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Contents Contents 2

About this Sustainability Report 3

Measuring our performance 5

Our structure 6

The CIMIC Group’s operations 8

Executive Chairman and CEO message 10

Sustainability at the CIMIC Group 12

Material issues 13

Providing safe communities and workplaces 16

Acting with integrity 21

Developing a performance culture 28

Innovating to deliver projects 38

Using resource efficiently 48

Our awards 60

Summary of performance 62

GRI Index 64

Organisational profile 66

In 2015, CIMIC Group Limited was again recognised

by the industry leading Dow Jones Sustainability

Indices (DJSI) with inclusion in DJSI’s Australia Index.

Structure of this Sustainability Report

This report is structured around our five

sustainability commitments which are to:

• Provide safe communities and safe,

supporting and positive workplaces for

our people;

• Act with integrity ‐ honestly and

respectfully – in all relationships with the

Group’s stakeholders;

• Develop a united and collaborative culture

where engaged employees are aligned to

achieve superior performance and

integrate governance, economic,

environmental and social considerations

into their roles;

• Seek competitive advantage by innovating

to deliver construction, mining and

services projects that satisfy the

governance, economic, environmental

and social needs of clients; and

• Use resources efficiently, minimise waste

and promote the delivery of energy

efficient, environmentally and socially

responsible projects.

These colour coded commitments provide a

navigation framework for this Sustainability

Report.

Our commitments are derived from, and

based on, our Principles – Integrity,

Accountability, Innovation and Delivery –

underpinned by Safety. They provide a

common unifying bond for our people and set

the framework for the behaviour of our

people. The principles and our commitments

uphold our mission which is to maximize long‐

term value for shareholders by sustainably

delivering projects for our clients while

providing safe, rewarding and fulfilling careers

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About this Sustainability Report

Reporting approach

The CIMIC Group, which includes

CIMIC Group Limited (CIMIC) – the

ASX listed parent company – and its

various Operating Companies, is

committed to operating sustainably

and reporting on our environmental,

social and governance (ESG)

performance and progress. This

Sustainability Report marks a new

era in the disclosure of sustainability

information which is increasingly

being sought by our stakeholders.

For the financial year ended 31

December 2015, we have adopted a

Global Reporting Initiative (GRI) G4

framework for the preparation of

this Sustainability Report. By doing

so we aim to generate reliable,

relevant and standardized

information with which our

stakeholders can assess our

opportunities and risks, and enable

more informed decision‐making –

both within the business and

externally. It is our intention over the

next two years to continually

improve our disclosure and

engagement so as to achieve fully

compliant GRI G4 reporting.

This Sustainability Report forms part

of our annual reporting suite of

documents. These documents are all

available online at

www.cimic.com.au

Report boundary and scope

This Report is for the 12 month

period to 31 December 2015, unless

otherwise noted. The scope of this

report covers all of the CIMIC and its

100% controlled operations which

include:

• CPB Contractors Pty Ltd

(formerly Leighton Contractors

Pty Ltd, with the name change

effective from 4 January 2016);

• Thiess Pty Limited;

• EIC Activities Pty Ltd;

• Pacific Partnership Pty Ltd;

• Leighton Asia Limited, including

Leighton India and Leighton

Offshore; and

• Leighton Properties Pty Ltd.

CIMIC Group Limited and its 100%

owned operations are referred to in

this Sustainability Reports as the

CIMIC Group or the Group.

At this stage, the scope does not

extend to include the operations of

the CIMIC Group’s investments,

where the CIMIC Group does not

have 100% ownership, namely:

• Devine Limited: CIMIC owns a

59.1% stake (as at 31 December

2015) in the listed property

development company;

• Ventia: CIMIC holds 50% of an

investment partnership for the

merged services business of CPB

Contractors and Thiess;

• Habtoor Leighton Group: CIMIC

holds a 45% share in the Middle

East‐based construction

company;

• Sedgman Limited: CIMIC owns a

46.4% stake (as at 5 February

2016) in the listed resources

engineering company;

• Nextgen Group: CIMIC holds a

28.9% stake (as of 31 December

2015) in the telecommunications

network, data centre and cloud

services provider; and

• Macmahon Holdings Limited:

CIMIC owns a 19.7% stake (as of

31 December 2015) in the listed

mining contracting company.

In December 2014, the Group sold

100% of its shareholding in the John

Holland Group (JHG) to CCCC

International Holding Limited and

50% of its share of the Thiess

Services and Leighton Contractors

Services businesses (Services) to

funds managed by affiliates of Apollo

Global Management, LLC (Apollo),

and entered into a joint venture with

Apollo. As the Group no longer

controlled JHG or Services (now

called Ventia), the transaction was

recorded as a disposal of controlled

entities during the period to 31

December 2014. The sales of JHG

and Services were completed in April

and March of 2015 respectively and

they are not included in this

Sustainability Report.

Monetary amounts referred to in

this report are reported in Australian

dollars, unless otherwise stated.

Availability of Information

In 2014, the Group commenced a

significant restructure, establishing

dedicated, streamlined and efficient

businesses focused on contract

mining services (Thiess),

construction (CPB Contractors and

Leighton Asia), public private

partnerships (Pacific Partnerships),

and engineering (EIC Activities).

Given this transformation, a number

of comparable operational safety

and environmental performance

measures are not available prior to

the 2015 year on which we are

currently reporting. Where

comparable data is available, it has

been provided. In future reports, the

Group expects to be able to provide

more detailed operational

performance measures by Operating

Company.

External assurance

This report, prepared using the GRI

G4 as a framework, has not been

externally assured. It is our intention

within the next two years to have

our Sustainability Report externally

assured.

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Measuring our performance At the CIMIC Group, our people are project‐focused, committed to the achievement of high quality standards, and gain satisfaction

from meeting or beating targets. We believe that people perform best when they have clearly defined goals and when they are

empowered to operate and are held accountable for delivering. This philosophy assists us to foster a culture of high performance.

The table below summarise some of our key sustainability targets and performance across a range of metrics as per our

commitments.

Target FY2015 Performance

Result Commentary Target date

Providing safe communities and workplaces

Zero work‐related fatalities ○ One fatality in Thiess’ Queensland mining services operations

Annual

Reduce TRIFR1 ● Reduced Group TRIFR from 3.8 in 2014 to 3.2 in 2015 Annual

Reduce number of Class 1 injuries ● Reduced from 5 in 2014 to 2 in 2015 Annual

Safety management systems in place ● 100% of operations certified to ISO 18001 and/or AS/NZ4801

Annual

Acting with integrity

Refreshed and re‐issued Code of Conduct ● Education program rolled out across Group End 2015

No serious breaches of Code ● On‐going

Developing a performance culture

Promote gender equity ● Addressed gender pay gaps in fixed remuneration reviews and bonus awards

Annual

Promote diversity ● Developed new Diversity & Inclusion strategy to achieve key objectives

End 2015

Promote diversity ● Communicated revised Diversity and Inclusion Policy and Workplace Behaviour Procedure

On‐going

Foster female participation ● Total (staff and workforce) female participation at 17% – higher than the Australian construction and mining industry averages

On‐going

Innovating to deliver projects

Increase number of ISCA2 rated projects ● 12 ISCA rated projects delivered to‐date On‐going

Deliver sustainable return for shareholders ● Total 1‐year shareholder return (TSR) of 13.1% and rolling 3‐year TSR of 58.2%

Annual

Utilising technology in the delivery of projects ● 454 people trained in the use of Building Information Modelling (BIM) and Geographic Information Systems (GIS) during the year

On‐going

Using resources efficiently

No significant environmental incidents ◑ No Level 1 incidents across the Group. Significant reduction in Level 2 incidents at CPB Contractors and none recorded at Thiess

Annual

Reduce number of legal breaches ● 2 minor legal breaches resulting in fines Annual

Environmental management systems in place ● 100% of operations certified to ISO 14001 Annual

● Achieved ◑ Partly achieved ○ Not achieved

1 Total Recordable Injury Frequency Rate

2 Infrastructure Sustainability Council of Australia

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Geographic scope of operations …

Full page spread being

updated by Corporate

Comm’s

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For CIMIC, sustainability is the

integration of environmental, social

and governance factors into our

decision‐making to maximize long

term shareholder value, and

contribute to safe and healthy

employees, communities and

ecosystems.

Sustainability is embedded in our

business. It is not a new concept; it is one

that our people have been practicing for

years. While many of our initiatives were

not labelled as ‘sustainable’, the

outcomes certainly were. The actions of

our people have been, and continue to

be, built on our Principles of Integrity,

Accountability, Innovation and Delivery,

and are underpinned, in everything that

we do, by Safety.

The CIMIC Principles are integral to

sustainability. Acting with integrity means

being honest about, and accountable for,

the performance of our business. It means

innovating in terms of the disclosure of

sustainability information, hence this

Sustainability Report, and delivering

useful information on which stakeholders

can make informed decisions.

We operate in an increasingly globalised

world, one where the creation of shared

wealth is more important. A world where

our stakeholders expectations continue to

rise and there is a greater understanding

of the impact of our actions on the

environmental and society. We

understand and respect the demands for

greater disclosure regarding our actions

and that our stakeholder’s need to be

able to evaluate the current and potential

impacts of our business.

An enhanced focus on sustainability this

year has seen us refresh our strategy,

undertake a materiality assessment in

consultation with our stakeholders,

appointed a senior executive to manage

the function and produce this Report, all

within a 6‐month period.

Our refreshed sustainability strategy aims,

over the next 3‐5 years, to further

develop a culture where CIMIC Group

employees understand the important role

of sustainability and fully integrate the

strategy into business decisions to meet

the needs of our clients. In doing so, we

aim for CIMIC to be recognised as an

industry leader in delivering sustainable

projects which, in turn, helps develop

client loyalty and facilitates the winning of

new or repeat work. At the same time, we

constantly strive to improve our efficiency

and reduce waste, thereby lowering our

costs, improving our value proposition

and growing the loyalty of our clients. In

doing so, we aspire to be recognised as an

employer of choice which will help to

attract, engage, motivate and retain

employees who share our commitment to

operating sustainably.

The CIMIC Group is building a systematic

approach to sustainability governance,

capabilities, business integration and

engagement. This will allow our Board to

effectively oversee the sustainability of

our business at a Group‐wide level. It will

also enable our Operating Companies to

better share their knowledge and

experience within a common decision‐

making framework.

Responsibility for sustainability resides

with the Board of CIMIC Group Limited

who delegate authority to our Ethics and

Compliance Committee. This year,

reflecting the importance of sustainability

to the Group, that Committee was

renamed the Ethics, Compliance and

Sustainability Committee.

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In preparing this Sustainability Report, we

undertook a Material Aspects assessment

to help identify, refine, and assess the

numerous potential environmental, social

and governance issues that could affect

our stakeholders and/or our business in

the future. We have condensed these into

a short‐list of topics that helps to inform

the Group’s strategy, targets, and

reporting. The process and results are set

out on pages 13‐15 of this Report.

The issues identified in our Material

Aspects assessment are addressed in

more detail in this Report in five colour‐

coded sections which correspond with our

Sustainability Commitments (as per the

framework on the page above). In each of

these sections we address our key focus

areas and our performance across a range

of related metrics, as per the GRI G4

reporting framework.

Tragically, it is with great sadness I report

the death of one of our colleagues due to

a work‐related incident during 2015. On

behalf of the Board, I extend my deepest

sympathies to the families and friends of

our colleague who passed away and

confirm our ongoing commitment to

ensuring safety is paramount and

underpins all we do at CIMIC Group.

The Group’s performance on a number of other key measures this year has been positive:

• our key safety lag indicators were

stable or showed improvements

across the business;

• no material environmental

compliance matters were reported for

the period; and

• we delivered a number of projects

that were externally recognised for

their sustainability.

Reflecting our sustainability efforts, I’m

pleased to report that the Group was

again recognised in 2015 by the industry

leading Dow Jones Sustainability Indices

(DJSI) which tracks the performance of

the companies that lead their industries in

terms of corporate sustainability. CIMIC

was again included in DJSI’s Australia

Index, one of only two construction and

engineering companies to be recognised.

We achieved a Total DJSI Sustainability

Score of 81 in 2015 compared with 76 in

both 2014 and 2013. Our performance

across all three major dimensions ‐

economic, environment and social ‐ also

improved. A highlight was CIMIC’s

recognition as the construction and

engineering global leader in four

categories including: 1) Risk & Crisis

Management; 2) Building Materials; 3)

Environmental Policy/Management

System; and 4) Resource Conservation

and Resource Efficiency. Only 13 other

engineering and construction companies

globally were selected for inclusion in the

DJSI which reflects well on the CIMIC

Group.

CIMIC’s sustainability performance was

also recognised by inclusion in

RobecoSAM’s 2016 “The Sustainability

Yearbook”. The Yearbook also

acknowledged CIMIC as the construction

& engineering ‘Industry Mover’ for

achieving the largest proportional

improvement in its sustainability

performance within the top 15% of the

industry compared to the previous year.

We were also recognised by CDP

(formerly the ‘Carbon Disclosure Project’)

which works with institutional investors

to drive sustainable economies. For our

Climate Change submission, we received

99 out of 100 for Disclosure and a ‘C’

rating for our performance, in line with

other respondents. We received a ‘B’

rating for our Water submission.

This year’s Sustainability Report and the

other changes we have made

demonstrate our increased focus on

sustainability. We are committed to

operating sustainably and reporting on

our performance and progress.

We recognise that we are on a journey to

further integrate environmental, social,

governance and economic factors in to

our decision making. I trust that our

stakeholders will appreciate the enhanced

disclosure of our sustainability practices

and we look forward to receiving

feedback on how we can continue to

improve our performance and disclosure

in the future.

Marcelino Fernández Verdes Executive Chairman and Chief Executive

Officer

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Sustainability at the CIMIC Group

The Group applies a holistic

approach to sustainability,

integrating the concept into our

core business strategy, so we can

better identify new growth

opportunities while reducing our

exposure to legal, resource, and

socio‐political risk.

Sustainability is not a new concept

for CIMIC and the Group has long

embraced a sustainable approach to

doing business. What is new is our

enhanced focus, a new strategy, the

dedication of resources to manage

the function and our commitment,

both internally and externally, to

operating sustainably.

The transformation of the Group,

establishing dedicated, streamlined

and efficient market focused

businesses, has led to Group‐wide

policies to ensure consistent

governance and delivery. Further

embracing sustainability also helps

us sharpen our strategies and

strengthens our ability to execute –

leading to improvements in the

value chain and value creation for all

of our stakeholders.

Governance and sustainability

Our commitment to sustainability

starts at the Board level. The Board

is responsible to shareholders for the

long‐term performance of the CIMIC

Group and for overseeing the

implementation of appropriate

corporate governance with respect

to the Group’s affairs. The Board

delegates authority to our standing

committees and, in the case of

sustainability, this has been the

Ethics and Compliance Committee.

This year, reflecting the importance

of sustainability to the Group, that

Committee was renamed the Ethics,

Compliance and Sustainability

Committee (ECSC).

The ECSC has adopted a formal,

Board‐approved Charter that details

its role, authority, responsibilities,

membership and operations. Our

Committee Charters are reviewed

annually and are available on our

website.

The ECSC regularly reports to the

Board on matters relevant to the

Committee’s role and

responsibilities. The ECSC’s

members, and details on how often

it meets, are set out in CIMIC’s 2015

Annual Report.

The Executive Chairman and CEO

further delegates authority within

the business to our senior executives

as judged appropriate to achieve

CIMIC’s sustainability objectives.

These delegations are outlined in our

annual business plan, in senior

executive position descriptions and

letters of appointment, and through

formal performance reviews

conducted by the Executive

Chairman and CEO, and other

executives. We are seeking to

develop a culture where our

employees understand the

important role of sustainability and

integrate these factors into business

decisions to meet the needs of

clients.

In 2015, an Executive General

Manager, Sustainability (EGM,

Sustainability) was appointed,

reporting to the Executive Chairman

and CEO, to lead the development

and execution of a broad‐based,

Group‐wide strategic sustainability

initiative integrating and reporting

on sustainability throughout the

company, and to ensure that the

Group’s sustainability effort

enhances business performance and

supports the long‐term interests of

the Group. The EGM, Sustainability

regularly reports to the ECSC on

consultation with stakeholders

relating to economic, environment,

social and governance issues.

In 2014, we reviewed our corporate

governance and reporting practices

to enable us to early‐adopt the third

edition of the ASX Corporate

Governance Principles and

Recommendations. Our corporate

governance statement has been

made available on our website again

this year, in the section titled Board

and Governance. We have also made

this Sustainability Report available

online so as to avoid the printing

costs and the impact on the

environment of publishing a hard‐

copy report.

Assessing our HSEC/ESG

performance

CIMIC has an oversight role in the

management of health, safety,

environmental and community

(HSEC) matters for each of the

Operating Companies who manage

the operational aspects of these

matters. In assessing the Group’s

performance, and ensuring

compliance with all legal obligations

and regulatory expectation, the

Operating Companies regularly

report to the ECSC on ethical

matters, and environmental and

safety performance and issues. The

processes for the reporting of any

ethical matters or transgression

which may breach the Group’s Code

of Conduct are set out in more detail

on page 24.

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Our Material issues Defining material issues

Principle 7.4 of the 3rd edition of the ASX

Corporate Governance Principles and

Recommendations requires that 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.” A ‘material exposure’

in this context means a real possibility that

the risk in question could substantively

impact the listed entity’s ability to create or

preserve value for security holders over the

short, medium or long term.3

The materiality assessment process

In November 2015, CIMIC undertook a

materiality assessment to seek to identify

and confirm the important potential

economic, environmental, social and

governance issues that could affect the

business, both positively and negatively.

The process initially involved a series of

interviews with senior management from

across the Group and ESG analysts at

broking firms, an assessment of media

reports about the Group, reviews of client

sustainability reports, and reference to

recent sustainability reporting submissions

such as DJSI and CDP.

The topics and themes identified by these

sources were then used to develop a

shortlist of 32 potential material issues

which formed the basis of a web‐facilitated

survey, as per the Material Issues below.

The colour coding of these potential

materials issues shows were they are

addressed in this report.

● Proving safe communities and workplaces (pages 16‐21)

● Acting with integrity (pages 22‐27) ● Developing a performance culture

(pages 28‐37) ● Innovating to deliver projects (pages

38‐47) ● Using resources efficiently (pages 48‐

59)

Our Materials Issues

4 and our Sustainability commitments

3 ASX Corporate Governance Principles and Recommendations, 3rd Edition, 27 March 2014.

4 Diagram shows the Group’s 32 Material Issues categorised by our Sustainability Commitment and ranked by Importance and Impact, the top 22 of which are plotted on the following page.

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Surveying stakeholders

The survey was then sent to a selection

of stakeholders identified through our

strategic plans and in consultation with

our Operating Companies. These

included:

• Senior managers from across the

Group and employees with

operational responsibility for

sustainability related functions;

• ESG and equity analysts providing

broking coverage of the Group; and

• Managers representing the Group’s

major equity investors and

financiers.

A desktop review of our major client’s

sustainability issues was also

undertaken and cross‐checked against

the results.

Certain stakeholders, including clients

and suppliers, were identified but not

surveyed. It is our intention to extend

our engagement to other stakeholders

as we progress on the sustainability

journey.

Respondents were asked to prioritise

the 32 identified potential material

issues which were structured using GRI

Guidelines (Economic, Governance,

Environmental and Social ‐ labour

practices, human rights, society,

product responsibility) to rank, on a 5

point scale, their:

• importance in their assessment of,

and decision regarding, the CIMIC

Group; and

• current or potential impact in

terms of revenue, costs,

investments or risk, on the medium

and long‐term success of the CIMIC

Group.

142 responses were received from

those surveyed. The results of this

survey are summarised in the chart

below with the top 22 responses (of

the 32 identified material issues)

plotted based on their ratings.

The remaining 10 material issues are

still addressed in this report because of

their importance to rating bodies such

as DJSI or they are key topics identified

in the GRI reporting framework, and

they are still relevant to some

stakeholders.

An explanation of our approach to

dealing with each individual Material

Issue is set out in more detail in this

Sustainability Report under the colour‐

coded chapter headings of our

sustainability commitments.

Importance and impact map

Bribery and corruptionPublic safety

Ensuring compliance in overseas markets

Managing risk

Workplace safety

Child labour

Funding future infrastructure

Overseas compliance

Employee attraction & retention

Regulatory certainty

Workforce availabilityEncouraging competition

Labour standards

Culture of innovation

Protect local communities

Decline in coal demand

Transparent disclosureGlobalization and

competition

Energy efficiency

Aligning remuneration

Tax policy

Protecting biodiversity

Importan

ce

Impact HighLow

Low

High

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Integrating material issues with risk

Management

Effective risk management is an

integral element of good management

practice and is essential to good

corporate governance. As a listed

company on the Australian Securities

Exchange, risk management is

fundamental to our ongoing

compliance with all applicable legal

and regulatory compliance

requirements and obligations,

including those arising from the

Corporations Act 2011 (Cth) and the

ASX Corporate Governance Principles

and Recommendations.

To be most effective, risk management

must be embedded into the Group’s

operating philosophy, practices,

business processes and culture, rather

than be viewed or practiced as a

separate activity. CIMIC defines risk

management as the identification,

assessment and treatment of risks that

have the potential to materially

impact: the Group’s operations,

employees, and reputation; the

environment and communities in

which the Group works; and the

financial prospects of the Group. Our

risk management framework is tailored

to our business, embedded largely

within existing processes and aligned

to the Group’s objectives, both short

and longer term.

The Group’s risk framework

The CIMIC Group Risk Framework is

based on International Standard ISO

31000:2009 ‘Risk management –

Principles and guidelines’, and forms

the basis for CIMIC’s risk management

activities. Our approach to risk is

approved by the Board through the

CIMIC Group Risk Management Policy

and is supported by associated policies

and minimum requirements, with

which our Operating Companies are

required to comply.

Given the diversity of the Group’s

operations and the breadth of its

geographies and markets of

operations, a wide range of risk factors

have the potential to affect the

achievement of business objectives.

Key risks, including those arising from

economic, environmental, social and

governance issues, together with the

Group’s approach to managing those

risks, are set out in CIMIC’s 2015

Annual Report.

Application of Group work

procurement standards and approval

processes maximises the likelihood of

securing quality work with

commensurate returns for the risks

taken. Pre‐contracts assurance teams

manage and assure the work

procurement process. Our EIC

Activities business undertakes early

reviews of prospects to identify risks

and mitigations, and provides

engineering solutions to complex

technical problems. In doing so, EIC

Activities enhances our ability to

mitigate and manage risk.

Significant resources are devoted to

the avoidance, management and

resolution of work delivery challenges.

Operating Companies provide project

teams with guidance and support to

achieve project and business

objectives. Project oversight is

maintained by regular performance

reviews that involve Operating

Company and CIMIC Group

management, commensurate with the

scale, complexity and status of the

project.

The Material Issues identified in the

stakeholder consultation process are

communicated to the Group’s senior

management team, as well as the

Strategy and Risk teams for

incorporation into the development of

strategic and business plans.

Areas of material business risk for the

Group are highlighted in the Business

Plan that is presented to the Board by

the CEO each year. The Board then

reviews and approves the parameters

within which significant business risks

that have been identified will be

managed before it adopts the Business

Plan.

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Graphic to be inserted across page

Our approach

Within the Group’s Principles framework, safety

underpins everything that we do. It is fundamental to

our business: to our integrity and respecting our

people; to being accountable and responsible for our

performance, and the welfare of our workmates; to

innovating, so that we continually improve and learn

from our mistakes; and to delivery, because if we

don’t deliver projects safety, we jeopardise our

reputation, our financial performance and our ability

to secure repeat work.

Actions during 2015 ‐ Integrated best elements of CPB Contractors’ and Thiess’ safety programs for their respective businesses

‐ Commenced development of global health and safety systems for mining

‐ Developed Thiess Safety Essentials and implemented globally

Measures in place ‐ All systems compliant with Australian and international standards

‐ Comprehensive audit program conducted within Mining with HSEQT systems audited at all sites

Performance ‐ Improvement in safety performance metrics across all Operating Companies

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Our focus areas and performance

Creating safer and healthier workplaces

The environments that our people work in are inherently

hazardous. These risks, such as working with moving

vehicles and equipment, lifting of heavy construction

materials, and working at heights, makes safety a challenge.

Our people, and their families, should rightly expect that

their workmates, their sons and daughters, their fathers and

mothers, their husbands and wives, will return home safely

at the end of a day’s work. We believe that committed

leadership and an uncompromising emphasis on hazard

identification, risk assessment and risk management

provides the cornerstone for health and safety. This is

expressed and encouraged through our Policies, our health

and safety expectations, and the Group’s health and safety

culture.

Health and safety hazards are identified and the risks

eliminated as a first priority and, where not possible,

minimised so far as is reasonably practicable via the highest

order of control/s possible. The risks and hazards can vary

between construction and mining. In construction, the

critical risk areas we are focusing on to create safer and

healthier workplaces are:

• working at heights and falling objects;

• lifting operations;

• working with utilities and live services;

• mobile plant interaction and live traffic; and

• working with temporary structures.

In mining, the critical risk areas for potential injuries are:

• falls from height;

• tyres;

• traffic management;

• explosives;

• isolation of energy; and

• lifting operations.

Each of our Operating Companies is required to: develop

and implement management systems and practices to

manage safe, sustainable and efficient operations, reflecting

their unique operating environments. Any change with

health and safety implications is identified and the health

and safety risks managed through an effective change

management process.

The next phase of creating workplaces free from fatalities

and serious injuries is to maintain the focus on managing

critical risks and establish a culture of ownership of safety.

We are undertaking a cultural change transformation to

drive greater ownership of safety accountability at all levels.

Significant inroads for this journey were made in 2015.

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Fatalities and Class 1 injuries

The Group’s occupational health and safety performance

improved during 2015 despite a fatality in Thiess’ mining

operations.

The Group is deeply saddened to report that, in February

2015, in an incident at the Dawson South coal mine in

Queensland, an experienced fitter died and a 22‐year‐old

apprentice was seriously injured while they were fitting an

assembled tyre and rim to a water cart.

Thiess has undertaken an investigation of the incident, one

element of which focussed on a detailed engineering and

metallurgical analysis of the rim components which are

widely used across the industry. Learnings from this review

were communicated across Thiess’ Australian and

international business units, and the wider Group. To date,

three global actions have been raised externally targeting

the effective application of existing systems and processes.

An investigation by the Department of Mines is ongoing.

We are also saddened that, in March 2015, in Leighton Asia ,

the appointed banksman directing the operation of a crane,

sustained serious injuries to both legs as a result of being

struck and run over by the rear of a forklift which was

reversing down a ramp at the time of the incident. The

banksman subsequently required the surgical amputation of

the left leg above the knee as a result of the injuries

sustained.

All other injuries

We record the number of lost time injuries (LTI’s)5 which are

an industry recognised metric. The Group measures Lost

Time Injury Frequency Rate (LTIFR)6 as a lag indicator of

injury prevention performance.

5 An occurrence that resulted in a fatality, permanent disability or time lost from work of one day/shift or more. While the criteria for LTIs vary across industries, essentially any injury that results in the injured employee losing one shift is generally regarded as an LTI. 6 Accidents per million hours worked (MhW).

7

On this measure, our performance in CPB Contractors was

ahead of target while Leighton Asia was behind target. At

Thiess, the LTIFR continues on its downward trend, dropping

to 0.4 in December 2015 from 0.7, 12 months earlier.

At CIMIC, our preferred measure of injuries is Total

Recordable Injuries (TRI)8. We use the Total Recordable

Injury Frequency Rate (TRIFR) as the key lag metric. TRIFR,

which captures LTIs and medically treated injuries, provides

a different lens on workplace injury. With the separate

category of LTIs removed, all TRIs are treated equally in the

first instance, with severity assessed on the injury itself and

the circumstances surrounding the incident.

Total Recordable Injury Frequency Rate 9 (TRIFR)

2015

CPB Contractors TRIs/MhW 4.0

Leighton Asia TRIs/MhW 3.7

Thiess TRIs/MhW 2.0

Other TRIs/MhW 0

Group TRIs/MhW 3.2

The TRIFR has been trending down over the 2015 year

across CPB Contractors and Thiess, and is below our target

in both companies. At Leighton Asia, the TRIFR was slightly

above target at the year end, the first time in more than 2

years that the target had not been achieved. The Group

TRIFR has reduced from 3.8 in 2014 to 3.2 in 2015.

7 CPB Contractors (CPB), Thiess and Leighton Asia (LAL)

8 All fatalities, lost time injuries, cases restricted for work, cases of substitute work due to injury, and medical treatment cases by medical professionals (doctors, nurses, etc.). It does not include any first aid injury. 9 TRIFR ‐ includes all fatalities, lost time injuries, cases restricted for work, cases of substitute work due to injury, and medical treatment cases by medical professionals per million hours worked.

0

1

2

CPB Thiess LAL

Lost time injury freqency rate (LTIFR) (accidents/MhW)

LTIFR

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Lead indicators

The Group uses lead indicators as a measure of safety

performance to identify and help prioritise where effort is

needed in order to reduce the potential for injury to people.

Lead indicators used in this way become important tools for

risk avoidance and minimisation across any business.

The Group tracks Potential Class 1 incidents which comprise

fatalities and permanent disabling injuries.

Potential Class 1 incidents 2015

CPB Contractors # 93

Leighton Asia # 55

Thiess # 44

Other # 0

Total # 192

By focusing on identifying the causes of Potential Class 1

incidents we are able to address key safety risks and reduce

injuries in the future.

An important lead indicator for Leighton Asia is the

Significant Near‐Miss (SNM)10. The Significant Near Miss

Reporting Frequency Rate (SNMFR) is measured per million

man hours worked. Leighton Asia’s SMNFR was 0.71 in 2015.

The challenge in improving the SNMFR is largely cultural as

the reporting of near misses is still seen as a negative by

many local supervisors and workforces in the regions in

which Leighton Asia operates. During 2015, Leighton Asia

relaunched its ‘Near Miss’ reporting campaign along with

including Near Miss reporting as part of ongoing Leighton

Asia Project Safety Reviews.

The Group strives to improve safety outcomes by also

focusing on and tracking other leading safety indicators

including:

• Compliance – measuring the percentage close out of

incident alerts;

• Leadership – measuring the percentage of management

safety walks conducted versus the planned schedule;

• Governance – measuring the percentage of health and

safety system compliance audits conducted versus

schedule; and

• Training ‐ percentage of staff completing safety

leadership training.

These indicators provide an insight into how our Operating

Companies are managing the safety systems that prevent

injuries at work. For example, scheduled audits confirm that

safety processes are being followed. Similarly, timely

10 An unplanned event at a workplace, which had the potential to

result in serious injury, illness or damage but may not have resulted in a Class 1 incident at the time of the event. A SNM may have the potential to result in an LTI, restricted work injury (RWI) or medical treatment injury (MTI).

management of corrective actions confirm that our

Operating Companies are taking appropriate action to

control workplace safety risk and prevent injuries.

Managing safety in construction

At CPB Contractors, a Safety Essentials program has been

designed to give teams the highest level of confidence that

they are identifying, eliminating and/or controlling critical

risks in accordance with the requirements specified in each

of the divisional Safety Essentials modules.

The Safety Essentials program was developed from lessons

people have learned on the job, and has now been rolled

out across all sites. Part of the day‐to‐day working culture,

the Safety Essentials program continues to be embedded

across CPB Contractors’ business. We are integrating the

best elements of the former Thiess construction business

into our new, focused construction business, CPB

Contractors.

Leighton Asia continues to utilise their successful ‘Strive for

LIFE’ safety program which was born out of a vision to effect

genuine positive change and a cultural shift towards the

elimination of Class 1 incidents. LIFE stands for ‘Leighton

Incident Free Environment’, the aspiration of this

construction business.

Started in 2009 in Hong Kong and Macau, the program was

subsequently rolled out across Asia. It includes a site safety

inspection process called the Strive for LIFE safety walk. A

Safety Leadership Program has been developed to educate

managers and supervisors, and to put the workforce through

Health, Safety and Environment Induction Programs.

In 2010, Leighton Asia opened a state‐of‐the‐art Strive for

LIFE Knowledge and Skills Training Centre in Hong Kong,

where workers undergo classroom instruction and practical

training on the safety standards. By embracing safety as an

underpinning Principle, Leighton Asia actively encourages a

safety culture on site.

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Managing safety in mining

Thiess’ award‐winning ‘lag‐to‐lead’ safety transformation

program was further integrated into the business

throughout 2015. The program has included:

• implementing business‐specific lead indicators;

• increasing the functionality and accessibility of the

Synergy reporting system;

• implementing the collaborative ALFA (Ask, Listen, Find

out, Act) safety initiative; and

• delivering the Thiess executive mentoring program.

In addition to the focus on lead initiatives, in 2015, Thiess

has developed and implemented Thiess Safety Essentials

(TSEs) to address the six most critical risks in the business.

Each TSE suite comprises a Critical Controls document, a

mandatory Core Procedure, and a range of supporting

documentation.

Ask, Listen, Find out, Act at Thiess

After being introduced in 2014, the innovative ALFA

method was rolled out across Thiess mines in 2015. The

process involves a storytelling component that allows

Thiess employees to share their experiences regarding

what work can be like and the difficulties they face on a

day‐to‐day basis.

When the process was introduced at the Curragh North

coal project, 172 people shared more than 300 examples

from their personal work experiences. Once their feedback

was analysed, the project initiated a wide range of local

solutions to improve delivery.

Health and wellbeing of employees

We recognise that our responsibility to our people extends

beyond making our workplaces safe. All of our Operating

Companies are seeking to encourage the broader health and

wellbeing of employees.

We are aware that certain members of our workforce, such

as ‘fly‐in fly‐out’ workers, may be more vulnerable to a

heightened risk of mental health issues. Work has

commenced on the development of a broad health and

wellbeing program at Thiess and CPB Contractors, with a

particular focus on mental health. The program is being

developed in consultation with CIMIC, with initial meetings

held with the CEO from Mates in Construction and other

mental health support organisations such as Beyond Blue.

Public safety

The Group continues to take every precaution to protect the

health and safety of its clients and the public. A critical

consideration, particularly when constructing infrastructure

projects, is ensuring the safety of the general public. We are

constantly assessing the workplace for health and safety

risks that can place our people or the public in danger. Once

the risks are identified, we work to find innovative ways to

eliminate or control those risks.

Tailored safety measures may include speed restrictions

when working with live traffic and the use of large crash

barriers to isolate pedestrians from moving vehicles.

Traffic management at the Gateway WA project

Safe and efficient management of the traffic network is a

key priority of the Gateway WA project. The CPB

Contractors led alliance manages the traffic network with

safety as the number one priority while aiming to minimise

disruption to traffic during construction.

Through the use of technology, including the real‐time

traffic map and variable message signs (VMS), traffic is

monitored so that the project network can operate as

efficiently as possible. Other measures utilised throughout

the project road network include variable speed signs, auto

flaggers, barrier guards and truck mounted attenuators.

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Emergency plans and resources are prepared and

maintained, which allow for effective responses to health

and safety emergencies and crises on projects. The Group

maintains a Group Crisis Management Plan which

coordinates any Group crisis response, and ensures

appropriate Group capabilities are in place to respond if

required.

Passenger safety on the Epping to Thornleigh Third Track

An alliance including CPB Contractors is constructing 6km

of new and upgraded track within the existing rail corridor

between the Epping and Thornleigh stations in Western

Sydney in a contract worth $280 million.

Due to limited access to the track, construction has to be

achieved in a live rail corridor. This challenge includes

significant earthworks (widening the sandstone and shale

cuttings up to 14m in height), the need to maintain access

to all stations and adjoining roads, and the need to

minimise environmental and community impacts.

To enable construction while the track is live and

operational, a 3m rock fall safety barrier was installed

adjacent to the track between Cheltenham and Pennant

Hills in specific high risk areas when CPB Contractors had

access to undertake work.

To enable the station works to be undertaken while

minimising any impact on customers and commuters, the

following measures were carried out:

• careful planning with the Station Construction Liaison

Group to consider passenger safety and awareness;

• an advanced public awareness strategy through clear,

concise signage at stations and the use of leaflet

distribution notice boards;

• hoarding‐off of worksites and access routes wherever

possible to create defined boundaries; and

• temporary relocation of covered waiting rooms where

possible.

Outlook and Future Plans

We are committed to our people returning home safely at

the end of a day’s work. In 2016, we plan to:

• maintain our commitment to, and measurement of,

Leadership Walks to provide senior management focus

on safety inspections;

• addressing mental health within our workforce,

particularly amongst ‘fly‐in‐fly‐out’ workers;

• roll out a ‘Working at Heights’ campaign in CPB

Contractors;

• further develop our ‘Significant Near‐Miss’ reporting in

Leighton Asia;

• issue Class One Risk Management Processes and

Standards in Leighton Asia for Temporary Works, Fitness

for Work, Tunneling and Excavation, Confined Spaces,

and Tools and Equipment, and train all project staff on

their contents and requirements;

• continue to embed the application of the current Thiess

Safety Essentials and commence development of the

seventh Essential covering Ground Stability; and

• complete the development of the Thiess Global Health &

Safety management system.

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Our approach

At the CIMIC Group, integrity is one of our

fundamental principles. People often define integrity

as doing the right thing even when no one else is

around. At CIMIC, we also believe it means being

respectful and honest with ourselves, our colleagues,

our clients, our suppliers, our shareholders and our

other stakeholders.

Actions during 2015 ‐ Refreshed and re‐issued Code of Conduct ‐ Education program rolled out including town hall meetings by Executive Chairman and CEO

Measures in place ‐ Code of Conduct available to all employees ‐ Group‐wide independent Ethics Line available for reporting

Performance ‐ Employees across the Group undertook formal training in the Code of Conduct

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Avoiding bribery and corruption

At CIMIC, our approach to acting with integrity is explicitly

set out in our Code of Conduct (the Code) which is available

on our website. The Code sets the foundation for everyone

in the Company and outlines the standards of behaviour we

expect regardless of Operating Company, role or country.

The Code is built on our Principles of Integrity,

Accountability, Innovation and Delivery, and within our

Principles framework – Safety – which underpins everything

we do. It is fundamental to our business.

In 2015, the Code was refreshed and relaunched. Among

other things, the Code sets out the Group’s commitment to:

• the health and safety of our workforce and those under

our care;

• rejection of child and forced labour;

• providing a supportive and positive working

environment;

• zero tolerance for all forms of bribery and corruption

including facilitation payments;

• dealing with gifts and hospitality;

• avoiding conflicts of interest and insider trading;

• having effective business relationships with

subcontractors and other third parties;

• the fair and lawful treatment of personal information;

• respecting the environment;

• building relationships and working collaboratively with

communities;

• committing to the principles of free and fair competition,

and complying with all applicable national and

international laws;

• using the assets of the Group appropriately and

complying with all applicable rules, laws and regulations

governing business reporting; and

• meeting all continuous disclosure obligations.

The Code is supported by Procedures, training modules and,

a Group‐wide Ethics Line (to provide an independent and

safe avenue for reporting).

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Communication and training

The refreshed Code was communicated to staff via emails,

intranet announcements and video messages from the

Executive Chairman and CEO. All employees are provided with

a copy of the Code and supporting documents upon induction

to the Group. The Code is accessible in each office and project

site, and is available on the CIMIC, and each Operating

Company’s intranet. Any updates to the Code are promptly

communicated to all employees.

The Group monitors the volume and type of disclosures

received through the CIMIC Group Ethics Line.

Any complaints that are received are dealt with as per the

Management, Monitoring and Reporting Procedure which

details the related processes for:

• reporting a concern about a possible, potential breach of

the Code;

• protecting any employee (‘Whistleblower’) who reports a

genuinely held concern; and

• how any concerns reported will be investigated.

The Procedure also outlines the roles and responsibilities of

leadership and employee groups, and the training requirements

that are necessary.

The Board monitors and reviews the ethical standards and

practices generally within the Group, compliance with the

Code, and compliance with applicable legal and regulatory

requirements. The ECSC receives quarterly reporting at a high

level on the nature of all calls to the Ethics Line. Any serious

matters are also reported to the ECSC.

The Group has a number of roles, including senior managers,

where exposure to external parties seeking to breach our Code

is increased. These roles11 received additional, more focused

training in the Code during the year which will be repeated bi‐

annually. This training is delivered by Counsel of each Operating

Company, with the support of senior managers, reflecting the

importance that we place on this training.

All other salaried employees are to complete the bi‐annual

online training module. Where online training is not available,

alternative delivery is provided. In addition, all employees were

required to complete the Code of Conduct ‘acknowledgment’

online when the refreshed Code was released.

11 May include the following roles: Senior corporate management;

Senior project management; Finance and Administration; Procurement and contract administration / management; Business development; Government relations; and Plant Managers.

12

CIMIC is continuing to cooperate with the relevant authorities

regarding an alleged breach of the Code by employees within

the Leighton International business that, if substantiated, may

have contravened Australian laws. This matter was self‐

reported in 2012 and CIMIC does not know when the

investigations will be concluded.

Encouraging fair and open competition

As per the Code, the Group is committed to the principles of

free and fair competition. The Group will always compete

vigorously but fairly, and comply with all applicable competition

laws. The Group will also comply with all applicable national

and international laws, regulations and restrictions relating to

the movement of materials and services.

Senior salaried employees are required to complete SALT (self‐

administered legal training) Competition and Consumer

Protection training every two years to ensure the knowledge of

employees is current. In 2015, the module was refreshed and

93 employees completed the training in areas including:

Introducing Competition and Consumer Law; Advertising; Anti‐

Competitive Behaviour; and Product liability.

In keeping with the Code, the Group did not make any

donations, either in kind or directly, to political organisations,

political parties, politicians, or trade unions in 2015.

No legal actions were commenced or are outstanding with

respect to anti‐competitive, anti‐trust or monopoly behaviour.

There were no instances of significant fines or sanctions for

non‐compliance with Australian and international laws and

regulations during the year.

The Group does not sell banned or disputed products.

12 EIC Activities (EIC) shows number of employees who undertook an

Acknowledgment course. For Leighton Asia (LAL), the figure reflects Senior Manger training undertaken in May 2014. 3,405 (95%) of Leighton Asia’s people undertook Acknowledgment training in 2015.

0

1,000

2,000

3,000

CIMIC CPB Thiess LAL EIC Pacific

Formal Code of Conduct training in 2015 (#)

No. of people trained

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Transparent disclosure of information

The CIMIC Group is committed to providing information to

shareholders and to the market in a manner which is consistent

with the meaning and intention of the ASX Listing Rules. The

Group’s Market Disclosure and Communications Framework is

published on our website.

CIMIC has an established set of principles, policies and

procedures to ensure the continuous disclosure of information

concerning CIMIC that a reasonable person would expect to

have a material effect on the price or value of CIMIC’s

securities. This includes the establishment of a Continuous

Disclosure Committee to oversee the day‐to‐day disclosure

obligations to the company and quantitative guidance regarding

matters which should be disclosed such as earnings guidance,

changes in net assets, and new contract awards or variances.

In 2015, the views of the investment community were rated by

fund managers and brokers in the 9th East Coles Australian

Corporate Performance Report. When compared to the ASX

Top 100 companies, CIMIC was rated as number two out of 10

companies in the Industrials sector for ‘Quality of Website’ and

‘Quality of Investor Relations’.

In the ASX Top 100, East Coles ranked CIMIC 20th for ‘Quality of

Website’ and 29th for ‘Quality of Investor Relations’ which is

above the Group’s market capitalisation ranking of 38.13

During 2015, no incidents of non‐compliance with regulations

or voluntary codes were received with respect to the Group’s

marketing communications.

Privacy

The Group has a Privacy Policy which commits the company to:

safeguarding all personal information provided to CIMIC;

ensuring that personal information remains confidential and

secure; and taking all reasonable steps to ensure that personal

privacy is respected. CIMIC handles personal information in

Australia, including that of its Australian clients and business

partners, in accordance with the Australian Privacy Act 1988

(Cth) and the Australian Privacy Principles. Outside Australia,

CIMIC handles personal information in accordance with the

applicable law.

No substantiated complaints were received in 2015 with

respect to breaches of client privacy or losses of client data.

13 As of close of business Monday 8 February 2016, The Australian 9

February 2016.

Tax policy

The Group is committed to managing all taxes in a sustainable

manner with regard to the commercial and social imperatives

of our business and stakeholders.

We have a long established Tax Corporate Governance

framework which has been approved by the Group Audit and

Risk Committee outlining that we should manage our taxes in a

compliance with tax laws and our Principles. We also strive to

maintain a proactive and positive relationship with all Revenue

Authorities through regular, open and transparent dialogue.

We recognise that our sustainable tax contributions are

important to public finances and the social programs they are

required to fund.

The Group will not undertake purely tax driven transactions.

Specifically, no innovative or aggressive tax planning

transactions will be undertaken and all transactions have a

legitimate business purpose.

In 2015, the Group’s effective tax rate was 30%, the same as

the Australian corporate tax rate of 30%. Our performance over

the last four years is set out below and shows that in 2013,

2014 and 2015 our effective tax rate was the same or more

than the Australian corporate tax rate.

14

The effective tax rate is impacted by:

• the blend of different tax rates on profits and losses from

the various jurisdictions in which the Group operates15;

• entitlements under the Australian Government’s Research

and Development tax incentive15; and

• taxes on the gains and losses on divestments.

The overall effective tax rate on the gains on the divestments of

JHG and Services in 2014 was 38% and on the sale of the

Group’s Telecommunications Assets in 2013 was 47%. These

differences arose as a result of the treatment of the various

components of the divestment for tax law purposes and

14 Based on comparable reported results in the 2015 Annual Report.

15 The amounts of which are disclosed in Note 6: Income Tax (Expense) /

Benefit in the Financial Report within CIMIC’s Annual Reports.

0

10

20

30

40

2012 2013 2014 2015

Effective tax rate v Aust'n corporate tax rate (%)

Actual rate Corporate tax rate

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differences in the tax cost base of assets and liabilities

compared to their accounting values.

CIMIC does not receive significant financial aid from

governments, apart from standard tax relief measures that are

available to businesses in the jurisdictions where we operate

such as Research and Development tax incentives or

accelerated depreciation allowances.

Local and regional regulatory uncertainty

The Group has a broad sphere of operations, working in

approximately 20 countries throughout the Asia Pacific, the

Middle East, Sub‐Saharan Africa and South America. Across and

even within these countries there are different cultures,

customs, regulations and laws. We are mindful of the

differences that exist and are sensitive to them. At the same

time we apply our Code and Policies, and our Principles –

Integrity, Accountability, Innovation and Delivery – wherever

we operate and the Code applies, even when it is more

stringent than local laws. These Principles, underpinned by

Safety, unite the many countries and cultures we operate in

and distinguish us from our competitors.

Regular and rigorous reviews of the Group’s current and

potential geographies, industries, activities and competitors are

undertaken. Oversight of key risks is maintained by the Board

Audit and Risk Committee, supported by a quarterly Risk Report

that aggregates and highlights risks to the Group achieving its

objectives. Areas of material business risk for the Group are

highlighted in the Business Plan that is presented to the Board

by the CEO each year.

Our people continue to participate in local business advisory

panels, and industry and sustainable development committees

to identify and address local issues that may impact on our

strategy or our operations.

Ensuring compliance overseas

The Group is committed to the highest standard of ethical

conduct, and statutory and regulatory compliance wherever we

operate. This is supported by a comprehensive range of Group

level policies and standards, including our Code of Business

Conduct. CIMIC promotes clear governance through the

empowerment of individuals with delegated authority,

appropriate segregation of duties, and clear accountability and

oversight for risks.

In international markets, policies, standards and other

governance documents are translated into the languages of the

countries that we operate in. In our overseas operation, our

Operating Companies translated the Code into local languages,

and training is conducted across the business in multiple

languages.

Our Ethics Line is staffed by highly trained, independent

consultants who are able to also access a comprehensive

interpreter service covering all the regions and languages

where we operate.

Fulfilling the rights of local communities when

delivering projects for clients

We recognise that, wherever we operate, we are guests of the

local community and we endeavour to minimise the impact of

our work on local residents and their environment and to

maximise opportunities for local communities to participate in

the operation. We are also committed to supporting our clients

to ensure that all land access agreements are met.

We encourage communication and consultation with local

communities, and operate with a strong focus on having a

positive community impact. By prioritising the employment of

local residents at our projects and providing training, we aim to

directly benefit local workers, their families and the community.

Consultation and engagement

We work with relevant community stakeholders, especially

those most affected by our operations, and seek to identify and

address their concerns and expectations. We also incorporate a

Stakeholder Engagement Plan in the project planning process,

which includes the recording and tracking of the management

of community concerns. Each Operating Company has its own

community engagement policy and framework.

Local participation

Locally‐sourced goods and services support local employment,

boost regional economic growth and create upskilling

opportunities. In some cases, purchasing locally‐made products

and services can minimise transport costs and reduce fuel

consumption and the associated greenhouse gas emissions.

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In 2015, our Operating Companies created thousands of jobs

through the engagement of local suppliers, making a substantial

contribution to the national, regional and local economies in

which we operate. We seek to attract and retain a workforce

that reflects the diversity of the clients and the broader

communities in which we operate.

In Australia, Thiess’ mining business injected approximately

$1.75 billion into the economy and created more than 3,000

jobs. This included spending more than $100 million with

subcontractors and suppliers from surrounding towns near

their operations. In Indonesia, Thiess is creating more than

5,500 jobs across the Archipelago.

Supplier assessment for impacts on society Our Operating Companies aim to build sustainable supply

chains. For example, Thiess actively pursues sustainable

procurement by ensuring that consideration of energy, water,

pollution and ecology, economics, community, safety,

governance and waste are included in product and service

specifications, and contract terms and conditions. Sustainability

criteria are used in supplier evaluations and pre‐qualification

documentation.

Grievance mechanisms for impacts on society Increasingly our projects will ensure they engage with the

communities that they may impact. Projects are required to

have stakeholder engagement plans in place to manage this risk

which helps to smooth delivery and enhances our brand and

reputation.

Two way communications is vital to stakeholder engagement.

Projects use a variety of tools including town‐hall meetings, site

barbecues, house visits, tours, questionnaires, and regular news

and SMS updates. Complaints are dealt with at the project and

resolved locally where possible so as to minimise disruption to

the project.

Providing corporate community investment in local

communities

Our objectives are to deliver shared value for the community

and the CIMIC Group. For the community, our initiatives should

make a tangible, genuine and lasting improvement to the

quality of people’s lives.

For the CIMIC Group, the initiatives should deliver us more

opportunities through a strengthened social licence to operate,

support deeper employee engagement, and build stronger and

broader capabilities.

We seek to invest in strategic community initiatives by:

• partnering with organisations that have the necessary

financial, governance and management capabilities;

• creating initiatives that create opportunities for our people

to be involved, draw on our other capabilities and assets

including our networks and relationships, and align with our

business vision and values; and

• managing them as rigorously as we do any other business

initiative, with appropriate metrics and reporting on both

community and CIMIC Group benefits.

We partner with private clients and governments in building,

operating and maintaining social and economic infrastructure

for communities. By doing so and investing in communities, we

create shared value that continues long after our work is

finished.

The Group may support local community groups and charities

through sponsorships and donations that are legal, ethical and

further the interests of the Group, and have mutual benefit to

the community or broader society and the CIMIC Group.

In the financial year ended 31 December 2015, the Group gave

more than $0.75 million to the community through

partnerships, sponsorships, donations and workplace giving.

Our people are also encouraged to fundraise and volunteer to

help create sustainable communities.

Collaborating with industry not‐for‐profits to

generate shared value

The Group has built strong relationships with industry and not‐

for‐profit groups, including non‐governmental organisations, at

local, regional and national levels, as part of our commitment to

achieving sustainable outcomes for the Group, our industries

and the broader community.

We partner with and/or are members of groups such as the

Green Building Council of Australia, the Infrastructure

Sustainability Council of Australia, the Minerals Council of

Australia, the Australian Constructors Association, the Hong

Kong Construction Association, the Singapore Contractors

Association Ltd, the Masters Builders Association Malaysia and

the Indonesian Contractors Association.


We are committed to acting with integrity and doing the right

thing, regardless of where we operate. In 2016, we plan to

• continue to reinforce the Code through senior management

roadshows and presentations;

• maintain our focus on training for everyone; and

• continue to engage with our stakeholders to identify risk

and to minimize impacts on local communities.

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Our approach

The CIMIC Group is a serviced‐based organisation and

our success is dependent on the quality of the service

we deliver. Our people deliver those services and so

they are, without doubt, the key asset driving the

business. We are striving to develop a culture where

our employees understand the important role of

sustainability and integrate these factors into business

decisions to meet the needs of clients and other

stakeholders. By doings so we aim to be recognised as

an employer of choice which helps to attract, engage,

motivate and retain employees.

Actions during 2015 ‐ Re‐issued and communicated new Diversity and Inclusion Policy

‐ Developed new Diversity and Inclusion strategy to achieve key objectives

‐ Addressed gender pay gaps in fixed remuneration reviews and bonus awards

Measures in place ‐ Comprehensive skill mapping in place across all Operating Companies

‐ Rigorous procedures in place to apply appropriate labour standards

Performance ‐ CPB Contractors and Thiess ranked 5th and 10th respectively in LinkedIn’s ‘Australia's 30 Most InDemand Employers: 2015’

‐ CPB Contractors and Thiess both ranked as top 40 employers by students from across 41 Australian universities

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‐



Attracting, developing and retaining employees

We are a business that relies on the performance of our

people. Our approach to attracting, developing,

empowering, retaining and redeploying our people defines

the CIMIC Group as an employer of choice. Our aim is to

provide our people with a world of opportunities to grow

and succeed.

The Group is committed to:

• providing a supportive and positive working

environment where employees are treated fairly and

with respect; and

• developing and maintaining a diverse and inclusive

workforce.

To be successful and create value for shareholders, our

people must be motivated and encouraged to innovate. We

are seeking to further develop a performance‐driven culture

throughout the Group and to reward performance against

stated objectives through various incentive schemes.

Managing our employees effectively and rewarding their

performance against objectives results in stronger employee

engagement which, in turn, leads to:

• increased productivity; and

• the development of a Group‐wide culture of high

performance.

We are committed to attracting the best in the business so

that clients, project partners and our people gain the

advantage of having access to both seasoned experts and

promising young talent. Across the Group we offer

scholarships, internships and graduate employment

opportunities to help promising trainees develop the

necessary skills to excel.

To maintain our position as a leader in the industries where

we operate, we must ensure the knowledge and expertise of

our people grows. We are committed to retaining quality

people. We invest in their development and offer them

opportunities to practise and extend their professional

capabilities.

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Employment

As a service organisation, our success is dependent on the

quality of our service which is driven largely by the skills,

passion and expertise of our people. As at 31 December

2015, the Group directly employed 27,939 people, 7,610 in

Australia and 20,329 in the international operations. The

number of direct employees has declined due to the sale of

the JHG business and the disposal of 50% of Services (now

called ‘Ventia’) and the formation of a joint venture with

Apollo.

16

Based on a proportional share of our investments in HLG,

Devine Limited and Ventia, our total number of employees

is 43,433.

The average tenure of our people is 3 years reflecting the

commitment of our workforce. The Group’s management,

which includes key operational roles such as project

managers, foremen and site superintendents, enjoy a

substantially longer tenure which demonstrates our desire

to retain these important personnel.

The turnover rate of our employees varies across each

Operating Company and reflects the relatively short term

duration on many of the Group’s construction projects.

Typically, many trade related employees such as labourers

16 CPB Contractors (CPB), Leighton Asia (LAL), Leighton Properties

(LPPL), EIC Activities (EIC), Pacific Partnerships (Pacific)

are recruited for construction projects and then leave for

other opportunities when the project, or their contribution

to the project, is completed. This distorts turnover rates in

the construction industry and makes them incomparable to

many other industries.

The Group’s policy preference is to recruit internal

candidates and they must always be considered for roles,

prior to external recruitment. This includes employees who

are in redeployment. Employment of contractors, casual

employees or temporary employees for non‐project based

roles will only be considered in exceptional circumstances,

and where there is a clear business need.

Additionally, selection should be based on competency,

experience and qualifications, and assessed against bona

fide and defined job requirements. Employment processes

and decisions should be free from bias and discrimination.

LinkedIn recognition for Operating Companies

In 2015, CPB Contractors and Thiess were ranked 5th and

10th respectively in LinkedIn’s ‘Australia's 30 Most

InDemand Employers: 2015’.

Our Group companies were among the most sought‐after

employers in Australia based on billions of interactions

from LinkedIn's 7 million Australian members and this

result reflect their efforts to create attractive places to

work. They sit in esteemed company alongside multi‐

nationals such as RioTinto, Google, BHP Billiton, Microsoft

and Qantas.

CPB Contractors and Thiess were both ranked by Universum

as top 40 employers by students from across 41 Australian

universities studying Engineering and Natural Sciences. For

more information visit http://universumglobal.com/.

0

5,000

10,000

15,000

CIMIC CPB LAL Thiess EIC Pacific LPPL

Direct employees (#)

Employees

0

2

4

6

2012 2013 2014 2015

Tenure of employment (years)

Voluntary turnover rate

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Aligning remuneration to encourage

performance

The key remuneration principles that underpin CIMIC’s

approach to remuneration of employees enables the Group

to attract, retain and motivate personnel with the

experience and skills necessary to lead, manage and

operate the Group for the benefit of shareholders. We

remunerate fairly and responsibly in accordance with the

markets in which we operate, and we maintain rewards and

benefits that are highly competitive within our industry.

Our approach is premised on the philosophy that a fair

day’s work deserves a fair day’s pay. We foster a

performance‐driven culture throughout the Group and

reward performance against stated objectives through

various incentive schemes.

The Group’s approach to employee benefits is that full time

employees are remunerated in accordance with, or above,

the standards of the country in which they are being

employed. Benefits such as life insurance, health care,

disability and invalidity coverage and retirements provisions

vary from country to country and we comply with all

regulatory obligations to provide these benefits.

Regular and equitable performance reviews facilitate the

transparent discussion of employee achievement against

key performance indicators and expectations. By doing so

we improve employee attraction, retention and

engagement which ensures we have the skills to execute on

our strategy.

Superannuation in Australia is government‐mandated and

minimum provisions are compulsory for employees.

Employers are required by law to pay "superannuation

guarantee" contribution amounts to a designated

superannuation fund for their employees at 9.5% of their

wages and salaries. Defined contribution superannuation

plans exist to provide benefits for eligible employees or

their dependants. Contributions by the Group are expensed

to the statement of profit or loss as incurred.

In 2013, the Leighton Superannuation Plan and the AMEC

Superannuation Fund members were transferred to the

defined contribution category within the same plans. As a

result, there are no defined benefit superannuation plans at

year end.

Paid parental leave is provided in Australia. In other

countries paid parental leave is provided in accordance with

current legislation.

Individual remuneration is determined by reference to:

• Group policy regarding the mix of fixed to variable

remuneration;

• performance and experience of the individual;

• comparable jobs within the Group, and

• remuneration for comparable jobs amongst peer

companies.

The principles underpinning our approach to senior

executive remuneration are to:

• ensure that senior executives are rewarded on the basis

of performance measures that support the Group’s

business plans and strategy, and are consistent with the

Group’s values;

• align the interests of senior executives and shareholders

by focusing on those characteristics that underpin

sustainable growth in shareholder value;

• attract and retain key talent; and

• provide a balance between:

‐ fixed and performance‐based, variable

remuneration;

‐ remuneration paid in cash and through the issue of

equity; and

‐ short‐term and medium‐term performance

horizons.

Options are used as a form of incentive for senior

management. In 2015, we simplified the Long Term

Incentive (LTI) plan for senior executives to a stock options

based scheme. This provides stronger alignment between

Group performance and individual rewards.

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Availability of a skilled workforce

We recognise that, as a service business, we must have

access to a skilled workforce to be able to deliver our

projects. To do this we utilise a range of strategies

including:

• offering graduate programs, apprenticeships and

scholarships to attract quality candidates;

• offering our people opportunities to work on a diverse

range of operations around the globe;

• working to ensure community access to training,

employment and development so as to encourage

participation of locals in our workforce;

• leveraging the expertise and experience of the

resources of our major shareholder HOCHTIEF and their

major shareholder, ACS Group; and

• investing in the training and development of our people.

To maintain our position as a leader in the industries where

we operate, we must ensure the knowledge and expertise

of our people continues to grow. Each of our Operating

Companies has a framework for managing the performance

of its people. Skill mapping against role requirements is

used to identify gaps in capability. We invest in training that

supports our business requirements and the development

of our employees.

Each of our Operating Companies conducts regular skills‐

based training and programs, such as technical and

vocational training; and health and safety programs, to

support our business requirements. From comprehensive

on‐the‐job training for apprentice mechanical and plant

technicians, to safety and executive leadership

programmes, we provide the training needed for our

employees to advance their careers and increase job

performance and overall job satisfaction.

Across the Group, significant investments of time and

money were made on training. Thiess’ learning

management system – Advance ‐ continued to be rolled out

in 2015 with 191,815 hours of training deployed to 2,534

people. This flexible delivery mode enables courses to be

used in the workplace, minimising off‐the‐job time. Training

includes skill areas such as technical subjects, the Code, and

environmental and cultural awareness.

Thiess, in conjunction with our client, has delivered a

nationally‐recognized “Certificate III in Surface Extraction”

vocational qualification at its Prominent Hill site. This

training formalizes the skills of 235 employees and is a key

component of the social impact management strategy.

EIC Activities provided webinars on technical topics for

1,762 employees across the Group and approximately 660

employees attended technical training provided by our

focused engineering entity.

CIMIC also cooperates with universities and other external

institutions to provide learning opportunities for its people.

For a number of years CIMIC has facilitated a Masters

degree in Project Management through the University of

New South Wales.

Application of appropriate labour standards

The Group does not tolerate harassment, discrimination,

bullying, vilification, occupational violence or victimisation

on any grounds, whether by race, gender, sexual

preference, marital status, age, religion, colour, national

extraction, social origin, political opinion, disability, family

or carer’s responsibilities, or pregnancy.

As per the Code, the Group does not tolerate child labour or

any form of exploitation of children or young people and

will comply with the International Labour Organisation (ILO)

with respect to under‐age workers. The Group also rejects

all forms of forced labour. No employee may be obliged to

work by the direct or indirect use of force and/or

intimidation. Only people who voluntarily make themselves

available for work may be employed.

Supporting this approach, recruitment procedures are in

place across the Group which ensure:

• preference is given to internal candidates, nationals and

local communities;

• external recruitment must include the Group’s Human

Resources (HR) representatives in the process;

• approval to recruit requires a 2‐up approval;

• candidates must be interviewed; and

• reference checking must be undertaken.

Our Operating Companies are responsible on an individual

basis for managing workplace relations. This approach to

employee relations helps to ensure that any matters that

arise on a project can be quickly identified and resolved in

the field.

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Freedom of Association and Collective Bargaining

We recognise the right of our employees to freely associate

and collectively bargain. We aim to fairly, consultatively and

constructively engage with workers, union representatives

and regulators.

Some 55% of the Group’s employees in Australia are

covered by collective bargaining agreements.

Supplier assessment for labour practices and human rights

The Group has a rigorous approach to dealing with third

parties which can include clients, joint venture partners,

subcontractors, consultants and suppliers, agents or

intermediaries. The Group will only do business with third

parties for legitimate purposes, in accordance with the

Code, relevant laws and where that business relationship

will benefit the Group. The Group will not do business with

a third party that does not share a similar approach to the

Group in relation to ethical matters, or where engaging with

the third party will harm the reputation of the Group.

This Procedure applies to all relationships with third parties

and applies to CIMIC and all Operating Companies in all

jurisdictions.

Appropriate enquiries (due diligence) must be carried out

on all third parties prior to formal engagement.

A third party is designated as High Risk if, amongst other

things, the engagement relates directly to a project for a

government or state‐owned enterprise in any country

which has a ranking of 80 or higher in the most recent

Corruption Perceptions Index (as published from time to

time by Transparency International) such as Mongolia,

India, the Philippines, Sri Lanka, Thailand, China, Indonesia,

Vietnam, Laos, Papua New Guinea, Cambodia and

Myanmar.

High Risk third parties may only be engaged where they

have completed and executed a Third Party Anti‐Bribery

and Corruption Declaration and integrity checks on the third

party have been completed that are acceptable to the

approving manager.

The Declaration explicitly asks third parties, “Has slavery,

forced or child labour been used anywhere by the Third

Party or, to the best of the Third Party’s knowledge, by any

direct suppliers to the Third Party?”

Where either the Third Party Anti‐Bribery and Corruption

Declaration or the basic integrity checks are not to the

satisfaction of the approving Manager, further enquires

must be made. These could include:

• enquiries of the third party about the specific concerns;

and

• detailed due diligence by an approved specialist due

diligence provider (eg. Thomson Reuters or Control

Risks). All High Risk third parties must annually complete and sign

the Declaration.

Human rights grievance mechanisms

The refreshed Code of Conduct outlines the standards of

behaviour required of all employees of the CIMIC Group

regardless of role or location. Our Policies include a

Management, Monitoring and Reporting Procedure which

supports the operation of the Code across the Group,

including how to report a potential breach, contact details

and how to deal with matters raised by a whistleblower.

The Group will not tolerate victimisation of anyone who

raises a genuinely held concern about a breach or potential

breach of the Code (ie a whistleblower). The Group is

unaware of any grievances about human rights impacts

being filed through formal grievance mechanisms during

the reporting period.

Non‐discrimination

No substantiated cases of discrimination were reported

during the year.

0

20

40

60

80

CPB Thiess

Collective agreements (%)

Collective agreements coverage

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Fostering a more diverse workforce

In 2015, the Group re‐issued its Diversity and Inclusion

Policy. The revised policy sets out the CIMIC Group’s

commitment to diversity and inclusion, and this applies to

all employees of CIMIC Group including our Operating

Companies, and third parties engaged by the Group.

As a global employer, the CIMIC Group recognises that to

operate successfully and sustainably we must:

• treat all clients, employees, suppliers, sub‐contractors

and members of the community with respect and

dignity;

• maintain a workplace culture of inclusive practices,

procedures and behaviours;

• make decisions that are fair and free from bias;

• provide employment opportunities based on merit;

• not discriminate based on individual differences such as

race, gender, sexual preference, marital status, age,

religion, colour, national extraction, social origin,

political opinion, disability, family or carer’s

responsibilities, or pregnancy;

• foster and leverage diversity of thought, experience and

skills;

• attract and retain a workforce that reflects the diversity

of the clients and the broader communities in which we

operate; and

• respect and take into account in our decisions the needs

and interests of our stakeholders in the markets in

which we operate.

The objectives of the Group's Diversity and Inclusion Policy

are to:

• Promote and improve gender equality and female

participation in the workplace;

• Increase Indigenous employment and use of Indigenous

suppliers;

• Invest in local employment to ensure the future

workforce is reflective of the countries/communities in

which we operate; and

• Cultivate an inclusive workplace of fairness and equity

which fosters the unique skills and talent of our people.

The Policy seeks to increase and leverage the diversity that

exists across the organisation. This includes increasing and

retaining the number of women employed at all levels in

the CIMIC Group by seeking to overcome the challenges

associated with the relatively small numbers of women

entering the engineering trades and profession. We are also

focused on promoting local participation internationally,

Indigenous employment, and are aware of the importance

of age diversity to our business.

Equal opportunity In 2015, the Group’s Senior Women’s Network continued.

This network group aims to support the growth of women

moving into senior positions across the Group by:

• promoting gender diversity through advocacy,

mentoring and role modelling;

• actively supporting the initiatives of the Diversity

Forum; and

• influencing and leading change.

The Company is a ‘relevant employer’ under the Workplace

Gender Equality Act. Our most recent ‘Gender Equality

Indicators’ are set out in our Workplace Gender Equality

Report which is available on our website.

Salaried employees are to complete SALT (self‐administered

legal training) on‐line Diversity and Equality training every

two years (including assessment) which features modules

including: Ethical use of resources; (Advanced) Complaints

and incidents; and (Advanced) Bullying, discrimination and

sexual harassment. In 2015, 110 CIMIC employees

completed all or some of this training, subject to position

and perceived risk.

The Group partnered with the Diversity Council of Australia

(DCA) and sponsored research that assesses and promotes

Australian business capability to positively and productively

engage in Asian cultures.

At the CIMIC Group, we are also aware of the importance of

having a balance of age groups in our workforce. We want

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to retain the experience that mature age workers have

gained from working in our industry and our organisations

for long periods. The maturity profile of our workforce is as

follows:

17

CIMIC Group aims to maintain a Board wherein

membership reflects a diversity of backgrounds, including

gender, to best steer the CIMIC Group through the diverse

opportunities and challenges we face. We currently have

one female board member, Dr Kirstin Ferguson, who was

appointed Independent Non‐executive Director on 10 July

2014. Dr Ferguson is Chairman of the Ethics, Compliance

and Sustainability Committee.

The age composition of the Directors is as follows:

The Directors have a broad mix of expertise and experience

so that the Board can effectively discharge its corporate

governance and oversight responsibilities. This mix is

described in the Board skills matrix in the Group’s 2015

Corporate Governance Statement.

17 Data on ‘workers by age group’ is based on available information

and represented about 46% of the total workforce in 2015.

Local participation

Our aim is to employ an international workforce that

reflects that populations in which it operates and be an

employer of choice in the regions in which we operate.

As at 31 December 2015, 98.9% of those staff employed in

Thiess’ international operations were local to the country

where they were employed and 95.9% of those employed in

Leighton Asia’s operations were local. Our international

businesses are focused on further increasing representation

of local talent through recruitment and retention initiatives.

The Group targets local talent through apprenticeships,

university and graduate career programs, and by offering

promising graduates the best of local peer mentoring and

international development opportunities.

Indigenous participation

Aboriginal and Torres Strait Islander people are the first

inhabitants of Australia, and we respect and value

Indigenous people, their land and communities, and their

culture and heritage. We are committed to improving

employment opportunities for Indigenous people, both in

our Operating Companies and through our subcontractors

and suppliers. To that end, we partner with governments

and Indigenous communities to promote education,

training and employment opportunities, and build an

organisational culture with a supportive work environment.

0%

50%

100%

2014 2015

Workers by age group (%)

<30 30‐50 >50

25.0%

12.5%50.0%

12.5%

Age spread of Directors

40‐49 50‐59 60‐69 Over 70

80%

85%

90%

95%

100%

Thiess Leighton Asia

Local participation (%)

Local Expatriates

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A partnership between Thiess, The Salvation Army’s

Employment Plus and Wesfarmers Curragh has culminated

in the unique “Oothungs (sisters) in Mining” program. This

program has been designed to launch the careers of

Indigenous women in the mining industry. The women

undergo extensive training in the classroom environment

and complete a program in the advanced haul truck

simulator

We provide a wide range of employment opportunities and

job readiness programs for Indigenous Australians, and we

have partnered with the Diversity Council Australia to

support emerging research into the capability of Australian

business to grow into Asian markets. We also seek, where

possible, to increase opportunities for indirect economic

participation, for example through subcontracting or supply

contracts; and to build our knowledge of and capacity in,

Indigenous participation.

At 31 December 2015, the Group employed 294 full‐time

equivalent Indigenous Australians, with Indigenous

participation at 3.9% of all Australian employees, up from

3.2% in 2014. While the percentage has increased, this is

partly a result of the decline in overall workforce numbers

due to the sale of JHG and 50% of Services. The absolute

decline in the number of Indigenous employees reflects the

change in the Group’s construction work as some of the

large regional oil and gas projects, which employed a

number of Indigenous people, neared completion and

employment opportunities wound down.

Our Operating Companies are also pursuing a number of

apprenticeships and mentoring schemes that are enabling

Indigenous employment. Examples include Thiess’s 20‐week

pre‐apprentice program for Indigenous trainees. CPB

Contractors is supporting with initiatives that include the

Jawun program, which enables employees to work with

Indigenous communities and business in order to exchange

skills and capabilities.

In 2013, CPB Contactors was the first corporate

organisation in Australia to sign a 10‐year partnership with

CareerTrackers under their 10×10 Indigenous Internship

Program. This program formalised a commitment to

providing internship positions for Indigenous students. CPB

Contractors continues to support interns as they embark on

their career journeys.

In 2009 CIMIC Group was a founding member of Supply

Nation (formerly the Australian Indigenous Minority Supply

Council), which aims to provide direct business‐to‐business

links between companies, government agencies and

Indigenous‐owned businesses. In 2014/15, CPB Contractors

spent more than $34 million on transactions with Supply

Nation registered businesses.

CPB Contractors is also a 50% shareholder in Ngarda Civil

and Mining Pty Limited18, one of Australia's largest

Indigenous contracting companies, and a multi‐disciplined

service provider in mining, civil construction and

infrastructure works across Australia.

In 2013, Thiess launched its Reconciliation Action Plan (RAP)

which aims to provide Aboriginal and Torres Strait Islander

people with opportunities to gain employment, build life‐

long careers or do business with Thiess.

In 2015, Thiess was again proud to support NAIDOC

(National Aborigines and Islanders Day Observance

Committee) Week with a morning tea recognising the

history, culture and achievements of Aboriginal and Torres

Strait Islander people around Australia. Thiess also

supported a number of NAIDOC Week celebrations across

their projects, offices and local communities

The Group has not identified any incidents of violations

involving the rights of Indigenous peoples during the

reporting period.

Ensuring gender equity

Pay equity

Since 2012, we have undertaken gender pay equity reviews

at several of our Operating Companies to ensure that our

remuneration and promotion decisions are fair and free

from bias.

In 2014, we undertook a pay equity study and addressed

those gender pay gaps identified through the 2015 annual

pay and bonus review cycle.

18 Ngarda does not qualify as a member of Supply Nation because

of its ownership structure.

0

2

4

6

0

100

200

CPB Thiess

Indigenous employment (# and %)

Number (lhs) Percentage of workforce (rhs)

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In 2016, we will undertake a formal pay equity review

following changes to our operating model.

Female participation

Each year, non‐public sector employers with 100 or more

employees in Australia must report certain gender related

information to the Australian Government’s Workplace

Gender Equality Agency (WGEA)19 based on the year ended

30 June.

The 2014/15 WGEA submissions show that for the reporting

entities of CIMIC, CPB Contractors, Thiess and Leighton

Properties, females accounted for almost 15% of both

management and non‐management positons. While these

results reflect the traditionally male dominated nature of

the construction and mining industries, the Group is

committed to attracting and retaining a workforce that

reflects our clients and the broader community.

As we increase female representation across the CIMIC

Group, we are seeking to ensure that women are not over‐

represented in administrative and professional service

roles, and under‐represented in the trade, engineering and

leadership roles that are core to our business. Each of our

Operating Companies has initiatives designed to manage

that risk, for example, the award‐winning Oothungs (Sisters)

in Mining program at Thiess and the Women Greenhorns

initiative at Leighton Asia.

Businesses in all sectors are tasked with removing the ‘glass

ceiling’ faced by women in senior management roles. Our

19 Detailed reports by company can found at

https://www.wgea.gov.au/public‐reports‐0

businesses have initiatives to encourage and support

women to succeed in management ranks. These initiatives

are in addition to the general female participation programs

in place in our businesses, for example, Thiess' Women in

Leadership program with the University of Queensland.

Data segmenting females by age brackets is not currently

available but will be addressed in the future.

Outlook and future plans

We place considerable emphasis on leadership,

responsibility and accountability, and are committed to

developing the individual skills and career paths of our

employees. In 2016, we plan to:

• implement a Group‐wide graduate induction program;

• conduct a pay equity review and develop targeted

initiatives to further close the gender pay equity gap

across the Group;

• progress programs to encourage greater female

participation and to remove the ‘glass ceiling’;

• roll out a simplified, options based, long term incentive

scheme for senior executives;

• further improve the robustness of our metrics for

monitoring progress towards achieving our Diversity

Policy objectives;

• implement a Diversity Council for the Group; and

• use our new CIMIC Group Diversity and Inclusion

dashboard to help us to measure and monitor our

progress.

0%

20%

40%

60%

80%

CIMIC CPB Thiess LPPL

Female particaption (%)

All managers All non‐managers

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Our approach

In 2014, following a broad based, strategic review of

the Group’s operations, we implemented our

blueprint for the future which involved strengthening

the balance sheet, streamlining the operating model,

and improving project delivery. We are now

structured to deliver for our clients and are continually

striving to innovate so as to create shared value for

our shareholders, our stakeholders and the wider

community.

Actions during 2015 ‐ EIC Activities developing libraries of best practice ‐ Developed ‘GeoView’ tool to improve engineering processes

‐ Trained 454 people in the use of BIM and GIS ‐ Ten Green Star rated construction projects currently in hand

Measures in place ‐ Comprehensive risk management framework in place

‐ EIC Activities established as a centre of technical engineering excellence

Performance ‐ Total rolling 3‐year shareholder return of 58% ‐ CPB Contractors the leading sustainability contractor with 12 ISCA rated projects in hand

‐ CPB Contractors have completed 46 Green Star rated building projects since 2007

‐ CPB Contractors generated in excess of $1.5 billion of revenue from sustainably rated or ‘green’ projects

‐ 17 Green Standards projects registered in 2015

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The Group offers a broad range of contracting and project

development services and skills to public and private sector

clients across a wide range of markets. Our activities include

construction, contract mining, engineering, PPPs and

development and investment across a range of sectors,

including transport, telecommunications, power and

utilities, social, building and resources‐related industries, in

Australia and across selected geographies. We deliver

through focused contracting entities which allows us to

leverage our expertise and to create economies of scale,

thereby lowering our cost base and helping to improve our

competitive advantage.

Our dedicated construction businesses – CPB Contractors

and Leighton Asia ‐ have delivered and are undertaking

some of the largest and most complex infrastructure and

building projects in the region. No two construction projects

are ever the same and our Operating Companies bring an

innovative approach to the successful delivery of projects. In

mining, Thiess delivers innovative and cost saving solutions

to clients at 26 mines across 6 countries.

We have combined our existing PPP capabilities to create a

focused, industry leading business – Pacific Partnerships –

which forms a key component of our growth strategy.

Similarly, we have combined our existing engineering skills

into EIC Activities which is providing innovative solutions for

clients and promoting greater self‐reliance, thereby

enhancing our ability to manage project risk. EIC Activities’

name – which stands for Engineering, Innovation and

Capability – reflects this approach.

At CIMIC, we believe in leading by innovation. This means

challenging conventional practices and adapting to new

technologies, proactively investing for the future, sharing

knowledge and learning from mistakes. In today’s highly

competitive environment, our clients depend on our use of

innovative technology and business systems to deliver

operational excellence, and to pioneer new and better ways

to overcome challenges. By working closely with clients,

partners, suppliers and subcontractors, we solve tomorrow’s

problems today through world‐class expertise, management

and quality.

We are also seeking to leverage off the expertise of, and

relationship with, entities related to our major shareholder,

HOCHTIEF AG, such as Turner and Dragados. Their global

reach allows us to tap into specialist design, technical

support, research and technology from some of the leading

engineering, construction and services companies in the

world.

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Government funding of future infrastructure

A substantial infrastructure deficit in the Australia‐Pacific

region should generate growth in construction opportunities

over the next decade. BMI Research forecast that output for

the global construction industry will grow in real terms by an

annual average of 3.2% over their forecast period of 2015‐

2024, with Asia cementing its position as the world's largest

construction market.20

Years of underinvestment by governments has resulted in a

lack of transport and energy facilities, raising logistics costs

and capping growth. Governments in many countries are

aware of the deficits and have set out ambitious plans to

develop the sector. However the ability of governments to

finance additional infrastructure projects is limited so the

bulk of investment required to meet this large infrastructure

gap is expected to come from the private sector.

There is sufficient capital within the finance markets to fund

the projects that are currently being, or are likely to be,

procured across the region. The global stock of capital

managed by pension funds, sovereign wealth funds,

insurance companies and other institutional investors is $50

trillion out of which only 0.8% is allocated to infrastructure.21

Australia’s buoyant economy, growing population and

increased trade footprint are driving the country’s need for

new and sophisticated investments in infrastructure.

Australia’s Federal and certain State Governments have

announced substantial infrastructure funding programs. The

Australian Government has committed A$50 billion to

investment in land transport infrastructure between 2013–14

and 2019–20.22 The 2015/16 financial year will see the single

biggest Federal infrastructure investment to date with over

$9.7 billion in Federal funding flowing across the nation.23

20 BMI Research, Global Construction Outlook 2015‐2024:

Cementing Asia's Dominance, May 2015. 21 The Economist, ’The trillion‐dollar gap’, 22 March 2014.

22 Australia Unlimited: Investment Opportunities in Australian

infrastructure, October 2015. 23 Deputy Prime Minister The Hon. Warren Truss, Annual Ministerial

Infrastructure Statement, 1 Dec 2015.

The Federal Government is evaluating funding and financing

options across all types of infrastructure, exploring

concessional loans, equity and value capture, where

appropriate, while also pursuing a more equitable user

charging system. Major investment opportunities for the

private sector – direct and indirect – continue to grow in

Australia, especially as state governments seek to take

advantage of the current Asset Recycling Initiative.

Infrastructure Australia has identified up to A$219 billion in

publicly owned assets with privatisation potential.8

In 2014, the CIMIC Group combined its PPP capabilities to

create Pacific Partnerships – a focused, industry– leading

business in PPPs, and a key component of CIMIC’s growth

strategy. The Group is positioning itself as equity participant,

contractor and asset manager, as it focuses on PPP activities,

with the aim of creating value as it helps governments to

fund the infrastructure needs of the future.

Population growth and urbanisation

The infrastructure deficit across Asia is a well‐established fact

– the ability of Asia to continue growing at current rates will

depend largely on how much infrastructure can be delivered

in the coming years. Power generation capacity, clean water,

effective utility networks and much needed improvements in

transportation networks are essential if Asia is to fulfil its

potential.

There is a very high degree of urbanisation in Asia’s emerging

economies. Over the course of the last decade, we have seen

significant growth in urban centres as people move from the

countryside into cities to live and work. This trend is forecast

of to continue and, in many cases, to accelerate.

Currently, the level of urbanisation in the Philippines is 49%

and the Philippine National Economic and Development

Authority expect the rate to reach 65% by 2030. Likewise for

China, in the last three decades, the urban population has

risen by more than 500 million people. By 2030, China’s cities

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are forecast to contain around a billion people. In China and

Indonesia, the expectation is that 10% or more of the total

population will shift from the countryside to the cities

between now and 2025. With urbanisation and increased

population within city centres, and as congestion and

pollution become problematic, the demand on utilities will

increase substantially and the need for housing will grow.

City planners, mayors and their teams need solutions to

encourage effective urban planning that provides for the

future. As cities grow, more investment needs to be made in

transportation networks to reduce reliance on private

vehicles; increased housing stock needs to be built to

accommodate growing populations; and utilities and public

services require investment to satisfy the growing number of

urban residents.

The Asian Infrastructure Investment Bank (AIIB) was launched

in Beijing in 2014, with the aim of boosting investment in

infrastructure in Asia. The AIIB estimates it will be responsible

for spending amounting to 60% of the world's total

infrastructure spending by 2025.24

The CIMIC Group is well placed to benefit from the

opportunities that population growth and urbanisation will

offer; both directly, providing construction services in Asia,

and indirectly, providing mining services to clients selling

commodities into this market.

Globalisation and competition

The Australian construction market is, and has been for many

years, a competitive market with a substantial international

presence. In the 1940s, the founder of CPB Contractors

(formerly Leighton Contractors) ‐ Stanley Leighton ‐ turned

24 www.out‐law.com, ‘What to expect from the first five years of the

Asian Infrastructure Investment Bank’, 16 Nov 2015.

his focus to the new market of Australia in which to use his

skills following a decline in the local English construction

industry at the end of the second world war.

Global competitors have since come and gone; Americans

and British in the 1960s and 1970s, Japanese in the 1980s and

1990s. Some were successful like HOCHTIEF who acquired a

stake in CIMIC (then Leighton Holdings Limited) in 1983.

In more recent years, a number of European firms have

entered the market, seeking to diversify after their home

markets slowed. More open markets, promoted by the World

Trade Organisation (WTO) which has ‐ as its premise ‐ that

trade liberalisation will benefit all concerned, have led to

further globalisation of services such as construction.

While this globalisation trend has brought new entrants to

the Australian construction market, establishing a presence in

the market is not easy. A deep understanding of the country’s

complex industrial relations system is important and being

able to manage the supply chain is critical to success.

CIMIC welcomes new entrants and understands that it

operates in a global marketplace. It is with this understanding

that the Group streamlined in 2014 to leverage its existing

expertise and to create economies of scale, thereby lowering

our cost base and helping to improve our competitive

advantage.

In Asia, entry into new markets is challenging for foreign

companies because of the cultural, legal and operational

nuances that exist from country to country. A cookie‐cutter

approach doesn’t work and local knowledge is crucial. Those

companies that are successful, like Leighton Asia, combine

on‐the‐ground experience with the resources of the wider

Group.

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Managing risk

The recognition and management of risk is embedded in all

activities of the Group and is a core part of the Group’s

culture. The Group’s exposure to risk stems from its broad

and evolving business risk profile, which covers areas

including operations, safety, reputation, regulation,

contracts, human resources, finance, information technology

and strategy.

It is essential that the Group’s risk management and control

framework continues to evolve to address anticipated

changes to the Group’s risk profile, as well as to respond to

any issues which may emerge. As part of this ongoing

process, steps were undertaken during the period to

strengthen the Group’s approach to risk management. The

Group is also implementing changes to the way it tenders and

delivers major projects from a risk management perspective,

including the recent formation of the Board’s Audit and Risk

committee.

The Board is responsible for the oversight of the Group's risk

management and control framework. The Audit and Risk

Committee assists the Board in fulfilling its responsibilities in

this regard by reviewing and monitoring the financial and

reporting aspects of the Group's risk management and

control framework.

As required by the Board, management has implemented a

policy framework designed to ensure that the Group's

material business risks are identified and that adequate

controls are in place and function effectively, and for

management to report to the Board on whether those risks

are managed appropriately. This framework incorporates the

maintenance of comprehensive policies, procedures and

guidelines which span the Group's diverse contracting and

project development activities, including setting financial

controls, conducting business audits, managing all

investments and acquisitions, and ensuring high standards in

corporate communications and external affairs.

The Group’s risk policy framework covers areas such as:

• tendering and contract negotiations;

• design and project management;

• occupational health and safety;

• environmental management;

• competition and consumer laws;

• interest rate and foreign currency exposures;

• ethical conduct;

• gathering and release of material information;

• crisis management and IT disaster recovery; and

• business continuity planning.

Responsibility for control and risk management is delegated

to the appropriate level of management within the Group,

with the Executive Chairman and CEO, COO and CFO having

ultimate accountability to the Board for the risk management

and control framework.

Areas of material business risk for the Group are highlighted

in the Business Plan that is presented to the Board by the

Executive Chairman and CEO each year. The Board then

reviews and approves the parameters within which significant

business risks that have been identified will be managed

before it adopts the Business Plan.

Encouraging a culture of innovation

Our Principles provide a shared language and identity for us

as the new CIMIC Group and guide our actions. Innovation is

one of those Principles and, for us, this means that we always

need to adapt. It requires us to look at ourselves and be self‐

critical, and to continue to evolve so that we will not need a

major transformation in the future.

Innovation is about delivering technical excellence and

creating efficient, smart solutions that satisfy our clients. We

constantly assess new technologies and how they can be

applied to further streamline processes and increase

efficiencies.

Drawing together expertise from across the CIMIC Group, the

recently created EIC Activities is a centre of technical

engineering excellence that works across the Group to deliver

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solutions, capability and innovation. The Group’s EIC

Activities business strives to provide best‐in‐class engineering

solutions that will drive improved effectiveness and efficiency

of our current or prospective projects and, most importantly,

deliver value.

Technology in construction

During the construction and operation phases of a project,

various instruments are used for the measurement of

groundwater, pore pressure, stress, deformation,

settlement, loads and strain, etc. Data is then used during

the project life cycle for design inputs, to verify design

assumptions and monitor safety performance. With the

increasing complexity of equipment and a reliance on

external expertise, data management can be unproductive

and expensive.

To overcome these issues, EIC Activities has developed an

internal instrumentation and monitoring data

management system branded ‘Geoview’. The tool has been

designed to improve our engineering processes, be

customisable, flexible and scalable, and of course to deliver

time and cost savings on projects.

The initial ‘GeoView’ build was trialled extensively to

monitor stability and settlement performance of fill

embankments over soft ground on the Frederickton to

Eungai Project, a 26.5km 4 lane divided road project in

Northern NSW. It has since been implemented on the $3

billion Sydney Metro Northwest Project, a 15 km twin

tunnel rail project and the $1 billion Moreton Bay Rail Link

Project, a 14 km double track rail project in Brisbane.

The EIC Activities team brings together highly specialised and

extensive technical expertise to deliver engineering,

innovation and capability across the infrastructure, industrial

and building sectors while providing specialist design and

technical support and leading the way in research and

technology.

With a track record in delivering complex and challenging

projects, EIC Activities has in‐depth knowledge of national

and international markets and understanding client

requirements. EIC Activities and CPB Contractors also have

strong connections to the engineering divisions of our major

shareholder HOCHTIEF, its subsidiary Turner, and related

entity Dragados.

EIC Activities is developing knowledge libraries of best

practice methods, design details and tools, and helping to

capture the lessons learned from tenders and projects. It is

also researching, investigating, and monitoring developments

in engineering, construction methods and technology, and

researching, developing, trialling and implementing

innovative engineering and project management software

solutions.

BIM at work on Royal Adelaide Hospital

The $1.85 billion new Royal Adelaide Hospital project is set

to create a benchmark within Australia’s healthcare sector.

The design and construction is encompassing high‐

technology collaborative design solutions and construction

methodologies that are adding significant value to the

build process and ongoing facility maintenance. One of

these innovations is the introduction of Building

Information Modelling (BIM).

BIM is a ‘process’ of generating and managing digital

information during an asset’s life cycle. The BIM process

adds ‘value’ by enabling various technologies through a

collaborative disciplined approach. It encourages common

standards, methodologies and protocols so the whole

team can share the digital ‘information’ as the process

evolves. This not only removes duplication, but minimises

the risk of error and provides a smarter, faster and more

efficient way of working.

An additional 17 projects are being, or have been, delivered

using BIM in 2015, bringing the total to 73 projects utilising

this technology. In addition, we currently have 44 projects

(including in Ventia) using Geographic Information Systems

(GIS) which deal with spatial or geographic data. In 2015, we

trained 454 people in the use of BIM and GIS.

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Procurement practices

CPB Contractors has developed an innovative capability in

the area of sustainable buildings and infrastructure. In 2015,

CPB Contractors reported the following green standard

projects:

Registered Certified

ISCA – Design 6 3

ISCA – As built 2 5

Green Star – Design 2 ‐

Green Star – As built 2 ‐

LEED – As built 1 ‐

Green Roads – Pilot 1 ‐

CPB Contractors has completed 46 Green Star rated building

projects since 2007 with ten in hand. The table below

provides a selection of CPB Contractors’ Green Star rated

projects:

Project Rating Type

111 Eagle St, Brisbane • Office As Built V2 – 6 STAR QUT Science and Technology Precinct, Brisbane

• Education Design V1 – 5 STAR

• Education As‐Built V1 – 5 STAR

ABC Brisbane Accommodation Project

• Office Design V3 – 5 STAR

177 Pacific Highway, North Sydney

• Office Design V3 (Registered)

567 Collins St, Melbourne • Office Design V3 – 5 STAR 1 Parramatta Square, Sydney

• Education Design V1 – 5 STAR

• Education As‐Built V1 – 5 STAR

Kings Square – Stage 2 , Perth

• Office Design V3 – 5 STAR • Office As‐Built V3 (Registered)

Kings Square – Stage 4, Perth

• Office Design V3 – 5 STAR • Office As‐Built V3 (Registered)

Perth HQ • Office Design V3 – 5 STAR • Office As‐Built V3 – 5 STAR

CPB Contractors is a member of the Infrastructure

Sustainability Council of Australia (ISCA) and an early

adopter of the scheme, with the Great Eastern Highway

Upgrade receiving Australia’s first ever transport ‘As‐Built’

ISCA rating.

CPB Contractors is currently the leading sustainable

contractor in the Australian market with 12 ISCA projects

registered worth more than $10 billion in total. Those

projects include:

Project Value Rating

Type

City‐Link Tulla Widening, Melbourne

$572m Design V1

Gateway WA, Perth $1,000m Design V1

Elizabeth Quay, Perth $440m Design V1

Mitchell Freeway Extension, Perth

$209m Design V1

WestConnex M4 Widening, Sydney

$310m Design V1

WestConnex M4 East, Sydney

$2,700m Design V1

Sydney Metro Northwest Tunnel and Station Civils

$1,150m Design V1

Sydney Metro Northwest Operations, Trains and Systems

$2,500m Design V1

Webb Dock West Automotive Terminal, Melbourne

$63m Design V1

Wynyard Walk, Sydney $154m Design V1

In 2015, revenue generated by CPB Contractors from

sustainably rated or ‘green’ projects was in excess of $1.5

billion.

In Leighton Asia, three building projects are registered and

in progress. Two are in Hong Kong for the Government and

are registered with BEAM (the Hong Kong Green Building

Council Limited’s green building assessment system). The

other project, in India, is registered with LEED; the most

widely used green building rating system in the world.

0

500

1,000

1,500

2,000

2014 2015

CPB Contractors' green project revenue ($m)

ISCA Green Star LEED Green Roads

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ISCA Rating for Wynyard Walk

ISCA has awarded its ninth Infrastructure Sustainability (IS)

rating (in Aug 2015) to CPB Contractors which is delivering

the Wynyard Walk project on behalf of Transport for NSW.

Wynyard Walk, a new pedestrian walkway connecting

Sydney’s CBD with the Barangaroo precinct, was certified

with a ‘Commended’ IS Design rating to recognise the

adoption of sustainability practices.

CPB Contractors is building on a range of design and

construction‐related environmental, stakeholder,

community and engineering requirements nominated by

Transport for NSW to achieve productivity efficiencies and

minimise risks. These include minimising waste, reducing

community impacts during construction, enhancing the

user’s experience, optimising energy efficiencies and

improving sustainability outcomes for the project.

The ISCA assessment process highlighted three areas where

the Wynyard Walk team best demonstrated sustainable

practices including Management and Governance,

Procurement, and Climate Change. This includes efficiency

in management systems, sustainability reporting,

procurement, climate change adaptation, risk assessment,

baseline studies, modelling actual data, performance in

resource use and environmental and heritage impact

assessments.

At the end of 2015, 35 CPB Contractors employees had ISCA

employee certification and 6 had Greenstar certification.

Our economic performance

Value creation

The direct economic value we generated for our

stakeholders in the reporting period included the following:

Economic Value

Generated25

2013 2014 2015

Revenue $m 16,259 16,876 13,371

Economic value

distributed

Operating costs $m 10,039 11,170 8,824

Employee wages and benefits

$m 4,536 4,363 3,059

Payments to providers of capital

$m 607 636 194

Payments to governments

27

$m 131 22 221

Community investments

$m 6.9 4.3 0.8

Economic Value retained

$m 939 681 1,073

A key indicator of economic value distributed is wages paid

to employees. In 2015, we paid over $3.1 billion of wages

and other benefits to our employees.

Shareholder returns

At CIMIC, sustainability is the integration of environmental,

social and governance factors into our decision making to

maximize long term shareholder value. The two generators

of shareholder value are share price appreciation and

dividends.

Total shareholder

return

2013 2014 2015

Share price

appreciation

% (10.0) 38.2 8.0

Dividends per share

paid during the year

A$ 1.05 1.17 1.1428

Shareholder

return29

% (38.8) 36.3 58.2

As at December 2015, the Group has generated a rolling

three‐year period total shareholder return of 58%.

25 Restated for 2013 and 2014 for comparison to reflect continuing

operations after disposals. 27 The Group incurred tax expenses of $430.4 million in 2014 and

$135.1 million in 2013 due to the profits on sale and income from its discontinued operations. 28 Included special 2014 dividend of 15 cents per share paid in 2015.

29 TSR is determined over a rolling three‐year period.

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Indirect economic impacts

The Group is a major employer of people in construction,

mining, operations and maintenance services, and

administration and management roles. The Group typically

employs people in roles that are paid more than the relevant

award and above the average wage which helps generate

indirect economic benefits to local businesses and

communities, as well as to government. In addition, we

engage many thousands of sub‐contractors to provide

services to our projects and the payments we make provide

employment and support investment.

The infrastructure projects that we build for public and

private sector clients are fundamental to improving the

productivity of economies and the quality of life of people.

Building roads eases congestion and stimulates trade;

constructing water recycling plants secures supplies of fresh

water; developing hospitals reduces mortality and improves

health; and installing renewable energy infrastructure

provides power while also reducing greenhouse gas

emissions. And our services contracts help to maintain and

operate this infrastructure, ensuring that it is efficient and

effective. Our projects have a real and beneficial impact on

the everyday lives of people.

Our building projects provide comfortable, safe and efficient

places for people to work or receive an education. They help

to stimulate investment and encourage economic

development.

Meanwhile, our contract mining operations provide valuable

resources for developing nations: coking coal and iron to

produce steel to facilitate urbanisation in China; thermal

coal to provide electricity in India; diamonds for jewellery

and industrial use; and copper for use in a range of

industries. These exports provide royalties to governments,

generate tax income, stimulate local communities, and

generate well paid and relatively secure employment.

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Outlook and future plans

We are committed to bringing an innovative approach to

the successful delivery of projects. In 2016, we plan to:

• continue to work with ISCA and GreenStar on projects

that are externally recognised as being sustainable;

• invest in EIC Activities’ research and development of

innovative engineering and project management

software solutions;

• leverage the engineering expertise and experience of our

major shareholder, HOCHTIEF, and its related entities;

and

• further encourage through EIC Activities the sharing of

technical engineering excellence across the Group.

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Using res ources efficiently


Our approach

Respect for the environment is a demonstration of the

CIMIC Group's core values of integrity, accountability,

innovation and delivery. We aim to continually

innovate so as to improve the efficiency of the

resources we use and reduce waste, thereby lowering

our costs, improving our value proposition and

benefitting the environment.

Actions during 2015 ‐ Revised and rolled out new Environmental Management Systems in CPB Contractors and Thiess

‐ Achieved energy management system certification for Hong Kong government building projects

Measures in place ‐ All Operating Companies certified to ISO 14001

Performance ‐ Excellent environmental result with no Level 1 incidents recorded

‐ No Level 2 incidents at Thiess, significant reduction in Level 2 incidents at CPB Contractors, steady performance at Leighton Asia

‐ Numerous environmental awards received across the Operating Companies

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Managing our environmental footprint and the impacts to

our operations presents both challenges and opportunities

that affect our ability to bid for and deliver work. Our key

environmental objective is to avoid causing any

environmental degradation which has high severity impacts,

or may have irreversible detrimental long term impacts, and

appropriately manage all other risks to the environment

across the Group's operations.

By effectively managing our environmental footprint and

environmental impacts to our operations, we stand to gain a

competitive advantage by working as a more risk aware,

innovative and efficient business. With our clients and key

stakeholders we recognise that by:

• preventing and mitigating pollution and degradation,

and anticipating and adapting to climate impacts, we

avoid potential operational delays, remediation costs,

fines and legal fees, and enhance our relationships with

the communities and markets in which we operate;

• delivering on specifications and standards set by

regulators, clients and other stakeholders, we stand to

gain the confidence of the markets and communities in

which we operate, and avoid potential litigation and

increased insurance premiums; and

• anticipating and adapting to natural resource

constraints, we optimise our production and operational

capacities, and prevent unforeseen and unmanaged

increases in operational costs, taxes and carbon permit

liabilities.

Our interactions with the environment can affect the health,

well‐being and prosperity of communities where we

operate. These communities and other key stakeholders

expect us to, wherever possible, prevent or otherwise

mitigate and remediate any harmful effects from our

operations. To achieve this outcome requires us to identify

potential environmental hazards and risks, and to develop

and implement adequate controls to eliminate or mitigate

the effects of these hazards and risks should they result. By

adopting a comprehensive, systematic and collective

approach to hazard and risk management, and continuously

monitoring and improving our performance, we ensure we

remain competitive in the markets in which we operate.

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Dealing with climate change and reducing

emissions

Managing our environmental footprint and the

environmental impacts to our operations presents both

challenges and opportunities that affect our ability to bid for

and deliver work. We aim to reduce emissions by working

together with our clients and business partners. Our

Operating Companies use a range of systems to track and

report on our energy use and calculate our greenhouse gas

(GHG) emissions.

CPB Contractors, Leighton Asia and Thiess are all large

energy users and emitters of GHGs because of their

construction and mining operations. Diesel is the most

common fuel consumed and represents around 98% of

energy used in 2015 by the Group. Electricity represents a

much smaller component of energy use – around 2%. Other

sources of energy, such as petrol, liquefied petroleum gas

(LPG) and other gases are only used in minor quantities.

Thiess’ mining operations represented more than 90% of the

Group’s energy consumption, 58% in the Australia/Pacific

and 42% in Asia and the new markets of Africa and the

Americas.

While climate change poses many threats to society, it

potentially offers opportunities to the construction industry.

Climate change is driving a move away from fossil fuels and

towards renewable energy, leading to construction

opportunities in wind farms, solar plants, new transmission

lines and other associated infrastructure. Similarly, it is likely

to lead to opportunities in the decommissioning and

cleaning up of coal fired power stations.

Climate change impacts may necessitate the rehabilitation

of infrastructure such as roads, railways, ports, sea walls and

power lines damaged by potential weather extremes. It

could also mean that new and more robust infrastructure

will have to be built to take into account rising sea levels and

greater temperature variations. Examples include investing

in concrete roads rather than typical aggregate based roads,

which will be more expensive, and raising sea walls to

protect low lying areas.

Buildings are also vulnerable to climate change and may

require refitting to reduce energy consumption and

protection from sea level rises and storm surges. New

buildings will need to be more energy and resource efficient

to cope with the anticipated changes.

The Group is conscious of the sustainability of the

infrastructure and buildings it constructs. Our involvement

with, and support for, organisations such as the ISCA and the

Green Building Council of Australia (GBCA), and their ratings

systems, aims to position the Group as an industry leader in

this space.

Emissions

We are registered to report under Australia’s National

Greenhouse and Energy Reporting (NGER) Act 2008. Energy

use and emissions data is collected for all company projects

and sites irrespective of the operational control status. The

Group has comprehensive measures in place to manage its

NGER obligations including:

• having established legal review processes to identify

Operational Control status at the tender and contract

stages;

• utilising Group wide accounting system to manage all

data; and

• having the Group’s data and processes subjected to

annual external assurance audits.

An audit was undertaken by Ernst & Young in 2015 and no

major issues were raised.

The Greenhouse Gas Protocol recognizes both direct and

indirect emissions. Scope 1 is all direct GHG emissions while

Scope 2 includes all indirect GHG emissions from

consumption of purchased electricity, heat or steam. The

Group naturally has a higher level of Group 1 emissions.

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Based on the information provided to NGER, the Group

reported the following Greenhouse Gas Emissions and

energy consumption:30

Year Total Scope 1 Emission (t CO2‐e)

Total Scope 2 Emission (t CO2‐e)

Total Net Energy

consumed (GJ)

2014/1531 77,412 72,142 1,434,467

2013/14 153,239 92,522 2,604,328

2012/13 206,245 128,495 2,660,483

2011/12 730,542 132,516 6,918,762

2010/11 775,441 187,887 8,435,737

2009/10 684,758 243,487 7,811,131

2008/09 478,444 114,785 5,278,962

Emission vary from year to year depending on a range of

factors including whether we or our clients have

‘Operational control’ of operating facilities (and therefore

reporting is done by our clients) and the change in the mix of

contracting activities that the Group undertakes. The

reduction in 2014/15 also reflects the divestment of JHG and

the Services business, and the recent challenging conditions

experienced in the resources industry.

Within the Group, we capture and report all emissions

regardless of whether we have operational control of

facilities and so the numbers shown in the charts will be

higher than those reported under the NGER scheme.

32

The majority of the Group’s GHG impact is derived from

plant and equipment diesel emissions in the Group’s mining

operations.

30 http://www.cleanenergyregulator.gov.au/NGER/Published‐

information/Published‐NGER‐data/Reported‐greenhouse‐and‐energy‐information‐by‐year. Figures are for where the Group has ‘Operational control’ for the facility as per the NGER definition. 31 Reported to NGER, expected to be published by the Clean Energy

Regulator at the end of Feb 2016. 32 2015 GHG data includes all energy paid up to December 2015.

Given the lagging nature of payments for usage, the full 2015 emissions are expected to be accounted for by April 2016 and will be reported to NGER as appropriate.

Mount Owen mine increases haul efficiency and saves

diesel

During the Mount Owen mine’s annual energy efficiency

workshop, the team identified that haul efficiencies could

be made in the weekly mine plan. By increasing the volume

of waste in the base level of the dump, the volume in the

void was able to be reduced which resulted in shorter haul

distances. This simple opportunity did not cost Thiess

anything to implement, yet resulted in approximately

$700,000 of diesel savings and reduced greenhouse gas

emissions by 160 tonnes CO2 ‐e. This opportunity is an

example of how integrated planning can produce cost

effective environmental outcomes for the business.

Scope 3 includes other indirect emissions, such as: the

extraction and production of purchased materials such as

concrete, asphalt and steel: fuel for transport‐related

activities in vehicles not owned or controlled by the Group;

electricity‐related activities not covered in Scope 2;

outsourced activities; and waste disposal.

Transport

The most significant impact of the Group’s transport

footprint is: 1) in the haulage of soil and ore at mine sites,

and 2) in the removal of waste material (spoil) from

construction sites and the cartage of inputs such as concrete

and steel to the sites.

0

500

1,000

1,500

2,000

CPB Thiess LAL

Scope 1 & 2 2015 GHG emissions (kt.CO2‐e)

Scope 1 Scope 2

0

1,000

2,000

3,000

CPB Thiess LAL

Scope 3 2015 GHG emissions (kt.CO2‐e)

Suppliers Support services

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The major impact of this transport is in terms of energy use ‐

primarily diesel – and the consequent generation of

greenhouse gases, both of which are addressed in this

report. In considering the efficient operation of a mine site,

Thiess is always seeking to minimise haulage distances and

transport costs so as to reduce fuel consumption and

associated GHG emissions.

Rise of renewables and decline of coal

In 2015, the International Energy Agency (IEA) forecast that

“renewables are set to become the leading source of new

energy supply from now to 2040. Their deployment grows

worldwide, with a strong concentration in the power sector

where renewables overtake coal as the largest source of

electricity generation by the early‐2030s. Renewables‐based

generation reaches 50% in the EU by 2040, around 30% in

China and Japan, and above 25% in the United States and

India.”33

In Australia, the Senate passed a Renewable Energy Target

(RET) that will result in more than 23.5% of Australia's

electricity being derived from renewable sources by 2020.34

This will create considerable growth in both small and large

scale renewable energy sources, and should provide

construction opportunities for wind farms where the Group

has considerable expertise.

The world’s appetite for electricity is expected to lift

demand by more than 70% by 2040. Given that growth,

demand for coal will continue to grow and global production

is likely to increase by around 10% by 2040, albeit at a

slower rate than during the last decade.

While global demand for thermal coal is likely to shrink in

the developed markets of Europe and the US, in India the

opposite is true. India is the world’s third largest energy

consumer and its energy use is projected to grow at a rapid

pace supported by economic development, urbanisation,

improved electricity access and an expanding manufacturing

base. Declining self‐sufficiency has led to increased imports

from countries such as Indonesia and, to a lesser extent,

Australia.

The IEA forecasts that India will emerge as the world’s

largest coal importer as soon as 2025. Over their projection

period, India’s share of the world’s inter‐regional trade is

projected to increase from barely 10% to almost one‐third.

33 International Energy Agency, World Outlook Energy 2015, 10

November 2015. 34 Media release, “Certainty and growth for renewable energy’, The

Hon. Greg Hunt MP and The Hon. Ian Macfarlane, 23 June 2015.

Other Asian countries are also projected to emerge as major

importers over the period to 2040, driven by rapidly

increasing coal imports in Malaysia, Thailand, Chinese Taipei,

Bangladesh and Pakistan, collectively reaching 290 million

tonnes of coal equivalent (Mtce) by 2040, which is larger

than China’s projected imports at that time.

For the CIMIC Group, this growth should sustain contract

mining opportunities. Contract mining of thermal coal, used

in power generation, currently accounts for approximately

42% of the Group’s mining revenue and around 8% of total

revenue. This segment of the market is unlikely to grow at

the same rate as in previous years but will still present

organic opportunities.

Reducing water consumption and waste

Our projects require materials and energy, the cost and

availability of which can be significantly influenced by

external environmental, social and governance impacts.

Global demand for major environmental resources

continues to rise. Demand for water will increase 55% by

2050 according to the United Nations.35

Governments and regulators have sought to address these

pressures through mechanisms such as usage restrictions

and taxes. Consequently, it is essential to create business

systems that are resilient to these pressures to survive in a

competitive market. This means understanding our resource

usage and footprint to inform targeted resource efficiency

initiatives. It also means having effective risk management

strategies to remove or reduce resource constraints that

affect our ability to deliver and bid for work.

Each of the Group’s projects develops a water management

plan to effectively manage water according to the unique

conditions of that project. For example, Thiess’ projects rely

on water for activities such as dust suppression, processing

of minerals and employee facilities.

Erosion control award for LNG project

Since 2012, CPB Contractors has been installing Australia

Pacific LNG’s (APLNG’s) gas‐gathering system, installing

some 650 coal seam gas (CSG) wells in Queensland’s Surat

Basin. The vast size of the APLNG Upstream project has

resulted in ongoing challenges due to changing ecosystems

and interaction with fragile and poorly structured sodic

soils.

CPB Contractors’ extensive planning and innovation,

combined with an embedded environmental culture, is

35 The United Nations World Water Development Report 2015, 20

March 2015.

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driving best‐practice in a relatively new Australian gas

industry. Key initiatives include:

• progressive rehabilitation – within three months of

disturbance; • development of mandatory, non‐negotiable risk

management procedures, resulting in more than 200

successful waterway crossings; • greater understanding of soil characteristics through

assessment and learnings from internal CPESC and

industry soil conservationists; and • implementation of industry‐leading erosion and

sediment management techniques, including application

of:

‐ in excess of 4,000 whoa‐boys and as many outlet

controls (coir logs or geo‐textile filter fences);

‐ 35kL of environmentally friendly poly‐soil binder applied

as erosion control;

‐ approximately 9,000T of gypsum used to ameliorate

soils;

‐ 16.5ha of geo‐textile as temporary stabilisation, outlet

controls or batter stabilization;

‐ 2.6km of geo‐textile dewatering socks;

‐ 31kL of flocculent to treat construction waters; and

‐ successful rehabilitation of some 1700ha.

The water management plans address the environmental

values of the surrounding environment; potential water

sources; and the regulatory commitments and landholder

obligations that the project must meet. The plans

systematically address all risks associated with water

management on the project and identify controls the project

will put in place to manage environmental values and

associated risks. They also focus on identifying options for

minimising potable water use and maximising recycling and

water reuse. These options are critical on projects where

water is scarce.

Water

The Group’s construction and mining projects seek to

identify and implement opportunities for water efficiency

and savings. During 2015, the Group used 11.9 million

kilolitres of water and discharged almost 3.96 million

kilolitres.36

36 Thiess’ water use and water sources, and waste generation, are not available for “New Markets” of Africa and the Americas. These markets are not material water users or waste generators.

Of total water demand, 43% (5.1 million kilolitres) was met

through recycling or reusing water. Of the water that was

withdrawn, it was sourced as follows:

CPB Thiess LAL

Mains % 62 1 99

Groundwater % 29 1 1

Surface water % 8 98 0

Marine water % 1 0 0

The discharges of water went to the following areas:

CPB Thiess LAL

Surface water % 46 100 1

Marine environment

% 12 0 1

Other discharges % 42 0 98

Waste

To minimise the impact of our operations on the

environment we encourage our teams, wherever possible,

to take a life‐cycle approach to resource efficiency. This

means reducing waste through smarter design and

procurement, and recycling when we can.

In 2015, we generated a total of 329,547 tonnes of waste36,

of which 61% was diverted for recycling and the balance was

disposed of in landfill.

‐4,000

‐2,000

0

2,000

4,000

6,000

CPB Thiess LAL

Water use (ML)

Discharges Withdrawls Re‐use

0

50,000

100,000

150,000

200,000

CPB Thiess LAL

Waste generation (tonnes)

Landfill Recycled

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The Group is not aware of having transported, imported,

exported or having treated any hazardous waste and has not

shipped any hazardous waste internationally.

Hazard and risk management

There were no Level 1 incidents recorded for the 2015 year.

Two minor Level 2 environmental incidents were recorded

by Leighton Asia and two by CPB Contractors in New South

Wales. In Leighton Asia, these related to an incident of

mosquito larvae breeding and an uncontrolled silt discharge,

both in Singapore. Two minor infringements were recorded

which resulted in fines of A$3,000. One potential Level 2

mosquito incident is pending in Hong Kong from 2015 with a

conviction notice expected to be issued in February 2016.

CPB Contractors’ two Level 2 environmental incidents

related to works occurring outside of approved construction

hours on the WestConnex Stage 1A M4 Widening project

and the access of a storm water pipe to allow the release of

water off site from an excavation. CPB Contractors received

a warning from the New South Wales EPA over the noise

incident and, while it was deemed a legal breach, no fine

was recorded.

In New Zealand, CPB Contractors received a fine in 2015 of

$500 from the Environmental Regulator for a 2014 incident

on the Transmission Gully project relating to unauthorised

access across the Wainui Stream.

Thiess recorded one legal breach in 2015 when the regulator

issued a warning notice to the client at the Lake Vermont

coal mine for a minor exceedance of sewerage quality limits.

No fine was imposed.

37

The majority of all other environmental incidents

categorized as Level 3 in the Australian construction

business relate to contamination of land and groundwater.

These incidents are predominately minor leaks and spills of

hydrocarbons with no material environmental harm.

Similarly in Thiess, most Level 3 incidents relate to minor

contamination of land as a result of diesel/oil spillages from

mobile plant.

In Leighton Asia, Level 3 breaches are predominantly related

to noise and vibration, silt discharges from site, mosquito

larvae, erosion and sediment control, and contamination of

land and ground water.

Managing the supply chain

The identification of sustainability risks in the supply chain is

integrated into the CIMIC Group’s multi‐disciplinary Group

wide risk management processes. Under the CIMIC Risk

Framework (the Framework), CIMIC provides guidelines and

sets minimum standards for the management and control of

all risks including sustainability risks across the Group. The

Framework facilitates consistency and compatibility with

AS/NZS ISO 31000. Risks are assessed at three levels of the

organisation; the CIMIC enterprise level; the Operating

Company corporate level; and at the project level.

Materials

As a major contractor in the construction and mining

sectors, the supply chain of our suppliers and sub‐

contractors is pivotal to our success.

In construction, our Operating Companies:

• acquire materials such as concrete, reinforcing steel and

aggregates;

• engage sub‐contractors such as haulage contractors,

form workers or electricians;

• hire engineers, foremen and labourers; and

37 Number of Level 1 and Level 2 incidents per million man hours.

0

1

2

3

CPB LAL Thiess

Envionmental incidents (#)

Level 2 Level 1

0.00

0.05

0.10

CPB Thiess LAL

Environmental incident frequency rate (#/MhW)

2015

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• purchase or hire equipment such as tunnel boring

machines, cranes and light vehicles.

Sustainable road construction

An alliance including CPB Contractors, working in

partnership with Main Roads WA, is delivering the $1

billion Gateway WA Perth Airport and Freight Access

Project, Western Australia’s largest ever road project.

Decisions made with a focus on sustainability on Gateway

WA are also leading to economic and cost advantages.

The substitution of materials was one way the project team

derived sustainable benefits for the project. They looked at

materials used for road construction to see if sustainable

benefits could arise from the replacement of one material

for another.

In road construction higher modulus equals greater

strength, which in turn means a thinner deep lift asphalt

pavement that achieves the same design life of 40 years.

The changing of asphalt binder from the traditional Class

320 bitumen to Class 600 was adopted by the project and

this enabled a higher modulus asphalt to be obtained.

The result of this is an approximate 10% reduction in total

asphalt quantity for the project overall. Not only is this a

significant cost saving for Gateway WA but it also reduces

greenhouse gas emissions and so delivers both economic

and environmental benefits.

The volume and spend on materials (concrete, steel, asphalt

and timber) is as follows:

As a contract miner, Thiess did not purchases construction

materials such as concrete, steel or timber in 2015.

The quantities of construction materials purchased and the

spend on those materials are split as follows:

Quantities CPB LAL

Concrete % 89 81

Steel % 5 6

Asphalt % 6 9

Timber % ‐ 4

Spend CPB LAL

Concrete % 60 43

Steel % 31 45

Asphalt % 9 11

Timber % ‐ 1

In mining, Thiess:

• procures dump trucks, excavators and bulldozers, and

the diesel to operate them; and

• recruits the workforce to supervise and operate the

mine and its equipment.

Of the Group’s total expenses in 2015: materials were 15%;

sub‐contractors were 36%; personnel costs were 25%; and

plant costs, including depreciation and lease payments,

were 13%, and other expenses were 11%.

Procurement practices

Each Operating Company seeks to promote and adopt

sustainable procurement practices.

We seek to minimise the impact of our construction

materials such as steel, timber and concrete by working with

our suppliers to identify measures to improve the efficient

use of these resources. Measures identified include

providing financial incentives for subcontractors to reduce

wastage of rebar, cabling and pipes, reusing inert waste and

secondary aggregate as backfill on projects; and

redeployment of concrete waste to build temporary road

structures, hard stands and precast concrete road barriers,

amongst other things.

0

125

250

375

0

1

2

3

CPB LAL

Materials use (MT) and Spend ($m)

Quantity (lhs) Spend (rhs)

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Through quarterly reviews with preferred suppliers, Thiess

has identified new and innovative opportunities to reduce

their footprint, including investigating opportunities to

replace the diesel in explosives with waste oil to reduce

resource consumption; and recycling worn ground engaging

tools into new products by melting them down at the

supplier’s foundry.

Procurement at Thiess

In its online procurement platform, the Thiess Shop, a

'green tick' is used to identify sustainable products that

deliver long‐term benefits. This extends to a supplier’s

ordering system and their demonstration of sustainability

qualities during manufacture, operation and/or disposal. It

looks at whether they go beyond business‐as‐usual and

may relate to items such as biodegradable oils and

lubricants, recycled paper, products with a lower toxicity or

suppliers with affordable packaging take‐back schemes.

At all levels risks are identified using a suitable,

comprehensive and systematic process, detailing cause,

effect, current controls in place and the risk owner. Project

level assessments focus on work procurement and project

delivery risks, while Operating Company and CIMIC

enterprise level risks focus on aggregated material project

level risks, as well as business and strategic risks.

Improving energy efficiency

Our projects require materials and energy, the cost and

availability of which can be significantly influenced by

external environmental, social and governance impacts.

Global demand for major environmental resources

continues to rise. The IEA forecasts that global energy use is

set to grow by one‐third to 2040.38 Combined with resource

stresses derived from climate change, such as water and

land availability, this means the pressure on these resources

is likely to grow.

It is essential to create business systems that are resilient to

these resources pressures to survive in a competitive

market. This means understanding our resource usage and

footprint to inform targeted resource efficiency initiatives. It

also means having effective risk management strategies to

remove or reduce resource constraints that affect our ability

to deliver and bid for work.

38 International Energy Agency, World Outlook Energy 2015, 10

November 2015.

An energy efficient new office

Leighton Properties is developing, and CPB Contractors is

constructing, a $415 million high rise development that

will redefine the North Sydney CBD skyline. Featuring

40,000m2 of A‐Grade commercial space across 30 levels, a

portion of this building is proposed as the new

headquarters for the CIMIC Group.

The building is targeting a 5 Star NABERS Energy rating

and 5 Star Green Star – Office As Built V3 rating. A number

of environmentally sustainable features have been

incorporated into the building design including low‐

temperature air conditioning systems for reduced energy

consumption, rainwater harvesting, water efficient fittings

/ fixtures to minimize potable water consumption, 90,000

litre rainwater capture system servicing irrigation and

toilet flushing, end‐of‐trip facilities, energy efficient

lighting and performance glass facades (which reduce

glare and UV light).

The building has a side core allowing an open floor plate to

maximize external views and natural light, reducing the

required artificial lighting levels. It has high efficiency

mechanical service systems improving air quality for

occupants through greater flushing of indoor pollutants.

Additionally, 90% of all timber is from certified sustainable

sources that do not contribute to deforestation whilst 80%

of all building waste will be reused or recycled.

Energy use

The Group is a substantial user of energy, particularly driven

by the mining operation of Thiess which utilises large

volumes of diesel. The Group’s energy consumption for 2015

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Consumption by our Operating Company is as follows:

CPB energy ‐ 2015 Consumption

Liquid, gas and solid fuel % 92

Electricity % 8 Thiess energy ‐ 2015 Consumption

Liquid, gas and solid fuel % 99.7

Electricity % 0.3 LAL energy ‐ 2015 Consumption

Liquid, gas and solid fuel % 81

Electricity % 19 As per NGER, the Group reported energy consumption

which his shown in the table on page 51.

In 2015, the Group launched a program in conjunction with

our major shareholder, HOCHTIEF, to promote the

responsible use of energy. The HOCHTIEF Energy Award is

open to all employees across CIMIC Group ‐ and our

Operating Companies, and our sister companies ‐ HOCHTIEF,

Turner and Flatiron ‐ who have verifiably saved energy or

who have a good idea for energy saving.

Protecting biodiversity

The Group conducts its construction, mining and services

projects across vastly different environments ranging from

built up cities to regional and remote areas.

Each project has different biodiversity values and varying

degrees of ecological sensitivity. We aim to avoid

environmental impacts to sensitive locations during the

design and planning phases of our projects. Where this is

not possible, we deploy strategies to minimize disturbance

while efficiently, effectively and safely completing work. In

areas with sensitive ecological communities, the Group

employs a range of measures to manage and mitigate

potential impacts. Central to this is the development of

biodiversity management plans that consider local contexts,

baseline surveys, monitoring results and specialist advice.

Biodiversity

The rehabilitation of disturbed areas remains an integral

element of dealing with biodiversity on our construction and

mining projects. This typically involves progressively

reshaping disturbed areas, establishing erosion control

structures, and topsoiling and seeding. Rehabilitation aims

to ensure areas are safe, stable and suitable for agreed land

uses, such as agriculture, grazing or natural habitats. In

2015, Thiess rehabilitated 1,477 hectares of land on its

mining projects.

2015 rehabilitation of mining areas

Re‐shaped

Top‐soiled

Seeded

Australia/Pacific ha 416 385 23

Asia ha 348 305 ‐

Total ha 764 690 23 Thiess receive international recognition at Mount Owen

In March 2015, delegates of the International Mining for

Development Centre (IM4DC) inspected mined areas at

Glencore’s Mount Owen coal mine nearly 20 years after

they were rehabilitated by Thiess. IM4DC is a partnership

between the Federal Government, the University of

Western Australia and the University of Queensland, and is

designed to deliver best practice to developing nations as

they build their mining industries.

Professor David Mulligan, Director of UQ’s Centre for

Mined Land Rehabilitation said that, “Mount Owen is

certainly a leader in rehabilitation for the coal industry and

it has been for many years.”

Areas rehabilitated in the 1990s now feature established

native flora and resemble the remnant vegetation of the

adjacent state forest. Native fauna such as quolls and

gliders are also returning to the rehabilitated areas.

Timber and rock piles were built by Thiess into the rehab

area to provide habitat and nesting boxes were installed in

trees for gliders and other species. In time, the trees will

develop natural hollows, overcoming the need for the

artificial habitat.

‐

50

100

150

0

2,000

4,000

6,000

8,000

CPB Thiess LAL

Energy consumption (GWH) spend ($m)

Total GWH (lhs) Energy spend (rhs)

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Legal compliance and managing reputation

The Board is responsible to shareholders for the long‐term

performance of the CIMIC Group and for overseeing the

implementation of appropriate corporate governance with

respect to the Group’s affairs.

The Board has adopted a formal Board Charter that details

the Board’s role, authority, responsibilities, membership and

operations, and is available on our website. The Charter sets

out the matters specifically reserved for the Board and the

powers delegated to its Committees and to the CEO.

The Board delegates responsibility for the day‐to‐day

management of the CIMIC Group to the Executive Chairman

and CEO, but retains responsibility for the overall strategy,

governance and performance of the Group. The Executive

Chairman and CEO then delegates authority to the

appropriate senior executives for specific activities and

transactions. This authority is governed by a formal

‘Delegations of Authority’ matrix.

The Group is not aware of any significant grievances related

to its environmental performance during 2015. Two fines

totalling $3,500 for environmental breaches were incurred

as detailed on page 54.

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We are committed to, wherever possible, preventing or

otherwise mitigating and remediating any harmful effects

from our operations. In 2016, we plan to:

• continue to focus on initiatives to reduce GHG emissions; • conduct waste management workshops on all new

projects in Leighton Asia to promote waste

minimisation; • develop and promote an Energy Management System to

promote efficient use of energy in Leighton Asia; • initiate quarterly cultural surveys in CPB Contractors to

embed a SHEQ39 Cultural Framework; and • further develop and improve support tools and

processes to integrate Infrastructure Sustainability on

projects.

39 Safety, Health, Environment and Quality.

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Our Awards Sustainability

CIMIC

• Included in DJSI’s Australia Index and recognised as the

construction and engineering global leader in four

categories including: 1) Risk & Crisis Management; 2)

Building Materials; 3) Environmental Policy/Management

System; and 4) Resource Conservation and Resource

Efficiency.

• Included in RobecoSAM’s 2016 “The Sustainability

Yearbook” and acknowledged as the construction &

engineering ‘Industry Mover’ for achieving the largest

proportional improvement in its sustainability performance

within the top 15% of the industry compared to the

previous year.

• Recognised by CDP (formerly the ‘Carbon Disclosure

Project’) with 99 out of 100 for Disclosure and a ‘C’ rating

for our Climate Change submission and a ‘B’ rating for our

Water submission.


CPB Contractors

• Western Australia’s WorkSafe awarded Broad Construction

(a CPB Contractors subsidiary) a platinum certificate of

achievement.

Leighton Asia

• Hong Kong Considerate Contractors Awards (CCA) Gold

Award in the Public Works – New Works category for the

Central Wanchai Bypass‐Central Interchange project.

• Hong Kong (CCA) Considerate Contractor Site Merit Award

in the Public Works – New Works category for the Tin Shui

Wai Hospital project.

• Hong Kong MTR Outstanding Performance in Quality,

Safety, Environmental and Stakeholder Engagement (QSE)

Silver Safety Award for the West Kowloon Terminus

Approach Tunnel (South).

• Hong Kong CCA Innovative Safety Initiative Award (ISIA)

Bronze Award in the ‘Safe Operational Device’ category for

the South Island Line (East) project.

• Hong Kong CCA ISIA Merit Award in the ‘Safe Operational

Device’ category for the Central‐Wanchai Bypass‐Central

Interchange project.

• Hong Kong Lighthouse Club‐Contractors’ Dinner and Safety

Awards (LCCDSA) Bronze Award for the Hong Kong Zhuhai‐

Macao Bridge BCF PCB project.

• Hong Kong LCCDSA Merit Award for the West Kowloon

Terminus Station North project.

• Lighthouse Club Best Contractor on Project Division Safety

Week 2015 for the West Kowloon Terminus Station North

project.

• Hong Kong Construction Safety – Forum and Award

Presentation Merit Award in the ‘Best Method Statement’

category for the Central – Wan Chai Bypass – Route Wide

project.

• Good Housekeeping Forum and Award Presentation 2015

Silver Award for the Central Wanchai Bypass‐Central

Interchange project.

• 2014 Hong Kong Construction Association Proactive Safety

Contractors Award.

• Hong Kong MTR Highest DNV score in second half year of

2014 for the West Kowloon Terminus Station North project.

• Hong Kong MTR Silver Safety Award for the Express Rail

Link, West Kowloon Terminus, Fire Services, Plumbing &

Drainage project.

• Hong Kong MTR Lowest RAFR Award for the Express Rail

Link, West Kowloon Terminus, Fire Services, Plumbing &

Drainage project.

• Labour Department Construction Industry Safety Award

Scheme 2014/2015 Merit Award in the Building Site

category for the Tin Shui Wai Hospital project.

• Labour Department Construction Industry Safety Award

Scheme 2014/2015 Bronze Award in the Safe Teams

category for the MTR Shatin to Central Link Contract 1112:

Hung Hom Station & Stabling Siding project.

• Singapore Workplace Safety and Health (WSH) Safety and

Health Award Recognition for Projects (SHARP) for the

Springleaf Station and Tunnel project.

• The Ministry of Indonesian Man Power Department Zero

Accident Award 2015 for Bekasi Workshop Indonesia.

• The Ministry of Indonesian Man Power Department

Certificate of Recognition to OHS Management System

Compliance for Leighton Indonesia.

• The Royal Society for Accident Prevention RoSPA (Gold)

Award for the Springleaf Station and Tunnels for Thomson‐

East Coast Line.


Leighton Asia

• Hong Kong Council of Social Services Considerate Caring

Company Award.

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CPB Contractors

• Ranked 5th in LinkedIn’s ‘Australia’s 30 Most InDemand

Employers: 2015’.

• Ranked 33rd most attractive employer amongst students

from across 41 Australian universities studying

Engineering/Natural Sciences.

Thiess

• Ranked 10th in LinkedIn’s ‘Australia’s 30 Most InDemand

Employers: 2015’.

• Ranked as 36th most attractive employer amongst students

from across 41 Australian universities studying

Engineering/Natural Sciences.

• Excellence in Diversity Programs and Performance Award

for Thiess’ Oothungs (Sisters) in Mining Program.

Promoting diversity in mining

Operating a 70‐tonne dozer in the heat and dust of South

Australia’s outback may not seem a woman’s top job choice.

But for driver Sabrina McKenzie, it has earned her the title of

most outstanding tradeswoman in the Women in Resources

National Awards.

She was one of four South Australian winners of the five

national awards presented in Perth by the Minerals Council

and state chambers of mines and energy. Ms McKenzie is the

only woman dozer operator in the Thiess crew at OZ Minerals’

Prominent Hill copper mine – and a role model for other

women and Indigenous workers.


CPB Contractors

• 2015 Sustainability in Infrastructure Award ‐ IS Project or

Asset Award ‐ the Sydney Metro Northwest Tunnel and

Station Civils project. This prestigious award recognises a

project or asset that has demonstrated the highest overall

excellence and sustainability achievements.

Leighton Asia

• Hong Kong MTR Outstanding Performance in QSE Bronze

Quality Award for the Express Rail Link – Contract 822.

Thiess

• Sir Leslie Thiess inducted in the Australian Prospectors and

Miners Hall of Fame in recognition of his outstanding

contribution to the Australian coal industry.

Using resource efficiently

CPB Contractors

• The International Erosion Control Association Australasia

Environmental Excellence Award ‐ Australia Pacific LNG Gas

Gathering Project.

• Banksia Sustainable Water Management Award for

managing the Swan River during the development of

Elizabeth Quay to CPB Contractors and Broad Construction.

Leighton Asia

• Hong Kong Awards for Environmental Excellence (HKAEE)

Bronze Award for the West Kowloon Terminus Station

North project.

• HKAEE Merit Award for the Shatin to Central Link Contract

1112: Hung Hom Station & Stabling Siding project.

• HKAEE Merit Award for the Tin Shui Wai Hospital project.

• Hong Kong MTR Outstanding Performance in QSE Bronze

Environmental Award for the West Kowloon Terminus

Approach Tunnel (South).

• Hong Kong CCA Merit in the Outstanding Environmental

Management and Performance Award category for the

Central Wanchai Bypass‐Central Interchange project.

• Hong Kong Silver Green Contractor Award 2014 for the Tin

Shui Wai Hospital project.

• Certificate of Merit from DevB’s OEMPA for the Central

Wanchai Bypass‐ Central Interchange project.

• Singapore ‘Green and Gracious Builder Award’ (Excellent

Level).

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Summary of Performance 2012 2013 2014 2015

Creating shareholder value

Total revenue from continuing operations 40 $m 20,830 16,259 16,876 13,371

Net Profit After Tax40 $m 450 509 677 520

Earnings per share $ 1.33 1.51 2.00 1.54

Dividends paid per share in the year41 $ 0.80 1.05 1.17 1.14

Closing share price $ 17.88 16.11 22.50 24.30

Opening share price43 $ 19.25 17.90 16.28 22.51

Share price appreciation % (7.1) (10.0) 38.2 8.0

1 year total shareholder return % (3.0) (4.1) 45.4 13.1

3 year rolling total shareholder return % (45.8) (38.8) 36.3 58.2

Market capitalisation at year end $m 6,030 5,440 7,616 8,225

Net cash/(debt) plus operating leases $m (1,363) (1,338) 20 528

Total equity $m 2,917 3,246 3,782 4,115

Gross debt to equity ratio % 94.6 65.5 79.2 25.7

Human Capital ROI45 # 1.13 1.13 1.03 1.31

Revenue per person $k 369.8 403.0 462.4 478.1

2012 2013 2014 2015


Total fatalities # 3 5 3 1

Of which: Australia # 1 1 3 1

International # 2 4 0 0

Total Class 1 Injuries # 10 9 5 2



Lost Time Injury Frequency Rate LTI/MhW 1.18 1.27 1.08 0.92

Total Recordable Injury Frequency Rate TRIs/MhW 6.6 5.7 3.8 3.2

Potential Class 1 incidents # 600 469 333 192

Million hours worked MhW 232.4 247.4 46252.5 131.0

2012 2013 2014 2015


Income tax rate vs Aus’t corporate tax rate Actual % / Corp % 22 / 30 36 / 30 34 / 30 30 / 30

Total strategic community investment $m 6.4 6.9 4.3 0.8

2012 2013 2014 2015


Total direct employees46 # 56,323 55,990 36,512

47 27,939

Personnel costs $m 5,538.3 5,908.1 4,363 3,059

Payroll ratio48 $k/employee 98.3 105.5 119.5 109.5

Average tenure of employment years 3.7 4.0 3.9 3.0

Total employee turnover rate % 27.6 25.6 56.5 42.7

Females on the Board # / % 1 / 10 2 / 10 1 / 8 1 / 8

40 Excludes joint ventures and associates, and JHG and Services which were sold in December 2014 and re shown in the Financial Statements as

discontinued operations (2013 is also restated for continuing operations as per the 2014 Annual Report). 41 Dividends paid during the year. Not dividends declared. 2015 includes special dividend of 15 cents per share.

43 The opening share price takes into account trades after market close on the last day of the relevant financial year.

45 Total Revenue less Total Operating Expenses less Total Employee Related Costs (TERC) divided by TERC. As reported to DJSI.

46 Relates to 45,214 employees which includes the discontinued operations of JHG and Services.

47 Reflects total employees from continuing operations as at 31 December 2015; total employees including continuing operations was 45,214 – 22,355 in

Australia and 22,859 in the Group’s international operations. 48 For 2014, ratio is based on continuing operations and total employees of 36,512. Ratio is distorted because it includes redundancy cost and most of the

redundancies occurred in the second half of the year, thereby inflating the ratio. For 2013, ratio is based on continuing operations, restated to match 2014.

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2012 2013 2014 2015

Developing a performance culture (cont.)

Females in the workforce % 12 12.2 12.3 9.4

Females in senior management % 10 12.9 10.2 14..3

Indigenous employees in Australia # 594 821 72049 294

Indigenous employees in Australian workforce % 2.1 2.9 3.2 3.9

Local participation in International workforce % ‐ ‐ ‐ 96.8

2012 2013 2014 2015


Cumulative green buildings completed # 27 35 50 57

Cumulative ISCA certified and rated projects # ‐ 2 6 12

Green Standard projects registered # ‐ ‐ 9 14

Green Standard projects certified # ‐ 7 8 8

Green Standard employee certifications # ‐ ‐ ‐ 41

2012 2013 2014 2015


Total Level 1 incidents # 0 0 0 0







Total Breaches # 26 3 12 4



Environmental Incident Frequency Rate50 No/MhW 0.15 0.08 0.145 0.03

Violations with fines exceeding $10k # 0 1 0 0

Value of fines related to above $k 0 15 0 0

Energy consumption ‐ Diesel GWH ‐ 12,605 12,224 7,477

Energy consumption ‐ Electricity GWH ‐ 244 269 109

Energy consumption ‐ Other51 GWH ‐ 174 233 75

Total energy consumption GWH ‐ 13,023 12,726 7,661

Energy consumption (NGER) TJ 6.9 2.7 2.6 1.4

Water use (withdrawls and re‐use) ML ‐ ‐ ‐ 11,935

Of which: Withdrawals ML ‐ ‐ ‐ 6,837

Reuse ML ‐ ‐ ‐ 5,098

Water discharges ML ‐ ‐ ‐ 3,957

GHG emissions ‐ Scope 1 (NGER)52

kt.C02‐e 730.5 206.2 153.2 77.4

GHG emissions ‐ Scope 2 (NGER) kt.C02‐e 132.5 128.5 92.5 72.1

GHG emissions ‐ Scope 153 ‐ 3,172 3,191 1,790

GHG emissions ‐ Scope 253 ‐ 210 219 84

GHG emissions ‐ Scope 3 kt.C02‐e ‐ ‐ 4,731 3,497

Level of assurance Type Limited Limited Limited Limited

Total material volumes54 kT ‐ ‐ 5,951 4,077

Of which: Concrete kT ‐ ‐ 4,880 3,418

Asphalt kT ‐ ‐ 359 309

Steel kT ‐ ‐ 580 238

Timber kT ‐ ‐ 132 111

Economic dimension Out of 100 74 78 78 79

Environmental dimension Out of 100 71 81 78 87

Social dimension Out of 100 65 68 73 74

Total sustainability score Out of 100 70 76 76 81

49 Includes Indigenous employees of JHG and Services until 2014.

50 EIFR; total number of Level 1 and Level 2 environmental incidents per million hours worked. 2014 EIFR excludes JHG and Services.

51 2013 excludes solid fuels from Leighton Asia, India and Offshore operations.

52 As reported to NGER.

53 For 2013 and 2014, period is to 30 June and includes John Holland and Services. For 2015, period is to 31 December and includes internal reporting of

emissions regardless of who has operational control of facilities. 54 Materials includes John Holland and Services for 2014.

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GRI Index Index for the Global Reporting Initiative

GRI G4 Index (for “In accordance” –Core)

General GRI indicators Application level

Page number/s

Link/notes

G4‐1 Strategy and analysis

G4‐1 Sustainability strategy and relevance of sustainability

● 10‐11 2015 Annual Report

G4‐2 Key impacts, risks and opportunities

◕ 13‐15

G4‐3–16 Organizational profile G4‐3 Name of organization ● 3, 66

G4‐4 Brands, products, and services ● 3, 6‐9, 66 http://www.cimic.com.au/our-business G4‐5 Location of headquarters ● 66

G4‐6 Number and names of countries where Group operates

● 8‐9, 66 http://www.cimic.com.au/our-business

G4‐7 Nature of ownership and legal form ● 66 http://www.cimic.com.au/investor-and-media-centre

G4‐8 Markets in which Group operates ● 6‐9 2015 Annual Report G4‐9 Scale of Group ● 62 2015 Annual Report G4‐10 Detailed information on workforce ◑ 30, 33, 35,

36‐37, 62‐63

G4‐11 Employees covered by collective bargaining agreements

◕ 33

G4‐12 Group’s supply chain ◕ 54‐56

G4‐13 Changes during reporting period ● 3 2015 Annual Report G4‐14 Precautionary principle ◑ 11 Covered under ‘Our Sustainability Commitments’

G4‐15 Commitments ◑ 32 Comply with ILO with respect to under‐age workers

G4‐16 Memberships ◑ 27

G4‐17‐23 Identified material aspects and boundaries

G4‐17 List of subsidiaries, associates, and other significant interests

● 3, 66 2015 Annual Report

G4‐18 Reporting principles and report content

● 3

G4‐19 Material aspects of report content ● 13‐14

G4‐20 Material aspects within Group ◑ 3, 13‐14

G4‐22 Restatements of information provided in previous reports

● 3 Sale of JHG and 50% of Ventia

G4‐24‐27 Stakeholder engagement G4‐24 Stakeholder groups engaged by Group ◕ 13‐14

G4‐25 Basis for identification of stakeholders ◕ 13‐14

G4‐26 Approach for engagement of stakeholder groups

◕ 13‐14

G4‐27 Key topics raised through stakeholder engagement

◕ 13‐14

G4‐28‐33 Report profile

G4‐28 Reporting period ● 3 Annually

G4‐29 Date of previous report ● 3, 10‐11 No previous GRI based Report produced

G4‐30 Reporting cycle ● 3 2015 Annual Report G4‐31 Contact point ● 66

G4‐32 Content index ◑ 3 Core

G4‐33 Basis and scope of assurance; relationship between organization and auditors; Executive Board support

◕ 3

G4‐34 Governance

G4‐34 Governance structure ● 10‐12 2015 Corporate Governance Statement

G4‐35 Delegating authority ◕ 12

G4‐36 Executive responsibility ◕ 12

● Covered in full ◕ Covered for the most part ◑ Covered in part CoC = Conduct of Conduct

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G4‐34 Governance (cont.) G4‐38‐55 Governance process ◕ 2015 Corporate Governance

Statement, Board Charters

G4‐56 Ethics and integrity

G4‐56 Principles, values, and standards ● 2, 10‐11, CoC http://www.cimic.com.au/our-approach/mission-and-principles

G4‐57‐58 Internal and external mechanisms ◕ 23‐24, CoC

Specific GRI Indicators in relation to CIMIC’s major sustainability focus

Application level

Page number Link/notes

Focus Area 1 Providing safe communities and workplaces

G4‐LA1 Employee turnover ◑ 30, 62

G4‐LA2 Employee benefits ◕ 31

G4‐LA6 Injuries and fatalities ● 18‐20, 62

G4‐LA7 Higher incidence or risk ◕ 17‐21

Focus Area 2 Acting with Integrity

G4‐SO1 Community engagement ◑ 26‐27

G4‐SO3 Risk assessment ◑ 33

G4‐SO4 Training on anti‐corruption policies ● 24, CoC

G4‐SO5 Confirmed incidents of corruption ● 24

G4‐SO6 Political contributions ● 24, CoC

G4‐SO7 Anti‐competitive behaviour ● 24, CoC

G4‐SO8 Anti‐competitive compliance ● 24, CoC

G4‐PR6 Banned or disputed products ● 24

G4‐PR7 Marketing communications ● 25 http://www.cimic.com.au/investor-and-media-centre

G4‐PR8 Customer privacy ● 25, CoC

G4‐PR9 Compliance ● 24, CoC

Focus Area 3 Developing a performance culture

G4‐EC6 Senior managers from local community ◕ 35

G4‐LA12 Diversity of the Board/workforce ◕ 34‐36, 62‐63 2015 Annual Report, 2015 Corporate Governance Statement

G4‐LA14 Screening of suppliers ◕ 33

G4‐HR5 Risk of child labour ◕ 13‐14, 23, 32‐33. CoCo

G4‐HR5 Risk of forced or compulsory labour ◕ 13‐14, 23, 32‐33, CoC

G4‐HR8 Indigenous incidents ◕ 36

Focus Area 4 Innovating to deliver projects G4‐EC1 Economic value generated & distributed ● 45

G4‐EC3 Defined benefit plan obligations ● 31 2015 Annual Report G4‐EC4 Financial assistance received ◕ 25‐26 2015 Annual Report G4‐EC8 Indirect economic impacts ◕ 26‐27, 46

Focus Area 5 Using resources efficiently G4‐EN1 Materials used ◕ 54‐55

G4‐EN3 Energy consumption ◕ 51, 56‐57, 63

G4‐EN8 Water withdrawals ◑ 52‐53, 63

G4‐EN10 Water recycled and reused ◑ 52‐53, 63

G4‐EN13 Habitats protected or restored ◕ 57

G4‐EN15 Scope 1 Greenhouse Gas emissions ◑ 50‐51, 63



G4‐EN22 Water discharges ◑ 52‐53, 63

G4‐EN23 Waste disposal ◕ 53‐54

G4‐EN24 Significant spills ● 54, 63

G4‐EN25 Hazardous waste ● 53‐54

G4‐EN29 Fines and sanctions ● 54, 58

G4‐EN30 Transport ◕ 51‐52

G4‐EN32 Supplier screening ◕ 55‐56

G4‐EN34 Grievances ◑ 58

● Covered in full ◕ Covered for the most part ◑ Covered in part CoC = Conduct of Conduct

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Organisational Profile CIMIC Group Limited ABN 57 004 482 982 Principal registered office in Australia

472 Pacific Highway, St Leonards, NSW, 2065, Australia

Telephone: +61 2 9925 6666

Fax: +61 2 9925 6000

Website: www.cimic.com.au

Ownership and legal form

CIMIC Group Limited (ASX: CIM) was listed on the Australian

Securities Exchange in 1962 and is based in Sydney, Australia.

HOCHTIEF Australia Holdings Limited is a substantial

shareholder of CIMIC with 69.9% of the shares as at 25 January

2016. The shareholding structure is set out in the 2015 Annual

Report.

Securities Exchange Listings

CIMIC Group Limited shares are listed on the ASX and are

traded under the stock code ‘CIM’. The ASX home branch is

Sydney, Australia. A subsidiary, Leighton Finance (USA) Pty

Limited, has notes on issue which are listed on the Singapore

Exchange.

Primary brands, products and services

The CIMIC Group is comprised of four core businesses, each

with their own brand/s and focus:

• Construction through CPB Contractors and Leighton Asia –

leading international construction contractors;

• Mining through Thiess – a global contract miner;

• Public Private Partnership (PPPs) through Pacific

Partnerships – a PPP manager, financing arranger, and

operations and maintenance manager; and

• Engineering through EIC Activities– our internal engineering

and consultancy which provides specialist design, technical

support and research and technology. The CIMIC Group also has the following investments:

• 59.1% (as of 31 December 2015) of the Australian listed

property development company Devine Limited;

• 50% of an investment partnership in the Australian services

entity Ventia;

• 45% of the Middle East based construction company

Habtoor Leighton Group;

• 46.4% (as of 5 February 2016) of the listed resources

engineering company Sedgman Limited;

• 28.9% (as of 31 December 2015) of the telecommunications

Nextgen Group Holdings Pty Limited;

• 19.7% (as of 31 December 2015) of the listed mining

contracting company Macmahon Holdings Limited.

Countries

The CIMIC Group’s four core businesses are currently delivering

projects in the following countries:

• Australia

• New Zealand

• Papua New Guinea

• Indonesia

• Singapore

• Malaysia

• Philippines

• Hong Kong

• Macau

• Mongolia

• India

• Iraq

• Chile

• Botswana The Habtoor Leighton Group is delivering, or has recently delivered projects, in:

• United Araba Emirates

• Oman

• Qatar

• Saudi Arabia

• Kuwait

• Iraq

• Bahrain

Contact information

Justin Grogan Executive General Manager, Sustainability Tel: +61 2 9925 6628 Email: [email protected]

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