’ and Executives’ remuneration and some equity instrument disclosures as permitted by section 300 A of the Corporations Act 2001 is provided in the Remuneration Report in the Directors Report.


23 Remuneration of auditors During the year, the following fees were paid or payable for services provided by the auditor of the Company, its related practices and non-related audit firms:

2015 2014 $ $

Audit services Fees paid to KPMG Australia for audit and review of financial reports and other audit work under the Corporations Act 2001

422,006 563,996

Fees paid to KPMG overseas firms for audit and review of financial reports and other audit work

186,492 121,250

Remuneration paid to KPMG for audit services 608,498 685,246 Fees paid to non-KPMG audit firms for the audit or review of financial reports of any entity in the Group 18,548 52,253 Non-audit assurance services Fees paid to KPMG Australia in relation to other assurance and advisory services 43,000 94,229

Fees paid to KPMG overseas firms for taxation and other assurance and advisory services 215,000 67,888 Total remuneration paid to KPMG for non-audit assurance services 258,000 162,117 It is the Group’s policy to employ KPMG on assignments additional to its statutory audit duties where its expertise or experience within the Group is important. These assignments are principally other assurance services approved by the Audit Committee, or where KPMG is awarded assignments on a competitive basis. These assignments are measured against an independence agreement between the Group and KPMG, to establish compliance with the agreement before the assignments are awarded to the firm.

24 Contingent liabilities a) Guarantees The Company and consolidated entity had contingent liabilities at 30 June 2015 in respect of:

2015 2014

$’000 $’000

Guarantees given in respect of performance under contracts and premises leases 8,219 6,553 These guarantees may give rise to liabilities in the Group if the subsidiaries do not meet their obligations under the terms of the bank overdrafts, loans, leases or other liabilities subject to the guarantees. b) Other As at the date of this Report, other than noted below, there is no current litigation, or pending or threatened litigation, which would not be covered by professional indemnity insurance or has not already been provided for in the financial statements of the Group; is capable of reliable measurement; or where the likelihood of a material effect on the financial performance of the Group is not considered remote. On 23 December 2014 the Supreme Court of Western Australia partially upheld a ruling by the Western Australia Contaminated Sites Committee (CSC) which assigned a 70% responsibility for site remediation to Coffey LPM Pty Ltd (CLP) (a wholly owned subsidiary of Coffey International Limited). The CSC ruled that CLP punctured a fuel pipe and contaminated a former service-station site during soil contamination test drilling. CLP has lodged an appeal against the decision however if the appeal is unsuccessful CLP will be required to pay its’ share of the site remediation.



25 Commitments

2015 2014

$'000 $'000

a) Capital commitments There is no capital expenditure contracted at the reporting date. b) Lease commitments - operating Commitments for minimum lease payments in relation to non-cancellable operating leases are payable: Within one year 19,974 16,934 Later than one year but not later than five years 54,946 49,189 Later than five years 30,783 36,231 Total lease commitments 105,703 102,354 Representing: Non-cancellable operating leases 105,703 102,354 The operating lease commitments above relate primarily to commercial premises, office, IT and motor vehicle leases which expire from within one to fifteen years. These leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated. During the year, rental income of $1,655,000 (2014: $2,333,000) was recognised as other income in the income statement.



26 Earnings per share

2015 Continuing Operations

2015 Total


2014 Total

Cents Cents Cents Cents a) Basic earnings per share Attributable to the ordinary equity holders of the company

2.3c (7.8)c 4.7c 1.8c

b) Diluted earnings per share

Attributable to the ordinary equity holders of the company

2.1c (7.8)c 4.4c 1.7c

c) Reconciliations of earnings used in calculating earnings per share

2015

Continuing Operations

$'000

Discontinued operations

$'000 Total $'000

Basic earnings per share (Loss)/Profit for the year 5,370 (23,418) (18,048) Profit for the year attributable to non-controlling interests (80) - (80)

Profit for the year attributable to the ordinary equity holders of the Company used in calculating basic earnings per share

5,290

(23,418)

(18,128)

Diluted earnings per share Profit for the year attributable to the ordinary equity holders of the Company used in calculating diluted earnings per share

5,290

2014

Continuing Operations

$'000 (Restated)*

Discontinued operations

$'000 (Restated)*

Total $'000

(Restated)* Basic earnings per share (Loss)/Profit for the year 11,444 (6,987) 4,457 Profit for the year attributable to non-controlling interests (88) - (88)

Profit for the year attributable to the ordinary equity holders of the Company used in calculating basic earnings per share

11,356

(6,987)

4,369

Diluted earnings per share Profit for the year attributable to the ordinary equity holders of the Company used in calculating diluted earnings per share

11,356 4,369

* See note 5



26 Earnings per share (continued)


2015 Total


2014 Total

No. of

shares No. of

shares No. of

shares No. of

shares

d) Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share and operating earnings per share

231,665,325

231,665,325

240,646,446

240,646,446

Adjustments for calculation of diluted earnings per share:

Coffey Rewards Plan 24,167,840

-

15,186,719

15,186,719

Weighted average number of ordinary shares and potential ordinary shares

used as the denominator in calculating diluted earnings per share

255,833,165

231,665,325

255,833,165

255,833,165

At 30 June 2015, 24,774,565 shares held in trust and options were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.

27 Events occurring after the reporting date No matter or circumstance has arisen since 30 June 2015 that has a material effect, or may materially affect:

the Group’s operations in future financial periods the results of those operations in future financial periods the Group’s state of affairs in the future financial periods; or the Group’s financial report at 30 June 2015.



28 Deed of Cross Guarantee Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998, the wholly owned subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of Financial Reports, and Directors' Reports. It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect of the Deed is that the Company guarantees to each creditor payment in full in the event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up. The subsidiaries subject to the Deed are:

Coffey International Limited; Coffey Australian Holdings Pty Ltd; Macsis Pty Ltd; Coffey Testing Pty Ltd (formerly Coffey Information Pty Ltd); Coffey Natural Systems Pty Ltd; Coffey Environments Pty Ltd; Coffey International Development Pty Ltd; Coffey Projects (Australia) Pty Ltd; Coffey Geotechnics Pty Ltd; Coffey Mining Pty Ltd; Coffey Corporate Pty Ltd; Coffey Corporate Services Pty Ltd; and Coffey Environments Australia Pty Ltd.

A consolidated statement of comprehensive income and consolidated statement of financial position, comprising the Company and controlled entities which are party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, for the year ended 30 June 2015 is set out as follows. Statement of comprehensive income and retained earnings

2015 2014

$’000 $’000

Continuing operations


326,383 324,742

Raw materials, subcontractor costs and travel

(116,134) (128,604) Employee benefits expense

(165,993) (150,797)

Depreciation and amortisation

(6,443) (6,316) Occupancy costs

(14,535) (16,110)

Other expenses

(8,480) (7,010) Related party divestment (19,412) (199) Impairment (6,479) - Dividends received

7,718

Net foreign exchange gain/(loss)

7,069 (1,859) Profit/(Loss) before interest and income tax (4,024) 21,565 Net financing expenses (5,522) (6,566) Profit/(Loss) before income tax (9,546) 14,999 Income tax (expense) / benefit 1,842 (752) Profit/(Loss) for the year (7,704) 14,247 Other comprehensive income/(loss) (7,326) 1,057 Total comprehensive income/(loss) (15,030) 15,304 Retained earnings at the beginning of the year 22,719 (6,490) Share based payment transfer - 14,962

Profit/(Loss) for the year

(7,704) 14,247 Retained earnings at the end of the year 15,015 22,719



28 Deed of Cross Guarantee (continued) Statement of financial position

2015 2014

$’000 $’000 ASSETS

Current assets Cash and cash equivalents

15,576 17,129 Receivables – external

36,609 40,619

Receivables – inter-group 34,161 31,819 Work in progress

13,779 11,941

Income tax receivable - 389 Total current assets 100,125 101,897 Non-current assets

Receivables – inter-group

90,695 92,788 Investments in subsidiaries 106,692 107,077 Plant and equipment

17,906 19,351

Deferred tax assets

18,045 16,640 Intangible assets 26,221 27,130 Total non-current assets 259,559 262,986 Total assets 359,684 364,883

LIABILITIES

Current liabilities

Payables – external 21,123 24,247 Payables – inter-group

38,908 38,818

Loans and borrowings

10,750 7,000 Employee benefits

14,813 15,845

Total current liabilities 85,594 85,910 Non-current liabilities


80,030 69,875 Other financial liabilities

69 67

Employee benefits

576 802 Other non-current liabilities - 3,587 Deferred tax liabilities 4,283 1,312 Payables – inter-group 33,089 32,685 Total non-current liabilities 118,047 108,328 Total liabilities 203,641 194,238 Net assets 156,043 170,645

EQUITY

Share capital

127,045 127,607

Reserves

13,983 20,319 Retained earnings 15,015 22,719 Total equity 156,043 170,645



28 Deed of Cross Guarantee (continued) Statement of financial position

2015 2014

$’000 $’000 ASSETS

Current assets Cash and cash equivalents

15,576 17,129 Receivables – external

36,609 40,619

Receivables – inter-group 34,161 31,819 Work in progress

13,779 11,941

Income tax receivable - 389 Total current assets 100,125 101,897 Non-current assets

Receivables – inter-group

90,695 92,788 Investments in subsidiaries 106,692 107,077 Plant and equipment

17,906 19,351

Deferred tax assets

18,045 16,640 Intangible assets 26,221 27,130 Total non-current assets 259,559 262,986 Total assets 359,684 364,883

LIABILITIES

Current liabilities

Payables – external 21,123 24,247 Payables – inter-group

38,908 38,818


10,750 7,000 Employee benefits

14,813 15,845

Total current liabilities 85,594 85,910 Non-current liabilities


80,030 69,875 Other financial liabilities

69 67

Employee benefits

576 802 Other non-current liabilities - 3,587 Deferred tax liabilities 4,283 1,312 Payables – inter-group 33,089 32,685 Total non-current liabilities 118,047 108,328 Total liabilities 203,641 194,238 Net assets 156,043 170,645

EQUITY

Share capital

127,045 127,607

Reserves

13,983 20,319 Retained earnings 15,015 22,719 Total equity 156,043 170,645


29 Parent entity disclosures a) Result of the parent entity:

2015 2014 $'000 $'000 Profit/(Loss) for the year (156) (982)

Other comprehensive income - - Total comprehensive income for the period (156) (982)

b) Financial position of the parent entity comprising: Current assets - - Non-current assets 206,616 205,834 Total assets 206,616 205,834 Current liabilities 7,625 8,203 Non-current liabilities 34,731 33,210 Total liabilities 42,356 41,413

c) Total equity of the parent entity comprising: Share capital 127,046 127,607

Reserves – share-based payments 3,329 2,773

Retained earnings 33,885 34,041 Total equity 164,260 164,421 d) Parent entity guarantees in respect of the debts of its subsidiaries The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in respect of its subsidiaries. Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed are disclosed in Note 28.

30 Share-based payments Expenses arise from equity-based payments. Equity-based payments include employee participation in either the Coffey Rewards Share Plan or the Coffey Rewards Option Plan. Shares and options issued under both plans are accounted for as equity-settled share-based payments as required by AASB 2 Share-based payment. They are deemed to be equity-settled share-based payments for employee services. An expense has been recognised for the fair value of the shares or options, and is recognised on a straight-line basis, over the vesting period attaching to the shares or options. a) Coffey Rewards Share Plan (formerly Coffey International Limited Employee Leveraged Share Plan) The Coffey Rewards Share Plan was approved by special resolution at the Annual General Meeting (AGM) of the Company held on 21 November 1995 and later amended at the AGM of the Company in November 2007. The Coffey Rewards Share Plan entitles nominated employees in the Group (including Executive Directors) to purchase shares, subject to vesting, in Coffey International Limited (ASX code: COF) funded by way of interest-free limited recourse loans from Coffey International Limited. The loans arising from the grant of shares under the Share Plan are limited recourse in nature and accordingly provide equity upside opportunity to the individual without equity downside price risk. The loan reduces over the life of the arrangement by the value of dividends paid per instrument. In respect of options, the full exercise price of the options being exercised is required for delivery to the Company before issue of shares to the individual occurs.



30 Share-based payments (continued) For accounting purposes, the arrangements are considered to be an option whereby the employee effectively has the option to repay the remaining loan balance to take ownership of the shares after the vesting conditions have been satisfied. Due to their limited recourse nature, the arrangements are not considered a loan for related party disclosure purposes. All shares issued to the Coffey Rewards Share Plan rank equally with all other fully-paid ordinary shares on issue. Vesting conditions The number of shares ultimately vesting depends on the level of achievement of the service and performance hurdles attached to each grant. Maximum shares are vested only when 100% of each measure is achieved. The service condition requires that the participants must remain employed by the Group at the time of vesting. The performance measures are based on the earnings per share (EPS) annualised compound growth rate over three years and total shareholder return (TSR) compared to the ASX 300 Accumulation Index performance over the same period. These vesting conditions are subject to certain exceptions as set out in the Share Plan’s Trust Deed. If the vesting conditions for the Share Plan are met, the arrangement vests, allowing the individual the choice to settle the remaining exercise price and take ownership of the shares available to them under the grant, or to leave the current arrangement in place and repay the loan through dividends earned. Loyalty grants are subject only to the three-year service condition. Allocations of shares are determined by the Directors and the loan incurred by the employee is calculated as the market value of the Company shares at the date of acquisition multiplied by the number of shares acquired on their behalf. Coffey Rewards Share Plan – summary of Long-Term Rewards issues

Plan year Grant date Vesting date

No. of participants

at issue date

No. of participants

at 30 June 2015 Vesting conditions

2015 Nov 2014 Nov 2017 Incentive & Service 9 9 50% EPS + Service 50% TSR + Service

2014 Nov 2013 Nov 2016

Loyalty 110 103 100% Service

Incentive & Service 10 10 50% EPS + Service

50% TSR + Service

2013 Mar 2013 Mar 2016 Incentive & Service 1 1 50% EPS + Service 50% TSR + Service

2013 Dec 2012 Dec 2015


Incentive & Service 11 10 50% EPS + Service

50% TSR + Service

2012 Mar 2012 Mar 2015 Incentive & Service 1 1 50% NPAT + Service 50% TSR + Service

2012 Mar 2012 Mar 2015 Incentive & Service 8 7 50% NPAT + Service

50% TSR + Service




30 Share-based payments (continued) Shares granted but not yet vested at balance date under the Coffey Rewards Share Plan

Grant date No. of shares

Loan value at grant date

(per share)

Loan value at grant date

$’000

Exercise price at 30 June 2015

(per share) 13-Dec-2012 Loyalty 371,429 $0.3850 143 $0.385 30-Nov-2013 Incentive & Service 10,961,533 $0.2825 3,097 $0.2825 30-Nov-2013 Loyalty 1,448,668 $0.2825 409 $0.2825 30-Nov-2014 Incentive & Service 5,076,325 $0.3370 1,710 $0.3370

Total 17,857,955 The weighted average share price and number of equity shares accounted for as options are:

Weighted average

exercise price Number of options Weighted average

exercise price Number of options 2015 2015 2014 2014

Outstanding at 1 July $0.58 20,046,730 $0.95 10,874,567

Forfeited $0.57 (4,692,606) $0.69 (3,313,250)

Granted $0.34 5,076,325 $0.28 12,485,413 Outstanding at 30 June $0.51 20,430,449 $0.58 20,046,730

Exercisable at 30 June $1.98 2,572,494 $2.08 2,941,029 Share-based options outstanding at 30 June 2015 have an exercise price ranging from nil to $3.64 and weighted average contractual life of five years. The total amount outstanding on the Coffey Rewards Share Plan at the balance date excluding forfeited shares is $10,460,440 (2014: $11,530,569). b) Coffey Rewards Option Plan The Coffey Rewards Option Plan (Option Plan) implemented during the 2009 financial year, entitles nominated employees in the Group to be granted options to acquire shares on exercise, subject to vesting, in the Coffey International Limited entity. By virtue of their country of residency, certain Executives selected to participate in the Coffey Rewards Plan, are unable to participate in the Coffey Rewards Share Plan. To accommodate this restriction, the Company has invited those Executives to participate in the Option Plan. Allocations of options are determined by the Directors and the exercise price for each option is calculated as the market value of the Company’s shares at the date of grant. Details of recent grants for issue of options under the scheme to eligible employees are shown below. The options issued under the scheme are subject to a minimum three-year vesting condition during which period the employee must remain employed by the Group (subject to certain conditions as set out in the Plan Rules). The vesting conditions and performance hurdles in respect of the options are identical to those applying to the Coffey Rewards Share Plan.



30 Share-based payments (continued) Coffey Rewards Option Plan – summary of Long-Term Rewards issues

Plan year

Grant date

Vesting date

No. of participants at issue date

No. of participants at 30 June 2015 Vesting conditions

2010 Dec 2010 Nov 2013 Incentive & Service

45 17 20% Service

Options issued The weighted average share price and number of equity shares accounted for as options are:

Weighted average

exercise price Number of

options Weighted average

exercise price Number of

options 2015 2015 2014 2014

Outstanding at 1 July $1.56 153,246 $1.47 269,377

Forfeited $2.07 (77,057) $1.34 (116,131) Outstanding at 30 June $1.04 76,189 $1.56 153,246

Exercisable at 30 June $1.04 76,189 $1.56 153,246 c) Valuation – Coffey Rewards Share Plan and Coffey Rewards Option Plan The valuation methodology used to determine the option-based payment expense is identical to that applying to shares, and is set out below. The valuation methodology used to determine the share-based payment expense was the Monte Carlo simulation model. As required by AASB 2, the model took into account the exercise price of the option, the life of the option, the current price of the underlying shares, the expected volatility of the share price, the dividends expected on the shares and the risk-free interest rate for the life of the option. The expected life of the instrument was deemed to be the period from grant date to first available exercise date plus 24 months. The model inputs were as follows for the options and shares subject to valuation for the purposes of share-based payment expense in 2015. Instruments Shares Date of issue 30-Nov-2014 Incentive & Service Risk-free rate 3.0%

Standard deviation 63%

Share price at effective date $0.32

Exercise price (loan repayment) $0.34

Annualised dividend yield 5.5%

Number of options or shares 5,076,325

Performance conditions EPS and TSR vesting conditions

Fair value of the share-based payment EPS tranche: $0.19 TSR tranche: $0.15



30 Share-based payments (continued) d) Expenses arising from share-based payment transaction Total expenses (including forfeitures) arising from share-based payment transactions recognised during the period as part of employee benefit expense were:

2015 2014 2013

$'000 $'000 $'000

Shares issued under Coffey Rewards Share Plan 557 364 861

Shares issued through business combinations – – –

Total recognised in employee benefits expense 557 364 861

31 Subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1:

Name of entity Country of

incorporation Class of shares

Equity holding 2015 2014

Coffey Afghanistan LLC Afghanistan Ordinary 100% 100% A.C.N. 003 890 480 Pty Ltd (formerly Coffey Rail Pty Ltd) Australia Ordinary 100% 100% A.C.N. 070 821 939 (formerly John Wertheimer Consultants Pty Ltd) Australia Ordinary 100% 100% A.C.N. 119 095 037 Pty Ltd (formerly Asia Pacific Rail (NSW) Pty Ltd) Australia Ordinary 100% 100% A.C.N. 103 725 426 Pty Ltd (formerly Specialist Training Australia Pty Ltd) Australia Ordinary 100% 100% Aquaclear Technology Pty Ltd Australia Ordinary 100% 100% Balance Consulting Australia Pty Ltd Australia Ordinary 100% 100% BFP Consultants Pty Ltd Australia Ordinary 100% 100% Carson Group Australia Pty Ltd Australia Ordinary 100% 100% Carson Group NSW Admin Pty Ltd Australia Ordinary 100% 100% Carson Group Pty Ltd Australia Ordinary 100% 100% Carson Group QLD Pty Ltd Australia Ordinary 100% 100% Carson Group Vic Admin Pty Ltd Australia Ordinary 100% 100% Carson Group Vic Pty Ltd Australia Ordinary 100% 100% CCG Group Pty Ltd Australia Ordinary 100% 100% Clifton Coney Group (NSW) Pty Ltd Australia Ordinary 100% 100% Clifton Coney Group (QLD) Pty Ltd Australia Ordinary 100% 100% Clifton Coney Group (SA) Pty Ltd Australia Ordinary 100% 100% Clifton Coney Group (VIC) Pty Ltd Australia Ordinary 100% 100% Clifton Coney Group (WA) Pty Ltd Australia Ordinary 100% 100% Coffey Afghanistan Pty Ltd Australia Ordinary 100% 100% Coffey Africas Holdings Pty Ltd Australia Ordinary 100% 100% Coffey Americas Holdings Pty Ltd Australia Ordinary 100% 100% Coffey Australia Holdings Pty Ltd Australia Ordinary 100% 100% Coffey Commercial Advisory Pty Ltd Australia Ordinary 100% 100% Coffey Corporate Pty Ltd Australia Ordinary 100% 100% Coffey Corporate Services Pty Ltd Australia Ordinary 100% 100% Coffey Environments Australia Pty Ltd Australia Ordinary 100% 100%

Coffey Environments Pty Ltd Australia Ordinary 100% 100% Coffey Europe ME Holdings Pty Ltd Australia Ordinary 100% 100% Coffey Geosciences Pty Ltd Australia Ordinary 100% 100% Coffey Geotechnics Pty Ltd Australia Ordinary 100% 100% Coffey International Development Pty Ltd Australia Ordinary 100% 100% Coffey International Development (Middle East) Pty Ltd Australia Ordinary 100% 100% Coffey IP Pty Ltd Australia Ordinary 100% 100% Coffey LPM Pty Ltd Australia Ordinary 100% 100% Coffey Mine Development Pty Ltd Australia Ordinary 100% 100% Coffey Mining Pty Ltd Australia Ordinary 100% 100% Coffey MPW Pty Ltd Australia Ordinary 100% 100% Coffey Natural Systems Pty Ltd Australia Ordinary 100% 100% Coffey Oman Pty Ltd Australia Ordinary 100% 100% Coffey Partners International Pty Ltd Australia Ordinary 100% 100% Coffey Project Management Pty Ltd Australia Ordinary 100% 100% Coffey Projects (Australia) Pty Ltd Australia Ordinary 100% 100% Coffey Testing Pty Ltd Australia Ordinary 100% 100% Coffey Services Australia Pty Ltd Australia Ordinary 100% 100%



31 Subsidiaries (continued)

Name of entity Country of

incorporation Class of shares

Equity holding 2015 2014

Coffey Strategy Pty Ltd Australia Ordinary 100% 100% DASCEM Pty Ltd Australia Ordinary 100% 100% Farsands Facilities Management Ltd Australia Ordinary 100% 100% Farsands Risk Management Pty Ltd Australia Ordinary 100% 100% Farsands Solutions Pty Ltd1 Australia Ordinary 100% 100% Farsands Project Solutions Pty Ltd Australia Ordinary 100% 100% Geosciences Consulting (ME) Pty Ltd Australia Ordinary 100% 100% Global Justice Solutions (Pacific) Pty Ltd Australia Ordinary 100% 100% Global Justice Solutions (Asia) Pty Ltd Australia Ordinary 100% 100% Global Justice Solutions Pty Ltd Australia Ordinary 100% 100% IT Environmental (Australia) Pty Ltd Australia Ordinary 100% 100% Macsis Pty Ltd Australia Ordinary 100% 100% RSG Global Consulting Pty Ltd Australia Ordinary 100% 100% Soil & Rock Engineering Pty Ltd Australia Ordinary 100% 100% Water Studies Pty Ltd Australia Ordinary 100% 100% Coffey Consultoria e Servicos Ltda Brazil Ordinary 100% 100% Coffey Coney Group (Indo-China) Ltd5 British Virgin Isles Ordinary 0% 100% Coffey Projects (International) Limited British Virgin Isles Ordinary 100% 100% Coffey Canada Inc.3 Canada Ordinary 0% 100% Coffey Geotechnics Inc. 3 Canada Ordinary 0% 100% Coffey Consultoria Servicios SpA Chile Ordinary 100% 100% Coffey Asia Ltd Hong Kong Ordinary 100% 100% Development Company for Technical & Environmental Consultancy LLC Iraq Ordinary 100% 100% Coffey Projects (Middle East) Ltd Jersey Ordinary 100% 100% Coffey (Malaysia) Sdn Bhd Malaysia Ordinary 100% 100% Coffey Holdings Sdn Bhd Malaysia Ordinary 100% 100% Carson Group (AKL) Ltd New Zealand Ordinary 100% 100% Carson Group Ltd New Zealand Ordinary 100% 100% Clifton Coney Group (NZ) Ltd New Zealand Ordinary 100% 100% Coffey Geotechnics (NZ) Ltd New Zealand Ordinary 100% 100% Coffey International NZ Ltd New Zealand Ordinary 100% 100% Coffey Projects (New Zealand) Ltd New Zealand Ordinary 100% 100% Coffey Nigeria Ltd Nigeria Ordinary 100% 100% Aquaclear Technology (Pakistan) Pvt Ltd Pakistan Ordinary 95% 95% Coffey Services PNG Limited Papua New Guinea Ordinary 100% 100% Coffey International Inc. Philippines Ordinary 100% 100% Coffey Philippines Inc. 2 Philippines Ordinary 40% 40% Coffey Consultoria y Servicios S.A.C. Peru Ordinary 100% 100% Coffey International Development Sp. z o.o Poland Ordinary 100% 100% Coffey Projects (Singapore) Pte. Ltd Singapore Ordinary 100% 100% Bovell Freeman Holly Pty Ltd South Africa Ordinary 100% 100% Coffey International (Africa) Pty Ltd South Africa Ordinary 100% 100% Coffey Mining (South Africa) Pty Ltd South Africa Ordinary 100% 100% Coffey Projects (Africa) Pty Ltd South Africa Ordinary 73% 73% Duncan Rhodes Construction Pty Ltd South Africa Ordinary 51% 51% Duncan Rhodes Procurement Pty Ltd South Africa Ordinary 51% 51% RSG Global Consulting (SA) Pty Ltd South Africa Ordinary 100% 100% Coffey Thailand Ltd Thailand Ordinary 49% 49% Coffey (UK) Ltd UK Ordinary 100% 100% Coffey Geotechnics Ltd UK Ordinary 100% 100% Coffey International Development Holdings Ltd UK Ordinary 100% 100% Coffey International Development Ltd UK Ordinary 100% 100% Coffey UK Finance Limited4 UK Ordinary 0% 100% EDGE Consultants UK Ltd UK Ordinary 100% 100% Global Justice Solutions EMEA Ltd UK Ordinary 100% 100% Libra Advisory Group Ltd UK Ordinary 100% 100% Libra Knowledge Network Ltd4 UK Ordinary 0% 100% Libra Ventures Ltd4 UK Ordinary 0% 100% Webber Associates UK Ltd UK Ordinary 100% 100% The Evaluation Partnership Ltd UK Ordinary 100% 100% Coffey International Inc. U.S.A. Ordinary 100% 100% Management Systems International Inc. U.S.A. Ordinary 100% 100% Clifton Coney Group (Vietnam) Ltd5 Vietnam Ordinary 0% 100% 1 Farsands Solutions Pty Ltd has a minority holding of less than 0.01% 2 The remaining 60% of the issued capital is held by a third party for the benefit of the Coffey International Group 3 Coffey Canada Inc. and Coffey Geotechnics Inc. were placed into voluntary liquidation effective 31 May 2015. 4 Coffey UK Finance Limited, Libra Ventures Ltd and Libra Knowledge Network Ltd were dissolved during the financial year effective 30 June 2015. 5 These subsidiaries were sold effective 28 February 2015.



In the opinion of the Directors of Coffey International Limited:

a) the consolidated financial statements and notes that are set out on pages 62 to 111, and the Remuneration Report in the Directors’ Report, are in accordance with the Corporations Act 2001, including:

giving a true and fair view of the Group’s financial position as at 30 June 2015 and of its performance for the financial year ended on that date; and

complying with Australian Accounting Standards and the Corporations Regulations 2001; and

b) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

There are reasonable grounds to believe that the Company and the Group entities identified in Note 28 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those group entities pursuant to ASIC Class Order 98/1418.

The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Managing Director and Finance Director for the financial year ended 30 June 2015.

The Directors draw attention to Note 1 in the consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards.

Signed in accordance with a resolution of the Directors:

John F Mulcahy Chairman

John M Douglas Managing Director

Sydney 7 August 2015


Coffey International Limited Details of shareholders and shareholdings

The shareholder information set out below was applicable as at 16 July 2015. Substantial shareholdings The following notices of substantial shareholdings have been received by the Company. Holder Date of notice No. of units Ellerston Capital Limited 25 June 2015 23,030,803 Commonwealth Bank of Australia & Subsidiaries 1 June 2015 15,261,894 Forager Funds Management 23 April 2015 17,005,482 Celeste Funds Management 4 April 2014 16,016,783 H.E.S.T. Australia Limited ATF Health Employees Superannuation Trust Australia 17 April 2014 15,939,130 Distribution of ordinary shareholdings

Size of holding Holders No. of units Percentage held 1-1,000 134 55,843 0.02 1,001 – 5,000 1,001 3,255,493 1.27 5,001 – 10,000 673 5,283,831 2.07 10,001 – 100,000 1,432 47,109,949 18.41 100,001 and over 239 200,128,049 78.23 Total 3,479 255,833,165 100.00

The number of shareholders with holdings less than a marketable parcel or ordinary shares is 637. Using the 16 July 2015 closing price of $0.16, an unmarketable parcel is one of 3125 or fewer shares. Options The Company has on issue 76,189 options over unissued ordinary shares in the Company held by 17 option holders as at16 July 2015. Equity security holders The names of the 20 largest holders of quoted equity securities as at 16 July 2015 are listed below.

Holder name No. of ordinary

shares Percentage of issued shares

J P Morgan Nominees Australia Limited 42,676,068 16.68 Pacific Custodians Pty Limited Leveraged (Share Plan Trust) 24,435,070 9.55 National Nominees Limited 14,080,398 5.50 Citicorp Nominees Pty Limited 13,790,389 5.39 Hsbc Custody Nominees (Australia) Limited 7,479,327 2.92 Mr John Matheson Douglas 7,278,992 2.85 Citicorp Nominees Pty Limited (Colonial First State Inv A/C) 4,927,247 1.93 Bond Street Custodians Limited (Forager Wholesale Value FD) 3,736,480 1.46 Bnp Paribas Noms (Nz) Ltd (DRP) 3,616,181 1.41 Bnp Paribas Noms Pty Ltd (DRP) 3,332,705 1.30 Mr Charles Carnegie (Sorrento A/C) 2,523,809 0.99 Banlan Pty Ltd 2,000,000 0.78 London City Equities Limited 1,784,902 0.70 London City Equities Limited 1,750,000 0.68 Ctsf Pty Ltd (Vc Superannuation Fund A/C) 1,690,000 0.66 Juntos Investments Pty Ltd (Juntos Super Fund A/C) 1,639,286 0.64 Hsbc Custody Nominees (Australia) Limited - A/C 2 1,481,114 0.58 Ubs Wealth Management Australia Nominees Pty Ltd 1,376,512 0.54 Pacific Custodians Pty Limited Cof Plans Ctrl 1,354,441 0.53 Mr Stanley Henry Goodhew 1,274,912 0.50 Total 142,722,833 55.59 Voting rights The voting rights attached to the ordinary shares are that on a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.



Shareholder information

Annual General Meeting Directors

Date: Thursday, 15 October 2015 Time: 10.00am (Sydney time) Venue: The Mint, 10 Macquarie Street Sydney NSW 2000

Dr John Mulcahy (Chairman) Mr John Douglas (Managing Director) Mr Urs Meyerhans (Finance Director) Ms Leeanne Bond Mr Guy Cowan Ms Susan Oliver

Dividends Company Secretary

Final dividend: No final dividend has been declared with respect to the year ended 30 June 2015

Ms Jennifer Waldegrave E-mail: [email protected]

Share registry Registered office

Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 Australia Telephone: 1300 365 798 (within Australia) +61 1300 365 798 (outside Australia) Website: linkmarketservices.com.au

Level 19 Tower B 799 Pacific Highway Chatswood NSW 2067 Australia Telephone: +61 2 9406 1000 Facsimile: +61 2 9406 1002 E-mail: [email protected]

Securities exchange listing

Australian Securities Exchange (code: COF)

Website

coffey.com Electronic communication Auditor

Coffey encourages all shareholders to receive communications from the Group by e-mail if possible. Coffey publishes, and posts to its website, its Annual Financial Report by September each year. This Financial Report is lodged with the ASX and ASIC and is also available within the investor section of the Coffey website.

KPMG 10 Shelley Street Sydney NSW 2000


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coffey.com

Registered office

Level 19, Tower B – Citadel Tower 799 Pacific Highway Chatswood NSW 2067 Australia

t: +61 2 9406 1000 f: +61 2 9406 1002 e: [email protected]

Share registry

Link Market Services Limited Level 12 680 George Street Sydney NSW 2000 Australia

t: 1300 365 798 (within Australia) +61 1300 365 798 (outside Australia) w: linkmarketservices.com.au

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