Your directors present their report, together with the financial report of the Company, for the year ended 30 June 2019 and the auditor's report thereon.

Directors

The following were directors of the Company during the whole of the financial year and up to the date of this report:

• Lucio Di Bartolomeo
• Peter Iancov
• Janice van Reyk
• Jeremy Schultz
• Alan (Jim) Whalley
• David Knox

Principal activities

The Company holds property, plant and equipment utilised for the maintenance of the Collins Class submarines and construction of the AWDs and OPVs and is undertaking an expansion and refurbishment of the Osborne Naval Shipyard in support of the Commonwealth’s continuous naval shipbuilding program.

Review of operations

The review of operations is contained in the Chair and CEO’s letter and the Overview of Operations in the Company’s annual report.

Significant changes in the state of affairs

There were no significant changes in ANI’s state of affairs during the financial period ended 30 June 2019.

Significant events after the balance sheet date

The Directors are not aware of any matters or circumstances that have arisen since 1 July 2019 which have significantly affected, or may significantly affect:

• ANI’s operations in future financial years;
• the results of those operations in future financial years; or
• ANI’s state of affairs in future financial years.

Likely developments and expected results of operations

ANI is undertaking the OSDP to significantly expand and upgrade the existing shipyard for the construction of surface combatants. ANI expects that most of the works associated with the ‘new-build’ aspects of the project will be completed and handed over to the shipyard tenant for the construction of the Hunter class frigates prior to 30 June 2020, which will result in a significant increase in ANI’s revenue.

In addition, ANI is progressing the planning and design for the ONDP to build a new submarine yard to support the construction of the Attack class submarines. Construction activities are expected to commence by 31 December 2019 with the new facilities to be progressively tenanted from 2021.

Dividends

No dividends have been paid or declared by ANI since the end of the previous financial year.

Environmental regulation

The operations of the Company are subject to environmental regulation under both Commonwealth and State legislation in relation to activities undertaken on site in South Australia. The Company is committed to achieving a high standard of environmental performance consistent with the requirements of AS/NZ ISO 14001. ANI’s CUI has accreditation for AS/NZ ISO 14001: Environmental Management Systems.

The Company has complied with all applicable environmental regulations and site specific environmental licence requirements, and there have been no environmental incidents in the reporting period requiring official regulatory notification.

Directors’ benefits

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than reimbursement of expenses and the aggregate amount of remuneration received or due and receivable by directors shown in the accounts) because of a contract made by the Company, or a related body corporate with the director or with a firm of which the director is a member, or with an entity in which the director has a substantial interest.

Indemnification and insurance of directors and officers

(a) Indemnification

The Company has agreed to indemnify the current and previous directors and officers of the Company for all liabilities to another person (other than the Company or a related body corporate) that may arise in their capacity as directors and officers of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. The agreements stipulate that the Company will meet, to the extent permitted by law, the full amount of any such liabilities, including costs and expenses.

(b) Insurance premiums

Since the end of the previous financial year, the Company has paid insurance premiums in respect of directors' and officers' liability insurance contracts for current and former directors and officers, including executive officers of the Company and directors. The insurance premiums cover directors and officers for actual losses incurred in their capacity as directors and officers of the Company, which are not indemnified by the Company and which the director or officer becomes legally obligated to pay on account of certain claims made against him/her individually or otherwise. The terms of the insurance policy prohibit disclosure of the amounts of the premium payable.

The auditor's independence declaration, as required under section 307C of the Corporations Act 2001 (Cth) is set out in the AUDITOR'S INDEPENDENCE DECLARATION.

Lead auditor's independence declaration

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