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1 Appendix 4D Name of entity UGL Limited ABN Half-year ended ( current period ) Results for announcement to the market % $A 000 Revenues from ordinary activities Up/down 3.4 to 2,214,357 Profit (loss) from ordinary activities after tax attributable to members Up/down (14.9) to 55,350 Net profit (loss) for the period attributable to members Up/down (14.9) to 55,350 Dividends (distributions) Amount per security Franked amount per security Interim dividend 34 cents 34 cents Record date for determining entitlements to the dividend 2 March 2012 Brief explanation of any of the figures reported above and short details of any bonus or cash issue or other item(s) of importance not previously released to the market: Please refer to attached press release. The remainder of the information requiring disclosure to comply with listing rule 4.2A is contained in the attached Directors Report and Interim Financial Report for the half-year ended, the attached press release, and the additional information below. Additional information Net Tangible Assets/(Liabilities) per ordinary share: ($0.67) (June : $0.55) Details of interests in joint venture entities and associates: Interests held % Name Principal activities December June Joint ventures: Aker Kvaerner Australia/United Group Infrastructure Construction and maintenance of oil and gas facilities United Group Infrastructure/Balfour Beatty High voltage transmission line installation PREMAS (Thailand) Co. Ltd Integrated real estate management services Texmaco UGL Rail Private Ltd Manufacture and supply of rolling stock components UGL KAEFER General maintenance services and field managed modifications UGL Services LLC Integrated facilities and property management services 50 - DTZ Winssiner Tie Leung (Lux) SA Property advisory 50 - Zadelhoff Participates Property advisory 50 -

2 Interests held % Name Associates: Metro Trains Melbourne Pty Ltd Principal activities Operation and maintenance of Melbourne passenger train network December June DTZ Meridian Immoblilier SA Property advisory 20 - DTZ Qatar WLL Property advisory 40 - Columbus Partners SAS Property advisory 20 - Act'Immo SARL Property advisory 22 - Webimm SA Property advisory 25-3H SARL Property advisory 28 - DTZ Australia (WA) Pty Limited Property advisory 20 - DTZ Australia (GC Valuations) Pty Limited Property advisory 25 - DTZ McCombe Pierce LLP Property advisory 20 - DTZ Sherry FitzGerald Ltd Property advisory 20 - Details of the individual share of profits or losses of these entities has not been disclosed as many entities are created to deliver a specific contract and disclosure of this information would be prejudicial to the consolidated entity.

3 UGL Limited ABN Interim Financial Report 2012 maintaining today creating tomorrow

4 Contents Directors Report... 1 Lead Auditor s Independence Declaration... 3 Consolidated Interim Financial Report Consolidated Income Statement...4 Consolidated Statement of Comprehensive Income...5 Consolidated Statement of Financial Position...6 Consolidated Statement of Changes in Equity...7 Consolidated Statement of Cash Flows...9 Notes to the Consolidated Interim Financial Statements Directors Declaration Independent Auditor s Review Report Corporate Directory... 18

5 Directors Report The directors of UGL Limited (UGL) present their report together with the consolidated financial report of UGL and its subsidiaries (the Group) for the half-year ended and the review report thereon. Directors The names of directors in office during or since the end of the interim period are: Trevor C Rowe AO - Chairman Richard A Leupen - Managing Director & CEO Guy M Cowan Richard G Humphry AO John W Ingram AM Kathryn D Spargo Richard D White Unless indicated otherwise, all directors held their position as a director throughout the half-year and up to the date of this report. Principal activities The UGL Group is a diversified services entity operating in maintenance, facilities management, corporate real estate, engineering and construction. UGL has 31,000 direct employees and 24,000 sub-contractors in Australia, New Zealand, Asia, North America, Europe and the Middle East. The Group has a client base that includes local and national governments, institutions and blue-chip corporations. UGL consists of four complementary businesses: UGL Infrastructure is a multi-service business offering construction, engineering, operational and maintenance services to the water, power, road and rail transport, communications and defence industries. UGL Rail is the largest end-to-end rail rolling stock and technology solutions provider and integrator in the Asia-Pacific region and Australia s largest supplier of outsourced asset management and rolling stock maintenance services. UGL Resources is a long-term solution provider of project delivery and asset services to clients in the resources industry. UGL Services is a global provider of outsourcing services. Services include corporate real estate, facilities management, project management, finance and accounting, and procurement. This business includes UGL Services - Premas Operations in Asia, UGL Services - Equis Operations and UGL Services - Unicco Operations in North America and since 5 December, DTZ with operations in Europe, Middle East, Asia Pacific and the Americas. Results The consolidated profit for the Group for the period, after income tax and non-controlling interests was $55,350,000; reconciled to underlying net profit after tax (NPAT) as follows: Profit after income tax and non-controlling interests 55,350 Adjusted for: Acquisition related costs 13,987 Amortisation of acquired intangibles 4,692 Tax on amortisation of acquired intangibles (1,877) Underlying NPAT 72,152 $'000 Underlying NPAT has been presented to provide a more accurate reflection of the Group s operating performance excluding the effect of costs arising from acquisitions. Operational results by segment: UGL Infrastructure UGL Rail UGL Resources UGL Services EBIT 37,711 36,362 30,147 34, ,651 Total $'000 Corporate costs (28,322) Net interest (11,536) Income tax (26,519) Non-controlling interests (122) 72,274 Underlying NPAT 72,152 Underlying NPAT is non-ifrs financial information and has not been subject to review by the Group s external auditors. EBIT and reconciling items have been extracted from note 2 - Operating segments to the financial statements, which have been subject to review by the Group s external auditors. UGL Limited Interim Financial Statements 2012 Page 1

6 Dividends paid or to be paid The following dividends on issued ordinary shares of UGL have been paid or declared since the end of the previous financial year: Final ordinary dividend of 38 cents per share, fully franked, paid on 8 September 63,098 Interim ordinary dividend of 34 cents per share, fully franked, to be paid on 16 March ,547 As the interim dividend was declared subsequent to period end, it will be accounted for in the second half of the 2012 financial year. Review of operations UGL Infrastructure Revenue increased 20 per cent to $595.1 million and generated EBIT of $37.7 million for the half year ending. The strong top line growth was driven by solid operational performance across our key business segments including power, transport and communications. During the half year period, UGL Infrastructure incurred higher bidding costs given a near record level of tendering activity. The weighted and qualified pipeline of tendering opportunities identified is at $1.7 billion with significant opportunities across the power, transport and communications sectors supported by high levels of private investment. UGL has a number of infrastructure opportunities at an advanced stage of the tender process positioning the business well for the second half. UGL Rail UGL Rail generated EBIT of $36.4 million on revenue of $593.3 million during the half year period. Margins remained at 6.1 per cent reflecting a continuous drive to deliver cost efficiencies within the business, despite high levels of bidding costs being incurred due to elevated tendering activity. The results were also supported by increased demand for freight locomotive supply and maintenance services from the Western Australian and Queensland resources sector. UGL expects to participate in a significant proportion of the $1.6 billion weighted and qualified pipeline of tendering opportunities identified across the freight and passenger rail supply and maintenance markets, delivering sustainable growth to our Rail business. UGL Resources Revenue increased 9 per cent to $524.2 million while EBIT increased 160 per cent to $30.1 million during the half year period. The strong recovery in performance was driven by the absence of major project issues relative to the previous corresponding period as well as substantial growth in the asset services division following a number of significant contract awards across the coal, iron ore and oil and gas industries. Tendering activity for Resources is also significant, with a weighted and qualified pipeline of $1.4 billion of opportunities identified across core commodity segments, with both major construction and asset maintenance projects being actively pursued. UGL Services UGL Services delivered EBIT of $34.4 million on revenue of $677.8 million for the half year period. Impacting the result was subdued macroeconomic conditions in the US reducing transaction volumes as well as adverse foreign exchange movements during the period. Strong momentum continues to be generated by the Asia Pacific region, with a number of new projects being successfully secured. On 5 December, the Group acquired all of the trading operations of the global real estate services company DTZ Holdings plc (DTZ). Refer to note 7 for further details.the earnings contribution from DTZ for the half year period was neutral. Globally, tendering levels remain robust for property services and as the integration of DTZ progresses, the business will be uniquely positioned to participate in these opportunities by leveraging the global footprint and integrated end-to-end service offering created by the combined platform. Lead auditor s independence declaration The lead auditor s independence declaration is set out on page 3 and forms part of the directors report for the half-year ended. Rounding of amounts The parent entity is a company of the kind specified in Australian Securities and Investments Commission class order 98/100. In accordance with that class order, amounts in the consolidated interim financial report and the directors report have been rounded to the nearest thousand dollars unless specifically stated to be otherwise. Signed in accordance with a resolution of the directors. Trevor C Rowe AO Chairman Richard A Leupen Managing Director & CEO Dated at Sydney this 17th day of February UGL Limited Interim Financial Statements 2012 Page 2

7 Lead Auditor s Independence Declaration under Section 307C of the Corporations Act 2001 To: the directors of UGL Limited I declare that, to the best of my knowledge and belief, in relation to the review for the half-year ended there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and (ii) no contraventions of any applicable code of professional conduct in relation to the review. KPMG Mark Epper Partner Sydney 17th February 2012 KPMG, an Australian partnership and a member firm of KPMG network of independent member firms affiliated with KPMG International Corporate ( KPMG International ), a Swiss entity. UGL Limited Interim Financial Statements 2012 Page 3

8 Consolidated Income Statement for the half-year ended 2010 Revenue 2,214,357 2,140,511 Other income Raw materials and consumables (597,430) (587,184) Employment costs (1,075,293) (1,018,105) Depreciation and amortisation (28,157) (28,005) Subcontractor costs (221,602) (225,906) Finance costs (18,144) (16,115) Communication costs (6,928) (6,944) Insurance costs (14,812) (12,792) Motor vehicle expenses (20,333) (17,965) Travel costs (28,570) (28,241) Other expenses (123,215) (116,326) Share of profit of equity accounted investees (net of income tax) (1,791) 4,361 Profit before income tax expense 78,998 87,883 Income tax expense (23,526) (23,033) Profit for the period 55,472 64,850 Profit attributable to: Owners of the Company 55,350 65,034 Non-controlling interests 122 (184) Profit for the period 55,472 64,850 Cents Cents Basic earnings per share (cents per share) Diluted earnings per share (cents per share) The accompanying notes form an integral part of these consolidated interim financial statements. UGL Limited Interim Financial Statements 2012 Page 4

9 Consolidated Statement of Comprehensive Income for the half-year ended 2010 Profit for the period 55,472 64,850 Other comprehensive income Foreign currency translation differences - foreign operations 7,392 (31,474) Foreign currency translation differences equity-accounted investees (866) - Cash flow hedges (443) 1,060 Other comprehensive income for the period (net of tax) 6,083 (30,414) Total comprehensive income for the period 61,555 34,436 Total comprehensive income attributable to: Owners of the Company 61,423 34,616 Non-controlling interests 132 (180) Total comprehensive income for the period 61,555 34,436 The accompanying notes form an integral part of these consolidated interim financial statements. UGL Limited Interim Financial Statements 2012 Page 5

10 Consolidated Statement of Financial Position as at Current assets Note 30 June Cash and cash equivalents 178, ,688 Trade and other receivables 599, ,664 Inventories 370, ,998 Income tax receivable 4, Other financial assets Total current assets 1,153,888 1,103,351 Non-current assets Trade and other receivables 2,430 2,411 Other financial assets 22,908 21,611 Investments accounted for using the equity method 38,815 30,007 Property, plant and equipment 181, ,461 Intangible assets 1,239,368 1,039,547 Deferred tax assets 45,713 54,113 Total non-current assets 1,531,095 1,305,150 Total assets 2,684,983 2,408,501 Current liabilities Trade and other payables 496, ,421 Loans and borrowings 8 171,078 1,153 Employee benefits 204, ,155 Other financial liabilities 4,086 1,741 Income tax payable 11,763 26,333 Provisions 81,674 37,736 Total current liabilities 969, ,539 Non-current liabilities Loans and borrowings 8 442, ,765 Employee benefits 29,795 17,951 Other financial liabilities 30,731 4,960 Deferred tax liabilities 15,409 12,607 Provisions 38,868 31,257 Total non-current liabilities 557, ,540 Total liabilities 1,526,970 1,237,079 Net assets 1,158,013 1,171,422 Equity Share capital 3 908, ,875 Reserves (49,486) (41,824) Retained earnings 294, ,877 Total equity attributable to owners of the Company 1,153,418 1,165,928 Non-controlling interests 4,595 5,494 Total equity 1,158,013 1,171,422 The accompanying notes form an integral part of these consolidated interim financial statements. UGL Limited Interim Financial Statements 2012 Page 6

11 Consolidated Statement of Changes in Equity for the half-year ended Half-year ended Translation reserve Hedging reserve Employee equity benefit reserve Attributable to owners of the Company Reserve for treasury shares Total reserves Share capital Retained earnings Total Noncontrolling interests Balance at 1 July (44,015) ,889 (18,803) (41,824) 905, ,877 1,165,928 5,494 1,171,422 Profit for the period ,350 55, ,472 Foreign currency translation differences - foreign operations Foreign currency translation differences equity-accounted investees Gains/(losses) on cash flow hedges taken to equity Net change in fair value of cash flow hedges transferred to the initial carrying amount of the hedged item Total comprehensive income for the period Transactions with owners in their capacity as owners: 7, , , ,392 Total equity (866) (866) - - (866) - (866) - (432) - - (432) - - (432) - (432) - (11) - - (11) - - (11) - (11) 6,516 (443) - - 6,073-55,350 61, ,555 Shares issued ,900-2,900-2,900 Share-based payments - - 4,242-4, ,242-4,242 Treasury shares purchased (18,147) (18,147) - - (18,147) - (18,147) Transfer of vested shares - - (3,307) 3, Dividends to owners (63,098) (63,098) (4,617) (67,715) Acquired on purchase of subsidiaries ,586 3,586 Income tax related to transactions with owners Total transactions with owners (14,670) (13,735) 2,900 (63,098) (73,933) (1,031) (74,964) Balance at (37,499) (338) 21,824 (33,473) (49,486) 908, ,129 1,153,418 4,595 1,158,013 The accompanying notes form an integral part of these consolidated interim financial statements. UGL Limited Interim Financial Statements 2012 Page 7

12 Consolidated Statement of Changes in Equity for the half-year ended Half-year ended 2010 Translation reserve Hedging reserve Employee equity benefit reserve Attributable to owners of the Company Reserve for treasury shares Total reserves Share capital Retained earnings Total Noncontrolling interests Balance at 1 July 2010 (6,493) (402) 16,432 (10,638) (1,101) 904, ,577 1,158, ,159,116 Profit for the period ,034 65,034 (184) 64,850 Foreign currency translation differences - foreign operations Gains/(losses) on cash flow hedges taken to equity Net change in fair value of cash flow hedges transferred to the initial carrying amount of the hedged item Total comprehensive income for the period Transactions with owners in their capacity as owners: (31,478) (31,478) - - (31,478) 4 (31,474) Total equity - (314) - - (314) - - (314) - (314) - 1, , ,374-1,374 (31,478) 1, (30,418) - 65,034 34,616 (180) 34,436 Shares issued Share-based payments - - 2,559-2, ,559-2,559 Treasury shares purchased (6,973) (6,973) - - (6,973) - (6,973) Dividends to owners (58,075) (58,075) - (58,075) Income tax related to transactions with owners Total transactions with owners - - 2,559 (6,184) (3,625) 764 (58,075) (60,936) - (60,936) Balance at 2010 (37,971) ,991 (16,822) (35,144) 905, ,536 1,132, ,132,616 The accompanying notes form an integral part of these consolidated interim financial statements. UGL Limited Interim Financial Statements 2012 Page 8

13 Consolidated Statement of Cash Flows for the half-year ended Cash flows from operating activities Note 2010 Cash receipts from customers 2,403,617 2,373,547 Cash payments to suppliers and employees (2,370,548) (2,276,957) Interest received 2,089 2,448 Interest and other costs of finance paid (13,453) (13,758) Distributions from equity accounted investments 4,884 4,542 Income taxes paid (32,518) (23,936) Net cash (used in)/ from operating activities (5,929) 65,886 Cash flows from investing activities Payments for plant and equipment (13,490) (15,579) Proceeds from sale of plant and equipment Payments for software (7,395) (6,820) Project establishment costs (3,341) (3,787) Payment for other intangibles (9,836) (1,960) Acquisition of subsidiaries, net of cash acquired 7 (103,390) - Investment in associates and joint ventures (4,847) (5,000) Net cash used in investing activities (141,633) (32,518) Cash flows from financing activities Net proceeds from issue of shares & conversion of options 2, Proceeds from borrowings 308, ,500 Repayment of borrowings (140,196) (229,826) Payment for treasury shares (18,147) (6,973) Payment of finance lease liabilities (417) (502) Dividends paid to owners (63,098) (58,075) Dividends paid to non-controlling interests (4,617) - Net cash from/ (used in) financing activities 84,846 (72,112) Net increase/(decrease) in cash and cash equivalents (62,716) (38,744) Cash and cash equivalents at the beginning of the financial period 236, ,585 Effects of exchange rate fluctuations on the balances of cash held in foreign currencies 2,060 (9,343) Cash and cash equivalents, net of overdrafts, at 176, ,498 The accompanying notes form an integral part of the consolidated interim financial statements. UGL Limited Interim Financial Statements 2012 Page 9

14 Notes to the Consolidated Interim Financial Statements Note 1: Significant accounting policies UGL Limited (the Company or UGL) is a company domiciled in Australia. The consolidated interim financial statements of the Company for the half-year ended comprise the Company and its subsidiaries (together referred to as the Group) and the Group s interest in associates and jointly controlled entities. The consolidated annual financial report of the Group for the year ended 30 June is available at a) Statement of compliance The consolidated financial statements are general purpose financial statements which have been prepared in accordance with AASB 134: Interim Financial Reporting and the Corporations Act These consolidated interim financial statements do not include all information required for full annual financial statements, and should be read in conjunction with the consolidated annual financial statements of the Group for the year ended 30 June. The consolidated interim financial statements were authorised for issue by the directors on 17 February b) Basis of preparation These consolidated financial statements are presented in Australian dollars. The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial statements and Directors Report have been rounded off to the nearest thousand dollars, unless otherwise stated. These financial statements have been prepared in accordance with the historical cost convention and except for derivative financial instruments, which are stated at fair value, do not take into account changing money values or fair values of assets. Except as described below, the accounting policies applied by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 30 June. Employee benefits defined benefit plans As a result of the DTZ acquisition on 5 December, the Group has taken on retirement benefit obligations for two defined benefit plans located in the United Kingdom, closed to future accrual from October At, the retirement benefit obligation liability was $10,512,000. A defined benefit plan provides defined lump sum benefits based on years of service and final average salary. The liability recognised in the statement of financial position is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets, together with adjustments for unrecognised past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and maturity dates approximating the terms of the Group s obligations. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. c) Accounting Standards and Interpretations not previously applied The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to the Group s operations and effective for the current reporting period. The adoption of these new and revised Standards and Interpretations has not had any material impact on the Group s assets, profits or earnings per share in the half-year ended. d) Estimates The preparation of financial statements in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing these consolidated interim financial statements the significant judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 30 June. e) Financial risk management The Group s financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements for the year ended 30 June. Note 2: Operating segments For management purposes, the Group is organised into four business units based on their products and services: UGL Infrastructure: a multi-service business offering construction, engineering, operational and maintenance services to the water, power, road and rail transport, communications and defence industries. UGL Rail: the largest end-to-end rail rolling stock and technology solutions provider and integrator in the Asia-Pacific region and Australia s largest supplier of outsourced asset management and rolling stock maintenance services. UGL Resources: a long-term solution provider of multi discipline services to clients in the resources industry. UGL Services: a global provider of property outsourcing services. Services include corporate real estate, facilities management, project management, finance and accounting, valuations, consulting, research and procurement. This business includes UGL Services- Premas Operations in Asia, UGL Services - Equis Operations and UGL Services - Unicco Operations in North America; and from acquisition on 5 December, the DTZ group of companies. There have been no other changes to the basis of segmentation or the measurement basis for the segment profit or loss since 1 July UGL Limited Interim Financial Statements 2012 Page 10

15 Engineering Property Infrastructure Rail Resources Services Half-year ended Reportable Segments Corporate/ unallocated Eliminations Total External revenues 592, , , ,030 2,379, ,379,825 Inter-segment revenue 2, , ,661 - (10,661) - Total reportable segment revenue 595, , , ,809 2,390,486 - (10,661) 2,379,825 Reconciliation: Revenue - joint ventures and associates (167,555) (167,555) Interest income 2,087 Consolidated revenue 2,214,357 Reportable segment profit (loss) 37,711 36,362 30,147 34, ,651 (28,322) - 110,329 Reconciliation: Amortisation of intangible associated with acquisitions (4,692) - (4,692) Acquisition related expenses (13,987) - (13,987) Interest income , ,087 Interest expense (13,623) - (13,623) Tax on equity accounted income (1,116) (1,116) Consolidated profit before income tax 78,998 Half-year ended 2010 External revenues 494, , , ,797 2,273, ,273,705 Inter-segment revenue , ,690 - (7,690) - Total reportable segment revenue 495, , , ,690 2,281,395 - (7,690) 2,273,705 Reconciliation: Revenue - joint ventures and associates (135,589) (135,589) Interest income 2,395 Consolidated revenue 2,140,511 Reportable segment profit (loss) 40,270 38,543 11,601 35, ,987 (21,347) - 104,640 Reconciliation: Amortisation of intangible associated with acquisitions (5,124) (5,124) Interest income ,337 1,058-2,395 Interest expense (12,925) (12,925) Tax on equity accounted income (1,103) (1,103) Consolidated profit before income tax 87,883 UGL Limited Interim Financial Statements 2012 Page 11

16 Note 3: Share Capital Share capital 30 June 165,565,038 (30 June 165,297,171) ordinary shares 908, ,875 Movements in contributed equity Number of ordinary shares Opening balance 165,297, ,875 Shares issues pursuant to Employee Share Option Plan (i) 267,867 2,900 Closing balance 165,565, ,775 (i) In December, the Company issued 267,867 shares, pursuant to the exercise of options under the Employee Share Option Plan, at an exercise price of $ Total ordinary shares of 166,315,038 are held by the share registry, which includes an additional 750,000 shares, treated for accounting purposes as options. Treasury shares Treasury shares are shares in UGL that are held by the UGL Limited Employee Share Plan Trust purchased on market for the purpose of issuing shares under UGL employee share plans. As at, the Trust held 2,634,174 of the Company s shares (30 June : 1,586,820 shares) 328,693 shares vested under these employee share plans during the period (: nil). Note 4: Dividends Dividends recognised in the current period by the Company are: 2010 Final dividend of 38 cents ( cents) per share, fully franked paid on 8 September (2010: 17 September 2010) 63,098 58,075 Total dividends paid 63,098 58,075 Dividends not recognised at In addition to the above dividends, since the period end the directors have recommended the payment of an interim dividend of 34 cents ( 32 cents) per share fully franked based on tax paid at 30%. The aggregate amount of the proposed dividend expected to be paid on 16 March 2012 is not recognised as a liability at. 56,547 53,135 Note 5: Capital and other commitments Capital expenditure commitments Capital expenditure commitments contracted for plant and equipment purchases: 30 June within one year 5,210 3,812 one year or later and no later than five years - - 5,210 3,812 Note 6: Contingencies The directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement: (i) Under the provisions of joint venture agreements undertaken by entities controlled by UGL, the controlled entities are jointly and severally liable for all the liabilities incurred by the joint ventures. As at the assets of the joint ventures exceed such liabilities. (ii) During the normal course of business, entities within the Group may incur contractors and product liability in relation to their performance obligations for specific contracts. Such liability includes the potential costs to carry out further works and/or litigation by or against those Group entities. Provision is made for the potential costs of carrying out further works based on known claims and previous claims history, and for legal costs where litigation has commenced, or it is probable that litigation will commence. Whilst the ultimate outcome of these claims cannot be reliably determined at the date of this report, based on previous experience, amounts specifically provided, and the circumstances of specific claims outstanding, no additional costs are anticipated. UGL Limited Interim Financial Statements 2012 Page 12

17 Note 7: Business combination On 5 December, UGL Europe Limited (a wholly owned subsidiary of UGL Limited) acquired all of the trading operations of the global real estate services company DTZ Holdings plc (DTZ), for a cash consideration of $148.0 million (purchase price comprising GBP 77.5 million and assumed cash of GBP 19.0 million). UGL Europe Limited purchased the DTZ subsidiaries from the administrator of DTZ immediately after DTZ entered administration. DTZ is a leading real estate services group of companies, operating across 43 countries, providing services in occupational and development markets, professional services, valuation, investment agency and consulting and research. In the period to, the business contributed revenue of $39,002,000, and net profit after tax of $101,000 to the consolidated results for the period. The Group considers it impractical to disclose the pro forma half-yearly results to include the business acquired due to the difficulties of restating the results of DTZ with the exclusion of the holding company and inter-related group transactions. Identifiable assets acquired and liabilities assumed Property, plant and equipment 26,310 Intangible assets 74,640 Equity accounted investments 11,932 Other financial assets 893 Inventories 10,382 Income tax receivable 1,414 Trade and other receivables 123,471 Deferred tax assets 2,702 Cash and cash equivalents 47,556 Loans and borrowings (8,728) Deferred tax liabilities (267) Provisions (42,786) Trade and other payables (92,599) Other financial liabilities (28,922) Income tax payable (5,694) Employee benefits (59,134) Total net identifiable assets 61,170 The Group is continuing the review of assets acquired and liabilities assumed. If new information is obtained within one year of the acquisition date, the acquisition accounting will be revised. Trade receivables comprise gross contractual amounts due of $94,181,000 of which $11,094,000 was expected to be uncollectible at the acquisition date. Contingent liabilities In the normal course of business, entities within the DTZ business may be involved in threatened or pending legal actions arising from its activities; including property management and valuations. Provision has been made for claims and for legal costs where litigation has been commenced, or it is probable that litigation will commence. The business carries professional indemnity insurance and no separate disclosure is made of the cost of claims covered by insurance as to do so could seriously prejudice the position of the Group. As the ultimate outcome of these claims cannot be reliably determined at the date of this report, contingent liabilities may exist for any amounts that ultimately become payable in excess of current provisioning levels. Goodwill Goodwill was recognised as a result of the acquisition as follows: Total consideration transferred 147,984 Non-controlling interests, based on their proportionate interest in the recognised amounts of the assets and liabilities of the acquiree Fair value of identifiable net assets (61,170) Goodwill 90,400 3,586 Goodwill is attributable mainly to the skills and specialised knowledge and experience of the DTZ work force, and the synergies expected to be received from integrating the DTZ business into UGL s existing property service business. None of the goodwill recognised is expected to be deductible for income tax purposes. UGL Limited Interim Financial Statements 2012 Page 13

18 Note 7: Business combination (continued) Outflow of cash Cash consideration 147,984 Less: cash balances acquired Cash (47,556) Bank overdrafts 2,962 (44,594) Outflow of cash 103,390 Acquisition related costs The Group incurred acquisition related costs of $13,987,000 related to external legal fees and due diligence costs. These costs have been included in other expenses in the Group s consolidated income statement. Note 8: Loans and borrowings Current Unsecured: 30 June - bank overdraft 2, bank loan 165, other loan 1, Secured: - finance lease liabilities Non-current Unsecured: 171,078 1,153 - bank loans 190, ,719 - other loan US notes 246, ,796 Secured: - finance lease liabilities 1, bank loans 3, , ,765 Short term facilities were entered into to provide temporary bridging finance for the DTZ acquisition and to fund potential DTZ working capital requirements. UGL Limited Interim Financial Statements 2012 Page 14

19 Note 8: Loans and borrowings (continued) Bank loans and US notes (current and non-current) are drawn under the following term debt facilities: Principal facility currency amount Principal facility amount Amount utilised Amount unutilised Maturity date thousands A A A Bank loans: Term debt May 2012 RMB 8,500 1,340 1,340 - Term debt November 2012 GBP 175, , , ,684 Term debt July 2013 USD 90,000 88,618 88,618 - Term debt August 2014 AUD 50,000 50,000-50,000 Term debt March 2015 HKD 29,900 3,763 3,763 - Term debt July 2015 USD 95,000 93,541 59,078 34,463 Term debt July 2015 AUD 60,000 60,000-60,000 Term debt June 2016 AUD 110, ,000 42,340 67, , , ,807 US notes: Tranche 1 September 2016 USD 50,000 49,232 49,232 - Tranche 2 June 2018 USD 150, , ,696 - Tranche 3 September 2018 USD 50,000 49,232 49, , , June Principal facility currency amount Principal facility amount Amount utilised Amount unutilised Maturity date thousands A A A Bank loans: Term debt February 2012 RMB 5, Term debt July AUD 20,000 20,000-20,000 Term debt July 2012 AUD 60,000 60,000-60,000 Term debt July 2012 USD 75,000 69,839 55,871 13,968 Term debt July 2013 USD 90,000 83,807 83,807 - Term debt June 2016 AUD 110, ,000 40,041 69,959 US notes: 344, , ,002 Tranche 1 September 2016 USD 50,000 46,559 46,559 - Tranche 2 June 2018 USD 150, , ,678 - Tranche 3 September 2018 USD 50,000 46,559 46, , ,796 - UGL Limited Interim Financial Statements 2012 Page 15

20 Directors Declaration In the opinion of the directors of UGL Limited: 1) the consolidated financial statements and notes, set out on pages 4 to 15, are in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Group s financial position as at and of its performance for the half-year period ended on that date; and b) complying with Australian Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and 2) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the directors. Trevor C Rowe AO Chairman Richard A Leupen Managing Director & CEO Dated at Sydney this 17th day of February UGL Limited Interim Financial Statements 2012 Page 16

21 Independent Auditor s Review Report to the members of UGL Limited Report on the financial report We have reviewed the accompanying half-year financial report of UGL Limited ( the Company ), which comprises the consolidated statement of financial position as at, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year period ended on that date, notes 1 to 8 comprising a summary of significant accounting policies and other explanatory information and the directors declaration of the Group comprising the Company and the entities it controlled at the half-year s end or from time to time during the half-year period. Directors responsibility for the half-year financial report The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group s financial position as at and its performance for the half-year period ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations As auditor of UGL Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the halfyear financial report of UGL Limited is not in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group s financial position as at and of its performance for the half-year period ended on that date; and (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations KPMG Mark Epper Partner Sydney 17th February 2012 KPMG, an Australian partnership and a member firm of KPMG network of independent member firms affiliated with KPMG International Corporate ( KPMG International ), a Swiss entity. UGL Limited Interim Financial Statements 2012 Page 17

22 Corporate Directory Directors Trevor C Rowe AO Non-executive Chairman Guy M Cowan Non-executive Director Richard G Humphry AO Non-executive Director John W Ingram AM Non-executive Director Richard A Leupen Managing Director & Chief Executive Officer Kathryn D Spargo Non-executive Director Richard D White Non-executive Director Chief Financial Officer Robert Bonaccorso Company Secretaries Dennis Mentzines Lyn Nikolopoulos Registered Office Level Miller Street North Sydney NSW 2060 Telephone: Auditors KPMG 10 Shelley Street Sydney NSW 2000 Share Registry Link Market Services 680 George Street Sydney NSW 2000 Telephone: Overseas: UGL Limited Level Miller Street Locked Bag 903 North Sydney NSW 2060 Telephone: Facsimile: uglinfo@ugllimited.com Website: UGL Infrastructure Level 5 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Telephone: Facsimile: infrastructureinfo@ugllimited.com UGL Rail Level 5 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Telephone: Facsimile: railinfo@ugllimited.com UGL Resources Level 5 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Telephone: Facsimile: resourcesinfo@ugllimited.com UGL Services Level 5 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Telephone: Facsimile: servicesinfo@ugllimited.com UGL Services - Equis Operations 161 N Clark Street Suite 2400 Chicago IL United States Telephone: Facsimile: info@ugl-equis.com UGL Services Premas Operations Blk 750 Oasis, Chai Chee Road Chai Chee # Singapore Telephone: Facsimile: info@ugl-premas.com UGL Services - Unicco Operations 275 Grove Street Newton MA United States Telephone: Telephone: Facsimile: info@ugl-unicco.com DTZ 125 Old Broad Street London EC2N 2BQ United Kingdom Telephone: +44 (0) Facsimile: + 44 (0) info@dtz.com Web site: UGL Limited Interim Financial Statements 2012 Page 18