SRG GLOBAL LIMITED — Annual Report 2012

Oct 17, 2012

Annual Report 2012

ABN 81 104 662 259 Global CONSTRUCTION SERVICES LIMITED GCS is a leading supplier of integrated on-site products and services to all industries. Our national reach, local branch network and strong industrial presence enable us to provide for any stage of a project's lifecycle. We work in partnership with our clients to understand their needs and allocate the appropriate resources to deliver the best outcome. By delivering customised solutions, we ensure cost-effective savings without compromising quality and safety. Our wide-ranging experience and result-driven strategies make us a supplier of choice and a reliable industry partner.

03	Company Highlights	34	Directors' Report
04	Letter from Chairman & Group Managing Director	48	Auditor's Independence Declaration
08	Board of Directors	49	Directors Declaration
11	About GCS	50	Independent Auditor's Report
12	Products & Services	54	Consolidated Statement of Comprehensive Income
15	Commercial Sector	55	Consolidated Statement of Financial Position
17	Residential Sector	56	Consolidated Statement of Cash Flows
19	Resource & Industrial Sector	57	Consolidated Statement of Changes in Equity
21	Current Locations	60	Notes to the Consolidated Financial Statements
22	Health, Safety, Environment, & Quality	106	ASX Additional Information
25	Community	107	Corporate Directory
28	Corporate Governance Statement	108	Branch Directory

Collaboration. Discipline. Results.

Company Highlights

financial HIGHLIGHTS In 2012, GCS invested significantly in organically growing and enhancing the performance of its current businesses. On the horizon is a significant committed investment pipeline and GCS is well positioned to capture and capitalise on the opportunities in its markets.

The GCS Group delivered a solid performance, increasing revenue and profits notwithstanding the challenging conditions in certain markets.

Substantial investment has been made in expanding our infrastructure and increasing the pool of hire assets based on strong demand for Site Accommodation and General Pant Hire.

Corporate HIGHLIGHTS

The acquisition of specialised labour hire company Global Industrial Services (Aust.) Pty Ltd in June 2011 diversifies and opens up significant opportunities to GCS through a more comprehensive package offering to customers in key markets.

Strategic 50% investment in SmartScaff Pty Ltd provides GCS immediate access to the East Coast of Australia through an experienced management team.

Strengthened management team through the appointment of new high calibre executives to focus GCS on the pipeline of growth opportunities.

EPS (¢)

EPS (¢)

15.6 15.2

15.6 15.2

15.8 17.9 16.9 2012 $37.3m 2011 $30.0m FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 30.0 FY08 FY09 FY10 FY11 FY12

Dear Shareholders, on behalf of the Board, I am pleased to present you the Global Construction Services Annual Report for the year ended 30 June 2012.

The 2012 financial year saw GCS invest in the organic growth and performance of its current businesses in contrast to the acquisition activity it has undertaken in prior years.

GCS continued to achieve solid performances across its two main divisions and delivered increased revenue and profit in 2012. A significant capital expenditure program to increase the size of the hire fleet, predominately in the Site Accommodation and General Plant Hire divisions, was undertaken to meet the strong demand for these products and related services and to ensure GCS is positioned to capitalise on the substantial pipeline of investment in its key operating markets.

Financial Result

The GCS Group delivered a positive profit result in 2012 which was pleasing, as the environment in which it operates saw increased competition, delays on various Commercial projects, and challenging trading conditions in the Residential sector.

Revenue increased 46.2% to $212.2 million (2011: $145.2 million). Net Profit after Tax was $22.8 million (2011: $19.4 million) an increase of 17.5%, EBITDA improved to $50.4 million (2011: $38.0 million) and Earnings per Share were 19.7 cents (2011: 20.8 cents).

The Directors determined to not pay a final dividend for FY12, with dividends for the year totalling 4.25cents (2011: 8.25 cents).

Review

GCS's primary focus was on the ongoing performance and organic expansion of its current businesses. As part of the growth into new markets, GCS made a $3.5 million investment to acquire a 50% interest in SmartScaff, an East Coast scaffolding company based in Melbourne with operations in Sydney and Brisbane. The SmartScaff executive management team has over of 25 years of experience in the construction and maintenance industry.

GCS dedicated significant resources in expanding and managing the growth experienced by the Resource and Industrial division. A capital expenditure program to expand the infrastructure and hire fleet was undertaken in FY12 with approximately $60 million invested in assets of which the majority was Site Accommodation and General Plant Hire equipment. The investment was funded via debt and led to a progressive net debt increase of $55.4 million in the year.

In September 2012, GCS undertook a capital raising of approximately $32.2 million dollars to existing and new shareholders via an Institutional Placement and non-renounceable Institutional Entitlement Offer and Retail Entitlement Offer on a 5-to-16 basis at $0.60 per share. The raising was well supported and will be utilised to reduce the Group's net debt by approximately $20 million and provide additional working capital to enable the continued growth in FY13.

Commercial Division

The Commercial division performed satisfactorily in FY12. The division's progress was on target on the QEII Hospital Car Park contract for Probuild and the GCS labour division delivered revenue and earnings above expectations for the year. A significant amount of Perth infrastructure initiatives are committed in FY13, of which GCS has currently tendered $200 million, with awards pending in the first half of FY13. We are anticipating a strong positive outlook in this sector supported by the $7.6 billion committed State government infrastructure pipeline for 2012-2013.

Residential Division

The Residential division continues to operate in subdued market conditions. New housing starts have been at an all-time low with developers lacking confidence in the market. GCS continues to maintain its market share despite depressed market conditions. The Residential division will continue to experience tough trading conditions in 2013, however a modest improvement in new housing sales has been noted in recent weeks, subsequent to interest rate cuts.

Resource and Industrial Division

The Resource and Industrial Division continues to experience rapid growth, benefiting from its exposure to the high demand Resources, Industrial and Energy sectors of the Western Australian economy. GCS has invested heavily in this segment in FY13 to meet the current demand and capitalise on the pipeline of new work proceeding in this sector.

GCS has opened two new Plant Hire branches in Geraldton and Port Hedland to service the Group's growing customer base in the Mid-west and Pilbara regions of Western Australia. New operating sites were also purchased in Newman and Karratha to expand the current operations and the suite of products offered. GCS Industrial Services has commenced deploying its pool of labour onto projects in the North-west and continues to build on its strong presence in this sector.

GCS's primary focus was on the ongoing performance and organic expansion of its current businesses.

Growth. Value. Diversity.

Letter from Chairman & Group Managing Director

Board and Executive Appointments

The GCS Group made a number of key appointments during the year. The Board was delighted to welcome Mr Peter Wade on 17 November 2011 as an independent Non-Executive Chairman of the Group. Mr Wade brings a wealth of experience in engineering, construction, project management, mining, and infrastructure services gathered over an accomplished forty year career and is the current Executive Chairman and Managing Director of Mineral Resources Limited.

GCS Group Managing Director Mr Enzo Gullotti and Executive Director Mr George Chiari extended their tenure from 1 July 2012 for a further three years to 30 June 2015 on the same terms as their current contacts.

On 5 July, Mr Mike Sertorio joined the GCS Group Board as an Executive Director. Mr Sertorio was an original vendor of specialised labour hire company Global Industrial Services (Aust.) Pty Ltd, acquired by GCS on 3 June 2011. Mr Sertorio has, subsequent to the end of the financial year, become a Non-Executive Director of the GCS Group.

Mr Raul Used was appointed as a Divisional Managing Director of GCS on 18 July 2011. Mr Used is a construction engineer and holds a Bachelor of Engineering (Construction) degree. He has over 20 years of experience in large scale management and project engineering in the building, civil infrastructure and resources sector. Mr Used oversees the day to day running of several of the Group's key divisions.

Mr Carlo Genovesi joined the GCS Group as Chief Financial Officer in November 2011. Mr Genovesi, a qualified CPA, brings over twenty five years of experience as a Senior Finance Executive. Mr Genovesi has held a number of CFO/Controller positions both in Australia and Europe with blue chip companies including, Alcoa, Wesfarmers Limited and Norilsk Nickel, one of the world's largest mining companies.

In March 2012, Mrs Susan Cameron joined the GCS team as Group Financial Controller and in May 2012, Ms Sandra Thorp also joined GCS as Group Human Resources Manager.

The Year Ahead

In the coming year, GCS will look to continue growing its current operations and extract the value of its capital investment program. The Group will continue on its path of organic growth in its Plant Hire and Site Accommodation divisions and look forward to new contract awards in the Commercial sector and signs of improvement in the Residential sector.

Although challenges exist in the Mining sector, demand for GCS products and services continue. Additionally, the significant investment and expansion in nation building LNG energy projects are proceeding including; The Chevron Gorgon and Wheatstone projects, both of which have commenced construction; and the Inpex and Browse basin developments, on which GCS is receiving early stage enquiries for our full suite of products and services.

GCS have recently been awarded the first major scaffold supply contract on the $43 billion Gorgon Project for an initial supply of 6,000 tonne of equipment to the CBI Kentz Joint Venture and also the early works Site Accommodation supply for Theiss on the Wheatstone project.

As the cycle moves from construction to operations and maintenance, GCS is well positioned to provide a range of ongoing services to support customers and win new work. Additionally, the number of exciting developments earmarked for the Perth Commercial sector will provide significant opportunities for GCS to replenish its order book and provide the end to end solutions the company is renowned for.

I would like to thank all of our employees for their achievements in what has been a challenging year. Finally, we thank our shareholders for their ongoing support and of course our valued clients and suppliers.

We look forward to taking advantage of the significant new opportunities in front of us in the 2013 financial year and beyond.

Peter Wade Enzo Gullotti Non-Executive Chairman Group Managing Director

Board of Directors

Peter Wade, Non-Executive Chairman

Mr Peter Wade holds a Bachelor of Engineering (Hons) and has over forty years of experience in engineering, construction, project management, mining, and infrastructure services. He started his career with the NSW Public Service managing the construction, building, and operation of significant infrastructure projects such as the Port Kembla coal loader and grain terminals in Newcastle and Wollongong. Mr Wade was also a Deputy Director for the Darling Harbour Redevelopment construction project.

Subsequently, as an Executive of the Transfield Group, Mr Wade was responsible for a number of significant construction, building, and operation projects including, the Melbourne City Link, the Airport Link, the Northside Storage Tunnel, and the Collinsville and Smithfield Power Plants.

Mr Wade has been the Managing Director of Crushing Services Pty Ltd and PIHA Pty Ltd since 1999 and Minerals International Pty Ltd since 2002 (now all wholly owned subsidiaries of Mineral Resources Limited). In 2006, with the formation and listing of Mineral Resources Limited, Mr Wade was appointed as Managing Director and has overseen a sustained period of successful development and growth. In 2008, Mr Wade was appointed the Executive Chairman of Mineral Resources Limited.

ENzo gUllotti, Group Managing Director

Mr Enzo Gullotti established GCS in 2003 having had fifteen years of experience in the scaffolding and construction industry. Mr Gullotti was a founding member of the PCH Group (now CAPE) where he was an Executive Director for approximately eight years and the Managing Director of the scaffolding subsidiary. Mr Gullotti was instrumental in growing PCH, including the establishment of operations in Karratha, Sydney, Darwin, Bunbury, Singapore, Thailand, Dubai and the Caspian Sea.

Mr Gullotti has grown the GCS business significantly since its formation, including leading the successful integration of several key acquisitions and expanding the Group's footprint throughout Australia.

gEoRgE cHiARi, Executive Director

Mr George Chiari is a recognised industry leader in the field of commercial formwork and concrete with over forty years of experience at CASC Constructions. His skills and knowledge are invaluable as GCS builds on the success of recent times and seeks to capitalise on the significant opportunities in Western Australia. Mr Chiari is also a large shareholder in GCS.

Sam Mangione, Non-Executive Director

Mr Sam Mangione holds a Bachelor of Business degree and has been associated with the GCS Group since July 2005. Mr Mangione has over twenty three years of experience in the construction, mining, and hire industries.

Mr Mangione is co-owner of the largest privately held waste management company in Western Australia and is also a leading manufacturer of temporary site accommodation. Mr Mangione has developed state of the art processes in the recovery and recycling of waste product via purpose designed waste transfer stations.

micHAEl sERtoRio, Non-Executive Director

Mr Michael Sertorio has over twenty years of experience in senior management and board positions spanning financial services, manufacturing, professional services, and wholesale trade in Australia and Asia, with organizations including Chase Manhattan Bank Australia, Standard Chartered Bank Australia, and ICI Australia.

From 2001 to 2007, Mr Sertorio was owner and Managing Director of Mercer Mooney, now part of the Moraitis Group, a BRW Top 500 company in which he remains a Non-Executive Director and shareholder. Mr Sertorio was a Director and shareholder of labour hire company Global Industrial Services (Aust) Pty Ltd. Upon its acquisition by GCS in June 2011, Mr Sertorio joined the GCS Board as an Executive Director. Mr Sertorio continues to serve on the GCS Board as a Non-Executive Director from 6 August 2012.

Mr Sertorio is a Fellow of the Australian Institute of Company Directors and holds a Bachelor degree in Industrial Relations and Politics. Mr Sertorio was appointed to the Board of GCS on 5 July 2011.

The GCS Board has extensive experience in the construction and maintenance industries and is supported by a professional management team and highly motivated employees.

1. Mr Peter Wade 2. Mr Enzo Gullotti 3. Mr George Chiari 4. Mr Sam Mangione 5. Mr Michael Sertorio

Vision. Experience. Leadership.

Safety. Versatility. Initiative.

About GCS

GCS is a leading supplier of integrated on-site products and services to all industries. Our national reach, local branch network and strong industrial presence, enables us to provide for any stage of a project's lifecycle. We work in partnership with our clients, to understand their needs and allocate the appropriate resources to deliver the best outcome. By providing customised solutions, we ensure cost effective savings without compromising on quality and safety. Our wide-ranging experience and resultdriven strategies makes us the supplier of choice and a reliable industry partner.

GCS is an Australian company that offers a diverse range of products and services operating under the strict corporate governance requirements of the ASX, ISO 9001:2008 Quality Management System and AS/NZS 4801:2001 OH&S Management System. We provide high quality products and services including; On-Site Workforce; Scaffold and Access Solutions; Plant and Equipment; Formwork and Concreting; Site Accommodation; and Specialised Site Services.

GCS has a number of key divisions operating throughout Australia. Our foundation is underpinned by utilising strategic metropolitan and regional bases whilst utilising the financial, operational, and logistical infrastructure of a national group. This unique structure promotes unparalleled economies of scale, and ensures that we operate nationally but supply locally.

STRENGTHS & CAPABILITIES

• » Locally owned and operated.
• » Dedicated, energetic and highly experienced team.
• » Personalised service, exceeding customer expectations.
• » Cultivation of strong relationships with our clients and suppliers.
• » Innovative processes and systems with continual evaluation and updates.
• » Synergy in the products and services we offer.

GOALS & VALUES

• » Excel in our field of expertise with integrated products and services.
• » Be a leader in terms of our people, products and reputation.
• » Support the region in which we operate today, tomorrow, and in the future.
• » Share our success within our communities.
• » Be a responsible corporate entity and make direct contributions to the community.
• » Provide value to both shareholders and customers.

Corporate Governance Statement Products & Services (CONTINUED)

GCS is a leading supplier of integrated on-site products and services to all industries.

GCS is uniquely positioned in the Australian market place, to provide a comprehensive range of products and services throughout the lifecycle of a project.

Our multi-disciplinary capabilities allow us to complete large-scale projects, whilst working within internationally recognised safety standards. Combined with an understanding of our clients wider businesses, we are able to continually identify and implement improved working strategies and new solutions. This means our clients can reduce contractor numbers and we can provide safer and more efficient operations.

Clients choose us for our proven experience and reliability in working with local, national and international companies in all major sectors.

We supply and manage a national workforce for projects across Australia, giving our clients greater flexibility and capability for rapid expansion when required. Above all, we assist in increasing the productivity and business performance of the companies we work with.

Our staffing solutions include; Tradesmen (such as carpenters, electricians, welders); Labour (such as scaffolders, riggers, dogmen, crane drivers); and Professionals (such as HSE staff, nurses, project managers).

We offer an expansive range of the latest Plant and Equipment to customers in all market sectors. Our ever-expanding fleet features well-known brands that offer the latest in safety and technological innovation. All of our equipment is maintained to the highest standard and has the backing of our mechanical support team. Our sales and service professionals can offer you knowledgeable advice about the equipment you need, 24 hours a day, 7 days a week.

Our plant and equipment solutions include; Access Equipment; Compressors and Air Power Tools; Compaction Equipment; Generators, Power and Lighting; Loaders and Excavators; Materials Handling; Hydraulic Power Tools; and Mine Spec Vehicles.

GCS is always looking to incorporate new products that complement its fleet of equipment. As a new division operating under our rapidly expanding Plant and Equipment operations, GCS have introduced specialised vehicles for on-site rentals to the Resource and Industrial sector. We offer current-model, mine spec vehicles, fully equipped including flashing lights, CB radios, first aid kits, fire extinguishers, internal roll bars, wheel stops, safety triangles, hi-vis whip aerials, and multiple spare tyres.

Our fleet rental solutions include; Buses (Hiace 12 seat, 21 seat); Duel Cabs and Utilities (Landcruiser, Hilux, Amarok); Wagons and Troop Carriers (Landcruiser 200 and 79 series, Prado 150 series); and Trucks (Hino 616 Crew Cabs, Tipper Trucks, Water Trucks).

Formwork & concreting

By offering hire, sale, contracting, and sub-contracting services, GCS can supply a flexible, all-inclusive Formwork and Concreting package. Our mix of Australian and International equipment coupled with our innovative work practices enable us to complete structures faster, safer and more cost effectively. Above all, we offer our clients reliability, flexibility and experience in Formwork and Concrete construction.

Our integrated solutions include; Formwork Contracting; Concrete Pumping; Concrete Placement; Wall Formwork; Falsework and Propping; Timber and Plywood; and Column Formwork.

Operating as a supplier and sub-contractor, we offer a complete range of the latest scaffold equipment and a specialised workforce to customers in all market sectors. Our experienced industry professionals utilise customised management packages, with the latest safety initiatives, to deliver jobs on time and on budget. With our innovative technical systems and management, we can also deliver satellite yards or servicing facilities to the most remote parts of Australia.

access solutions

Scaffold &

Our scaffold and access solutions include; Scaffolders; Modular Scaffold; Tube and Fitting Scaffold; Scaffold Accessories; Aluminium Mobile Scaffold; A-Frame Scaffold; Swing Stages; Hoists; and Rope Access.

Our temporary site units provide the flexibility, comfort and security to meet all our customers' needs. We supply highquality, durable, site accommodation units across Australia including cyclonic regions. These robust, multi-purpose units can satisfy every application.

accommodation

Site

Our site accommodation solutions include; Lunch Rooms; Site Offices; First Aid Huts; Ablution Blocks; Shower Blocks; Accommodation Quarters; Chemical and Sewer Toilets; Storage Containers; and Temporary Fencing.

Specialised site services

We provide a range of Specialised Site Services under the strict governance of an accredited, quality company. Together with our other integrated solutions, we offer a multidisciplinary approach that enables our clients to lower operational costs while enhancing output and safety.

Our specialised site services include; Rope Access; HSE Management and Personnel; Traffic Management; Security Services; Façade and Window Installation; and Painting Services.

Flexibility. Cooperation. Service.

A number of significant project awards in the Perth market are imminent in FY13 as part of the $7.6 billion 2012-2013 committed infrastructure initiatives by the State government.

Our operations in the Commercial sector consist of supplying a range of products and services to customers involved in the construction or maintenance of commercial and mixed-use developments. These typically include office towers, high rise apartments, shopping centres, hotels, car parks, recreational buildings, and hospitals. Contracts are typically medium to long term.

Segment Size (by Revenue Share)	^61.5%FY11 72.7%
Revenue	24%^FY12 $130.5m, FY11 $105.6m
Adjusted EBITDA1	3%^FY12$34.2m, FY11$33.0m
Net Assets	16%FY12 $36.8m,FY11 $43.7m

1 Adjusted EBITDA is EBITDA derived from the operating segments and excludes investments, other income, and GCS support functions including corporate office and treasury which are included in corporate/other.

Residential Sector

GCS's scale and its quality products have enabled the residential division to maintain market share in a subdued market.

Our operations in the Residential sector consist of supplying a range of products and services to customers involved in the construction or maintenance of single and multi-story residential developments. These typically include houses, townhouses, units, and apartments. Contracts are generally short to medium term.

Segment Size (by Revenue Share)	^11.1%FY11 15.4%
Revenue	6%^FY12 $23.6m, FY11 $22.3m
Adjusted EBITDA1	7%FY12 $4.8m, FY11 $5.1m
Net Assets	^19%FY12 $22.4m, FY11 $18.9m

1 Adjusted EBITDA is EBITDA derived from the operating segments and excludes investments, other income, and GCS support functions including corporate office and treasury which are included in corporate/other.

Feasibility. Advancement. Partnership.

Significant investment in the pool of Site Accommodation and General Plant Hire Equipment. Continued expansion of GCS Hire with two new operating sites opening.

Our operations in the Resource and Industrial sector consist of supplying a range of products and services to customers involved in either construction or maintenance of the following types of projects. Oil and gas, energy, major infrastructure, mining, power generation, water treatment plants, decommissioning, shutdowns, and civil works. Contracts vary in length from short to long term.

Segment Size (by Revenue Share)	^27.4%FY11 11.9%
Revenue	236%^FY12$58.2m, FY11 $17.3m
Adjusted EBITDA1	401%^$17.4m, FY11 $3.5mFY12
Net Assets	776%^FY12$29.9m, FY11 $3.4m

1 Adjusted EBITDA is EBITDA derived from the operating segments and excludes investments, other income, and GCS support functions including corporate office and treasury which are included in corporate/other.

Local. Regional. National.

Current Locations

Our national presence allows us to provide multidisciplined labour and high quality equipment to all industries anywhere across Australia. GCS's success lies in its ability to react quickly and mobilise wherever the demand may rise. Having established metropolitan and regional bases in key locations across Australia, GCS is able to fully service its clientele both onshore and offshore. We are committed to helping our clients complete large and small scale projects by delivering practical and result-driven products and services.

With strategic bases across Australia, GCS is uniquely positioned to service a wide range of industry sectors through its local branch network.

Health, Safety, Environment, & Quality

Our professional reputation is built on delivering integrated products and services across multiple markets and sectors at industry-leading standards. Central to growing and exceeding this ethic, is our Integrated Management System. Developed to communicate our Health; Safety; Environment; and Quality objectives, and apply consistent standards across our Australian network.

QUALITY ASSURANCE

The ISO 9001:2008 Quality Management System has received widespread international acclaim and is the world's most recognised business management standard. It offers a comprehensive business framework and ensures key management objectives are achieved.

At GCS, our Quality Management System has been integrated as one discipline and provides a stable platform across all business processes. It incorporates It incorporates Health; Safety; Environment; & Quality, driving measurable, cost-saving performance initiates whilst providing a mechanism from which improvement actions are launched.

GCS businesses that have been certified thus far to ISO 9001:2008 Quality Management Systems are, Global Construction Services Limited, GCS Rapid Access Pty Ltd, GCS Budget Portables Pty Ltd, GCS Industrial Services Pty Ltd and GCS Hire Pty Ltd.

HEALTH AND SAFETY

At GCS, Health and Safety is the number one priority in conducting our business. The well-being of our employees is of the utmost importance and we continually work to ensure all staff follow this edict. GCS has a practical and effective safety management system which is used to direct and assist staff in working safely in accordance with our high standards.

The cooperation of all employees is essential in achieving a high level of accident prevention and, by engaging input from staff at all levels, we continually improve our procedures. We empower our staff to continually spread the safety message by ensuring they themselves work safely in accordance with the Group's safety procedures and all legislative requirements.

GCS businesses that have been certified thus far to AS/ NZS 4801:2001 Occupational Health & Safety Management Systems are, Global Construction Services Limited, GCS Rapid Access Pty Ltd and GCS Industrial Services Pty Ltd.

ENVIRONMENT

GCS has developed its environmental policy to ensure environmental issues and risks are central to our strategic planning process. GCS fosters a strong environmental ethic amongst its workforce and looks to highlight valuable, sustainable initiatives within the industry.

As a company, we strive to minimise any harmful effects on the environment, meet legal environmental requirements, and achieve continual improvement of our environmental performance. We believe it is everybody's responsibility to look after the environment in which we work and to continually improve on procedures to ensure minimal environmental impact.

GCS Rapid Access Pty Ltd has achieved FSC Chain of Custody Certification to distribute green star rated plywood and laminated veneer lumber (LVL) which is harvested from forests that meet stringent environmental, social and economic standards. This has enabled GCS to be a retailer of specific eco-friendly products, allowing further expansion of its market within Australia. GCS continues to review innovative ways to improve industry accepted environmental management standards.

Focus. Efficiency. Reputation.

Community

GCS is committed to supporting the regions in which it operates today, tomorrow, and in the future. The Group is dedicated to working honourably, consistently, and responsibly within our community's social framework and we endeavour to share our success.

GCS is a major contributor to community activities through direct contributions and in addition to the general social and economic benefits flowing from our activities. The company provides support by the way of donations and sponsorships through both the corporate office and the businesses we own.

Our goal is to be a responsible corporate entity with a true social conscience and cultivate strong relationships with our employees, our clients and the community at large. Our approach is based on a premise that individual development enhances community capacity. In short, empowering people to achieve what they believe they cannot.

Youth Focus and Hawaiian Ride For Youth

The Hawaiian Ride for Youth is one of Australia's premier charity events. Held annually over 5 days in March, the riders travel from Albany to Perth covering over 700kms to raise money for Youth Focus. Whilst cycling through the towns of Walpole, Pemberton, Busselton, Bunbury, Frankland River, Bridgetown, Collie and Mandurah, the riders visit high schools to engage the students in the issues of youth suicide, depression and self harm and highlight the services that Youth Focus provide.

Since 2009, GCS has sponsored a team for the annual event, and has seen the ride grow into Youth Focus' main fundraising event. In 2011, GCS agreed to a new 3 year sponsorship deal for the event showing its commitment to Ride for Youth as they strived to reach their 2012 fundraising target $1.25 million.

A record number of 93 riders took part in the 2012 event with all participating in a strenuous six month training program. Over $2 million was raised adding to a total of nearly $7 million since the events inception in 2003.

WA Motor Industry Foundation – Wheels For Hope

The Motor Industry Foundation is a Public Benevolent Institution and registered Charity. They rely on the support from individuals, associations and business like GCS, who want to help people in the Western Australian community who may have nowhere else to turn.

Their fundraising is primarily through, sponsorship, donations, annual businesses contributions, auctions, cause marketing, foundation membership and special events. Although mainly supported by the automotive industry in WA, attendance at events and membership to the Foundation is open to all members of the public.

GCS is proud to sponsor 'Wheels for Hope' as part of our commitment to support families in need. In 2012, GCS presented five families with new vehicles as part of our sponsorship. The custom fitted vehicles gave mobility that otherwise would not have been available to the disabled recipients and their families.

Movies By Burswood

Movies by Burswood is Perth's family-friendly outdoor cinema raising funds for children's charities in WA. Their goal is simple; assist charities that seek to improve the quality of life of children in a health or physical ability crisis. For over nine years, Movies by Burswood (Inc) has supported a wide range of children's charities who work with Movies by Burswood (itself a registered charity under the WA Charitable Collections Act) to present the event.

To date Movies by Burswood has raised over $3,000,000 directly for its Charity Partners and has assisted many other charities in their fund raising activities. Over 400 volunteers annually contribute their time and energy to make Movies by Burswood Perth's most affordable, enjoyable and family-friendly outdoor cinema.

Over the years, Movies by Burswood have assisted; Ronald McDonald House Charities; Starlight Children's Foundation; Camp Quality; Noah's Ark; Youth Focus WA; Speakeasy WA; St George Foundation, Youthcare; and Princess Margaret Hospital amongst others.

For the second year running GCS is proud to support this event and contribute as a Principle partner of Movies by Burswood.

Autism West – UDIA National Congress 2012 and iinet Team Sprint Cup

GCS became a corporate sponsor to the 2012 UDIA National Congress in Perth supporting the TOBY Playpad application and Autism West. This year also saw GCS competed in the 2012 iiNet Team Sprint Cup to raise money for Autism West.

Autism West Support Inc is a registered Charity formed by parents and friends of children diagnosed with Autism Spectrum Disorder (ASD). They aim to increase the awareness of the challenges faced every day by families with children who are on the Autism Spectrum.

The TOBY Playpad is an iPad based application that flexibly delivers Autism therapy based lessons using a rich array of personalised, user-generated content. Because TOBY monitors a child's interactions at an unprecedented level, it is able to adapt lesson delivery to a child's performance using underlying semantic network technology. The TOPY Playpad enriches the parents knowledge of their child's leaning, empowering and educating them throughout the lesson.

Fiona Stanley Hospital Paediatric Playground

As a major subcontractor associated with the construction of the Fiona Stanley Hospital project, Brookfield Multiplex invited GCS to join them in donating towards the cost of constructing a world class paediatric playground.

Adjacent to the paediatric ward, the playground will be built on the podium roof level of the main hospital building. When the hospital opens in 2014, children and patients will have access to a brand new, all weather paediatric playground designed to maximise education and fun.

GCS is proud to be a Platinum Level sponsor.

Celebrate WA

GCS's partnership with Celebrate WA is now in its seventh year. Celebrate WA's objective is to create a positive social environment in which all Western Australians can achieve their potential and aspirations with security. This year heralded the first ever WA Day and the Celebrate WA festivities culminating in the June long weekend in honour of the day. Highlights of the planned festivities included the Western Australian of the Year Awards and 2012 Oz Concert.

GCS is a Celebrate WA Corporate Partner and proud to support this event.

Supporting Local and Regional Events

GCS is also involved in providing funding for local events that encourage a healthy lifestyle. This year GCS has sponsored; the UCI World Cycling Tour Road Race; Bunbury Forum Force FC; Geraldton Buccaneers; Joondalup Giants Rugby League Club; West Coast Cowan AFC; Variety; Dreamfit Foundation; and the World Match Racing Tour with Black Swan Racing.

GCS is a major contributor to community activities and provides funding for local events and sports that encourage a healthy lifestyle.

Support. Sponsorship. Benefit.

Safety is the primary focus of everything we do – it's part of our culture and embraced at all levels of our business. In order to achieve a practical balance between productivity and safety, we use an Integrated Management System that specifies operations, outlines processes, and provides quality control for GCS. Our aim is to ensure the absolute safety of our staff, clients, subcontractors and any other contractors working on site. At all times, we strive to operate consistently and compliantly, manage risk effectively, be proactive rather than reactive, and set and exceed industry standards.

SAFETY.

Notes to the Consolidated Financial Statements (CONTINUED) Corporate Governance Statement

Global Construction Services Limited (GCS) places great importance in achieving high standards of corporate governance. The Board is committed to continuously assessing its governance framework and practices, as it believes good corporate governance is correlated to performance and serves the best interests of shareholders and stakeholders.

GCS's corporate governance statement has been prepared in accordance with the ASX Corporate Governance Principles and Recommendations with 2010 Amendments 2nd Edition.

A description of the group's main corporate governance practices and its "if not, why not" report on compliance with the guidelines is set out below. Where the Company's practices depart from a recommendation, the Board has disclosed along with reasons for adoption of its own practices.

	ASX Principles and Recommendations 1	If not, why not 2
Recommendation 1.1	P
Recommendation 1.2	P
Recommendation 1.3	P
Recommendation 2.1		O
Recommendation 2.2	P
Recommendation 2.3	P
Recommendation 2.4	P
Recommendation 2.5	P
Recommendation 2.6	P
Recommendation 3.1	P
Recommendation 3.2		O
Recommendation 3.3		O
Recommendation 3.4	P
Recommendation 3.5		O
Recommendation 4.1	P
Recommendation 4.2		O
Recommendation 4.3	P
Recommendation 4.4	P
Recommendation 5.1	P
Recommendation 5.2	P
Recommendation 6.1	P
Recommendation 6.2	P
Recommendation 7.1	P
Recommendation 7.2	P
Recommendation 7.3	P
Recommendation 7.4	P
Recommendation 8.1	P
Recommendation 8.2	P
Recommendation 8.3	P
Recommendation 8.4	P

1 Indicates where the Company has followed the Principles and Recommendations.

2 Indicates where the Company has provided an "if not, why not" disclosure

PRINCIPLE 1: Lay solid foundations for management and oversight

GCS has a Corporate Governance Statement section on its website www.gcs-group.com.au containing the key GCS corporate governance documents which establish the roles and functions reserved for the board and the roles and functions delegated to the Group Managing Director and Executives and the relationship between the board and the Group Managing Director and Executives.

The Board's primary responsibility is to safeguard and enhance the interests of shareholders and stakeholders by overseeing the Company's business activities and management.

The Group Managing Director is responsible and charged with running the affairs of the Company and executing the strategy set by the Board.

The Remuneration Committee assesses and evaluates the performance of the Board as a collective, the Group Managing Director, individual Directors and key Executives annually. Performance measures are established by the Board and outcomes of the review are reported to the Board. All senior Executives are subject to an annual performance evaluation which is undertaken by their direct relevant manager.

An evaluation of the individual performance of the Group Managing Director, individual Directors and senior Executives was conducted during the reporting period.

PRINCIPLE 2: Structure the board to add value

The GCS Board comprises five Directors. The Board does not have a majority of independent Directors where an independent Director is a Non-Executive Director who meets the criteria for independence included in the ASX Best Practice Recommendations.

The Board believes that given the size of the Company and the unique and significant industry experience the Directors bring to the Board, it is not practical to have a majority of independent Directors. Mr Peter Wade was appointed a Non-Executive Director and elected Chair of GCS on 17 November, 2011. Mr Wade fulfils the Governance Council's independence criteria and the addition of Mr Wade as an independent Chair has enhanced the GCS board structure and benefits all shareholders and stakeholders.

The role of Chair and Group Managing Director is exercised by separate individuals in compliance with Recommendation 2.3 of The ASX Corporate Governance Principles and Recommendations.

The GCS Group Board has established a Nomination Committee to consider, assess and establish guidelines on items including but not limited to; Director nomination and election, Director succession, Board composition, Board renewal and Board competencies. The Committee meets on an as required basis. As a consequence of the size of the company, all Directors are members of the Nomination Committee which is chaired by an independent Non-Executive Chair.

The Board believes that given the size of the Company and its Board, it is not practical to have a majority of independent Directors managing the Nomination Committee therefore all Directors have an active role in the Nomination Committee.

The Nomination Committee Charter is available on the Company's website in the Investor Relations Centre section.

An evaluation of the performance of the Board and its Directors is undertaken each year. The Chairman of the Board leads this process. The evaluation of the performance of the Board's various committees is undertaken on an exception basis. The Chair of the Board is also the leader of the evaluation.

A biography profiling each Director's skills, experience, expertise and term of office is set out in the Directors Report.

PRINCIPLE 3:

Promote ethical and responsible decision making

The GCS Group has adopted a Code of Conduct which prescribes guidelines and policies aimed at maintaining high ethical standards and corporate behaviour of honesty, safety, integrity and equity in the workplace.

GCS encourages the reporting of instances which may involve a breach of the Code of Conduct.

The Company has established a share trading policy imposing basic trading restrictions on all employees of the Company with "inside information" and additional trading restrictions on the Directors of the Company. Further, Directors, Officers and Employees involved in the preparation and release of financial statements may not trade in the company's shares for the period commencing the four weeks prior to the announcement of the results.

GCS Group is committed to creating a diverse workplace which reflects the breadth of talent available in the communities it operates in. GCS believes a range of employees encompassing diversity of gender, age, ethnicity and cultural background enables greater innovation by drawing on diverse backgrounds, experience and skills. Improving the level of diversity and female participation and promotion in GCS remains an objective of the Board.

The current GCS workforce composition is shown in the following table.

Number of women	Number	Percentage
1. Employed in the whole organisation	56	8%
2. In senior Executive positions	2	0.3%
3. On the Board	NIL	NIL

GCS Group operates in a traditionally male dominated industry of construction and related services and is therefore predictably underrepresented by women in its workforce.

During the period the company has undertaken a process of Board and Executive renewal and has yet not developed measureable diversity objectives.

Notes to the Consolidated Financial Statements Corporate Governance Statement (CONTINUED) (CONTINUED)

PRINCIPLE 3: (CONTINUED)

Promote ethical and responsible decision making

In May 2012, Ms Sandra Thorp joined GCS as Group Human Resources Manager which represents important progress in GCS increasing the representation of women in its senior Executive ranks. Ms Thorp will be working with the Board in establishing policies and objectives in gender diversity for the forthcoming period.

PRINCIPLE 4: Safeguard integrity in financial reporting

GCS has an Audit and Risk Management Committee to support the oversight responsibilities of the Board in relation to the Company's financial reporting, internal control structure, risk management procedures and the internal and external audit function.

The composition of the Board and size of the Company does not lend to the practicality of a majority of independent Directors managing the Audit and Risk Management Committee. All Directors and the Company Secretary are members of the Audit and Risk Management Committee, and the Committees charter is available on the Company's website.

The details, qualifications and experience of each committee member and the attendance of committee members at Audit and Risk Management Committee meetings is contained in the Directors' Report.

The Audit and Risk Management Committee meets at least twice per annum.

PRINCIPLE 5: Make timely and balanced disclosures

The Company has established written policies to ensure compliance with the continuous disclosure regime of the Corporations Law and the Listing Rules of the Australian Stock Exchange Limited.

The disclosure obligations include:

All Directors, Officers and Employees must comply with the ASX Listing Rules and Corporations Law provisions relating to a timely disclosure of price sensitive information to the ASX. The Company does this by releasing written announcements to the ASX.

The Board has ultimate authority and responsibility for disclosures made to the market. This responsibility is delegated to the Group Managing Director and Company Secretary. Board approval is a prerequisite of significant matters requiring disclosure.

The Company's Shareholder Communications Policy is available on the Company's website.

PRINCIPLE 6: Companies should respect the rights of shareholders and facilitate the effective exercise of those rights.

GCS's Shareholder Communication's policy has been designed to facilitate the means of effective communications with shareholders. The policy is available in the Corporate Governance section of the Company's website.

GCS encourages shareholder attendance and participation at member meetings as it represents an opportunity to meet, question and discuss issues with the Board and senior Executives. The Board and external Auditors attend all of the Company's Annual General Meetings and are available for shareholders to ask questions of.

The GCS Group website is central source of information for shareholders; the Company's Shareholder Communications Policy is available on the website in the Investor Centre section.

PRINCIPLE 7: Recognise and manage risk

GCS is committed to the identification, monitoring and management of risks associated with its business activities as a key part of its governance activities. GCS has implemented a number of controls in its risk management and reporting systems. The daily operational management of risk is delegated to management under the direction of the Group Managing Director. The Board monitors and receives reports on areas of various risks and considers strategies for appropriate risk management arrangements.

There is a separate Audit and Risk Management committee to monitor the integrity of financial reporting.

The Committee meets at least twice per year. The categories of risk identified and reported include; operational, health and safety, contracting, environmental, statutory and compliance risks, products, reputation, credit and financial, business security and interruption.

The Board requires the Group Managing Director and the Chief Financial Officer to provide a declaration to the board in accordance with Section 295A of the Corporations Act 2001, assuring the Board that a sound system of risk management and internal control is operating effectively in respects related to financial reporting risks.

Information on the Company's charter of the Audit and Risk Committee is available on the Company's website in the Investor Relations Centre section.

PRINCIPLE 8: Remunerate fairly and responsibly

The GCS Group Board has established a Remuneration Committee to deal with remuneration related issues including Remuneration policy, Director and Executive engagement, Non-Executive Director fees and the development of short and long term incentives.

The full Board carries out the function of the Remuneration Committee and it deals with remuneration-related issues on an as-required basis during the year.

The structure of Non-Executive Directors' remuneration is clearly distinguished from that of Executive Directors' and senior Executives' and is within the cap approved by shareholders. This contrast in structure is underpinned by the Company's Remuneration Philosophy and Remuneration Structure.

The Remuneration Committee Charter is available on the Company's website in the Investor Relations Centre section.

We measure our performance by our ability to go beyond our clients' expectations. With our multi-disciplinary capabilities, we're able to provide comprehensive, customised solutions to cover various project needs and applications. We have a diverse range of complementary products and services, and if we don't have a particular resource available, we'll readily source it or provide alternatives. We're flexible in our approach, quick to respond, and we hold ourselves to the highest standard.

PERFORMANCE.

Directors' Report

Your Directors present their report on the consolidated entity (referred to hereafter as the Group, GCS Group or GCS) consisting of Global Construction Services Limited (the Company) and the entities it controlled at the end of, or during the year ended 30 June 2012.

Directors and Officers

The following persons were Directors of Global Construction Services Limited during the whole of the financial year and up to the date of this report.

Peter Wade	Appointed 17 November 2011	Non-Executive Chairman
Enzo Gullotti		Group Managing Director
Sam Mangione		Non-Executive Director
George Chiari		Executive Director
Michael Sertorio 1	Appointed 5 July 2011	Non-Executive Director
Vince Gerasolo		Company Secretary

1 Appointed Non-Executive Director 6 August, 2012.

Directors Experience, qualifications and responsibilities

Mr Peter Wade, holds a Bachelor of Engineering (Hons) and has over forty years experience in engineering, construction, project management, mining and infrastructure services. He started his career with the NSW Public Service managing the construction, building and operation of significant infrastructure projects such as the Port Kembla coal loader and grain terminals in Newcastle and Wollongong. Mr Wade was also a Deputy Director for the Darling Harbour Redevelopment construction project. Subsequently, as an Executive of the Transfield Group, Mr Wade was responsible for a number of significant construction, building and operation projects including; the Melbourne City Link, the Airport Link, the Northside Storage Tunnel and the Collinsville and Smithfield Power Plants.

Mr Wade has been Managing Director of Crushing Services Pty Ltd and PIHA Pty Ltd since 1999 and Minerals International Pty Ltd since 2002 (now all wholly owned subsidiaries of Mineral Resources Limited). In 2006 with the formation and listing of Mineral Resources Limited, Mr Wade was appointed as Managing Director and has overseen a sustained period of successful development and growth. In 2008, Mr Wade was appointed the Executive Chairman of Mineral Resources Limited.

Special Responsibilities	Chair of the Board
	Chair of the Audit and Risk Management Committee
	Chair on the Nomination and Remuneration Committee
Current and Former Directorships	Executive Chairman and Managing Director of Mineral Resources Limited

Mr Enzo Gullotti established GCS Group in 2003 having had fifteen years of experience in the scaffolding and construction industry. Mr Gullotti was a founding member of the PCH Group (now CAPE) where he was an Executive Director for approximately eight years and the Managing Director of the scaffolding subsidiary. Mr Gullotti was instrumental in growing PCH, including the establishment of operations in Karratha, Sydney, Darwin, Bunbury, Singapore, Thailand, Dubai and the Caspian Sea. Mr Gullotti has grown the business significantly since its formation, including leading the successful integration of several key acquisitions and expanding the Group's footprint throughout Australia.

Special Responsibilities Member of the Audit and Risk Management Committee Member of the Nomination and Remuneration Committee Current and Former Directorships Mr Gullotti has held no other public directorships in the last three years

34 GLOBAL CONSTRUCTION SERVICES LIMITED ANNUAL REPORT 2012

Directors Experience, qualifications and responsibilities

George Chiari Executive Director

Mr Sam Mangione holds a Bachelor of Business degree and has been associated with the GCS Group since July 2005. Mr Mangione has over twenty three years of experience in the construction, mining and hire industries.

Mr Mangione is co-owner of the largest privately held waste management company in Western Australia and also of a leading manufacturer of temporary site accommodation. Mr Mangione has developed state of the art processes in the recovery and recycling of waste product via purpose designed waste transfer stations.

Special Responsibilities	Member of the Audit and Risk Management Committee
	Member of the Nomination and Remuneration Committee
Current and Former Directorships	Mr Mangione has held no other public directorships in the last three years

Mr George Chiari is a recognised industry leader in the field of commercial formwork and concrete with over forty years of experience at CASC Constructions. His skills and knowledge are invaluable as GCS builds on the success of recent times and seeks to capitalise on the significant opportunities in Western Australia. Mr Chiari is also a large shareholder in GCS.

Special Responsibilities	Member of the Audit and Risk Management Committee
	Member of the Nomination and Remuneration Committee
Current and Former Directorships	Mr Chiari has held no other public directorships in the last three years

Mr Michael Sertorio has over twenty years of experience in senior management and Board positions spanning financial services, manufacturing, professional services and wholesale trade in Australia and Asia with organizations including Chase Manhattan Bank Australia, Standard Chartered Bank Australia and ICI Australia.

From 2001 to 2007 Mr Sertorio was owner and Managing Director of Mercer Mooney, now part of the Moraitis Group, a BRW Top 500 company; in which he remains a Non-Executive Director and shareholder.

Mr Sertorio was a Director and shareholder of labour hire company Global Industrial Services (Aust) Pty Ltd. Upon its acquisition by GCS in June 201l, Mr Sertorio joined the GCS Board as an Executive Director. Mr Sertorio continues to serve on the GCS Board as a Non-Executive Director from 6 August 2012.Mr Sertorio is a Fellow of the Australian Institute of Company Directors and holds a Bachelor degree in Industrial Relations and Politics. Mr Sertorio was appointed to the Board of GCS Group on 5 July 2011.

Special Responsibilities	Member of the Audit and Risk Management Committee
	Member of the Nomination and Remuneration Committee
Current and Former Directorships	Mr Sertorio has held no other public directorships in the last three years

Mr Vince Gerasolo is a qualified Certified Practising Accountant and qualified Chartered Secretary. He holds a Bachelor of Business degree and a Graduate Diploma in Corporate Governance. Mr Gerasolo has over fifteen years of experience in senior financial and commercial management roles in leading blue chip organisations with postings across Australia. Mr Gerasolo brings a diverse financial background of effective financial performance, control and governance and has worked in a variety of industries including construction services, steel manufacturing, asset finance and leasing, wholesale fast moving consumer goods and branded leisure product licensing and wholesaling in international markets. Mr Gerasolo has been the Company Secretary of the GCS Group since March 2011.

Special Responsibilities Member of the Audit and Risk Management Committee

Directors' Report (CONTINUED)

Meetings of Directors

The number of meetings of GCS's Board of Directors and each Board Committee held during the year ended 30 June 2012 and the number of meetings attended by each Director was:

		Full meetings of Directors		Audit and Risk		Nomination and Remuneration
	Eligible	Attended	Eligible	Attended	Eligible	Attended
Peter Wade 1	7	7	1	1	2	2
Enzo Gullotti	10	10	2	2	2	2
Sam Mangione	10	8	2	1	2	2
George Chiari	10	9	2	2	2	2
Michael Sertorio 2	10	8	2	1	2	2

Meetings of committees

1 Appointed 17 November 2011

2 Appointed 5 July 2011

Committee Membership

As at the date of this report the Company has established an Audit and Risk Committee and a Nomination and Remuneration Committee.

The Board has also established a Due Diligence Committee which is conducted on an as required basis, no Due Diligence Committee meetings were held in the year ended 30 June 2012.

The Board believes that given the size of the Group and the composition of its Board, all Directors will have an active role in the Audit and Risk Management Committee and the Nomination and Remuneration Committee.

Interests in Shares and Options

The Directors of the Company hold the following interests in the issued and unissued share capital of the Company as at 28 September 2011.

Director	Options	Ordinary shares
Peter Wade	Nil	62,500
Enzo Gullotti	Nil	8,034,350
Sam Mangione	Nil	4,797,062
George Chiari 1	Nil	4,655,362
Michael Sertorio 2	Nil	8,078,788

1 CASC Services Pty Ltd held 6,282,622 shares (2011 – 6,282,622) which are held in the Chiari Used Unit Trust in which G. Chiari has an interest.

2 Michael Sertorio's interests in 3,939,393 (no. of shares) shares of the company are subject to a voluntary escrow, the terms of the escrow were released to the market on 26 June 2011.

Principal Activities

The principal continuing activities of the Group consisted of a range of products and services to a diverse set of customers in the commercial, residential, resources, industrial, energy and oil and gas sectors of the construction and maintenance industries. These activities include the provision of equipment and on site specialised labour services including the hire and sales of scaffolding, formwork, concrete installation, material hoists, temporary site accommodation, general plant hire, temporary fencing and related engineering and design services.

Significant Changes in state of affairs

On 3 June 2011 the Group acquired 100% of the issued shares in Global Industrial Services (Aust) Pty Ltd (GIS), a provider of specialised, skilled and general temporary labour hire. The nature and scale of the activities of the group occurred to the extent of obtaining a full year contribution of GIS revenue and earnings for the year.

Effective 1 July 2011 GCS Group acquired a strategic 50% interest in SmartScaff Pty Ltd for $3.5m in cash. SmartScaff Pty Ltd is an East Coast scaffolding company, with operations in Sydney, Melbourne and Brisbane. The investment delivers the Company an immediate platform to expand and diversify the GCS geographical base under an experienced management team.

In the 2012 financial year the GCS Group undertook a significant asset and infrastructure investment program to expand its operations predominantly in the Northwest of Western Australia. The Group acquired approximately $60m in additional plant and equipment, the majority part consisting of rental plant and equipment for the plant hire division and temporary site accommodation for the portables division. The capital expenditure program was principally funded by debt, with the GCS Group's net debt increasing from $55.4m to $92.2m (2011: $36.8m). New "GCS Hire" general plant hire branches were opened during the year in Geraldton and Port Hedland. The Group added to its operating site portfolio with the purchases of premises in Karratha, Port Hedland and Newman. The GCS Hire business diversified its suite of products to offer vehicles to customers in the Resource & Industrial services division under the brand "GCS Fleet Rental."

The Company issued 269,984 shares at $1.35 cents per share on 26 September 2011 under its Dividend Reinvestment Plan (DRP) for the FY11 final dividend and 164,113 shares at $1.31 on 2 April 2012 for its interim FY12 dividend.

The company issued 335,000 shares at a weighted average price of $1.18 cents per share to employees, exercised under the Global Construction Services Limited, Employee Option Plan during the year ended 30 June 2012.

Results

Global Construction Services Limited has delivered profit after tax of $22.8 million (2011: $19.4 million) on group revenue for the year of $212.2 million (2011: $145.2 million).

Group EBITDA for the year was $50.4 million (2011: $38.0 million). EBIT was $37.3 million (2011: $30.0 million). Earnings per Share of 19.7 cents (2011: 20.8 cents).

The GCS Group Board is satisfied to deliver a ppositive profit result, particularly as the group has faced delays on various projects, increased competition and challenging trading conditions in some sectors.

Corporate Activity

Strategic Growth

i. Investments

On the 26 August 2011 GCS acquired a 50% interest in SmartScaff Pty Ltd (SmartScaff) for a consideration of $3.5m cash. SmartScaff is a Melbourne based scaffolding company operations in Sydney and Brisbane. The consideration was funded from operating cash. GCS has two Directors on the SmartScaff board.

SmartScaff provides a platform for GCS Group to expand its operations into the East Coast under an experienced management team.

ii. Organic Growth

GCS Group continued to expand its plant hire division "GCS Hire" in 2012 with new branches opening in Geraldton in Western Australia's Midwest region and in Port Hedland in Western Australia's Pilbara region. The current branch in Newman will be expanded with the purchase of an additional operating site.

The Group's Transportable Site Accommodation division "GCS Budget Portables" also expanded its operations in Karratha with an additional operating site to service the growing demand for its products in the Northwest.

GCS Group continued to significantly invest to expand its fleet of products and services particularly, Plant Hire and Transportable Site Accommodation. Approximately $60 million (2010: $35 million) was invested in capital assets across the GCS Group in the 2012 financial year.

iii. Board and Executive Team

On 17 November 2011 Mr Peter Wade joined the GCS Group Board as Non-Executive Chairman. Mr Wade is the current Executive Chairman and Managing Director of Mineral Resources Limited. Mr Wade brings a wealth of experience in engineering, construction, project management and mining and infrastructure services gathered over an accomplished forty year career.

On 5 July 2011, Mr Michael Sertorio joined the GCS Group Board as an Executive Director. Mr Sertorio was an original vendor of specialised labour hire company Global Industrial Services (Aust) Pty Ltd, acquired by GCS on 3 June 2011. Mr Sertorio has subsequent to the end of the financial year become a Non-Executive Director of GCS Group.

Mr Raul Used was appointed a Divisional Managing Director of GCS on 18 July 2011. Mr Used overseas the day to running of several of the group's key divisions.

Directors' Report (CONTINUED)

Corporate Activity (CONTINUED)

Strategic Growth (continued)

iii. Board and Executive Team (continued)

Mr Carlo Genovesi joined GCS Group as Chief Financial Officer in November 2011 and Mrs Susan Cameron also joined the GCS Group finance team as Group Financial Controller in March 2012.

Review of Operations

GCS Group's business divisions performed satisfactorily and relative to the market conditions each division operates in FY12.

Commercial Division

The Commercial division's progress is on target on the QEII Hospital Car Park contract for Probuild. The Commercial division has tendered $200 million of work as part of the significant pipeline of infrastructure and commercial projects in the Perth CBD which are to be awarded imminently.

Residential Division

The Residential division continues to operate in a depressed market. Trading conditions are tough and significant margin pressure is expected to continue in this sector for the 2013 year.

Resources & Industrial Division

The Resource & Industrial division continues to be the fastest growing division of the Group. New Plant Hire branches were opened in Geraldton and Port Hedland and expanded sites in Newman have increased the geographic reach of GCS into the high demand sectors of the Western Australian economy. The GCS Northwest division was also rebranded to "GCS Industrial Services" which offers an expanded product range and deploys skilled labour into projects throughout the North-west.

Matters subsequent to the end of financial year

GCS Group Managing Director Mr Enzo Gullotti and GCS Group Executive Director Mr George Chiari extended their tenure with GCS Group for a further three years to 30 June 2015 on the same terms as their current contacts.

On 6 August 2012 Mr Michael Sertorio, Executive Director of GCS Group became a Non-Executive Director of the Company.

On 7 September 2012 GCS Group announced to undertake a capital raising of approximately $32.2m for new GCS Group ordinary shares at an offer price of $0.60 per new share. The raising was undertaken to reduce net debt by approximately $20m and provide additional working capital.

The raising components were:

• • Approximately $10.4m placement to institutional and sophisticated investors;
• • 5-for-16 Accelerated Non-Renounceable Entitlement Issue to institutional and sophisticated investors of approximately $16.9 million, together with an institutional shortfall bookbuild; and
• • 5-for-16 Non-Renounceable Entitlement Issue to retail shareholders to raise approximately $4.9 million.

Bell Potter Securities Limited has been appointed Lead Manager of the Offer and will underwrite the Retail Entitlement Offer subject to the successful completion of the Institutional Placement and Entitlement Offer and market standard termination events. Argonaut Securities has been appointed Co Manager to the Institutional component of the Offer.

The institutional component was strongly subscribed and was completed on 10 September 2012. The Company issued a total of 45,401,507 new ordinary shares from the Accelerated components.

The Retail component of the offer is scheduled to be competed on 10 October 2012 with new shares to commence trading on 11 October 2012. 1

GCS has been awarded the first major scaffold supply contract on the $43 billion Gorgon Project. Under the terms, GCS will sell an initial 6,000 tonne of equipment to the CBI Kentz Joint Venture (CKJV).

Likely developments and expected results in operations

Further information on likely developments in the operations of the group have not been included in this annual financial report as the Directors believe it would be likely to result in unreasonable prejudice to the group.

Corporate Governance

The Board continues to review its corporate governance policies and procedures to ensure they are appropriate for the Group at this time, that it fulfils its obligations and continues to meet the expectations of stakeholders.

The ASX Corporate Governance Council's publication Corporate Governance Principles and Recommendations 2nd Edition has been updated to incorporate a number of amendments. The changes in the reporting requirements for each of the amendments to the Principles and Recommendations apply to the financial year commencing 1 July 2011 and will be disclosed in the annual report published by the end of October 2012.

Dividends

The Directors have determined to not pay a final dividend for FY12. The total dividend paid in the period was 4.25 cents per share.

1 The above date is indicative only and subject to change. It is in accordance with the ASX Circular published on 7 September 2012.

The Company reserves the right, subject to the Corporations Act 2001 (Cth) and the ASX Listing Rules, to amend the indicative timetable set out above or to withdraw the Offer at any time.

2011

Dividends paid or payable to members during the year were as follows: 2012

	$'000	$'000
The Board determined to not pay a final dividend for the year ended 30 June 2012
Interim dividend for the year ended 30 June 2012 of 4.25 cents per share, fully franked paid on 2 April 2012 (Dividend Reinvestment Plan applied)	4,937	-
Final dividend for the year ended 30 June 2011 of 4.50 cents per share, fully franked, declared on 24 August 2011, payable on 26 September 2011(Dividend Reinvestment Plan applied)	-	5,215
Interim dividend for the year ended 30 June 2011 of 3.75 cents per share, fully franked paid on 31 March 2011 (Dividend Reinvestment Plan applied)	-	3,414
Total dividend paid or payable	4,937	8,629

Remuneration Report (Audited)

This remuneration report for the year ended 30 June 2012 outlines the remuneration arrangements of the Group for each Director and other Key Management Personnel in accordance with the requirements of the Corporations Act 2001 and it regulations. For the purpose of this report Key Management Personnel are defined as those persons having authority and responsibility for planning, directing and controlling the main activities of the Company and the Group.

The Directors, Officers and Key Management Personnel disclosed in this report are:

Directors

Peter Wade	Non-Executive Chairman
Enzo Gullotti	Group Managing Director
George Chiari	Executive Director
Sam Mangione	Non-Executive Director
Michael Sertorio	Non-Executive Director

Officers

Vince Gerasolo Company Secretary

Key Management Personnel

Raul Used Divisional Managing Director Graeme Hearn Divisional Managing Director Carlo Genovesi Chief Financial Officer

Remuneration Philosophy

The performance of the company depends upon the quality of its Directors and Executives. To prosper, the Company must attract, motivate and retain highly skilled Directors and Executives. To this end, the Company embodies the following principles in its remuneration framework:

• • Provide competitive rewards to attract high calibre Executives; and
• • Link Executive rewards to shareholder value.

Remuneration Committee

The Remuneration committee of the Board of Directors of the Company is responsible for determining and reviewing compensation arrangements for Directors and the Executive team.

The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and all Executives on a periodic basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum stakeholder benefit from the retention of a highly qualified Board and Executive team.

Remuneration Structure

In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive remuneration is separate and distinct.

The Remuneration Committee policy is to remunerate Executives at market rates for comparable companies for time, commitment and responsibilities but which also take into consideration the financial state of the company.

The Remuneration Committee determines payments to the Executives and reviews their remuneration.

As at 30 June 2012 the Group had not formalised its short term or long term incentive policy however its link to performance for Key Management Personnel remains tied to the discretionary bonus considered once the Group's results for the year have been assessed.

For the year ended 30 June 2012, the bonuses payable to the Executive Directors and Key Management Personnel were linked to the performance of GCS Group on its major projects The assessment of the bonus is tied to the performance and practical completion of major projects and is related to the carry-over of contracts commenced in FY11 and completed in FY12. The remuneration committee is responsible for determining and assessing whether bonus amounts are paid. The committee also has the discretion to adjust short-term incentives downwards in light of unexpected or unintended circumstances.

Directors' Report (CONTINUED)

The table below sets out summary information about the Company's consolidated earnings and share price movements for the five years to 30 June 2012.

Yearended 30 June	2012$'000	2011$'000	2010$'000	2009$'000	2008$'000
Revenue	212,244	146,477	91,576	85,609	69,059
Net profit after tax	22,843	19,424	11,429	10,846	9,089
Dividends paid	10,152	6,328	4,884	5,071	2,134
	Cents	Cents	Cents	Cents	Cents
Earnings per share	19.7	20.8	13.1	15.2	15.6
Dividends per share determined during the period	4.25	8.25	5.50	6.50	7.25
Share price at start of year	100.52	88.0	60.0	97.0	N/A

Non-Executive Director Remuneration

Objective

The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

Structure

The Constitution provides that the Company may remunerate the Directors. The remuneration shall, subject to any resolution of a general meeting, be fixed by the Directors.

The Constitution provides that Non-Executive Directors may collectively be paid as remuneration for their services a fixed sum not exceeding the aggregate maximum of $300,000 per annum. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst Directors' is reviewed annually. The Board considers the fees of Non-Executive Directors of comparable companies when undertaking the annual review process.

Each of the Directors will be entitled to superannuation contributions in addition to these amounts.

The remuneration of Non-Executive Directors for the year ended 30 June 2012 is detailed in Table 1 of this report.

Use of remuneration consultants

In the year ended 30 June 2012, Global Construction Services Limited did not engage the services of a remuneration consultant in respect of its remuneration matters.

Voting and comments made at the Company's 2011 Annual General Meeting

Global Construction Services Limited received more than 99% of "yes" votes on its remuneration report for the 2011 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.

Managing Director and Executive Remuneration Objective

The Group aims to reward the Group Managing Director and Executives with a level and mix of remuneration commensurate with their position and responsibility within the Company, to reward Executives for company, business unit and individual performance against targets by reference to appropriate benchmarks; link reward with the strategic goals and performance of the company; and ensure total remuneration is competitive by market standards.

Structure

In determining the level and make-up of the remuneration of the Managing Director and Executives, the Remuneration Committee obtains advice detailing market levels of remuneration for comparable roles.

Remuneration comprises fixed remuneration with a variable discretionary bonus determined by the Remuneration Committee based on the performance of the company, the performance of the Executives and the prevailing market conditions.

Relationship of rewards to performance

The Remuneration Committee, in conjunction with the Managing Director, reviews the performance of the Executives at least annually.

There is currently no at risk performance remuneration other than discretionary bonuses.

Service Agreements

Except as disclosed below, all Directors and Executives are employed under contracts of employment with standard commercial terms, such as having no fixed term of expiry, notice periods of between one and three months and termination payments in lieu of notice.

Enzo Gullotti

An employment agreement has been entered into between Enzo Gullotti and Global Construction Services Limited as the Group Managing Director of the Group for a additional term of three years, commencing 1 July 2012. The terms of this agreement are all as per the previous 5 year agreement and include:

• a. Salary payable is $561,505 inclusive of superannuation from 1 July 2012;
• b. Entitlement to thirty days of annual leave per annum;
• c. Provision of a fully maintained vehicle, mobile phone and income protection insurance;
• d. Mr Gullotti must exercise the utmost good faith in the best interests of the Group;
• e. GCS may terminate the agreement at will and upon termination the employee will be entitled to 50 per cent of his salary for the period remaining in the employment agreement;
• f. If the employee terminates the employment he must give at least six months' notice of termination. On resignation the employee will not be entitled to any further payment other than for services provided during the notice period;
• g. The agreement may also be terminated for serious misconduct, in which event the Company is not required to pay compensation;
• h. A one year non-compete and non-solicitation covenant on termination of the agreement, whereby Mr Gullotti will not engage directly or indirectly or through any person in an enterprise, company or firm to carry on a substantially similar activity to that of GCS. The Company may elect to allow him to work as an employee in the restricted area in lieu of paying him during the restraint period and, in these circumstances, the Company will not continue to pay his salary during this restraint period. If 50 per cent or more of the shares are acquired by a party as a result of a takeover or scheme of arrangement, the employment agreement, including the above restrictive covenants shall cease to apply to Mr Gullotti; and
• i. Pay increases are by approval of the Remuneration Committee, however an annual CPI increase with a minimum 5% is guaranteed.

George Chiari

Employment arrangements have been entered into between CASC Constructions Pty Ltd (CASC) and George Chiari.

• a. The term of employment is three years from 1 July 2012;
• b. Salary payable is $454,252 per annum inclusive of superannuation commencing 1 July 2011 plus the use of a mobile phone;
• c. The employee must exercise the utmost good faith in the best interests of the Group and CASC;
• d. CASC may terminate the agreement at will and upon termination the employee will be entitled to 50 per cent of his salary for the period remaining in the employment agreement;
• e. The agreement may also be terminated for serious misconduct, in which event CASC is not required to pay compensation;
• f. George Chiari has provided CASC with a three year restrictive covenant which is effective from 1 July 2012, whereby the employee will not engage directly or indirectly or through any person in an enterprise, company or firm to carry on a substantially similar activity to that of CASC (including formwork and scaffolding). Each employee will not attempt to or entice away clients of CASC or suppliers of CASC or other employees of CASC.
• g. Pay increases for each employee are by approval of the Remuneration Committee, however an annual CPI increase with a minimum 5% is guaranteed.

Graeme Hearn

Employment arrangements have been entered into between Global Industrial Services (Aust) Pty Ltd (GIS) and Graeme Hearn.

The terms of these deeds of employment are substantially the same and include:

• a. The term of employment is five years from 15 April 2011;
• b. Graeme Hearn's salary payable is $454,252 per annum inclusive of superannuation commencing 1 July 2012, plus the use of a mobile phone;
• c. Entitlement to twenty five days of annual leave per annum;
• d. The employee must exercise the utmost good faith in the best interests of the Group and GIS;
• e. GIS may terminate the agreement at will by giving three months written notice and upon termination the employee will be paid their salary to the time of summary termination plus notice;
• f. The agreement may also be terminated for serious misconduct, in which event GIS is not required to pay compensation; and
• g. Graeme Hearn has provided GIS with a five year restrictive covenant on termination of the agreement, whereby the employee will not engage directly or indirectly or through any person in an enterprise, company, firm etc to carry on a substantially similar activity to that of GIS. Each employee will not attempt to or entice away clients of GIS or suppliers of GIS or other employees of GIS. Nothing prevents each employee from working for a salary in restricted areas after the term if GIS does not continue his employment;
• h. Pay increases for each employee are by approval of the Remuneration Committee, however an annual CPI increase minimum is guaranteed.

Directors' Report (CONTINUED)

Details of remuneration

Details of the remuneration of the Directors, Officers and the Key Management Personnel of the Group and specified Executives are set out in the following tables.

Table 1: Directors' and Executives' remuneration of the Company for the year ended 30 June 2012.

		Short-term employee benefits		Post employmentbenefits	Share basedpayments	Other
	Cash salaryand fees	Cash bonus	Non monetarybenefits	Super-annuation	Options	Terminationbenefits	Total	PerformanceBased
2012	$	$	$	$	$	$	$	%
Non-Executive Director
P Wade 1	52,144	-	-	-	-	-	52,144	-
S Mangione	64,313	-	-	5,788	-	-	70,101	-
M Sertorio 2	249,687	-	-	20,103	-	-	269,790	-
Executive Directors
E Gullotti	570,588	150,000	23,196	25,000	-	-	768,784	20%
G Chiari	406,200	100,000	18,104	35,459	-	-	559,763	18%
Key Management Personnel
G Hearn	415,322	100,000	-	34,678	-	-	550,000	18%
R Used 3	407,421	100,000	-	26,447	-	-	533,868	19%
C Genovesi 4	168,578	-	-	15,172	-	-	183,750	-
	2,334,253	450,000	41,300	162,647	-	-	2,988,200	-

1 Appointed 17 November, 2011

2 Mr Sertorio was an Executive Director from 5 July, 2011. Mr Sertorio was appointed a Non-Executive Director 6 August 2012, and continues in office as at the date of this report

3 Appointed 18 July, 2011

4 Appointed 28 November, 2011

Table 2: Directors' and Executives' remuneration of the Company for the year ended 30 June 2011.

		Short-term employee benefits		Post employmentbenefits	Share basedpayments	Other
	Cash salaryand fees	Cash bonus	Non monetarybenefits	Super-annuation	Options	Terminationbenefits	Total	PerformanceBased
2011	$	$	$	$	$	$	$	%
Non-Executive Director
S Mangione	73,500	-	-	6,615	-	-	80,115	-
Executive Directors
E Gullotti	519,568	204,375	58,615	15,199	-	-	797,757	25.6
G Chiari	396,900	150,000	15,894	49,221	-	-	612,015	24.5
D Kiggins 1	269,560	-	4,169	25,000	-	58,197	356,926	-
Company Secretary
V Gerasolo 2	47,250	15,000	-	5,602	-	-	67,852	22.1
Key Management Personnel
P Chiari	396,900	150,000	595	49,221	-	-	596,716	25.1
L Used	396,900	150,000	595	25,346	-	-	572,841	26.1
B Callender	396,900	150,000	595	49,221	-	-	596,716	25.1
J Harriman	376,900	150,000	16,610	23,587	-	-	567,097	26.5
G Hearn 3
	5,613	-	-	27,720	-	-	33,333	-
N Bright 3	33,557	-	-	2,511	-	-	36,068	-
	2,913,548	969,375	97,073	279,243	-	58,197	4,317,436	-

1 Resigned 1 March, 2011

2 Appointed 14 March, 2011

3 Appointed 3 June, 2011

Directors' Report (CONTINUED)

Share-based compensation

No options were granted during the year.

Additional information

Board Policy on dealings in Company securities

The Company's share trading policy imposes basic trading restrictions on all employees of the Company with inside information and additional trading restrictions on the Directors of the Company.

Inside information is information that is not generally available and if it were generally available, it would, or would be likely to influence investors in deciding whether to buy or sell the Company's securities.

Directors and Employees are prohibited from trading in the Company's shares where they possess information which is not generally available and that information, if readily available, may have a material effect on the share price of the Company. Further, Directors, Officers and Employees involved in the preparation and release of financial statements may not trade in the company's shares for the period commencing four weeks prior to the announcement of the results.

This is the end of the audited Remuneration Report.

Shares under option

Unissued ordinary shares of Global Construction Services limited under option at the date of this report are as follows:

Dateoptions granted	Expirydate	Exerciseprice	Balance at theend of the year
12 May 2008	9 May 2013	$1.60	345,000
12 May 2008	9 May 2014	$1.90	345,000
Totals			690,000

Shares issued on exercise of options

The following ordinary shares of Global Construction Services Limited were issued during the year ended 30 June 2012 on the exercise of options under the Global Construction Services Limited Employee Option Plan. No amounts are unpaid on any of the shares.

Dateoptions granted	Exercise price	Number ofshares issued
12 May 2008	$1.30	135,000
28 May 2009	$1.10	200,000
Totals		335,000

Indemnification and Insurance of Directors and Officers

During the financial year, the Group has paid premiums of $72,737 in respect of a contract insuring the Directors and Officers of the Group against legal costs incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or a contravention of sections 182 or 183 of the Corporations Act 2001, as prohibited by section 199B of the Corporations Act 2001.

Environmental Regulation and Performance

The consolidated entity is subject to a range of environmental regulations. During the financial year, all reporting requirements under all relevant legislation were met. There were no incidents which required reporting.

The Group continually aims to improve its environmental performance.

Non Audit Services

The Company has at times engaged the Auditor's services for assignments in addition to their statutory audit duties with the Company/Group.

The Board of Directors have considered the position and are satisfied the provision of non audit services is compatible with the general standard of independence imposed by the Corporations Act 2001 for the following reasons:

• • all non-audit services have been reviewed by the Audit and Risk 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 the Auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

Details of the amounts paid or payable to the Auditor (BDO Audit (WA) Pty Ltd and its related entities) for non-audit services are set out below.

Consolidated	2012$'000	2011$'000
Taxation services	328,770	160,233
	328,770	160,233

Rounding of amounts

The company is of a kind referred to in ASIC Class Order 98/0100 relating to the "rounding off" of amounts in the directors' report. Amounts in the Directors' 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'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 page 48.

This report is made in accordance with a resolution of Directors.

Peter Wade Non-Executive Chairman

28 September 2012

Our clients rely on us to supply products and services on time and to perform as planned in any situation. And we always deliver. Our staff are readily available day and night to give advice, pre-plan, trouble shoot, or mobilise for unplanned operations. As a team, we work together to fulfil our commitments, anticipate challenges and use initiative to develop better solutions. We have a proven track record in service and reliability, and offer our clients local and regional expertise backed by national capabilities.

RELIABILI

RELIABILITY.

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au 38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

28 September 2012

To Board of Directors Global Construction Services Limited 2 Redcliffe Road REDCLIFFE WA 6104

Dear Sirs,

DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF GLOBAL CONSTRUCTION SERVICES LIMITED As lead auditor of Global Construction Services Limited for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

• • the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• • any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Global Construction Services Limited and the entities it controlled during the period.

Phillip Murdoch Director

BDO Audit (WA) Pty Ltd Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

The Directors of the Company declare that:

• 1. The financial statements, comprising the statement of consolidated comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001 and:
  • a. comply with Accounting Standards, the Corporations Regulations 2001; and
  • b. give a true and fair view of the financial position as at 30 June 2012 and of the performance for the year ended on that date of the Group.
• 1. In the Directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
• 1. The remuneration disclosures included in the Directors' Report (as part of the Remuneration Report) for the year ended 30 June 2012, comply with Section 300A of the Corporations Act 2001.
• 1. The Group has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards.
• 1. The Directors' have been given the declarations by the Managing Director and Chief Financial Officer required by Section 295A.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:

Peter Wade Chairman

28 September 2012

Independent Auditor's Report

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au 38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GLOBAL CONSTRUCTION SERVICES LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Global Construction Services Limited, which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year.

Directors' Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Global Construction Services Limited, would be in the same terms if given to the directors as at the time of this auditor's report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

Opinion

In our opinion:

• a. the financial report of Global Construction Services Limited is in accordance with the Corporations Act 2001, including:
  • i. giving a true and fair view of the consolidated entity's financial position as at 30 June 2012 and of its performance for the year ended on that date; and
  • ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and
• b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Emphasis of Matter

Without modifying our opinion, we draw attention to Note 2 in the financial report which states the group commercial bill and property financing facilities are due to expire in May 2013 and consequently have been classified as current liabilities as at 30 June 2012. This condition along with other matters as set forth in Note 2, indicate the existence of a material uncertainty which may cast doubt about the consolidated entity's ability to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Report on the Remuneration Report

We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Global Construction Services Limited for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001.

BDO Audit (WA) Pty Ltd

Phillip Murdoch Director

Perth, Western Australia Dated this 28th day of September 2012

We bring a wealth of industry experience, specialist expertise and integrity to every project we undertake. Our teams are well trained, innovative and technically qualified to be able to tackle any type of assignment. Our management have extensive practical experience and provide essential mentoring and ongoing support to our staff. Over the years, we've developed a deep understanding of our markets and gained valuable insight to deliver effective solutions today, and plan for bigger things in the future.

EXPERIENCE.

Consolidated Statement of Comprehensive Income

	Note	2012$'000	2011$'000
Continuing operations
Revenue from hire of equipment, provision of labour and contracting services		201,555	134,916
Sale of goods		10,689	10,296
	5(a)	212,244	145,212
Raw materials, consumables and services		(37,331)	(58,433)
Personnel expenses		(108,161)	(36,931)
Other expenses		(12,924)	(9,380)
Occupancy		(4,062)	(3,219)
Repairs and maintenance		(580)	(478)
Depreciation expense	5(d)	(11,863)	(8,107)
Amortisation expense	5(d)	(1,251)	(7)
Other income	5(b)	732	1,265
Finance Costs		(5,279)	(3,542)
Share of profit of equity accounted investees (net of tax)	25	505	63
Profit before income tax expense		32,030	26,443
Income tax expense	6	(9,187)	(7,019)
Profit for the year		22,843	19,424
Other comprehensive income for the year, net of income tax		-	-
Total Comprehensive Income for the year		22,843	19,424
Profit and Total Comprehensive Income for the year attributable to
Owners of the Company		22,843	19,424
Earnings per share for profit attributable to owners of the Company
Basic earnings per share	23	19.7 cents	20.8 cents
Diluted earnings per share	23	19.6 cents	20.4 cents

Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position

	Note	2012$'000	2011$'000
ASSETS
Current Assets
Cash and cash equivalents	7	7,158	17,535
Trade and other receivables	8	42,519	30,546
PrepaymentsInventories	9	4,1645,523	2,1594,014
Total Current Assets		59,364	54,254
Non-Current Assets
Other ReceivablesInvestments accounted for using the equity method	1011	5,8374,267	191262
Property, plant and equipment	12	169,272	120,825
Intangible assets	13	60,157	61,386
Deferred tax assets	14	3,980	4,272
Other financial assets	15	72	12
Total Non-Current Assets		243,585	186,948
TOTAL ASSETS		302,949	241,202
LIABILITIES
Current Liabilities
Trade and other payables	16	34,960	23,247
Borrowings	17	53,927	15,726
Deferred Income	18	1,555	10,871
Current tax liabilities		7,613	9,155
Total Current Liabilities		98,055	58,999
Non-Current Liabilities
Borrowings	17	45,450	38,633
Provisions	19	1,017	816
Deferred tax liabilities	20	11,732	9,765
Total Non-Current LiabilitiesTOTAL LIABILITIES		58,199156,254	49,214108,213
NET ASSETS		146,695	132,989
EQUITY
Issued Capital	21	97,355	96,339
Reserves	21	140	140
Retained profits	21	49,200	36,510
TOTAL EQUITY		146,695	132,989

Consolidated Statement of Cash Flows

	Note	2012$'000	2011$'000
Cash flows from operating activitiesReceipts from customersPayments to suppliers and employees		194,533(148,646)	151,388(106,607)
Income taxes paid		(8,287)	(1,143)
Net cash inflow from operating activities	29	37,600	43,638
Cash flows from investing activities
Payments for property, plant and equipment		(25,377)	(4,871)
Proceeds from sale of property, plant and equipmentInterest received		32433	261654
Acquisition of subsidiaries, net of cash acquired	24	30	(15,200)
Acquisition of associateLoans from/(to) related parties		(3,497)(5,646)	--
Net cash outflow from investing activities		(34,025)	(19,156)
Cash flows from financing activities
Proceeds from borrowings		30,260	9,000
Repayment of borrowingsInterest paid		(29,559)(5,461)	(36,657)(3,542)
Proceeds from issue of ordinary shares		396	18,292
Transaction costs from issue of ordinary shares		(14)	(816)
Dividends paid to Group shareholdersNet cash outflow from financing activities		(9,574)(13,952)	(4,851)(18,574)
Net increase/(decrease) in cash and cash equivalentsCash and cash equivalents at the beginning of the year		(10,377)17,535	5,90811,634
Effects of exchange rate changes on cash and cash equivalents held in foreign currencies at the end of the year		-	(7)
Cash and cash equivalents at the end of the year	7	7,158	17,535

Consolidated Statement of Changes in Equity

	Ordinary$'000	Option Reserve$'000	Retained Earnings$'000	Total$'000
for the yearended 30 June 2012
Balance at 1 July 2010	53,943	140	23,414	77,497
Profit for the year	-	-	19,424	19,424
Total comprehensive income for the period	-	-	19,424	19,424
Transactions with owners in their capacities as owners
Issue of ordinary shares, net of transactions costs	40,649	-	-	40,649
Dividends paid	1,477	-	(6,328)	(4,851)
Tax-effect share based transaction expenses	270	-	-	270
Balance at 30 June 2011	96,339	140	36,510	132,989
for the yearended 30 June 2011
Balance at 1 July 2011	96,339	140	36,510	132,989
Profit for the year	-	-	22,843	22,843
Total comprehensive income for the period	-	-	22,843	22,843
Transactions with owners in their capacities as owners
Issue of ordinary shares, net of transactions costs	382	-	-	382
Issue of shares on acquisition of subsidiary	51	-	-	51
Dividends paid	579	-	(10,153)	(9,574)
Tax-effect share based transaction expenses	4	-	-	4
Balance at 30 June 2012	97,355	140	49,200	146,695

QUALITY.

The outcomes of our clients' projects and our own success hinge on the quality of products and services we provide. That's why we source the latest Australian and international equipment known for its performance and safety, invest in ongoing research and development, carry out exhaustive testing and quality control, provide maintenance and engineering support, and comply with all Australian Standards and Codes of Practice. We seek the highest calibre of people with the right mix of qualifications and competency, and we invest in their development through in depth inductions and ongoing training.

Notes to the Consolidated Financial Statements

Note 1: Reporting Entity

Global Construction Services Limited is a company limited by shares incorporated in Australia, whose shares are publicly traded on the Australian Securities Exchange.

These financial statements are general purpose financial statements. It includes separate financial statements for Global Construction Services Limited (the "Company" or "Parent Entity") and its subsidiaries (together referred to as the "consolidated entity" or "Group") and the consolidated entity's interests in jointly controlled entities.

The principal accounting policies adopted in the preparation of the Financial Report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

The Financial Report was authorised for issue in accordance with a resolution of the Directors on 26 September 2012.

Note 2: Statement of Compliance

Basis of preparation

This Financial Report has been prepared in accordance with applicable Australian Accounting Standards, Australian Accounting Interpretations, and other authoritative pronouncements of the Australian Accounting Standards Board (AASB), and the Corporations Act 2001.

The consolidated financial statements also comply with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Basis of measurement

The Financial Report has been prepared on a historical cost basis, except for non-current provisions for employee benefit liabilities and the revaluation of certain non-current assets and financial instruments. Cost is based on the fair value of consideration given in exchange for assets.

Functional and presentation currency

The amounts contained in the Financial Report are presented in Australian dollars; the functional currency of Global Construction Services Limited and each of its subsidiaries and jointly controlled entities.

The Company is of a kind referred to in ASIC class order 98/0100 and in accordance with the class order has elected to round amounts to the nearest thousand dollars ($000) unless otherwise stated.

Going concern

The Financial Report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The consolidated entity recorded a profit after income tax from continuing operations for the year of $22.8m (2011: $19.4m) and had cash assets of $7.2m as at 30 June 2012 (30 June 2011: $17.5m). At 30 June 2012 the consolidated entity is reporting a working capital deficiency of $38.7m (30 June 2011: $4.7m). As previously disclosed in the Company's previous Annual Reports, the Commercial Bill and Property financing facilities are due to expire in May 2013 and consequently have been classified as current liabilities in the current reporting period, resulting in the working capital deficiency. The working capital deficiency may cast uncertainty on the consolidated entity's ability to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business.

On 7 September 2012 GCS Group announced to undertake a capital raising of approximately $32.2m for new GCS Group ordinary shares. The raising was undertaken to reduce net debt by approximately $20m and provide additional working capital. The institutional component was strongly subscribed and was completed on 10 September 2012. The Company issued a total of 45,401,507 new ordinary shares from this accelerated components. The retail component of the offer is fully underwritten by Bell Potter and is scheduled to be completed on 10 October 2012 with new shares to commence trading on 11 October 2012.

The Directors are confident that they will be able to renegotiate and refinance its banking facilities and successfully complete the capital raising being undertaken as required to continue as a going concern. The Groups bankers have committed to enter into negotiations during the second quarter of FY13 to renew the facilities. Accordingly the financial report has been prepared on a going concern basis.

Note 3: Significant Accounting Policies

a. Principles of consolidation

i. Subsidiaries

Subsidiaries are entities controlled by the Company. The consolidated financial statements are prepared by consolidating the financial statements of all the entities that comprise the Group, being Global Construction Services Limited ("Company" or "Parent Entity") and its subsidiaries as defined in AASB 127: Consolidated and Separate Financial Statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. Acquisitions of entities are accounted for using the acquisition method of accounting.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated tatement of comprehensive income and statement of financial position respectively. Total comprehensive income is attributable to the owners of Global Construction Services Limited and non-controlling interests even if this results in the noncontrolling interests having a debit balance.

Transactions eliminated on consolidation

All intra-Group balances and any unrealised gains and losses or income and expenses arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of the consolidated entity's interest in the entity with adjustments made to the "Investment in Associates" and "Share of Associates Net Profit" accounts.

Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Gains and losses are recognised as the contributed assets are consumed or sold by the associate or, if not consumed or sold by the associate, when the consolidated entity's interest in such entity is disposed of.

Changes in ownership interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interest in the subsidiary. Any differences between the amount of the adjustment to non-controlling interests and any consideration paid or received are transferred to retained earnings.

When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is re-measured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership in a jointly controlled entity or an associate is reduced, but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss, where appropriate.

ii. Joint ventures

Joint ventures are those entities whose activities the consolidated entity has joint control in the strategic, financial and operating decisions of the entity.

Interest in a joint venture is accounted for using the equity method of accounting. Under the equity method, the share of the profits or losses of the partnership are recognised in the income statement and the share of movements in the net assets is recognised as a non-current asset in the statement of financial position.

b. Business combinations

The acquisition method of accounting is used to account for all business combinations. Consideration is measured at the fair value of the assets transferred, liabilities incurred and equity interests issued by the Group on acquisition date. Consideration also includes the acquisition date fair values of any contingent consideration arrangements, any pre-existing equity interests in the acquiree and share-based payment awards of the acquiree that are required to be replaced in a business combination. The acquisition date is the date on which the Group obtains control of the acquiree. Where equity instruments are issued as part of the consideration, the value of the equity instruments is their published market price at the acquisition date unless, in rare circumstances it can be demonstrated that the published price at acquisition date is not fair value and that other evidence and valuation methods provide a more reliable measure of fair value.

Identifiable assets acquired and liabilities and contingent liabilities assumed in business combinations are, with limited exceptions, initially measured at their fair values at acquisition date. Goodwill represents the excess of the consideration transferred and the amount of the non-controlling interest in the acquiree over fair

value of the identifiable net assets acquired. If the consideration and non-controlling interest of the acquiree is less than the fair value of the net identifiable assets acquired, the difference is recognised in profit or loss as a bargain purchase price, but only after a reassessment of the identification and measurement of the net assets acquired.

For each business combination, the Group measures non-controlling interests at either fair value or at the non-controlling interest's proportionate share of the acquiree's identifiable net assets.

Acquisition-related costs are expensed when incurred. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Where the Group obtains control of a subsidiary that was previously accounted for as an equity accounted investment in associate or jointly controlled entity, the Group remeasures its previously held equity interest in the acquiree at its acquisition date fair value and the resulting gain or loss is recognised in profit or loss.

c. Revenue recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The following specific recognition criteria must also be met before revenue is recognised:

• • Revenue from hire of equipment is recognised when the service is provided.
• • Revenue from the sale of goods is recognised when the product is delivered to the customer.
• • Interest revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying value amount of the financial asset.
• • Dividends are recognised when the Group's right to receive payment is established.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 3: Significant Accounting Policies (continued)

c. Revenue recognition (continued)

• • Contract revenue and expenses are recognised in accordance with the percentage of completion method unless the outcome of the contract cannot be reliably estimated. For fixed price contracts, the stage of completion is measured by reference to quantity of formwork installed, the concrete poured and costs incurred to date compared to the total construction contracted work. When the outcome of the fixed price construction contract cannot be estimated reliably, revenues are recognised to the extent that costs are recoverable and costs are recognised in the period they are incurred.
• • Where it is probable that a loss will arise from the contract, the excess of total costs over revenue is recognised immediately as an expense in the statement of financial position.

d. Income tax

The income tax expense for the period is the tax payable on the current period'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.

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 on goodwill or 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 recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities, associates and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances relating to amounts recognised directly in equity are also recognised directly in equity.

Deferred tax assets and liabilities are offset where 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 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.

e. Tax consolidation legislation

Global Construction Services Limited and its wholly-owned Australian subsidiaries have implemented the tax consolidation legislation with effect from 1 July 2007.

The parent entity, Global Construction Services Limited and the controlled entities in the tax consolidation group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, Global Construction Services Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from the unused tax losses and unused tax credits assumed from controlled entities within the tax consolidated group.

The allocation of taxes under the tax funding agreement is recognised as an increase/decrease in its subsidiaries' intercompany accounts with the Group parent entity, Global Construction Services Limited.

f. Goods and services tax

Revenues, expenses and assets are recognised net of the amount of GST except where the GST is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable and receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as an operating cash flow.

g. Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts with original maturities of three months or less.

h. Trade and other receivables

Trade receivables are initially recognised at fair value and subsequently carried at amortised cost less an allowance for any uncollectible amounts. Trade receivables are due for settlement no more than 30 days from the date of recognition.

Collectability of trade receivables is made on an ongoing basis an allowance account for impaired trade receivables is made when there is objective evidence that the Group will not be able to collect the amounts owed according to the original terms. When a trade receivable is deemed uncollectible for which an impairment allowance has been recognised it is written off against the allowance account.

The amount of impairment loss is recognised in the statement of comprehensive income within other expenses. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income.

i. Inventories

Inventories are measured at the lower of cost and net realisable value. Cost comprises all direct materials, direct labour and an appropriate portion of variable and fixed overheads. Fixed overheads are allocated on the basis of normal operating capacity. Costs are assigned to inventories using the weighted average costs. Costs of purchased inventories are determined on deducting discounts but not rebates. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated selling cost of completion and selling expenses.

j. Work in progress

Construction work in progress is stated at the aggregate of 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 amount is shown under Other Liabilities as Deferred Income.

Contract costs include all costs that relate directly to the specific contract, costs that are specifically chargeable to the customer under the terms of the contract and an allocation of overheads incurred in connection with the Group's construction activities in general.

k. Investments and other financial assets

The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and reevaluates this designation at each reporting date.

l. Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets except for those with maturities greater than twelve months after the reporting date which are classified as non-current assets.

Loans and receivables are carried at amortised cost using the effective interest rate method.

The Group assesses at each reporting date whether there is objective evidence that a financial asset or Group of financial assets is impaired.

m. Fair value estimation

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

n. Property, plant and equipment

Land is measured at fair values. Buildings are measured at fair value less accumulated depreciation. Any accumulated depreciation at revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated as the revalued amount of the asset.

All other plant and equipment is stated at historical cost, including costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, less depreciation and any impairment. Subsequent costs are included in the assets carrying amount insofar it is probable future economic benefits will flow to the Group and can be measured reliably. Repairs and maintenance are charged to the profit and loss as incurred.

Land is not depreciated. Depreciation on other assets is calculated on a straight-line basis over the estimated useful life of the asset as follows:

•	Buildings	25-50 years
---	-----------	-------------

• • Equipment 4-40 years
• • Vehicles 3-8 years
• • Furniture and fittings 3-8 years

Increases in the carrying amount arising on the revaluation of land and buildings are recognised, net of tax in other comprehensive income and credited to a reserve in equity. Decreases that reverse previous increases of the same asset are recognised in other comprehensive income to the extent of the surplus attributable to the asset all other decrements are charged to the profit and loss.

The residual values and useful lives of the assets are reviewed and adjusted, if appropriate, at each reporting date. Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the asset's carrying amount and are included in the statement of comprehensive income in the year that the item is derecognised, any revaluation reserve relating to sold assets is transferred to retained earnings.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 3: Significant Accounting Policies (continued)

o. Leases

Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases and capitalised at inception of the lease at the fair value of the leased property, or if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and rewards of ownership of the net asset are classified as operating leases. Payments made under operating leases (net of incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

p. Impairment

The Group assesses at least twice a year for an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value.

For the purposes of assessing impairment assets are grouped at the lowest levels for which there are identifiable cash flows – cash generating units. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at a revalued amount in which case the impairment loss is treated as a revaluation decrease.

q. Intangible assets

i. Goodwill

Goodwill represents the excess of the purchase consideration over the fair value of the identifiable net assets at the time of acquisition of a combination. Goodwill is not amortised but is assessed at least twice a year for impairment or more frequently where events or changes in circumstances indicate that the carrying value may be impaired.

Goodwill is measured at cost less any accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to each of the cash-generating units expected to benefit from the combination's synergies. Impairment is determined by assessing the recoverable amount of the cashgenerating unit to which the goodwill relates. Impairment losses on goodwill cannot be reversed.

ii. Identifiable intangible assets

Intangible assets acquired separately or in a business combination are initially measured at the lower of cost or fair value cost at the time of acquisition. The Group assesses identifiable intangible assets as having either finite or indefinite useful lives.

Intangible assets with finite lives are amortised over the useful life and assessed for impairment at least twice a year or whenever there is an indication that the intangible asset may be impaired. The amortisation period and amortisation method are reviewed at least each financial year end. Changes in the expected useful life or flow of economic benefits intrinsic in the asset are an accounting estimate. The amortisation charge on intangible assets with finite lives is recognised in the statement of comprehensive income. The Group amortises identifiable intangible assets with finite lives for periods between one and twenty years.

Intangible assets with indefinite useful lives are not amortised but assessed for impairment at least twice a year or whenever there is an indication that the intangible asset may be impaired. The assets are assessed either individually or at cash generating unit level. The expected useful life or flow of economic benefits intrinsic in the asset are reviewed at least each financial year end to ascertain whether the indefinite useful life continues to be supportable.

If the indefinite useful life does not continue to be supportable the asset is reclassified as an intangible asset with a definite useful life and will be amortised on a prospective basis. This change is an accounting estimate.

iii. Customer contracts

Customer contracts acquired as part of a business combination are recognised separately from goodwill. The customer contracts are carried at their fair value at the date of acquisition less accumulated amortisation and any impairment losses. Where customer contracts useful lives are assessed as finite, the customer contracts are amortised over their estimated useful lives.

r. Borrowings

All loans and borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of financial performance over the period of the loans and borrowings using the effective interest method.

All borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

s. Borrowing costs

Borrowing costs incurred for the construction of a qualifying asset are capitalised during the period of time that it is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period they are incurred.

The capitalisation rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest rate on the Group's borrowings outstanding during the year.

t. Trade and other payables

Liabilities for trade creditors and other payables are initially measured at fair value and subsequently carried at amortised cost which is the amount of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity. The amounts are unsecured and are usually paid within 30 days. Payables to related parties are carried at the principal amount.

u. Provisions

Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that that an outflow of economic resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management's best estimates where the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

v. Employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and sick leave crystallising or expected to be settled within twelve months of the reporting date are recognised in other payables in respect of employees' services up to the reporting date and re-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 measured at the rates paid or payable. Employee benefits payable later than one year are measured at the present value of the estimated future cash flows to be made for those benefits.

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments based on the contractual due date to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.

w. Contributed equity

Issued and paid up capital is recognised at the fair value of the consideration received by the Company. 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.

x. Share based payments

Share based benefits may be provided to Directors and Employees via the Global Construction Services Limited Employee Option Plan as set out in Note 26.

The fair value of options granted is independently determined using the Black-Scholes Option Valuation model. The option is recognised as an expense with a corresponding increase in equity. Share based payments are measured at grant date and recognised over the period during which option holders become unconditionally entitled to the options.

The fair value of the options granted is adjusted to reflect market vesting conditions. At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The benefit recognised each period reflects the most recent estimate. The impact of any revision if any, is recognised in the statement of comprehensive income with a corresponding adjustment to equity.

y. Segment reporting

The Group has identified and reports its operating segments based on internal reports provided and used by the Group Managing Director to assess performance and allocate resources. The segments identified and reported are by the customer segments Commercial, Residential, and Resource & Industrial.

The Group's operations are managed separately and with each segment serving a particular customer base. The Group operates in one geographical segment Western Australia.

The segment results include the allocation of assets where attribution is by segment utilisation irrespective of entity ownership or physical location.

Corporate overheads are not allocated to segments as they are not considered a core function of the operations but a support function.

Investments in shares or financial assets at fair value held by the Group are not allocated to operating segments but are managed as part of the activities of Corporate.

A portion of the Group's borrowings are not allocated to individual segments as they are a component of the overall Group's treasury and funding function.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 3: Significant Accounting Policies (continued)

z. Earnings per share

i. Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

ii. Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financial costs associated with dilutive potential ordinary shares and the weighted average number of shares outstanding plus the weighted average number of ordinary shares that would be issued on the conversion of all potential ordinary shares into ordinary shares.

aa. Critical accounting estimates and judgements

The Group makes estimates and assumptions concerning the future.

Estimates and assumptions are continuously and rigorously evaluated based on historical experience, research and other factors including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

i. Estimated impairment of assets and intangibles

The Group tests at least twice a year whether assets and intangibles has suffered any impairment in accordance with the accounting policy stated in Note 2(p) and Note 2(q). The recoverable amounts of cash generating units have been determined on value in use calculations. Refer to Note 13(c) for details of the assumptions used in these calculations.

ii. Construction contracts

The Group enters into construction contracts to undertake formwork supply and installation for a fixed sum and price. When the outcome of the fixed price construction contract can be estimated reliably revenue and costs are accounted for on a stage of completion method. The stage of completion is established by comparing costs incurred to date against estimated cost to complete and total cost which requires the use of estimates and assumptions.

When the outcome of the fixed price construction contract cannot be estimated reliably revenues are recognised to the extent that costs are recoverable and costs are recognised in the period they are incurred.

ab. New accounting standards and interpretations

Certain new accounting standards and interpretations have been issued that are not mandatory for the 30 June 2012 reporting period. The Groups assessment of the impact of these new standards and interpretations is set out below.

i. New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2011:

• • AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project (AASB 1, AASB 7, AASB 101 & AASB 134 & Interpretation 13);
• • AASB 7 Financial Instrument Disclosures;
• • AASB 101 Presentation of Financial Statements;
• • AASB 1054 Australian Additional Disclosures and AASB 2011- 1 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project (AASB 1, AASB 5, AASB 101, AASB 107, AASB 108, AASB 121, AASB 128, AASB 132 & AASB 134 and Interpretations 2, 112 & 113);
• • AASB 124 Related Party Disclosures (December 2009).

The adoption of these standards did not have any impact on the current period or any prior period and is not likely to affect future periods.

ii. New accounting standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2012 reporting periods and have not yet been applied in the Financial Report. The Group's assessment of the impact of these new standards and interpretations is set out below.

• • AASB 9 Financial Instruments and AASB 2009-12 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective for annual reporting periods beginning on or after 1 January 2015). AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2015 but is available for early adoption. The Group is continuing to assess its full impact.
• • AASB 10 Consolidated Financial Statements (effective for the annual reporting periods commencing on or after 1 January 2013). AASB 10 introduces a single 'control model' for all entities in order to conclude that an investor controls an investee. The Group is continuing to assess the impact of the standard.
• • AASB 11 Joint Arrangements (effective for the annual reporting periods commencing on or after 1 January 2013). AASB 11 introduces certain changes to the accounting for joint arrangements. Joint arrangements will be classified as either joint operations (where parties with joint control have rights to assets and obligations for liabilities) or joint ventures (where parties with joint control have rights to the net assets of the arrangement). Joint arrangements structure as a separate vehicle will generally be treated as joint ventures and account for using the equity method. The Group is continuing to assess the impact of the standard.

Note 4: Segment Information

a. Description of segments

Management has determined that strategic decision making is facilitated and enhanced by evaluation of operations on the customer segments of Commercial, Residential and Resource & Industrial. For each of the strategic operating segments, the Group Managing Director reviews internal management reports on a monthly basis.

GCS Group supplies an extensive range of specialised labour services and equipment including hire and sales of scaffolding, formwork, material hoists, temporary site accommodation, chemical toilets, general plant hire, temporary fencing. Together with delivery and pick up, installation and dismantling and related estimating, design and engineering services, plus supply and installation of concrete in the Commercial segment.

Customer Sectors

Our strong market presence and customised solutions, makes us the leading supplier to the Commercial, Residential, Resource & Industrial sectors.

The following summary describes the operations in each of the Group's reportable segments:

Our operations in the Commercial sector consist of supplying a range of products and services to customers involved in the construction or maintenance of commercial and mixed-use developments. These typically include office towers, high rise apartments, shopping centres, hotels, car parks, recreational buildings, and hospitals. Contracts are typically medium to long term.

Our operations in the Residential sector consist of supplying a range of products and services to customers involved in the construction or maintenance of single and multi-story residential developments. These typically include houses, townhouses, units, and apartments. Contracts are generally short to medium term.

Our operations in the Resource and Industrial sector consist of supplying a range of products and services to customers involved in either construction or maintenance of the following types of projects. Oil and gas, energy, major infrastructure, mining, power generation, water treatment plants, decommissioning, shutdowns, and civil works. Contracts vary in length from short to long term.

• AASB 12 Disclosure of Interests in Other Entities (effective for annual reporting periods commencing on or after 1 January 2013). AASB 12 required disclosure in respect of subsidiaries, joint arrangements, joint ventures, associated and also unconsolidated structured entities. The Group is continuing to assess the impact of the standard.

• • AASB 13 Fair Value Measurement (effective for annual reporting periods commencing on or after 1 January 2013). AASB 13 establishes a single framework for measuring fair value of financial and non-financial items recognised at fair value on the balance sheet or disclosed in the notes to the financial statements. The Group is continuing to assess the impact of the standard.
• • AASB 119 Employee Benefits (effective for annual reporting periods commencing on or after 1 January 2013). AASB 119 main changes includes elimination of the 'corridor' approach for deferring gains/losses on defined benefit plans, actual gains/losses on remeasuring defined benefit plan obligations/ assets, amendments to the timing for recognition of liabilities for termination benefits, liabilities for employee benefits being calculated based on date of expected settlement rather than the date when settlement is due. The Group is continuing to assess the impact of the standard.
• • AASB 2011-9 Presentation of Financial statements (effective for annual reporting periods commencing on or after 1 July 2013). AASB 101, amended in June 2011, introduces amendments to align the presentation items of other comprehensive income with US GAAP. The Group will apply the amended standard from 1 July 2013. When the standard is first adopted there will be changes to the presentation of the statement of comprehensive income. However, there will be no impact on any of the amounts recognised in the financial statements.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 4: Segment Information (continued)

b. Segment information provided to the Managing Director

Segment Information	Commercial	Residential	Resource & Industrial	Total
Year ended 30 June 2012	$'000	$'000	$'000	$'000
Total segment revenue	192,487	24,901	58,243	275,631
Intersegment revenue	(62,026)	(1,268)	(93)	(63,387)
Revenue from external customersInterest revenue	130,461120	23,63325	58,15014	212,244159
Adjusted EBITDA	34,162	4,763	17,371	56,296
Depreciation and amortisation	6,591	1,920	3,193	11,704
Income tax expense				9,468
Share of profits of equity investees				505
Segment assets	148,419	32,867	62,155	243,441
Total assets includes:
Investments in equity accounted investees				505
Additions to non-current assets (other than financial assets and deferred tax assets)	13,979	1,868	27,977	43,824
Segment liabilities	111,610	10,428	32,216	154,254
There was no impairment charge or other significant non cash item recognised in 2012.
	Commercial	Residential	Resource & Industrial	Total
Year ended 30 June 2011	$'000	$'000	$'000	$'000
Total segment revenue	210,727	23,979	17,879	252,585
Intersegment revenue	(105,127)	(1,688)	(558)	(107,373)
Revenue from external customers	105,600	22,291	17,321	145,212
Interest revenue	159	53	17	229
Adjusted EBITDADepreciation and amortisation	33,0115,712	5,1311,488	3,464788	41,6067,988
Income tax expense				9,308
Share of profits of equity investees				63
Segment assets	135,643	29,043	20,684	185,370
Total assets includes:Investments in equity accounted investees				63
Additions to non-current assets (other than financial assets and deferred tax assets)	27,974	3,668	264	31,906
Segment liabilities	91,936	10,150	17,267	119,353

There was no impairment charge or other significant non cash item recognised in 2011.

c. Other segment information

i. Segment revenue

Sales and cross-hire between segments is carried out on arms length terms and eliminated on consolidation. Revenues from external customers is derived from the hire and sales of scaffolding, formwork, material hoists, temporary site accommodation, chemical toilets, general plant hire, temporary fencing and services including labour services, design, estimating, delivery and pick up installation and dismantling; plus supply and installation of concrete.

Segment revenue reconciles to total revenue from continuing operations as follows:

Year ended 30 June	Note	2012$'000	2011$'000
Total segment revenue		275,631	252,585
Intersegment eliminations		(63,387)	(107,373)
Total revenue from continuing operations	5a	212,244	145,212
Segment interest revenue		159	229
Unassigned interest revenue		275	425
Total interest revenue	5b	434	654
Net gain/(loss) on disposal of plant and equipment		(3)	(103)
Rebates		109	96
Unrealised foreign exchange gains/(losses)		1	(7)
Property rental income		58	110
Management service fees		30	430
Other		103	85
Total other revenue		298	611
Total other revenue	5b	732	1,265

Revenues of approximately $48m (2011: $71m) of the consolidated entity's revenue is derived from a single customer. These revenues are attributed to the Commercial segment.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 4: Segment Information (continued)

ii. Adjusted EBITDA

The Group Managing Director assesses the performance of the operating segments based on a measure of adjusted EBITDA. This measurement excludes certain non recurring expenditures which are of an isolated nature such as equity settled share based payments and corporate activities pertaining to the overall Group including the treasury function which manages the cash and funding arrangements of the Group.

A reconciliation of adjusted EBITDA to operating profit before income tax is provided as follows:

	2012	2011
Year ended 30 June	$'000	$'000
Adjusted EBITDA	56,296	41,606
EliminationsShare of equity accounted investees (net of income tax)	-505	23663
Finance costs	(5,279)	(3,542)
Depreciation and amortisation	(13,114)	(8,114)
Unallocated amounts: other revenue	1,104	1,458
Unallocated amounts: corporate	(7,482)	(5,264)
Profit before income tax from continuing operations	32,030	26,443
iii.Segment assets
Assets are measured in a manner consistent with the financial statements. The assets are allocated on the basis of operating segment utilisation irrespective ofentity ownership or physical location.
Investments in shares or financial assets at fair value held by the Group are not allocated to operating segments but are managed as part of the activities of corporate.
A reconciliation of segment assets to total assets is provided as follows:
	2012	2011
Year ended 30 June	$'000	$'000
Segment Assets	243,441	185,370
Unallocated:
Intersegment eliminations	(18,481)	(23,274)
Corporate Assets:
Cash and cash equivalents	427	11,856
Receivables	5,918	3,575
Prepayments	412	264
Property, plant and equipment	12,957	8,215
Intangibles	1,498	-
Goodwill	51,449	54,178
Share of equity accounted investees (net of income tax)Deferred tax assets	4,267	262
Total assets per statement of financial position	1,061302,949	756241,202

iv. Segment liabilities

Liabilities are measured in a manner consistent with the financial statements. Liabilities are allocated on the basis of incurrence by the operating segment. A portion of the Group's borrowings are not allocated to individual segments as they are a component of the overall Group's treasury and funding function. A reconciliation of adjusted EBITDA to operating profit before income tax is provided as follows:

Year ended 30 June	2012$'000	2011$'000
Segment Liabilities	154,254	119,353
Unallocated:
Intersegment eliminations	(20,665)	(31,379)
Trade and other payables	2,628	1,406
Current loans and borrowings	34,690	3,968
Non-current loans and borrowings	188	7,000
Income tax (benefit) payable	(14,982)	7,752
Provisions	131	102
Deferred tax lLiabilities	10	11
Total liabilities per statement of financial position	156,254	108,213

Notes to the Consolidated Financial Statements (CONTINUED) For the Financial Year Ended 30 June 2012

Not	e 5:Revenue,Other Incomeand Expenses	2012$'000	2011$'000
	Revenues, other income and expenses from continuing operations
a.	Continuing operations
	Hire of equipment and related services	159,776	61,918
	Contracting	41,779	72,998
	Sale of goods	10,689	10,296
		212,244	145,212
b.	Other income
	Net gains/(loss) on disposal of plant and equipment	(3)	(103)
	Management service fees	30	430
	Interest receivedRebates	434109	65496
	Unrealised foreign exchange gains/(losses)	1	(7)
	Property rental income	58	110
	Other	103	85
		732	1,265
c.	Other expenses
	Impaired trade receivables	327	246
		327	246
d.	Depreciation and amortisation
	Depreciation:
	Buildings and leasehold improvements	249	207
	Office and computer equipmentMotor vehicles	2911,598	3601,519
	Plant and rental equipment	9,725	6,021
	Total depreciation	11,863	8,107
	Amortisation	1,251	7
		13,114	8,114
e.	Operating leases expensed through profit and loss
	Properties	3,051	2,464
	Motor vehicles and mobile equipment	237	205
		3,288	2,669
f.	Impairment of other assets
	Inventories	227	302
g.	Employee benefit expenses	227	302
	Defined contribution superannuation expense
		7,868	3,019
		7,868	3,019

	Note 6:IncomeTaxExpense	2012$'000	2011$'000
a.	Income tax expense
	Current tax	8,347	6,566
	Deferred tax	1,675	(363)
	Adjustment for tax of prior periods	(835)	816
	Income tax expense reported in the statement of comprehensive income	9,187	7,019
	Deferred income tax (benefit)/expense included in income tax expense comprises:
	Decrease/(increase) in deferred tax assets	(292)	(2,431)
	(Decrease)/increase in deferred tax liabilities	1,967	2,068
		1,675	(363)
b.	Numerical reconciliation of tax expense to prima facie tax payable
	Profit from operations before income tax expense	32,030	26,443
	Tax at the Australian tax rate of 30% (2011 – 30%)	9,609	7,933
	Tax effect of amounts which are not deductible (taxable) in calculating taxable income	413	78
	Adjustment for tax of prior periods	(835)	(992)
	Income tax expense	9,187	7,019
c.	Amounts recognised directly in equityNet deferred tax – debited (credited) directly to equity
		(4)	(270)

d. Tax consolidation

Global Construction Services Limited and its wholly-owned Australian controlled entities implemented the tax consolidation legislation from 1 July 2007. The accounting policy in relation to this legislation is set out in Note 3(e).

On adoption of the tax consolidation legislation, the entities in the tax consolidated Group entered into a tax sharing agreement which in the opinion of the Directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the parent entity, Global Construction Services Limited.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Global Construction Services Limited for any current tax payable assumed and are compensated by Global Construction Services Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits transferred to Global Construction Services Limited.

The amounts receivable or payable under the tax funding agreement are due upon receipt of the funding advice from the parent entity. The parent entity may also require payment of interim funding amounts to assist with the payment of instalment obligations. The funding amounts are recognised as non-current intercompany receivables.

Notes to the Consolidated Financial Statements (CONTINUED)

		NOTE 7: CASH AND CASH EQUIVALENTS
--	--	------------------------------------------	--

Note 7:Cash and Cash Equivalents	2012$'000	2011$'000
Cash at bank and in hand	7,158	17,535
a.Reconciliation to cash at the end of the yearThe cash and cash equivalents reconcile to the cash at the end of the financial year as shown in the statement of cash flows as follows:	7,158	17,535
Balances as above:Cash at bank and in handBalances as per statement of cash flows	7,1587,158	17,53517,535
The Group's exposure to interest rate risk is discussed in Note 33. The Group's exposure to foreign currency risk is immaterial and is not discussed.
Note 8:Tradeand Other Receivables
Current
Trade receivablesAllowance for impairment	42,798(776)	31,274(1,101)
	42,022	30,173
Other receivables	49742,519	37330,546
a.Terms and conditions relating to the above financial instruments
i.Trade receivables are non-interest bearing and generally on 30 day terms; and
ii.Other receivables relate to minor Group transactions arising outside normal operating activities. Interest may be charged at commercial rates and terms aregenerally 30 days.
b.Impaired trade receivables
The Group recognised a loss of $327,372 in impaired trade receivables during the year ended 30 June 2012 (2011: $246,166). The Group carries an allowancefor impaired trade receivables of $775,716 (2011: $1,101,240). The individual allowance for impaired receivables are segmented as Commercial; $690,908(2011: $995,784), Residential; $83,890 (2011: $70,098), Resource & Industrial; $918 (2011: $35,358). It is anticipated a portion of these receivables will berecoverable. Refer to Note 33 for additional information and ageing on impaired trade receivables.
Movements in the allowance for impaired trade receivables are as follows:
At the beginning of the financial yearAllowance for impairment, recognised during the yearReceivables written off as uncollectable	1,1012(327)776	814533(246)1,101

The establishment of the allowance for impaired receivables is included in 'other expenses' in the profit and loss.

Amounts charged to the provision are written off when there is no expectation of recovery.

c. Credit risk

Refer to Note 33 for information on credit risk policies.

Note 9:Inventories2012Current$'000Inventory5,034Construction work in progress4895,523Inventories recognised as an expense during the year ended 30 June 2012 amounted to $7,433,746 (2011: $7,723,743). Obsolete stock was included in thisamount of $529,796 (2011: $302,335).Write downs of inventories recognised as expense during the year due to obsolescence amounted to $227,461 (2011: $302,335).Note 10:Non-current receivablesNon-CurrentLoans to related parties5,837As at 30 June 2012, Global Construction Services Limited had a loan outstanding of $180,000 from GCS Concrete Pumping Pty Ltd which is being utilised by thebusiness as working capital. The loan is unsecured and accrues interest in accordance with the shareholders agreement. Global Construction Services Limitedholds a 50% interest in GCS Concrete Pumping Pty Ltd as a joint venturer.As at 30 June 2012, Global Construction Services Ltd had a loan outstanding of $5,657,000 from SmartScaff Pty Ltd which is being utilised by the business asworking capital. The loan is secured and accrues interest at the rate of the Commercial Bill rate plus 2% margin per annum. Global Construction Services Limitedholds a 50% interest in SmartScaff Pty Ltd.Note 11:Investmentsin Associatesaccounted for using theequity methodInvestments accounted for using the equity method4,267
		2011$'000
		3,8361784,014
		191
		262

Notes to the Consolidated Financial Statements (CONTINUED) For the Financial Year Ended 30 June 2012

Not e 12: P r operty, Plant and Equip men

Note 12:Property, Plant and Equipment	Land	Buildings andLeaseholdImprovement	Office andComputerEquipment	MotorVehicles	Plant andRentalEquipment	Total
Consolidated	$'000	$'000	$'000	$'000	$'000	$'000
Asat 1 July 2010
Cost or fair value	4,408	2,932	1,463	7,627	94,675	111,105
Accumulated depreciation	-	(534)	(819)	(2,712)	(15,370)	(19,435)
Net book amount	4,408	2,398	644	4,915	79,305	91,670
Yearended 30 June 2011
Opening net book amount	4,408	2,398	644	4,915	79,305	91,670
Acquisition of subsidiary	-	98	224	597	1,416	2,335
Additions	1,267	1,436	350	1,275	36,590	40,918
Disposals	-	(17)	-	(285)	(5,689)	(5,991)
Depreciation charge	-	(207)	(360)	(1,519)	(6,021)	(8,107)
Closing net book amount	5,675	3,708	858	4,983	105,601	120,825
Asat 30 June 2011
Cost or fair value	5,675	4,448	2,037	9,214	126,485	147,859
Accumulated depreciation	-	(740)	(1,179)	(4,231)	(20,884)	(27,034)
Net book amount	5,675	3,708	858	4,983	105,601	120,825
Asat 1 July 2011
Cost or fair value	5,675	4,448	2,037	9,214	126,485	147,859
Accumulated depreciation	-	(740)	(1,179)	(4,231)	(20,884)	(27,034)
Net book amount	5,675	3,708	858	4,983	105,601	120,825
Yearended 30 June 2012
Opening net book amount	5,675	3,708	858	4,983	105,601	120,825
Additions	4,637	218	432	1,620	58,351	65,258
Disposals	-	(1)	(27)	(49)	(4,871)	(4,948)
Depreciation charge	-	(249)	(291)	(1,598)	(9,725)	(11,863)
Closing net book amount	10,312	3,676	972	4,956	149,356	169,272
Asat 30 June 2012
Cost or fair value	10,312	4,665	2,404	10,721	178,393	206,495
Accumulated depreciation	-	(989)	(1,432)	(5,765)	(29,037)	(37,223)
Net book amount	10,312	3,676	972	4,956	149,356	169,272

a. Assets in the course of construction

The carrying amounts of the assets disclosed above include the following expenditure recognised in relation to land, plant and rental equipment which is in the course of construction.

Assets in the course of construction	2012$'000	2011$'000
Land	58	195
Plant and rental equipment	755	2,133
	813	2,328
Global Construction Services Limited has paid a deposit of $58k for a parcel of land in Newman, Western Australia. The land will ultimately be developed tofacilitate the expansion of operations in the North West.
Assets in the course of construction are not depreciated. Depreciation is recognised from when the asset is ready for use.
b.Leased assets
Plant and rental equipment includes the following amounts where the Group is a lessee under a finance lease or hire purchase agreement.
Leased equipment
Cost	72,805	65,058
Accumulated depreciation	(14,022)	(11,583)
Net carrying amount	58,783	53,475

Notes to the Consolidated Financial Statements (CONTINUED)

Note 13: Intangible Assets

a.Intangible asset movement
	Goodwill	Customer contracts	Other intangibles	Total
30 June 2011	$'000	$'000	$'000	$'000
Opening net book amount as at 1 July 2010	24,093	-	123	24,216
Acquisition of subsidiary	37,170	-	-	37,170
Closing net book amount as at 30 June 2011	61,263	-	123	61,386
Cost	61,263	-	184	61,447
Accumulated amortisation and impairment	-	-	(61)	(61)
Closing net book amount as at 30 June 2011	61,263	-	123	61,386
30 June 2011
Opening net book amount as at 1 July 2011	61,263	-	123	61,386
Acquisition of subsidiary	22	-	-	22
Allocation of identifiable intangible assets (i)	(2,750)	2,750	-	-
Amortisation expense	-	(1,251)	-	(1,251)
Closing net book amount as at 30 June 2012	58,535	1,499	123	60,157
Cost	58,535	2,750	184	61,469
Accumulated amortisation and impairment	-	(1,251)	(61)	(1,312)
Closing net book amount as at 30 June 2012	58,535	1,499	123	60,157

(i) GCS acquired 100% of the issued capital of Global Industrial Services (Aust) Pty Ltd (GIS) on 3 June 2011, and the acquisition of the subsidiary was provisionally accounted for as Goodwill at the 30 June 2011 in accordance with AASB 3 Business Combinations. During the provisional accounting period to 3 June 2012, Customer Contracts of $2.750m were identified and assessed as having useful lives based on the life of the Customer Contracts of between 1 to 3 years.

b. Impairment test for goodwill

Goodwill is allocated to the Group's cash-generating units (CGU) identified according to the customer segment. The customer segment-level of goodwill is as follows:	2012	2011
	$'000	$'000
Commercial	50,729	16,286
Residential	7,806	7,806
	58,535	24,092

On 3 June 2011, Global Construction Services Limited acquired 100% of the issued shares in Global Industrial Services (Aust) Pty Ltd. As at 30 June 2011, this business combination has been provisionally accounted for under AASB 3 Business Combinations as a result of an incomplete measurement period. These provisionally measured intangibles were excluded from value-in-use calculation as at 30 June 2011, the value of the unallocated portion was approximately $37.2m. During the 2012 financial year the value of the business combination was finalised in which $2.75m of intangible assets were identified as customer contracts and allocated out of the Goodwill balance allocated to the Group's cash-generating units. The Goodwill acquired in relation to this business combination has been included in the valuein-use calculations as at 30 June 2012.

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a five year period. Cash flows beyond the five year period are extrapolated using the estimated growth rates below.

		Growth rate		Discount rate
c.Key assumptions used for value-in-use calculations	2012	2011	2012	2011
Cash generating unit	%	%	%	%
Commercial	6	7	16.7	12.7
Residential	2	6	16.7	12.7
Resource & Industrial	9	9	16.7	12.7

These assumptions are used in analysing each CGU within the business segment. The weighted average growth rates are consistent with current and forecasted conditions, the nature of fixed contracts in place and reflect management's outlook on growth. Margins are based on individual segment past performance accounting for fixed contracts and also reflect industry forecasts of the economic climate. The discount rate used is the Groups weighted average cost of capital and reflects the specific risks relating to the individual segment.

d. Impact of possible changes to key assumptions

A reduction in the weighted average growth rates in the value-in-use calculation for the Resources & Industrial CGU from 9% to 5%; the Group is satisfied it will not incur an impairment charge in its carrying amount of Goodwill or property, plant and equipment.

An increase of 1% on management's estimation in the pre tax discount rate of the weighted average cost of capital in each segment to 17.7%; the Group is satisfied it will not incur an impairment charge in its carrying amount of Goodwill or property, plant and equipment.

Upon assessment of the Group's CGU discounted estimated future cash flows, the Directors of Global Construction Services Limited are satisfied that no impairment charge is deemed for the year ended 30 June 2012.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 14:Non-current assets – Deferred taxassets	2012$'000	2011$'000
The balance comprises temporary differences attributable to:
Plant and equipment	109	19
Employee benefits	1,869	1,468
Doubtful debts	233	330
	2,211	1,817
Other:
Costs of initial public offering	184	521
Other	1,585	1,934
Subtotal other	1,769	2,455
Total deferred tax assets	3,980	4,272
Deferred tax assets to be recovered within 12 months	3,573	3,378
Deferred tax assets to be recovered after more than 12 months	407	894
	3,980	4,272

Movements	Plant andEquipment	EmployeeBenefits	Doubtful Debts	Other	Total
Consolidated	$'000	$'000	$'000	$'000	$'000
At 1 July 2010	250	688	244	659	1,841
(Charged)/credited to:
Profit or loss	(258)	167	(244)	1,324	989
Directly to equity	-	-	-	270	270
Acquisition of subsidiary	27	613	330	202	1,172
At 30 June 2011	19	1,468	330	2,455	4,272
(Charged)/credited: to profit or loss
Profit or loss	90	401	(97)	12	406
Directly to equity	-	-	-	(698)	(698)
Acquisition of subsidiary	-	-	-	-	-
At 30 June 2012	109	1,869	233	1,769	3,980

Note 15:Other financialassetsNon-current	2012$'000	2011$'000
Deposits held in trust on property leases (carried at cost)	72	12
Note 16:Tradeand otherpayables
Current
Trade Payables (a)	19,198	12,715
Other Payables (b)	15,762	10,532
	34,960	23,247
(a)Trade creditors are non-interest bearing and normally settled on terms ranging from 14 to 30 day terms.
(b)Other payables include accruals for employee benefits of annual leave and sick leave. Annual leave and sick leave is measured and presented as current.The Group does not have an unconditional right to defer settlement, however based on past experience the Group does not anticipate the full amount ofthe accrued annual leave to be taken within the next twelve months. Accrued sick leave will be settled within the current period in accordance with theEnterprise Bargaining Agreement applicable to those employees.
The following amounts reflect the annual leave benefits evaluated not to be settled within the next twelve months.

Annual leave obligations evaluated to be settled after twelve months 483 597

Notes to the Consolidated Financial Statements (CONTINUED)

Note 17:Borrowings
	2012	2011
Current	$'000	$'000
Unsecured
Borrowings	3,454	2,051
Total unsecured current borrowings	3,454	2,051
Secured
Bank bill facility	32,760	2,000
Hire purchase finance	17,325	11,326
Lease liability	388	349
Total secured current borrowings	50,473	13,675
Total current borrowings	53,927	15,726
Non-current
Secured
Bank bill facility	-	10,758
Hire purchase finance	44,454	26,490
Lease liability	996	1,385
Total secured non-current borrowings	45,450	38,633

a. Unsecured borrowings

Current unsecured borrowings are repayable in 10 monthly instalments and bear interest at a flat rate of 2.70% per annum.

b. Lease & HP liabilities

The lease & HP liabilities are secured by the rights to the asset in the event of a default. The carrying value of assets pledged as security is disclosed in Note 12b.

c. Secured borrowings

The secured borrowings relate to a bill facility from Westpac Banking Corporation that has been secured by a fixed and floating charge over the assets of the Group.

d. Risk exposures

Details of the Group's exposure to risks on borrowings are set out in Note 33.

Global Construction Services Limited has access to a total bank bill facility of $35m (2011 – $18.5m). The facility is drawn to $32.76m at 30 June 2012 (2011 – $9m).

The facility is due to be renegotiated in May 2013 and is secured by a fixed and floating charge over the Group's assets. The carrying value of the Groups assets under a fixed and floating charge is $175m (2011 – $173m).

Note 18: Deferred income

Current					2012$'000	2011$'000
Deferred incomeTotal Unearned Income					1,555	10,871
GCS recognises contract revenue in accordance with the percentage of completion method where the outcomes can be reliability measured. Construction workin progress is stated at the aggregate of costs incurred to date plus recognised profits less recognised losses and progress billings. If there are contracts whereprogress billings exceed the aggregate costs incurred plus profits less losses, the net amount is classified as deferred income.					1,555	10,871
Note 19:Tradeand otherpayables
Non-currentEmployee benefits – Long service leave					1,017	816
The provision for long service leave is recognised as a present value of expected future payments in respect of services provided up to the reporting date using theprojected current unit method. Of the total provision, $318k (2011– $271k) of long service leave is current as the Group does not have the right to defer settlement.Note 20:Non-current liabilities – Deferred taxliabilities
The balance comprises differences attributable to:Plant and equipmentOtherTotal deferred tax liabilitiesDeferred tax assets to be recovered within 12 monthsDeferred tax assets to be recovered after more than 12 monthsTotal deferred tax liabilities					11,22450811,73211,732-11,732	9,0946719,7659,765-9,765
MovementsConsolidated	Plant andEquipment$'000	EmployeeBenefits$'000	Doubtful Debts$'000	Other$'000	Total$'000
At 1 July 2011	7,639	-	-	58	7,697
(Charged)/credited to:Profit or loss	1,455	-	-	613	2,068
Other comprehensive income	-	-	-	-	-
Directly to equityAt 30 June 2011	-9,094	--	--	-671	-9,765
(Charged)/credited to:Profit or loss	2,130	-	-	(163)	1,967-
Other comprehensive incomeDirectly to equity	--	--	--	--	-
At 30 June 2012	11,224	-	-	508	11,732

Notes to the Consolidated Financial Statements (CONTINUED)

Note 21: Contributed equity

a.Number of ordinary shares and value of contributed equity
Ordinary shares	2012	2011
Contributed equity – number of shares	116,464,741	115,654,987
Contributed equity – $'000	97,355	96,339

b. Movements in ordinary share capital

		Number of shares	Issue Price $	$'000
1 July 2010	Balance	89,671,143		53,943
29 September 2010	Dividend reinvestment plan issues	1,005,050	0.9633	968
20 December 2010	Exercise of options issues	150,000	0.5500	83
8 March 2011	Exercise of options issues	75,000	1.3000	97
15 March 2011	Exercise of options issues	150,000	0.7500	112
31 March 2011	Dividend reinvestment plan issues	299,723	1.6991	509
28 April 2011	Placement issues	10,000,000	1.80	18,000
14 June 2011	Placement issues	14,304,071	1.62	23,173
	Deferred tax previously recognised directly in equity			270
	Less: Transaction costs arising on share issue			(816)
	Movement during the year	25,983,844		42,396
30 June 2011	Balance	115,654,987		96,339
2 September 2011	Exercise of options issues	200,000	1.10	220
12 September 2011	Dividend reinvestment plan issues	269,984	1.35	364
28 Mar 2012	Exercise of options issues	45,000	1.30	59
29 April 2012	Exercise of options issues	45,000	1.30	59
20 April 2012	Exercise of options issues	45,000	1.30	59
30 April 2012	Dividend reinvestment plan issues	164,113	1.31	215
	Issue on part consideration acquisition of subsidiary	40,657	1.25	51
	Deferred tax previously recognised directly in equity			4
	Less: Transaction costs arising on share issue			(15)
	Movement during the year	809,754		1,016
30 June 2012	Balance	116,464,741		97,355

c. Ordinary shares

Fully paid ordinary shares carry one vote per share and entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held.

Ordinary shares have no par value and the Company does have a limit on the amount of authorised capital.

d. Options

Information relating to the Global Construction Services Limited Employee Option Plan, including details of options issued, exercising and lapsed during the financial year and options outstanding at the end of the financial year, is set out in Note 26.

e. Capital Risk Management

The Groups objective when managing capital is to safeguard its ability to operate as a going concern, provide returns for shareholders and stakeholders, continue as a going concern and to maintain a capital structure that optimises the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Group and the parent entity monitor capital via a number of methods including;

i. The economic gearing ratio (EGR)

• • The EGR is calculated as net debt divided by total capital.
• • Net debt is calculated as the total secured borrowings less fixed charge asset backed facilities and hire purchase facilities less cash and cash equivalents.
• • Total capital is calculated as equity (including non-controlling interest) plus net debt.

ii. The gearing ratio

• • The gearing ratio is calculated as net debt divided by total capital.
• • Net debt is total borrowings including trade and other payables less cash and cash equivalents.
• • Total capital is calculated as equity (including non-controlling interest) plus net debt.

	2012	2011
Economic gearing ratio	$'000	$'000
Total secured borrowings	95,923	52,308
Less: asset backed leases and hire purchase facilities	(63,163)	(35,793)
Less: cash and cash equivalents	(7,158)	(17,535)
Net debt	25,602	(1,020)
Equity (including non controlling interest)	146,695	132,989
Total capital	172,297	131,969
Economic gearing ratio	15%	0%

Notes to the Consolidated Financial Statements (CONTINUED)

Note 21:	Contributed equity (continued)
----------	--------------------------------

	2012	2011
Gearing ratio	$'000	$'000
Total borrowings	135,892	88,476
Less: cash and cash equivalents	(7,158)	(17,535)
Net debt	128,734	70,941
Total equity	146,695	132,989
Total capital	275,429	203,930
Gearing ratio	47%	35%
Compliance with externally imposed capital requirements.
The Group has bank bill facility agreements that require it to satisfy certain financial ratio covenants during the financial year. The Group stringently monitors
these covenants and it has complied with its externally imposed capital requirements during the reporting period.
f.Reserves
i.Share Option Reserve is used to recognise the grant date fair value of options issued to employees but not exercised
Movements in reserves
Share option reserve
Balance 1 July	140	140
Options issued during the year	-	-
Balance 30 June	140	140
g.Retained earnings
Movements in retained earnings
Balance 1 July	36,510	23,414
Net Profit for the year	22,843	19,424
Non-controlling interest on acquisition of subsidiary	-	-
Dividends and other equity distributions	(10,153)	(6,328)
Balance 30 June	49,200	36,510

Note 22:Dividendsa.Dividends paid or payable	2012$'000	2011$'000
The Directors have determined not to pay a full year dividend	-
Interim dividend for the year ended 30 June 2012 of 4.25 cents per share, fully franked, declared on 31 March 2012, paid on 2 April 2012(Dividend Reinvestment Plan applied)	4,937
Final dividend for the year ended 30 June 2011 of 4.50 cents per share, fully franked, declared on 24 August 2011, paid on 26 September 2011(Dividend Reinvestment Plan applied)		5,215
Interim dividend for the year ended 30 June 2011 of 3.75 cents per share, fully franked, paid on 31 March 2011(Dividend Reinvestment Plan applied)		3,414
Total dividend paid or payable	4,937	8,629

b. Dividends not recognised at year end

Given the Group is experiencing increasing demand for Plant and Equipment in supporting the growing needs of the Resource, Industrial and Energy sectors and has applied significant capital to this area, the Board of Directors has determined not to pay a full year dividend. The total fully franked dividend for the year is 4.25 cents (2011: 8.25 cents).

Notes to the Consolidated Financial Statements (CONTINUED)

Note 23:Earningspershare	2012	2011
	Cents	Cents
a.Basic earnings per shareProfit from operations attributable to the ordinary equity holders of the CompanyProfit attributable to the ordinary equity holders of the Company	19.719.7	20.820.8
b.Diluted earnings per shareProfit from operations attributable to the ordinary equity holders of the CompanyProfit attributable to the ordinary equity holders of the Company	19.619.6	20.420.4
	$'000	$'000
c.Reconciliations of earnings used in calculating earnings per shareBasic earnings per shareProfit from operationsProfit attributable to the ordinary equity holders of the Company used in calculating basic earnings per shareDiluted earnings per shareProfit from operationsProfit attributable to the ordinary equity holders of the Company used in calculating diluted earnings per share	22,84322,84322,84322,843	19,42419,42419,42419,424
d.Weighted average number of shares used as the denominator	Number	Number
Basic earnings per shareWeighted average number of shares used as the denominator in calculating basic earnings per shareDiluted earnings per share	115,654,987	93,532,245
Weighted average number of options outstandingWeighted average number of shares and potential ordinary shares used as the denominator in calculating diluted earnings per share	996,000116,650,987	1,622,27495,154,519

Note 24: Business combinations

Business combinations for the year ended 30 June 2012

Acquisition of Dandl Bourne Pty Ltd

On the 1 September 2011 Global Construction Services Limited wholly owned subsidiary Global Industrial Services (Aust) Pty Ltd acquired 100% of issued shares in Dandl Bourne Pty Ltd for a consideration of $143k made up of a combination of shares and cash. Dandl Bourne Pty Ltd is a provider of specialised Health, Safety and Environmental Services.

The business contributed revenues of $1.97m and a net profit after tax of $130k to the Group for period from 1 September 2011 to the year ended 30 June 2012.

As a result of the measurement period the business combination has been provisionally accounted in accordance with AASB 3 Business Combinations.

Details of the net assets acquired and goodwill are as follows:

Purchase consideration	$'000
Cash paid	92
Share consideration	51
Total purchase consideration	143
	$'000
Fair value of net identifiable assets	117
Goodwill	26
The assets and liabilities arising from the acquisition are:	Fair value
	$'000
Cash	122
Trade and other receivables	159
Trade and other payablesCurrent tax liabilities	(143)(21)
Net identifiable assets acquired	117
Inflow of cash to acquire business, net of cash acquired:
	$'000
Cash consideration	(92)
Less cash acquired	122
Inflow of cash	30

Business combinations for the year ended 30 June 2011

Acquisition of Global Industrial Services (Aust) Pty Ltd

On 3 June 2011 Global Construction Services Limited acquired 100% of the issued shares in Global Industrial Services (Aust) Pty Ltd (GIS) for a consideration of $39.6m made up of $16.4m in cash and the issue of 14.3 million GCS shares. The cash component of the transaction was funded by a placement of 10 million shares at $1.80 per share to institutional and sophisticated investors. GIS is a leading provider of specialised labour hire in Western Australia and Queensland.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 24: Business combinations (continued)

The business contributed revenues of $6.3m and a net profit after tax of $300k to the Group for period from 3 June 2011 to the year ended 30 June 2011.

As a result of the measurement period the business combination was provisionally accounted in accordance with AASB 3 Business Combinations for the year ended 30 June 2011. At the end of the measurement period the acquisition of the business combination has been finalised and accounted for in accordance with other applicable Australian Accounting Standards.

Details of the net assets acquired and goodwill are as follows:

Purchase consideration	$'000
Cash paid	16,398
Share consideration	23,173
Total purchase consideration	39,571
	$'000
Fair value of net identifiable assets (i)	5,145

Goodwill (i)	34,426

	Acquirer's
The assets and liabilities arising from the acquisition are:	carrying amount	Fair value
	$'000	$'000
Cash	1,198	1,198
Trade and other receivables	11,013	11,536
Property plant and equipment	1,681	1,681
Intangibles	3	-
Deferred tax assets	-	1,173
Trade and other payables	(7,921)	(8,383)
Employee benefits provision	(183)	(215)
Current tax liabilities	(1,733)	(2,106)
Borrowings	(2,460)	(2,488)
Net identifiable assets acquired	1,598	2,396
Allocation of identifiable intangible assets (i)		2,750
Fair Value of Net Identifiable assets after measurement period		5,145

(i) During the provisional accounting period to 3 June 2012, customer contracts of $2.75m were identified. Refer Note 13(a).

Outflow of cash to acquire business, net of cash acquired:

	$'000
Cash consideration	16,398
Less cash acquired	1,198
Outflow of cash	15,200

Note 25: Investments in Associates accounted for using the equity method

Global Construction Services Limited acquired a 50% interest in the issued shares and equity of SmartScaff Pty Ltd, a scaffolding company with operations and facilities in Melbourne, Sydney and Brisbane. The investment was for a cash consideration of $3.5m. The effective date of the transaction was 1 July 2011.

Global Construction Services Limited is party to a jointly controlled entity GCS Concrete Pumping Pty Ltd (GCSCP).

Global Construction Services Limited has a 50% interest in the issued capital and equity of the entity and 50% of the voting rights in GCSCP. GCSCP provides concrete pump hire and contracting services to the Commercial construction market in Western Australia.

The interest of Global Construction Services Limited is accounted for in the consolidated financial statements using the equity method of accounting and is carried at cost. Global Construction Services Limited share of results, aggregated assets and liabilities are as follows:

Movements in carrying amounts	2012$'000	2011$'000
Carrying amount at the beginning of the financial year	262	199
Share of profits after income tax	505	63
Investment in SmartScaff Pty Ltd	3,500	-
Carrying amount at the end of the financial year	4,267	262

Summarised financial information of associates	Ownership interest%	Assets$'000	Liabilities$'000	Revenues$'000	Profit/(loss)$'000
2012
GCS Concrete Pumping Pty Ltd	50	932	712	300	(42)
SmartScaff Pty Ltd	50	14,951	9,689	4,500	547
		15,883	10,401	4,800	505
2011
GCS Concrete Pumping Pty Ltd	50	1,097	835	583	63
SmartScaff Pty Ltd	50	-	-	-	-
		1,097	835	583	63

As at 30 June 2012, Global Construction Services Limited had a loan outstanding of $5,657,000 from SmartScaff Pty Ltd which is being utilised by the business as working capital. The loan is secured and accrues interest at the rate of the Commercial Bill rate plus 2% margin per annum. Global Construction Services Limited holds a 50% interest in SmartScaff Pty Ltd.

As at 30 June 2012, Global Construction Services Limited had a loan outstanding of $180,000 from GCS Concrete Pumping Pty Ltd which is being utilised by the business as working capital. The loan is unsecured and accrues interest in accordance with the shareholders agreement. Global Construction Services Limited holds a 50% interest in GCS Concrete Pumping Pty Ltd as a joint venturer. GCSCP had no capital commitments as at 30 June 2012 (2011: Nil).

Notes to the Consolidated Financial Statements (CONTINUED)

Note 26: Share-based payments

a. Employee option plan

Global Construction Services Limited established an Employee Option Plan on 2 May 2008.

The purpose of the Employee Option Plan is to:

• • Recognise the ability and efforts of the employee's contribution to the success of the Group;
• • Provide an incentive to employees to achieve the long term objectives of the Group;
• • Attract and retain persons of experience and ability to the Group;
• • Promote employee loyalty and improve performance of the Group; and
• • Enable employees the opportunity to acquire shares in the Group.

Participation in the plan is at the Board's discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. Options are granted under the plan for no consideration and carry no dividend or voting rights.

When exercisable, each option will be converted into one ordinary share within twenty business days after the receipt of a properly executed Notice of Exercise and payment for the exercise price of each option being exercised.

Set out below are summaries of options granted.

Consolidated 2012

Grant Date	Vesting Date	Expiry Date	Exercise Price	Balance at startof the year	Granted duringthe year	Exercised duringthe year	Forfeited duringthe year	Balance at theend of the year	Vested andexercisable at theend of the year
12 May 2008	12 May 2009	9 May 2012	$1.30	270,000	-	(135,000)	(135,000)	-	-
12 May 2008	12 May 2010	9 May 2013	$1.60	345,000	-	-	-	345,000	345,000
12 May 2008	12 May 2011	9 May 2014	$1.90	345,000	-	-	-	345,000	345,000
28 May 2009	1 Sept 2010	1 Sept 2014	$1.10	200,000	-	(200,000)	-	-	-
28 May 2009	1 Sept 2011	1 Sept 2015	$1.60	200,000	-	-	(200,000)	-	-
Totals				1,360,000	-	(335,000)	(335,000)	690,000	690,000
	Weighted Average Exercise price			$1.60	-	$1.18	$1.48	$1.45	$1.45

Consolidated 2011

Grant Date	Vesting Date	Expiry Date	Exercise Price	Balance at startof the year	Granted duringthe year	Exercised duringthe year	Forfeited duringthe year	Balance at theend of the year	Vested andexercisable at theend of the year
12 May 2008	12 May 2009	9 May 2012	$1.30	360,000	-	(75,000)	(15,000)	270,000	270,000
12 May 2008	12 May 2010	9 May 2013	$1.60	360,000	-	-	(15,000)	345,000	345,000
12 May 2008	12 May 2011	9 May 2014	$1.90	360,000	-	-	(15,000)	345,000	345,000
28 May 2009	28 May 2009	1 Sept 2012	$0.55	150,000	-	(150,000)	-	-	-
28 May 2009	1 Sept 2009	1 Sept 2013	$0.75	150,000	-	(150,000)	-	-	-
28 May 2009	1 Sept 2010	1 Sept 2014	$1.10	200,000	-	-	-	200,000	200,000
28 May 2009	1 Sept 2011	1 Sept 2015	$1.60	200,000	-	-	-	200,000	200,000
Totals				1,780,000	-	(375,000)	(45,000)	1,360,000	1,360,000
	Weighted Average Exercise price			$1.38	-	$0.78	$1.60	$1.54	$1.54

The weighted average remaining contractual life of share options outstanding at the end of the period was 2.0 years (2011: 2.4 years)

There were no options granted during the year ended 30 June 2012 (2011: no options granted)

The fair value at grant date is determined using a Black-Scholes option pricing model taking into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share and the risk free interest rate for the term of the option.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 27: Key Management Personnel (KMP) Disclosures

	2012$'000	2011$'000
a.Key management personnel compensation
Short-term employee benefits	2,825	3,980
Post employment benefits	163	279
Termination benefits	-	58
	2,988	4,317

Additional detail is contained in the Remuneration Report contained within the Directors' Report.

b. Option holdings

The following table contains all options issued or held by Directors and Key Management Personnel.

							Vested and	Vested and
		Balance at the start	Granted as	Exercised during	Forfeited during	Balance at the end	exercisable at the	exercisable at the
Year	Name	of the year	compensation	the year	the year	of the year	end of the year	end of the year
2011	D Kiggins 1	700,000	-	(300,000)	-	400,000	400,000	-

1 Resigned 1 March 2011

There were no options granted in the year ended 30 June 2012.

c. Share holdings

The number of shares in the Company held directly or indirectly during the financial year by each Director and members of the Key Management Personnel of the Group, including their related parties are set out below. There were no shares granted during the reporting period as compensation.

2012	Balance as at1 July 2011	Other changesduring the year	Balance as at30 June 2012
Directors
P Wade 1	-	62,500	62,500
E Gullotti	9,368,986	(1,376,303)	7,992,683
S Mangione	4,263,729	-	4,263,729
G Chiari 2	4,652,762	2,600	4,655,362
M Sertorio 3	7,878,788	200,000	8,078,788
Other Key Management Personnel
G Hearn	1,941,292	(302,436)	1,638,856
R Used 4	-	-	-
C Genovesi 5	-	-	-

1 Appointed 17 November 2011

2 At 30 June 2012, CASC Services Pty Ltd held 6,282,622 shares (2011 – 6,282,622) which are held in the Chiari Used Unit Trust by G Chiari

3 Mr Sertorio was an Executive Director from 5 July 2011. Mr Sertorio was appointed a Non-Executive Director 6 August 2012

4 Appointed 18 July 2011

5 Appointed 28 November 2011

2011	Balance as at1 July 2010	Other changesduring the year	Balance as at30 June 2011
Directors
E Gullotti 1	9,354,419	14,567	9,368,986
S Mangione 1	4,035,552	228,177	4,263,729
D Kiggins 2 & 3	217,870	-	-
G Chiari 1 & 4	4,500,095	152,667	4,652,762
M Sertorio	-	7,878,788	7,878,788
Other Key Management Personnel
L Used 1 & 4	4,926,627	167,544	5,094,171
P Chiari 1 & 4	4,465,464	150,708	4,616,172
N Bright 5	-	2,407,732	2,407,732
G Hearn 5	-	1,941,292	1,941,292
J Harriman	196,667	(96,667)	100,000
B Callender	310,000	(310,000)	-

1 At 30 June 2011, GMBC Holdings Pty Ltd (GBMC) held no shares (2010 – 2,000,000) and the following Directors and Key Management Personnel held shares in GBMC: E Gullotti, S Mangione, L Used, G Chiari and P Chiari

2 Resigned as Executive Director 1 March 2011

3 Resigned as Joint Company Secretary 13 May 2011

4 At 30 June 2011, CASC Services Pty Ltd held 6,282,622 shares (2010 – 6,077,575) which are held in the Chiari Used Unit Trust by G Chiari, P Chiari, and L Used

5 Appointed 3 June 2011

d. Transactions with key management personnel and their related parties

GCS Rapid Access Pty Ltd has an agreement to hire various plant and equipment from CASC Hire Pty Ltd at arms length commercial terms for 11 years and two months commencing 1 July 2004 for $516,972 per annum. George Chiari is a Director of GCS, CASC Constructions Pty Ltd and CASC Hire Pty Ltd.

The GCS Group utilises the waste management services provided by Instant Waste Management at its metropolitan locations. Sam Mangione, a Director of GCS is a related party of Instant Waste Management. Instant Waste Management has been paid $111,072 (2011: $99,174) for its services which are provided on arms length commercial terms on an 'as needs' basis.

GCS Budget Portables Pty Ltd purchase a number of their site accommodation units from Aussie Modular Solutions Pty Ltd on arms length commercial terms. Sam Mangione, a Director of GCS, is a Director of Aussie Modular Solutions Pty Ltd. Aussie Modular Solutions Pty Ltd has been paid approximately $13,367,788 (2011: $4,250,466) for these services.

GCS Rapid Access Pty Ltd leases premises in Redcliffe at arms length commercial terms from Mar Pty Ltd and Golden Wood Pty Ltd. The rental amount is $333,291 per annum. George Chiari, Director of CASC Constructions Pty Ltd has an interest in Mar Pty Ltd and Golden Wood Pty Ltd.

CASC Constructions Pty Ltd leases premises in Redcliffe on standard commercial terms from Mar Pty Ltd and Golden Wood Pty Ltd. The rental amount is $193,352 per annum. George Chiari, Director of CASC Constructions Pty Ltd has an interest in Mar Pty Ltd and Golden Wood Pty Ltd.

Notes to the Consolidated Financial Statements (CONTINUED)

NOTE 27: Key Management Personnel (KMP) Disclosures (continued)

Enzo Gullotti, Sam Mangione and George Chiari, Directors of GCS have interests in GBMC Holdings Pty Ltd.

• • GCS Budget Portables Pty Ltd leases premises in Bassendean on arms length commercial terms from GBMC Holdings Pty Ltd. The rental amount from 1 July 2012 is $467,969 per annum.
• • GCS Security Scaffolding Pty Ltd leases premises in Wangara on arms length commercial terms from GBMC Holdings Pty Ltd. The rental amount from 1 July 2012 is $345,194 per annum.
• • GCS Site Services Pty Ltd (formerly Miami Holdings Pty Ltd) and GCS Security Scaffolding Pty Ltd lease premises in Port Kennedy on arms length commercial terms from GBMC Holdings Pty Ltd. The rental amount from 1 July 2012 is $305,352 per annum.
• • CASC Constructions Pty Ltd leases premises in Wangara on arms length commercial terms from GBMC Holdings Pty Ltd. The rental amount from 1 July 2012 is $35,000 per annum.

GCS Hire Pty Ltd and CASC Constructions Pty Ltd leases premises on arms length commercial terms in Embleton from Forrestview Investments. Sam Mangione, a Director of GCS, has an interest in Forrestview Investments. The lease commences July 2012 and the rental amount is $700,000 per annum.

GCS Budget Portables Pty Ltd lease yard space on arms length commercial terms in Muchea on an as needs basis from Aussie Modular Solutions Pty Ltd. The rental amount is $2,000 per month. Sam Mangione, a Director of GCS, is a Director of Aussie Modular Solutions Pty Ltd.

Aggregate amounts of each type of transactions with key management personnel of the Group	2012$'000	2011$'000
Amounts recognised in expenses	2,632	2,784
Purchases and hire of equipment and services	15,088	4,867
Sales of goods and services	2,071	394
Outstanding balances arising from sales/purchases of goods and services. The following balances are outstanding at the reporting date in relation to transactionswith related parties and Key Management Personnel:
Current receivables (sales of goods and services) – Related partiesCurrent payables (purchases of goods and services) – Related parties	1343,878	139592

Note 28: Related Party Transactions

i. Key management personnel

Disclosures relating to Key Management Personnel are set out in Note 27.

ii. Related parties

Other than those disclosed in Note 27(d), there are no further related party transactions.

No provisions have been raised in relation to any outstanding balances, and no expense has been recognised in respect of bad or doubtful debts due from related parties.

iii. Loans to/from related parties

Loans to related parties	2012$'000	2011$'000
Beginning of the year	191	296
Loans advanced	5,687	41
Loan repayments	(41)	(146)
Interest charged	133	-
Interest paid	(133)	-
End of the year	5,837	191

A loan of $180,000 is provided to GCS Concrete Pumping Pty Ltd, a Joint Venture, and is being utilised by the business as working capital. The loan is unsecured and accrues interest in accordance with the shareholders agreement. Global Construction Services Limited holds a 50% interest in GCS Concrete Pumping Pty Ltd as a joint venturer.

A loan of $5,657,000 is provided to SmartScaff Pty Ltd and is being utilised by the business as working capital. The loan is secured and accrues interest at the rate of the Commercial Bill rate plus 2% margin per annum. Global Construction Services Limited holds a 50% interest in SmartScaff Pty Ltd.

There were no loans from related parties during the financial year ended 30 June 2012 (2011: Nil).

Notes to the Consolidated Financial Statements (CONTINUED)

Note 29:Reconciliation of profit afterincome tax to net cash from operating activities	2012$'000	2011$'000
Profit for the year	22,843	19,424
Adjusted forDepreciation and amortisation of non-current assets	13,114	8,114
Interest received	(433)	(654)
Interest paid	5,461	3,542
(Gain)/Loss on disposal of property, plant and equipment	3	103
Impairment of debtors	327	20
Increase/(Decrease) in IPO costs tax effect	4	270
Effect of exchange rate changes on the balances	1	(7)
Changes in assets
(Increase)/Decrease in trade debtors	(11,258)	(8,058)
(Increase)/Decrease in other debtors	(1,280)	(331)
(Increase)/Decrease in prepayments	(2,005)	(527)
(Increase)/Decrease in inventory	(1,198)	(1,320)
(Increase)/Decrease in WIP	(311)	128
(Increase)/Decrease in goodwill(Increase)/Decrease deferred tax assets	(22)292	-(2,059)
Changes in liabilities
Increase/(Decrease) in trade payables	6,483	4,188
Increase/(Decrease) in other creditors and accruals	1,259	1,510
Increase/(Decrease) in other payables	3,694	9,731
Increase/(Decrease) in employee provisionsIncrease/(Decrease) in deferred tax liability	2011,967	3112,068
Increase/(Decrease) in income tax liability	(1,542)	7,185
Net cash flow from operating activities	37,600	43,638
Note 30:Noncash investing and financing activities
Acquisition of property plant and equipment by means of finance lease/hire purchase	39,372	36,047
Issue of shares on part consideration acquisition of subsidiaries	51	23,173

Note 31:Commitments
	2012$'000	2011$'000
a.Capital commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Plant and equipment	10,231	6,767
b.Lease commitments: Group as lessee
Operating lease commitments are payable:
– Within one year	4,908	2,592
– One year but not later than five years	6,802	3,486
– Greater than five yearsTotal lease liability	3,90415,614	6266,704
Consists of:
Cancellable operating lease	2,620	330
Non cancellable operating lease	12,994	6,374
Total lease liability	15,614	6,704
Finance lease commitments are payable:
– Within one year	22,412	14,998
– One year but not later than five years	51,795	33,209
– Greater than five years	-	-
Minimum lease payment	74,207	48,207
Future finance charges	(11,043)	(8,657)
Total lease liability	63,164	39,550
Consists of:
– Current	17,714	11,675
– Non-current	45,450	27,875
Total lease liability	63,164	39,550

Operating leases

The Group leases various offices, warehouses and yards under non-cancellable operating leases expiring within one to eight years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

The Group also leases various plant and vehicles under cancellable operating leases. Varying periods of notice are required to terminate these leases.

Notes to the Consolidated Financial Statements (CONTINUED)

Note 32: Parent entity disclosures

As at and throughout the year ended 30 June 2012 Global Construction Services Limited ("The Company") was the parent entity of the consolidated entity.

The following information presented in respect of the Company is prepared using consistent accounting policies per Note 3.

Interest of participant: Global Construction Services Limited	2012$'000	2011$'000
Result of the parent entity
Profit/(loss) for the year	(222)	(3,037)
Other comprehensive income	-	-
Total comprehensive income for the year	(222)	(3,037)
Financial position of the parent entity at year end
Current assets	1,100	15,695
Non-current assets	101,853	74,461
Total assets	102,953	90,156
Current liabilities	(37,376)	(6,378)
Non-current liabilities	14,711	6,889
Total liabilities	(22,665)	511
Contributed equity	97,355	96,339
Reserves	140	140
Retained earnings	(17,208)	(6,834)
Total equity	80,287	89,645

The parent entity has provided financial guarantees in respect of the bank facility of SmartScaff Pty Ltd, the guarantee is limited to $2.324m.

Note 33: Financial risk management

The Group's principal financial instruments comprise bank loans and cash and short-term deposits. The main purpose of these financial instruments is to provide a component of funding of the Group's operations. The Group has various other financial asset and liabilities such as trade receivables and payables, which arise directly from its operations.

The Group's activities expose it to a variety of financial risk, market risk (including interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and aging analysis for credit risk. Risk management is carried out by the Board of Directors, who evaluates and agrees upon risk management policy and objectives.

The Group holds the following financial instruments:

	2012$'000	2011$'000
Financial assets
Cash and cash equivalents	7,158	17,535
Trade and other receivables	48,635	31,465
	55,793	49,000
Financial liabilities
Trade and other payables	34,960	23,247
Borrowings	99,377	54,359
	134,337	77,606

The Board of Directors review the written principles for overall risk management, including the following specific areas:

a. Market risk

The Group's activities expose it primarily to the financial risk of changes in foreign currency exchange rates and interest rates. There has been no material change to the Group's exposure to market risk and how it manages those risks from 2011.

i. Foreign exchange risk

The Group undertakes certain transactions denominated in foreign currencies, hence exposure to exchange rate fluctuations arise. The Group's exposure to this risk is immaterial and consequently no formal risk management policy has been implemented and no sensitivity analysis has been undertaken.

ii. Cash flow and interest rate risk

The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's long term debt obligations that have floating interest rates. The Group's policy is to manage its interest cost using an appropriate mix between fixed and floating rate borrowings.

As at 30 June 2012, approximately 67% of the Group's total borrowings are at a fixed rate of interest (2011 – 84%) and 100% of the bank bills are at a floating rate (2011 – 100%).

The Group monitors forecasts and actual cash flows and the maturity profiles of financial assets and liabilities to manage its liquidity risk.

Notes to the Consolidated Financial Statements (CONTINUED)

NOTE 33: Financial risk management (continued)

As at the reporting date, the financial instruments exposed to interest rate risk are as follows:

		2012		2011
Consolidated	Weighted averageinterest rate%	Balance$'000	Weighted averageinterest rate%	Balance$'000
Financial assetsCash and cash equivalentsFinancial liabilities	3.75	7,158	4.60	17,535
BorrowingsNet exposure to cash flow interest rate risk	5.40	(32,760)(25,602)	6.11	(9,000)8,535
The following sets out the Group's exposure to interest rate risk, including the effectiveweighted average interest rate by maturity periods.	Weighted average
2012 Consolidated	interest rate%	1 year or less$'000	2-5 years or less%	Total$'000
Financial assetsCash and cash equivalentsFinancial liabilities	3.75	7,158	-	7,158
BorrowingsTotal	5.40	(32,760)(25,602)	-	(32,760)(25,602)
2011 Consolidated	Weighted averageinterest rate%	1 year or less$'000	2-5 years or less%	Total$'000
Financial assetsCash and cash equivalentsFinancial liabilities	4.60	17,535	-	17,535
BorrowingsTotal	6.11	(9,000)8,535	-	(9,000)8,535

Group sensitivity

As at 30 June 2011 and 2012 a sensitivity analysis has not been disclosed in relation to the floating interest deposits for the Group, as the net results of a reasonable possible change in interest rates have been determined to be immaterial to the statement of comprehensive income.

b. Credit risk

Credit risk is the risk of financial loss to the Group if a customer of counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's trade and other receivables.

The Group has adopted the policy of only dealing with recognised creditworthy counterparties and obtaining sufficient collateral or guarantees where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures credit risk on a fair value basis.

Trade and other receivables

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each counterparty.

The Group has established an allowance for impairment that represents an estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures as at 30 June 2012.

The Group's range of customers is in the main exposed to the construction industry. The Group's risk is reduced by exposure to the Residential, Commercial, and Resource & Industrial sectors of the construction industry. The Group has a significant risk exposure to one customer. The maximum amount of exposure at 30 June 2012 to the one customer is $4,268k (2011: $8,353k).

The ageing of the Group's non-impaired trade receivables at the reporting date was:	2012$'000	2011$'000
Past due 0-30 days	13,283	7,980
Past due 31-90 days	3,782	1,353
More than 90 days	2,489	246
	19,554	9,579
The ageing of the Group's impaired trade receivables at the reporting date was:
Past due 0-30 days	-	-
Past due 31-90 days	-	-
More than 90 days	776	1,101
	776	1,101
The credit quality of financial assets that are neither past due nor impaired has been assessed by reference to external credit ratings (if available) or to historicalinformation about default rates.
The counterparties with external credit rating were:
Cash and cash equivalents – 'AA' S&P Rating	7,158	17,535
Counterparties without external credit rating:
Existing customers with no defaults in past	17,903	19,428
New Customers (less than six month)Existing customers with some defaults in past	1,702-	1,165-
	19,605	20,593

Notes to the Consolidated Financial Statements (CONTINUED)

NOTE 33: Financial risk management (continued)

c. 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 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 Group has liquidity risk management policies, which assists it in monitoring cash flow requirements. Cash flow requirements for the Group are reviewed weekly.

The following are the contractual maturities of financial liabilities.

Consolidated 2012	1 Year or less$'000	1-2 Years$'000	2-5 Years$'000	More than 5 years$'000	Total$'000	Carrying amount$'000
Borrowings	37,851	-	-	-	37,851	36,213
Hire purchase liabilities	22,412	18,408	33,387	-	74,207	63,164
Trade and other payables	34,021	939	-	-	34,960	34,960
	94,284	19,347	33,387	-	147,018	134,337
Consolidated 2011	1 Year or less$'000	1-2 Years$'000	2-5 Years$'000	More than 5 years$'000	Total$'000	Carrying amount$'000
Borrowings	8,169	2,444	6,109	-	16,722	14,809
Hire purchase liabilities	14,998	12,935	20,274	-	48,207	39,550
Trade and other payables	22,650	597	-	-	23,247	23,247

d. Fair value

Due to the short term nature of current receivables and liabilities, the carrying amounts approximate to their fair value. The fair values of non-current borrowings are not considered to be materially different to their carrying values.

Note 34: Auditors remuneration

During the year the following fees were paid or payable for services provided by the Auditor, BDO Audit (WA) Pty Ltd and their related entities.

The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for Auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that Auditor independence was not compromised.

	2012$'000	2011$'000
Audit Services and review of financial statements	200	119
Non audit, advisory, tax compliance and other services	329	160
	529	279

Note 35: Contingencies

As at 30 June 2012 the Group has no material contingent liabilities or contingent assets.

Note 36: Events occurring after the reporting period

Equity raising

On 7 September 2012 GCS Group announced to undertake a capital raising of approximately $32.2m for new GCS Group ordinary shares at an offer price of $0.60 per new share. The raising was undertaken to reduce net debt by approximately $20m and provide additional working capital. Subsequent to balance date approximately $19m of the total Bill facilities has been repaid.

The institutional component was strongly subscribed and was completed on 10 September 2012. The Company issued a total of 45,401,507 new ordinary shares from this accelerated components.

The retail component of the offer is scheduled to be completed on 10 October 2012 with new shares to commence trading on 11 October 2012.

Extension of Directors' tenure

The GCS Group has agreed to extend the tenure of GCS Group Managing Director Mr Enzo Gullotti and GCS Group Executive Director Mr George Chiari.

Mr Gullotti and Mr Chiari have re-signed for a further three years on the same terms, conditions and remuneration they currently have. The extension to their contracts will expire 30 June 2015.

Mr Michael Sertorio became a Non-Executive Director of the GCS Group on 6 August 2012. Mr Sertorio was an Executive Director of the GCS Group since his appointment on 5 July 2011.

Contracts awarded

GCS has been awarded the first major scaffold supply contract on the $43 billion Gorgon Project. Under the terms, GCS will sell an initial 6,000 tonne of equipment to the CBI Kentz Joint Venture (CKJV).

ASX Additional Information

Additional information required to be included by the Australian Securities Exchange Limited and not shown elsewhere in the report is as follows. The information is applicable as at 11 October 2012.

Ordinary share capital

170,128,165 fully paid ordinary shares were held 1,465 individual shareholders. All issued ordinary shares carry one vote per share and the rights to dividends.

Of the issued fully paid ordinary shares 7,152,035 shares are subject to a voluntary escrow. The voluntarily escrowed shares are scheduled to be released on 16 October, 2012.

Distribution of members and their holdings

Size of Holding	Number of Holders	Ordinary Shares
1 to 1,000	237	41,407
1,001 to 5,000	340	1,028,556
5,001 to 10,000	256	1,989,795
10,001 to 100,000	511	14,807,598
100,001 and over	121	152,260,809
	1,465	170,128,165

There were 216 holders of less than a marketable parcel of ordinary shares.

Substantial shareholders

The number of shares held by substantial holders, as disclosed in the substantial shareholding notice given to the Company.

Shareholder	Number ofOrdinary Shares
Commonwealth Bank of Australia	18,122,068
Majicyl Pty Ltd	9,309,915
IOOF Holdings Limited	8,855,475

Twenty largest shareholders

Name	Percentage of Issued Capital	Number of Ordinary Shares Held
Citicorp Nominees Pty Ltd	9.51	16,178,781
National Nominees Pty Ltd	9.38	15,951,370
JP Morgan Nominees Australia Limited	6.31	10,738,281
Majicyl Pty Ltd	5.47	9,309,915
Piperlake Pty Ltd	4.63	7,878,788
Mr Vincenzo Daniele Gullotti	4.41	7,506,973
CASC Services Pty Ltd	4.04	6,867,622
BNP Paribas Nominees Pty Ltd	3.91	6,647,121
Meadowview Investments Pty Ltd	2.08	3,530,918
Luform Pty Ltd	2.05	3,482,584
Foshan Pty Ltd	1.87	3,183,042
Sujo Pty Ltd	1.87	3,183,042
HSBC Custody Nominees (Australia) Limited	1.87	3,175,596
Okelane Holdings Pty Ltd	1.85	3,145,558
Australian Executor Trustees Limited	1.35	2,299,584
Citicorp Nominees Pty Ltd (CFS Investments)	1.28	2,180,655
Mr Antonio Fortunato Multari	1.19	2,026,392
Mr Graeme Eden Hearn	0.96	1,638,856
Skye Alba Pty Ltd	0.94	1,591,047
AMP life Limited	0.93	1,578,859

Unquoted equity securities

	Number of Options on Issue	Number of Holders
Options issued under the GCS Employee Option Plan	690,000	11

No person holds 20% or more of the unissued ordinary shares under option.

ASX Additional Information Corporate Directory

Directors

Peter Wade Non-Executive Chairman

Enzo Gullotti Group Managing Director

Sam Mangione Non-Executive Director

George Chiari Executive Director

Michael Sertorio Non-Executive Director

Company Secretary

Vince Gerasolo

Registered Office

2 Redcliffe Road, Redcliffe, WA 6104 T: +61 8 9479 7990 | F: +61 8 9479 7789 www.gcs-group.com.au

ACN: 104 662 259 | ABN: 81 104 662 259

Auditors

BDO Audit (WA) Pty Ltd 38 Station Street, Subiaco, WA 6008

Bankers

Westpac Banking Corporation 109 St George's Terrace, Perth, WA 6000

Solicitors

Herbert Smith Freehills QV1 Building, 250 St Georges Terrace, Perth WA 6000

Stock Exchange

The Company's securities are quoted on the Official List of the Australian Securities Exchange Ltd, the home exchange being Australian Securities Exchange (Perth) Limited.

2 The Esplanade Perth, WA 6000

ASX Code

GCS

Share Registry

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St George's Terrace, Perth, WA 6000

Telephone: +61 8 9323 2000 1300 55 70 10 (within Australia)

For any change in personal details, please contact Computershare.

We work closely with our clients, and we are the industry partner of choice to leading organisations in Australia. We collaborate and engage with our customers in order to understand their requirements, overcome challenges, deliver comprehensive solutions and achieve the best project outcomes. In doing so, we're able to form long-lasting, mutually beneficial partnerships.

108 GLOBAL CONSTRUCTION SERVICES LIMITED ANNUAL REPORT 2012

Ph: 139 GCS (139 427) www.gcs-group.com.au