McConnell Dowell 2019 Annual Review

80 McConnell Dowell Group Notes to the annual financial statements (continued) for the year ended 30 June 2019 Consolidated All figures are in A$ 000’s 2019 2018 21. Contingent Liabilities Contingent liabilities at balance date, not otherwise provided for in the annual financial statements, arising from guarantees in the normal course of business from which it is anticipated that no material liabilities will arise: - bank guarantees 33,016 58,126 - letters of credit 1,091 4,918 - insurance bonds 262,435 222,481 Total contingent liabilities 296,542 285,525 The Group has banking and bonding facilities of $479.0 million (2018: $464.6 million). The assets of the Group are pledged under a fixed and floating charge as security for the United Overseas Bank facility of $100.0miilion. As at 30 June 2019 the Group had $182.5 million (2018: $179.0 million) available (unused) under these facilities. The Group sometimes has claims that arise out of engineering and construction contracts that have been made by or against the Group in the ordinary course of business. Please refer to Significant Accounting Judgements, Estimates and Assumptions in Note 1 for further information. The Group is subject to routine tax audits via the ATO in Australia and in certain other overseas jurisdictions. The ultimate outcome of any tax audit cannot be determined within any acceptable degree of reliability at this time. The Group believes that it is making adequate provision for its taxation liabilities (including amounts shown as current and deferred tax liabilities). However, there may be an impact to the Group if any revenue authority investigations results in an adjustment that increases the Group’s taxation liabilities. 22. Financial risk management objectives and policies The Group’s principal financial instruments are cash and short-term deposits, receivables, payables and interest bearing liabilities. The Group also provides performance guarantees for the Group’s operations. The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, liquidity risk and credit risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. The Group has developed a risk management process to facilitate, control and monitor its exposure to key financial risks. This process includes the formal documentation of policies, including limits, controls and reporting structures. The Group does not trade in financial instruments. Primary responsibility for identification and control of financial risk rests with the Board. The Board reviews and agrees policies for managing each of the risks identified below. Details of the significant accounting policies and methods adopted, including the criteria for recognition of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements. Financial Statements 2019