Maca Ltd
Annual Report 2018

Plain-text annual report

ANNUAL REPORT 2018 CORPORATE DIRECTORY MACA LIMITED ABN 42 144 745 782 DIRECTORS Andrew Edwards Non-executive Chairman REGISTERED OFFICE 45 Division Street WELSHPOOL WA 6106 SHARE REGISTRY Computershare Investor Services Pty Ltd Telephone (08) 6242 2600 Facsimile (08) 6242 2677 11 / 122 St Georges Terrace PERTH WA 6000 Chris Tuckwell Managing Director / Chief Executive Officer SOLICITORS Steinepreis Paganin Lawyers and Consultants Geoff Baker Executive Director Linton Kirk Non-executive Director Robert Ryan Non-executive Director Peter Gilford Company Secretary Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000 AUDITORS Moore Stephens Exchange Tower 2 The Esplanade PERTH WA 6000 STOCK EXCHANGE LISTINGS MACA Limited shares are listed on the Australian Securities Exchange ASX CODE : MLD WEBSITE ADDRESS www.maca.net.au MACA LIMITED ANNUAL REPORT 2018 CONTENTS Corporate Directory About MACA Chairman’s Address Managing Director’s Review of Operations Directors’ Report Remuneration Report – Audited Auditor’s Independence Declaration Corporate Governance Statement Consolidated Statement of Profit and Loss and Other comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of changes in Equity Consolidated Statement of Cash Flows Sections to the Financial Statements Directors’ Declaration Independent Audit Report Shareholder Information Inside front cover 2 3 4 12 18 32 33 36 37 38 39 40 73 74 79 1 MACA LIMITED ANNUAL REPORT 2018 ABOUT MACA MACA is a publicly listed, successful international contracting group providing services to the Australia and Latin American mining and construction industries. With a team of over 1,600 highly skilled and dedicated people we provide tailored solutions to suit the needs of our clients. We specialise in: • • • • • Contract Mining Contract Crushing Civil Construction Infrastructure, and Mineral Processing Equipment Mining – providing open pit contracting services including loading and hauling, and drilling and blasting across a range of commodities in Australia and Brazil. Crushing – providing crushing services including crushing and screening and screening only Civil Construction and Infrastructure – through our dedicated civil construction and asset maintenance businesses, we provide a broad range of civil infrastructure and maintenance services including ‘construct only or ‘design and construct’ in both ‘greenfields’ and urban ‘brownfields’ environments. Our clientele are both state and federal road authorities, local municipalities and private organisations across Australia. Mineral Processing Equipment – delivering small to large scale structural, mechanical and piping (SMP) projects including engineering, procurement and construction (EPC), new and refurbished process plant & equipment, maintenance of, and consumables including grinding media to the Mineral Processing sector of the resources industry. Incorporated as a private company in November 2002, MACA was admitted to the Australian Securities Exchange (‘ASX’) in November 2010. MACA consistently delivers on its revenue forecasts and maintains a solid financial position and operational capacity. We achieve this by understanding and working collaboratively with our clients, looking after and investing safely and development of our people and sourcing reliable and quality equipment. 2 MACA LIMITED ANNUAL REPORT 2018CHAIRMAN’S ADDRESS 2018 WAS A DIFFICULT YEAR FOR MACA AND DID NOT MEET OUR EXPECTATIONS. THIS WAS IN PART DUE TO FACTORS OUTSIDE OUR CONTROL (WIDESPREAD WET WEATHER) BUT ALSO TO FIRST HALF LOSSES INCURRED ON UNDER PERFORMING CONTRACTS IN MACA INTERQUIP AND OUR VICTORIAN CIVIL & INFRASTRUCTURE DIVISION. WE EXPECT AN IMPROVED TRADING PERFORMANCE IN 2019 AS WE CONTINUE TO PURSUE OUR STRATEGY OF DIVERSIFYING AND EXPANDING THE GROUP’S REVENUE BASE. MACA delivered a full year net profit after tax of $23.6 million. This was 26% down on the prior year, reflecting the impact of the factors noted above. I would like to offer my sincere thanks to our executive leadership team and all our staff for their hard work, and to my fellow Directors for their wise counsel. I would also like to thank our shareholders for your continuing support and assure you that the Board remains focused on delivering strong shareholder returns. Andrew Edwards Chairman The lower earnings, combined with the impacts on working capital from the Company’s support of Blackham Resources’ recapitalisation and the recovery of monies owed by Beadell Resources (now formalised in a payment plan agreed as part of the termination of the Tucano mining contract), have weighed on MACA’s share price over the past 12 months. We are confident in the Company’s ability to improve its financial performance in the current year and beyond. As previously announced, MACA is expecting revenue to increase to approximately $620 million in FY19, of which over 92% is already contracted. Our Australian mining operations continue to perform solidly given the wet weather in the second half which affected all sites. The recently announced contract extension with Regis Resources at the Duketon South Operations is testament to the strong relationships the Company has developed with its customers as well as our strong focus on safety, continuous improvement and exceeding client expectations. Our strategy of diversifying the Group’s operational activities also continues to advance. In recent months we have been awarded crushing contracts with BHP and a ‘life of mine’ coal contract in Queensland with Carabella Resources. Our civil and infrastructure businesses achieved a much improved financial performance on the prior year. We expect these businesses to continue their upward progression in 2019 as we realise the benefits of past investments made in these sectors. As at the end of August the Group had contracted work in hand of almost $2 billion and a decent pipeline of opportunities. With its strong balance sheet, including cash on hand as at 30 June 2018 of $108 million, MACA is well placed to realise its growth objectives. Your Directors have declared a final dividend of 3.5 cents per share, taking the total dividends for the year to 6.5 cents fully franked. This dividend has been set having regard to the recent level of earnings and the desire to retain sufficient funds for equipment and working capital investments required to support future projects. 3 MACA LIMITED ANNUAL REPORT 2018MANAGING DIRECTOR’S REVIEW OF OPERATIONS Dear Shareholders MINING - AUSTRALIA This report marks the eighth year since listing and sixteenth year since incorporation of MACA, I am pleased to present a review of the company’s performance to you the shareholders of MACA Limited. The 2018 financial year was a challenging one in many respects, with significant one off items having a substantial impact on first half results and the second half results being impacted by wet weather across all mining sites. Whilst wet weather is always encountered in the second half of the financial year, it is unusual to have impact across all Western Australia mining sites at the same time. Against that background the Group’s core mining services business has continued to perform solidly. The other parts of our business are maturing and beginning to generate improved financial performance in line with our corporate group strategy. Operational activities have continued to grow in gold, with MACA commencing new contracts with Ramelius Resources at Mount Magnet and Minjar Gold at Cue, and for Pilbara Minerals Pilgangoora Lithium project. During the period MACA continued operations at Rosemont, Garden Well and Moolart Well for Regis Resources, Abydos and Mt Dove for Atlas Iron, and at Matilda for Blackham Resources. Operations at Central Murchison for MetalsX, Browns Range for Northern Minerals, and Abydos for Atlas Iron were completed during the year. Subsequent to year end operations commenced on our crushing services contract for BHP at various sites within the Pilbara region and works at Mt Dove for Atlas Iron ceased as at end of July 2018. 4 MACA LIMITED ANNUAL REPORT 2018The commencement of both BHP crushing projects being Mining Area C late in the first half and crushing of stemming material and other stockpiles at various sites in July 2018 will enable MACA to fully utilise our idle crushing equipment and importantly continued employment for personnel relocating from completed crushing projects. Further subsequent to year end MACA has been awarded; - - Extended tenure with Regis Resources at Duketon South for a period of 5 years from July 2018; and A 10 year ‘Life of Mine’ coal contract in Queensland for Carabella Resources – this contract will see the business working in a new geographic location, in a different commodity and with the next size up of equipment than the business has to date operated with. MINING - INTERNATIONAL The copper project for Avanco Resources (now owned by Oz Minerals) at the Antas mine continues to perform satisfactorily given the challenges of remoteness. At year end MACA agreed a mutual termination of the contract with Beadell Resources at the Tucano project. The Company continues to look for further opportunities in Brazil given the majority of equipment coming available from the termination with Beadell Resources. FINANCIAL AND OPERATING PERFORMANCE Operating revenue of EBITDA of $562.6m $78.8m Net operating cash flow of Final dividend per share of $8.7m 3.5c (Fully franked) Total for FY18 of 6.5 CPS) Net profit after tax attributable to members of $23.6m Strong balance sheet with a net cash position of $63.3m 5 MACA LIMITED ANNUAL REPORT 2018MANAGING DIRECTOR’S REVIEW OF OPERATIONS OPERATIONS MINING AND CRUSHING The division’s revenue of $401 million represented 71% of the total Group revenue and was derived from continuing operations, the completion of 4 projects and the commencement of 3 new projects during the period. Mining and crushing contracts by sector from July 2017 include: GOLD Angle-Right Mining services Commenced Ramelius Resources at Mount Magnet in July 2017 Minjar Gold at Gossan Hill in March 2018 Continued Regis Resources at Moolart Well Completed Awarded subsequent to year end Regis Resources at Garden Well Regis Resources at Rosemont Blackham Resources at Matilda Metals X at Central Murchison in Sept 2018 Beadell Resources at Tucano (Brazil, South America) in June 2018 Extended tenure at Garden Well and Rosemont (Duketon South Operations) for Regis Resources in July 2018 IRON ORE Angle-Right Crushing and screening services Continued Completed To commence Atlas Iron at Mt Dove Atlas Iron at Abydos in Sept 2017 (mining and crushing services only) BHP at Mining Area C in December 2018 Awarded subsequent to year end BHP (stemming and other stockpiles at various sites) in July 2018 COAL Awarded subsequent to year end Carabella Resources at Bluff Coal (Queensland) in July 18 COPPER Angle-Right Mining services Continued LITHIUM Angle-Right Mining services Commenced 6 Avanco Resources at Antas (Brazil, South America) Pilbara Minerals at Pilgangoora in January 2018 OTHER MINERALS Angle-Right Mining services Completed Northern Minerals at Browns Range in November 2017 CIVIL AND INFRASTRUCTURE The civil and infrastructure businesses continued a strong performance with growth in 2017/18 in both the Western Australian and Victorian sectors. Both sectors exceeded business plan revenue targets and increased market share by strong performances on our projects and positive relationships with our valued clients. In Western Australia, the civil business unit delivered its highest ever revenue turnover for MACA since its inception in 2007 and met all operational and performance key performance indicators for the period. The result was underpinned by the success of the Gruyere Gold project near Laverton which was the largest earthworks project undertaken by any Earthworks Contractor in WA in 2017. The Gruyere project involved the greenfield development of the overall process plant bulk earthworks, access roads, storage ponds, airstrip, sealed intersections and tailings storage facility (TSF) works and commenced in June 2017. The initial program was completed in April 2018 and our civil team is now constructing additional lining works in the TSF for Gruyere and miscellaneous earthworks as a Stage 2 award to the original contract. Other contracts were delivered for Blackham Resources and Pilbara Minerals in the period and new projects commenced in Q3 2018 for Main Roads WA at Coongan Gorge and Western Areas Odysseus Evaporation Pond Project. The infrastructure business in Western Australia has maintained its strong relationship with Main Roads during the period and continued it’s delivery of the Road and Asset Maintenance contract in the Kimberley region. One of the success stories from this project has been the outstanding intake of local aboriginal employees in the workforce and their job growth development in the region. The civil and infrastructure business in Victoria has maintained its strong relationships with VicRoads and Baw Baw Shire Council plus other local government clients with continuing long-term Road and Asset Maintenance contracts. Two significant Design/Construct Projects were secured with VicRoads at O’Herns Road Upgrade and Doncaster Bus Lanes. MACA Civil was also invited to join a panel of local contractors to deliver safety improvements to Victorian Roads. These panel contracts involve safety barrier upgrades and MACA Civil was voted No. 1 Contractor out of the 16 participants in a recent internal survey by Vic Roads. MACA Civil once again achieved re-certification in the National pre-qualification system to R4 / B1 (conditional) level for Roads and has also retained its accreditation to the Office of Federal Safety. This allows continued participation on or competing for federally funded public infrastructure projects. MACA LIMITED ANNUAL REPORT 2018Angle-Right Western Australia Projects Angle-Right Victoria Projects Gruyere Joint Venture - Site Bulk Earthworks, Access Roads, Airstrip and Tailings Storage Facility works Pilbara Minerals - Tailings Storage Facility Blackham Resources - Tailings Storage facility Main Roads WA - for Kimberley Road Maintenance Main Roads WA - Coongan Gorge realignment in the Kimberley region Western Areas - Odysseus Evaporation ponds at the Cosmos project VicRoads - Western Region Road and Roadside Maintenance VicRoads - Design and Construct signalized Intersection Upgrade - O’Herns Road, Epping VicRoads - Safe System Road Infrastructure Projects (SSRIP) Project Zero Construction Panel VicRoads - Design and Construct Doncaster Bus-lanes Works for various shires and councils - Yarra Ranges, Baw Baw, Hobson Bay, Mornington Peninsula and Wyndham City MINERAL PROCESSING MACA Interquip (MACA 60% owned) is a business providing end to end processing solutions in Western Australia and the Northern Territory. This acquisition has enabled MACA to establish a Structural, Mechanical and Piping (SMP) offering within the mining industry providing engineering, procurement and construction (EPC) services. Earnings were adversely affected by an under-performing contract in the MACA Interquip (60% owned) business in the first half of 2018. Steps have been taken to address the issues that arose in the fixed price contract. The current solid pipeline of opportunities supports MACA’s objectives of revenue and profit growth going forward. Angle-Right Western Australia Projects Refurbishment and maintenance services for Panoramic Resources Savannah project SMP services for a filtration upgrade for Sandfire Resources De Grussa project Secondary mill upgrade for AngloGold Ashanti at Tropicana Angle-Right Northern Territory Projects Newmont Mining - Tanami Gold project mill upgrade THE BUSINESS MACA is well placed to participate in the upswing in a number of projects in both mining and civil and infrastructure sectors. The latest award of the Bluff Coal project in Queensland will further underpin our mining services business in a new jurisdiction and commodity exposure. In addition, our Civil and Infrastructure businesses are starting to benefit from increased spending on road and asset management predominantly on the East Coast. Our work in hand for both the Civil and Infrastructure, and Interquip businesses stands at record levels from the start of the new financial year and we expect to see a further improvement in our financial returns form these businesses. Our strategy is to make the business more diversified and sustainable, and to do this we have a Growth Plan that looks at our Strategy, our Key Area of Focus and the Critical Success Factors that will build and deliver on this Strategy. MACA LIMITED ANNUAL REPORT 2018 7 MANAGING DIRECTOR’S REVIEW OF OPERATIONS THE BUSINESS (CONTINUED) In short, our Strategy is underpinned by: - Delivering for exiting clients; - Winning new work; - Diversifying into new markets, services - and commodities; Extracting value from all trading divisions and assets; and - Providing our divisions with support to grow The Key Areas of Focus include: Safety, health and wellbeing; FINANCIAL AND OPERATING PERFORMANCE Deliver on financial targets; Attraction retention and people development Business improvement and Technology; and Risk Management The Critical Success factors are: Safety, health and wellbeing Financial discipline Client Focus MACA Can Do culture Business improvement; and Informed decision making 30 June 2018 30 June 2017 Movement Revenue EBITDA EBIT Net Profit Before Tax Net Profit After Tax Contracted Work in Hand Operating Cash Flow Earnings per share - basic Dividends per share (fully franked) 1 As at 31 August 2018 $562.6M $497.9M $78.8M $29.4M $31.6M $23.6M $1,051M $8.7M 9.1 cents 6.5 cents $99.2M $46.4M $44.1M $32.1M $1,982M 1 $68.1M 13.7 cents 9.0 cents 13% (20)% (37)% (28)% (26)% Group revenue increased overall by 13%, with a decline in growth of the core mining segment of 5%, an increase in revenue of 93% from $72 million to $139 million for the civil and infrastructure division and mineral processing equipment businesses now separated out as a new business segment. The total dividend paid during the year was $19.0 million (2017: $21.0 million). OPERATING CASH FLOW AND CAPITAL EXPENDITURE Operating cash flow for the 12 months ending 30 June 2018 was $8.7 million. The Net Profit Before Tax was $31.6 million for the year ended 30 June 2018. The Mining Division made a profit before tax of $37.1 million on a reduced revenue and wet weather in the second half as discussed earlier in the report. The Civil and Infrastructure Division reported a profit before tax of $1.4 million and the 60% owned Interquip SMP Division recorded a loss of $8.1 million predominantly due to a loss making contract in the first half. Capital expenditure for the financial year was $39.6 million relating to plant and equipment associated with sustaining capital and the commencement of the Pilgangoora project for Pilbara Minerals and some capital commitments for early works for the crushing project for BHP at Mining area C. Capital equipment purchases were funded by a combination of cash and equipment finance contracts. The Company did not enter into any off balance sheet financing arrangements. EBITDA (Earnings before interest, tax, depreciation and amortisation) was $78.8 million (14% of revenue) for the period ending 30 June 2018. DIVIDEND On the 27th August 2018, the board of MACA Limited declared a final dividend for the financial year ending 2018 of 3.5 cents per share. This payout is consistent with our targeted guideline and the Board’s objective to provide a return to shareholders whilst still retaining the financial capacity to support our growth plans. The operating cashflow in the second half was significantly impacted by working capital adjustments as a result of repayment arrangements and extended terms provided on new projects. These include support of Blackham Resources recapitalisation (refer ASX announcement 15th January 2018) for $14.9 million, and mutual termination of Tucano Mining Contract, (refer ASX announcement 22nd June 2018) where we agreed a repayment plan with $6.2 million received since the end of the reporting period. 8 MACA LIMITED ANNUAL REPORT 2018 MACA’s HSEQ Management System is our totally integrated internal knowledge base of HSEQ process information continually improved from lessons learned, alignment to changes in legislation and other internal corrective actions and feedback applied. MACA’s HSEQ Management System complies with the requirements of AS/NZS4801:2001 Occupational Health and Safety Management System and ISO14001:2015 Environmental Management Systems which is externally accredited by SAI Global under these Standards. The continued focus on health and safety through our proactive processes and risk-based approach, has seen our Lost Time Injury Frequency Rate (LTIFR) at zero for the 2018 financial year and other safety metrics remain well below industry benchmarks. QUALITY MANAGEMENT The integrated approach of MACA’s HSEQ Management System allows all of MACA’s systems and processes to function under one complete quality management system framework, providing the business structure and allowing internal departments and projects alike, within the company, to function in an interdependent and interrelated manner. MACA Limited is also externally accredited by SAI Global for complying with the requirements of ISO9001:2015 Quality Management System. BALANCE SHEET AND GEARING The Group as at 30 June 2018 remains in a strong financial position with a net cash position of $63 million and with cash on hand of $108 million. In September 2017 MACA raised a total of ~$60.0 million through a placement of ~33.4 million shares at an issue price of $1.80 per share (“Placement”). Post completion MACA has retained a substantial cash balance to maintain its financial capacity to drive further growth opportunities. ORDER BOOK As at 30 June 2018 the Company had Work-In-Hand of $1,051 million, with Mining accounting for $906 million, Civil and Infrastructure being $125 million and Interquip $18 million. The current order book as at the end of August 2018 stands at $1,982 million. HEALTH, SAFETY AND ENVIRONMENT MACA is committed to driving and developing leadership behaviour so the likelihood of realising ‘zero harm’ to health, safety and to the environment grows and is embedded in our culture. We recognise that people are the greatest asset in MACA and our brand is defined by how we live our core values in the workplace. We provide the tools, information and coaching to empower people in responsibility for the safety of themselves and others and in doing so create an ownership that has developed into a proactive HSEQ Management System. MACA acknowledges we work in a risky environment, however we manage those risks proactively through consultation with our workforce and through a preventive mindset for only accepting work will proceed after each potential significant risk is reduced to as low as reasonably practicable by implementing and verifying each Critical Controls is in place and is working. 9 MACA LIMITED ANNUAL REPORT 2018MANAGING DIRECTOR’S REVIEW OF OPERATIONS PEOPLE MACA is a people focused Company with our team being central to our success. At the end of June, the number of employees and contractors across our workforce globally was 1,680, up 9% from the previous period due to increased project activity and resulting demand for labour. Our approach to business, The MACA Way is underpinned by our vision, core values and brand promise: Our Vision: Be number 1 in what we do. OUR CORE VALUES: People First We care for people and create a safe and enjoyable workplace. We treat them fairly, with integrity, honesty and respect. Exceed Expectations We strive to consistently exceed employee, client and investor expectations. We recognise the importance of encouraging and rewarding continuous improvement and innovation. We show leadership and responsibility for our community. Continuous Improvement Community OUR BRAND PROMISE: We Care We are Flexible We Deliver Our people strategy remains focused on: - Safety, health and wellbeing of our team - Attraction and retention of highly skilled people who fit The MACA Way - People development - Succession planning - Team engagement and feedback - Creating a united culture across our operations - Diversity and equality of our people 10 MACA LIMITED ANNUAL REPORT 2018LEARNING AND DEVELOPMENT COMMUNITY MACA is committed to investing in our people and providing opportunities for them to grow and develop. We continue to implement several initiatives aimed at enhancing the capability and performance of our team which ensures we are able to successfully meet the needs of our clients. Key initiatives underway include: - Leadership and Management Program - Traineeships (surface extraction, drilling, warehouse operations, civil construction) - Apprenticeships - Engineering Graduate Program ABORIGINAL ENGAGEMENT MACA is fully committed to providing direct employment to Aboriginal people. Our Aboriginal Employment Program is focused on providing Aboriginal people equal opportunity to access jobs, skills development and career prospects. Our Reconciliation Action Plan (RAP) launched in 2017 supports our Company aim of, where we can, playing a part in enhancing the lives of Aboriginal people. MACA is an active supporter of the community through ongoing partnerships, donations and sponsorships. Our MACA in the Community Program is focused on making a positive difference to the community and society as a whole. We actively encourage all of our employees to volunteer their time to support a local charity, cause or event. We are proud of our long-standing partnerships with the following: - MACA Ride to Conquer Cancer in support of the Harry Perkins Institute of Medical Research - Hawaiian Ride for Youth in support of Youth Focus - Perth Children’s Hospital Foundation - Starlight Children’s Foundation - West Australian Symphony Orchestra In closing, MACA highly values its hard working, dedicated and loyal employees. The Board would like to extend its thanks to them and all of our stakeholders who remain an integral part of our success, and our clients who show great faith in MACA to deliver services in a safe, timely and cost effective manner. Chris Tuckwell Managing Director, CEO MACA LIMITED ANNUAL REPORT 2018 11 DIRECTOR’S REPORT 12 MACA LIMITED ANNUAL REPORT 20181 As at 31 August 201837%Principal Activities and Any Significant Changes in NatureTheprincipalactivitiesoftheGroupduringtheyearwereinthreebusinessesandtwogeographicalsegmentsbeingtheprovisionofcontractminingservices,civilcontractingservicesandmineralprocessingservicesthroughoutAustralia,andcontractminingservicesin Brazil, South America. ChangeAreviewof,andinformationabouttheoperationsoftheconsolidatedentityforthefinancialyearandtheresultsofthoseoperationsare set out in the Chairman's Address and the Managing Director's Review of Operations that forms part of this Directors' report.497.928%1,13068.19 centsThere were no significant changes in the nature of the Group's principal activities during the financial year.TheDirectorspresenttheirreport,togetherwiththefinancialstatements,oftheconsolidatedentity(referredtohereafterasthe'consolidatedentity')consistingofMACALimited(referredtohereafterasthe'company'or'parententity')andtheentitiesitcontrolled for the year ended 30 June 2018.Mr Robert Neil Ryan (Non-executive Director) Mr Linton John Kirk (Non-executive Director)Mr Geoffrey Alan Baker (Executive Director)Mr Christopher Mark Tuckwell (Chief Executive Officer and Managing Director)Mr (Hugh) Andrew Edwards (Chairman, Non-executive Director)The following persons were directors of MACA Limited during the whole or part of the financial year and up to the date of this report:Directors4.54.5Interim dividend declared and paid per ordinary shareFinal dividend declared and paid per ordinary share3.03.5The final fully franked dividend was paid on 20th September 2018.Dividend Reinvestment PlanThere is no dividend reinvestment plan in place. A summary of key financial indicators is set out in the table below.Review of Operations13.7 cents13%Basic earnings per share Dividend per share (fully franked) 1,982 16.5 centsEBITDA $'M$'M20172018562.69.1 cents99.246.444.132.126%Operating CashflowContracted Work in HandNet Profit after tax 8.731.623.621%Directors' ReportDividends Paid or RecommendedDividends that are fully franked and paid or declared for payment since the end of the previous financial year are as follows:2017cps2018cps78.829.4RevenueNet Profit before tax EBIT DIRECTOR’S REPORT 13 MACA LIMITED ANNUAL REPORT 2018SubsequenttotheendofthereportingperiodMACAhasexecuteda10year‘lifeofmine’contractwithCarabellaResourcesPtyLtdfortheprovisionofminingservicesattheBluffCoalprojectnearBlackwaterintheBowenBasininQueensland(referASX announcement 31 July 2018) that will generate $700 million in revenue over a 10 year period from November 2018. Qualifications:Title:B Com FCA SF Finsia FAICDIndependent Non-executive ChairmanMrEdwardsiscurrentlyamemberoftheBoard'sRemunerationCommittee,AuditCommitteeandRiskCommittee.Changes in controlled entitiesEvents Subsequent To Balance DateAfter balance date events include the following:SubsequenttotheendofthereportingperiodMACAhasbeenawardedanextensionatDuketonSouthforRegisResources(refer ASX announcement 31 July 2018) that will generate a further $590 million in revenue over a 5 year period from July 2018. OtherthanthemattersdetailedabovenocircumstanceshavearisensincetheendofthefinancialyearwhichsignificantlyaffectedormaysignificantlyaffecttheoperationsoftheGroup,theresultsofthoseoperations,orthestateofaffairsoftheGroupinfuturefinancial years.Information on current DirectorsMrEdwardsiscurrentlyNon-executiveChairmanofMMAOffshoreLimited(appointedDecember2009)andNon-executiveDirectorofNidoPetroleumLimited(appointedDecember2009)(delistedfromASXJune 2017).Mr Edwards has been a board member of MACA Limited since 10th November 2010.MrEdwardsisaformerManagingPartnerofPriceWaterhouseCoopers(PwC),PerthOffice,aformernationalVicePresidentoftheSecuritiesInstituteofAustralia(nowtheFinancialInstituteofAustralasia)andaformerPresidentoftheWesternAustraliandivisionofthatInstitute.MrEdwardsisaFellowofChartered Accountants Australia and New Zealand and has served as a state councillor of that Institute. Mr Andrew EdwardsNilName:Current directorships:Experience and expertise:During the period MACA gained control of the following entities:Interest in shares Special responsibilities:20,000There have not been any significant changes in the state of affairs of the Company.Environmental IssuesMACA is aware of its environmental obligations with regard to its principal activities and ensures it complies with all regulations.Significant Changes in State of AffairsFormer directorships (in last 3 years)Nil.DIRECTOR’S REPORT 14 MACA LIMITED ANNUAL REPORT 2018184,619 vesting 30 June 2020215,476 vesting 30 June 2019146,775 vesting 30 June 2020Special responsibilities:Mr Baker is currently a member of the Board's Risk Committee.Former directorships (in last 3 years)Mr Kirk is currently the Chair of the Board's Audit Committee and Risk Committee and a member of the Remuneration Committee.MrKirkhasover35years'experienceinminingandearthmoving,coveringbothopenpitandundergroundoperationsinseveralcommodities.Hehasheldtechnical,operationalandmanagementpositionsinavarietyofminingandminingservicecompaniesthroughouttheworldpriortobecomingaconsultantin1997.MrKirkholdsaBachelorofEngineering(Mining)degreefromtheUniversityofMelbourne,isafellowandChartedProfessionaloftheAustralianInstituteofMiningandMetallurgyandhas completed a Company Directors course.Current directorships:Mr Kirk has been a board member of MACA Limited since 1st October 2012.Interest in shares 50,000363,816 vested 30 June 2018 not yet issuedQualifications:Name:Title:Executive DirectorQualifications:MAICDExperience and expertise:MrBakerisafoundingshareholderofMACA.Geoffisresponsibleforplanning,operatingstrategy,capitalexpenditureanddeliveryofsafetyandfinancialoutcomesonallprojectsforthebusiness.MrBaker has worked in the sector for 39 years focusing on plant maintenance and asset management.774,064Former directorshipsMr Tuckwell was a board member of MACA Limited from 10th November 2010 to 25th July 2012.(in last 3 years):Nil.Name:Mr Chris TuckwellTitle:Chief Executive Officer and Managing DirectorQualifications:B Eng (Construction) Experience and expertise:MrTuckwellholdsaBachelorofEngineering-Constructionandhasspenthisentirecareerwithintheminingindustry,workingwithbothminingcontractorsandminingcompaniesoverthepast33years.DuringhiscareerMrTuckwellhasalsofulfilledsenioroff-shoremanagementandexecutivepositionsinWest and East Africa, South America, Indonesia and the West Indies.Current directorships:Mr Tuckwell has been a board member of MACA Limited since 4th August 2014.Special responsibilities:Mr Tuckwell is currently a member of the Board's Risk Committee.268,254 vesting 30 June 2019Interest in shares 444,737 vested 30 June 2018 not yet issuedInterest in shares Name:Mr Geoff BakerMr Kirk was a Non-executive Director of Middle Island Resources from September 2011 to July 2016.Special responsibilities:Experience and expertise:Title:Independent Non-executive DirectorB Eng (Mining) FAusIMM (CP) Mr Linton Kirk12,500,000Current directorships:Mr Baker has been a board member of MACA Limited since 10th November 2010.Interest in Performance Rights Interest in Performance Rights Former directorships (in last 3 years)Nil.DIRECTOR’S REPORT 15 MACA LIMITED ANNUAL REPORT 2018NumberNumberNumberNumberattendedattendedattendedattended62226--26--262226222B Com CA AGIA ACISTitle:Chief Financial Officer / Company SecretaryName:The number of directors meetings which directors were eligible to attend (including Committee meetings) and the number attended by each director during the year ended 30th June 2018 were as follows:Experience and expertise:MrGilfordhasover17year'sexperienceintheareasoffinancialmanagement,accounting,businessandtaxationservices.Hehasprovidedservicestoalargenumberofmining,explorationandconstructioncompaniesandhasprovidedservicestoMACAforover10years.MrGilfordhasactedinrolesofDirector,CompanySecretaryandCFOforanumberofprivatelyownedbusinesses.PeterisamemberoftheCharteredAccountantsAustraliaandNewZealandandhascompletedaGraduateDiplomainAppliedCorporate Governance with the Governance Institute of Australia.2226to attendNumber eligibleto attendNumber eligibleto attendNumber eligibleto attend2-Remuneration ReportThe audited remuneration report is set out on pages 18 to 31 and forms part of this Directors' Report.DuringthefinancialyeartheCompanypaidapremiuminrespectofacontractinsuringthedirectorsoftheCompany,thecompanysecretaryandallexecutiveandnon-executivedirectorsoftheCompanyandanyrelatedbodycorporateagainstaliabilityincurredassuch a director, company secretary or executive officer to the extent permitted by the Corporations Act 2001.Indemnifying Officers or AuditorCommittee MeetingsDirectors' Meetings2--2Chris Tuckwell Robert RyanAudit Remuneration Risk 22Mr Peter GilfordNumber eligible6Special responsibilities:MrRyaniscurrentlytheChairoftheBoard'sRemunerationCommitteeandmemberoftheAuditCommittee and Risk Committee.Experience and expertise:MrRyanhasextensivecivilcontractingandconstructionengineeringexperiencewithparticularexpertiseinengineering,project,assetandseniormanagement.Hisexperienceininfrastructureprojectsissubstantial.MrRyanhasextensiveexperienceatseniorlevelsofasignificantpubliccompanyandwasapartner in a successful civil earthmoving business for over 12 years. Current directorships:Mr Ryan has been a board member of MACA Limited since 18th August 2015.Interest in shares 28,604Andrew EdwardsMeetings of DirectorsQualifications:Mr Robert RyanName:TheCompanyhasnototherwise,duringorsincetheendofthefinancialyear,excepttotheextentpermittedbylaw,indemnifiedoragreedtoindemnifyanofficerorauditoroftheCompanyorofanyrelatedbodycorporateagainstaliabilityincurredassuchanofficerorauditor.Inaccordancewithaconfidentialityclauseundertheinsurancepolicy,theamountofthepremiumpaidtoinsurershas not been disclosed. This is permitted under s300(9) of the Corporations Act 2001. 6-22266Linton KirkGeoff BakerTitle:Independent Non-executive DirectorQualifications:CP Eng MIEAust MAICDFormer directorships (in last 3 years)Nil.DIRECTOR’S REPORT 16 MACA LIMITED ANNUAL REPORT 2018Demand RiskBusiness AcquisitionsGenerallyintheminingindustry,mostcontractscanbeterminatedforconveniencebytheclientatshortnoticeandwithoutpenalty,withtheclientpayingforallworkcompletedtodate,unusedmaterialandinmostcasesdemobilisationfromthesiteandredundancies.Asaresult,therecanbenoassurancethatworkinhandwillberealisedasrevenueinanyfutureperiod.MACAseekstomanagethisriskbybeingselectiveinthecontractsthatitentersintoandalwaysseekstoextendcontractswherepossibleinaneffort to maximise its return on capital.NopersonhasappliedforleaveofCourttobringproceedingsonbehalfoftheCompanyorinterveneinanyproceedingstowhichtheCompany is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.No non-audit services were provided during the year by the auditor to the Company or any related body corporate.Auditors Independence DeclarationTheauditor'sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001issetoutonpage32andformspart of the directors' report for the financial year ended 30 June 2018.Theindustrysectorsinwhichweoperateinvolveahighdegreeofoperationalrisk.MACAbelievesittakesreasonableprecautionstomanagesafetyandenvironmentalriskstoensurethecontinuedsustainabilityofthebusiness.However,therecanbenoassurancethattheCompanywillavoidsignificantcosts,liabilityandpenaltiesorcriminalprosecution.Thisriskismitigatedbyprogressivelyimprovingonalreadyhighsafetyperformancestandardsacrossthebusinessandbymaintainingindependentlyreviewedhealthandsafety, environmental and quality certifications. The execution and delivery of projects involves judgment regarding the planning, development and operation of complex operating facilities and equipment. Some parts of MACA's business are involved in large-scale projects that may occur over extended time periods. As a result, the Company's operations, cash flows and liquidity could be affected if MACA miscalculates the resources or time needed to complete a project, if it fails to meet contractual obligations, or if it encounters delays or unspecified conditions. MACA maintains a strict project monitoring regime, proactive management and decision making to mitigate project delivery risks.MACAisacontractoroperatingpredominantlyintheminingresourcesandcivilsectors.Asaresult,failuretoobtaincontracts,delaysinawardsofcontracts,cancellationsorterminationsofcontracts,delaysincompletion,changesineconomicconditionsandthevolatileandcyclicalnatureofcommoditypricesmeansthatthedemandforMACA'sgoodsandservicescanvarymarkedlyoverrelativelyshortperiods.Accordingly,changesinmarketconditionscouldimpactMACA'sfinancialperformance.TheCompanyseekstomanagedemandriskasbestitcanbymaintainingadiversifiedclientbaseandcommoditymixandhavingaproportionofequipment and labour on hire.WhenMACAacquiresabusinessthereisariskofnotbeingabletorealiseorsustainexpectedbenefitsoftheacquisition.Thegoodwillrepresentstheamountspaidforthebusiness,lessthefairvalueofthenetassetsacquired.MACA,atleastannually,reviewsthecarryingvalueofgoodwillandmayincurimpairmentchargesrelatedtogoodwillifthebusinessesormarketstheyservedeteriorate.Inaddition,businessesthatMACAacquiresmayhaveliabilitiesthatMACAwasunawareofinthecourseofperformingduediligenceinvestigations.AnysuchliabilitiesmayhavematerialadverseimpactonMACA'sbusinessandfinancialposition.Aspartoftheduediligenceprocess,MACAthoroughlyreviewsallcontractstomitigatetheriskofacquiringonerouscontractsandchangeincontrol provisions, and historic liabilities and integration risks.Order Book RiskProceedings on Behalf of CompanyHealth, Safety, Sustainability and Environment Risk Project Delivery RiskRiskSetoutbelowisanoverviewofthemoresignificantbusinessrisksfacingMACAandtheapproachtakentomanagingthoserisks.Thefactorsidentifiedbelowarenotneccessarilylistedinorderofimportanceandarenotintendedasanexhaustivelistofalltherisksand uncertainties associated with the MACA business. MACA'sriskmanagementframeworkisembeddedwithinexistingprocessesandisalignedtotheCompany'sstrategicbusinessobjectives.GiventhemarketsandthegeographiesinwhichtheCompanyoperates,awiderangeofriskfactorshavethepotentialtoaffecttheachievementoftheseobjectives.ForfurtherinformationinrelationtotheCompany'sriskmanagementframework,referto the Corporate Governance Statement.Non Audit ServicesASIC CI 2016/191 Rounding of AmountsTheCompanyisanentitytowhichASICCI2106/191RoundingofAmountsappliesand,accordingly,amountsinthefinancialstatements and directors' report have been rounded to the nearest thousand dollars.The Company was not a party to any such proceedings during the year.Demand RiskBusiness AcquisitionsGenerallyintheminingindustry,mostcontractscanbeterminatedforconveniencebytheclientatshortnoticeandwithoutpenalty,withtheclientpayingforallworkcompletedtodate,unusedmaterialandinmostcasesdemobilisationfromthesiteandredundancies.Asaresult,therecanbenoassurancethatworkinhandwillberealisedasrevenueinanyfutureperiod.MACAseekstomanagethisriskbybeingselectiveinthecontractsthatitentersintoandalwaysseekstoextendcontractswherepossibleinaneffort to maximise its return on capital.NopersonhasappliedforleaveofCourttobringproceedingsonbehalfoftheCompanyorinterveneinanyproceedingstowhichtheCompany is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.No non-audit services were provided during the year by the auditor to the Company or any related body corporate.Auditors Independence DeclarationTheauditor'sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001issetoutonpage32andformspart of the directors' report for the financial year ended 30 June 2018.Theindustrysectorsinwhichweoperateinvolveahighdegreeofoperationalrisk.MACAbelievesittakesreasonableprecautionstomanagesafetyandenvironmentalriskstoensurethecontinuedsustainabilityofthebusiness.However,therecanbenoassurancethattheCompanywillavoidsignificantcosts,liabilityandpenaltiesorcriminalprosecution.Thisriskismitigatedbyprogressivelyimprovingonalreadyhighsafetyperformancestandardsacrossthebusinessandbymaintainingindependentlyreviewedhealthandsafety, environmental and quality certifications. The execution and delivery of projects involves judgment regarding the planning, development and operation of complex operating facilities and equipment. Some parts of MACA's business are involved in large-scale projects that may occur over extended time periods. As a result, the Company's operations, cash flows and liquidity could be affected if MACA miscalculates the resources or time needed to complete a project, if it fails to meet contractual obligations, or if it encounters delays or unspecified conditions. MACA maintains a strict project monitoring regime, proactive management and decision making to mitigate project delivery risks.MACAisacontractoroperatingpredominantlyintheminingresourcesandcivilsectors.Asaresult,failuretoobtaincontracts,delaysinawardsofcontracts,cancellationsorterminationsofcontracts,delaysincompletion,changesineconomicconditionsandthevolatileandcyclicalnatureofcommoditypricesmeansthatthedemandforMACA'sgoodsandservicescanvarymarkedlyoverrelativelyshortperiods.Accordingly,changesinmarketconditionscouldimpactMACA'sfinancialperformance.TheCompanyseekstomanagedemandriskasbestitcanbymaintainingadiversifiedclientbaseandcommoditymixandhavingaproportionofequipment and labour on hire.WhenMACAacquiresabusinessthereisariskofnotbeingabletorealiseorsustainexpectedbenefitsoftheacquisition.Thegoodwillrepresentstheamountspaidforthebusiness,lessthefairvalueofthenetassetsacquired.MACA,atleastannually,reviewsthecarryingvalueofgoodwillandmayincurimpairmentchargesrelatedtogoodwillifthebusinessesormarketstheyservedeteriorate.Inaddition,businessesthatMACAacquiresmayhaveliabilitiesthatMACAwasunawareofinthecourseofperformingduediligenceinvestigations.AnysuchliabilitiesmayhavematerialadverseimpactonMACA'sbusinessandfinancialposition.Aspartoftheduediligenceprocess,MACAthoroughlyreviewsallcontractstomitigatetheriskofacquiringonerouscontractsandchangeincontrol provisions, and historic liabilities and integration risks.Order Book RiskProceedings on Behalf of CompanyHealth, Safety, Sustainability and Environment Risk Project Delivery RiskRiskSetoutbelowisanoverviewofthemoresignificantbusinessrisksfacingMACAandtheapproachtakentomanagingthoserisks.Thefactorsidentifiedbelowarenotneccessarilylistedinorderofimportanceandarenotintendedasanexhaustivelistofalltherisksand uncertainties associated with the MACA business. MACA'sriskmanagementframeworkisembeddedwithinexistingprocessesandisalignedtotheCompany'sstrategicbusinessobjectives.GiventhemarketsandthegeographiesinwhichtheCompanyoperates,awiderangeofriskfactorshavethepotentialtoaffecttheachievementoftheseobjectives.ForfurtherinformationinrelationtotheCompany'sriskmanagementframework,referto the Corporate Governance Statement.Non Audit ServicesASIC CI 2016/191 Rounding of AmountsTheCompanyisanentitytowhichASICCI2106/191RoundingofAmountsappliesand,accordingly,amountsinthefinancialstatements and directors' report have been rounded to the nearest thousand dollars.The Company was not a party to any such proceedings during the year.DIRECTOR’S REPORT 17 MACA LIMITED ANNUAL REPORT 2018Labour Costs and AvailabilityLabourrepresentsasignificantportionofoperatingexpenses.Inordertocompeteforworkandtoserviceclients,theGroupneedstobeabletocontinuetoattractandretainskilledemployees.Consequently,theGroupisexposedtoincreasedlabourcostsinmarketswherethedemandforlabourisstrong.Withinmorestablelabourmarkets,thegroup'slabourcostsaretypicallyprotectedby rise and fall mechanisms within client contracts, which help neutralise the impact of rising labour costs.changing government regulation including tax, occupational health and safety, and changes in policy and spending;lossofreputationthroughpoorprojectoutcomes,unsafeworkpractices,unethicalbusinesspractices,andnotmeetingthemarket’s expectation of its financial performance ;public liability risk incurred maintaining road assets requiring identified defects to be closed out within a specified timeframe;loss of key Board, management or operational personnel.foreign exchange rates and interest rates in the ordinary course of business, and Competition Riskoperatingininternationalmarkets,potentiallyexposingMACAtocountryspecificadverseeconomicconditions,civilunrest,conflicts, and bribery and corrupt practices; Partner RiskMACA,insomecases,mayundertakeservicesthroughandparticipatein,jointventuresorpartnering/alliancearrangements.ThesuccessofthesepartneringactivitiesdependsonthesatisfactoryperformancebyMACA'spartners.ThefailureofpartnerstomeetperformanceobligationscouldimposeadditionalfinancialandperformanceobligationsthatcouldcausesignificantimpactonMACA'sreputationandfinancialresults.MACAcompletesduediligenceonpotentialpartnerspriortoforminganybusinessrelationship and regularly monitors these relationships.Currency FluctuationAsaCompanywithinternationaloperations,MACAisexposedtofluctuationsinthevalueoftheAustraliandollarversusothercurrencies.BecauseMACA'sconsolidatedfinancialresultsarereportedinAustraliandollars,ifMACAgeneratessalesorearningsorhasassetsandliabilitiesinothercurrencies,thetranslationintoAustraliandollarsforfinancialreportingpurposescanresultinasignificantincreaseordecreaseintheamountofthosesalesorearningsandnetassets.MACAusescashbackeddepositstomitigatesome of the US dollar currency risk. Currently the company has unhedged exposure to the Brazilian Real. Other material risks that could affect MACA include: a major operational failure or disruption at key facilities or to communication systems which interrupt MACA’s business;MACAhasamixedexposuretocontracttypes.However,iftheCompanymateriallyunderestimatesthecostofprovidingservices,equipment,orplant,thereisariskofanegativeimpactonMACA'sfinancialperformance.MACAfollowsaproventenderreviewprocess to reduce the risk of under-pricing contracts.TheriskofMACAnotbeingabletomeetitsfinancialobligationsastheyfalldueismanagedbymaintainingadequatecashreservesandavailableborrowingfacilities,asrequired.ErrorsorunforeseenchangesinactualandforecastcashflowsthatthencreateamismatchagainstthematurityprofilesoffinancialassetsandliabilitiescouldhaveadetrimentaleffectontheCompany'sliquidity.TheCompany'sapproachtomanagingliquidityistoensure,asfaraspossible,thatitwillalwayshavesufficientliquiditytomeetitsliabilitieswhendue,underbothnormalandstressedconditions,withoutincurringunacceptablelossesorriskingdamagetotheCompany's reputation. Contract Pricing RiskLiquidity RiskThemarketinwhichMACAoperatesishighlycompetitive,whichmayresultindownwardpressureonpricesandmargins.IfMACAisunabletocompeteeffectivelyinitsmarkets,itrunstheriskoflosingmarketshare.MACAcontinuestofocusondeliveringqualityservices to make us a contractor of choice as a means of mitigating this risk.REMUNERATION REPORT - AUDITED 18 MACA LIMITED ANNUAL REPORT 2018General Manager - Corporate ServicesFull yearChief Financial Officer / Company SecretaryChief Executive Officer / Managing DirectorOperations DirectorFull yearDirectors - ExecutiveFull YearDavid GreigMark DavidovicGeoff BakerGeneral Manager - Business DevelopmentFull yearDavid KentExecutivesRemuneration Report - auditedRemuneration GovernanceIntroduction2018 Executive remuneration framework and improvementsCompany performance and the link to remunerationSection 3Section 4Section 5Section 6Section 7Full yearFull yearChris TuckwellOutlines the scope of the Remuneration Report and the individuals disclosed.TitleSectionSection 1Section 2Executive remuneration outcomesExecutive contractsNon-executive Directors’ feesDescriptionProvides detail regarding the fees paid to Non-executive Directors.Appointments and notice periods for current and former Key Management Personnel.Provides Chief Executive officer remuneration, Short Term Incentive (STI) and Long Term Incentive (LTI) Plan details and Executive remuneration outcomes for the year.The outcomes of the key business metrics and hurdles that are used for measuring variable pay outcomes.Outlines the 2018 remuneration framework and changes to remuneration plans.Describes the role of the board, the Remuneration Committee and matters considered (including external advice) when making remuneration decisions.Full yearFull YearAndrew EdwardsDirectors - Non-executivePersonLinton KirkRobert RyanPositionNon-executive ChairmanNon-executive DirectorNon-executive DirectorPeriod in position during the year1 IntroductionFull yearFull yearFull yearPeter GilfordGeneral Manager - MiningGeneral Manager - Brazil OperationsTim GoochMitch WallaceThisremunerationReportformspartoftheDirectors’Reportfor2018andoutlinestheremunerationstrategyandarrangementsfortheCompany’sDirectorsandExecutives(together“KeyManagementPersonnel”or“KMP”)inaccordancewithsection300AoftheCorporations Act.TheKMPoftheGroupduringandsincetheendofthefinancialyearcomprisethecompanydirectors(asdetailedinthebeginningoftheDirectors’Report)andthefollowingseniorexecutiveofficers.Exceptasnoted,thesepersonsheldtheircurrentpositionforthewhole of the financial year and since the end of the financial year.1.1 Key Management PersonnelGeneral Manager - CivilREMUNERATION REPORT - AUDITED 19 MACA LIMITED ANNUAL REPORT 2018 ◦ ◦ ◦ ◦◦Non-financial metrics comprise some or all of:Safety indicators - LTI and TRIFRTheCommitteemakesrecommendationstotheBoardonanannualbasiswithbenchmarkingagainstcomparableindustrypackagesand adjusting to recognise the specific performance of both the company and the individual. ◦Number of performance rights issued up to 25% of fixed annual remuneration divided by the independently assessed value of a performance right ◦ Long-term incentive (LTI) Short-term incentive (STI) Total fixed remuneration (TFR)TFR takes into account similar positions in peer companies, length of service, experience and contribution◦Personal performanceRelative TSR using a benchmark index namely the S&P/ASX Small Ordinaries Accumulation Index (XSOAI) measured over a 3 year period (100% component)TFR is reviewed annually◦Peer companies are those with broadly similar revenue and in related industriesInperformingthisfunctiontheRemunerationCommitteereviewstheremunerationpackagesofallDirectors,theChiefExecutiveOfficer and other Executives (collectively the KMP). Financial metrics comprise some or all of:Earnings per share◦Net profit after tax - company and divisional The Board oversees the remuneration arrangements of the KMP. 3 2017 Executive remuneration framework Remuneration FrameworkRemunerationpracticesarecontinuouslydevelopedinlinewiththeCompany’sbusinessdemands,industryconditionsandoverallmarkettrends.TheprimarygoalistolinkexecutiveremunerationwiththeachievementofMACA’sbusinessandstrategicobjectiveswiththeaimtoincreaseshareholdervalueovertheshortandlongerterm.ThenatureandamountofcompensationforexecutiveKMP is designed to retain and motivate individuals on a market competitive basis.TheRemunerationCommitteemayalsoengageanexternalremunerationconsultanttoreviewthelevelsofseniorexecutiveandnon-executive remuneration. No external remuneration consultant was engaged over the past financial year. 2 Remuneration GovernanceMaximum STI is 15 - 25% of TFR depending on the individualREMUNERATION REPORT - AUDITED 20 MACA LIMITED ANNUAL REPORT 2018- --0Special dividend declared (cents)04.59.521.7Reported basic earnings per share (cents) 9.113.710.4247.411.61201651267.813.714.84.57.57.55.523.3Interim dividend declared (cents)3.04.54.0--Reported net profit/(loss) attributable to equity holders of the parent ($m)2015201620172018ThefollowingCompanyperformancemeasuresareamongthosethatmaybeincludedinincentiveplansforrelevantexecutives.KPIsmaybeadjustedforindividuallylargeorunusualitemstoderiveanunderlyingperformancemeasureoutcome.TheBoardbelieves these KPIs are aligned to Shareholder wealth and returns to investors.KeyPerformanceIndicators(‘KPIs’)forbothshorttermandlong-termExecutiveincentiveschemesarelinkedtotheCompany’sstrategicandbusinessobjectivesandasaresult,payoutcomesaredirectlyalignedwithCompanyperformanceagainsttheseobjectives.4 Company performance and the link to remuneration55.42013201449.530-Share price at 30 June (cents)Mr Tuckwell’s remuneration package as CEO was determined by benchmarking it against that paid to CEOs in similar organisations. The remuneration package comprises the following components:(23.3)38.174.6(37.0)28.2(17.3)3 year Annual Compound TSR 1 76.55.1 Managing Director and CEO arrangements7723.26.38(9.0)10.3-5 Executive remuneration outcomes-25Final dividend declared (cents)3.54.5There was no STI payable for Mr Tuckwell for 2018 as most KPI's were not met - refer 5.4 below.Total Fixed Remuneration (TFR) is $679,423 per annum inclusive of superannuation plus the use of a company motor vehicle. AnLTIunderwhichMrTuckwellmayreceiveshareperformancerightsconvertibleintofullypaidshares,subjecttoperformancecriteriabeingmet.Atthe2017AnnualGeneralMeetingtheBoardsoughtandreceivedapprovalforthegrantof184,619PerformanceRightspursuanttotheCompany’sPerformanceRightsPlan(PRP).Subjecttotherelevantperformancehurdles being met, these may vest in June 2020. AnSTIwhichincludestheopportunitytoearnanannualcashbonusofupto25%oftotalfixedremuneration,subjecttoachievingperformancehurdles.MrTuckwell’sSTIplanhasbeenalignedwithotherseniorexecutivesundersimilarplanruleswithKPIsthataligntoprofitableperformanceandsafety.TheCEO’sSTIPlancomprises40%forkeyfinancialKPI’s,30%forsafetyKPI’sand30%forpersonalKPI’s.ThefinancialKPIscompriseNetProfitafterTaxandEarningsperSharegrowth.Thesafety KPIs are based on the Long Term Injury Frequency Rate (LTIFR) and the Total Recordable Injury Frequency Rate (TRIFR).00030.331.515.315.9Shareholders’ Wealth 2Total recordable injury frequency rate (TRIFR)7.8Long term injury frequency rate (LTIFR)1 All dividends in the TSR (Total Shareholder Return) calculation are on a declared (rather than paid) basis in respect to each financial year.54.424.231.223.622.5185177Total shareholder return (TSR %) 1Reported return on equity (%)REMUNERATION REPORT - AUDITED 21 MACA LIMITED ANNUAL REPORT 201825%7.5% (6 months)Executive DirectorsOther Executive KMP25% (6 months)All Executives received TFR as outlined in page 26 of this report. TFR comprises base salary and superannuation plus the use of a company motor vehicle or motor vehicle allowance.CEOExecutive DirectorsOther Executive KMP2017: KPIs are set for the Group – the KPI Program was put on hold for all Executives during the financial year to December 2016 and was then reinstated as of January 2017.15%2018: Financial and safety targets are all agreed with the Board and personal KPIs are set in consultation with the relevant Executive.% of TFR paid on Target Achievement25%At risk paymentsKey features of the STI Plan are outlined in the table below.5.2 Total Fixed Remuneration (TFR)2017: The STI Plan was suspended for the six months to 31 December 2016.FixedpayhasbeenreviewedandsetagainstpeercompanieswithwhomMACAcompetes.MACAalsobenchmarksthroughindustrysurveys and reports and may seek external advice for KMP remuneration.Assessment of KPIsFinancial and safety targets are all agreed with the Board and personal KPIs are set in consultation with the relevant Executive. Performance is measured quantitatively and progress against key targets measured at half year and full year. KPIsfortheCEOandExecutiveDirectorsincludeEarningperShare(EPS),NetProfitafterTax(NPAT),LongTermInjuryFrequencyRate(LTIFR),TotalRecordableInjuryFrequencyRate(TRIFR) and personal assessment.EachKPIisweightedaccordingtoitsimportanceindrivingprofitableperformanceandreturnsto Shareholders.Cessation of employmentAny performance target met will trigger the calculation of total or part payment of the STI. The board may exercise its discretion in relation to the payment of STI’s.2018: The STI is a component of ‘at risk’ pay provided to Executives and KMP. STIforfeitedifanExecutiveorKMPresignsoristerminatedbeforethepaymentdate.Inexceptional circumstances this may be reviewed by the Board. % of TFR paid on Target Achievement25% (6 months)Trigger for paymentPerformance conditionsSetting of KPIsSTI PlanCEO5.3 Short-Term Incentive Plan (STI Plan)KPIsaresettoencourageaprofitandsafetydrivenculturewiththeultimateaimofdrivingStakeholderreturns.TheSTIpaymentsarestructuredtorecognizeandmotivateemployeestoaligntheirperformancewiththeCompany’sgoals.TheamountofbonusactuallyearnedwilldependonperformanceagainstpredeterminedKPIswithpaymentcommencinguponreachingthose hurdles.All executive key management personnel.ObjectiveEligibilityKPIsforotherExecutiveKMPincludeNetProfitafterTax(NPAT),businessoperatingunitprofitperformance,LongTermInjuryFrequencyRate(LTIFR),TotalRecordableInjuryFrequencyRate(TRIFR) and personal assessment.REMUNERATION REPORT - AUDITED 22 MACA LIMITED ANNUAL REPORT 2018LTI PlanKey features of the LTI Plan are outlined in the table below.25%25%% of TFR applied in LTI Other Executive KMPExecutive DirectorsThe Plan offers Executive KMP performance rights with the opportunity to receive fully paid ordinary shares in MACA Limited for no consideration, subject to specified time restrictions, continued employment and performance conditions being met. Each performance right will entitle participants to receive one fully paid ordinary share at the time of vesting.The Plan is designed to assist with Executive and KMP retention and to incentivise employees to maximise returns and earnings for Shareholders. ObjectiveOverview of the LTI Plan5.5 Long-Term Incentive Plan (LTI Plan)As only 2 of the 5 applicable KPI's in the STI performance conditions above for Executives and KMP were met no STI was paid to any executive.5.4 STI OutcomesExecutive KMP as determined by the Board.EligibilityAt risk payments2017: The LTI is a component of ‘at risk’ pay offered to Executive KMP. The number of performance rights issued will depend on performance against predetermined KPIs with vesting occurring upon reaching those hurdles.The number of performance rights that vest is linked to relative Total Shareholder Return (TSR).2018: No changes% of TFR applied in LTI20%25%25%20%CEO Other Executive KMPExecutive DirectorsCEOREMUNERATION REPORT - AUDITED 23 MACA LIMITED ANNUAL REPORT 2018LTI Plan (cont)2018: No changes.2017: Performance is measured quantitatively and progress against key targets reported at full year.2018: No changes.2017: Assessed 100% against TSR using a benchmark index namely the S&P/ASX Small Ordinaries Accumulation Index (XSOAI).Assessment of KPIsTSR Comparator Group2017: KPIs are set for the Group (where relevant). 2018: No changesKPIs for the CEO, Executive Directors and other Executive KMP comprise 100% against a Total Shareholder Return (TSR) using a benchmark index namely the S&P/ASX Small Ordinaries Accumulation Index (XSOAI) measured over a 3 year period.Each KPI is weighted according to its importance in driving profitable performance and returns to Shareholders.5.6 Unvested entitlementsNo options were granted during the period and no options were vested or were exercised during the period. At 30 June 2018 no options were held by KMP. 5.8 KMP performance rightsCessation of employmentTrigger for vesting2018: No changes.2017: LTI forfeited if an Executive resigns or is terminated before the payment date. In exceptional circumstances this may be reviewed by the Board. 2018: No changes.2017: Assessed 100% against TSR using a benchmark index namely the S&P/ASX Small Ordinaries Accumulation Index (XSOAI). The Board has discretion to not approve the vesting of the rights if the TSR is negative. Duringthe2018financialyear972,231(2017:1,196,083)performancerightsweregrantedundertheGroup’sPerformanceRightsPlanand334,637(2017:407,768)performancerightswereforfeited.Subjecttotheachievementofdesignatedperformancehurdles,theseperformancerightswillvestinJune2020.Asat30June2018therewere2,014,485(2017:2,528,307)performancerightsoutstanding.On14November2017shareholdersapprovedtheissueof184,619performancerightstotheManagingDirectorMr Chris Tuckwell and 146,775 performance rights to the Operations Director Mr Geoff Baker. 5.7 KMP OptionsItistheCompany'spolicytoprohibitexecutivesfromenteringintotransactionsorarrangementswhichlimittheeconomicriskofparticipating in unvested entitlements under any equity-based remuneration schemes.Performance conditionsREMUNERATION REPORT - AUDITED 24 MACA LIMITED ANNUAL REPORT 2018Exercised during the yearOther changes during the yearBalance at end of yearVested and exercisableVested and un-exercisableUnvested at end of year - - 897,610 (444,737) - 452,873 - - 726,067 (363,816) - 362,251 - - 486,050 (241,450) - 244,600 - - 501,549 (249,932) - 251,617 - - 103,781 - - 103,781 - - 221,045 - - 221,045 - - 90,244 - - 90,244 - - 404,015 (186,118) - 217,897 - - - - - - - - - - - - - - - - - - - - 3,430,361 (1,486,053) - 1,944,308 902,054 - Linton Kirk - TotalRobert RyanIn addtion to the above there were 70,177 performance rights issues to employees not classed as KMP. 2,528,307 Non-executive DirectorNon-executive Director 136,556 84,489 - The number of rights over ordinary shares held by each KMP of the Group during the financial year is as follows:5.8 KMP performance rights (cont)Mitch WallaceGeneral Manager - MiningTim Gooch 400,242 146,775 98,339 Mark Davidovic General Manager - Civil and Infrastructure - 103,781 30 June 2018Granted as remuneration during the yearBalance at beginning of year - David Kent - 90,244 General Manager - Corporate Services 101,307 579,292 Executive DirectorGeoff Baker 387,711 311,515 92,500 - Peter GilfordManaging Director / Chief Executive OfficerChris Tuckwell 712,991 184,619 General Manager - Business DevelopmentDavid Greig General Manager - Brazil OperationsChairmanHugh (Andrew) EdwardsChief Financial Officer / Company Secretary - REMUNERATION REPORT - AUDITED 25 MACA LIMITED ANNUAL REPORT 2018David Greig - - - - - - - 74,064 - 43,021 David Kent - - - 30 June 2018General Manager - Brazil Operations - Other changes during the yearIssued on exercise of rights during the yearIncrease other 612,500 - 87,500 Geoff BakerMitch Wallace - - - - 27,500 31,858 Non-executive DirectorRobert RyanHugh (Andrew) EdwardsChief Financial Officer 18,604 28,604 Total - 774,064 General Manager - MiningTim Gooch 43,021 - - - - 189,286 97,500 - - - Balance at end of yearThe number of ordinary shares in MACA Limited held by each KMP of the Group during the financial year is as follows:5.9 KMP shareholdingsBalance at beginning of year - - Granted as remuneration during the yearManaging Director / Chief Executive OfficerChris TuckwellExecutive Director 12,500,000 - 40,343 - - - 40,343 12,500,000 - 50,000 General Manager - Corporate ServicesGeneral Manager - Business Development - - Non-executive DirectorLinton Kirk - - 59,358 10,000 - Peter Gilford 20,000 Mark Davidovic - 20,000 - 13,228,604 - - - Chairman - - - 50,000 - 13,515,390 - General Manager - Civil and Infrastructure - REMUNERATION REPORT - AUDITED 26 MACA LIMITED ANNUAL REPORT 2018Salary, fees and leave Committee feesCash bonus/STINon-monetary OtherSuperannuationOtherIncentive plansLSLShare / UnitsOptions / Rights$$$$$$$$$$$$Executive Directors2018 643,566 - - - 44,384 25,000 - - - - 185,859 898,809 2017 628,165 - 70,671 - 41,836 25,000 - - - - 145,996 911,668 2018 557,390 - - - - - - - - - 143,819 701,209 2017 559,080 - 56,142 - - - - - - - 91,333 706,555 2018 1,200,956 - - - 44,384 25,000 - - - - 329,678 1,600,018 2017 1,187,245 - 126,813 - 41,836 25,000 - - - - 237,329 1,618,223 2018 141,552 - - - - 13,447 - - - - - 154,999 2017 141,552 - - - - 13,447 - - - - - 154,999 2018 125,517 - - - - 8,042 - - - - - 133,559 2017 91,370 - - - - 7,846 - - - - - 99,216 2018 115,168 - - - - - - - - - - 115,168 2017 131,962 - - - - - - - - - - 131,962 2018 382,237 - - - - 21,489 - - - - - 403,726 2017 364,884 - - - - 21,293 - - - - - 386,177 Salary, fees and leave Committee feesCash bonus/STINon-monetary OtherSuperannuationOtherIncentive plansLSLShare / UnitsOptions / Rights$$$$$$$$$$$$2018 407,648 - - - 25,006 38,726 - - - - 96,371 567,751 2017 397,893 - 28,211 - 21,085 37,800 - - - - 80,183 565,172 2018 495,028 - - - - - - - - - 99,402 594,430 2017 427,930 - 29,062 - 6,388 20,769 - - - - 80,932 565,081 2018 456,103 - - - - 24,411 - - - - 26,812 507,326 2017 191,769 - 11,256 - - 13,805 - - - - - 216,830 2018 397,276 - - - - 35,176 - - - - 50,504 482,956 2017 395,000 - 26,536 - - 35,150 - - - - 28,677 485,363 2018 361,421 - - - 27,204 24,129 - - - - 81,257 494,011 2017 345,180 - 24,234 - 25,643 29,956 - - - - 63,893 488,906 2018 429,778 - - - - 23,330 - - - - 23,314 476,422 2017 256,944 - 26,536 - - 22,885 - - - - - 306,365 2018 2,547,254 - - - 52,210 145,772 - - - - 377,660 3,122,896 2017 2,014,716 - 145,835 - 53,116 160,365 - - - - 253,685 2,627,717 TotalYearChris Tuckwell David Kent 5General Manager - Corporate ServicesTotal compensation for ExecutivesChief Financial Officer / Company SecretaryPeter Gilford Short-term benefitsPost-employment benefitsTotal compensation for Non-executive DirectorsRobert Ryan 25.10.1 Employment benefits and payments for the year ended 30 June 20185.10 KMP remunerationOperations DirectorGeoff BakerLinton Kirk 1ChairmanThefollowingtablesetsoutthebenefitsandpaymentdetails,inrespecttothefinancialyear,andthecomponentsofremunerationformembersofkeymanagementpersonneloftheconsolidatedGroup,andtotheextentdifferent,amongthefiveGroupexecutives and five company executives receiving the highest remuneration. Andrew EdwardsNon-executive DirectorsGeneral Manager - Business DevelopmentDavid Greig 4Long-term benefitsMark Davidovic 3General Manager - Civil and InfrastructureEquity-settled share-based paymentsYearExecutives (KMP)General Manager - Brazil OperationsMitch WallaceGeneral Manager - MiningTim GoochTotalLong-term benefitsEquity-settled share-based paymentsTotal compensation for Executive DirectorsManaging Director / Chief Executive OfficerShort-term benefitsPost-employment benefitsREMUNERATION REPORT - AUDITED 27 MACA LIMITED ANNUAL REPORT 20182018 - - - - - - - - - - - - 2017 287,774 - - - - 25,786 - - - - 83,880 397,440 2018 - - - - - - - - - - - - 2017 287,774 - - - - 25,786 - - - - 83,880 397,440 2018 4,130,447 - - - 96,594 192,261 - - - - 707,338 5,126,640 2017 3,854,619 - 272,648 - 94,952 232,444 - - - - 574,894 5,029,557 123456David Kent - appointed as General Manager - Corporate Services effective 1st November 2016.Linton Kirk was engaged on a contract basis through his business Kirk Mining Consultants to perform consulting work. The engagement was charged at hourly rates and is included in the amount of salary and fees above.5.10 KMP remuneration (cont)Robert Ryan was engaged on a contract basis through his business Hensman Properties to perform consulting work in business development. The engagement was charged at hourly rates and is included in the amount of salary and fees above.Mark Davidovic - appointed as General Manager - Civil and Infrastructure effective 20th February 2017.Total compensation for former KMPFormer KMPMaurice Dessauvagie - replaced as General Manager - Civil and Infrastructure effective 20th February 2017.Total compensation for KMPMaurice Dessauvagie 6General Manager - Civil and InfrastructureDavid Greig - appointed as General Manager - Business Development effective 18th July 2016.Salary, fees and leave Committee feesCash bonus/STINon-monetary OtherSuperannuationOtherIncentive plansLSLShare / UnitsOptions / Rights$$$$$$$$$$$$Executive Directors2018 643,566 - - - 44,384 25,000 - - - - 185,859 898,809 2017 628,165 - 70,671 - 41,836 25,000 - - - - 145,996 911,668 2018 557,390 - - - - - - - - - 143,819 701,209 2017 559,080 - 56,142 - - - - - - - 91,333 706,555 2018 1,200,956 - - - 44,384 25,000 - - - - 329,678 1,600,018 2017 1,187,245 - 126,813 - 41,836 25,000 - - - - 237,329 1,618,223 2018 141,552 - - - - 13,447 - - - - - 154,999 2017 141,552 - - - - 13,447 - - - - - 154,999 2018 125,517 - - - - 8,042 - - - - - 133,559 2017 91,370 - - - - 7,846 - - - - - 99,216 2018 115,168 - - - - - - - - - - 115,168 2017 131,962 - - - - - - - - - - 131,962 2018 382,237 - - - - 21,489 - - - - - 403,726 2017 364,884 - - - - 21,293 - - - - - 386,177 Salary, fees and leave Committee feesCash bonus/STINon-monetary OtherSuperannuationOtherIncentive plansLSLShare / UnitsOptions / Rights$$$$$$$$$$$$2018 407,648 - - - 25,006 38,726 - - - - 96,371 567,751 2017 397,893 - 28,211 - 21,085 37,800 - - - - 80,183 565,172 2018 495,028 - - - - - - - - - 99,402 594,430 2017 427,930 - 29,062 - 6,388 20,769 - - - - 80,932 565,081 2018 456,103 - - - - 24,411 - - - - 26,812 507,326 2017 191,769 - 11,256 - - 13,805 - - - - - 216,830 2018 397,276 - - - - 35,176 - - - - 50,504 482,956 2017 395,000 - 26,536 - - 35,150 - - - - 28,677 485,363 2018 361,421 - - - 27,204 24,129 - - - - 81,257 494,011 2017 345,180 - 24,234 - 25,643 29,956 - - - - 63,893 488,906 2018 429,778 - - - - 23,330 - - - - 23,314 476,422 2017 256,944 - 26,536 - - 22,885 - - - - - 306,365 2018 2,547,254 - - - 52,210 145,772 - - - - 377,660 3,122,896 2017 2,014,716 - 145,835 - 53,116 160,365 - - - - 253,685 2,627,717 TotalYearChris Tuckwell David Kent 5General Manager - Corporate ServicesTotal compensation for ExecutivesChief Financial Officer / Company SecretaryPeter Gilford Short-term benefitsPost-employment benefitsTotal compensation for Non-executive DirectorsRobert Ryan 25.10.1 Employment benefits and payments for the year ended 30 June 20185.10 KMP remunerationOperations DirectorGeoff BakerLinton Kirk 1ChairmanThefollowingtablesetsoutthebenefitsandpaymentdetails,inrespecttothefinancialyear,andthecomponentsofremunerationformembersofkeymanagementpersonneloftheconsolidatedGroup,andtotheextentdifferent,amongthefiveGroupexecutives and five company executives receiving the highest remuneration. Andrew EdwardsNon-executive DirectorsGeneral Manager - Business DevelopmentDavid Greig 4Long-term benefitsMark Davidovic 3General Manager - Civil and InfrastructureEquity-settled share-based paymentsYearExecutives (KMP)General Manager - Brazil OperationsMitch WallaceGeneral Manager - MiningTim GoochTotalLong-term benefitsEquity-settled share-based paymentsTotal compensation for Executive DirectorsManaging Director / Chief Executive OfficerShort-term benefitsPost-employment benefitsREMUNERATION REPORT - AUDITED 28 MACA LIMITED ANNUAL REPORT 2018Year201820172018201720182017201820172018201720182017201820172018201712018201722018201720182017395.1 100.0 100.0 - 91.3 - - 16.4 83.6 100.0 Thefollowingtableprovidesdetailsofpersonswhowere,duringthefinancialyear,membersofkeymanagementpersonneloftheconsolidatedGroup,andtotheextentdifferent,amongthefiveGroupexecutivesandfivecompanyexecutivesreceivingthehighestremuneration.Thetablealsosetsouttheproportionofremunerationthatwasperformanceandnon-performancebasedandtheproportion of remuneration received in the form of options and performance rights.100.0 - Chairman - %Executive Directors - Shares / UnitsProportions of elements of remuneration not related to performance - 14.2 80.8 100.0 Executives (KMP) - - 5.5 General Manager - Business Development 100.0 Andrew EdwardsFixed Salary / Fees - Mark Davidovic 1General Manager - Civil and InfrastructureNon-executive DirectorsGeoff Baker - - % 20.5 79.5Proportions of elements of remuneration related to performance 7.9 - David Kent 3 - 4.9 General Manager - Corporate Services 8.7 - - 12.9 79.2 - 20.7 79.3Chris Tuckwell 100.0 - 100.0 Operations Director76.2 100.0 - 16.0 Options / RightsNon-salary cash-based incentives%%%5.10.2 Employment details of members of key management personnel and other executives 100.0 Peter Gilford 100.0 TotalManaging Director / Chief Executive Officer 7.8 - Chief Financial Officer / Company Secretary 5.0 - 13.1 81.9 10.5 89.5 100.0 Robert Ryan - Tim Gooch - - 17.0 16.7 83.3David Greig 2 100.0 - 100.0 100.0 Mitch Wallace 5.3 94.7 5.0 - - 94.5 - 100.0 - - 100.0 General Manager - Mining 100.0 100.0 5.2 - - 94.8 100.0 - - 100.0 100.0 - - - 100.0 100.0 Linton Kirk - - - 83.0 100.0 General Manager - Brazil Operations 5.1 - 14.3 80.6 100.0 100.0 - - - 100.0 REMUNERATION REPORT - AUDITED 29 MACA LIMITED ANNUAL REPORT 2018Year2018201741234Fixed Salary / FeesTotalDavid Greig - appointed as General Manager - Business Development effective 18th July 2016.Mark Davidovic - appointed as General Manager - Civil and Infrastructure effective 20th February 2017.Non-salary cash-based incentivesThe contract is ongoing and has no fixed term%%%The contract is ongoing and has no fixed term3rd November 2010David Kent1st November 2016The contract can be terminated by either party with 3 months’ notice or payment in lieuGeneral Manager - Corporate ServicesNotice period for contract cessation4th August 2014%Proportions of elements of remuneration related to performanceProportions of elements of remuneration not related to performance - Options / Rights5.10.2 Employment details of members of key management personnel and other executives (cont)Shares / Units - Former KMPExecutivecontractsofservicebetweentheCompanyorcompanywithintheGroupandKMPareonacontinuingbasis,thetermsofwhich are not expected to change in the immediate future. The notice period for termination varies from one to three months.6 Executive ContractsMaurice Dessauvagie - replaced as General Manager - Civil and Infrastructure effective 20th February 2017. 21.1 78.9 100.0 Maurice Dessauvagie 4 - - - - - General Manager - Civil and InfrastructureDavid Kent - appointed as General Manager - Corporate Services effective 1st November 2016.%The contract can be terminated by either party with 3 months’ notice or payment in lieuAppointment to KMPThe contract can be terminated by either party with 3 months’ notice or payment in lieuThe contract can be terminated by either party with 3 months’ notice or payment in lieuGeneral Manager - Brazil OperationsThe contract can be terminated by either party with 3 months’ notice or payment in lieu18th July 2016The contract is ongoing and has no fixed termGeneral Manager - Mining Tim GoochOperations DirectorGeoff BakerMark DavidovicGeneral Manager - Civil and InfrastructureThe contract is ongoing and has no fixed termManaging Director / Chief Executive OfficerChris TuckwellExecutive20th February 2017The contract is ongoing and has no fixed termChief Financial Officer / Company Secretary20th June 201123rd July 2014The contract is ongoing and has no fixed termPeter GilfordMitch WallaceThe contract can be terminated by either party with 1 months’ notice or payment in lieuThe contract can be terminated by either party with 3 months’ notice or payment in lieuGeneral Manager - Business DevelopmentDavid GreigThe contract is ongoing and has no fixed term3rd November 2010The contract can be terminated by either party with 3 months’ notice or payment in lieuThe contract is ongoing and has no fixed termREMUNERATION REPORT - AUDITED 30 MACA LIMITED ANNUAL REPORT 2018Risk CommitteeRemuneration CommitteeRemuneration CommitteeAudit CommitteeRisk Committee$155,000BoardKey management person and/or related party$94,554Andrew Edwards 41,962 43,658 2,381,300 1,922,082 Hensman Properties Pty Ltd - a company controlled by current director Mr R. Ryan.Expense - Consulting feesGateway Equipment Parts & Services Pty Ltd - a company controlled by current director Mr G Baker and former directors Mr D Edwards, Mr F Maher and Mr J Moore.Expense - Hire of equipment and purchase of equipment, parts and services.$94,554Audit CommitteeRobert Ryan Linton Kirk$$Partnership comprising entities controlled by current director Mr G Baker and former directors Mr J Moore, Mr D Edwards and Mr F Maher.Expense - Rent on Division St business premises. 1,598,815 1,589,382 8 Other transactions with key management persons and / or related partiesTransactionKirk Mining Consultants - a company controlled by current director Mr L Kirk.Expense - Mining consulting fees 40,860 20172018Remuneration Committee Audit CommitteeRisk committeeMember$ / ChairmanNon-executive Directors7 Non-executive Directors feesNon executive Directors fees, other than for the Chairman (no change), were increased by 2% with effect from 5th March 2018 in line with KMP increases.FeespaidtoNon-executiveDirectorsaresetatlevelswhichreflectboththeresponsibilitiesof,andtimecommitmentsrequiredfrom,eachNon-executiveDirectortodischargetheirdutiesandarenotlinkedtothefinancialperformanceoftheCompany.Non-executiveDirectorsfeesarereviewedannuallybytheBoardtoensuretheyareappropriateforthedutiesperformed,includingBoardcommitteeduties,andareinlinewiththemarket.Otherthanstatutorysuperannuation,Non-executiveDirectorsarenotentitled to retirement benefits.Non-executiveDirectorsfeesaredeterminedwithinanaggregatedirectorsfeepoolwhichisperiodicallyrecommendedforapprovaltoshareholders.Thecurrentaggregatedirectors’feepoolis$600,000.ThisprovidesforanyfutureincreasestoNon-executiveDirectors fees and to allow for any changes to the Board make up and potential increases in the number of Non-executive Directors. 8,780 REMUNERATION REPORT - AUDITED 31 MACA LIMITED ANNUAL REPORT 2018Gateway Equipment Parts & Services Pty Ltd - a company controlled by current director Mr G Baker and former directors Mr D Edwards, Mr F Maher and Mr J Moore. 263,548 110,000 This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of Directors.Perth28th day of September, 2018 Managing DirectorChris TuckwellKey management person and/or related partyTransactionAmounts payable at year end arising from the above transactions (Receivables Nil)20182017$$On behalf of the Directors8 Other transactions with key management persons and / or related parties (cont)AUDITOR’S INDEPENDENCE DECLARATION Level 15, Exchange Tower,  2 The Esplanade, Perth, WA 6000  PO Box 5785, St Georges Terrace,   WA 6831  T   +61 (0)8 9225 5355  F   +61 (0)8 9225 6181  www.moorestephens.com.au  AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION  307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS  OF MACA LIMITED & CONTROLLED ENTITIES  I declare that, to the best of my knowledge and belief, during the year ended 30 June 2018 there have been  no contraventions of:  i. ii. the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and any applicable code of professional conduct in relation to the audit. NEIL PACE  PARTNER  MOORE STEPHENS  CHARTERED ACCOUNTANTS  Signed at Perth this 28th day of September 2018  Liability limited by a scheme approved under Professional Standards Legislation. Moore Stephens ‐ ABN 16 874 357 907. An independent member of Moore Stephens  International Limited ‐ members in principal cities throughout the world. The Perth Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.  32 MACA LIMITED ANNUAL REPORT 2018CORPORATE GOVERNANCE STATEMENT - CHECKLIST 33 MACA LIMITED ANNUAL REPORT 2018Principle 1.01.11.2Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those functions.1.1Lay Solid Foundations for Management and OversightCorporate Governance Statement – ChecklistThe BoardofMACALimitediscommittedtoensuringthattheCompany’sobligationsandresponsibilitiestoitsstakeholdersarefulfilledthroughitscorporategovernancepractices.MACAiscommittedtothedevelopmentofaculturethatdeliversourPromise–WeCare,WeareFlexibleandWeDeliver,andtheCoreValuesoftheCompany–PeopleFirst,ExceedExpectations,ContinuousImprovementandCommunity.Webelievethatoperatinginaccordancewiththecorporategovernanceguidelinesenhancesthedelivery of the above expectations.ThischecklistreportsonMACA’skeygovernanceprinciplesandpracticeswhicharereviewedandrevisedasappropriatetoreflectchangesinlawanddevelopmentsincorporategovernance.AcompleteCorporateGovernanceStatementandallCharters,Policies,Procedures,Disclosures,Definitions,CodesandStrategiesareavailableforviewingontheCompany’swebsiteundertheCorporateGovernance tab.ASX Corporate Governance Principles and Best Practice RecommendationsReferenceComplianceTheBoardasawholereviewsandmakeschangesinlinewithrecommendationsmadebyindividualBoardmembersandasaresultofthisfocus,theBoardissatisfiedthattheCompanymeetstheCorporateGovernanceCouncil’sCorporateGovernancePrinciplesandRecommendationswithdeparturesasdisclosedbelow.Therewerenodeparturesduringtheyear.Achecklistcross-referencingtheCorporateGovernanceCouncil’sCorporateGovernancePrinciplesandRecommendationstotherelevantsectionsofthisStatement is shown below.As required by the Australian Securities Exchange Limited (“ASX”) Listing Rules, the Corporate Governance Statement contained on the Company website and in reference to this checklist reports on:- The extent to which the Company has followed the Corporate Governance recommendations contained in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd Edition); and- ThereasonsforanydeparturesfromtheCorporateGovernanceCouncil’sCorporateGovernancePrinciplesandRecommendations (3rd Edition), in compliance with the “if not, why not” regime.Overall approach to corporate governance1.41.4Board CharterThe company secretary of a listed entity should be accountable directly to the Board, through the chair, on all matters to do with the proper functioning of the Board.Remuneration ReportA listed entity should have a written agreement with each Director and senior executive setting out the terms of their appointment.Prior to appointing a Director a company should undertake appropriate checks (e.g. checks as to the persons character, experience, education, criminal record and bankruptcy history) before appointing a person, or putting forward to security holders a candidate for election, as a Director and provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a Director.1.21.31.3Disclosure - Performance Evaluation (b) disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.1.6A listed entity should:A listed entity shall have:1.51.61.7Disclosure - Performance Evaluation 1.7A listed entity should have and disclose a process for periodically evaluating the performance of its senior executives; and disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.(a) have a diversity policy which includes requirements for the Board or a relevant committee of the Board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and(c) disclose as at the end of each reporting period the measureable objectives for achieving gender diversity set by the Board or a relevant committee of the Board in accordance with the entity’s diversity policy and its progress towards achieving them, and either;• the respective proportions of men and women on the Board, in senior executive positions and across the whole organization (including how the entity has defined “senior executive” for these purposes); or• if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under the Act.1.5Cultural Diversity Policy / Disclosure - Diversity Procedure (a) have and disclose a process for periodically evaluating the performance of the Board, its committees and individual Directors; andCORPORATE GOVERNANCE STATEMENT 34 MACA LIMITED ANNUAL REPORT 2018Principle 2.02.12.22.42.53.04.04.35.0ComplianceStructure of Board to Add ValueASX Corporate Governance Principles and Best Practice RecommendationsReference• if a Director has an interest, position, association or relationship of the type described in the recommendations but the Board is of the opinion that it does not compromise the independence of the Director, the nature of the interest, position association or relationship in question and an explanation of why the Board is of that opinion; and• the names of the Directors considered by the Board to be independent Directors;Disclose:2.3• as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings.• the members of the committee; and2.2Directors Report / Board Charter / Nomination Committee Charter4.24.3Make Timely and Balanced Disclosure• the relevant qualifications and experience of the members of the committee; and• the charter of the committee;and disclose:• is chaired by an independent Director, who is not chair of the Board, Ensure that its independent auditor attends its AGM and is available to answer questions from security holders relevant to the audit.4.1• the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity;• the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively; and• the institution of processes to ensure Managing Director and Chief Financial Officer declarations are tabled at Board meetings that approve financial statements.5.1Establish written policies designed to ensure compliance with ASX Listing rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those polices.Disclosure - Continuous Disclosure5.13.12.6The chair of the Board of a listed entity should be an independent Director and, in particular, should not be the same person as the CEO of the entity.A majority of the Board of a listed entity should be independent Directors.• the length of service of each Director.Definition of Independence • the charter of the committee;and disclose:The Board of a listed entity should have a nomination committee which:• has at least three members, a majority of whom are independent Directors; and• is chaired by an independent Director, 2.1Promote Ethical and Responsible Decision-Making3.1The Board of a listed entity should have a code of conduct for its Directors, senior executives and employees and disclose that code or a summary of it.Corporate Code of Conduct2.32.42.5A listed entity should have a program for inducting new Directors and provide appropriate professional development opportunities for Directors to develop and maintain the skills and knowledge needed to perform their role as Directors effectively.2.6Board Charter / Nomination Committee Charter A listed entity should have and disclose a Board skills matrix setting out the mix of skills and diversity that the Board currently has or is looking to achieve in its membership. Safeguard Integrity in Corporate Reporting• has at least three members, all of whom are non-executive Directors and a majority of whom are independent Directors; and4.1Audit Committee Charter • the financial records of the entity have been properly maintained;4.2The Board of a listed entity should have an audit committee which:The Board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its Managing Director and Chief Financial Officer a declaration that, in their opinion:• in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings.CORPORATE GOVERNANCE STATEMENT 35 MACA LIMITED ANNUAL REPORT 2018Principle 6.07.07.27.37.48.08.18.28.2Remuneration Report / Remuneration Committee Charter6.4A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.Shareholder Communication StrategyA listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.A listed entity should provide information about itself and its governance to investors via its website.6.1Shareholder Communication Strategy6.36.2Investor Centre6.26.1• the charter of the committee;and disclose:• is chaired by an independent Director, • has at least three members, a majority of whom are independent Directors; ComplianceReferenceA listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.Remunerate Fairly and Responsibly7.4A listed entity should disclose if it has an internal audit function, how the function is structured and what role it performs.Respect the Rights of Security HoldersASX Corporate Governance Principles and Best Practice RecommendationsShareholder Communication Strategy6.36.47.3• disclose, in relation to each reporting period, whether such a review has taken place.• review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; andDisclosure - Risk Management The Board or a committee of the Board should:7.2• as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings.• the members of the committee; andRecognise and Manage RiskThe Board of a listed entity should have a committee or committees to oversee risk, each of which:7.17.1Risk Committee Charter 8.4A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive Directors and the remuneration of executive Directors and other senior executives.8.1Remuneration Report8.3• has at least three members, a majority of whom are independent Directors; andA listed entity which has an equity-based remuneration scheme should have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and disclose that policy or a summary of it.Remuneration Report8.4as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings.• the members of the committee; and8.3• the charter of the committee;and disclose:• is chaired by an independent Director, The Board should establish a remuneration committee.The remuneration committee should be structured so that it;CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 30 June 2018 36 MACA LIMITED ANNUAL REPORT 2018Impairment of Goodwill - - Members of the Parent Entity497,922 23,906 29,086 (2,084) - 2,552 Finance Costs(1,829)806 30,170 (10,446) - Direct CostsOther Comprehensive Income:Exchange Differences on Translating Foreign Operations31,193 (9,962)21,667 Revenue3.1(a)Other Income3.1(b)$’000$’000Consolidated Statement of Profit or Loss and Other Comprehensive IncomeFor the Year Ended 30 June 2018Section20182017 562,594 Profit for the YearProfit Before Income TaxTotal Comprehensive Income Attributable to:- Non-controlling Interest(864)32,057 31,193 (864)(1,928)(1,928) 23,595 21,667 - Members of the Parent Entity 31,034 13,149 13.72 13.62 (13,376)31,629 Total Comprehensive Income for the YearShare Based Payment ExpenseIncome Tax Expense3.6.1(a)Foreign Exchange Gains /(Losses) 11,221 Fair Value Gains/(Loss) on Available-For-Sale Financial Assets, Net of TaxOther Expenses from Ordinary Activities(543,805)(103)Profit / (Loss) Attributable to:(1,584)(15,814)30,170 11,221 9.06 8.95 (456,406)(3,813)- Non-controlling Interest44,108 (12,915)- Basic Earnings per Share (cents)3.6.4- Diluted Earnings per Share (cents)3.6.4Earnings per Share: The accompanying Sections form part of these Financial Statements(3,338)CONSOLIDATED STATEMENT OF FINANCIAL POSITION for the year ended 30 June 2018 37 MACA LIMITED ANNUAL REPORT 2018(7,502)3,244 269,727 319,519 1,316 The accompanying Sections form part of these Financial StatementsTotal Equity62,652 266,483 320,835 4.2Financial Assets4.1Loans to Other Companies4.1Inventory4.2Trade and Other Payables4.6Financial Liabilities5.2.1Current LiabilitiesTotal Non Current AssetsTotal AssetsDeferred Tax Assets3.6.2(a) Property, Plant and Equipment4.4Loans to Other Companies4.1Non Current AssetsTrade and Other Receivables4.1113,667 4.5GoodwillTotal Current LiabilitiesCurrent Tax Liabilities3.6.2(b)Short-term Provisions4.7Issued Capital5.5Reserves5.6(b)269,806 (17,948)67,661 Non-controlling Interest250,408 446,378 64,620 2018124,687 112,008 - 114,785 Work In ProgressOther Assets4.2Total Current Assets(345) - 1,756 9,675 13,647 Financial Assets4.1$’000$’000Current Assets64,042 2017128,905 Trade and Other Receivables4.1 19,975 39,165 Cash and Cash Equivalents5.1.17,618 13,649 (2,023)2,257 1,395 255,822 2,179 3,187 108,239 21,838 3,428 10,402 99,710 125,797 11,265 190,556 - 107 25,980 Consolidated Statement of Financial PositionAs at 30 June 2018Section14,991 1,226 11,838 92,675 2,958 29,910 32,868 125,543 320,835 1,648 6,526 8,037 145,116 395,524 26,087 269,727 211,333 Deferred Tax Liabilities3.6.2(b)EquityTotal LiabilitiesNet AssetsFinancial Liabilities5.2.1Total Non Current LiabilitiesNon Current LiabilitiesRetained ProfitsParent InterestCONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2018 38 MACA LIMITED ANNUAL REPORT 2018Issued CapitalRetained ProfitsOutside Equity InterestGeneral ReservesOption ReserveFX ReserveTotal$’000$’000$’000$’000$’000$’000$’000208,81650,814(448)(3,777)604(376)255,633 - 32,057(864) - - - 31,193208,81682,871(1,312)(3,777)604(376)286,826 - - - - - - - - 806 - - - (1,829)(1,023)208,81683,677(1,312)(3,777)604(2,205)285,803 2,400 - - - - - 2,400 - - - - 103 - 103 117 - - - (117) - - - - 448 - - - 448 - - 4,108(2,110) - - 1,998 - (21,025) - - - - (21,025)211,33362,6523,244(5,887)590(2,205)269,727211,33362,6523,244(5,887)590(2,205)269,727 - 23,595 (1,928) - - - 21,667 211,333 86,247 1,316 (5,887) 590 (2,205) 291,394 - - - - - - - - - - - - (10,446)(10,446) 211,333 86,247 1,316 (5,887) 590 (12,651) 280,948 60,176 - - - - 60,176 (1,703) - - - - - (1,703) - - - - - - - - - - - - - - - - - - - - - - (18,586) - - - - (18,586)269,80667,6611,316(5,887)590(12,651)320,835Profit for the Period SUB-TOTALOther Comprehensive Income:Revaluation of InvestmentSUB-TOTALShares IssuedOptions Issued Net of Options ExercisedTransactions with Non-controlling InterestsSUB-TOTALOther Comprehensive Income:Revaluation of InvestmentSUB-TOTALConsolidated Statement of Changes in EquityFor the Year Ended 30 June 2018Shares IssuedOptions Issued Net of Options ExercisedTransactions with Non-controlling InterestsAcquisition of Non-controlling InterestDividends Paid Balance at 1 July 2016Profit for the Period Options/Rights IssuedAcquisition of Non-controlling InterestDividends Paid Balance at 30 June 2018The accompanying Sections form part of these Financial StatementsOptions/Rights IssuedBalance at 30 June 2017Balance at 1 July 2017CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2018 39 MACA LIMITED ANNUAL REPORT 2018(3,814)(12,999)68,142 3,175 Loans Provided to Customers(17,918) - (21,411)Income Tax Paid115,602 112,008 The accompanying Sections form part of these Financial Statements(2,811)20182017Cash Flow form Investing ActivitiesProceeds from Sale of Property, Plant and Equipment5,633 (38,769)(21,909)(2,677)Net Cash Used In Investing ActivitiesReceipts from CustomersPayments to Suppliers and EmployeesCash Flows form Operating Activities 529,526 (509,532)482,742 (399,268)SectionConsolidated Statement of Cash Flows For the Year Ended 30 June 2018$’000$’000Net Cash Provided By Operating Activities5.1.2 - (51,054)58,473 (694)(18,586)39,193 (3,179)112,008 108,239 Interest PaidDividends ReceivedInterest Received - Cash and Cash Equivalents at the Beginning of the YearCash and Cash Equivalents at the End of Financial YearNet Cash Provided by / (Used in) Financing Activities1,481 147 4,342 (12,990)8,682 5.1.1 - (590)Net movement in BorrowingsDividends Paid by the Parent(27,105)(21,025)Cash Flow form Financing Activities(48,130)(1,399)Net Proceeds from Share IssueNet Cash Consideration for Acquisition of SubsidiariesPurchase of Property, Plant and EquipmentNet Increase/(Decrease) in Cash HeldEffect of Exchange Rate Changes on the Balance of Cash Held in Foreign Currencies(2,195)SECTIONS TO THE FINANCIAL STATEMENTS for the year ended 30 June 2018 40 MACA LIMITED ANNUAL REPORT 2018Section 1 General InformationTheacquisitionofsubsidiariesisaccountedforusingtheacquisitionmethodofaccounting.Achangeinownershipinterest,withoutthelossofcontrol,isaccountedforasanequitytransaction,wherethedifferencebetweentheconsiderationtransferredandthebookvalueof the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.Non-controllinginterestintheresultsandequityofsubsidiariesareshownseparatelyinthestatementofprofitorlossandothercomprehensiveincome,statementoffinancialpositionandstatementofchangesinequityoftheconsolidatedentity.Lossesincurredbytheconsolidated entity are attributed to the non-controlling interest in full.1.4 Basis of ConsolidationThefinancialstatementsaregeneralpurposefinancialstatementsthathavebeenpreparedinaccordancewithAustralianAccountingStandards,AustralianAccountingInterpretations,otherauthoritativepronouncementsoftheAustralianAccountingStandardsBoardandtheCorporationsAct2001.TheGroupisaforprofitentityforfinancialreportingpurposesunderAustralianAccountingStandards.Thesefinancialstatements also comply with International Financial Reporting standards as issued by the International Accounting Standards Board (IASB).For the year ended 30 June 2018TheconsolidatedfinancialstatementsincorporatetheassetsandliabilitiesofallsubsidiariesofMACALimitedasat30June2018andtheresultsofallsubsidiariesfortheyearthenended.MACALimitedanditssubsidiariestogetherarereferredtointhesefinancialstatementsasthe ‘consolidated entity’.AustralianAccountingStandardssetoutaccountingpoliciesthattheAASBhasconcludedwouldresultinfinancialstatementscontainingrelevantandreliableinformationabouttransactions,eventsandconditions.CompliancewithAustralianAccountingStandardsensuresthatthefinancialstatementsandnotesalsocomplywithInternationalFinancialReportingStandardsasissuedbytheIASB.Materialaccountingpoliciesadoptedinthepreparationofthesefinancialstatementsarepresentedbelowandhavebeenconsistentlyappliedunlessotherwisestated. Intercompanytransactions,balancesandunrealisedgainsontransactionsbetweenentitiesintheconsolidatedentityareeliminated.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceoftheimpairmentoftheassettransferred.Accountingpoliciesof subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.1.2 Statement of ComplianceTheseFinancialStatementsaregeneralpurposeFinancialStatementswhichhavebeenpreparedinaccordancewiththeCorporationsAct2001, Accounting Standards and Interpretations, and comply with other requirements of the law.TheFinancialStatementscomprisetheconsolidatedFinancialStatementsoftheCompany.ForthepurposesofpreparingtheconsolidatedFinancialStatements,theCompanyisafor-profitentity.AccountingStandardsincludeAustralianAccountingStandards.CompliancewithAustralianAccountingStandardsensuresthattheFinancialStatementsandSectionscomplywithInternationalFinancialReportingStandards(“IFRS”).The Financial Statements were authorised for issue by the Directors on 27 August 2018.1.3 Basis of Preparation1.1 Reporting EntityThesefinancialstatementshavebeenpreparedonanaccrualsbasisandarebasedonhistoricalcosts,modified,whereapplicable,bythemeasurementatfairvalueofselectednon-currentassets,financialassetsandfinancialliabilities.ThesefinancialstatementsarepresentedinAustralian dollars.Sections to the Financial StatementsMLDisalimitedcompanyincorporatedinAustralia.TheaddressesoftheCompany'sregisteredofficeandprincipalplacesofbusinessaredisclosed in the Corporate Directory. The Principal activities of the Company are described in the Directors' Report.Subsidiariesareallthoseentitiesoverwhichtheconsolidatedentityhascontrol.Theconsolidatedentitycontrolsanentitywhentheconsolidatedentityisexposedto,orhasrightsto,variablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspowertodirecttheactivitiesoftheentity.Subsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredto the consolidated entity. They are de-consolidated from the date that control ceases.SECTIONS TO THE FINANCIAL STATEMENTS 41 MACA LIMITED ANNUAL REPORT 2018Section 1 General Information (cont.)ThisStandardamendsthemandatoryeffectivedate(applicationdate)ofAASB15:RevenuefromContractswithCustomerssothatAASB15isrequiredtobeappliedforannualreportingperiodsbeginningonorafter1January2018insteadof1January2017.Therefore,thisStandardalsodeferstheconsequentialamendmentsthatwereoriginallysetoutinAASB2014-5:AmendmentstoAustralianAccountingStandardsarisingfromAASB15.ThisdeferralisachievedinavarietyofwaysbecausesomeoftheStandardsamendedbyAASB2014-5havebeensupersededbynewprincipalversionsissuedin2015thatapplytoannualreportingperiodsbeginningonorafter1January2017or2018.ThisStandardamendsInterpretation1052:TaxConsolidationAccountingtoupdatethecross-referencestoStandardsandtoremovethereferencestodividendsandotherdistributions,sothatthewordingofInt1052.45isappropriateforannualreportingperiodsbeginningonorafter1January2018.AASB15isalsoreformattedtofollowthestructureofthenewprincipalversionsofotherStandardsbydeletingormoving the Aus-numbered “Application” paragraphs.AASB 2014-7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2014)AASB2014-7(issuedDecember2014)giveseffecttotheconsequentialamendmentstoAustralianAccountingStandards(includingInterpretations)arisingfromtheissueofAASB9:FinancialInstruments(December2014).Moresignificantly,additionaldisclosurerequirementshavebeenaddedtoAASB7:FinancialInstruments:Disclosuresregardingcreditriskexposuresoftheentity.ThisStandardalsomakes various editorial corrections to Australian Accounting Standards and an Interpretation.AASB2014-7mandatorilyappliestoannualreportingperiodsbeginningonorafter1January2018.Earlierapplicationispermitted,providedAASB 9 (December 2014) is applied for the same period.AASB15:RevenuefromContractswithCustomers(applicabletoannualreportingperiodsbeginningonorafter1July2018,asdeferredbyAASB 2015-8: Amendments to Australian Accounting Standards – Effective Date of AASB 15AASB15establishesasinglecomprehensivemodelforentitiestouseinaccountingforrevenuearisingfromcontractswithcustomers.Basedonanassessmentperformedovereachlineofbusinessandproducttype,theeffectsofAASB15arenotexpectedtohaveamaterialeffectonthe Group.AASB 2015-8: Amendments to Australian Accounting Standards – Effective Date of AASB 15AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning on or after 1 July 2018TheStandardwillbeapplicableretrospectively(subjecttotheprovisionsonhedgeaccountingoutlinedbelow)andincludesrevisedrequirements for the classification and measurement of financial instruments requirements for financial instruments and hedge accounting.ThekeychangesthatmayaffecttheGrouponinitialapplicationincludecertainsimplificationstotheclassificationoffinancialassets,simplificationstotheaccountingofembeddedderivatives,upfrontaccountingforexpectedcreditloss,andtheirrevocableelectiontorecognisegainsandlossesoninvestmentsinequityinstrumentsthatarenotheldfortradinginothercomprehensiveincome.AASB9alsointroducesanewmodelforhedgeaccountingthatwillallowgreaterflexibilityintheabilitytohedgerisk,particularlywithrespecttohedgesofnon-financialitems.ShouldtheentityelecttochangeitshedgepoliciesinlinewiththenewhedgeaccountingrequirementsoftheStandard, the application of such accounting would be largely prospective.AASB 2014-5: Amendments to Australian Accounting Standards arising from AASB 15ThisStandardisapplicabletoannualreportingperiodsbeginningonorafter1January2017andmakesconsequentialamendmentstovariousAustralianAccountingStandardsarisingasaresultoftheissueofAASB15:RevenuefromContractswithCustomers.AASB2014-5isnotexpected to impact the Group’s financial statements.Basedonanassessmentperformedovereachlineofbusinessandproducttype,theeffectsofAASB9arenotexpectedtohaveamaterialeffect on the Group.1.5 New Accounting Standards for Application in Future PeriodsAccountingStandardsissuedbytheAASBthatarenotyetmandatorilyapplicabletotheGroup,togetherwithanassessmentofthepotentialimpact of such pronouncements on the Group when adopted in future periods, are discussed below:SECTIONS TO THE FINANCIAL STATEMENTS 42 MACA LIMITED ANNUAL REPORT 2018••••••••••Section 1 General Information 1.5 New Accounting Standards for Application in Future Periods (Cont.)ThecoreprincipleoftheStandardisthatanentitywillrecogniserevenuetodepictthetransferofpromisedgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthegoodsorservices.Toachievethisobjective, AASB 15 provides the following five-step process:AASB 2016-3 mandatorily applies to annual reporting periods beginning on or after 1 January 2018, with earlier application permitted.TheGroupintheprocessofcompletingitsimpactassessmentofAASB16.Basedonapreliminaryassessmentperformedovereachlineofbusinessandleasetype,theeffectofAASB16isnotexpectedtohaveamaterialeffectontheGroup.AnestimateoftheexpectedimpactofAASB16 will be provided in the acconts for the half year ending 31 December 2018.WhenrequiredbyAccountingStandards,comparativefigureshavebeenadjustedtoconformtochangesinpresentationforthecurrentfinancial year.1.7 Rounding of AmountsTheparententityhasappliedthereliefavailabletoitunderASICCI2016/191andaccordingly,amountsinthefinancialstatementsanddirectors’ report have been rounded off to the nearest $1,000. Wheneffective,thisStandardwillreplacethecurrentaccountingrequirementsapplicabletoleasesinAASB117:LeasesandrelatedInterpretations.AASB16introducesasinglelesseeaccountingmodelthateliminatestherequirementforleasestobeclassifiedasoperatingor finance leases.The main changes introduced by the new Standard are as follows:ThetransitionalprovisionsofAASB16allowalesseetoeitherretrospectivelyapplytheStandardtocomparativesinlinewithAASB108orrecognise the cumulative effect of retrospective application as an adjustment to opening equity on the date of initial application.identify the contract(s) with a customer;identify the performance obligations in the contract(s);determine the transaction price;allocate the transaction price to the performance obligations in the contract(s); andrecognise revenue when (or as) the performance obligations are satisfied.recognitionofaright-of-useassetandleaseliabilityforallleases(excludingshort-termleaseswithaleaseterm12months or less of tenure and leases relating to low-value assets);depreciationofright-of-useassetsinlinewithAASB116:Property,PlantandEquipmentinprofitorlossandunwindingofthe liability in principal and interest components;inclusionofvariableleasepaymentsthatdependonanindexorarateintheinitialmeasurementoftheleaseliabilityusing the index or rate at the commencement date;applicationofapracticalexpedienttopermitalesseetoelectnottoseparatenon-leasecomponentsandinsteadaccountfor all components as a lease; andinclusion of additional disclosure requirements.Wheneffective,thisStandardwillreplacethecurrentaccountingrequirementsapplicabletorevenuewithasingle,principles-basedmodel.Apartfromalimitednumberofexceptions,includingleases,thenewrevenuemodelinAASB15willapplytoallcontractswithcustomersaswell as non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential customers.ThetransitionalprovisionsofthisStandardpermitanentitytoeither:restatethecontractsthatexistedineachpriorperiodpresentedperAASB108:AccountingPolicies,ChangesinAccountingEstimatesandErrors(subjecttocertainpracticalexpedientsinAASB15);orrecognisethecumulativeeffectofretrospectiveapplicationtoincompletecontractsonthedateofinitialapplication.Therearealsoenhanceddisclosurerequirements.BasedonanassessmentperformedovereachlineofthebusinesstheeffectsofAASB15arenotexpectedtohaveamaterial effect on the Group.AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 July 2019WhentheGroupappliesanaccountingpolicyretrospectively,makesaretrospectiverestatementorreclassifiesitemsinitsfinancialstatements, a statement of financial position as at the beginning of the earliest comparative period will be disclosed.1.6 Comparative FiguresSECTIONS TO THE FINANCIAL STATEMENTS 43 MACA LIMITED ANNUAL REPORT 2018TheDirectorsevaluateestimatesandjudgmentsincorporatedintothefinancialreportbasedonhistoricalknowledgeandbestavailablecurrentinformation.Estimatesassumeareasonableexpectationoffutureeventsandarebasedoncurrenttrendsandeconomicdata,obtained both externally and within the Company.Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivableaftertakingintoaccountanytradediscountsandvolumerebatesallowed.Anyconsiderationdeferredistreatedastheprovisionoffinanceandisdiscountedatarateofinterestthatisgenerallyacceptedinthemarketforsimilararrangements.Thedifferencebetweentheamountinitiallyrecognisedandtheamountultimatelyreceivedis interest revenue.Revenuefromthesaleofgoodsisrecognisedatthepointofdeliveryasthiscorrespondstothetransferofsignificantrisksandrewardsofownership of the goods and the cessation of all involvement in those goods.Section 2 Critical Accounting Estimates and JudgmentsRevenuerecognitionrelatingtotheprovisionofservicesisdeterminedwithreferencetothestageofcompletionofthetransactionattheendofthereportingperiodandwhereoutcomeofthecontractcanbeestimatedreliably.Stageofcompletionisdeterminedwithreferencetotheservicesperformedtodateasapercentageoftotalanticipatedservicestobeperformed.Wheretheoutcomecannotbeestimatedreliably,revenue is recognised only to the extent that related expenditure is recoverable.All revenue is stated net of the amount of goods and services tax (GST).Thevalueinusecalculationswithrespecttoassetsrequireanestimationofthefuturecashflowsexpectedtoarisefromeachcashgeneratingunitandasuitablediscountratetoapplytothesecashflowstocalculatenetpresentvalue.TheDirectorshavedeterminedthatthereisnoadjustment required to the carrying value of assets in the current reporting period.Estimation of Useful Lives of AssetsTheestimationoftheusefullivesofproperty,plantandequipmentisbasedonhistoricalexperienceandisreviewedonanongoingbasis.Thecondition of the assets is assessed at least annually against the remaining useful life with adjustments made when considered necessary.The following is an analysis of the Company’s revenue and other income for the year:TheGroupassessesimpairmentattheendofeachreportingperiodbyevaluatingconditionsandeventsspecifictotheGroupthatmaybeindicativeofimpairmenttriggers.Recoverableamountsofrelevantassetsarereassessedusingvalue-in-usecalculationswhichincorporatevarious key assumptions. ThissectionfocusesontheresultsandperformanceoftheCompanyandincludesdisclosuresexplainingtheCompany'sresultsfortheyear,segment information, capital and leasing commitments, taxation and EPS.3.1 RevenueAccounting PoliciesRevenue RecognitionInterestrevenueisrecognisedusingtheeffectiveinterestratemethod,which,forfloatingratefinancialassets,istherateinherentintheinstrument.All dividends received shall be recognised as revenue when the right to receive the dividend has been established.Section 3 Results for the YearTaxationBalancesdisclosedinthefinancialstatementsandthenotesthereto,relatedtotaxation,arebasedonbestestimates.TheseestimatestakeintoaccountboththefinancialperformanceandpositionoftheGroupastheypertaintocurrentincometaxationlegislation,andtheGroup’sunderstandingthereof.Noadjustmenthasbeenmadeforpendingorfuturetaxationlegislation.Thecurrentincometaxpositionrepresentsthat best estimate, pending an assessment by the Australian Taxation Office.Key Estimates and JudgementsImpairmentSECTIONS TO THE FINANCIAL STATEMENTS 44 MACA LIMITED ANNUAL REPORT 2018Unlessindicatedotherwiseinthesegmentassetsnote,investmentsinfinancialassets,deferredtaxassetsandintangibleassetshavenotbeenallocated to operating segments.Segment liabilitiesSection 3 Results for the Year3.1 Revenue (Cont.)ThegroupinformationpresentedinthefinancialreportistheinformationthatisreviewedbytheBoardofDirectors(chiefoperatingdecisionmaker) in assessing performance and determining the allocation of resources.Identification of Reportable SegmentTheGroupidentifiesitsoperatingsegmentsbasedoninternalreportsthatarereviewedandusedbytheBoardofDirectors(chiefoperatingdecision maker) in assessing performance and determining the allocation of resources.TheGroupoperatesinthreebusinessandtwogeographicalsegments,beingtheprovisionofcivil,SMPandcontractminingservicesthroughout Australia and mining services to the mining industry in Brazil, South America. Basis of Accounting for Purposes of Reporting by Operating SegmentsAccounting Policies AdoptedUnlessotherwisestated,allamountsreportedtotheBoardofDirectorsasthechiefoperatingdecisionmaker,isinaccordancewithaccounting policies that are consistent to those adopted in the financial statements of the Company. 1,312 1,125 Reversal of Earnout not Payable 1,500 - Rebates 22,997 22,781 Liabilitiesareallocatedtosegmentswherethereisdirectnexusbetweentheincurrenceoftheliabilityandtheoperationsofthesegment.Segment liabilities include trade and other payables and certain direct borrowings.Unallocated itemsThefollowingitemsofrevenue,expense,assetsandliabilitiesarenotallocatedtooperatingsegmentsastheyarenotconsideredpartofthecore operations of any segment:- Dividends, interest, head office and other administration expenditure. 23,906 Reversal of Impairment - Crushing 2,217 - Profit / (Loss) on Sale of Investments 1,060 - Profit / (Loss) on Disposal of Property, Plant and EquipmentInter-segment transactionsInter-segmentloanspayableandreceivableareinitiallyrecognizedattheconsiderationreceivednetoftransactioncosts.Ifinter-segmentloansreceivableandpayablearenotoncommercialterms,thesearenotadjustedtofairvaluebasedonmarketinterestrates.Thispolicyrepresents a departure from that applied to the statutory financial statements.Segment assetsWhereanassetisusedacrossmultiplesegments,theassetisallocatedtothesegmentthatreceivesthemajorityofeconomicvaluefromtheasset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location. 164 20172018$'000$'0003.1(a) Revenue from Operating ActivitiesContract Trading RevenueInterest Received20182017$'000$'000Total Revenue from Operating Activities 497,922 1,480 562,594 4,342 496,278 557,325 Other Revenue 927 3.1(b) Other IncomeTotal Other Income 29,086 3.2 Operating SegmentsSECTIONS TO THE FINANCIAL STATEMENTS 45 MACA LIMITED ANNUAL REPORT 2018MiningCivil / InfrastructureInterquip 1Un-allocated$’000$’000$’000$’000 398,368 138,243 20,714 - 3,018 954 38 1,259 401,386 139,197 20,752 1,259 77,793 2,921 (4,131) - (44,171)(1,224)(696) - 2,217 - (3,338) - 3,018 27 38 1,259 (1,745)(306)(33) - 37,112 1,418 (8,160)1,259 288,788 41,382 18,181 97,762 93,391 24,524 5,215 2,148 38,056 668 735 163 3.2 Operating Segments (Cont.)Section 3 Results for the YearImpairment(1,121)Income Tax Expense(12,915)Profit After Income Tax Expense31,193 Earnings Before Interest, Tax, Depreciation and Amortisation102,693 (3,186)(966)98,541 Depreciation and Amortisation(50,667)(1,432) - (52,099)Interest Revenue 384 31 1,065 1,480 Finance Costs(3,515)(299) - (3,814)Profit/(Loss) Before Income Tax Expense48,895 (4,886)99 44,108 Other RevenueTotal Revenue446,113 Total Assets446,378 Liabilities1 Structural, Mechanical and Piping businessConsolidated - June 2017MiningCivil / InfrastructureUnallocatedTotal$’000$’000$’000$’000125,278 Total Liabilities125,543 Capital ExpenditureTotal Reportable Segment Revenue 423,698 72,580 - 496,278 Earnings Before Interest, Tax, Depreciation and Amortisation76,583 Assets39,622 Segment AssetsRevenueSegment Liabilities557,325 5,269 (46,091)Interest Revenue4,342 Finance Costs(2,084)Profit/(Loss) Before Income Tax Expense31,629 Income Tax Expense(9,962)Profit After Income Tax Expense21,667 Other Revenue 480 Total Reportable Segment RevenueRevenue$’000Consolidated - June 2018Total562,594 Depreciation and Amortisation 99 1,065 1,644 Total Revenue424,178 72,679 1,065 497,922 SECTIONS TO THE FINANCIAL STATEMENTS 46 MACA LIMITED ANNUAL REPORT 2018Civil / InfrastructureUnallocatedTotal$’000$’000$’000$’000Consolidated - June 2017MiningSection 3 Results for the Year3.2 Operating Segments (Cont.) 50,870 55,436 – Plant and Equipment Depreciation and Amortisation 3.3 Operating Costs from Continuing OperationsSection$'000$'00046,091 52,099 TheGrouphasanumberofcustomerstowhomitprovidesbothproductsandservices.TheGroupsupplies3singleexternalcustomersintheminingsegmentwhichaccountfor31.3%,8.9%and8.7%ofexternalrevenue.(2017:40%,15%and13%).Thenextmostsignificantclientaccounts for 8.0% (2017: 8%) of external revenue.20182017 90,110 99,562 Leasesareclassifiedasfinanceleaseswheneverthetermsoftheleasetransfersubstantiallyalltherisksandrewardsofownershiptothelessee.Allotherleasesareclassifiedasoperatingleases.Financeleasesarecapitalisedbyrecordinganassetandaliabilityattheloweroftheamountsequaltothefairvalueoftheleasedpropertyorthepresentvalueoftheminimumleasepayments,includinganyguaranteedresidual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. ExpensesTotal Employee Benefits Expense 173,341 132,936 Total Depreciation and Amortisation Expense– Other– Motor VehiclesBrazil 69,839 81,349 60,111 37,741 Total562,594 497,922 190,556 145,116 Major Customers 23,171 8,279 - 31,450 RevenueNon-current AssetsGeographical Information2018201720182017$’000$’000$’000AssetsSegment Assets 248,705 51,908 94,911 395,524 Total Assets395,524 Australia 492,755 416,573 130,445 107,375 Segment Liabilities 93,410 29,187 3,200 125,797 Total Liabilities125,797 Capital Expenditure$’000Repairs, Service and Maintenance 44,989 LiabilitiesMaterials and SuppliesLeases3.4 Capital and Leasing CommitmentsAccounting Policies 50,356 789 1,560 313 183 SECTIONS TO THE FINANCIAL STATEMENTS 47 MACA LIMITED ANNUAL REPORT 2018 16,405 30,804 - Section 3 Results for the Year3.4 Capital and Leasing Commitments (Cont.)3.5 Auditors RemunerationAudit or Review of the Financial ReportOther Non-Audit ServicesTaxation ServicesTotal Auditor's Remuneration 220 210 - - - - Plant and Equipment Purchases 28,005 210 10,694 $28.0M of commitments for property, plant and equipment expenditure exist at 30 June 2018 (June 2017: $10.7M).– Between 12 Months and 5 Years– Greater Than 5 YearsMinimum Commitments - - - - 28,005 10,694 6,038 3,984 – Greater Than 5 Years7,500 - 5,562 $'000$'000Non-cancellable Operating Leases Contracted For but Not Capitalised in the Accounts:Operatingleasepaymentsarerecognisedasanexpenseinprofitandlossonastraight-linebasisovertheleaseterm.Operatingleaseincentivesarerecognisedasaliabilitywhenreceivedandsubsequentlyreducedbyallocatingleasepaymentsbetweenrentalexpenseandareduction of the liability.(b) Finance Lease Commitments 220 Payable — Minimum Lease Payments– Not Later Than 12 Months1,650 1,578 – Between 12 Months and 5 YearsTotal Operating Lease Commitments 15,188 Leasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,arechargedasexpensesintheperiods in which they are incurred. Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. Payable– Not Later Than 12 Months47,209 50,613 (2,308)(2,795)Less Future Finance ChargesTotal Finance Lease Commitments Payable — Minimum Lease Payments– Not Later Than 12 Months 24,079 28,005 10,694 – Between 12 Months and 5 Years 26,534 – Greater Than 5 Years - Minimum Lease Payments 44,901 47,818 (b) Capital Expenditure CommitmentsAuditor's Remuneration - Moore Stephens20182017$'000$'00020182017(a) Operating Lease CommitmentsSECTIONS TO THE FINANCIAL STATEMENTS 48 MACA LIMITED ANNUAL REPORT 2018Section 3 Results for the Year9,962 12,915 Deferred3.6 TaxationGoods and Services Tax (GST)Accounting PoliciesCashflowsarepresentedinthestatementofcashflowsonagrossbasis,exceptfortheGSTcomponentofinvestingandfinancingactivities,which are disclosed as operating cash flows.(a) The Components of Tax Expense Comprise: 12,735 15,219 (2,773)(2,304)20182017Income Tax3.6.1 Income Tax ExpenseSection$'000$'000CurrentThe income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).Currentincometaxexpensechargedtotheprofitorlossisthetaxpayableontaxableincomecalculatedusingapplicableincometaxratesenacted,orsubstantiallyenacted,asattheendofthereportingperiod.Currenttaxliabilities(assets)arethereforemeasuredattheamountsexpected to be paid to (recovered from) the relevant taxation authority.Deferredincometaxexpensereflectsmovementsindeferredtaxassetanddeferredtaxliabilitybalancesduringtheyearaswellasunusedtaxlosses.Currentanddeferredincometaxexpense(income)ischargedorcrediteddirectlytoequityinsteadoftheprofitorlosswhenthetax relates to items that are credited or charged directly to equity.Deferredtaxassetsandliabilitiesareascertainedbasedontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.Deferredtaxassetsalsoresultwhereamountshavebeenfullyexpensedbutfuturetaxdeductionsareavailable.Nodeferredincometaxwillberecognisedfromtheinitialrecognitionofanassetorliability,excludingabusinesscombination, where there is no effect on accounting or taxable profit or loss.Deferredtaxassetsandliabilitiesarecalculatedatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesenactedorsubstantivelyenactedattheendofthereportingperiod.Theirmeasurementalsoreflectsthemanner in which management expects to recover or settle the carrying amount of the related asset or liability.Deferredtaxassetsrelatingtotemporarydifferencesandunusedtaxlossesarerecognisedonlytotheextentthatitisprobablethatfuturetaxable profit will be available against which the benefits of the deferred tax asset can be utilised.Wheretemporarydifferencesexistinrelationtoinvestmentsinsubsidiaries,branches,associates,andjointventures,deferredtaxassetsandliabilitiesarenotrecognisedwherethetimingofthereversalofthetemporarydifferencecanbecontrolledanditisnotprobablethatthereversal will occur in the foreseeable future.Currenttaxassetsandliabilitiesareoffsetwherealegallyenforceablerightofset-offexistsanditisintendedthatnetsettlementorsimultaneousrealisationandsettlementoftherespectiveassetandliabilitywilloccur.Deferredtaxassetsandliabilitiesareoffsetwherealegallyenforceablerightofset-offexists,thedeferredtaxassetsandliabilitiesrelatetoincometaxesleviedbythesametaxationauthorityoneitherthesametaxableentityordifferenttaxableentitieswhereitisintendedthatnetsettlementorsimultaneousrealisationandsettlementoftherespectiveassetandliabilitywilloccurinfutureperiodsinwhichsignificantamountsofdeferredtaxassetsorliabilitiesareexpectedtobe recovered or settled.Revenues,expensesandassetsarerecognisednetoftheamountofGST,exceptwheretheamountofGSTincurredisnotrecoverablefromtheAustralianTaxationOffice.InthesecircumstancestheGSTisrecognisedaspartofthecostofacquisitionoftheassetoraspartofanitemof the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. SECTIONS TO THE FINANCIAL STATEMENTS 49 MACA LIMITED ANNUAL REPORT 2018Less Tax Effect of– Franking Credits on Dividends Received 2,408 3,861 1,948 497 Add Tax Effect of– Dividend Imputation– Other Non-allowable Items13,232 Section 3 Results for the Year3.6.1 Taxation Tax Expense (Cont.)$'000$'00029.3%Prima Facie Tax Payable on Profit From Ordinary Activities Before Income Tax at 30% (2017: 30%)9,489 31.5%– Research and Development Credit– Other Taxable Items3.6.2 Current Tax Assets and LiabilitiesSection(8,028)(12,871)(5,924)(814) 10,069 9,010 (b) The Prima Facie Tax on Profit From Ordinary Activities Before Income Tax is Reconciled to the Income Tax as Follows:2018Non CurrentIncome Tax Attributable to the EntityThe Applicable Weighted Average Effective Tax Rate as - - 3,596 9,962 12,915 20173,611 (a) Tax AssetsDeferred Tax Assets Comprise:8,307 7,930 $'0007,930 (Charge)/Credit To Income Statement739 2,310 3.6.3 ReconciliationsSection(Charge)/Credit To Equity(362)The Overall Movement In the Deferred Tax Account is as Follows: - (a) Gross Movements5,620 Non CurrentCurrent2,835 113 Opening BalanceOther 123 (6)20182017$'000Closing Balance 6,585 3,980 Total Current Tax LiabilitiesIncome Tax 1,226 3,428 (b) Tax Liabilities3,428 ProvisionsLossesDeferred Tax Liability Comprise:DepreciationOtherTotal Current Tax Assets 700 830 11,265 8,037 107 1,226 Total Non Current Tax Liabilities2,958 – Other Deductible Items (Losses Not Previously Brought to Account)SECTIONS TO THE FINANCIAL STATEMENTS 50 MACA LIMITED ANNUAL REPORT 20183.6.3 Reconciliations (Cont.)Section$'0002,958 3,611 3,012 Credit To Income StatementOpening BalanceDiluted EPS BasicEPSiscalculatedbydividingtheprofitattributabletoequityholdersoftheCompany,excludinganycostsofservicingequityotherthanordinary shares, by the weighted average number of ordinary shares during the financial year. DilutedEPSiscalculatedbydividingtheprofitattributabletoequityholdersoftheCompany,excludinganycostsofservicingequityotherthanordinaryshares,bytheweightedaveragenumberofordinarysharesandperformancerightsfortheeffectsofalldilutivepotentialordinary shares.Closing Balance700 830 Losses: - Charge / (Credit) To Equity232 128 Charge / (Credit) To Equity(362) - Closing BalanceOpening Balance2,989 1,577 107 107 113 Charge / (Credit) To Income StatementThe Movement In Deferred Tax Liabilities For Each Temporary Difference During the Year is as Follows:$'000Section 3 Results for the Year20182017(b) Deferred Tax Liabilities3,596 2,019 (Charge) / Credit To Income StatementOther:2,851 (6)Closing Balance3,980 3,611 - Opening Balance(c) Deferred Tax AssetsAccounting PoliciesBasic EPS3.6.4 Earnings per Share3,596 369 599 The Movement In Deferred Tax Assets For Each Temporary Difference During the Year is as Follows:Provisions:Closing Balance6,585 Other:Opening Balance830 702 Charge / (Credit) To Income StatementSECTIONS TO THE FINANCIAL STATEMENTS 51 MACA LIMITED ANNUAL REPORT 2018Debtors subject to Payment Arrangements - Current124,687 113,667 Total Current4,436 1,648 $'000CurrentAvailable For Sale Financial AssetsShares in Listed Corporations at Fair Value - Current2,257 - Shares in Listed Corporations at Fair Value - Non-current2,179 1,648 Total Available For Sale Financial AssetsTrade DebtorsDebtors Subject to Payment Arrangements - Non-currentSection 4 Assets and LiabilitiesThisSectionshowstheassetsusedtogeneratetheCompany’stradingperformanceandtheliabilitiesincurredasaresult.Liabilitiesrelatingto the Company’s financing activities are addressed in Section 5. Current and deferred tax assets and liabilities are shown in Section 3.7. Accounting PoliciesTradeandotherreceivablesrepresenttheassetoutstandingattheendofthereportingperiodforgoodsandservicesprovidedbytheGroupduringthereportingperiodwhichremainunpaid.Thebalanceisrecognisedasacurrentassetwiththeamountnormallybeingreceivedwithin 30 to 45 days of recognition of the receivable.116,502 113,667 201820174.1 Trade and Other ReceivablesTrade and Other ReceivablesSection$'00021,667 31,193 Section 3 Results for the Year3.6.4 Earnings per Share (Cont.)20182017Cents per ShareCents per Share23,595 32,057 260,428 233,628 (Profit)/loss Attributable To Non-controlling Interest b. WeightedAverageNumber(000)ofOrdinarySharesOutstanding During the Year In Calculating Basic EPS1,928 864 a. Reconciliation Of Earnings To Profit and LossProfitEarnings Used To Calculate Basic EPS23,595 32,057 Earnings Used in the Calculation of Dilutive EPS39,165 - 163,852 113,667 3,115 1,802 WeightedAverageNumber(000)ofDilutiveOptionsOutstandingWeightedAverageNumber(000)ofOrdinarySharesOutstanding During the Year Used In Calculating Dilutive EPS 263,543 235,430 8,185 27,593 7,997 Loans to Other CompaniesTotal Loans to Other CompaniesLoans to Other Companies - Current7,618 7,114 Loans to Other Companies - Non-current19,975 883 Total Trade and Other ReceivablesSECTIONS TO THE FINANCIAL STATEMENTS 52 MACA LIMITED ANNUAL REPORT 2018(2,023)124,687 - Inventories27,593 9,675 11,626 113,667 - Total Non-current4.1 19,975 - Total Current4.2 Inventories and Work In Progress (WIP)Accounting PoliciesInventoriesandworkinprogressaremeasuredatthelowerofcostornetrealisablevalue.Thecostofmanufacturedproductsincludesdirectmaterials,directlabourandanappropriateportionofvariableandfixedoverheads.Overheadsareappliedonthebasisofnormaloperatingcapacity. Costs are assigned on the basis of weighted average costs. 20182017Inventories and Work In Progress (WIP)(345) 13,302 Total Inventories and Work in Progress (WIP) 39,165 - Credit risk - Total Non-current163,852 - - Trade and Term Receivables113,667 - 39,165 Other loans- Total Current4.17,618 9,675 - Total Trade and Term ReceivablesWIP$'000$'00088,042 20182017Financial Assets Classified as Loans and Receivables25,625 88,042 Other Receivables - - - $’000$’000$’000$’00030-Jun-18119,386 Trade and Term ReceivablesGross amountPast due and impairedPast due but not impairedThefollowingtabledetailstheGroup’stradeandotherreceivablesexposedtocreditrisk(priortocollateralandothercreditenhancements)withageinganalysisandimpairmentprovidedforthereon.Amountsareconsideredas‘pastdue’whenthedebthasnotbeensettledwithinthetermsandconditionsagreedbetweentheGroupandthecustomerorcounterpartytothetransaction.Receivablesthatarepastdueareassessedforimpairmentbyascertainingsolvencyofthedebtorsandareprovidedforwheretherearespecificcircumstancesindicatingthatthe debt may not be fully repaid to the Group.5,301 163,852 - 44,466 119,386 Trade and Other ReceivablesSection 4 Assets and Liabilities4.1 Trade and Other Receivables (Cont.) 39,165 - 113,667 - 25,625 30-Jun-17Other ReceivablesWithin initial trade termsTotal Trade and Term Receivables 13,649 13,647 The balance of receivables that remain within initial trade terms (as detailed in the table) are considered to be of acceptable credit quality.TheGrouphasapproximately28.7%(2017:32.1%)ofcreditriskwithasinglecounterpartyorgroupofcounterparties.Failureordefaultofamajorcounterpartywouldhaveamaterialimpactonearnings.ManagementofcreditriskisdiscussedinSection5.3FinancialRiskManagement.Theclassofassetsdescribedas“tradeandotherreceivables”isconsideredtobethemainsourceofcreditriskrelatedtotheGroup.Section$'000124,687 113,667 $'000SECTIONS TO THE FINANCIAL STATEMENTS 53 MACA LIMITED ANNUAL REPORT 2018Section 4 Assets and Liabilities4.3 Other Current Assets4.4 Property, Plant and EquipmentAccounting PoliciesEachclassofproperty,plantandequipmentiscarriedatcostorfairvalueasindicatedless,whereapplicable,anyaccumulateddepreciationand impairment losses.PropertyPlant and equipmentOther Current Assets$'000$'000Prepayments 544 103 Deposit 851 1,653 Total Other Current Assets 1,395 1,756 Freeholdlandandbuildingsareshownattheirfairvalue(beingtheamountforwhichanassetcouldbeexchangedbetweenknowledgeablewillingpartiesinanarm’slengthtransaction),basedonperiodic,butatleasttriennial,valuationsbyexternalindependentvaluers,lesssubsequent depreciation for buildings.Increasesinthecarryingamountarisingonrevaluationoflandandbuildingsarecreditedtoarevaluationsurplusinequity.Decreasesthatoffsetpreviousincreasesofthesameassetarechargedagainstfairvaluereservesdirectlyinequity,allotherdecreasesarechargedtothestatementofcomprehensiveincome.Eachyearthedifferencebetweendepreciationbasedontherevaluedcarryingamountoftheassetchargedtothestatementofprofitorlossandothercomprehensiveincomeanddepreciationbasedontheasset’soriginalcostistransferredfrom the revaluation reserve to retained earnings.Anyaccumulateddepreciationatthedateofrevaluationiseliminatedagainstthegrosscarryingamountoftheassetandthenetamountisrestated to the revalued amount of the asset.Plant and equipment are measured on the cost basis.Thecarryingamountofplantandequipmentisreviewedannuallybydirectorstoensureitisnotinexcessoftherecoverableamountfromtheseassets.Therecoverableamountisassessedonthebasisoftheexpectednetcashflowsthatwillbereceivedfromtheasset’semploymentandsubsequentdisposal.Theexpectednetcashflowshavebeendiscountedtotheirpresentvaluesindeterminingrecoverableamounts.Thecostoffixedassetsconstructedwithintheconsolidatedgroupincludesthecostofmaterials,directlabour,borrowingcostsandanappropriate proportion of fixed and variable overheads.Subsequentcostsareincludedintheassetscarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Allotherrepairsand maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.DepreciationThedepreciableamountofallfixedassetsincludingbuildingsandcapitalisedleaseassets,butexcludingfreeholdland,isdepreciatedonadiminishingvalueorstraightlinebasisovertheasset’susefullifetotheconsolidatedgroupcommencingfromthetimetheassetisheldreadyforuse.Leaseholdimprovementsaredepreciatedovertheshorterofeithertheunexpiredperiodoftheleaseortheestimatedusefullivesofthe improvements.The depreciation rates used for each class of depreciable assets are:Class of Fixed AssetDepreciation RateLeasehold Improvements2.50%Plant and Equipment10% – 40.0%Low Value Pool18.75% – 37.5%Motor Vehicles18.75% – 50%20182017SECTIONS TO THE FINANCIAL STATEMENTS 54 MACA LIMITED ANNUAL REPORT 2018Section 4 Assets and LiabilitiesLeased assets are depreciated on a diminishing or straight-line basis over the shorter of their estimated useful lives or the lease term. Leasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,arechargedasexpensesintheperiods in which they are incurred. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. 4.4 Property, Plant and Equipment (Cont.) 12,436 13,317 Accumulated Depreciation(9,283)(9,728) 3,153 3,589 Land and Building – at Cost 3,272 3,180 PLANT AND EQUIPMENTPlant and Equipment – at Cost 479,623 472,703 Accumulated Depreciation and Impairment(372,355)(351,877) 107,268 120,826 Motor Vehicles – at Cost 128 273 Leasehold Improvements – at CostAccumulated Depreciation(440)(419) 2,832 2,761 - 1,080 Accumulated Depreciation-(1,080) 2,529 2,400 Accumulated Depreciation(1,125)(944) 1,404 1,456 Leased Plant and Equipment – at Cost - -Low Value Pool – at Cost 409 419 Accumulated Depreciation(281)(146)20182017$'000$'000Total Plant and Equipment 110,549 124,688 Total Property, Plant and Equipment 114,785 128,905 Movements in Carrying AmountsMovements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year are as follows:The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.Anasset’scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverable amount.Gainsandlossesondisposalsaredeterminedbycomparingproceedswiththecarryingamount.Thesegainsandlossesareincludedinthestatementofprofitorlossandothercomprehensiveincome.Whenrevaluedassetsaresold,amountsincludedintherevaluationsurplusrelating to that asset are transferred to retained earnings.LeasesLeasesoffixedassetswheresubstantiallyalltherisksandbenefitsincidentaltotheownershipoftheasset,butnotthelegalownershipthatistransferred to entities in the consolidated group, are classified as finance leases. Financeleasesarecapitalisedbyrecordinganassetandaliabilityattheloweroftheamountsequaltothefairvalueoftheleasedpropertyorthepresentvalueoftheminimumleasepayments,includinganyguaranteedresidualvalues.Leasepaymentsareallocatedbetweenthereduction of the lease liability and the lease interest expense for the period.SECTIONS TO THE FINANCIAL STATEMENTS 55 MACA LIMITED ANNUAL REPORT 2018Consolidated:$’000$’000 57 154,167 30 31,450 192 5,794 - (10,407) - - (6)(52,099)273 128,905 $’000$’000 273 128,905 - 39,622 - - (74)(6,905) - 2,217 - (2,963)(71)(46,091)128 114,785 (i)(ii)(iii)Plant and EquipmentMotor VehiclesLand and BuildingsLeased Plant and EquipmentLow Value PoolSection 4 Assets and Liabilities4.4 Property, Plant and Equipment (Cont.)Leasehold ImprovementsTotalthe consideration transferred;any non-controlling interest (determined under either the full goodwill or proportionate interest method); andthe acquisition date fair value of any previously held equity interest;over the acquisition date fair value of net identifiable assets acquired.Theacquisitiondatefairvalueoftheconsiderationtransferredforabusinesscombinationplustheacquisitiondatefairvalueofanypreviously held equity interest shall form the cost of the investment in the separate financial statements.Plant and EquipmentMotor VehiclesLand and BuildingsLeased Plant and EquipmentLow Value PoolLeasehold ImprovementsTotal$’000$’000$’000$’000$’000 - Foreign Currency movements - - - - - Depreciation expense(50,356)(1,560)(22) - (155)Opening balance at 1 July 2016 - 1,433 Additions 28,548 1,948 853 - 71 Additions through Business Combinations 5,321 174 - - 107 120,826 3,589 2,761 - 1,456 Disposals(9,537)(870) - - $’000$’000$’000$’000$’000Opening balance at 1 July 2017 120,826 3,589 2,761 - 1,456 1,930 3,897 146,850 The Group monitors market conditions for indications of impairment of its operating assets. Where a trigger event occurs which indicates an impairment may have occurred, a formal impairment assessment is performed.For the financial year ended 30 June 2018 there have been no indicators of impairment.Balance at 30 June 2017Additions 38,767 564 123 - 168 Additions through Business Combinations - - - - - Disposals(6,589)(211)(31) - - Foreign Currency movements(2,963) - - - - Depreciation expense(44,990)(789)(21) - (220)Balance at 30 June 2018107,268 3,153 2,832 - 1,404 4.5 Intangible AssetsAccounting PoliciesGoodwillGoodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:Fairvalueremeasurementsinanypre-existingequityholdingsarerecognisedinprofitorlossintheperiodinwhichtheyarise.Wherechangesinthevalueofsuchequityholdingshadpreviouslybeenrecognisedinothercomprehensiveincome,suchamountsarerecycledtoprofitorloss.Reversal of Impairment2,217 - - - - SECTIONS TO THE FINANCIAL STATEMENTS 56 MACA LIMITED ANNUAL REPORT 2018•••4.5 Intangible Assets (Cont.)Section 4 Assets and LiabilitiesGoodwillonacquisitionofsubsidiariesisincludedinintangibleassets.Goodwillonacquisitionofassociatesisincludedininvestmentsinassociates.GoodwillistestedforimpairmentannuallyandisallocatedtotheGroup'scash-generatingunitsorgroupsofcash-generatingunits,representingthelowestlevelatwhichgoodwillismonitoredandnotlargerthananoperatingsegment.Gainsandlossesonthedisposalofanentity include the carrying amount of goodwill related to the entity disposed of.Changesintheownershipinterestsinasubsidiarythatdonotresultinalossofcontrolareaccountedforasequitytransactionsanddonotaffect the carrying amounts of goodwill. 3,187 6,525 Impairment of AssetsAttheendofeachreportingperiod,theGroupassesseswhetherthereisanyindicationthatanassetmaybeimpaired.Theassessmentwillincludetheconsiderationofexternalandinternalsourcesofinformationincludingdividendsreceivedfromsubsidiaries,associatesorjointlycontrolledentitiesdeemedtobeoutofpre-acquisitionprofits.Ifsuchanindicationexists,animpairmenttestiscarriedoutontheassetbycomparingtherecoverableamountoftheasset,beingthehigheroftheasset’sfairvaluelesscoststosellandvalueinuse,totheasset’scarryingvalue.Anyexcessoftheasset’scarryingvalueoveritsrecoverableamountisexpensedtothestatementofprofitorlossandothercomprehensive income.Whereitisnotpossibletoestimatetherecoverableamountofanindividualasset,theGroupestimatestherecoverableamountofthecash-generating unit to which the asset belongs.20182017Goodwill and Other Tangibles$'000$'000Carrying Value of Goodwill and Other TangiblesTheamountofgoodwillrecognisedonacquisitionofeachsubsidiaryinwhichtheGroupholdslessthan100%interestwilldependonthemethodadoptedinmeasuringthenon-controllinginterest.TheGroupcanelectinmostcircumstancestomeasurethenon-controllinginterestintheacquireeeitheratfairvalue(fullgoodwillmethod)oratthenon-controllinginterest'sproportionateshareofthesubsidiary'sidentifiablenetassets(proportionateinterestmethod).Insuchcircumstances,theGroupdetermineswhichmethodtoadoptforeachacquisition and this is stated in the respective notes to these financial statements disclosing the business combination.Underthefullgoodwillmethod,thefairvalueofthenon-controllinginterestisdeterminedusingvaluationtechniqueswhichmakethemaximum use of market information where available. Under this method, goodwill attributable to the non-controlling interest is recognised in the consolidated financial statements.Allocation of Goodwill to Cash Generating UnitGoodwillisallocatedtotheCompany’scashgeneratingunitsidentifiedaccordingtooperatingsegment.Goodwillisnotamortisedbutissubjecttoimpairmenttestingonanannualbasisorwheneverthereisanindicationofimpairment.Thecarryingamountofgoodwillwasallocated to cash generating units as follows:Goodwill and Other TangiblesGoodwill Carrying Amount 3,187 6,525 MACA InfrastructureMACA Interquip 3,187 3,187 - 3,338 Impairment Test for GoodwillTherecoverableamountofthegoodwillineachcashgeneratingunitisbasedonvalueinusecalculations.Thesecalculationsusecashflowprojections based on the following year’s budget and increased for growth at 2.5% for the forecast period being five years. The key assumptions used in the value in use calculations as at 30 June 2018 and 30 June 2017 were as follows: growth rate used to extrapolate cash flows beyond the forecast period: 2.5% (2017: 2.0%); divisional Revenue, EBIT, working capital adjustments and maintenance capital expenditure. pre-tax discount rate: 16.6% (2017: 16.6%); and SECTIONS TO THE FINANCIAL STATEMENTS 57 MACA LIMITED ANNUAL REPORT 2018Section 4 Assets and LiabilitiesAccounting PoliciesTradeandotherpayablesrepresenttheliabilityoutstandingattheendofthereportingperiodforgoodsandservicesreceivedbytheGroupduringthereportingperiodwhichremainsunpaid.Thebalanceisrecognisedasacurrentliabilitywiththeamountbeingnormallypaidwithin45 days of recognition of the liability.Current4.6 Trade and Other Payables20182017Payables$'000$'000Financial Liabilities at Amortised Cost Classified as Trade and Other PayablesTrade and Other Payables Unsecured Liabilities:Trade Creditors 45,723 48,483 Sundry Creditors and Accruals 18,897 15,559 Total Trade and Other Payables 64,620 64,042 Creditors are non-interest bearing and settled at various terms up to 45 days.- Total Non-current - - Total Trade and Other Payables 64,620 64,042 - Total Current 64,620 64,042 20182017ProvisionsarerecognisedwhentheGrouphasalegalorconstructiveobligation,asaresultofpastevents,forwhichitisprobablethatanoutflow of economic benefits will result and that outflow can be reliably measured. 4.7 ProvisionsAccounting PoliciesEmployee BenefitsProvisionismadefortheGroup’sliabilityforemployeebenefitsarisingfromservicesrenderedbyemployeestobalancedate.Employeebenefitsthatareexpectedtobesettledwithinoneyearhavebeenmeasuredattheamountsexpectedtobepaidwhentheliabilityissettled.Employeebenefitspayablelaterthanoneyearhavebeenmeasuredatthepresentvalueoftheestimatedfuturecashoutflowstobemadeforthosebenefits.Indeterminingtheliability,considerationisgiventoemployeewagesincreasesandtheprobabilitythattheemployeemaysatisfyvestingrequirements.Thosecashoutflowsarediscountedusingmarketyieldsonnationalgovernmentbondswithtermstomaturitythat match the expected timing of cash flows.Provisions$'000Employee Entitlements11,838 10,402 Opening Balance as at 1 JulyAdditional Provisions Amounts UsedClosing Balance as at 30 June 10,402 9,954 13,236 11,066 $'000Movement in Provisions(11,800)(10,618)11,838 10,402 SECTIONS TO THE FINANCIAL STATEMENTS 58 MACA LIMITED ANNUAL REPORT 2018Duringtheyeartheeconomicentityacquired$19.5millioninplantandequipment(2017:$9.5M)bymeansoffinanceleases.Theseacquisitions are not reflected in the statement of cash flows.Section 5 Capital Structure and Financing CostsThis Section outlines how the Company manages its capital structure, including its balance sheet liquidity and access to capital markets. 201820175.1.1 Cash and Cash Equivalents$'000$'000Cashandcashequivalentsincludecashonhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturities of three months or less, and bank overdrafts. The Company does not have any Bank overdraft facilities.5.1 Cash and Cash EquivalentsAccounting PoliciesTheDirectorsdeterminetheappropriatecapitalstructureofMLD,specifically,howmuchisraisedfromshareholders(equity)andhowmuchisborrowedfromfinancialinstitutions(debt)inordertofinancetheCompany’sactivitiesbothnowandinthefuture.TheDirectorsconsidertheCompany’scapitalstructureanddividendpolicyatleastannuallyanddosointhecontextofitsabilitytocontinueasagoingconcern,toexecute the strategy and to deliver its business plan. During FY18, the Company complied with all the financial covenants of its borrowing facilities. (490) (Increase)/Decrease in Inventories and Work-In-Progress654 1,189 Reconciliation of Cash Flow from Operations with Operating Profit After TaxOperating Profit After Income Tax 21,667 31,193 46,092 52,099 (2,010)(1,125) 212 - 46,404 52,661 (1,228)1,584 Impairment 3,338 - 108,239 112,008 Net Cash Increase/(Decrease) from Operating Activities8,682 68,142 4.45.6(a) Share Based Payment Foreign Exchange Losses Net (Gain)/Loss on Disposal of Investments Net (Gain)/Loss on Disposal of Plant and Equipment Depreciation and AmortisationNon-cash Flows in Profit Net (Gain)/Loss on Intangibles194 (2,433) Increase/(Decrease) in Provisions1,437 (2,096)Total Working Capital Movements(59,389)(15,712)Movements in Working CapitalTotal Non-Cash Flows in Profit (Increase)/Decrease in Other Assets(746)(3,222)2,348 Increase/(Decrease) in Deferred Tax Payable201820175.1.2 Cash Flow Information$'000$'000 - 103 (Increase)/Decrease in Trade and Other Receivables(58,825)(36,481)5.1.3 Non-Cash Financing and Investing Activities4.5 - - Increase/(Decrease) in Trade and Other Payables1,119 22,251 Increase/(Decrease) in Income Tax PayableSECTIONS TO THE FINANCIAL STATEMENTS 59 MACA LIMITED ANNUAL REPORT 20182017CurrentSecured LiabilitiesFinance Lease LiabilityTotal Current Financial LiabilitiesProperty, Plant, and Equipment 5,687 Land and Building 107 Trade and Other Payables(4,216)Financial Liabilities(1,214)Other Liabilities(3,570)Cash Out-flow on Acquisition(2,527)Assets and Liabilities Held at A+cquisition Date (Excluding Cash) Excluded from the Consolidated Statement of Cash Flow:Trade and Other Receivables 5,995 WIP and Inventory 4,334 Other Assets 74 There were no acquisitions for the year ended 30 June 2018$'000Cash acquired:Cash Held by Interquip at Date of Acquisition 3,073 Interquip Pty Ltd (Interquip)Purchase Consideration:Non Cash Consideration(3,900)Cash Consideration Exchanged(5,600)Total Consideration(9,500)5.1 Cash and Cash Equivalents (Cont)Section 5 Capital Structure and Financing CostsOn 15 December 2016, MACA acquired 60% of the ordinary share capital and voting rights in Interquip as described in section 6.1:Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofassetsthatnecessarilytakeasubstantialperiodoftimetopreparefortheirintendeduseorsale,areaddedtothecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintended use or sale.All other borrowing costs are recognised in income in the period in which they are incurred.20182017Duringthe2018year233,506performancerightsvestedtoKMPsandotherExecutivesfornoconsideration(2017:261,830).Onvesting,theperformance rights converted into ordinary fully paid shares. Shares Issued TheCompanyhasaninsurancebondingfacilityandbankguaranteefacilitiestotalling$18.1million.At30June2018theamountdrawnonthefacility was $14.9 million (2017: $8.3 million). Insurance Bonding Facilities 14,991 21,838 14,991 21,838 5.2.1 Financial Liabilities$'000$'0005.2 Interest Bearing Loans and BorrowingsAccounting PoliciesSECTIONS TO THE FINANCIAL STATEMENTS 60 MACA LIMITED ANNUAL REPORT 2018Non-currentCarrying Amounts of Non-current Assets Pledged as Security 45,230 60,291 Secured LiabilitiesFinance Lease Liability Total Non-current Financial Liabilities29,910 25,980 29,910 25,980 5.2 Interest Bearing Loans and Borrowings (Cont.)Section 5 Capital Structure and Financing Costs20182017$'000$'00044,901 47,818 44,901 47,818 Finance Lease LiabilityTotal Current and Non-current Secured Liabilities: 64,620 64,042 5.3 Financial Risk ManagementAccounting Policies 4,436 1,648 304,120 236,998 TheGroup’sfinancialinstrumentsconsistmainlyofdepositswithbanks,localmoneymarketinstruments,short-terminvestments,accountsreceivable and payable, loans to and from subsidiaries, loans to other companies and leases.— Listed InvestmentsTotal Financial AssetsFinancial LiabilitiesThetotalsforeachcategoryoffinancialinstruments,measuredinaccordancewithAASB139asdetailedintheaccountingpoliciestothesefinancial statements are as follows: 108,239 112,008 163,852 113,667 27,593 9,675 — At Fair ValueTheBoardofDirectors(“theBoard”)isresponsiblefor,amongstotherissues,monitoringandmanagingfinancialriskexposuresoftheGroup.TheBoardmonitorstheGroup’sfinancialriskmanagementpoliciesandexposuresandapprovesfinancialtransactionswithinthescopeofitsauthority.Italsoreviewstheeffectivenessofinternalcontrolsrelatingtocommoditypricerisk,counterpartycreditrisk,currencyrisk,financing risk and interest rate risk.TheBoard’soverallriskmanagementstrategyseekstoassisttheconsolidatedgroupinmeetingitsfinancialtargets,whileminimisingpotentialadverseeffectsonfinancialperformance.Itsfunctionsincludethereviewoftheuseofhedgingderivativeinstruments,creditriskpolicies and future cash flow requirements.Financial Liabilities at Amortised Cost— Trade and Other Payables— BorrowingsTotal Financial Liabilities20182017$'000$'000Financial AssetsLoans and Receivables— Trade and Other Receivables— Other LoansAvailable-for-Sale Financial Assets: 44,901 47,818 Cash and Cash Equivalents 109,521 111,860 SECTIONS TO THE FINANCIAL STATEMENTS 61 MACA LIMITED ANNUAL REPORT 2018•••••••Section 5 Capital Structure and Financing Costs5.3 Financial Risk Management (Cont.)TheGrouphasapproximately28.7%(2017:32.1%)ofcreditriskwithasinglecounterpartyorgroupofcounterparties.Failureordefaultofamajorcounterpartywouldhaveamaterialimpactonearnings.DetailswithrespecttocreditriskofTradeandOtherReceivablesareprovidedinSection4.1.MACAcarriesacreditriskinsurancepolicy.Theamountofcovervariesonaclientbyclientbasisdependantonthecounterparty.Themaximumexposuretocreditriskbyclassofrecognisedfinancialassetsatbalancedate,excludingthevalueofanycollateralorothersecurityheld,isequivalenttothecarryingvalueandclassificationofthosefinancialassets(netofanyprovisions)aspresentedinthestatementoffinancialposition.Creditriskalsoarisesthroughtheprovisionoffinancialguarantees,asapprovedatBoardlevel,giventoparties securing the liabilities of certain subsidiaries (refer Section 6.7 Parent Entity Disclosures for details).WheretheGroupisunabletoascertainasatisfactorycreditriskprofileinrelationtoacustomerorcounterparty,theriskmaybefurthermanagedthroughinsurance,titleretentionclausesovergoodsorobtainingsecuritybywayofpersonalorcommercialguaranteesoverassetsofsufficientvaluewhichcanbeclaimedagainstintheeventofanydefault.Riskisalsominimisedthroughinvestingsurplusfundsinfinancialinstitutions that maintain a high credit rating, or in entities that the Board has otherwise cleared as being financially sound.Creditriskismanagedthroughthemaintenanceofprocedures(suchproceduresincludetheutilisationofsystemsfortheapproval,grantingandrenewalofcreditlimits,regularmonitoringofexposuresagainstsuchlimitsandmonitoringofthefinancialstabilityofsignificantcustomersandcounterparties),ensuringtotheextentpossible,thatcustomersandcounterpartiestotransactionsareofsoundcreditworthiness.Suchmonitoringisusedinassessingreceivablesforimpairment.DependingonthedivisionwithintheGroup,credittermsaregenerally 30 to 45 days from the invoice date.Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group.Liquidity RiskLiquidityriskarisesfromthepossibilitythattheGroupmightencounterdifficultyinsettlingitsdebtsorotherwisemeetingitsobligationsrelated to financial liabilities. The Group manages this risk through the following mechanisms:TheGroup’spolicyistoensurethatallleaseagreementsenteredinto,areoveraperiodthatwillensurethatadequatecashflowswillbeavailable to meet repayments.preparing forward looking cashflow analysis in relation to its operational, investing and financing activities;Specific Financial Risk Exposures and ManagementCredit RiskCreditriskrelatedtobalancesheldwithbanksandotherfinancialinstitutionsareonlyinvestedwithcounterpartieswithaStandard&Poor'srating of at least AA-.comparing the maturity profile of financial liabilities with the realisation profile of financial assets.only investing surplus cash with major financial institutions; andmanaging credit risk related to financial assets;maintaining a reputable credit profile;obtaining funding from a variety of sources;monitoring undrawn credit facilities;ThemainriskstheGroupisexposedtothroughitsfinancialinstrumentsarecreditrisk,liquidityriskandmarketriskconsistingofinterestraterisk, foreign currency risk and commodity and equity price risk.Trade and other receivables that are neither past due or impaired are considered to be of acceptable quality. Cashflowsrealisedfromfinancialassetsreflectmanagement’sexpectationastothetimingofrealisation.Actualtimingmaythereforedifferfromthatdisclosed.Thetimingofcashflowspresentedinthetabletosettlefinancialliabilitiesreflectstheearliestcontractualsettlementdates and does not reflect management’s expectations that banking facilities will be rolled forward.Thetablesbelowreflectanundiscounted(exceptforfinanceleaseliabilities)contractualmaturityanalysisforfinancialliabilities.FinancialguaranteeliabilitiesaretreatedaspayableondemandsincetheGrouphasnocontroloverthetimingofanypotentialsettlementoftheliabilities.SECTIONS TO THE FINANCIAL STATEMENTS 62 MACA LIMITED ANNUAL REPORT 201820182017201820172018201720182017‘000‘000‘000‘000‘000‘000‘000‘000 64,620 64,042-- - - 64,620 64,042 14,991 21,83829,910 25,980 - - 44,901 47,818 79,611 85,880 29,910 25,980 - - 109,521 111,860 79,611 85,880 29,910 25,980 - - 109,521 111,860 108,239 112,008 - - - - 108,239 112,008 124,687 123,342 39,165 - - - 163,852 123,342 9,875 - 22,154 1,648 - - 32,029 1,648 242,801 235,350 61,319 1,648 - - 304,120 236,998 163,190 149,470 31,409 (24,332) - - 194,599 125,138 201820172018201720182017201820172018201720182017‘000‘000‘000‘000‘000‘000‘000‘000‘000‘000%% 108,239 112,008 - - - - - - 108,239112,008 1.56 1.69 - - 8,185 - 39,165 - 116,502 124,990 163,852124,9906.8N/A - - 7,618 - 19,975 - - - 27,593 - 10N/A 108,239 112,008 15,803 - 59,140 - 116,502 124,990 299,684 236,998 - - 14,991 21,838 29,910 25,980 - - 44,90147,818 4.66 4.97 - - - - - - 64,620 64,042 64,62064,042N/AN/A - - 14,991 21,838 29,910 25,980 64,620 64,042 109,521 111,860 Liquidity Risk Financial Liability and Financial Asset Maturity AnalysisWithin 1 Year1 to 5 YearsOver 5 YearsTotalFinancial Liabilities Due for PaymentTrade and Other Payables Finance Lease LiabilitiesTotal Contractual OutflowsTotal Expected OutflowsFinancial Assets - Cash Flows RealisableCash and Cash EquivalentsTrade, Term and Loans ReceivablesOther InvestmentsTotal Anticipated Inflows Net (Outflow)/Inflow on Financial InstrumentsFinancial AssetsCashTrade and Other ReceivablesTotal Financial AssetsFinancial LiabilitiesFinance LeaseFinancial assets pledged as collateral. No financial assets have been pledged as security for debt.Market RiskInterest Rate RiskTheGroup’sexposuretointerestraterisk,whichistheriskthatafinancialinstrument’svaluewillfluctuateasaresultofchangesinmarketinterest rates and the effective weighted average interest rates on those financial assets and financial liabilities, is as follows:Floating Interest RateFixed Interest RateNon-interest BearingTotalWeighted Average Effective Interest RateWithin 1 Year1 to 5 YearsLoans to Other Companies5.3 Financial Risk Management (Cont.)Section 5 Capital Structure and Financing CostsTrade and Other PayablesTotal Financial LiabilitiesPrice RiskTheGroupisalsoexposedtosecuritiespriceriskoninvestmentsheldfortradingorformediumtolongerterms.Theriskassociatedwiththese investments has been assessed as reasonably not having a significant impact on the Group. Foreign Exchange RiskThegroupisexposedtofluctuationsinforeigncurrencies.ThecurrencyexposurerelatestoBrazilianRealandaUSDleasefacility.TheUSDleasefacilityisoffsetbycashheldinaUSDbankaccountequaltothetotalofthelease.BrazilianRealisunhedged.TheoriginalinvestmentintotheBraziliansubsidiaryisexposedtofluctuationsintheBrazilianReal.Totheextentthefluctuationsareunrealisedtheyaretakentotheforeigncurrencytranslationreserveuntilsuchtimeastheyarerealised.Uponrealisationthereisapotentialnegativeimpacttotheprofitandloss statement. SECTIONS TO THE FINANCIAL STATEMENTS 63 MACA LIMITED ANNUAL REPORT 2018TheGroupdoesnotdesignateanyinterestsinsubsidiaries,associatesorjointventureentitiesasbeingsubjecttotherequirementsofaccounting standards specifically applicable to financial instruments.Financialassetsandfinancialliabilitiesarerecognisedwhentheentitybecomesapartytothecontractualprovisionstotheinstrument.Forfinancial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset. Financeinstrumentsaresubsequentlymeasuredateitheroffairvalue,amortisedcostusingtheeffectiveinterestratemethod,orcost.Fair valuerepresentstheamountforwhichanassetcouldbeexchangedoraliabilitysettled,betweenknowledgeable,willingparties.Whereavailable, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.Amortised cost is calculated as: i. the amount at which the financial asset or financial liability is measured at initial recognition;ii. less principal repayments;iii. plusorminusthecumulativeamortisationofthedifference,ifany,betweentheamountinitiallyrecognisedandthematurityamountcalculated using the effective interest method; andiv. less any reduction for impairment.Theeffectiveinterestmethodisusedtoallocateinterestincomeorinterestexpenseovertherelevantperiodandisequivalenttotheratethatexactlydiscountsestimatedfuturecashpaymentsorreceipts(includingfees,transactioncostsandotherpremiumsordiscounts)throughtheexpectedlife(orwhenthiscannotbereliablypredicted,thecontractualterm)ofthefinancialinstrumenttothenetcarryingamountofthefinancialassetorfinancialliability.Revisionstoexpectedfuturenetcashflowswillnecessitateanadjustmenttothecarryingvaluewithaconsequential recognition of an income or expense in profit or loss.Initial recognition and measurement+/- 10% in AUD/USD Exchange Rate+/- 1,410+/- 1,410Year ended 30 June 2017+/- 2% in Interest Rates+/- 1,213+/- 1,213+/- 10% in the Value of Listed Investments+/- 165+/- 165+/- 10% in AUD/BRL Exchange Rate+/- 952+/- 2,503Summarised Sensitivity AnalysisSection 5 Capital Structure and Financing Costs5.3 Financial Risk Management (Cont.)The following illustrates sensitivities to the Group’s exposures to changes in interest rates, and equity prices. The table indicates the impact on howprofitandequityvaluesreportedattheendofthereportingperiodwouldhavebeenaffectedbychangesintherelevantriskvariablethat management considers to be reasonably possible.+/- 10% in AUD/USD Exchange Rate+/- 2,389+/- 2,389+/- 2% in Interest Rates+/- 1,266+/- 1,515+/- 10% in the Value of Listed Investments+/- 443+/- 443+/- 10% in AUD/BRL Exchange Rate+/- 407+/- 4,6505.4 Financial InstrumentsFinancialinstrumentsareinitiallymeasuredatfairvalueplustransactioncosts,exceptwheretheinstrumentisclassified‘atfairvaluethroughprofit or loss’, in which case transaction costs are expensed to profit or loss immediately.Classification and subsequent measurementThese sensitivities assume that the movement in a particular variable is independent of the other variables.ProfitEquity$’000$’000Year ended 30 June 2018SECTIONS TO THE FINANCIAL STATEMENTS 64 MACA LIMITED ANNUAL REPORT 2018Section 5 Capital Structure and Financing Costs5.4 Financial Instruments (Cont.)Attheendofeachreportingperiod,theGroupassesseswhetherthereisobjectiveevidencethatafinancialinstrumenthasbeenimpaired.Inthecaseofavailable-for-salefinancialinstruments,aprolongeddeclineinthevalueoftheinstrumentisconsideredtodeterminewhetheranimpairment has arisen. Impairment losses are recognised in the statement of comprehensive income. De-recognitionFinancialassetsarede-recognisedwherethecontractualrightstoreceiptofcashflowsexpiresortheassetistransferredtoanotherpartywherebytheentitynolongerhasanysignificantcontinuinginvolvementintherisksandbenefitsassociatedwiththeasset.Financialliabilitiesarede-recognisedwheretherelatedobligationsareeitherdischarged,cancelledorexpired.Thedifferencebetweenthecarryingvalueofthefinancialliabilityextinguishedortransferredtoanotherpartyandthefairvalueofconsiderationpaid,includingthetransferofnon-cashassets or liabilities assumed, is recognised in profit or loss.Loansandreceivablesareincludedincurrentassets,exceptforthosewhicharenotexpectedtomaturewithin12 monthsaftertheendofthereporting period. (All other loans and receivables are classified as non-current assets).Impairment d. Available-for-sale financial assetsAvailable-for-salefinancialassetsarenon-derivativefinancialassetsthatareeithernotsuitabletobeclassifiedintoothercategoriesoffinancialassetsduetotheirnature,ortheyaredesignatedassuchbymanagement.Theycompriseinvestmentsintheequityofotherentitieswhere there is neither a fixed maturity nor fixed or determinable payments.e. Financial liabilitiesNon-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.Available-for-salefinancialassetsareincludedinnon-currentassets,exceptforthosewhichareexpectedtomaturewithin12monthsafterthe end of the reporting period. (All other financial assets are classified as current assets).b. Loans and receivablesFair value Fairvalueisdeterminedbasedoncurrentbidpricesforallquotedinvestments.Valuationtechniquesareappliedtodeterminethefairvaluefor all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Held-to-maturityinvestmentsarenon-derivativefinancialassetsthathavefixedmaturitiesandfixedordeterminablepayments,anditistheGroup’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.Held-to-maturityinvestmentsareincludedinnon-currentassets,exceptforthosewhichareexpectedtomaturewithin12monthsaftertheend of the reporting period. (All other investments are classified as current assets).c. Held-to-maturity investmentsa. Financial assets at fair value through profit or lossIfduringtheperiodtheGroupsoldorreclassifiedmorethananinsignificantamountoftheheld-to-maturityinvestmentsbeforematurity,theentire held-to-maturity investments category would be tainted and reclassified as available-for-sale.Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketandaresubsequently measured at amortised cost.Financialassetsareclassifiedat‘fairvaluethroughprofitorloss’whentheyareeitherheldfortradingforthepurposeofshort-termprofittaking,derivativesnotheldforhedgingpurposes,orwhentheyaredesignatedassuchtoavoidanaccountingmismatchortoenableperformanceevaluationwhereagroupoffinancialassetsismanagedbykeymanagementpersonnelonafairvaluebasisinaccordancewithadocumentedriskmanagementorinvestmentstrategy.Suchassetsaresubsequentlymeasuredatfairvaluewithchangesincarryingvaluebeing included in profit or loss. SECTIONS TO THE FINANCIAL STATEMENTS 65 MACA LIMITED ANNUAL REPORT 2018Section 5 Capital Structure and Financing CostsIssued Capital268,007,708 234,343,334 5.5 Equity20182017$’000$’000268,007,708 (2017: 234,343,334) Fully Paid Ordinary Shares With No Par Value269,805 211,333 - 9 September 2016 Conversion of Performance Rights196,373 Performance RightsForinformationrelatingtoperformancerights,includingdetailsofperformancerightsissued,exercisedandlapsedduringthefinancialyear,refer to Section 5.8.- 15 December 2016 Consideration for Acquisition of Interquip 1,470,588 Shares at Reporting Date234,343,334 232,676,373 Capital ManagementManagementcontrolsthecapitaloftheGroupinordertomaintainaprudentdebttoequityratio,providetheshareholderswithadequatereturns and ensure that the Group can fund its operations and continue as a going concern.The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.Therearenoexternallyimposedcapitalrequirements.ManagementeffectivelymanagestheGroup’scapitalbyassessingtheGroup’sfinancialrisksandadjustingitscapitalstructureinresponsetochangesintheserisksandinthemarket.Theseresponsesincludethemanagement of debt levels, distributions to shareholders and share issues.20182017$’000$’000Thecompanyhasnoauthorisedsharecapital.Ordinarysharesparticipateindividendsandtheproceedsonwindingupoftheparententityinproportiontothenumberofsharesheld.Attheshareholders’meetingseachordinaryshareisentitledtoonevotewhenapolliscalled,otherwise each shareholder has one vote on a show of hands.Ordinary SharesNo.No.At the Beginning of the Reporting PeriodShares Issued During the YearTotal Borrowings5.2.1 44,901 47,818 Less Cash and Cash Equivalents5.1.1(108,239)(112,008)Net Debt(63,338)(64,190)Total Equity 320,835 269,727 Total Capital 257,497 205,537 Gearing Ratio(25%)(31%)- 6 September 2017 Conversion of Performance Rights- 20 September 2017 Placement of Securities @ $1.80 per share233,506 33,430,868 SECTIONS TO THE FINANCIAL STATEMENTS 66 MACA LIMITED ANNUAL REPORT 20185.6 ReservesAccounting PoliciesEquity Settled Employee Benefits ReserveTheGroupoperatesequity-settledshare-basedpaymentemployeeshareandoptionschemes.Thefairvalueoftheequitytowhichemployeesbecomeentitledismeasuredatgrantdateandrecognisedasanexpenseoverthevestingperiod,withacorrespondingincreasetoanequityaccount.Thefairvalueofsharesisascertainedasthemarketbidprice.ThefairvalueofoptionsandperformancerightsareascertainedusingaBlack–ScholespricingmodelandaMonteCarlosimulationrespectivelywhichincorporatesallmarketvestingconditions.Thenumberofsharesandoptionsexpectedtovestisreviewedandadjustedattheendofeachreportingdatesuchthattheamountrecognisedforservicesreceivedasconsiderationfortheequityinstrumentsgrantedshallbebasedonthenumberofequityinstrumentsthateventuallyvest.Theimpactoftherevisionoforiginalestimates,ifany,isrecognisedinprofitorlosssuchthatthecumulativeexpensereflectsthe revised estimate, with corresponding adjustment to the equity settled Option Reserve.Foreign Currency Translation ReserveSection 5 Capital Structure and Financing CostsForeign OperationsThefinancialtransactionsofforeignoperationswhosefunctionalcurrencyisdifferentfromthepresentationcurrencyaretranslatedattheexchangeratesprevailingatthedateofthetransaction.Attheendofthereportingperiod,assetsandliabilitiesarere-translatedattheratesprevailing at that date. Income and expenses are re-translated at average exchange rates for the period. ExchangedifferencesarisingontranslationofforeignoperationsaretransferreddirectlytotheforeigncurrencytranslationreserveintheConsolidatedStatementofFinancialPosition.Thesedifferencesarerecognisedinprofitandlossintheperiodinwhichtheoperationisdisposed.(a) Other Reserves Transactions with MembersBalance at the End of the Year Exchangedifferencesarisingontranslationofforeigncontrolledoperationsaretakentotheexchangefluctuationreserve.Gainsorlossesaccumulated in equity are recognised in the income statement when a foreign operation is disposed.20182017ReservesSection$’000$’000Other Reserves Foreign Currency Translation Reserve Equity-Settled Employee Benefits Reserve Total Reserves5.6(a)5.6(b)5.6 591 591 (12,650)(2,204)(5,887)(5,887)(17,946)(7,500)Balance at the End of the Year Balance at the Beginning of the Year - (2,110)(5,887)(5,887)(5,887)(3,777)(b) Foreign Currency Translation Reserve Balance at the Beginning of the Year (2,204)(376)(10,446)(1,828)(12,650)(2,204)Exchange Differences Arising on Translating the Foreign Operations SECTIONS TO THE FINANCIAL STATEMENTS 67 MACA LIMITED ANNUAL REPORT 20185.6 Reserves (cont)Total 0.075 18,586 Cents Per Share$’000Distributions Paid20172018Section 5 Capital Structure and Financing Costs5.8 Share-Based CompensationOptionsTheotherreservesrepresentthecumulativeeffectiveportionofgainsorlossesarisingonchangesinfairvalueofforwardforeignexchangecontractsenteredintoforcashflowhedges,andinterestrateswaps.Thegainorlossthatisrecognisedintheotherreservewillbereclassifiedto profit or loss only when the transaction affects the profit or loss.5.7 DividendsPerformance RightsTherewerenooptionsissuedfortheyearended30June2018.Theweightedaveragefairvalueofoptionsgrantedduringthepreviousyearwas Nil. 20,949 0.090 10,470 0.045 10,479 0.045 0.030 8,040 Interim Dividend in Respect of FY18/FY17Balance of franking account at year endInrespectofFY18,theDirectorsdeclaredthepaymentofaFinalDividendof3.5centspersharefullyfrankedtotheholdersoffullypaidordinary shares on the Company’s register at 6th September 2018 with payment date of 20th September, 2018.TheamountoftheFinalDividendis$8.4million.NoprovisionhasbeenmadefortheFinalDividendintheFinancialStatementsasthefinaldividend was not declared or determined by the Directors on or before the end of the financial year. 37,069 Cents Per Share$’000 36,145 Final Dividend in Respect of FY17/FY16 0.045 10,546 TheCompanyissuesperformancerightstoSeniorexecutivesinaccordancewiththetermsoftheLong-TermIncentivePlanandthePerformanceRightsPlanasapprovedbyShareholders.Whenvested,eachperformancerightisconvertedintooneordinarysharefornoconsideration. Performance rights granted carry no dividend or voting rights. Duringthe2018financialyear972,231(2017:1,196,083)performancerightsweregrantedundertheGroup’sPerformanceRightsPlanand334,637(2017:407,768)performancerightswereforfeited.Subjecttotheachievementofdesignatedperformancehurdles,theseperformance rights will vest in June 2020. As at 30 June 2018 there were 2,014,485 (2017: 2,528,307) performance rights outstanding. SECTIONS TO THE FINANCIAL STATEMENTS 68 MACA LIMITED ANNUAL REPORT 2018•••••• 3,500,538 3,096,450 (1,486,053)(568,143)VestedGrantedOutstanding at the Beginning of the Year 972,231 20182017NumberNumberThe following performance rights arrangement were in existence at 30 June 2018:NumberExpiry Date1,486,05330-Jun-18 1,042,254 30-Jun-195.8 Share-Based Compensation (Cont.)Section 5 Capital Structure and Financing Costs30-Jun-20Unlisted Performance RightsUnlisted Performance RightsUnlisted Performance RightsVested at Year EndOutstanding at the End of the YearCancelled or Expired 3,096,450 2,569,967 972,231 1,196,083 (233,506)(261,830)(334,637)Section 6 OtherBusiness combinations occur where an acquirer obtains control over one or more businesses.Anindependentvaluationwascompletedonperformancerightsgrantedduringtheyear.MarketbasedvestingconditionswerevaluedusingahybridshareoptionpricingmodelthatsimulatesthesharepriceoftheCompanyasatthetestdateusingaMonte-Carlosimulationmodel.For non-market based vesting conditions no discount was made to the underlying valuation model.Theweightedaveragefairvalueoftheperformancerightsgrantedduringtheyearended30June2018was$0.90perright.Thetotalsharebasedpaymentexpensefortheyearended30June2018relatingtothegrantofperformancerightsinthestatementofprofitorlossis$298k(2017: 103k). Inputs used to determine the fair value of performance rights granted during the year ended 30 June 2018 were:Share price $1.61 being the 30 day VWAP of the Company on the last trading day prior to 30 June 2017Exercise price: NilVolatility: 46.4%Option life: 3 yearsDividend yield: 5.2%Risk Free Rate 1.94%(407,770)6.1 Business CombinationsWhenmeasuringtheconsiderationtransferredinthebusinesscombination,anyassetorliabilityresultingfromacontingentconsiderationarrangementisalsoincluded.Subsequenttoinitialrecognition,contingentconsiderationclassifiedasequityisnotremeasuredanditssubsequentsettlementisaccountedforwithinequity.Contingentconsiderationclassifiedasanassetorliabilityisremeasuredineachreportingperiodtofairvalue,recognisinganychangetofairvalueinprofitorloss,unlessthechangeinvaluecanbeidentifiedasexistingatacquisition date.The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.Refer 4.5 Intangible Assets for treatment and calculation of goodwill.Abusinesscombinationisaccountedforbyapplyingtheacquisitionmethod,unlessitisacombinationinvolvingentitiesorbusinessesundercommoncontrol.Thebusinesscombinationwillbeaccountedforfromthedatethatcontrolisobtained,wherebythefairvalueoftheidentifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).Alltransactioncostsincurredinrelationtobusinesscombinations,otherthanthoseassociatedwiththeissueofafinancialinstrument,arerecognised as expenses in profit or loss when incurred.GoodwillSECTIONS TO THE FINANCIAL STATEMENTS 69 MACA LIMITED ANNUAL REPORT 2018Section 6 Other6.1 Business Combinations (Cont.)On15December2016theGroupacquired60%oftheissuedcapitalinInterquipPtyLtd,acompanyinvolvedinStructuralMechanicalandPipingConstruction.Theconsiderationconsistedof$5.6Mincash,$2.4MinsharesandanearnoutagreementbasedonEBITtargetsforFY2017 and FY 2018. The earnout was valued at $1.5M based upon expected outcomes.$’0006.2 Key Management PersonnelThe total of remuneration paid to KMP's of the Company during the year was as follows:20182017Cash and Cash Equivalents 3,073 1,500 Less:Financial LiabilitiesTrade and Other ReceivablesThe major classes of assets and liabilities at the date of the acquisition are as follows:BUSINESS COMBINATIONS2017 5,995 WIP and Inventory 4,334 Other Assets(3,000)2018There were no acquisitions during the year ended 30 June 2018.$’000Goodwill on AcquisitionCurrent Tax Liabilities$’000232 - 707 Interquip Pty LtdFair value at 15 December 2016On31October2016theGroupacquired25%oftheissuedcapitalinServicesSouthEastPtyLtdwhichitdidnotalreadyownforcashpaymentof$150,000andforgivenessofarelatedpartydebtandassumptionofliabilities.Thetotalconsiderationfortheremaining25%amounted to $1.662M. Value of Identifiable Assets Acquired and Liabilities AssumedPurchase consideration - Cash 5,600 - Shares 2,400 - Deferred Consideration(1,214)Advance PaymentProvisions4,221 Post-employment BenefitsShare Based Payments575 (140)Services South East Pty Ltd 5,085 (430) 10,270 6,162 Other Long-term Benefits 74 Property, Plant and Equipment 5,687 - 4,186 192 Land and Building 107 Trade and Other Payables(4,216)Total Remuneration5,028 Short-term Employee Benefits 3,338 The Totals of Remuneration Paid to KMP of the Company and the Group During the Year was as Follows:SECTIONS TO THE FINANCIAL STATEMENTS 70 MACA LIMITED ANNUAL REPORT 2018Section 6 Other6.3 Controlled EntitiesDetails of the Company's subsidiaries at the end of the reporting period are as follows:-2017Riverlea Corporation Pty LtdBrazil100%100%100%MACA Plant Pty LtdAustralia100%100%Controlled Entities MACA Infrastructure Pty LtdAustralia100%100%Marniyarra Mining and Civils Pty Ltd Australia50%Alliance Contracting Pty LtdAustralia100%100%50%6.4 Related Party TransactionsMACA Crushing Pty LtdTransactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Transactions with related parties: MACA Mining Pty Ltd Australia100%Anyperson(s)havingauthorityandresponsibilityforplanning,directingandcontrollingtheactivitiesoftheentity,directlyorindirectly,including any director (whether executive or otherwise) of that entity, are considered key management personnel. Other Related PartiesInformationregardingindividualdirectorsorexecutivesremunerationisprovidedintheRemunerationReportincludedintheDirector’sReport.Other related parties include entities over which key management personnel exercise significant influence. Parent Entity:Australia100%100%MACA Mineracao e Construcao Civil LtdaCountry of IncorporationPercentage Owned (%)2018-Key Management Personnel60%60%Interquip Pty Ltd AustraliaSubsidiaries:Transactionsbetweenrelatedpartiesareonnormalcommercialtermsandconditionsnomorefavourablethanthoseavailabletootherparties unless otherwise stated.Interests in controlled entities are set out Section 6.3. During the year, funds have been advanced between entities within the Company for the purposes of working capital requirements. 100%100%MACA LimitedAustraliaAustralia100%100%MACA Civil Pty LtdAustraliaSECTIONS TO THE FINANCIAL STATEMENTS 71 MACA LIMITED ANNUAL REPORT 201830 June 2018:Section 6 Other6.4 Related Party Transactions (Cont.)6.6 Events After Balance Sheet Date2017The Directors have recommended a final dividend payment of 3.5 cents per share. Refer to Section 5.7 for details. Otherthantheabove,therehasnotbeenanymatterorcircumstanceoccurringsubsequenttotheendofthefinancialyearthathassignificantlyaffected,ormaysignificantlyaffect,theoperationsoftheCompany,theresultsofthoseoperations,orthestateofaffairsoftheCompany in future financial years.6.7 Parent Entity DisclosuresStatement of Financial PositionMLDhasindemnifieditsbankersandinsurancebondprovidersinrespectofbankguarantees,insurancebondsandlettersofcredittovariouscustomers and suppliers for satisfactory contract performance and warranty security, in the following amounts: Claims Certainclaimsarisingoutofengineeringandconstructioncontractshavebeenmadeby,oragainst,controlledentitiesintheordinarycourseofbusiness.TheDirectorsdonotconsidertheoutcomeofanyoftheseclaimswillbemateriallydifferenttothepositiontakeninthefinancialaccounts of the Company.263,548 2,148 3,168 2,148 3,200 Total LiabilitiesThe following information has been extracted from the books and records of the parent and has been prepared in accordance with Accounting Standards.Current Assets 85,310 193,917 Total Assets 375,420 313,732 Liabilities$’000$’0006.5 Contingent LiabilitiesPerformance Guarantees Onthe4thofJuly2017theliquidatorsofKimberleyDiamondCompanyPtyLtdfiledaclaimforanunfairpreferencepaymentintheamountof$1.4million.Thecompanyisvigorouslydefendingtheclaim.Otherthanthislegalactionandtheguaranteesdescribedinsection5.1therewere no contingent liabilities as at 30 June 2018 (2017: none).Assets30 June 2017: $14.9 million2018SubsequenttotheendofthereportingperiodMACAhasbeenawardedanextensionatDuketonSouthforRegisResources(referASXannouncement31July2018)thatwillgenerateafurther$590millioninrevenueovera5yearperiod from July 2018. SubsequenttotheendofthereportingperiodMACAhasexecuteda10year‘lifeofmine’contractwithCarabellaResourcesPtyLtdfortheprovisionofminingservicesattheBluffCoalprojectnearBlackwaterintheBowenBasininQueensland(referASXannouncement31July2018)thatwillgenerate$700millioninrevenueovera10yearperiodfromNovember 2018. 110,000 GatewayEquipmentParts&ServicesPtyLtd-acompanycontrolledbycurrentdirectorMrG.Bakerandformerdirectors Mr D.Edwards, Mr F.Maher and Mr J.Moore.Amountspayableatyearendarisingfromtheabovetransactions (Receivables Nil) $8.3 million43,658 41,962 2,381,300 1,922,082 Key Management Person and/or Related PartyTransaction20182017$$GatewayEquipmentParts&ServicesPtyLtd-acompanycontrolledbydirectorMrG.BakerandformerdirectorsMr D.Edwards, Mr F.Maher and Mr J.Moore.HensmanPropertiesPtyLtd-acompanycontrolledbycurrent director Mr R.Ryan. KirkMiningConsultants-acompanycontrolledbycurrentdirector Mr L.Kirk. PartnershipcomprisingentitiescontrolledbycurrentdirectorMr G.BakerandformerdirectorsMrJ.Moore,Mr D.Edwards & Mr F.Maher.1,598,815 Current LiabilitiesExpense - hire of equipment and purchase of equipment, parts and services.Expense - Consulting feesExpense - Mining consulting feesExpense - Rent on Division St Business premises.1,589,382 47,720 8,780 SECTIONS TO THE FINANCIAL STATEMENTS 72 MACA LIMITED ANNUAL REPORT 2018% of Issued CapitalNumber of Shares 774 54 0.2 794 1,388 607 20182017$’000Distribution of ShareholdingsNumber of Shareholders$’0006.7 Parent Entity DisclosuresSection 6 OtherThere are no unlisted options.Fully Paid Ordinary SharesTotal100,001 and over shares10,001 – 100,000 shares 5,001 – 10,000 shares1,001 – 5,000 shares1 - 1,000 shares 268,007,708 237,013,250 21,515,477 4,854,230 4,153,216 471,535 100.088.48.01.81.5Section 7 Shareholder Information 3,617 7.1 Numbers of Holders of Equity SecuritiesOrdinary Share Capital268,007,708 fully paid ordinary shares are held by 3,617 individual shareholders.Listed OptionsThere are no listed options.Unlisted Options 22,852 21,142 Total Comprehensive Income 22,852 21,142 Contractual CommitmentsPlant and equipmentNot Longer than 1 year 46,060 32,532 ReservesIssued CapitalEquityAs at 31st August 2018 and 5th September 2018. 362,212 303,740 707 707 10,351 6,085 310,532 373,270 (Accumulated Losses) / Retained ProfitsLonger than 1 year and not Longer than 5 years 36,842 25,980 Longer than 5 years - - Total Contractual CommitmentsStatement of Financial PerformanceGuarantees MACALimitedhasenteredintoguaranteesforcertainequipmentfinancefacilitiesinthecurrentfinancialyear,inrelationtothedebtsentered into by its subsidiaries.Total Equity58,512 82,902 Profit For the Year (Including Interco Dividends)DIRECTOR’S DECLARATION for the year ended 30 June 2018 73 MACA LIMITED ANNUAL REPORT 2018(a)(b)(a)(b)(c) 7.2 MLD's Top Twenty Shareholders (Cont.)Other InformationSection 7 Shareholder Information MLD Limited is incorporated and domiciled in Australia and is a publicly listed company by shares.Company DetailsInthedirectors’opiniontherearereasonablegroundstobelievethattheGroupwillbeabletopayitsdebtsasandwhentheybecomedueand payable.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: Chris TuckwellManaging DirectorDated at Perth this 28th day of September, 2018the financial statements and notes for the financial year give a true and fair view.the financial statements and notes for the financial year comply with the Accounting Standards Board; andthefinancialrecordsoftheGroupforthefinancialyearhavebeenproperlymaintainedinaccordancewiths286oftheCorporations Act 2001;giveatrueandfairviewofthefinancialpositionasat30June2018andoftheperformancefortheyearendedonthatdate of the company and consolidated group; complywithAccountingStandardswhichasstatedintheaccountingpoliciesincludedinthefinancialstatements,constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and Voting RightsOrdinary SharesThe registered office is: The principal place of business is:MACA LimitedMACA Limited45 Division Street45 Division StreetWelshpool, Western Australia, 6106Welshpool, Western Australia, 6106Director’s DeclarationThe directors of the company declare that:1 The financial statements set out on pages 36 to 72 are in accordance with the Corporations Act 2001 and:2. The Managing Director (acting as Chief Executive Officer) and Chief Finance Officer have each declared that:For all ordinary shares, voting rights are on a show of hands whereby every member present in person or by proxy shall have one vote and upon a poll, each share shall have one vote.INDEPENDENT AUDIT REPORT INDEPENDENT AUDITOR’S REPORT  TO THE MEMBERS OF MACA LIMITED  REPORT ON THE AUDIT OF THE FINANCIAL REPORT  Opinion  Level 15, Exchange Tower,  2 The Esplanade, Perth, WA 6000  PO Box 5785, St Georges Terrace,   WA 6831  T   +61 (0)8 9225 5355  F   +61 (0)8 9225 6181  www.moorestephens.com.au  We have audited the financial report of MACA Limited (the Company and its subsidiaries) (the “Group”), which  comprises the consolidated statement of financial position as at 30 June 2018, 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, and notes to the financial statements, including a summary of significant  accounting policies, and the directors’ declaration.  In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act  2001, including:  i. ii. giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial  performance for the year then ended; and   complying with Australian Accounting Standards and the Corporations Regulations 2001.  Basis for Opinion  We conducted our audit in accordance with Australian Auditing Standards.  Our responsibilities under those  standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section  of our report.  We are independent of the Group in accordance with the auditor independence requirements  of  the  Corporations  Act  2001  and  the  ethical  requirements  of  the  Accounting  Professional  and  Ethical  Standards Board’s APES 110 Code of Ethics for Professional Accountants (the “Code”) that are relevant to our  audit of the financial report in Australia.  We have also fulfilled our other ethical responsibilities in accordance  with the Code.  We confirm that the independence declaration required by the Corporations Act 2001, which has been given  to  the  directors  of  the  Group,  would  be  in  the  same  terms  if  given  to  the  directors  as  at  the  time  of  this  auditor’s report.  We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our  opinion.  Key Audit Matters  Key audit matters are those matters that, in our professional judgement, were of most significance in our  audit of the financial report of the current period.  These matters were addressed in the context of our audit  of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate  opinion on these matters.  74 Liability limited by a scheme approved under Professional Standards Legislation. Moore Stephens ‐ ABN 16 874 357 907. An independent member of Moore Stephens  International Limited ‐ members in principal cities throughout the world. The Perth Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.  MACA LIMITED ANNUAL REPORT 2018                       INDEPENDENT AUDIT REPORT Key Audit Matters (continued)  Existence and Ownership of Assets – Plant and Equipment  Refer to Note 4.4 “Property, Plant and Equipment”  Existence and ownership of plant and equipment is  a key audit matter.  It is due to the size of this account balance and the  location  of  plant  and  equipment  (most  located  at  client  sites  throughout  Australia  and  overseas  i.e.  Brazil) that this is a key area of audit focus.  Our procedures included:   We  agreed  a  sample  of  plant  and  equipment  additions  to  supplier  invoices  and  to  Capital  Expenditure  Request  Forms  (for  appropriate  authority);   We agreed a sample of plant and equipment to  Recognition of Revenue  Refer to Note 3.1 “Revenue and Other Income”  The  Group’s  largest  revenue  stream  relates  to  the  rendering of mining services, all of which are based  on contracts which determine the services, products  and rates to be charged.  The  accurate  recording  of  revenue  dependent upon the following key factors;   Knowledge of the individual characteristics and  is  highly  status of contracts;   Management’s invoicing process including;   accurate  measurement  of  work  done,  and  services provided each month   invoices  prepared  in  compliance  with  contract  terms  such  as  services  performed,  and rates charged;   Determination  of  variations  and  claims,  including compliance with contractual terms and  an assessment of when the Group believes it is  probable that the amount will be approved and  thus recovered from the customer.  We focused on this matter as a key audit matter due  to  the  significance  of  revenue  to  the  Group  combined with the need to comply with a variety of  contractual conditions, leading to judgemental risk  associated with revenue recognition.  hire purchase financing agreements;   We agreed a sample of plant and equipment in  Australia  and  Brazil  by  obtaining  date  stamped  photographs and videos taken by senior MACA  personnel.  Our procedures included, amongst others:   We  evaluated  management’s  processes  regarding existence and valuation of the Group’s  contract revenues.  We tested internal controls  in  relation  to  preparation  and  authorisation  of  monthly  revenue  invoices  for  compliance  with  the Group’s policy;   We  selected  a  sample  of  sales  invoices  raised  during  the  year  and  performed  the  following  procedures;   agreed to contractual terms and rates   agreed  to  general  ledger  accounts  and  subsequent receipts from the customer   for  variations  or  claims  we  checked  they  were in accordance with contract terms and  evaluated for risk of non‐recovery;   We evaluated contract performance during and  subsequent to year end to audit opinion date to  reflect  on  year  end  revenue  recognition  judgements.  75 MACA LIMITED ANNUAL REPORT 2018             Valuation of Receivables  Refer to Note 4.1 “Trade and Other Receivables” and “Loans to Other Companies”  Valuation of receivables is a key audit matter.  INDEPENDENT AUDIT REPORT Key Matters (continued)  It is due to the size of the account balances and the  judgements  required  in  determining  their  carrying  value that this is a key area of audit focus.  Trade  debtors  and  debtors  subject  to  payment  arrangements amounted to $163,852,000 as at 30  June 2018. Of this amount $39,165,000 is expected  to be collected over a period of longer than the next  12 months.  to  Other  Companies  amounted  to  Loans  $27,593,000  as  at  30  June  2018.  Of  this  amount  $19,975,000  is  expected  to  be  collected  over  a  period of longer than the next 12 months.  Debtors  subject  to  payment  arrangements  and  loans  to  other  companies  are  all  subject  to  enforceable agreements entered into between the  group companies and the debtor.  76 Our procedures included, amongst others:   Review of subsequent sales invoices and related  claim  documentation  in  respect  of  accrued  revenue;   Review  of  subsequent  receipt  collections  from  debtors and ageing analysis post year end;   Confirmations  with  selected  trade  debtors  where considered necessary;   Review  of  the  Deed  of  Acknowledgement  of  Debt,  Termination  and  Release  of  Open  Pitt  Mining  Services  Contract  entered  into  by  the  Company  and  Beadell  Resources  Limited  dated  22  June  2018  in  order  to  ensure  that  related  receivables  are  properly  recorded  in  the  accounts at 30 June 2018   Review of agreements entered into in respect of  loan facilities provided to borrowers;   Discussion with management as to the existence  of  any  disputes  with  debtors  and  borrowers,  review  of  correspondence  and  assessment  of  impairment provisions raised by management;   Assessment of the financial viability of debtors,  where  considered  necessary  based  on  publicly  available  information  and  other  information  available to the Company;   Review  of  the  classification  of  receivables  between current and non‐current ensuring that  classification  reflects  the  agreements  entered  into with customers and borrowers;   Review of disclosures made in the notes to the  financial statements  MACA LIMITED ANNUAL REPORT 2018                     INDEPENDENT AUDIT REPORT Key Matters (continued)  Other Information  The directors are responsible for the other information.  The other information comprises the information  included in the Group’s annual report for the year ended 30 June 2018 but does not include the financial  report and our auditor’s report thereon.  Our opinion on the financial report does not cover the other information and accordingly we do not express  any form of assurance conclusion thereon.  In connection with our audit of the financial report, our responsibility is to read the other information and, in  doing so, consider whether the other information is materially inconsistent with the financial report or our  knowledge obtained in the audit or otherwise appears to be materially misstated.  If, based on the work we have performed, we conclude that there is a material misstatement of this other  information, we are required to report that fact.  We have nothing to report in this regard.  Responsibilities of the Directors for the Financial Report  The directors of the Group 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 gives a  true and fair view and is free from material misstatement, whether due to fraud or error.  In  preparing  the  financial  report,  the  directors  are  responsible  for  assessing  the  ability  of  the  Group  to  continue as a going concern, disclosing, as applicable, matters related to going concern and using the going  concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,  or has no realistic alternative but to do so.  Auditor’s Responsibilities for the Audit of the Financial Report  Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from  material  misstatement,  whether  due  to  fraud  or  error,  and  to  issue  an  auditor’s  report  that  includes  our  opinion.  Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in  accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.   Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,  they could reasonably be expected to influence the economic decisions of users taken on the basis of this  financial report.  As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement  and maintain professional scepticism throughout the audit.  We also:   Identify and assess the risks of material misstatement of the financial report, whether due to fraud or  error, design and perform audit procedures responsive to those risks, and obtain audit evidence that  is sufficient and appropriate to provide a basis for our opinion.  The risk of not detecting a material  misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve  collusion, forgery, international omissions, misrepresentation, or the override of internal control.   Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.   Evaluate  the  appropriateness  of  accounting  policies  used  and  the  reasonableness  of  accounting  estimates and related disclosures made by the directors.   Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,  based  on  the  audit  evidence  obtained,  whether  a  material  uncertainty  exists  related  to  events  or  conditions that may cast significant doubt on the Group’s ability to continue as a going concern.  If we  conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report  to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our  opinion.  Our conclusions are based on the audit evidence obtained up to the date of our auditor’s   77 MACA LIMITED ANNUAL REPORT 2018   INDEPENDENT AUDIT REPORT   report.  However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate  the  overall  presentation,  structure  and  content  of  the  financial  report,  including  the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.  Obtain  sufficient  appropriate  audit  evidence  regarding  the  financial  information  of  the  entities  or business activities within the Group to express an opinion on the financial report.  We are responsible for the direction, supervision and performance of the Group audit.  We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the  audit and significant audit findings, including any significant deficiencies in internal control that we identify  during our audit.  We also provide the directors with a statement that we have complied with relevant ethical requirements  regarding  independence,  and  to  communicate  with  them  all  relationships  and  other  matters  that  may  reasonably be thought to bear on our independence, and where applicable, related safeguards.  From  the  matters  communicated  with  the  directors,  we  determine  those  matters  that  were  of  most  significance in the audit of the financial report of the current period and are therefore the key audit matters.  We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about  the  matter  or  when,  in  extremely  rare  circumstances,  we  determine  that  a  matter  should  not  be  communicated in our report because the adverse consequences of doing so would reasonably be expected to  outweigh the public interest benefits of such communication.  REPORT ON THE REMUNERATION REPORT  Opinion on the Remuneration Report  We have audited the Remuneration Report included in pages x to y of the directors’ report for the year ended  30 June 2018.  In our opinion, the Remuneration Report of MACA Limited, for the year ended 30 June 2018 complies with  section 300A of the Corporations Act 2001.  Responsibilities  The directors of the Group 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.  NEIL PACE  PARTNER  MOORE STEPHENS  CHARTERED ACCOUNTANTS  Signed at Perth on the 28th day of September 2018  78 MACA LIMITED ANNUAL REPORT 2018SHAREHOLDER INFORMATION 79 MACA LIMITED ANNUAL REPORT 2018% of Issued CapitalNumber of Shares 774 54 0.2 794 1,388 607 20182017$’000Distribution of ShareholdingsNumber of Shareholders$’0006.7 Parent Entity DisclosuresSection 6 OtherThere are no unlisted options.Fully Paid Ordinary SharesTotal100,001 and over shares10,001 – 100,000 shares 5,001 – 10,000 shares1,001 – 5,000 shares1 - 1,000 shares 268,007,708 237,013,250 21,515,477 4,854,230 4,153,216 471,535 100.088.48.01.81.5Section 7 Shareholder Information 3,617 7.1 Numbers of Holders of Equity SecuritiesOrdinary Share Capital268,007,708 fully paid ordinary shares are held by 3,617 individual shareholders.Listed OptionsThere are no listed options.Unlisted Options 22,852 21,142 Total Comprehensive Income 22,852 21,142 Contractual CommitmentsPlant and equipmentNot Longer than 1 year 46,060 32,532 ReservesIssued CapitalEquityAs at 31st August 2018 and 5th September 2018. 362,212 303,740 707 707 10,351 6,085 310,532 373,270 (Accumulated Losses) / Retained ProfitsLonger than 1 year and not Longer than 5 years 36,842 25,980 Longer than 5 years - - Total Contractual CommitmentsStatement of Financial PerformanceGuarantees MACALimitedhasenteredintoguaranteesforcertainequipmentfinancefacilitiesinthecurrentfinancialyear,inrelationtothedebtsentered into by its subsidiaries.Total Equity58,512 82,902 Profit For the Year (Including Interco Dividends)SHAREHOLDER INFORMATION 80 MACA LIMITED ANNUAL REPORT 2018 12341234567891011121314151617181920 17,275,633 13,475,332 12,500,000 12,300,000 20,175,123 17,275,633 Substantial Shareholder 7,178,749 Unmarketable ParcelsAs at 5th September 2018, there were 175 holders who held shares that were unmarketable parcels.7.2 MLD's Top Twenty Shareholders0.42.0 22,521,647 5,755,391 5,350,000 3,955,362 1,698,828 0.6J P MORGAN NOMINEES AUSTRALIA LIMITEDHSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED4.68.46.55.0Fully Paid Ordinary Shares 30,120,976 BNP PARIBAS NOMS PTY LTD MR JAMES EDWARD MOORE + MS JULIA CATHERINE MOORECITICORP NOMINEES PTY LIMITED 2,779,474 2,582,987 2,329,283 2,203,112 4.7Restricted SecuritiesKen KamonCommonwealth Bank of Australia % of Total Shares 24.616.31.5GEMBLUE NOMINEES PTY LTD MR FRANCIS JOSEPH MAHER + MS SHARON JANE MAHER BNP PARIBAS NOMINEES PTY LTD 0.4MS TINA HARDY MR DAVID STEWART FIELDUBS NOMINEES PTY LTDTotal Held by Top 20 1,470,588 1,140,000 1,081,672 Schroder Investment Management Australia Limited 1,590,352 MINING & CIVIL MANAGEMENT SERVICES PTY LTDAUST EXECUTOR TRUSTEES LTD BNP PARIBAS NOMINEES PTY LTD MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED BRISPOT NOMINEES PTY LTD MR KENNETH JOSEPH HALL There were no restricted securities at the date of this report. 226,881,567 84.7There were no listed options at the date of this report.CITICORP NOMINEES PTY LIMITEDTotal Ordinary Fully Paid Shares on Issue 268,007,708 100.02.72.2Other InformationThevotingrightsattachedtoordinarysharesaregovernedbytheConstitutionoftheCompany.OnashowofhandseverypersonpresentwhoisaMemberorrepresentativeofaMembershallhaveonevoteonapoll,everyMemberpresentinpersonorbyproxyorbyattorneyorduly authorised representative shall have one vote for each share held. None of the options have any voting rights.1.01.00.90.80.60.6Perpetual Investments LimitedMR KENNETH RUDY KAMONNATIONAL NOMINEES LIMITED6.2There were no substantial option holders listed in the Company’s register as at 5th September 2018.Section 7 Shareholder Information Registered Shareholder 65,924,598 43,768,559 7.1 Numbers of Holders of Equity Securities (Cont.)Substantial Share and Option HoldersAn extract of the Company's register of substantial shareholders (who held a relevant interest in 5% or more of issued capital) is set out below: % of Total Shares 11.27.56.4 16,641,004 Fully Paid Ordinary Shares SHAREHOLDER INFORMATION (a)(b)(a)(b)(c) 7.2 MLD's Top Twenty Shareholders (Cont.)Other InformationSection 7 Shareholder Information MLD Limited is incorporated and domiciled in Australia and is a publicly listed company by shares.Company DetailsInthedirectors’opiniontherearereasonablegroundstobelievethattheGroupwillbeabletopayitsdebtsasandwhentheybecomedueand payable.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: Chris TuckwellManaging DirectorDated at Perth this 28th day of September, 2018the financial statements and notes for the financial year give a true and fair view.the financial statements and notes for the financial year comply with the Accounting Standards Board; andthefinancialrecordsoftheGroupforthefinancialyearhavebeenproperlymaintainedinaccordancewiths286oftheCorporations Act 2001;giveatrueandfairviewofthefinancialpositionasat30June2018andoftheperformancefortheyearendedonthatdate of the company and consolidated group; complywithAccountingStandardswhichasstatedintheaccountingpoliciesincludedinthefinancialstatements,constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and Voting RightsOrdinary SharesThe registered office is: The principal place of business is:MACA LimitedMACA Limited45 Division Street45 Division StreetWelshpool, Western Australia, 6106Welshpool, Western Australia, 6106Director’s DeclarationThe directors of the company declare that:1 The financial statements set out on pages 36 to 72 are in accordance with the Corporations Act 2001 and:2. The Managing Director (acting as Chief Executive Officer) and Chief Finance Officer have each declared that:For all ordinary shares, voting rights are on a show of hands whereby every member present in person or by proxy shall have one vote and upon a poll, each share shall have one vote. MACA Limited and its Controlled Entities ABN 42 144 745 782 www.maca.net.au 

Continue reading text version or see original annual report in PDF format above