Fletcher Building
2013 Annual Report
3
Snapshot
Chairman’s review
Chief Executive’s review
Board of Directors
Management team
Divisional overview
Divisions
Infrastructure Products
Building Products
Laminates & Panels
Distribution
Construction
FBUnite
Canterbury update
People
Health & Safety
Environment & Sustainability
Corporate governance
Remuneration report
Financial review
Financial statements
Independent auditor’s report
Trend statement
Regulatory disclosures
Investor information
Directory
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You can obtain an electronic copy
of the Annual Report by going to
the following website address:
fbu.com/investor-centre/reports.
The Annual Shareholders’ Meeting of
Fletcher Building Limited will be held in the
Level 4 Lounge, South Stand, Eden Park,
Reimers Avenue, Auckland, at 10.30am
on Wednesday, 16 October 2013.
This report is dated 4 September 2013
and is signed on behalf of the board of
Fletcher Building Limited.
Ralph Waters
Chairman of Directors
Mark Adamson
Managing Director
SNAPSHOT
$326NET EARNINGs
for the prior year. million
for the financial year
to 30 June 2013,
76% higher than
34c
PER sHARE DIVIDEND for the
2013 financial year.
$569million
OPERATING EARNINGs for the 2013 financial year.
BUILDING
ON SUCCESS
CHAIRMAN’S REVIEW
This past year Fletcher Building
has once again encountered
mixed economic conditions.
In contrast to the past four years,
this year we experienced a strong
improvement in market conditions
in New Zealand, and a marked
deterioration in activity levels in
Australia. Also diverging from
recent trends was the US market
which had solid growth in volumes
compared with China, previously
a strong growth market but which
slowed in the past year.
Uncertain economic conditions
have thus continued to set the
background for the performance
of the company. In this context, it
is pleasing to report that we have
delivered operating earnings
within the guidance range
provided to the market last year
and that this has been achieved
at the same time as a number of
restructuring initiatives have been
undertaken. Importantly, while
underlying growth in earnings
over last year was modest,
operating cashflows were up
strongly reflecting the renewed
focus during the year on lifting
cash returns.
Repositioning for the future
Following his appointment as
chief executive officer last year,
Mark Adamson has undertaken
a thorough review of Fletcher
Building’s strategy and operating
model. As detailed later in this
report, Mark and the executive
team have identified a number of
opportunities where, by making
2
changes to the decentralised
operating model, further
efficiency gains and operational
improvements can be effected.
These initiatives have been
grouped together under the
project name FBUnite.
A key priority of FBUnite is to
ensure that our businesses
remain competitive in the face
of strong domestic currencies
and increased competition from
local manufacturers and imports.
The board is in full support of the
FBUnite programme and believe
that its successful implementation
will provide a very strong
foundation for the next chapter
in Fletcher Building’s future.
Operating performance
Net earnings for the year to
30 June 2013 were $326 million,
compared with $185 million in the
2012 financial year. As the prior
year’s result included significant
items totalling $132 million after
tax, prior year net earnings before
significant items were $317 million.
Net earnings before significant
items were 3 percent higher than
for the prior year.
Operating earnings (earnings
before interest and tax) were
$569 million compared with
$403 million achieved in the prior
year, and prior year operating
earnings before significant items
of $556 million.
Total group revenues of $8,517
million were down 4 percent
mainly due to the sale of several
businesses during the year.
New Zealand operating earnings
before significant items increased
by 38 percent and this was driven
by rising levels of new house
building activity, strong momentum
with the repairs and rebuilding work
in Canterbury, and contributions
from several large infrastructure
projects. We were able to counter
the impacts of the high New
Zealand dollar and increased
competition through cost reduction
and efficiency initiatives that were
implemented during the year.
Economic conditions in Australia
deteriorated as the year
progressed. Residential and
improvement is expected. Recent
government announcements for
major projects in Auckland and
Canterbury are encouraging,
and there are good opportunities
for building in the health and
education sectors as well.
The outlook in Australia remains
uncertain. While volumes have
generally stabilised at current
levels, there has been little
improvement evident in residential
construction and commercial
activity has remained flat with no
obvious signs of recovery. The
knock-on impact of a slowdown in
mining and resources investment
is expected to impact overall
activity levels.
Trading conditions in North
America continue to remain mixed.
While there have been improving
trends in the residential housing
market and positive signs that the
market may continue to improve
during the year, the commercial
market has remained flat.
In South-East Asia, demand has
remained firm and the outlook
is positive, however, growth and
activity levels have slowed in
China and Taiwan and the near
term outlook in these markets
remains uncertain.
European markets show no signs
of improvement, and a recovery
there is not expected in the short
to medium term.
In terms of the earnings outlook
for the 2014 financial year, a
sustained improvement in activity
levels in New Zealand coupled with
operational efficiency gains should
drive earnings growth. However,
no significant volume growth is
forecast in the Australian market
and any further deterioration from
current levels will temper earnings
momentum elsewhere across
the group.
commercial markets were weak,
and a slowdown in mining and
resources investment had a
knock-on effect across other
parts of the construction industry.
Consequently, operating earnings
before significant items from the
Australian businesses fell by
22 percent.
Operating earnings before
significant items from our
operations beyond Australasia
declined by 11 percent. Improved
volumes in North America were
offset by worsening conditions in
Europe, while Asia was generally
flat or slightly down.
A highlight of this year’s result was
cashflow from operations, which
was 25 percent higher at $559
million. This was driven by stronger
cash contributions from the
Construction, Building Products
and Distribution divisions.
Balance sheet
As a result of the increase in
operating cashflow and lower
capital expenditure levels, the
balance sheet was strengthened
during the year. Net debt declined
by $283 million and our gearing
ratio, the ratio of net debt to net
debt plus equity, declined to
33.3 percent from 37.4 percent
in the prior year.
shareholder return
It is especially pleasing to report
that the total shareholder return
for the year to 30 June 2013 was
50.5 percent, driven principally
by a resurgent share price. A year
ago I noted the negative investor
sentiment towards the building
materials sector that had resulted
in disappointing returns to
shareholders. This year’s very
strong outcome reflects the
sharp change in the view of
investors towards our sector,
with most building materials and
products companies in Australia
experiencing similarly strong
share price appreciation.
Dividend
The total dividend for the year
is 34 cents per share, consistent
with what was paid in the prior
year. This represents a pay-out
ratio of 71 percent, a level we are
comfortable with given this year’s
strong operating cashflow and
the strength of the balance sheet.
We anticipate that in the future
the dividend will grow at a slower
rate than earnings as we seek to
return the dividend pay-out ratio
to a level that is sustainable over
the long term.
People
This past year has continued to
present many challenges for our
people. Some have had to grapple
with the pressures of rapidly
increased demand for products
and services, whilst others have
faced the difficulty of dealing with
declining markets and industry
over-capacity. The need to further
rationalise operations in a number
of our businesses has tested many
of our people. On behalf of the
board I thank everyone for their
commitment and efforts this year.
Directors
As noted in last year’s annual
report, Hugh Fletcher and
Jonathan Ling retired from the
board at the end of September
2012. The retirement of Hugh
Fletcher was part of the board’s
programme of regular rotation
of directors with most only
having a nine year expected
term. Typically this has seen one
director retiring each year, so
refreshing the board over time.
Outlook
As we look ahead, we expect
many of the trends that we have
experienced over the past year to
influence our performance in 2014.
In New Zealand, we are expecting
a further increase in construction
activity across most sectors.
The residential housing market,
particularly in Auckland, is
expected to be strong in the
coming year. The repair of houses
and infrastructure in Christchurch
will continue to boost activity
levels and there is growing interest
in commercial building projects
within the central business area.
After a long period of weak
demand in civil infrastructure and
commercial building, a steady
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BUILDING
OUR FUTURE
CHIEF EXECUTIVE’S REVIEW
Since starting as chief executive
in October last year, the executive
team and I have been looking at
the Fletcher Building business
model and how we might evolve
the way we work in the future.
Through this process we formed a
strong view of the opportunities to
foster greater collaboration across
the group, combine resources and
better leverage our scale, improve
our operating efficiency and better
target investment towards future
growth opportunities.
These ideas have evolved
into a number of separate but
related work streams, which
will collectively transform how
Fletcher Building operates, under
the banner of FBUnite. FBUnite’s
goal is to build the foundations for
Fletcher Building’s next phase, by
fundamentally transforming the way
Fletcher Building operates, with the
twin aims of creating shareholder
value and charting the growth path
for the next decade and beyond.
We want to retain the best aspects
of our decentralised business
model, with businesses working
close to their customers and being
focused on their product and
market segments. At the same time
we want to harness the collective
strength of the Fletcher Building
group to reduce costs and more
efficiently deliver supporting and
enabling services to our businesses.
A further priority since I started
last October has been to undertake,
in conjunction with the board and
executive team, a broad strategy
review. This work has validated
our position as an integrated
manufacturer and distributor
of infrastructure and building
products, as well as a
construction company.
This strategy review has led to
several new areas of exploration
within the FBUnite programme.
In particular, we have work
streams looking at:
■ how we can harness digital
technologies to further drive
revenues and make it easier for
customers to interact with us;
■
future opportunities in our
distribution activities across
Australia and New Zealand;
■ other growth opportunities
for expansion in adjacent
products or industries.
This work is on-going and
will feed into the strategic
conversations we are having
at executive and board level.
simplifying the business
During the year, a number of
changes were made to simplify
our divisional structure and bring
greater clarity around business
clusters.
The long steel and distribution
businesses have been brought into
the Infrastructure Products division,
alongside the concrete, concrete
products and quarry businesses.
Subsequently, the Iplex Pipelines
and Crane Copper Tube businesses
that were acquired as part of the
acquisition of Crane were also
combined with Infrastructure
Products, thereby bringing all the
pipe business units together in one
division and providing a broader
suite of products to end customers.
The Infrastructure Products division
is thus comprised of businesses
that manufacture products used
typically in the early part of the
construction cycle and involve
heavy manufacturing processes.
In grouping these businesses in this
way, we have been able to leverage
existing channels to market and
better serve our customers with a
broader solutions offering.
The other businesses within the
Steel division – the coated steel
businesses of Stramit Building
Products, Dimond, Pacific
Coilcoaters and Gliderol –
have been grouped within the
Building Products division.
Again, there was a clear rationale
for this, as the Building Products
division is comprised of building
materials businesses that are
more commonly utilised in the
middle and latter parts of the
construction cycle.
Both the Infrastructure Products
and Building Products divisions
have made a number of further
organisational changes during
the year to combine businesses
and reduce complexity.
Management changes
As a result of the changes
over the past year, both the
Steel and Crane divisions were
disestablished as separate
divisions, reducing our number
of divisions to five from seven.
Following these changes, David
Worley decided to leave Fletcher
Building. Tim Hickey was appointed
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programme. We expect repairs to
the final Earthquake Commission
(EQC) referred property will be
completed in December 2014
which is well ahead of the original
target set.
With this achievement, our
attention is turning to ensuring
that we are able to transition our
people involved with the home
repair programme to larger
commercial construction projects
and other parts of our business
as the residential repair workload
decreases. Their skills will be
invaluable to the work that remains
to be done in Canterbury.
Looking ahead
While implementing FBUnite is a
key priority for us over the next few
years, we will continue to work on
strengthening and extending our
core positions across New Zealand
and Australia. We believe there
will be good opportunities across
our markets for further organic
growth through our existing
businesses and that we can also
drive internal efficiencies and
improve our cost competitiveness.
At the same time, we will continue
to seek opportunities to extend
core positions in New Zealand
and Australia through infill and
adjacent acquisitions, along with
opportunities to leverage existing
assets and capabilities in selected
new markets.
Beyond Australia and New Zealand,
we will seek to build and enhance
positions in select products and
geographies where we believe we
have proven capabilities that can
be leveraged successfully.
Operating earnings of $569 million
were within the guidance range
provided at the half year, albeit
towards the lower end of the range.
This was due to the deterioration in
trading conditions we experienced
in Australia throughout the year.
A particularly noteworthy aspect
of this year’s result was the strong
uplift in operating cashflow of
25 percent to $559 million. This
was driven by a focused effort
across our businesses on cash
management.
Investing for the future
Consistent with our increased
focus on cash management,
capital expenditure for the 2013
financial year was $246 million,
down from $353 million in the
previous year. Looking ahead
we expect a modest increase
in capital expenditure in the
current year between $250 million
and $300 million excluding
acquisitions. In addition to the
continued investment across our
businesses, this year we will be
prioritising capital expenditure
on information technology and
supporting infrastructure that will
enable various FBUnite projects.
Health and safety
We have continued to further
reduce our injury rates over the
past year. Our primary injury
rate measure is the 12-month
rolling average Total Recordable
Injury Frequency Rate per million
employee and contractor hours
(TRIFR), with total injuries being
the sum of lost-time and medical
treatment injuries. In the year to
30 June 2013 this rate was 6.80,
a reduction from 8.48 in the prior
year. This figure was more than
60 in 2005. Our lost time injury
frequency rate has dropped
from 3.27 to 2.82.
Mark Adamson
Chief Executive
chief executive Distribution
Australia in March, having worked
previously as a senior executive
for Yum Brands in the US and as
the CEO of Midas Australia.
In June, John Beveridge
announced his resignation as
chief executive of the Distribution
division. Dean Fradgley has been
appointed chief executive of the
New Zealand Distribution business
to replace John, and will relocate
from the UK to take up his role
in October 2013. Dean has more
than twenty years’ experience in
retailing and for the past thirteen
years has worked within the trade
and hardware sectors.
Earnings overview
Achieving net earnings for the
year of $326 million was a solid
outcome given the mixed trading
conditions we encountered across
our operations. This year’s result
included a number of costs relating
to restructuring and business
efficiency initiatives, the benefits
of which will be seen in the current
financial year and beyond.
Delivering in Canterbury
This past year has been one of
considerable progress in our
role as project manager for
the Canterbury Home Repair
Programme. In June we reached
an important milestone with the
completion of 40,000 full scope
home repairs – marking the
halfway point in the home repair
5
BOARD
OF DIRECTORS
Ralph G Waters
Mark D Adamson
Antony J Carter
Alan T Jackson
CPEng, FIE Aust, M Bus
BA (Hons), ACA, ATII
Independent Non-Executive
Chairman of Directors
Chairman of the Nominations
Committee
First appointed 10 July 2001
Mr Waters, 64, has extensive
management experience in the
Australasian building products
industry including as managing
director of Email, a major Australian
industrial company, and until
31 August 2006 as the chief
executive officer and managing
director of Fletcher Building. He is
chairman of Woolworths, Fletcher
Building Industries and the ICC
Cricket World Cup 2015 and is a
director of Asciano. Mr Waters is a
Chartered Professional Engineer
and a Fellow of the Institution of
Engineers Australia.
Non-independent Executive Director
First appointed 1 October 2012
Mr Adamson, 47, is chief executive
officer and managing director
of the company. He joined the
Formica Group in 1998 as chief
financial officer of the European
division followed by the role of
managing director UK and Eire
and in 2004 became president
of Formica Europe. He became
the chief executive of Formica
Corporation in 2008 and of the
Laminates & Panels division in
2011. Prior to joining Formica
he was financial controller of
the pharmaceutical company
GlaxoSmithKline. Mr Adamson is
a member of the English Institute
of Chartered Accountants and the
Institute of Taxation and a director
of Fletcher Building Industries.
BE (Hons), ME, MPhil
(Loughborough)
BEng (Hons), PhD (Auckland), MBA
(IMD Management Institute)
Independent Non-Executive Director
Independent Non-Executive Director
Member of the Remuneration and
Nominations Committees
First appointed 1 September 2010
Mr Carter, 55, was previously
managing director of Foodstuffs
(Auckland) and Foodstuffs (New
Zealand), New Zealand’s largest
retail organisation, and a director
of a number of related companies.
He has extensive experience in
retailing, having joined Foodstuffs
in 1994 and from having owned
and operated several Mitre 10
hardware stores, and was a director
and later chairman of Mitre 10
New Zealand. Mr Carter is
chairman of Fisher & Paykel
Healthcare, Air New Zealand (with
effect from 27 September) and
the Blues LLP, a director of ANZ
Bank New Zealand and Fletcher
Building Industries, co-chair of the
NZ Initiative and a trustee of the
Maurice Carter Charitable Trust.
Chairman of the Remuneration
Committee and member of the
Nominations Committee
First appointed 1 September 2009
Dr Jackson, 60, was until 2009
chairman Australasia, senior vice
president and director of The
Boston Consulting Group. He has
been an international management
consultant since 1987 with The
Boston Consulting Group and has
proven experience at the most
senior levels of international and
government business. Dr Jackson
has worked across a range of
industries including resources,
diversified industrials, building
products and construction
sectors including as chairman
of Housing Corporation New
Zealand. Dr Jackson is a Fellow
of the Institution of Professional
Engineers. He is a director of
Delegat’s Group and Fletcher
Building Industries and a trustee
of The ICEHOUSE Auckland.
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John F Judge
Kathryn D Spargo
Cecilia Tarrant
Gene T Tilbrook
BCom, FCA, MPP, FINSTD
LLB (Hons), BA
BA, LLB (Hons), LLM (Berkeley)
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Chairman of the Audit and Risk
Committee and member of the
Nominations Committee
First appointed 9 June 2008
Mr Judge, 60, has considerable
experience in Australasian business
and brings financial and analytical
knowledge to the board. His career
includes various roles within Ernst
& Young culminating in the position
of chief executive of Ernst & Young
New Zealand. He is chairman of
ANZ Bank New Zealand and the
Auckland Art Gallery Foundation,
a director of Fletcher Building
Industries and a member of the
Otago University Business School
advisory board.
Member of the Audit and Risk and
Nominations Committees
Member of the Audit and Risk and
Nominations Committees
First appointed 1 March 2012
First appointed 10 October 2011
Ms Spargo, 61, has extensive
business experience from advisory
roles on strategic and governance
issues following a career in legal
practice in both the public and
private sectors. She has a number
of non-executive directorships,
including ASX listed companies,
UGL and Sonic Healthcare, and
of SMEC Holdings and Investec
Bank (Australia). She also serves
as a director on a number of “not
for profit” businesses. Ms Spargo is
currently the chair of the Australian
Accounting Professional and Ethical
Standards Board, is a member of
the International Ethics Standards
Boards for Accountants and is a
Fellow of the Australian Institute of
Company Directors.
Ms Tarrant, 52, is an executive-
in-residence at The University of
Auckland Business School after
over 20 years’ experience in
international banking and finance
in the USA and Europe. In that time,
she worked as a real estate finance
lawyer and as an investment
banker with Credit Suisse First
Boston and Morgan Stanley,
culminating in holding the position
of managing director in Morgan
Stanley’s Global Capital Markets
Group in London. Ms Tarrant is
currently a trustee of The University
of Auckland Foundation, a director
of Fletcher Building Industries
and Shopping Centres Australasia
Property Group Trustee NZ and
deputy chair of the Government
Superannuation Fund Authority.
BSc, MBA (University of
Western Australia)
Independent Non-Executive Director
Member of the Audit and Risk and
Nominations Committees
First appointed 1 September 2009
Mr Tilbrook, 62, was finance
director at Wesfarmers until
his retirement in May 2009.
He led Wesfarmers’ business
development group, becoming
executive director, business
development in 2002 and finance
director in 2005. Mr Tilbrook is
a director of Fletcher Building
Industries, Orica, Aurizon Holdings
and the GPT Group. He is a
councillor of Curtin University of
Technology and of the Australian
Institute of Company Directors (WA).
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MANAGEMENT
TEAM
Mark Adamson
Chief Executive Officer
and Managing Director
Gerry Bollman
Chief Executive Business
Strategy and Performance
Kate Daly
Group General Manager
Human Resources
Graham Darlow
Chief Executive
Construction
Martin Farrell
Company Secretary
and General Counsel
Tim Hickey
Chief Executive
Distribution Australia
Mark Malpass
Chief Executive
Infrastructure Products
Nick Olson
Chief Financial Officer
Tim Richards
Chief Executive
Building Products
Paul Zuckerman
Chief Executive
Laminates & Panels
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Mark Adamson
Chief Executive Officer
and Managing Director
Mark Adamson is the chief
executive officer and managing
director of Fletcher Building. Prior
to taking up his current role in
October 2012, Mark held a number
of positions with the Formica Group.
He joined the Formica Group in
1998 as chief financial officer of the
European division. Following that
role he was appointed managing
director UK and Eire, in 2004 was
appointed president of Formica
Europe and then chief executive
of Formica Corporation in 2008.
Prior to joining Formica Corporation
he was financial controller of
the pharmaceutical company
GlaxoSmithKline. Mark holds a
Bachelor of Arts degree in Business
Finance from Northumbria University
UK. He is a member of the English
Institute of Chartered Accountants
and the Institute of Taxation.
Gerry Bollman
Chief Executive – Business
Strategy and Performance
Gerry Bollman joined the senior
management team at Formica
Group in 2008, based in the United
States of America but working
extensively across Europe, Asia
and India. Prior to moving to
New Zealand in October 2012 to
commence his current role, Gerry
was most recently Formica Group’s
vice president – strategy & business
development. In that role Gerry
spent considerable time working
with Formica Asia on their China
growth and expansion; with Formica
Europe on the acquisition in India;
and with the Laminex Australia
and New Zealand teams on their
transformation programmes. Before
joining Formica he spent 7 years with
the global management consultancy
Booz Allen Hamilton. Gerry holds
an MBA from The University of
Michigan and a Bachelor of Science
degree (Finance) from Xavier
University in Cincinnati.
Kate Daly
Group General Manager –
Human Resources
Kate Daly joined Fletcher Building
as the group general manager of
human resources in June 2011.
Prior to this she was general
manager corporate affairs, people
& performance at Coca-Cola
Amatil (NZ). Ms Daly has also
worked for Deutsche Bank, Merrill
Lynch, ABN AMRO and Greenwich
Healthcare Trust in London. Kate
holds a Bachelor of Commerce
degree (majoring in Economics
and International Business) and
a Bachelor of Science degree
(majoring in Pharmacology) from
The University of Auckland.
Graham Darlow
Chief Executive – Construction
Graham Darlow has held the role of
chief executive, construction since
November 2011. He joined Fletcher
Building in 1988, after starting his
career as a professional engineer in
Australia and the United Kingdom.
He progressed through Fletcher
Construction’s engineering
division to become general
manager in 2001. After holding
senior positions on many of New
Zealand’s largest construction
projects, he now plays a significant
role in the rebuild of Christchurch.
Graham is a fellow and past
president of the Institution of
Professional Engineers New
Zealand and a fellow of the Institute
of Civil Engineers (UK). Graham
holds a Bachelor of Engineering
(Civil) from Auckland University
and attended the Advanced
Management Programme at
Mt Eliza Business School.
Martin Farrell
Company Secretary and
General Counsel
Martin Farrell joined Fletcher
Challenge Limited in 1980 where
he headed the tax function
across the Fletcher Challenge
group. In early 2000 he also
became company secretary.
His responsibilities have been with
the board, governance, legal and
taxation matters. Prior to joining
Fletcher Challenge he worked
for KPMG. Martin has Bachelor
of Commerce and Bachelor of
Laws degrees from the University
of Otago. He is a chartered
accountant and a member of
the New Zealand Institute of
Chartered Accountants.
Tim Hickey
Chief Executive –
Distribution Australia
Tim Hickey was appointed chief
executive, Distribution Australia,
in July 2013. Prior to this permanent
appointment he was interim
executive general manager of
Tradelink between April 2013
and July 2013. Tim was most
recently chief executive of Midas
Australia, a business which was
transformed from a position of
voluntary administration into a
profitable franchise operation under
Tim’s leadership. He has previously
worked as a senior executive for
PepsiCo restaurants and Yum
Brands in the US, holding various
roles in marketing and operations.
Tim has a Bachelor of Economics
from Macquarie University and has
completed courses in marketing
management from the University
of NSW and strategic management
from the Macquarie Graduate
School of Management.
Mark Malpass
Chief Executive –
Infrastructure Products
Mark was appointed chief executive,
infrastructure products division
(formerly concrete) in November
2011. Prior to joining Fletcher
Building he had a 19 year career with
ExxonMobil Corporation. He has had
senior leadership roles in Australia,
United States and most recently
Singapore, where he led strategic
change across the Asia-Pacific
business. Mark has also held the role
of country manager and chairman
of Mobil Oil New Zealand. He was
also a director of the New Zealand
Refining Company. Mark holds an
MBA from Victoria University of
Wellington, Bachelor of Engineering
(BE Mechanical, Hons) from the
University of Auckland, and New
Zealand Certificate in Engineering
(NZCE Mechanical) from Auckland
Institute of Technology.
Nick Olson
Chief Financial Officer
Nick Olson joined Fletcher Building
as chief financial officer in April 2013.
Prior to this he held the position
of chief financial officer, Telecom
Corporation of New Zealand Limited,
from October 2010 until December
2012. Nick joined Telecom in
January 2002, and between 2002
and 2010 held numerous roles with
the company, including treasurer,
general manager finance and group
controller. Prior to this he spent
13 years in the investment banking
industry. Nick has extensive capital
markets, mergers and acquisitions
and corporate finance experience.
In 2012 was awarded ‘CFO of the
year’ at the annual New Zealand
CFO Awards. Nick holds a Bachelor
of Engineering (1st Class Hons)
from the University of Auckland
and is an Associate Chartered
Accountant (NZICA).
Tim Richards
Chief Executive – Building Products
Tim Richards was appointed chief
executive, building products division
in October 2011. He has been with
Fletcher Building since 2005 when
the Amatek Group was acquired
and he became general manager
of Stramit, a leading Australian
manufacturer and distributor
of steel building products and
systems. Prior to joining Stramit Tim
worked for Boral Timber and KPMG.
Tim holds a Bachelor of Business
(Accountancy) from Charles Sturt
University, is a member of the
Institute of Chartered Accountants
in Australia, and in 2010 attended
the Advanced Management
Program at The Wharton School,
University of Pennsylvania.
Paul Zuckerman
Chief Executive – Laminates & Panels
Paul Zuckerman was appointed
chief executive, laminates & panels
division in October 2012. Prior to
this he was chief executive of the
steel division, a role he held since
May 2007. Prior to joining Fletcher
Building he held the position
of president, Greater China
with BlueScope Steel. He held
numerous senior management
roles with BlueScope over a 13 year
period. Prior to this he spent eight
years at PPG Industries, a leading
global manufacturer of industrial
coating, glass and chemical
products. Paul gained his Bachelor
of Science degree in Chemistry
from Syracuse University and his
Master of Business Administration
from Ohio State University.
9
DIVISIONAL
OVERVIEW
Key businesses
Crane Copper Tube
Firth
Fletcher Easysteel
Golden Bay Cement
Humes Pipeline Systems
Iplex Pipelines
Rocla Pipeline Products
Rocla Quarry Products
Winstone Aggregates
Key businesses
Decra Roofing Systems
Dimond
Fletcher Aluminium
Fletcher Insulation
Forman Group
Gerard Roofing Systems
Pacific Coilcoaters
Stramit Building Products
Tasman Insulation
Winstone Wallboards
Key businesses
Formica
Laminex
The Infrastructure Products
division is a manufacturer,
distributor and marketer of heavy
construction materials, including
aggregate, cement, concrete and
masonry products, plastic PE and
PVC pipe, and long steel products.
Its products and services are
typically used in the early stages
of the construction cycle.
The Building Products division
manufactures a broad range of
building products for residential and
commercial markets. Those products
include plasterboard, glasswool
insulation and other insulation and
acoustic products, metal roof tiles,
longrun roofing and other rolled
steel products.
The Laminates & Panels division
includes the Laminex and Formica
businesses. Formica manufactures
and distributes decorative surface
laminates in North America, Europe
and Asia. Laminex is the leading
Australasian manufacturer and
distributor of decorative surface
laminates, component products,
particleboard and medium density
fibreboard (MDF).
The Distribution division consists
of building, plumbing and pipeline
distribution businesses in Australia
and New Zealand. PlaceMakers and
Mico operate in New Zealand, with
Tradelink, Hudson Building Supplies,
Northern’s Plumbing Supplies and
Mico Design operating in Australia.
Key businesses
Hudson Building Supplies
Mico
PlaceMakers
Tradelink
The Fletcher Construction
Company is the preeminent general
contractor in New Zealand and the
South Pacific. The company’s five
divisions are; Building + Interiors,
Developments, South Pacific,
Earthquake Recovery (EQR) and
Engineering. Fletcher Residential
is New Zealand’s leading specialist
residential home building group.
Key businesses
Building + Interiors
Developments
Earthquake Recovery
Infrastructure
South Pacific
Residential
Infrastructure
Products
Page 12
Building
Products
Page 14
Laminates
& Panels
Page 16
Distribution
Page 18
Construction
Page 20
10
25% of total revenue
39% operating earnings
16% of total revenue
21% operating earnings
20% of total revenue
21% operating earnings
25% of total revenue
9% operating earnings
14% of total revenue
15% operating earnings
Percentage of operating earnings excludes corporate costs.
$246million
Capital expenditure
$8,517million
Total revenue
18,830 people
Across all divisions
Mark Malpass
meets with Golden
Bay Cement general
manager, Michele
Creagh, at Eastport,
Auckland.
12
INFRASTRUCTURE PRODUCTS
‘ Through reorganising our
businesses into logical, larger
business units we have enabled
the division to better leverage
operational capabilities, functional
depth and the benefits of scale.’
Mark Malpass
Chief Executive Infrastructure Products
with emphasis on innovation
and enhancing our overall value
proposition. Share growth across
the value chain is also a priority,
as is building deep functional
capability, particularly in sales and
operations management.
Infrastructure Products (NZ $million)
6
4
2
4
6
1
6
4
1
9
0
2
2
2
2
09
10
11
12
13
EBIT pre significant items
The Infrastructure Products
division is a manufacturer,
distributor and marketer of
heavy construction materials,
including aggregate, cement,
concrete and masonry
products, plastic PE and PVC
pipe, and long steel products.
Its products are typically
used in the early stages of
the construction cycle.
Infrastructure Products operating
earnings increased by $13
million to $222 million as a
result of continued operational
improvements, cost reductions
and efficiency gains.
Revenues were 9 percent lower
primarily due to the sale of the
Austral Wright metals business in
June 2012. On a like-for-like basis,
revenues decreased by 2 percent
while market shares were largely
stable for all businesses.
Significant divisional restructuring
was carried out this year, with
businesses being reorganised into
logical, larger business units. This
has resulted in annualised savings
of $6 million and will enable
the division to better leverage
operational capabilities, functional
depth and the benefits of scale.
Operating earnings of the cement,
concrete and aggregates
businesses increased by 6 percent
to $73 million. Cement volumes
were up 4 percent, and while
slightly lower prices were offset
by operational improvements,
earnings were impacted by
increased distribution costs.
Ready-mix concrete volumes
were up 19 percent, and prices
were generally stable. Aggregates
volumes in New Zealand were up
6 percent, while Australian volumes
declined 15 percent.
The concrete pipes and products
businesses recorded a 10 percent
increase in operating earnings
to $67 million. Australian pipe
volumes were 9 percent lower,
but earnings benefitted from
further cost efficiencies and
improved product premiums.
New Zealand concrete pipe
volumes increased by 9 percent
due to growth in the Auckland
and Canterbury markets.
Operating earnings in Iplex
Pipelines and Crane Copper
Tube were 21 percent lower at
$54 million, due to the sale of the
Austral Wright and Mico Metals
businesses at the start of the year.
In Australia volumes declined by
4 percent with weaker mining
demand and continued soft
building markets, partially offset
by contracts to supply coal seam
gas projects. Product substitution
continued to have a significant
impact on Crane Copper Tube.
Impacts of volume declines
were partially offset with the
implementation of cost-to-serve
tools, account management and
continued rationalisation of the
businesses. New Zealand plastic
pipe volumes increased in line
with activity levels in Canterbury
and Auckland.
Steel operating earnings increased
to $28 million from $11 million
in the prior year. The long steel
business benefitted from improved
manufacturing efficiencies which
helped to reduce conversion costs.
Volumes were 6 percent higher,
reflecting the increase in demand
in New Zealand. Steel distribution
businesses experienced increased
earnings with a focus on product
mix and reducing customer
service costs.
Looking ahead, disciplined cost
management will continue across
both markets, in conjunction with
a comprehensive programme of
manufacturing and supply-chain
optimisation.
A focus of the division is to
continue leveraging its scale to
drive utilisation and efficiencies,
13
BUILDING PRODUCTS
‘ A key priority is to continue the
business efficiency initiatives
particularly in Australia where
volumes and margins remain soft.’
Tim Richards
Chief Executive Building Products
Building Products (NZ $million)
6
5
1
7
5
1
9
6
1
2
2
1
9
0
1
09
10
11
12
13
EBIT pre significant items
Building Products
manufactures a broad
range of building products
for the residential and
commercial markets.
Products manufactured by
Building Products businesses
include: plasterboard,
glasswool insulation and
other insulation and acoustic
products, metal roof tiles,
roofing and other rolled
steel products.
Building Products operating
earnings before significant items of
$122 million were 12 percent higher
than the prior year. Revenues
declined by 3 percent but the
benefit of cost reduction initiatives
undertaken in the first half of the
year positively impacted earnings.
The plasterboard business
recorded a 43 percent increase
in operating earnings in a
stronger New Zealand residential
construction market.
first half of the year helped to drive
earnings higher in the second
half. New Zealand glasswool
volumes were flat on the prior
year reflecting increased levels of
competition and a warmer autumn.
Operating earnings for the
sinkware business declined by
37 percent due to declining
volumes and margins. Operating
earnings for the New Zealand
aluminium business doubled driven
by increased market share and
volumes. The opening of a new
aluminium powder coating and
assembly facility in Christchurch
in July 2012 significantly improved
our capability in the region.
In late 2012 the coated steel
businesses were transferred to
the Building Products division.
In grouping our coated steel
businesses with other materials
commonly utilised in the middle
and latter parts of the construction
cycle we can better leverage our
channels to market and provide
improved end-to-end solutions.
The insulation business’ operating
earnings were down 36 percent on
the prior year. Australian glasswool
margins continue to be soft due
to the strong Australian dollar
and continued excess inventory
across the industry. Restructuring
undertaken in Australia during the
Operating earnings for the
coated steel businesses were up
7 percent to $52 million due to
strong performances from the
New Zealand based businesses.
Roof tile volumes increased by
10 percent driven by strong
increases in Europe, Africa and
New Zealand, and operating
earnings increased by 31 percent.
In Australia, volumes in the Stramit
roll-forming business were down
on the prior year but an improving
trend during the year meant that
second half volumes were slightly
ahead of the same period in the
prior year. Restructuring in Stramit
has substantially lowered the fixed
operating cost of the business, and
operating earnings in that business
in the second half of the year were
25 percent higher than for the prior
corresponding period.
Under Stramit we now operate
three engineered solutions
businesses, all involved primarily
in the manufacture and supply
of small buildings and garages.
This presence provides a valuable
channel to market for our roll-
formed steel product and brings us
closer to the end customer.
A key divisional priority for 2014
is to continue the business
efficiency and cost reduction
initiatives particularly in Australia
where volumes and margins
remain soft and the economic
outlook is uncertain. Enhancing
cross-business opportunities
and efficiency through shared
technology solutions is also an area
of investment across the division
and the group more broadly.
14
Tim Richards
(right) meets
Pacific Coilcoaters
general manager
at Mt Wellington,
Auckland.
15
LAMINATES & PANELS
‘The continued promotion and
extension of premium products
helped mitigate price pressure.’
Paul Zuckerman
Chief Executive Laminates & Panels
improvements, and product
development and innovation.
In October Formica will open
its purpose-built manufacturing
facility in Jiujiang, China, which
will significantly increase capacity
across Formica’s Asia operations.
Laminates & Panels (NZ $million)
8
6
1
1
4
1
9
3
1
0
2
1
4
7
09
10
11
12
13
EBIT pre significant items
The Laminates & Panels
division includes Laminex
and Formica. Formica
manufactures and distributes
high-pressure decorative
surface laminates in North
America, Europe and Asia.
Laminex operates in Australia
and New Zealand and is
the leading Australasian
manufacturer and distributor
of decorative surface
laminates, component
products, particleboard
and medium density
fibreboard (MDF).
Operating earnings in Laminates
& Panels were $120 million
compared with $65 million in the
prior year. The prior year’s result
included significant items totalling
$74 million. Excluding significant
items, operating earnings were
13 percent lower than the prior
year. Revenues declined by
6 percent to $1,738 million.
Prices and margins were generally
flat or slightly down as a result
of strong price competition in
markets where volumes were
under pressure. The continued
promotion and extension of
premium products, particularly in
North America, helped mitigate
price pressure. Input prices in
key materials such as paper and
resins were either flat or down
on the prior year.
by the commercial market in which
Formica has greater exposure, with
no improvement evident over the
prior year.
FoRMICA
LAMINEX
Formica’s operating earnings before
significant items were $58 million,
down from $71 million in the prior
year. Volumes and revenue in markets
in Europe were down by 5 percent.
Markets in Spain, Central Europe
and the United Kingdom continued
to deteriorate while Scandinavia
remained stable. However, further
increases were recorded in the
growth markets of Russia and the
Middle East. Further costs were
incurred in the closure of Formica’s
plant in Bilbao, Spain, which was
completed during the year.
Revenue in Asia was down by
2 percent with volumes down in
China and Taiwan by 2 percent
and 3 percent respectively, while
Thailand remaining stable. During
the year Formica acquired a small
manufacturing site in India, which
will provide direct access to the
fastest growing high pressure
laminate market.
Laminex’s operating earnings
before significant items were
$62 million compared with $68
million in the prior year. Australian
revenue was down 9 percent
with increased new residential
commencements off-set by
decline in the housing renovation
and commercial sectors. Sales
volumes were maintained but
there was significant pressure on
product pricing and margins.
New Zealand revenues were
down by 10 percent due to the
exit of some product ranges and
the sale of the bench fabrication
business. Underlying revenue was
up slightly on the previous year.
In both Australia and New Zealand
we completed a number of cost
reduction and business restructure
initiatives, aimed at reducing cost
and re-sizing operations in line with
market demand.
In North America revenue was up
by 1 percent while volumes were
up marginally over the prior year.
Continued improvement in the
residential sector was largely offset
Enhanced digital and Enterprise
Resource Planning (ERP) systems
capabilities are a priority
for the coming year, along
with operational and service
16
Paul Zuckerman
(left) meets with
local staff at the
Formica Showroom
in Melbourne.
17
18
Tim Hickey (right)
is shown around the
Mico showroom in
Mt Wellington, Auckland,
by branch staff.
DISTRIBUTION
‘Our focus is on lifting our
customer offering through
better product availability and
improved speed of service.‘
Tim Hickey
Chief Executive Distribution Australia
NEW ZEALAND
PlaceMakers is the premier
supplier of building materials
to New Zealand’s residential
and commercial construction
markets. Mico Plumbing
specialises in the distribution
of plumbing, pipeline and
bathroom products.
AUSTRALIA
Tradelink Plumbing Centres,
a network of 211 branches
supplying plumbing
supplies to residential and
commercial markets, is our
largest distribution business
in Australia. Northern’s
Plumbing Supplies and
Mico Design also operate
in the plumbing, bathroom
and associated industries.
Hudson Building Supplies
business specialises in the
supply of building hardware
and products.
PlaceMakers
Revenues rose 9 percent with
market conditions showing
improvement from the second
quarter onwards. Operating
earnings increased by 33 percent
over the prior year to $36 million,
with the increase in revenues
more than offsetting the margin
decline of almost 1 percent.
Earnings were positively impacted
by operational improvements,
such as procurement benefits and
reduction in facility and employee
costs. In addition, inventory and
working capital ratios improved
on the prior year.
In June, PlaceMakers opened
a new purpose-built branch in the
Christchurch suburb of Hornby.
Following the resignation of
John Beveridge after four years
leading the business, Dean
Fradgley was appointed chief
executive Distribution New Zealand
and he will have responsibility
across all our New Zealand
distribution businesses.
Tradelink, Hudson Building
supplies, Mico Plumbing
Operating earnings for these
distribution businesses were
$14 million compared with
$37 million in the prior year.
Australian revenues declined
11 percent due to difficult trading
conditions. Hudson delivered
earnings benefits from an improved
cost position as some Queensland
locations were rationalised during
2013 whilst retaining revenue
across its markets in NSW and
Queensland. Tradelink revenues
fell sharply in the second and
third quarters of 2013, particularly
in Western Australia and South
Australia. In the final quarter of
2013 revenues began to improve as
branch improvement programmes
targeting improved service levels
to customers were implemented
and economic conditions stabilised.
New Zealand revenues were
down 18 percent due to the sale
of the Corys Electrical business
with effect from December 2012.
On a like-for-like basis, revenues
increased by 3 percent over the
prior year driven by improved
economic activity and market
share gains in the plumbing
segment. Operating earnings
included $4 million profit from
the sale of surplus property
in Christchurch.
A key appointment this year was
that of Tim Hickey to the position
of chief executive, Distribution
Australia. Tim was appointed
in an interim role leading Tradelink
and Hudson Building Supplies
in March, with his permanent
appointment announced in
July 2013.
Looking ahead, a key strategic
focus for PlaceMakers is enhancing
and greatly broadening its use
of digital platforms to improve
the customer experience, a
focus which extends across
Fletcher Building.
Cost-out initiatives will continue
in Australia in the coming year
with trading conditions expected
to remain flat. The benefit of
improvement initiatives and
expected positive uplift in
economic conditions should
deliver earnings improvements.
Distribution (NZ $million)
5
6
5
5
0
5
8
3
0
3
09
10
11
12
13
EBIT pre significant items
19
CONSTRUCTION
‘ After a long period of weak
demand in civil infrastructure
and commercial building, we’re
expecting a steady improvement.’
Graham Darlow
Chief Executive Construction
Auckland. Large land holdings
have also been secured in the
Auckland region for future building
activity. There is now a strategy to
extend housing operations beyond
the current model to include multi-
storey and affordable homes in
Auckland and elsewhere.
Construction (NZ $million)
7
8
9
5
7
5
0
6
0
5
09
10
11
12
13
EBIT pre significant items
The Fletcher Construction
Company is the preeminent
general contractor in
New Zealand and the South
Pacific. The division is
grouped around a building
and interiors business,
engineering infrastructure,
South Pacific construction
and earthquake recovery
(Fletcher EQR). Fletcher
Residential is one of
New Zealand’s leading
home building groups,
offering a range of homes
and developments.
The Construction division’s
operating earnings for the year
were $87 million, up 74 percent on
the prior year. This was due to a
significant upturn in house sales and
increased activity in Christchurch,
particularly with the Canterbury
Home Repair Programme and
the infrastructure rebuild.
In June the Canterbury Home
Repair Programme reached the
halfway point in respect of full-
scope house repairs, with 40,000
homes completed. A further
47,000 emergency repairs and
18,000 installations under the
winter heating initiative have also
been completed. It is anticipated
the final Earthquake Commission
(EQC) referred property will be
completed in December 2014,
well ahead of the original
target set.
Fletcher EQR has proven a
valuable talent incubator within
our business, with considerable
engineering and other technical
expertise built up over time.
Ensuring we retain these skills
across the business when
residential repair work decreases
is a key priority.
The repair of houses and
infrastructure in Christchurch is
expected to continue for some
time and there is growing interest
in commercial building projects
within the CBD.
All other business units performed
in line with expectations.
The Construction backlog was
$1,022 million at the end of June
compared with $1,094 million at
the end of June 2012. However,
Fletcher Construction is the
preferred bidder on the MacKays
to Peka Peka roading project north
of Wellington ($570 million) and
the Wynyard land development
proposal is preferred for Fonterra‘s
new Head Office in Auckland
($70 million). The contract for
the Aquatic Centre for the South
Pacific Games in Papua New
Guinea ($61 million) was confirmed
after balance date.
Major contracts awarded during
the year include the University of
Auckland Science Block upgrade
for $138 million, the Rangiriri
Bypass Project for $75 million
and a further $99 million share
of the Stronger Christchurch
Infrastructure Rebuild Team
(SCIRT) work.
A number of major projects
are progressing well including
the Waterview Tunnel Alliance.
Assembly of the tunnel boring
machine has started and tunnelling
is due to commence in November.
Construction of the Men’s Prison
at Wiri is also progressing well and
the new headquarters for ASB
Bank was completed on time and
to budget.
After a long period of weak demand
in civil infrastructure and commercial
building, a steady improvement is
expected. The recent Government
announcements for major projects
in Auckland and Canterbury
are encouraging, and there are
opportunities for building in the
health and education sectors as well.
Fletcher Residential performed
very well with strong sales from
the Stonefields development in
20
Graham Darlow
discusses the recent ASB
headquarters construction
in Auckland with ASB CEO
Barbara Chapman.
21
FBUNITE
‘FBUnite will transform how
Fletcher Building operates whilst
retaining the decentralised business
model that keeps businesses
focused on their customers.’
Gerry Bollman
Chief Executive Business Strategy
and Performance
Network optimisation
The network optimisation
project will identify, evaluate
and implement options to move
products from the point of
manufacture or supply to the
customer at the lowest cost, while
meeting service requirements.
The options will consider how
the network of transport lanes,
storage and distribution locations
is best configured and used to
meet customer demand, and
whether changes are required to
transport, warehouses, product
handling, business processes and
information systems.
The FBUnite business
transformation programme
seeks to drive benefits
across Fletcher Building
from greater collaboration,
combining resources and
leveraging the group’s
scale, improving operating
efficiency, and investing in
the capabilities for growth.
FBUnite is comprised of a
number of work streams that
will collectively transform how
Fletcher Building operates whilst
at the same time retaining those
aspects of the decentralised
business model that keep
businesses focused on their
customers, products and core
market segments.
It is expected that annual total
benefits from FBUnite will be in
the range of $75 million to $100
million per annum. FBUnite is,
however, a multi-year programme,
with individual work streams
set to be completed within
different timeframes such that
this quantum of benefit will
take several years to be fully
realised. Capital and operating
expenditure will be incurred in
the 2014 financial year to enable
a number of work streams to be
implemented which will offset
early gains, although benefits
should become evident from the
2015 financial year onwards.
A number of work streams have
commenced within the business
transformation programme
including the following:
shared services
The shared services project aims
to reduce the cost of core support
functions through centralising
transactional tasks and increasing
productivity by leveraging the
group’s scale. The project is
targeting finance (accounts
receivable, accounts payable,
credit management), human
resources (payroll, recruitment,
learning and development, health
and safety) and ICT (user support,
IT maintenance, IT infrastructure).
Procurement
The procurement project is
focussed on achieving greater
procurement co-ordination and
cost savings from the $800 million
per annum of indirect third party
expenditure across the group.
A specialist procurement function
has been established leveraging
the group’s size, experience and
leading practice. Reductions in
the cost to suppliers of serving
the group, fostering greater
collaboration and innovation in
procurement, are other core goals.
The first categories targeted have
included transport and logistics,
office supplies, mobile plant,
printing, plant consumables,
packaging, health and safety,
waste management, temporary
labour and fuel.
Property
The group’s total property costs
across New Zealand and Australia
are in excess of $200 million per
annum from around 1,000 property
interests. A review of the property
portfolio is being undertaken, with
the goal of reducing the group’s
property footprint through network
optimisation and business co-
location opportunities.
Operations excellence
The operational excellence
programme is addressing
manufacturing and supply chain
aspects of Fletcher Building’s
manufacturing and warehouse
facilities. The programme will
provide the tools needed to
achieve operations excellence
and is expected to take around
3 years to be fully implemented,
in conjunction with other work
streams including procurement
and property management.
22
Nick Olson (left) Chief Financial
Officer and Gerry Bollman (right)
Chief Executive – Business
Strategy and Performance at
Fletcher Building Head Office.
23
24
CANTERBURY UPDATE
1,700
Homes completed per month, as at June 2013
40,000
House repairs completed by the CHRP programme, as at 30 June 2013
In the past year Canterbury
has settled to a great
degree in respect of seismic
activity, allowing repair and
rebuild work in the region
to progress further and
removing some uncertainty
and nerves from the minds of
residents. Undoubtedly there
are still challenges to face
before the region returns to
a level of normality similar to
that prior to the earthquakes.
Pleasingly, we made considerable
progress in Canterbury over the
past 12 months, primarily through
Fletcher EQR’s role as project
manager for the Canterbury Home
Repair Programme (CHRP).
We passed two major milestones
in 2013. In January 2013 the amount
paid to contractors involved in the
programme reached $1 billion.
By the end of June that figure
had reached $1.3 billion and the
programme reached the halfway
point in respect of full-scope
house repairs – 40,000 homes
completed. The completion rate
at June was approximately 1,700
homes per month.
It is anticipated the final Earthquake
Commission (EQC) referred
property will be completed in
December 2014, well ahead of
the original targets set.
Work on the programme involves
a range of challenges including
the recruitment and retention
of skilled staff and contractors;
meeting technical requirements
for foundations, other structural
and general building work; and
delivering to the valid expectations
of various stakeholders, including
homeowners.
A key priority going forward is to
ensure we facilitate opportunities
for Fletcher EQR’s highly-skilled
employees to transition from
the home repair programme to
larger commercial construction
projects and other parts of our
business as the residential repair
workload decreases. Their skills are
invaluable considering the work
still ahead in Canterbury.
We also continued to invest in
our other operations in Canterbury
over the past year. Fletcher
Aluminium officially opened a
$5 million powder coating and
assembly facility in Wigram,
Christchurch in July 2012, and
Firth opened its third ready-mix
concrete plant in the region in
April this year. In June PlaceMakers
opened a brand new 2,745sqm
store in the Christchurch suburb
of Hornby.
As a large employer in the
region, our involvement in the
community also continues.
We remain a significant sponsor
and supporter of the Christchurch
Arts Festival, and are a sponsor
of the Champion Canterbury
Business Awards and its
acknowledgement of achievement
and innovation in the region.
We are also a foundation sponsor
of the recently established
University of Canterbury Quake
Centre. It is working with the
engineering and construction
industries on joint-venture
earthquake engineering research
projects, training initiatives and
product development, while
building on New Zealand’s
established reputation in the
field of earthquake engineering.
Lessons learnt in Canterbury will
undoubtedly have benefit much
further afield than Canterbury
and New Zealand.
Fletcher EQR scorecard
as at 23 August 2013
$14.5m
Amount paid per week to
contractors
18,373
staff and contractors inducted
47,500
Emergency repairs
80
Homes completed per day
25
PEOPLE
‘Developing a strong internal
pipeline of future leaders is
a key priority.’
Kate Daly
Group General Manager
Human Resources
participation across the Fletcher
Building group with the specific
focus of creating a more diverse
and inclusive workplace. Directors
were pleased to see that over the
past twelve months the number
of female senior leaders increased
from 14 percent to 16 percent.
There will be a continued focus to
ensure that this trend continues.
The board composition remains
unchanged from 2012; there are
eight directors, with 25 percent
being women.
We are also into our fourth year
of participation with the Global
Women programme and continue
to have board representation on
the Equal Employment
Opportunities Trust.
We employ a diverse
workforce of 18,830
people, based across 40
countries. The main areas
of focus with regard to
our people strategy is to
develop a strong leadership
pipeline, the attraction and
retention of talent across
the group and the creation
of a high performance,
highly engaged and
diverse workforce.
Developing leaders
Developing a strong internal
pipeline of future leaders is a
key priority. During the year
we launched a Leadership
Framework across the group
to provide a clear structure for
learning and development. Branch
management has been identified
as a focus area to develop a strong
pipeline of leadership talent,
and Branching Out was the first
leadership programme launched
under the new framework. Over
160 branch managers have
completed the first two modules
and this will be a core leadership
programme going forward.
A senior leadership programme,
The Leaders Edge, was developed
and launched in partnership
with The University of Auckland
Business School. The final two
leadership programmes will be
delivered in the coming year.
Attracting and retaining talent
Our aspiration is to be an employer
of choice in every country in which
we operate. Demand for roles across
New Zealand and Australia remains
high, with the processing of over
26,000 applications over the past
year. Our internal sourcing model
places emphasis on providing an
effective and efficient service to the
business and 1,100 roles across
New Zealand and Australia have
been placed during the year.
The Employee Educational Fund
continues to be a strong retention
tool for New Zealand, Australia and
the South Pacific. The fund provided
over $4 million of funding in the 2013
financial year. This funding was used
for workplace learning, leadership
development, grants for tertiary
study for employees, supporting
dependants of employees to retrain
and re-enter the workforce, and
to provide financial support for
employees’ children to study in
tertiary institutions.
Rebuilding Christchurch
The Fletcher Construction
Earthquake Recovery (EQR) team
continues to play a significant role
in the Christchurch rebuild. During
the year the team grew in size
from 540 to 700 direct employees.
With the final referred claim now
expected to be completed by the
end of December 2014, a priority
in the coming year is to determine
how the skills and expertise of
the EQR team can be best utilised
beyond that time. Given the labour
shortages in Christchurch, we
are working together with the
Ministry for Social Development
to ensure opportunities to create
a skills legacy are provided for
Christchurch.
Diversity
Building a diverse and inclusive
workforce is a key focus area
across the group. In the past year
we have provided employment
opportunities for 54 people
through alliances with Te Puni
Kokiri, Limited Services Volunteer,
Work and Income and the
Department of Corrections.
As the principal sponsor of the
First Foundation we funded 6
scholarships for high achievers
from low decile schools in the
past year.
During the year the Remuneration
Committee approved a diversity
policy that will drive greater
26
Kate Daly (left)
developing work
with senior Fletcher
Building teams,
Auckland.
27
HEALTH & SAFETY
Injury rates
Based on the 12-month rolling
average TRIFR.
2012
2013
8.48
6.80
Lost time injury frequency
Our rate has dropped 13.8% from
3.27 to 2.82.
13.8%
28
The correlation between
improved health and
safety, engagement and
productivity in the workplace
makes health and safety a
key strategic priority.
In the past year we have paid
particular attention to the reports
of the Pike River Royal Commission
and the Independent Task Force
Review of Health and Safety in
New Zealand. Broadly we believe
that improved safety performance
can be driven by business
organisations setting clear goals for
continual improvement, reinforced
by regulatory requirements that
ensure safety performance is
addressed with due diligence.
Additionally, we support improved
alignment of health and safety
legislation across New Zealand
and Australia, as is soon to be
implemented. This will enable
increased consistency and
coordination of health and
safety management across
Fletcher Building; one of the
objectives of our FBUnite business
transformation programme. FBUnite
has been a catalyst for integrating
health and safety and daily
operational management, ensuring
safety is a key consideration in
every operational decision made.
Pleasingly, over the past year we
further reduced our injury rates.
Our primary injury rate measure
is the 12-month rolling average
Total Recordable Injury Frequency
Rate per million employee and
contractor hours (TRIFR), with total
injuries being the sum of lost-time
and medical treatment injuries.
In the year to 30 June 2013 this rate
was 6.80, a reduction from 8.48 in
the prior year. This figure was more
than 60 in 2005. Our lost time
injury frequency rate has dropped
from 3.27 to 2.82.
Despite our progress, serious
injuries still occur. During the
past year, 15 employees and
contractors suffered serious
injuries, including 10 severe
lacerations and five fractures.
Each of these incidents has been
investigated and measures to
mitigate the associated risks have
been implemented.
To reduce significant operational
risks and hazards that could result
in serious injuries or fatalities, we
have engaged external process-
safety audits of our most high-risk
sites. Our four most high-risk
facilities have now been audited
and improvements across those
locations are being implemented.
Our first priority has been to
mitigate the risk of fires and
explosions in our high-temperature
manufacturing facilities. We are
developing further standardised
controls for significant hazards
across the group, driven by
business unit input.
Additionally, each of our business
units has developed long-
term plans for prioritising and
addressing general workplace
health issues. Workplace health
has a considerable impact on
business productivity, culture and
engagement. To ensure our on-site
managers are competent in respect
of health and safety, an enhanced
group-wide training programme
has been developed and
implemented by the FB Learning
Academy. Areas of focus include
safety leadership development and
ensuring a strong understanding of
emerging regulatory requirements.
For the sixth year, our Health, Safety
and Sustainability Awards were held
in recognition of achievements
around the company. Submissions
were received from business units
across the world. The business
unit award for safety excellence
went to Fletcher Aluminium, for
demonstrating a high level of safety
commitment, with evidence of
successful programmes to reduce
injuries and to improve overall
workplace health.
ENVIRONMENT & SUSTAINABILITY
In addition to reducing
the environmental
impacts resulting from the
manufacture and distribution
of building materials, we
seek to play a broader role
in leading our industries
towards improved sustainable
performance. From the
extraction of raw materials
to the eventual end-of-life of
products and projects, our
environmental efforts span
across the entire value-chain.
As a largely manufacturing-based
business, a key focus remains the
reduction of carbon emissions.
Pleasingly, we achieved our goal
of reducing group CO2 emissions
intensity by 5 percent between
2007 and the end of 2012. Total
CO2 emissions and energy use
were reduced by 11 percent,
although these numbers are
largely attributable to a decrease
in overall production.
Our energy and CO2 inventory is
updated every six months, and
provisional figures for the 2013
financial year show total CO2
emissions of 1,287,961 tonnes –
an increase of 6,938 on the
prior corresponding period.
This includes the CO2 emitted
during the generation of electricity
used by Fletcher Building. Emissions
from our New Zealand operations
totalled 711,397 tonnes, while
Australian operations emitted
419,190 tonnes and international
157,374 tonnes.
Our goal now is to further reduce
our CO2 emissions by 10 percent
between 2012 and 2020. Achieving
this will be driven by further process
and efficiency improvements,
increasing our use of alternative
energy sources and being smarter
about the way we store and
distribute our products.
We have partnered with the
New Zealand Energy Efficiency
and Conservation Authority (EECA)
to identify and implement energy
reduction initiatives across
our New Zealand operations.
In Australia, we have a programme
of energy efficiency assessments
that is reported to the Federal
Government, as part of our
requirements under the Energy
Efficiency Opportunities
programme. Through our group-
wide programme of operational
excellence we are pursuing further
efficiency improvements.
help facilitate improvement across
the business.
Our environmental strategy has
been influenced by the additional
costs associated with the
emissions trading schemes in
New Zealand and Australia, and
the fact that reduced carbon
emissions will have a broader
positive impact on society.
Sustainability and climate change
in particular have a major influence
on research, innovation and
product development across
Fletcher Building. A number of
our businesses are developing
new products and solutions
to further meet emerging
customer preferences in areas
of environmental sustainability.
Examples include Firth Industries’
seismic foundation solution,
window glazing systems with a
thermal break to reduce heat loss
through the aluminium frames
and insulated concrete floors
and masonry products. Many of
these products are also being
developed to align with external
building rating criteria and to gain
certification in recognition of their
environmental attributes.
The implementation of dedicated
software to capture and report on
energy use, CO2 emissions and
other sustainability factors will also
To ensure overall transparency
we continue to participate in the
Carbon Disclosure Project (CDP),
which requires us to report how we
Ngaruawahia
bypass bridge,
New Zealand.
manage the risks and opportunities
of climate change, and provide a
complete inventory of our annual
energy use and CO2 emissions.
In February we were the only New
Zealand manufacturer named in
the 2012 NZX50 Carbon Disclosure
Project Leadership Index. To be
included in the leadership index
a company must be in the top 10
percent of respondents in respect
of the quality and completeness
of their disclosures, and have
a measured understanding of
climate change issues, risks and
opportunities facing it.
In November 2012 we published
our second sustainability report
(fbu.com/sustainability/). This will
be updated again later this year.
Reduced emissions
Our total CO2 emissions and
energy use were reduced by 11%.
11.0%
29
CORPORATE GOVERNANCE
Fletcher Building is a New Zealand
based building materials
manufacturer whose securities
are listed on the New Zealand
and Australian stock exchanges.
These exchanges require formal adoption
of approved corporate governance practices
by listed company boards of directors.
Accordingly, the board of Fletcher Building
confirms that it is committed to the highest
standards of behaviour and accountability,
and has adopted policies and procedures that
reflect this commitment.
The company has adopted the principles
recognised by the ASX Corporate Governance
Council as an appropriate way to organise its
corporate governance policies and reporting.
In establishing its corporate governance
procedures, the company reviews the
practices and trends in corporate governance
in other jurisdictions, and has incorporated
these where appropriate.
The company believes that the practices it has
adopted ensure that it meets the requirements of
NZX’s Corporate Governance Best Practice Code
and the Financial Markets Authority’s Corporate
Governance in New Zealand Principles.
Fletcher Building’s corporate governance
practices, including matters reserved for the
board and those delegated to senior executives,
are fully detailed on its website and shareholders
seeking an in-depth review are encouraged to
access information from this source.
This section on corporate governance contains
commentary on seven of the eight principles
recognised by the ASX Corporate Governance
Council. The Remuneration Report addresses
the final principle being the requirement to
remunerate fairly and responsibly.
A fuller discussion on corporate governance
is included on the company’s website at
fbu.com/investor/governance.
1. Ensuring solid foundations for
management and oversight
The company’s procedures are designed to:
■ Enable the board to provide strategic
guidance for the company and effective
oversight of management.
■ Clarify the respective roles and
responsibilities of board members and
senior executives in order to facilitate board
and management accountability to both the
company and its shareholders.
■ Ensure a balance of authority so that no
single individual has unfettered powers.
The board has an obligation to protect and
enhance the value of the company’s assets,
and to act in its interests. It exercises this
obligation through the approval of appropriate
corporate strategies and processes, with
particular regard to portfolio composition and
30
return expectations. These include approval
of transactions relating to acquisitions,
divestments and capital expenditures above
delegated authority limits, financial and
dividend policy and the review of performance
against strategic objectives.
As part of its review of the strategic direction
of the company, a strategy session is held
with senior management each year. Senior
management are expected to address strategic
issues in the business as part of their board
review sessions. Special strategic reviews are
also held of each business unit on a rolling two
year cycle or where material change is evident
or contemplated.
The company achieves board and
management accountability through written
terms of reference for the chairman, directors
and management, and a formal delegation
of authority to the chief executive. The effect
of this framework is that whilst the board has
statutory responsibility for the activities of the
company, this is exercised through delegation
to the chief executive, who is charged with the
day-to-day leadership and management of
the company. As part of its annual review of its
governance processes, the board reviews the
delegations to the chief executive each year.
The terms of reference for directors and
the chairman, the charters for board
committees and the delegation to the chief
executive officer all provide for reviews of
the performance of directors and senior
management. The nominations committee
assesses the composition and effectiveness
of the board and its committees annually.
The chair of the nominations committee
undertakes one-on-one reviews annually with
all directors on the effectiveness of the board.
The board evaluates annually the performance
of the chief executive and the chief executive’s
direct reports. The evaluation is based on criteria
that include the performance of the business
and the accomplishment of long-term strategic
objectives, and other non-quantitative objectives
established at the beginning of each year. During
the most recent financial year, performance
evaluation of senior executives were conducted
in accordance with this process.
In addition to these annual performance
reviews, significant policy issues and capital
expenditure or divestment decisions of
management are required to undergo a formal
peer group review process, including review
by the company’s executive committee or
approval by the board where necessary.
The governance procedures require the board
to be comprised of a majority of independent
directors and for there to be a separation of
the role of chairman from that of the chief
executive. These policies also provide that
a director who has been employed in an
executive capacity in the last three years
cannot be considered an independent director.
Therefore, R G Waters has been an independent
director from 1 September 2009. With M D
Adamson being an executive director, seven of
the eight directors are independent directors.
2. structuring the board to add value
Directors believe that for the board to be
effective it needs to facilitate the efficient
discharge of the duties imposed by law on
the directors and add value to the company.
To achieve this, the board is organised in such
a way that it:
■ Obtains a proper understanding of, and
competence to deal with, the current and
emerging issues of the business.
■ Can effectively review and challenge the
performance of management and exercise
independent judgement.
■ Can assist in the identification of director
candidates for shareholder vote.
Board composition
While the constitution provides that the
appropriate size for the board is between three
and nine members, the board has determined
that eight is an appropriate number at this time
to ensure proper rotation arrangements. At
least one-third of all directors stand for election
every year although this can be increased due
to requirements of the stock exchanges. The
directors who retire in each year are those
who have been longest in office since their
last election or, if there are more than one of
equal term, those determined by agreement.
Subject to continued shareholder support, the
standard term for a non-executive director is
six years from the date that he or she initially
stands for election. At the end of this term the
director will offer his or her resignation. The
board may, if it considers it appropriate, offer a
further term of up to three years.
The board has constituted a nominations
committee, chaired by the chairman of the
company and composed of all the non-
executive directors. This committee assists
in the identification of appropriate directors
and, through the committee chair, reviews the
performance of existing directors.
Committees
Committees established by the board review
and analyse policies and strategies, usually
developed by management, which are
within their terms of reference. They examine
proposals and, where appropriate, make
recommendations to the full board. Committees
do not take action or make decisions on behalf
of the board unless specifically mandated by
prior board authority to do so. A committee
or an individual director may engage separate
independent counsel at the expense of the
company in appropriate circumstances, with
the approval of the chairman.
The current standing committees of the
board are audit and risk, remuneration and
nominations. These meet when necessary
and consist entirely of non-executive directors.
From time to time, the board may create ad
hoc committees to examine specific issues
on its behalf. The health and safety committee
established to review on-site safety practices
is one of those ad hoc committees.
Board process
Although directors are elected by the
shareholders to bring special expertise or
perspectives to board deliberations, decisions
of the board are made as a group, after taking
each perspective into account and the best
interests of the company.
The directors receive comprehensive
information on the company’s operations
before each meeting and have unrestricted
access to any other information or records. To
assist in ensuring information is timely, focused
and concise, board papers are prepared and
distributed electronically. Where directors
cannot participate in a meeting they forward
their views to another director in advance of the
meeting. Senior management are also available
at each meeting to address queries, and to
assist in developing the board’s understanding
of the issues facing the company and the
performance of its businesses.
Director participation remains very high, with
no apologies for absences from any of the ten
regular meetings during the year. In addition
to these meetings were seven site visits and
a strategic session with senior management.
The audit and risk committee met on
four occasions and the remuneration and
nominations committees both met twice.
3. Promoting ethical and responsible
decision-making
The company has written procedures to:
■ Clarify the standards of ethical behaviour
required of company directors and key
executives, and ensure observance of those
standards through a code of conduct and
the terms of reference for directors and
management.
■ Prescribe the circumstances where directors
and employees can trade in company
securities.
■ Annually establish and review progress
against measurable objectives for correcting
imbalances in workforce diversity and in
particular, gender diversity at senior levels of
the group.
The company has a written code of values and
a code of conduct with which all employees
are required to comply.
The company has a written policy on illegal
and unethical conduct. It reinforces this policy
with promotional programmes to employees
and provides a FairCall confidential telephone
hotline to enable reporting of inappropriate
behaviour. The FairCall line is operated by an
independent party, and the outcome of all
matters raised is reported to the audit and
risk committee.
New Zealand legislation and the company’s
securities trading code of conduct prevent
short-term trading and dealing in the
company’s securities whilst directors and
senior executives are in possession of
non-public material and relevant information.
The company reinforces these measures
by requiring that any of the 127 persons
comprising executives and directors, who are
currently designated as having the opportunity
to access price sensitive information, can
transact in its securities only with the prior
approval of the company secretary.
The company recognises that it has a
number of legal and other obligations to non-
shareholder stakeholders such as employees,
clients, customers and the community as a
whole. Its commitment to these obligations is
captured in the code of values, and in various
policies and procedures for ethical conduct,
the responsibilities of employees, conflicts of
interest, and relationships with suppliers and
customers. These are incorporated into the
employment terms of all employees.
The company is committed to developing an
inclusive working environment that promotes
employment equity and workforce diversity
at all levels, including senior management
and the board of directors. Fletcher Building
believes that a workforce in which diversity
differences, particularly in such matters as
gender, age and race, are well-represented,
builds competitive advantage and enhances
business and thinking around the world.
4. safeguarding the integrity
in financial reporting
While the ultimate responsibility to ensure the
integrity of the company’s financial reporting
rests with the board, the company has in
place a structure of review and authorisation
designed to ensure truthful and factual
presentation of its financial position. This
includes:
■ An appropriately resourced audit and
risk committee operating under a written
charter.
■ Review and consideration by the audit and
risk committee of the accounts and the
preliminary releases of results to the market.
■ A process to ensure the independence and
competence of the company’s external
auditors.
■ Establishment of an internal audit function
in the corporate office, with reporting
responsibility to the audit and risk
committee.
■ Responsibility for appointment of the
auditors residing with the audit and risk
committee.
5. Making timely and balanced disclosure
The company has in place procedures
designed to ensure compliance with the NZX
and ASX Listing Rules such that:
■ All investors have equal and timely access
to material information concerning the
company, including its financial situation,
performance, ownership and governance.
■ Company announcements are factual and
presented in a clear and balanced way.
Accountability for compliance with disclosure
obligations is with the company secretary.
Significant market announcements, including
the preliminary announcement of the half
year and full year results, the accounts for
those periods, and any advice of a change in
an earnings forecast require prior approval by
either the audit and risk committee or the board.
6. Respecting the rights of shareholders
The company seeks to ensure that its
shareholders understand its activities by:
■ Communicating effectively with them.
■ Giving them ready access to balanced and
clear information about the company and
corporate proposals.
■ Making it easy for them to participate in
general meetings.
To assist with this, a company website
is maintained with relevant information,
including copies of presentations, reports and
media releases. The corporate governance
procedures are also included on the website.
To further assist shareholders the company
prepares and distributes its accounts in
electronic format to shareholders who have
so requested. This annual report is also
available in electronic format. The company
has continued to provide to all shareholders
an annual review which is a summary of the
group’s operations and financial performance
for the year.
7. Recognising and managing risk
The company has a formalised system for
identifying, overseeing, managing and
controlling risk. The processes involved
require the maintenance of a risk register that
identifies key risks facing the business and
the status of initiatives employed to reduce
them. The risk register is reviewed regularly,
including as part of the internal audit reviews.
During the most recent financial year,
management has reported to the board on the
effectiveness of the company’s management
of its material business risks. As part of that
report, appropriate assurances were received
from management that the system of risk
management and internal control is operating
effectively in all material respects in relation to
financial reporting risks.
31
REMUNERATION REPORT
Remunerating fairly and responsibly
The company seeks to ensure that its
remuneration policies are fair and reasonable.
It also seeks to ensure these policies attract
and maintain talented and motivated directors
and employees as a way of enhancing the
performance of the company and aligning
their interests with those of the company.
Non-executive directors’ remuneration
The fees paid to non-executive directors for
services in their capacity as directors during
the year ended 30 June 2013 are shown in
the table to the right.
The remuneration policy for non-executive
directors does not include participation in
either a share or share option plan. Non-
executive directors or their associates are
nevertheless required to hold at least 20,000
shares in the company.
The company’s policy is to align directors’
remuneration with that for comparably sized
New Zealand and Australian companies.
Directors’ fees are normally reviewed annually
by the nominations committee with effect
from the beginning of the calendar year.
As part of its 2013 review of remuneration,
the company commissioned an independent
report on directors’ remuneration in
Australasia, which indicated that some
increase in fees was justified having regard to
market changes. As a result, from 1 January
2013, the base director’s fee was increased
from $140,000 per annum to $154,000 per
annum, with audit and risk, remuneration
and nomination committee fees remaining
the same at $23,000, $17,500 and $10,000
respectively. The maximum aggregate fees
payable in any year was set at $2,000,000 at
the 2011 annual shareholders’ meeting.
Committee chairs receive a 50 percent
premium to the committee fee. The board
chairman’s fee is two and a half times the
aggregate of the base and nominations
committee fees paid to directors, and is
inclusive of the time committed by the
chairman for participation on other board
committees. In acknowledgement of the
additional time commitment required of
any Australian-based director, a travelling
allowance of $18,000 per annum is also
payable. Where an ad hoc committee
is convened, such as for due diligence,
additional remuneration may be payable at
$1,200 per half day.
The company believes that this provides an
appropriate remuneration structure which
recognises the increased global focus of
the company’s activities and the increased
corporate governance obligations imposed on
directors.
Non-executive directors’ remuneration
Base Fees
$
Committee
Fees $
Other
Fees $
147,000
35,000
147,000
147,000
27,500
8,250
36,500
44,500
Total
$
174,500
43,250
183,500
191,500
147,000
33,000
18,000
198,000
147,000
147,000
392,500
33,000
33,000
180,000
18,000
198,000
18,000
410,500
1,309,500
215,750
54,000
1,579,250
A J Carter
H A Fletcher
A T Jackson
J F Judge
K D Spargo
C Tarrant
G T Tilbrook
R G Waters
Total
Limited, the NZX listed issuer of the group’s
debt securities.
Executive directors’ remuneration
J P Ling was the chief executive and managing
director until his retirement on 30 September
2012. Mr Ling’s remuneration for the period
from 1 July 2012 to 30 September 2012 was
$2,236,321 comprising salary and accrued
annual leave of $560,042 and termination
payments of $1,676,278, including a special
incentive to extend his tenure until the board
was ready to appoint his replacement rather
than leaving many months earlier as was
his contractual right, and a final payment in
respect of his participation in the Executive
Long-Term Share Scheme.
M D Adamson was appointed chief executive
and managing director on 18 June 2012 with
effect from 1 October 2012. His remuneration
comprises base remuneration of $1,500,000,
a short-term incentive if specified annual
performance targets are satisfied of up to 115%
of base remuneration and participation in the
company’s long-term incentive scheme of up
to 100% of base remuneration. In addition, his
total remuneration includes a portion of the
assessed value of options granted to him in
November 2012.
The actual remuneration and the value of other
benefits received by Mr Adamson in respect
of the financial year was $3,320,446. This
comprised $1,508,429 of base remuneration
and relocation costs and allowances and
accommodation payments in respect of his
move from the United States to New Zealand
as provided in his employment agreement, a
short-term incentive payment of $1,538,250
and $273,767 paid in October 2012 in respect
of his participation in the 2009 Executive
Long-Term Incentive Scheme.
received at the annual shareholders’ meeting
on 20 November 2012. His current long-term
incentives consist of the issue of 500,000
options over shares of the company and
entitlement to shares granted pursuant to the
Executive Long-Term Share Scheme. The value
of the 146,288 shares in the company acquired
under the Executive Long-Term Share Scheme
on 20 November 2012 was $1,005,000,
although these are subject to on-going
performance criteria.
The first grant of 500,000 options was made
with effect from 1 October 2012, being the
date of Mr Adamson’s appointment. A further
issue of up to 500,000 options may be made
to Mr Adamson at the discretion of the board
during the period from 1 October 2015 to 20
November 2015.
Each option was granted for no cash
consideration. The initial exercise price for
the first grant was $6.22, being the volume
weighted price of Fletcher Building shares
sold on the NZX in the ten business days
immediately preceding the announcement of
his appointment on 18 June 2012. The exercise
price is increased annually, with effect from
the date of grant, by the company’s cost of
capital, less any dividends actually paid.
There is a restrictive period of three years from
the date of grant during which the options may
not be exercised. Subject to the company’s
rules on the trading of securities, options may
be exercised at any time between the third and
sixth anniversary of the date of grant.
Directors are satisfied that they have received
independent advice that Mr Adamson’s
terms of employment provide an appropriate
remuneration package for the role of chief
executive officer.
As executive directors, Messrs Ling and
Adamson did not receive any further
remuneration in their capacity as directors of
Fletcher Building Industries Limited or other
subsidiaries.
Directors do not receive any further
remuneration in respect of them also being
directors of Fletcher Building Industries
As required by the NZSX and ASX Listing Rules,
shareholder approval of the two components
of Mr Adamson’s long-term incentives was
32
Directors’ and officers’ indemnification
and insurance
The company has arranged a programme
of directors’ and officers’ liability insurance
covering directors, executives and employees
in managerial positions acting on behalf of the
company. Cover is for damages, judgements,
fines, penalties, legal costs awarded and
defence costs arising from wrongful acts
committed whilst acting for the company.
Actions not covered include dishonest,
fraudulent or malicious acts or omissions;
wilful breach of a statute, regulation or a duty
to the company; improper use of information
to the detriment of the company; and breach
of professional duty. The insurance cover
is supplemented by indemnification by the
company, but this does not cover liability for
criminal acts.
senior management remuneration
The company’s remuneration strategy aims
to attract, retain and motivate high calibre
employees at all levels of the organisation, and
so drive performance and sustained growth in
shareholder value. Underpinning this strategy
is a philosophy that total remuneration should
be provided that is competitive in the markets
in which the company operates – particularly
for delivering superior performance that
contributes to improved business results.
Total remuneration for executives comprises
fixed pay, including the value of any benefits,
and a short-term variable incentive in the
form of an annual performance related bonus
that forms a significant portion of the total
package.
All executive performance bonuses require
achievement of a mixture of company financial
and personal targets.
The company’s remuneration committee
is kept fully appraised of relevant market
information and best practice, obtaining
advice from external advisors when necessary.
Remuneration levels are reviewed annually for
market competitiveness.
Fixed remuneration
It is the company’s policy to pay fixed
remuneration comparable to the median
and total compensation comparable to the
upper quartile for equivalent roles in the
country or region in which the incumbent
is located. For the purposes of determining
total remuneration within the senior executive
group, it is assumed that senior executives
will on average achieve 75 percent of their
potential short-term incentives over time, such
percentages to be reassessed periodically
in the light of the actual earnings achieved
over the business cycle. It is considered
appropriate that 50 percent of long-term
variable incentives be achieved over a normal
business cycle.
short-term incentive remuneration
Short-term incentive remuneration is
available to recognise the contribution of
senior executives to company and individual
performance objectives. Short-term incentive
remuneration targets are expressed as a
percentage of fixed remuneration which is up
to 100 percent of the fixed remuneration for
the chief executive and the direct reports to
the chief executive, and up to 40 percent for
all other senior executives.
Participation in the plan is by annual
invitation, at which time the target incentive
is established. This involves each participant
being notified of a financial target and several
challenging, measurable personal objectives
for the financial year. Personal and financial
objectives are independently assessed such
that a participant can achieve their personal
objectives even if the minimum financial target
is not achieved.
The financial measures include the operating
earnings target for the applicable division or
business unit and the corporate Economic
Value Added (EVA) target. Corporate
executives are measured on a mix of EVA and
personal objectives.
The target for commencement and
determination of variable incentive payments
is an assessed measure for each business
unit or operating division, and is based on the
approved budget. In most years 100 percent
of the financial component is earned if 100
percent of target is achieved and up to 120
percent of the financial component is earned
if 110 percent of budget target is achieved.
Individual variable compensation payments
are offered entirely at the discretionof the
board.
Long-term incentives
The company has implemented long-term
cash-based performance incentive schemes,
targeted at around 350 executives most
able to influence financial results. Where
performance targets are met, a cash bonus is
payable with the after-tax amount invested in
the company’s shares. Participation in any year
is by invitation, renewable annually and at the
complete discretion of the company.
Where permitted by securities legislation in
the relevant jurisdiction, participants purchase
shares in the company at the offer price
with an interest-free loan. The offer price is
established at market value at the time of offer,
which will normally be each 30 September.
The shares are held by a trustee on behalf
of participants until the end of a three year
restrictive period which may be extended for
one further year for up to 50 percent of the
entitlement. Provided certain performance
criteria are met and participants remain
employed with the company throughout
the restrictive period, legal title in the shares
will be transferred to them at the end of the
restrictive period.
The schemes are either share-ownership
based for New Zealand and Australian
executives or are designed to deliver the same
economic value as the share scheme and
is for a small number of executives in other
jurisdictions where offering a share scheme is
not optimum.
The cash-based share-ownership scheme,
the Executive Long-Term Share Scheme
(ELSS), will be offered to all eligible executives
this year and is described in detail on the
company’s website at fbu.com/investor-
centre/governance.
In circumstances where shares cannot be
acquired under the applicable securities
legislation, equivalent economic entitlements
are conveyed by way of cash bonus
entitlements.
The comparator group of Australasian
companies used to determine relative TSR
performance for the 2013 offer comprises
Adelaide Brighton, Amcor, Arrium, BlueScope,
Boral, Brickworks, CSR, GWA Group, James
Hardie, Leighton Holdings, Nuplex, Sims Group
and Steel & Tube. The minimum and maximum
EPS targets for the 2013 offer are for EPS for
the year ended 30 June 2013 to increase by
8 percent per annum and 14 percent per
annum respectively.
On 30 September 2013 the three year
restrictive period in respect of the third issue
under the ELSS, which was made in 2010,
ends. The EPS minimum vesting threshold
for the 2010 ELSS will not be met and
accordingly no shares will vest in respect
of the EPS tranche of shares in that offer.
However, present indications are that the
TSR of the company for the period will be in
the 65th percentile of the comparator group
of companies and accordingly participating
executives in the ELSS (in respect of the TSR
tranche) will be entitled to take up ownership
of around 220,000 Fletcher Building shares.
superannuation
Participation in defined benefit and defined
contribution retirement savings plans is
made available to executives as required
by remuneration practices in relevant
jurisdictions. For those participating, an
amount to recognise the value of the employer
contributions required is included in the
remuneration information in the remuneration
information later in this report.
Holding the company’s securities
A standard term in the senior executive
employment contract is a requirement that,
over time, senior executives must acquire
and maintain a holding in the company’s
ordinary shares until such time as the sum
so invested, or the market value of their
33
REMUNERATION REPORT
CONTINUED
shareholding, exceeds 50 percent of their
fixed remuneration. In meeting this obligation
executives are required, from the date of
receipt of the first payment under the senior
executive short-term variable incentive plan, to
apply at least half of the after tax proceeds so
earned in acquiring shares.
The company believes this shareholding
strengthens the alignment of senior executives
with the interests of shareholders and puts
their own remuneration at risk to long-term
company performance. Apart from the long-
term cash-based performance incentive
schemes outlined above where an agreed
percentage of any cash received is to be
invested in purchasing shares, executives
are left to their own discretion to organise
acquiring the shares within the normal insider
trading rules, and no allowance is made for the
restriction on trading those shares. Directors
may, in any year at their discretion, ease the
share investment percentage required in
terms of this policy in respect of any incentive
payment arising in that year.
Shares issued to executives under the long-
term incentive scheme, but still subject to the
restrictive period, do not count towards the
required minimum shareholding obligation.
The company does, however, allow New
Zealand-based executives to meet their
requirement to hold the company’s shares
by having an economic exposure to the
shares through a defined contribution
investment account in the Fletcher Building
Retirement Plan, the value of which is
calculated by reference to the Fletcher
Building share price.
Disclosure policy
The New Zealand Companies Act 1993
requires the disclosure of all remuneration
payable over $100,000 per annum in $10,000
bands. As the company must comply with
this obligation, it has chosen not to also make
detailed disclosure of the remuneration of the
five highest paid executives as is considered
best practice under the ASX Corporate
Governance Guidelines.
Compliance with AsX corporate
governance guidelines
The company meets all the best practice
requirements of the ASX Corporate
Governance Council other than making
detailed disclosure of the five highest
executives’ remuneration. As is noted above,
the company makes the remuneration
disclosures required of a New Zealand
company under the Companies Act 1993.
Employee remuneration
Section 211 (1) (g) of the New Zealand
Companies Act 1993 requires disclosure of
remuneration and other benefits, including
redundancy and other payments made on
termination of employment, in excess of
$100,000 per year, paid by the company
or any of its subsidiaries worldwide to
any employees who are not directors of
the company. To give more appropriate
information on total employees’ remuneration,
where there is a contractual commitment to
provide incentive remuneration in respect
of the year ended 30 June 2013, the amount
accrued as at 30 June 2013 has also been
included in the total remuneration
disclosed in the table to the right.
34
From NZ$
100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
190,000
200,000
210,000
220,000
230,000
240,000
250,000
260,000
270,000
280,000
290,000
300,000
310,000
320,000
330,000
340,000
350,000
360,000
370,000
380,000
390,000
400,000
410,000
420,000
430,000
440,000
450,000
460,000
470,000
480,000
490,000
500,000
510,000
520,000
540,000
550,000
570,000
580,000
590,000
610,000
650,000
670,000
680,000
700,000
730,000
770,000
780,000
1,000,000
1,030,000
1,130,000
1,180,000
1,360,000
1,480,000
2,550,000
To NZ$
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
190,000
200,000
210,000
220,000
230,000
240,000
250,000
260,000
270,000
280,000
290,000
300,000
310,000
320,000
330,000
340,000
350,000
360,000
370,000
380,000
390,000
400,000
410,000
420,000
430,000
440,000
450,000
460,000
470,000
480,000
490,000
500,000
510,000
520,000
530,000
550,000
560,000
580,000
590,000
600,000
620,000
660,000
680,000
690,000
710,000
740,000
780,000
790,000
1,010,000
1,040,000
1,140,000
1,190,000
1,370,000
1,490,000
2,560,000
Number of employees
International
business activities
New Zealand
business activities
522
389
300
232
161
116
82
79
74
53
53
30
33
28
12
11
18
20
22
12
11
10
11
8
9
6
5
4
8
2
3
1
4
3
3
3
2
1
3
2
1
1
1
1
3
1
2
1
2
2
1
1
350
240
159
117
82
66
39
41
28
32
23
19
17
14
11
15
11
6
7
6
6
4
4
2
4
4
2
2
2
1
4
5
1
2
1
2
3
2
2
1
1
1
1
1
1
1
1
2
1
2
1
Total
872
629
459
349
243
182
121
120
102
85
76
49
50
42
23
26
29
26
29
18
17
14
15
10
13
10
7
6
10
3
7
6
5
5
3
4
4
4
3
4
1
2
2
2
1
3
1
1
2
1
1
1
2
1
2
1
1
2
1
2
1
1
1
2,363
1,350
3,713
35
FINANCIAL REVIEW
Cashflow and capital expenditure
Cashflow from operations was $559 million,
up 25 percent on the $448 million achieved
in the prior year. The improvement was due to
strong cashflows in the Construction, Building
Products and Distribution divisions, and
reductions in working capital.
Capital expenditure for the period was $246
million, down from $353 million in the prior
year. Of this total, $148 million was for stay-in-
business capital projects and $98 million was
for new growth initiatives, including $13 million
for the acquisition of new businesses.
Capital management
and funding
The group’s gearing3 at 30 June 2013 was
33.3 percent compared with 37.4 percent
at 30 June 2012.
The group had total available funding of
$2,690 million as at 30 June 2013. Of this,
$819 million was undrawn and there was
an additional $123 million of cash on hand.
The group has drawn debt facilities maturing
within the next 12 months of $33 million, and
a further $112 million of capital notes subject
to interest rate and term reset. These
maturities are more than covered by the
undrawn facilities and cash on hand.
The average maturity of the debt is 5 years
and the currency split is 49 percent Australian
dollar; 33 percent New Zealand dollar;
11 percent US dollar; and 7 percent spread
over various other currencies.
74 percent of all borrowings have fixed interest
rates with an average duration of 3 years and
a rate of 7.4 percent. Inclusive of floating
rate borrowings the average interest rate on
the debt is 6.7 percent. All interest rates are
inclusive of margins but not fees.
Interest coverage4 for the period was 3.9 times
compared with 3.7 times in the previous year.
Risk management
The company has an integrated programme
to manage risk associated with movements
in interest rates, commodity prices and
exchange rates. This aims to ensure a base
level of profitability and reduces volatility of
earnings. Further details are provided in note
27 of the financial statements.
Retirement plans
The company operates a number of defined
benefit retirement plans for its employees.
The investment in all plans totalled 743 million
at 30 June 2013.
During the year the company contributed
$24 million towards funding these plans.
The group expects to contribute $21 million
to its defined benefit plans during the year
to June 2014.
1 Share price movement in year and gross
dividend received, to opening share price.
2 EBIT to average funds (net debt and equity
less deferred tax asset).
3 Net debt (borrowings less cash and deposits)
to net debt and equity.
4 EBIT before significant items to
total interest paid.
36
Total shareholder return (percentage) 1
.
5
0
5
0
.
2
4
9
2
4
-
.
08
.
5
4
2
1
.
4
1
.
2
4
1
09
10
11
12
13
Return on average funds
(percentage) 2
.
0
9
1
7
.
2
1
4
3
.
.
6
0
1
.
8
0
1
4
.
7
08
09
10
11
12
13
Operating cashflow (NZ $million)
3
3
5
2
2
5
4
3
4
8
4
4
2
0
4
9
5
5
08
09
10
11
12
13
Gearing (percentage) 3
1
.
0
4
3
.
1
3
.
8
6
2
4
.
7
3
.
3
4
3
.
3
3
3
08
09
10
11
12
13
Interest cover (times) 4
6
5
.
0
4
.
1
.
5
.
9
4
7
.
3
9
3
.
08
09
10
11
12
13
-27.2 FINANCIAL
STATEMENTS
Earnings statement
Statements of comprehensive income
and movements in equity
Balance sheet
Statement of cashflows
Reconciliation of net earnings to net cash
from operating activities
Statement of accounting policies
Notes to the financial statements
Independent auditor’s report
38
39
40
41
43
44
47
77
37
Earnings statement
For the year ended 30 June 2013
Sales
Cost of goods sold
Gross margin
Selling and marketing expenses
Administration expenses
Share of profits of associates
Other investment income
Intercompany investment income
Other gains and losses
Amortisation of intangibles
Restructuring and impairment charges
Operating earnings (EBIT)
Funding (costs)/income
Earnings before taxation
Taxation expense
Earnings after taxation
Earnings attributable to minority interests
Net earnings attributable to the shareholders
Net earnings per share (cents)
Basic
Diluted
Weighted average number of shares outstanding (millions of shares)
Basic
Diluted
Fletcher Building Group
Fletcher Building Limited
Notes
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
8,517
(6,346)
2,171
(1,040)
(585)
21
4
(2)
569
(147)
422
(85)
337
(11)
326
47.6
47.5
685
711
8,839
(6,613)
2,226
(1,095)
(603)
26
1
1
(153)
403
(152)
251
(58)
193
(8)
185
27.2
27.2
681
681
21
32
3
20
4
6
7
9
9
2
140
142
136
278
(39)
239
2
677
679
40
719
(11)
708
239
708
Dividends declared per share (cents)
34.0
34.0
The accompanying notes form part of and are to be read in conjunction with these financial statements.
On behalf of the Board, 21 August 2013
Ralph Waters
Chairman of Directors
Mark Adamson
Managing Director
38
Statements of comprehensive income
and movements in equity
For the year ended 30 June 2013
Statement of comprehensive income
Net earnings – parent interest
Net earnings – minority interest
Net earnings
Movement in cashflow hedge reserve
Movement in pension reserve
Movement in currency translation reserve
Income and expenses recognised directly in equity
Total comprehensive income for the year
Statement of movements in equity
Total equity at the beginning of the year as previously published
Change in accounting policy (Refer Note 1)
Total equity at the beginning of the year as restated
Total comprehensive income for the year
Movement in minority equity
Movement in reported capital
Dividends
Less movement in shares held under the treasury stock method
Total equity
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
(Restated)
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
326
11
337
22
71
(111)
(18)
319
3,603
(151)
3,452
319
(8)
25
(233)
(1)
3,554
185
8
193
(39)
(79)
(39)
(157)
36
3,700
(72)
3,628
36
(10)
30
(231)
(1)
239
239
3
3
242
708
708
(23)
(23)
685
3,002
2,518
3,002
2,518
242
685
25
(233)
30
(231)
3,452
3,036
3,002
The accompanying notes form part of and are to be read in conjunction with these financial statements.
39
Balance sheet
As at 30 June 2013
Assets
Current assets:
Cash and deposits
Current tax asset
Derivatives
Debtors
Stocks
Total current assets
Non current assets:
Fixed assets
Goodwill
Intangibles
Investments
Derivatives
Deferred taxation asset
Advances to subsidiaries
Total non current assets
Total assets
Liabilities
Current liabilities:
Provisions
Creditors and accruals
Current tax liability
Derivatives
Contracts
Borrowings
Advances from subsidiaries
Total current liabilities
Non current liabilities:
Provisions
Creditors and accruals
Deferred taxation liability
Retirement plan liability
Derivatives
Borrowings
Total non current liabilities
Total liabilities
Equity
Reported capital
Revenue reserves
Other reserves
Shareholders' funds
Minority equity
Total equity
Total liabilities and equity
Fletcher Building Group
Fletcher Building Limited
Notes
June 2013
NZ$M
June 2012
NZ$M
(Restated)
June 2013
NZ$M
June 2012
NZ$M
15
25
27
16
17
18
19
20
21
27
25
32
22
23
25
27
24
26
32
22
23
25
34
27
26
11
12, 13
12, 13
14
123
30
10
1,346
1,353
2,862
2,261
1,219
510
180
39
32
4,241
7,103
63
1,181
15
12
102
144
168
46
4
1,460
1,434
3,112
2,348
1,243
519
150
69
38
4,367
7,479
95
1,249
18
3
115
456
1,517
1,936
20
87
40
84
46
1,755
2,032
3,549
2,606
1,078
(165)
3,519
35
3,554
7,103
21
92
20
137
50
1,771
2,091
4,027
2,582
985
(147)
3,420
32
3,452
7,479
38
26
64
5,447
49
13
864
6,373
6,437
1
38
9
3,262
3,310
57
34
91
77
27
104
5,429
65
15
781
6,290
6,394
2
1
12
55
3,208
3,278
52
62
114
3,401
3,392
2,628
441
(33)
3,036
3,036
6,437
2,603
435
(36)
3,002
3,002
6,394
The accompanying notes form part of and are to be read in conjunction with these financial statements.
40
Statement of cashflows
For the year ended 30 June 2013
Cashflow from operating activities
Receipts from customers
Dividends received
Interest received
Total received
Payments to suppliers, employees and other
Interest paid
Income tax paid
Total applied
Net cash from operating activities
Cashflow from investing activities
Sale of fixed assets
Sale of investments
Sale of subsidiaries
Total received
Purchase of fixed assets
Purchase of investments
Purchase of subsidiaries
Net debt in subsidiaries acquired
Total applied
Net cash from investing activities
Cashflow from financing activities
Net debt drawdown
Issue of capital notes
Total received
Net debt repayment
Repurchase of capital notes
Advances to subsidiaries
Distribution to minority shareholders
Dividends
Total applied
Net cash from financing activities
Net movement in cash held
Add opening cash deposits
Effect of exchange rate changes on net cash
Closing cash and liquid deposits
The accompanying notes form part of and are to be read in conjunction with these financial statements.
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
8,539
19
8,558
7,790
149
60
7,999
559
18
9
64
91
233
2
11
246
(155)
170
57
12
208
447
(447)
(43)
168
(2)
123
8,908
32
1
8,941
8,227
143
123
8,493
448
16
11
27
261
6
86
10
363
(336)
107
67
174
21
13
201
235
(61)
51
115
2
168
26
140
164
330
28
28
302
74
59
208
341
(341)
(39)
77
38
2
677
60
739
44
20
64
675
59
59
487
201
688
(629)
46
31
77
41
Statement of cashflows
continued
For the year ended 30 June 2013
Analysis of subsidiaries acquired
Fixed assets
Goodwill on acquisition
Current assets
Minority interests
Debt in subsidiaries
Current liabilities
Total assets and liabilities recognised
Gain recognised in respect of investment previously held
Adjustment to derecognise investment previously held in subsidiaries acquired
Cash paid to date for subsidiaries acquired
During the year the group acquired two minor subsidiaries for aggregate consideration of $11 million.
The accompanying notes form part of and are to be read in conjunction with these financial statements.
Fletcher Building Group
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
8
3
1
(1)
11
11
41
102
19
(2)
(10)
(11)
139
(4)
(49)
86
42
Reconciliation of net earnings to net cash
from operating activities
For the year ended 30 June 2013
Cash was received from:
Net earnings
Earnings attributable to minority interests
Adjustment for items not involving cash:
Depreciation, depletions, and amortisation
Restructuring and impairment charges
Provisions and other adjustments
Taxation
Non cash adjustments
Cashflow from operations 1
Less gain on disposal of affiliates and fixed assets
Cashflow from operations before net working capital movements
Net working capital movements
Net cash from operating activities 2
Net working capital movements:
Debtors
Stocks
Contracts
Creditors
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
326
11
337
220
(51)
25
194
531
(6)
525
34
559
34
12
(6)
(6)
34
185
8
193
230
122
(21)
(65)
266
459
(2)
457
(9)
448
15
71
20
(115)
(9)
239
239
(2)
39
37
276
276
26
302
17
9
26
1 Includes (gain)/loss on disposal of affiliates and fixed assets.
2 As per the statement of cashflows.
The accompanying notes form part of and are to be read in conjunction with these financial statements.
708
708
(21)
11
(10)
698
698
(23)
675
(24)
1
(23)
43
Statement of accounting policies
For the year ended 30 June 2013
Basis of presentation
Estimates
The financial statements presented
are those of Fletcher Building
Limited (the company) and
its subsidiaries (the group).
Fletcher Building Limited
is a company domiciled in
New Zealand, is registered under
the Companies Act 1993, and is an
issuer in terms of the Securities Act
1978 and the Financial Reporting
Act 1993. The registered office
of the company is 810 Great
South Road, Penrose, Auckland.
Fletcher Building Limited is a profit
oriented entity.
The financial statements
comprise the earnings statement,
statement of comprehensive
income, statement of movements
in equity, balance sheet,
statement of cashflows, and
significant accounting policies,
as well as the notes to these
financial statements.
Accounting convention
The financial statements are
based on the general principles
of historical cost accounting,
except that financial assets and
liabilities as described below are
stated at their fair value. These
financial statements have been
prepared in accordance with
Generally Accepted Accounting
Practice in New Zealand which
is the New Zealand equivalent to
International Financial Reporting
Standards (NZ IFRS). They also
comply with International Financial
Reporting Standards.
The accounting policies have
been applied consistently by
all group entities, except as
disclosed in note 1, changes in
accounting policies.
Segmental reporting
Segmental information is
presented in respect of the
group’s industry and geographical
segments. The use of industry
segments as the primary
format is based on the group’s
management and internal
reporting structure, which
recognises groups of assets and
operations with similar risks and
returns. Inter-segment pricing
is determined on an arm’s
length basis.
44
The preparation of financial
statements in conformity with
NZ IFRS requires the directors to
make estimates and assumptions
that affect the reported amounts
of assets and liabilities, disclosure
of contingent assets and liabilities
at the date of the financial
statements and the reported
amounts of sales and expenses
during the reporting period.
Actual results could differ from
those estimates. The estimates
and assumptions are reviewed
on an ongoing basis. For further
information on areas of estimation
and judgement, refer to the notes
to the financial statements, in
particular note 19.
Basis of consolidation
The consolidated financial
statements comprise the company
and its subsidiaries and the group’s
interest in associates, partnerships
and joint ventures. Inter-company
transactions are eliminated in
preparing the consolidated
financial statements.
Subsidiaries
Subsidiaries are included in the
consolidated financial statements
using the acquisition method
of consolidation, from the date
control commences until the date
control ceases.
Associates
The equity method has been used
for associate entities in which the
group has a significant but not
controlling interest.
Goodwill on acquisition
Fair values are assigned to the
identifiable assets and liabilities
of subsidiaries and associates
of the group at the date they are
acquired. Goodwill arises to the
extent of the excess of the cost of
the acquisition over the fair value
of the assets and liabilities.
Goodwill is stated at cost, less
any impairment losses. Goodwill
is allocated to cash generating
units and is not amortised, but is
tested annually for impairment.
Goodwill in respect of associates
is included in the carrying amount
of associates. Any discount on
acquisition is recognised directly
in earnings on acquisition.
Joint ventures and partnerships
Where the ownership interest
in the joint venture is in the net
residue of the business and does
not give rise to an economic or
controlling interest in excess of
50 percent, the share of the net
assets and liabilities and earnings
of the investment is included on
an equity basis. If the interest does
give rise to a controlling interest
in excess of 50 percent, the
investment is consolidated.
Joint ventures in which the
ownership interest is directly in
the assets and liabilities, rather
than the net residue, are included
on a proportional basis with
assets, liabilities, revenues and
expenses based on the group’s
proportional interest.
Land, buildings, plant and
machinery, leased assets
and fixtures and equipment
are stated at cost, less
accumulated depreciation.
Investments
Investments are valued at historical
cost. Impairments in the value
of investments are written off to
earnings as they arise.
Stocks
Trading stock, raw materials and
work in progress are valued at
the lower of cost or net realisable
value, determined principally on
the first-in, first-out basis. Cost
includes direct manufacturing
costs and manufacturing
overheads at normal
operating levels.
Valuation of assets
Debtors
Land, buildings, plant and
machinery, fixtures and
equipment
The cost of purchasing land,
buildings, plant and machinery,
fixtures and equipment is the
value of the consideration given
to acquire the assets and the
value of other directly attributable
costs which have been incurred in
bringing the assets to the location
and the condition necessary for
their intended service, including
subsequent expenditure.
The costs of self constructed
assets include, where appropriate,
the costs of all materials used
in construction, direct labour
on the project, site preparation
and installation costs, costs of
obtaining resource consents,
financing costs that are directly
attributable to the project,
variable and fixed overheads
and unrecovered operating
costs incurred during planned
commissioning. Costs cease to
be capitalised as soon as the
asset is ready for productive
use. All feasibility costs are
expensed as incurred.
Leases in which the group
assumes substantially all the risks
and rewards of ownership are
classified as finance leases and are
measured at the lower of their fair
value or the present value of the
minimum lease payments at the
inception of the lease.
Debtors are valued at estimated
net realisable value. The valuation
is net of a specific provision
maintained for doubtful debts.
All known losses are written off to
earnings in the period in which it
becomes apparent that the debts
are not collectable. Trade debtors
normally have 30 to 90 day terms.
Construction work in progress
Construction work in progress
is stated at cost plus profit
recognised to date, less progress
billings and any provision for
foreseeable losses. Cost includes
all expenditure directly related to
specific projects and an allocation
of fixed and variable overheads
incurred in the group’s contract
activities based on normal
operating capacity.
Cash
Cash and deposits comprise cash
and demand deposits with banks
or other financial institutions and
highly liquid investments that are
readily convertible to cash.
Impairment
Impairment is deemed to occur
when the recoverable amount
falls below the book value of the
asset. The recoverable amount is
determined to be the greater of the
fair value, less disposal costs or the
sum of expected future discounted
net cashflows arising from the
ownership of the asset. Future
net cashflows take into account
the remaining useful life and the
expected period of continued
ownership, including any intended
disposals, and any costs or
proceeds expected to eventuate at
the end of the remaining useful life
or the end of the expected period
of continued ownership.
For the purposes of considering
whether there has been an
impairment, assets are grouped
at the lowest level for which
there are identifiable cashflows
that are largely independent of
the cashflows of other groups
of assets. When the book value
of a group of assets exceeds the
recoverable amount an impairment
loss arises and is recognised in
earnings immediately.
Goodwill and brands with an
indefinite life are tested for
impairment in June of each
year. Other assets are tested for
impairment when an indication of
impairment exists.
Brands
Brands for which all relevant
factors indicate that there is
no limit to the foreseeable net
cashflows, are considered to have
an indefinite useful life and are
held at cost and are not amortised,
but are subject to an annual
impairment test.
Retirement plans
The group’s net asset in respect of
its retirement plans is calculated
separately for each plan by an
independent actuary, as being
the fair value of the plan’s assets
less the present value of the future
obligations to the members. The
value of the asset recognised
cannot exceed the present value
of any future refunds from the
plans or reductions in future
contributions to the plans.
Foreign currency
Translation of the financial
statements of foreign operations
The assets and liabilities of the
group’s overseas operations
are translated into New Zealand
currency at the rates of exchange
ruling at balance date. The
revenue and expenditure of
these entities are translated
using an average exchange rate
reflecting an approximation of
the appropriate transaction rates.
Exchange variations arising on the
translation of these entities are
recognised directly in the currency
translation reserve.
instruments are held to hedge risk
on underlying assets, liabilities
and forecast and committed
trading transactions.
Exchange differences
Monetary assets and liabilities
in foreign currencies at balance
date which are not covered by
forward exchange contracts are
translated at the rates of exchange
ruling at balance date. Monetary
assets and liabilities in foreign
currencies at balance date which
are covered by forward exchange
contracts are effectively translated
at the exchange rates specified in
those contracts.
Non-monetary assets and liabilities
in foreign currencies are translated
at the exchange rates in effect
when the amounts of these assets
and liabilities were determined.
Net investments in foreign
operations
Exchange differences arising
from the translation of the net
investment in foreign operations,
and of related hedges, are taken
to the currency translation reserve
and are released to earnings upon
disposal.
Financial instruments
Non-derivative financial
instruments
Non-derivative financial
instruments comprise borrowings,
trade and other payables, cash and
cash equivalents, and trade and
other receivables.
Non-derivative financial
instruments are recognised
initially at fair value. Subsequent to
initial recognition, non-derivative
financial instruments are measured
at amortised cost using the
effective interest method, less any
impairment losses.
Derivative financial instruments
Derivative financial instruments
including foreign exchange
contracts, interest rate swaps,
currency swaps, options, forward
rate agreements and commodity
price swaps are utilised to reduce
exposure to market risks.
Group policy specifically
prohibits the use of derivative
financial instruments for trading
or speculative purposes. All
the group’s derivative financial
The fair values of derivative
financial instruments, as disclosed
in the financial instrument note, are
determined by applying quoted
market prices.
The group holds derivative
instruments until expiry except
where the underlying rationale
from a risk management point
of view changes, such as when
the underlying asset or liability
which the instrument hedges no
longer exists, in which case early
termination occurs.
Derivative financial instruments
are initially recorded at fair value
and are then revalued to fair value
at balance date. The gain or loss
on revaluation is recorded either in
earnings or equity depending on
whether the instruments qualify
for hedge accounting and the
nature of the item being hedged.
For a derivative instrument to
be classified and accounted for
as a hedge, it must be highly
correlated with, and effective as a
hedge of the underlying risk being
managed. This relationship must
be documented from inception.
Fair value hedges
Where a derivative financial
instrument is designated as a
hedge of a recognised asset or
liability, or of a firm commitment,
any gain or loss is recognised
directly in earnings together with
any changes in the fair value of
the hedged risk.
Cashflow hedges
Where a derivative financial
instrument is designated as
a hedge of the variability in
cashflows of assets or liabilities,
or of a highly probable forecasted
transaction, the effective part of
any gain or loss is recognised
directly in the cashflow hedge
reserve within equity and the
ineffective part is recognised
immediately in earnings. The
effective portion is transferred
to earnings when the underlying
cashflows affect earnings.
Net investment hedges
Where the derivative financial
instruments are designated as
a hedge of a net investment
in a foreign operation, the
derivative financial instruments
are accounted for on the same
basis as cashflow hedges through
the currency translation reserve
within equity.
Derivatives that do not qualify for
hedge accounting
Where a derivative financial
instrument does not qualify for
hedge accounting, or where hedge
accounting has not been elected,
any gain or loss is recognised
directly in earnings.
Valuation of liabilities
Taxation
The provision for current tax is the
estimated amount due for payment
during the next 12 months by the
group. The provision for deferred
taxation has been calculated using
the balance sheet liability method.
Deferred tax is recognised on the
temporary difference between
the carrying amount of assets and
liabilities and their taxable value.
Deferred tax assets are not
recognised on temporary
differences and tax losses unless
recovery is considered probable.
Finance leases
Finance leases are capitalised to
reflect the borrowings incurred
and the cost of the asset acquired.
Such obligations are classified
within borrowings. The finance
cost portion of lease payments is
written off to earnings. The leased
asset is depreciated on a straight
line basis over the estimated useful
life of the asset with regard to
residual values.
Borrowings
Interest bearing borrowings are
initially recognised at fair value.
Creditors
Trade creditors and other liabilities
are stated at cost or estimated
liability where accrued.
Annual leave
Annual leave is recognised on an
accrual basis.
Provisions
A provision is recognised when the
group has a current obligation and
it is probable that an economic
benefit will be required to settle it.
45
Statement of accounting policies
continued
Intercompany guarantees
Funding costs
Where the company enters into
financial guarantee contracts to
guarantee the performance or
indebtedness of other companies
within the group, the company
considers these to be insurance
arrangements and accounts for
them as such. In this respect, the
company treats the guarantee
contract as a contingent liability
until such time as it becomes
probable that the company will
be required to make a payment
under the guarantee.
Equity
Share capital
Ordinary shares are classified as
shareholders funds. Costs directly
attributable to the issue of new
shares or options are shown in
shareholders funds as a reduction
from the proceeds.
Dividends are recognised as a
liability in the period in which they
are declared.
Where a member of the group
purchases the company’s share
capital the consideration paid
is deducted from equity under
the treasury stock method as if
the shares are cancelled, until
they are reissued or otherwise
disposed of.
Income determination
Sales recognition
Sales are recognised in accordance
with the terms of sale when the
benefits of ownership and risk of
loss passes to the customer.
Construction contracts
Earnings on construction contracts
(including sub-contracts) are
determined using the percentage-
of-completion method. Earnings
are not recognised until the
outcome can be reliably estimated.
The company uses its professional
judgement to assess both the
physical completion and the
forecast financial result of the
contract. Provision is made for
estimated future losses on the
entire contract from the date it
is first recognised that a contract
loss may be incurred.
Investment revenue
Dividends and distributions are
taken to earnings when received,
or accrued where declared prior
to balance date.
46
Net funding costs comprise
interest expense, interest income,
amortisation of prepaid expenses
and gains/losses on certain
financial instruments that are
recognised in earnings.
Depreciation
Depreciation of fixed assets is
calculated on the straight line
method. Expected useful lives,
which are regularly reviewed on a
weighted average basis are:
Buildings
Plant and machinery
30 years
13 years
Fixtures and equipment
5 years
Leased assets capitalised
10 years
Leasing commitments
Expenditure arising from operating
leasing commitments is written off
to earnings in the period in which it
is incurred.
Retirement plan expense
Obligations for contributions
to defined contribution plans
are recognised in earnings as
incurred. The actuarial cost of
providing benefits under defined
benefit plans is expensed as it
accrues over the service life of the
employees, after taking account
of the income expected to be
earned by the assets owned by
the plans.
All actuarial gains or losses are
recognised in the pension other
comprehensive income reserve
(the pension reserve) in the year in
which are they incurred.
Long service leave
Long service leave is recognised in
earnings on an actuarial basis.
Research and development
Expenditure on research activities
is recognised in earnings
as incurred.
Executive share scheme
The company has implemented
a long term cash-based
performance incentive scheme
targeted at the company’s
executives most able to influence
the results of the company with
an agreed percentage of any
cash received to be invested in
purchasing the company’s shares.
The executive long-term share
scheme introduced in 2008 allows
group executives to acquire shares
in the company at market price,
funded by an interest free loan
from the group. The executives
are entitled to vote on the shares
and to receive cash dividends,
the proceeds of which are used
to repay the loan. The shares are
held in trust for the executives
by the Trustee, Fletcher Building
Share Schemes Limited. Payment
of half of any benefit under the
executive performance share
scheme is dependent upon the
group’s total shareholder return
exceeding the 51st percentile of
the total shareholder return of a
comparative group of companies
over a three year restricted period.
Payment of the other half of any
benefit is dependent upon the
group achieving an earnings per
share target. In addition, in respect
of the benefit which is dependant
on total shareholders return, the
three year restricted period is
automatically extended for up to
one year if total shareholders return
is less than the 51st percentile.
Executives can elect to extend
the restricted period for up to
one year if total shareholders
return is between the 51st and
75th percentile. No extension is
permitted for the benefit which
is dependant upon achieving an
earnings per share target.
At the end of the restricted period
or any extension, the group will
pay a bonus to the executives
to the extent that performance
targets have been met, the after tax
amount of which will be sufficient
for the executives to repay the
balance of the loan for the shares
which vest.
If the performance obligations
are not met or are only partially
met, the trustee will acquire the
beneficial interest in some or all
of the shares. The loan provided
in respect of those shares which
do not transfer to the executives
(the forfeited shares) will be
novated to the trustee and will be
fully repaid by the transfer of the
forfeited shares.
The group will recognise an
expense in earnings over the
restricted period to provide for the
maximum bonus payable.
The group accounts for the share
schemes under the treasury stock
method. The receivable owing
from the executives, representing
the shares held in the company, is
deducted from the group’s paid up
capital. If the performance targets
based on total shareholder return
are not met and the shares do not
vest, the after tax amount of the
bonus provision will be transferred
to equity and will not be released
to earnings. If the performance
targets based on earnings per
share are not met and the shares
do not vest, the after-tax amount
of the bonus provision will be
released to earnings. The shares
will continue to be deducted from
equity until they are disposed of
by the trustee.
To the extent that the performance
targets are met and the shares vest
the bonus will be paid enabling
repayment of the loan, and to the
extent of this loan repayment paid
up capital will increase.
Employee share purchase
scheme – FBuShare
The global employee share
purchase scheme, FbuShare,
allows eligible group employees to
regularly save up to NZ$5,000 per
annum of their after-tax pay and
purchase shares in the company
(purchased shares) at market
prices. At the end of rolling three
year qualification periods, and
provided they remain employed
by a group company, employees
will be awarded one free award
share for every two purchased
shares acquired in the first year
of each three year qualification
period and still held at the end of
those periods.
Dividends payable will be re-
invested in additional shares.
Employees will receive award
shares on any additional shares,
subject to the same conditions
set out above. The employees are
responsible for any income tax
liability payable on dividends and
on the value of any award shares.
At the end of each three year
qualification period, employees
may continue to hold any
purchased, additional and award
shares or they may sell some
or all of the shares. The group
accrues the liability to pay for
award shares over the three year
qualification periods.
Notes to the financial statements
1 Changes in accounting policies
NZ IAS 19 Employee Benefits has been revised with an effective date of 30 June 2014 for the group. The group decided to adopt this early for the year
ended 30 June 2013. This resulted in the unrecognised loss in respect of its retirement plans at 30 June 2011 of $87 million ($72 million net of tax) being
written off to the pension other comprehensive income reserve (the pension reserve). In addition the actuarial loss of $95 million ($79 million net of tax)
incurred during the year ended 30 June 2012 has been written off to the pension reserve. Therefore the total write-off at 30 June 2012 is $182 million
($151 million net of tax) and this has been written off to the pension reserve. The group has recalculated its pension expense for the current and prior year
and this has not changed materially. Going forward the adoption of the revised standard is not expected to have a material impact on the group’s earnings.
The International Accounting Standards Board has issued a number of other standards, amendments and interpretations which are not yet effective.
The group has not yet applied these in preparing these financial statements although the application of these standards, amendments and
interpretations would require further disclosures, but they are not expected to have a material impact on the group’s earnings. There have been no
other changes in accounting policies in the year ended 30 June 2013, however certain comparatives have been restated to conform with the current
year’s presentation.
2 Acquisitions
During the 2013 year the group acquired subsidiaries for a total consideration of $11 million (2012: $86 million).
The following values are recognised in the financial statements:
Fixed assets
Goodwill on acquisition
Current assets
Current liabilities
Enterprise value
Consideration paid
Final
fair value
NZ$M
8
3
1
(1)
11
11
During the year to 30 June 2013 these acquisitions contributed sales of $5 million and an operating earnings loss of $1 million.
As these acquisitions occurred at the beginning of the year, the above contributions are the same as the annualised results.
A formal fair value exercise of the assets and liabilities for the above acquisitions has been completed.
The major acquisition during the prior year was the purchase of the remaining half of Homapal on 2 April 2012 for a consideration of $52 million, having
previously held a 50 percent investment. From that date Homapal has been accounted for as a subsidiary of the group, having previously been equity
accounted as an associate.
The following values are recognised in the financial statements in respect of this acquisition:
Fixed assets
Brands
Goodwill on acquisition
Inventories
Receivables
Current liabilities
Deferred taxation liability
Enterprise value
Less debt acquired
Gain recognised in respect of investment previously held
Adjustment to derecognise investment previously held
Consideration paid
Final
fair value
NZ$M
13
14
85
7
3
(6)
(1)
115
(10)
(4)
(49)
52
47
Notes to the financial statements
continued
3 Specific disclosures
The following items are specific disclosures required to
be made and are included within the earnings statement:
Net periodic pension cost
Employee related short term costs 1
Other long term employee related benefits
Research and development
Bad debts written off
Donations and sponsorships
Maintenance and repairs
Operating lease expense
Other gains and (losses) 2
Auditors’ fees and expenses payable for:
Statutory audit – KPMG
Other services – KPMG 3
Other professional services to other firms
1 Remuneration for the executive committee included
in the above is disclosed in note 32.
2 Other gains and (losses) include the following:
Sale of assets
Acquisition costs
Insurance proceeds
Impairment of assets
Net cost of repairs due to earthquake damage
Net redundancies and restructuring costs
Other
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
14
1,436
67
3
7
2
169
179
4
3
1
1
13
(11)
2
4
12
1,429
68
2
7
1
167
180
1
3
1
2
8
(3)
1
(2)
(1)
(3)
1
1
3 Fees paid to the auditors during the year for other services are mainly with respect to the half year review, other assurance services and tax compliance work.
48
4 Restructuring and impairment charges – significant items (previously referred to as Unusual items)
There are no items or transactions that the company believes should be separately disclosed as significant items in the year ended June 2013. In the prior
year, significant items were as follows:
Fletcher Building Group – June 2012
Acquisition
income and
expenses 1
NZ$M
(1)
(1)
(1)
Restructuring
costs 2
NZ$M
Intangibles
impairment 3
NZ$M
Write-off of
fixed assets 4
NZ$M
Write-off
of stock 5
NZ$M
45
45
(7)
38
75
75
(4)
71
20
20
(6)
14
4
10
14
(4)
10
Total
NZ$M
79
74
153
(21)
132
Building Products division
Laminates & Panels division
Total restructuring and impairment
charges – EBIT
Tax benefit on above items 6
Total restructuring and impairment
charges – net earnings
Fletcher Building Group 2012
1 The group recorded a gain of $4 million arising from the revaluation of its existing 50 percent share in Homapal. In addition the group incurred $3 million
of acquisition costs.
2 The group incurred $45 million of restructuring costs in the Laminates & Panels division. $21 million is attributable to the decision to close the Formica
factory in Bilbao, Spain and consolidate operations at the Valencia site. The remaining $24 million was incurred in restructuring the Laminex Australia
and New Zealand businesses.
.
3 A strategic review of the Australian insulation business was completed during the year ended 30 June 2012. The review identified that medium term
earnings prospects had deteriorated, necessitating a reduction in the carrying value of the business. As a result the group wrote off $62 million of
goodwill and $13 million of brands.
.
4 The group decided to write off a further $3 million of fixed assets for The O’Brien Group Limited and $17 million for Laminex Australia. The Laminex
Australia write-offs were a result of product rationalisation initiatives.
5 The group also wrote off $10 million of stock in Laminex Australia as a result of product rationalisation initiatives, and incurred a further $4 million in
disposing of surplus stock in Fletcher Insulation Australia.
6 Tax benefit, see note 7.
49
Notes to the financial statements
continued
5 Discontinued operations
There were no discontinued operations in the current or the comparative year.
6 Funding costs
Interest expense
Loans and derivatives
Capital notes
Other
Interest income
Subsidiary companies
Cash and deposits
Plus bank fees, registry and issue expenses
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
97
38
(1)
134
13
147
101
39
2
(2)
140
12
152
23
15
(163)
(1)
(141)
5
(136)
(62)
2
(45)
5
(40)
Included in interest expense is the net settlement of the group’s interest derivatives. This consisted of $100 million of interest income and $110 million of
interest expense (2012: $80 million interest income; $86 million interest expense).
For items applying fair value hedges the gains or losses on the hedging instrument and on the hedged item net off to zero.
7
Taxation expense
Earnings before taxation
Taxation at 28 cents per dollar
Adjusted for:
Higher tax rate in overseas jurisdictions
Non assessable income
Non deductible expenses
Tax losses not recognised
Benefit of tax losses recognised
Tax in respect of prior years
Other permanent differences
Tax on operating profits pre restructuring and impairment charges
Tax benefit on restructuring and impairment charges
Total current taxation expense
Total deferred taxation expense
50
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
422
118
1
(9)
3
3
(5)
(2)
(24)
85
85
85
104
(19)
85
251
70
(3)
19
11
(17)
(22)
58
79
(21)
58
47
11
58
278
78
719
201
(39)
(190)
39
39
39
39
39
11
11
11
11
11
8 Shareholder tax credits
Imputation credit account
Imputation credits at the beginning of the year
Taxation paid
Imputation credits received
Imputation credits attached to dividends paid
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
3
29
1
(33)
34
1
(34)
1
35
(34)
1
1
32
(33)
Fletcher Building’s practice is to attach imputation credits to the final dividend and the company has until 31 March 2014 to fund any deficiency in its
imputation credit account.
Franking credit account
Franking credits at the beginning of the year
Taxation paid
Franking credits received
Franking credits attached to dividends paid
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
A$M
Year ended
June 2012
A$M
Year ended
June 2013
A$M
Year ended
June 2012
A$M
49
4
(41)
12
25
56
7
(39)
49
40
6
(41)
5
79
(39)
40
9 Net earnings per share
The diluted net earnings per share calculation uses the weighted average number of shares as determined for basic net earnings per share, adjusted
for dilutive securities. Capital notes and options are convertible into the company’s shares and may therefore result in dilutive securities for purposes of
determining the diluted net earnings per share. Fletcher Building may, at its option, purchase or redeem the capital notes for cash at the principal amount
plus any accrued but unpaid interest.
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Numerator
Net earnings
Numerator for basic earnings per share
Dilutive capital notes distribution
Numerator for diluted net earnings per share
Denominator (millions of shares)
Denominator for basic net earnings per share
Conversion of dilutive capital notes
Denominator for diluted net earnings per share
326
326
12
338
685
26
711
185
185
185
681
681
51
Notes to the financial statements
continued
10 Dividends
Dividends paid to shareholders
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
233
233
Year ended
June 2012
NZ$M
231
231
Year ended
June 2013
NZ$M
233
233
Year ended
June 2012
NZ$M
231
231
On 21 August 2013 the directors declared a dividend of 17 cents per share, payable on 16 October 2013.
11 Capital
Reported capital at the beginning of the year
Issue of shares
Reported capital at the end of the year including treasury stock
Treasury stock
2,603
25
2,628
(22)
2,606
2,573
30
2,603
(21)
2,582
2,603
25
2,628
2,573
30
2,603
2,628
2,603
All ordinary shares are issued and fully paid, and carry equal rights in respect of voting, dividend payments and distribution upon winding up. Costs directly
attributable to the issue of new shares are shown as a deduction from the proceeds. Shares held by the trustee of the Fletcher Building executive long-term
share scheme are deducted from the group’s capital until the shares vest, are reissued or otherwise disposed of. When such shares do vest, are reissued or
otherwise disposed of, any consideration received is included in the group’s equity.
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
Year ended
June 2012
Year ended
June 2013
Year ended
June 2012
Number of ordinary shares:
Number of shares on issue at the beginning of the year
682,866,936
678,573,570
682,866,936
678,573,570
Shares issued under the dividend reinvestment plan
3,229,491
4,293,366
3,229,491
4,293,366
Total number of shares on issue
Less accounted for as treasury stock
Share options:
686,096,427
682,866,936
686,096,427
682,866,936
(2,998,233)
(2,696,181)
683,098,194
680,170,755
686,096,427
682,866,936
On 1 September 2009, the Company issued 500,000 share options under the executive option scheme. As at 30 June 2013, the exercise price of the share
options is $9.72 and is increased annually by the company’s cost of capital, less actual dividends paid. The restrictive period was until 1 September 2012 and
the final exercise date is 1 September 2015. On 1 October 2012 the Company issued a further 500,000 options under the executive option scheme. At 30
June 2013 the exercise price of these share options is $6.50. The restrictive period is until 1 October 2015 and the final exercise date is 1 October 2018.
The options carry no dividend or voting rights. The company has calculated the fair value of granting these options and has expensed $0.5 million in
respect of the 2009 share options and $0.1 million in respect of the 2012 options to a share option reserve.
.
12 Reserve balances
Reserves comprise:
Retained earnings
Share option reserve
Cashflow hedge reserve
Currency translation reserve
Pension reserve
52
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
1,078
1
(31)
(55)
(80)
913
985
1
(53)
56
(151)
838
441
1
(34)
435
1
(37)
408
399
13 Reserve movements
Retained earnings
Retained earnings at the beginning of the year
Net earnings for the year – parent interest
Dividends paid during the year
Share option reserve
Share option reserve at the beginning of the year
Arising in the year
Cashflow hedge reserve
Cashflow hedge reserve at the beginning of the year
Arising in the year
Currency translation reserve
Currency translation reserve at the beginning of the year
Arising in the year
Pension reserve
Pension reserve at the beginning of the year
Arising in the year
Currency translation
14 Minority equity
Share capital
Reserves
15 Cash and deposits
Cash and bank balances
Short-term deposits
Fletcher Building Group
Fletcher Building Limited
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
Year ended
June 2013
NZ$M
Year ended
June 2012
NZ$M
435
239
(233)
441
1
1
(37)
3
(34)
(42)
708
(231)
435
1
1
(14)
(23)
(37)
985
326
(233)
1,078
1
1
(53)
22
(31)
56
(111)
(55)
(151)
73
(2)
(80)
1,031
185
(231)
985
1
1
(14)
(39)
(53)
95
(39)
56
(72)
(79)
(151)
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
21
14
35
90
33
123
20
12
32
89
79
168
9
29
38
11
66
77
53
Notes to the financial statements
continued
16 Debtors
Trade debtors
Contract debtors
Contract retentions
Less provision for doubtful debts
Trade and contract debtors
Other receivables
Current
0 – 30 days over standard terms
31 – 60 days over standard terms
61+ days over standard terms
Provision
Trade and contract debtors
17 Stocks
Raw materials
Work in progress
Finished goods
Consumable stores and spare parts
Stock held at cost
Stock held at net realisable value
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
1,071
95
18
(41)
1,143
203
1,346
815
255
43
71
(41)
1,143
1,168
89
27
(47)
1,237
223
1,460
906
267
42
69
(47)
1,237
26
26
27
27
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
300
138
856
59
1,353
1,252
101
1,353
338
126
912
58
1,434
1,351
83
1,434
The group also has conditional commitments for the purchase of land to be used for residential construction totalling $192 million (June 2012: $42 million).
Delivery of this land is expected to take place in the period to September 2017.
54
18 Fixed assets
Land
NZ$M
354
1
(4)
(16)
335
335
297
3
(10)
87
(19)
(4)
354
Gross value at 1 July 2012
Acquisitions during the year
Additions
Disposals
Acquisition restatement during the year
Currency translation
Gross value at 30 June 2013
Accumulated depreciation at 1 July 2012
Disposals
Depreciation expense
Currency translation
Accumulated depreciation
at 30 June 2013
Net book value at 30 June 2013
Gross value at 1 July 2011
Acquisitions during the year
Additions
Disposals
Acquisition restatement during the year
Transfer of quarry assets to inventory
Impairments in the income statement
Currency translation
Gross value at 30 June 2012
Accumulated depreciation at 1 July 2011
Disposals
Depreciation expense
Currency translation
Accumulated depreciation
at 30 June 2012
Fletcher Building Group
Buildings
NZ$M
Plant &
machinery
NZ$M
Fixtures &
equipment
NZ$M
Resource
extraction
NZ$M
Leased
assets
NZ$M
2,385
410
114
4
475
4
24
(6)
(14)
483
(100)
3
(17)
2
3
105
(72)
(14)
(57)
2,350
(987)
43
(158)
27
98
(14)
(5)
489
(285)
15
(38)
5
6
(3)
(4)
113
(20)
4
(4)
Total
NZ$M
3,742
8
233
(99)
(14)
(96)
4
3,774
(2)
(1,394)
(1)
65
(218)
34
(112)
(1,075)
(303)
(20)
(3)
(1,513)
371
478
10
(18)
11
(6)
475
(101)
14
(14)
1
(100)
1,275
2,244
41
197
(100)
27
(3)
(21)
2,385
(924)
97
(173)
13
(987)
186
388
44
(18)
15
(17)
(2)
410
(271)
22
(37)
1
(285)
Net book value at 30 June 2012
354
375
1,398
125
As at 30 June 2013, fixed assets includes $117 million of assets under construction (June 2012: $195 million).
93
110
7
(2)
(1)
114
(19)
4
(5)
(20)
94
1
5
(1)
4
(1)
(1)
(2)
2
2,261
3,522
41
261
(149)
140
(19)
(20)
(34)
3,742
(1,316)
137
(230)
15
(1,394)
2,348
55
Notes to the financial statements
continued
19 Goodwill
Goodwill acquired at cost
Accumulated currency translation
Accumulated impairment
Goodwill at the end of the year
Goodwill at the beginning of the year
Acquired during the year
Acquisition restatement during the year
Goodwill in subsidiaries sold during the year
Impaired during the year
Currency translation
Formica Asia
Tradelink
The Laminex Group
Stramit Corporation
Iplex New Zealand
Homapal Plattenwerk GmbH
Forman Insulation
Mico Plumbing
Tasman Insulation New Zealand
Tasman Sinkware
Iplex Australia
Roof Tile Group
Other subsidiaries
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
1,373
19
(173)
1,219
1,243
3
8
(35)
1,219
234
223
178
108
105
85
46
44
43
42
37
23
51
1,362
54
(173)
1,243
1,424
102
(220)
(1)
(62)
1,243
232
238
190
116
105
77
46
44
43
45
40
23
44
Goodwill by major subsidiaries
1,219
1,243
Impairment of goodwill
Goodwill has been tested for impairment in June 2013. Each business unit which carries goodwill has prepared a discounted cashflow on a value-in-
use basis. They have used their past experience of sales growth, operating costs and margin, and external sources of information where appropriate,
to determine their expectations for the future. These cashflow projections are based on the group’s three year strategic plan approved by the directors
which has been extended for a further two years. Cashflows beyond the five year period have been extrapolated using estimated terminal growth rates
which do not exceed the long term average growth rate for the industries in which the business units operate. The growth rates used range from 2 percent
to 3 percent, with the majority of the business units using 2 percent. The cashflows are discounted using a nominal rate of 10 percent after tax, with the
exception of Formica which has used 9 percent. This adjustment to the standard rate of 10 percent reflects the risk profile for the countries in which
Formica operates. The valuation models used are most sensitive to changes in the terminal year earnings and cashflows.
The group operates in cyclical markets and currently faces uncertain market conditions that make it difficult to predict future profitability. Residential
markets are still below long-term averages in many jurisdictions, however, there has been a recent improvement in New Zealand and USA.
The group has identified certain business units where the review indicated the recoverable amount was only marginally in excess of the carrying amount.
Management have identified a number of strategies and initiatives to achieve an appropriate improvement in their operating earnings. If this improvement
does not eventuate there would be a need for an impairment.
The impairment review confirmed that, for all other business units, there is clear headroom over the carrying value and as such there are no impairment
issues necessitating a write-down of goodwill.
.
56
20 Intangibles
Brands
Intangible assets
Brands
Brands at the beginning of the year
Acquisition restatement during the year
Brands in subsidiaries sold during the year
Impaired during the year
Currency translation
The Laminex Group
Formica Corporation including Homapal
Tradelink
Stramit Corporation
Iplex Australia
Other subsidiaries
Brands by major subsidiaries
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
504
6
510
511
14
(1)
(20)
504
145
140
57
47
40
75
504
511
8
519
396
135
(13)
(7)
511
155
124
61
50
44
77
511
Brands are considered to have an indefinite useful life as there are no factors which indicate that there is a limit on their capacity to generate foreseeable
cashflows. Factors considered before arriving at this conclusion are whether the businesses which own the brands are going concerns, whether there is
any evidence of obsolescence due to changes in either technology or regulatory conditions, whether the businesses are trading profitably and whether
there are any other market based indications. Brands have been tested for impairment in June 2013 on a value-in-use basis. This exercise confirmed that
there are no impairment issues necessitating a write-down.
Intangible assets
Intangible assets acquired at cost
Currency translation
Accumulated amortisation
Intangible assets at the end of the year
Intangible assets at the beginning of the year
Charged to earnings
25
(1)
(18)
6
8
(2)
6
25
(1)
(16)
8
8
8
57
Notes to the financial statements
continued
21 Investments
Investment in associates
Retirement plan surplus – see note 34
Other investments
Investment in subsidiary companies 1
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
137
42
1
180
June 2012
NZ$M
150
June 2013
NZ$M
June 2012
NZ$M
150
5,447
5,447
5,429
5,429
1 The principal subsidiaries included within investment in subsidiary companies are disclosed in note 33, principal operations.
Carrying amount of associates:
Carrying amount at the beginning of the year
Acquisition of associates
Loans to associates
Equity accounted earnings of associates
Purchase of controlling interest of Homapal investment
Acquisition restatement during the year
Sale of investment in associates
Currency translation
Dividends from associates
Investment in associates
Investment by associate:
Wespine Industries Pty Limited
Dynea Industries WA Pty Limited
Sims Pacific Metals Limited
Mt Marrow Blue Metal Quarries Pty Limited
Mitchell Water Australia Pty Limited
Mittagong Sands Pty Limited
Regional Resources NW Quarrying
Other
Associate information:
Balance sheet information for associates – 100%
Assets
Liabilities
Equity
Equity – Fletcher Building share
Goodwill acquired at cost
Plus loans to associates at the end of the year
Investment in associates
Equity accounted earnings comprise:
Sales – 100%
Earnings before taxation – 100%
Earnings before taxation – Fletcher Building share
Taxation expense
Earnings after taxation – Fletcher Building share
58
150
1
21
(9)
(7)
(19)
137
61
19
20
11
6
4
16
137
310
162
148
64
56
17
137
209
6
(1)
26
(49)
(5)
(4)
(32)
150
67
20
19
10
7
6
5
16
150
351
175
176
71
63
16
150
525
535
53
26
(5)
21
64
32
(6)
26
22 Provisions
Restructuring
NZ$M
Construction
claims
NZ$M
Warranty &
environmental
NZ$M
Other
NZ$M
Total
NZ$M
June 2013
Fletcher Building Group
Carrying amount at the beginning of the year
Currency translation
Charged to earnings
Settled or utilised
Released to earnings
June 2012
Carrying amount at the beginning of the year
Currency translation
Acquired
Charged to earnings
Settled or utilised
Released to earnings
37
8
(33)
(3)
9
25
(1)
42
(23)
(6)
37
2
(1)
1
43
(1)
16
(15)
(4)
39
Fletcher Building Group
2
1
(1)
2
43
19
(15)
(4)
43
June 2013
Fletcher Building Limited
Carrying amount at the beginning of the year
Released to earnings
June 2012
Fletcher Building Limited
Carrying amount at the beginning of the year
34
(1)
20
(16)
(3)
34
31
2
17
(14)
(2)
34
2
(2)
2
2
116
(2)
44
(65)
(10)
83
101
(1)
2
79
(52)
(13)
116
2
(2)
2
2
During the year the group utilised $33 million (30 June 2012: $23 million) in respect of restructuring obligations at certain businesses. The remaining
balance of restructuring claims are expected to be utilised in the next two years. Construction claims relate to disputes on jobs and provisions in regard
to the wind-down of overseas operations and are expected to be utilised over the next two years. Warranty and environmental provisions relate to
products sold and services provided and are expected to be utilised over the next three years. Other provisions relate to miscellaneous matters with
no individual amounts being significant.
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
Current portion
Non current portion
Carrying amount at the end of the year
63
20
83
95
21
116
2
2
59
Notes to the financial statements
continued
23 Creditors and accruals
Trade creditors
Contract retentions
Accrued interest
Other liabilities
Employee entitlements
Workers' compensation schemes
Current portion
Non current portion
Carrying amount at the end of the year
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
811
31
31
128
248
19
1,268
1,181
87
1,268
890
25
31
131
244
20
1,341
1,249
92
1,341
1
1
1
1
1
1
1
1
The non current portion of creditors and accruals relates to long service employee entitlement obligations.
24 Contracts
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
Gross construction work in progress plus margin to date
Progress billings
Work in progress/(money received in advance)
Construction contracts with net work in progress
Construction contracts with net money received in advance
of cost and margin
Carrying amount at the end of the year
2,699
(2,801)
(102)
18
(120)
(102)
1,956
(2,071)
(115)
3
(118)
(115)
Included in sales is $972 million of contract revenue (June 2012: $845 million).
60
25 Taxation
Provision for current taxation asset/(liability)
Included within the Balance sheet as follows:
Current tax assets
Current tax liabilities
Opening provision for current taxation asset/(liability)
Taxation in the earnings statement
Transfer from deferred taxation
Intercompany payment
Acquisitions and restatement of acquisitions
Minority share of taxation expense
Taxation in reserves
Net taxation payments
Provision for deferred taxation asset/(liability)
Included within the Balance sheet as follows:
Deferred tax assets
Deferred tax liabilities
Opening provision for deferred taxation asset/(liability)
Taxation in the earnings statement
Transfer to current taxation
Acquisitions and restatement of acquisitions
Taxation in reserves
Composed of:
Provisions
Inventory
Debtors
Fixed assets
Brands
Tax losses
Pensions
Other
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
30
(15)
15
28
(104)
17
(3)
4
13
60
15
32
(40)
(8)
18
19
(17)
(1)
(27)
(8)
132
16
11
(72)
(151)
35
14
7
(8)
46
(18)
28
(27)
(47)
(19)
(6)
3
1
123
28
38
(20)
18
21
(11)
19
(43)
32
18
149
25
12
(71)
(156)
28
33
(2)
18
(38)
(38)
(12)
(39)
1
12
(12)
(12)
55
(11)
(56)
(38)
(12)
13
13
15
(1)
(1)
13
13
13
15
15
6
9
15
15
15
There are no significant deferred tax liabilities in respect of the undistributed profits of subsidiaries and associates.
The group has recognised tax losses available in USA, Germany and the UK on the basis that the respective companies will have future assessable income.
The tax losses have been recognised on the basis of the forecasted operating earnings set out in the companies strategic plans approved by the directors
and the discounted cashflows prepared for the purposes of impairment testing. The group will review this situation annually and will consider further
opportunities to assist the companies to generate the required taxable income should it be necessary.
Formica has not recognised tax losses in France, Spain and Sweden of $95 million representing $337 million of gross tax losses
(June 2012: $92 million, $316 million gross losses).
61
Notes to the financial statements
continued
26 Borrowings
Bank loans
Other loans
Capital notes
Foreign currency revaluation on debt derivatives
Current borrowings
Bank loans
Private placements
Other loans
Capital notes
Foreign currency revaluation on debt derivatives
Non current borrowings
Borrowings
Less fair value adjustment included in borrowings
Borrowings excluding fair value adjustment
Total available funding
Unutilised banking facilities
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
39
112
(7)
144
136
1,246
57
322
(6)
1,755
1,899
(28)
1,871
2,690
819
317
71
75
(7)
456
23
1,338
4
420
(14)
1,771
2,227
(81)
2,146
2,928
782
15
(6)
9
37
4
(7)
34
43
(41)
2
52
10
(7)
55
23
45
8
(14)
62
117
(53)
64
The undrawn facilities have a weighted average maturity of 2.4 years (June 2012: 2.9 years).
Negative pledge
The group borrows certain funds based on a negative pledge arrangement. The negative pledge includes a cross guarantee between a number of wholly
owned subsidiaries and ensures that external senior indebtedness ranks equally in all respects and includes the covenant that security can be given only
in very limited circumstances. At 30 June 2013 the group had debt subject to the negative pledge of $1,394 million (June 2012: $1,614 million).
Bank loans
At 30 June 2013, the group had a syndicated revolving credit facility on an unsecured, negative pledge and borrowing covenant basis, with ANZ Bank New
Zealand, Bank of Tokyo Mitsubishi UFJ, Bank of New Zealand, Commonwealth Bank of Australia, Citibank N.A., The Hong Kong and Shanghai Banking Corporation
and Westpac Banking Corporation. The funds under this facility can be borrowed in United States, Australian and New Zealand dollars. The borrowing covenants
relate to net debt to EBITDA and interest cover, and at 30 June 2013, and throughout the year, the group was in compliance with the covenants.
Private placements
The group has borrowed funds from private investors (primarily US & Japanese based) on an unsecured, negative pledge and borrowing covenant basis.
These borrowings comprise NZ$144 million, AU$231 million, US$525 million and YEN10,000 million with maturities between 2015 and 2027. The borrowing
covenants relate to net debt to EBITDA and interest cover and at 30 June 2013, and throughout the year, the group was in compliance with the covenants.
Other loans
At 30 June 2013, the group had $31 million (June 2012: $45 million) of loans which are secured against the subsidiaries’ own balance sheet or against specific
assets and had unsecured loans at 30 June 2013 of $32 million (June 2012: $30 million) some of which are subject to the negative pledge. Other loans includes
bank overdrafts, short-term loans, working capital facilities, financial leases, PlaceMakers joint venture funding, amortising loans and discounted receivables.
Foreign currency revaluation on debt derivatives
This is the foreign currency revaluation of derivatives that have been specifically taken out to convert the various borrowings to the required currencies.
The majority of these instruments have the benefit of the negative pledge and includes cross currency interest rate swaps and foreign exchange forwards.
Capital notes
Capital notes are long-term fixed rate unsecured subordinated debt instruments. On each election date, the coupon rate and term to the next election date
of that series of the capital notes is reset. Holders may then choose either to keep their capital notes on the new terms or to convert the principal amount and
any interest into shares, at approximately 98 percent of the current market price. Instead of issuing shares to holders who choose to convert, Fletcher Building
may, at its option, purchase or redeem the capital notes for cash at the principal amount plus any interest. Under the terms of the capital notes, nonpayment of
interest is not an act of default although unpaid interest is accrued and is interest bearing at the same rate as the principal of the capital notes. Fletcher Building
Limited has covenanted not to pay dividends to its shareholders while interest that is due and payable on these capital notes has not been paid.
The capital notes do not carry voting rights and do not participate in any change in value of the issued shares of Fletcher Building Limited. If the principal
amount of the capital notes held at 30 June 2013 were to be converted to Fletcher Building shares, 51 million shares (June 2012: 83 million) would be
issued at the share price as at 30 June 2013, of $8.43 (June 2012: $5.87).
As at 30 June 2013 the group held $102 million (30 June 2012: $45 million) of capital notes as treasury stock.
Fair value adjustment included in borrowings
This is the revaluation of certain borrowings that have been designated in fair value hedge relationships for changes in benchmark interest rates.
Credit rating
The company has not sought and does not hold a credit rating from an accredited rating agency.
62
.
27 Financial instruments
Financial risk management overview
Exposures to credit, liquidity, currency, interest rate and commodity price risks arise in the normal course of the group’s business. The principles under
which these risks are managed are set out in policy documents approved by the board. The policy documents identify the risks and set out the group’s
objectives, policies and processes to measure, manage and report the risks. The policies are reviewed periodically to reflect changes in financial markets
and the group’s businesses. Risk management is carried out in conjunction with the group’s central treasury, which ensures compliance with the risk
management policies and procedures set by the board.
The group enters into derivative financial instruments to assist in the management of the identified financial risks. The group does not enter into derivative
financial instruments for trading or speculative purposes. All derivative transactions entered into are to hedge underlying physical positions arising from
normal business activities.
Risks and mitigation
(a) Credit risk
To the extent the group has a receivable from another party there is a credit risk in the event of nonperformance by that counterparty and arises
principally from receivables from customers, derivative financial instruments and the investment of cash.
(i) Trade receivables
The group has a credit policy in place under which customers are individually analysed for credit worthiness and assigned a purchase limit. If no external
ratings are available, the group reviews the customers’ financial statements, trade references, bankers’ references and/or credit agencies’ reports to
assess credit worthiness. These limits are reviewed on a regular basis. Due to the group’s industry and geographical spread at balance date there were no
significant concentrations of credit risks in respect of trade receivables. Please refer to note 16 for debtor aging analysis.
Most goods are sold subject to retention of title clauses, so that in the event of non-payment the group may have a secured claim. The group does not
require collateral in respect of trade receivables.
(ii) Derivative financial instruments and the investment of cash
The group enters into derivative financial instruments and invests cash with various counterparties in accordance with established limits as to credit
rating and dollar value but does not require collateral or other security except in limited circumstances. In accordance with the established counterparty
restrictions, there are no significant concentrations of credit risk in respect of the financial instruments and no loss is expected.
The group has not renegotiated the terms of any financial assets which would otherwise be overdue or impaired. The carrying amount of non-derivative
financial assets represents the maximum credit exposure. The carrying amount of derivative financial assets are at their current fair value.
(b) Liquidity risk
Liquidity risk is the risk that the group will encounter difficulty in meeting its financial commitments as they fall due. The group manages its liquidity risk
by maintaining a target level of undrawn committed credit facilities and a spread of the maturity dates of the group’s debt facilities. The group reviews its
liquidity requirements on an on going basis.
The following maturity analysis table sets out the remaining contractual undiscounted cashflows, including estimated interest payments for non-
derivative financial liabilities and derivative financial instruments. Creditors and accruals are excluded from this analysis as they are not part of the group’s
assessment of liquidity risk.
.
Bank loans
Capital notes
Private placements
Other loans
Non-derivative financial liabilities – Principal cashflows
Gross settled derivatives – To pay
Gross settled derivatives – To receive
Debt derivatives financial instruments – Principal cashflows
Total principal cashflows
Fletcher Building Group – June 2013
Contractual
cashflows NZ$M
Up to 1 year
NZ$M
1-2 years
NZ$M
2-5 years
NZ$M
Over 5 years
NZ$M
136
430
1,223
95
1,884
617
(630)
(13)
1,871
112
39
151
236
(243)
(7)
144
74
3
77
136
226
549
52
963
77
963
18
674
1
693
381
(387)
(6)
687
Contractual interest cashflows
650
120
109
215
206
Total contractual cashflows
2,521
264
186
1,178
893
63
Notes to the financial statements
continued
27 Financial instruments continued
(b) Liquidity Risk continued
Fletcher Building Group – June 2012
Contractual
cashflows NZ$M
Up to 1 year
NZ$M
1-2 years
NZ$M
2-5 years
NZ$M
Over 5 years
NZ$M
Bank loans
Capital notes
Private placements
Other loans
Non-derivative financial liabilities – Principal cashflows
Gross settled derivatives – To pay
Gross settled derivatives – To receive
Debt derivatives financial instruments – Principal cashflows
Total principal cashflows
340
487
1,265
75
2,167
788
(809)
(21)
2,146
317
75
71
463
349
(356)
(7)
456
Contractual interest cashflows
797
127
112
1
113
32
(39)
(7)
106
112
23
236
389
3
651
651
251
64
876
940
407
(414)
(7)
933
307
Total contractual cashflows
2,943
583
218
902
1,240
Fletcher Building Limited – June 2013
Contractual
cashflows NZ$M
Up to 1 year
NZ$M
1-2 years
NZ$M
2-5 years
NZ$M
Over 5 years
NZ$M
Other loans
Non-derivative financial liabilities – Principal cashflows
Gross settled derivatives – To pay
Gross settled derivatives – To receive
Debt derivatives financial instruments – Principal cashflows
Total principal cashflows
Contractual interest cashflows
Total contractual cashflows
15
15
1,150
(1,166)
(16)
(1)
(6)
(7)
15
15
236
(243)
(7)
8
8
16
146
(155)
(9)
(9)
(10)
(19)
768
(768)
(6)
(6)
2
2
Fletcher Building Limited – June 2012
Contractual
cashflows NZ$M
Up to 1 year
NZ$M
1-2 years
NZ$M
2-5 years
NZ$M
Over 5 years
NZ$M
Bank loans
Other loans
Non-derivative financial liabilities – Principal cashflows
Gross settled derivatives – To pay
Gross settled derivatives – To receive
Debt derivatives financial instruments – Principal cashflows
Total principal cashflows
Contractual interest cashflows
Total contractual cashflows
75
10
85
1,254
(1,267)
(13)
72
25
97
52
10
62
348
(355)
(7)
55
9
64
32
(40)
(8)
(8)
2
(6)
23
23
52
(50)
2
25
(24)
1
822
(822)
38
38
64
27 Financial instruments continued
(c) Foreign currency risk
(i) Currency translation risk
Currency translation risk arises from net investments in foreign operations. It is the group’s policy to hedge this foreign currency translation risk by
borrowing in the currency of the asset in proportion to the group’s long term debt to debt plus equity ratio. This reduces the variability in the debt to debt
plus equity ratio due to currency translation. Where the underlying debt in any currency does not equate to the required proportion of total debt, debt
derivatives such as foreign exchange forwards, swaps and cross currency interest rate swaps are entered into for up to fifteen years. Net investment,
cashflow and fair value hedge accounting is applied to these instruments.
In addition, the group has entered into foreign exchange derivatives to hedge the taxation exposure arising from the translation of certain assets for a
period of up to five years. Cashflow hedge accounting is applied to these instruments.
The group’s exposure to foreign currency risk on foreign currency borrowings after hedging is summarised as follows:
Australian dollars
Euro's
British pounds
New Zealand dollars
United States dollars
Indian Rupee
Chinese Renminbi
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
1,113
69
29
723
212
173
10
115
14
(313)
187
10
16
62
(203)
925
68
20
619
207
3
29
Currency translation risk – Foreign currency borrowings
1,871
2,146
(1)
72
(ii) Currency transaction risk
Currency transaction risk arises from committed or highly probable trade and capital expenditure transactions that are denominated in currencies other
than the operation’s functional currency. The objective in managing this risk is to reduce the variability from changes in currency exchange rates on the
operation’s income and cashflow to acceptable parameters. It is group policy that no currency exchange risk may be entered into or allowed to remain
outstanding should it arise on committed transactions. In addition the group hedges some highly probable forecast transactions for up to five years.
When exposures are incurred by operations in currencies other than their functional currency, foreign exchange forwards, swaps and options are entered
into to eliminate the exposure. The majority of these transactions have maturities of less than one year. Cashflow hedge accounting is applied to forecast
transactions. The main currencies hedged are the Australian dollar, the United States dollar, the Japanese yen, the Euro and the British pound. The gross
value of these foreign exchange derivatives is $357 million (June 2012: $313 million).
.
65
Notes to the financial statements
continued
27 Financial instruments continued
(d) Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cashflows associated with the instrument will change due to changes in market
interest rates and arises primarily from the group’s interest bearing borrowings. The group manages the fixed interest rate component of its debt and
capital notes obligations and aims to maintain this ratio between 40 to 70 percent, and at 30 June 2013, the group was slightly above the upper limit at
74% fixed (June 2012: 67% fixed). The position in this range is managed depending upon underlying interest rate exposures and economic conditions.
Cross currency interest rate, interest rate swaps, forward rate agreements and options are entered into to manage this position. The financial instruments
entered into are in Australian dollars, United States dollars, Euros, Japanese Yen and New Zealand dollars, and will mature over the next fourteen years.
Hedge accounting is applied on these instruments for floating-to-fixed instruments as cashflow hedges or for fixed-to-floating as fair value hedges.
Interest rate repricing
The following tables set out the interest rate repricing profile of interest bearing financial assets and liabilities. The group’s overall weighted average
interest rate excluding fees is 6.65% (June 2012: 6.65%).
Floating
Fixed up to 1 year
Fixed 1-2 years
Fixed 2-5 years
Fixed over 5 years
Total financial liabilities
Floating financial assets
(e) Commodity price risk
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
495
254
428
491
203
1,871
(123)
702
70
268
850
256
2,146
(168)
(377)
143
354
(17)
(104)
(1)
(39)
(343)
(5)
156
366
(102)
72
(77)
Commodity price risk arises from committed or highly probable trade and capital expenditure transactions that are linked to traded commodities. Where
possible the group manages its commodity price risks through negotiated supply contracts and, for certain commodities, by using commodity price
swaps and options. The group manages its commodity price risk depending on the underlying exposures, economic conditions and access to active
derivatives markets. Currently the group’s guideline is to hedge up to 100 percent of the New Zealand business units’ electricity requirements for up to
five years. Cashflow hedge accounting is applied to commodity derivative contracts.
At balance date, the notional value of fixed electricity exposure was as follows:
Fixed up to 1 year
Fixed 1-2 years
Fixed 2-5 years
Total
Average hedge price
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
8
34
18
60
5
35
36
76
8
34
18
60
5
35
36
76
NZ$/MWh
NZ$/MWh
NZ$/MWh
NZ$/MWh
92
96
92
96
Aluminium and copper are also hedged but the volume and values are not material.
66
27 Financial instruments continued
(f) Sensitivity analysis
The numbers in the sensitivity analysis for foreign currency risk, interest rate risk and commodity price risk have not been adjusted for tax and are based
only on the group’s financial instruments held at balance date and assumes that all other variables remain constant, except for the change in the chosen
risk variable.
(i) Foreign currency risk
It is estimated a 10 percent weakening of the New Zealand dollar against the major foreign currencies the group is exposed to through financial
instruments would result in a decrease to equity of approximately $194 million (June 2012: $150 million) and no material impact on earnings. If the
translation of the net assets of the foreign operations were included this would result in an increase to equity of approximately $273 million (June 2012:
$256 million).
(ii) Interest rate risk
It is estimated a 100 basis point increase in interest rates would result in an increase in the group’s interest costs in a year by approximately $3.7 million on
the group’s debt portfolio exposed to floating rates at balance date (June 2012: $7.0 million).
(iii) Commodity price risk
It is estimated a 10 percent increase in the New Zealand electricity spot price at balance date would not materially impact the Group’s earnings but this
would result in an increase in equity of $4 million (June 2012: $7 million).
(g) Fair values
The estimated fair values measurements for financial assets and liabilities are compared to their carrying values in the balance sheet, are as follows:
Fletcher Building Group
Bank loans
Private placements
Other loans
Capital notes
Classification
Amortised cost
Amortised cost
Amortised cost
Amortised cost
Foreign currency revaluation on debt derivatives – cashflow hedge
Fair value through P&L
Foreign currency revaluation on debt derivatives –
net investment hedge
Fair value through P&L
Foreign currency revaluation on debt derivatives – fair value hedge
Fair value through P&L
June 2013
NZ$M
Carrying
value
136
1,246
96
434
(12)
5
(6)
Fair
value
136
1,297
96
449
(12)
5
(6)
Borrowings
1,899
1,965
Forward exchange contracts – net investment hedge
Fair value through P&L
Forward exchange contracts – fair value hedge
Forward exchange contracts – cashflow hedge
Cross currency interest rate swaps – cashflow hedge
Fair value through P&L
Fair value through P&L
Fair value through P&L
Cross currency interest rate swaps – net investment hedge
Fair value through P&L
Cross currency interest rate swaps – fair value hedge
Interest rate swaps – fair value hedge
Interest rate swaps – cashflow hedge
Electricity price swaps – cashflow hedge
Derivatives
Creditors and accruals
Trade and other receivables
Cash and liquid deposits
Total financial instruments
Fair value through P&L
Fair value through P&L
Fair value through P&L
Fair value through P&L
Amortised cost
Loans and receivables
Loans and receivables
The borrowings hedge adjustment fair value is included in the fair value of the borrowings.
Fletcher Building Limited’s fair values are materially the same as the carrying values.
2
(1)
(3)
12
(40)
24
15
9
1,274
(1,352)
123
1,953
2
(1)
(3)
12
(40)
24
15
9
1,274
(1,352)
123
2,019
June 2012
NZ$M
Carrying
value
340
1,338
75
495
6
(21)
(6)
2,227
(8)
23
1
(28)
(53)
37
8
(20)
1,341
(1,460)
168
2,256
Fair
value
340
1,342
75
513
6
(21)
(6)
2,249
(8)
23
1
(28)
(53)
37
8
(20)
1,341
(1,460)
168
2,278
67
Notes to the financial statements
continued
27 Financial instruments continued
(g) Fair values continued
Fair value measurement
Financial instruments measured and recognised at fair value are derivatives and borrowings that are designated in hedge relationships. The fair value of base
metal price swaps is based on the quoted market prices of those instruments and are measured under level 2. All other derivatives are level 2 valuations are
based on accepted valuation methodologies. Forward exchange fair value is calculated using quoted forward exchange rates and discounted using yield
curves derived from quoted interest rates matching maturity of the contract. The fair value of electricity price swaps are measured using a derived forward
curve and discounted using yield curves derived from quoted interest rates matching the maturity of the contract. Interest rate derivatives are calculated by
discounting the future principal and interest cashflows at current market interest rates that are available for similar financial instruments.
(Level 1) Quoted prices (unadjusted) in active markets for identical assets or liabilities.
(Level 2) Inputs that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) other than quoted prices included within level 1.
(Level 3) Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Fair value disclosures
The fair values of borrowings used for disclosure are measured by discounting future principal and interest cashflows at the current market interest rate
plus an estimated credit margin that are available for similar financial instruments. The interest rates across all currencies used to discount future principal
and interest cashflows are between 1.2% and 11.12% (June 2012: 0.2% and 10.9%) including margins.
(h) Capital risk management
The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns to
shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the
capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to
reduce debt. The group monitors capital on the basis of debt to debt plus equity and aims to maintain this ratio between 40% to 50% in the long term but
currently is targeting 30% to 40% in the current economic environment.
28 Capital expenditure commitments of plant and investments
Committed at year end
Approved by the directors but uncommitted at year end
29 Lease commitments
Fletcher Building Group
June 2013
NZ$M
June 2012
NZ$M
70
66
136
85
62
147
The expected future minimum rental payments required under operating leases that have initial or remaining non-cancellable lease terms in excess of
one year are at year end:
Within one year
Within two years
Within three years
Within four years
Within five years
After five years
Fletcher Building Group
June 2013
NZ$M
June 2012
NZ$M
173
153
118
88
71
162
765
198
153
113
83
64
185
796
Operating lease commitments relate mainly to occupancy leases of buildings.
30 Contingent liabilities
Provision has been made in the ordinary course of business for all known and probable future claims but not for such claims as are considered remote.
Contingent liabilities arise in respect of the following categories:
Contingent liabilities with respect to guarantees extended on trading transactions, performance bonds
and other transactions
Letters of credit
68
Fletcher Building Group
June 2013
NZ$M
June 2012
NZ$M
184
1
151
11
31 Insurance
The company monitors its capacity to retain otherwise insurable losses. The directors believe that the group’s risk management programmes are
adequate to protect its assets and earnings against losses incurred. Based on past experience, the company does not anticipate that future losses within
these levels would have a significant impact on the group’s financial position or performance. In general terms, the group-wide insurance policies are
with insurers having a Standard & Poor’s A- grade rating (or equivalent) or better.
The following risks are insured at 1 July 2013 in respect of each event up to a maximum of:
Public and product liability
Loss or damage to group property including business interruption
Marine public liability
Public liability resulting from construction activities
June 2013
$M
US$150
NZ$1,000
NZ$50
NZ$100
June 2012
$M
US$150
NZ$1,000
NZ$50
NZ$100
Contract works – separate covers are arranged for each contract where the insured value exceeds
NZ$20M; annual policy is in place for lower value contracts.
NZ$20
NZ$20
32 Related party transactions
Fletcher Building Group
Fletcher Building Limited
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
Fletcher Building group
Trading activities with related parties:
Purchase of scrap metal from Sims Pacific Metals Limited
Amounts owing relating to the purchase of scrap metal from Sims Pacific Metals
Limited, and is included within creditors
Purchase of raw materials from Wespine Industries Pty Limited and Dynea
Industries WA Pty Limited
Amounts owing relating to the purchase of raw materials from Wespine Industries
Pty Limited and Dynea Industries WA Pty Limited, and is included within creditors
Purchase of materials from Dongwha Pattina NZ Limited
Sale of materials to Dongwha Pattina NZ Limited
Purchase of materials from Mt Marrow Blue Metal Quarries Pty Limited
Key management personnel compensation
Directors fees
Executive committee remuneration paid, payable or provided for:
Short term employee benefits
Termination benefits
Long term incentive payments
Fletcher Building Limited
Dividend income received from subsidiary companies
Term receivable owing from subsidiary companies 1
Liability owing to subsidiary companies 2
Liability owing to subsidiary companies 3
Liability owing to subsidiary company 4
112
4
32
2
14
2
2
15
2
2
124
4
49
3
14
1
2
2
11
3
140
864
7
955
677
781
148
838
2,300
2,222
1 These unsecured advances represent long term funding even though they are for no fixed term and bear interest at 10.2 percent.
2 These unsecured advances represent long term funding even though they are for no fixed term and bear interest at 7.5 percent.
3 These unsecured advances represent long term funding even though they are for no fixed term and bear interest at 6.7 percent.
4 The unsecured advance represents long term funding even though it is for no fixed term and is non interest bearing.
Fletcher Building Limited is the holding company of the Fletcher Building group. Fletcher Building Limited has a relationship with each of its subsidiaries,
associates and joint ventures. A full list of all the subsidiaries of the group is included in the Regulatory Disclosures section of the annual report.
Fletcher Building Retirement Plan
As at 30 June 2013, Fletcher Building Nominees Limited (the New Zealand retirement plan) held $7,300,000 of shares and $13,500,000 of capital notes in
Fletcher Building, (June 2012: $6,000,000 of shares; $18,500,000 of capital notes) in respect of economic interests that members of the retirement plan
have in Fletcher Building shares and capital notes.
69
Notes to the financial statements
continued
33 Principal operations
Fletcher Building Limited is the holding company of the Fletcher Building group. The principal subsidiaries and associates, as at 30 June 2013, are outlined below:
Country of domicile
% Holding
Principal activity
Principal subsidiaries
Fletcher Building Holdings Limited
Fletcher Building Holdings New Zealand Limited
Fletcher Building Products Limited
Fletcher Concrete and Infrastructure Limited
Fletcher Distribution Limited
Fletcher Steel Limited
Fletcher Residential Limited
The Fletcher Construction Company Limited
Winstone Wallboards Limited
Fletcher Property Limited
PlaceMakers subsidiaries – wholly owned
PlaceMakers subsidiaries – joint venture ownership
Fletcher Building Industries Limited
Tasman Insulation New Zealand Limited
AHI Roofing Limited
Forman Group Limited
Crane Distribution NZ Limited
Fletcher Building (Fiji) Limited
Laminex Group Limited
Fletcher Building (Australia) Pty Limited
Tasman Insulation Pty Limited
Tasman Sinkware Pty Limited
Rocla Pty Limited
Stramit Corporation Pty Limited
Insulation Solutions Pty Limited
Crane Group Limited
Crane Distribution Limited
Hudson Building Supplies Pty Limited
Iplex Pipelines Australia Pty Limited
Kingston Bridge Engineering Pty Limited
Australian Construction Products Pty Limited
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
NZ
Fiji
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Fletcher Construction (Solomon Islands) Limited
Solomon Islands
Fletcher Morobe Construction Pty Limited
Fletcher Building Netherlands B.V.
PNG
Netherlands
100
100
100
100
100
100
100
100
100
100
100
50.1
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Holding company
Holding company
Building products
Concrete products
Merchandising
Steel production
Housing
Construction
Gypsum plasterboard
Property management
Retail
Retail
Holding company
Insulation
Roofing
Insulation
Retail
Infrastructure
Building products
Holding company
Insulation
Sinks
Concrete products
Steel production
Insulation
Holding company
Retail
Retail
Building products
Building products
Construction
Construction
Construction
Finance
70
33 Principal operations continued
Tasman Investments (Netherlands Antilles) N.V.
Decra Roofing Systems Inc.
Formica Corporation
Formica Canada Inc.
Formica Limited
Formica S.A.
Shanghai Formica Decorative Material Co. Ltd
Formica IKI Oy
Formica Scandinavian AB
Formica (Thailand) Co., Ltd
Homapal Plattenwerk GmbH & Co. KG.
Formica Laminates (India) Pte Limited
Associates
Wespine Industries Pty Limited
Dynea Industries WA Pty Limited
Mt Marrow Blue Metal Quarries Pty Limited
Mittagong Sands Pty Limited
Regional Resources NW Quarrying
Sims Pacific Metals Limited
Dongwha Pattina NZ Limited
Country of domicile
% Holding
Principal activity
Neth Antilles
United States
United States
Canada
United Kingdom
Spain
China
Finland
Sweden
Thailand
Germany
India
Australia
Australia
Australia
Australia
Australia
NZ
NZ
100
100
100
100
100
100
100
100
100
100
100
100
50
50
50
50
50
50
20
Finance
Roofing
Building products
Building products
Building products
Building products
Building products
Building products
Building products
Building products
Building products
Building products
Saw miller
Building products
Quarrying
Quarrying
Quarrying
Metal recycling
Building products
71
Notes to the financial statements
continued
34 Retirement plans
Fletcher Building Limited is the principal sponsoring company of a plan that provides retirement and other benefits to employees of the group in New
Zealand. Participation in this plan has been closed for a number of years, although defined contribution savings plans have been made available. Various
defined benefit and defined contribution plans exist in Australia following the acquisition of Crane, Amatek, Tasman Building Products, and the Laminex
groups which companies contribute to on behalf of their employees. Various defined benefit plans and medical plans exist in other countries as a result of
the acquisition of the Formica group, which companies contribute to on behalf of their employees. All of the Formica plans have a deficit in their funded
status and the companies are making additional contributions, as recommended by the trustees of the plans, to improve the funded status.
The calculation of the defined benefit obligations are based on years of service and the employees’ compensation during their years of employment.
Contributions are intended to provide not only for benefits attributed to service to date but also for those expected to be earned in the future. These
obligations are accounted for in accordance with NZ IAS 19 Employee Benefits, which has the effect of recognising the volatility in the returns earned by
the plans straight to the pension reserve.
Fletcher Building Limited has an obligation to ensure that the funding ratio of the New Zealand plan’s assets is at least 115% of the plan’s actuarial liability.
This is based upon any two consecutive annual actuarial valuations as calculated by the plan’s actuary. This calculation is done on the plan’s funding basis
which differs from the calculation under NZ IAS 19. At 31 March 2013 the value of the assets was 129% of the actuarial liability and the funded surplus was
$62 million (31 March 2012: 122.1%, $49 million).
During the year the company contributed $4 million in respect of its Australian defined benefit plans and $20 million in respect of its Formica defined
benefit and medical plans. It contributed $43 million in respect of its defined contribution plans worldwide, including Kiwisaver.
Fletcher Building Group
June 2013
NZ$M
June 2012
NZ$M
10
4
14
743
(785)
(42)
37
5
42
(84)
(84)
(42)
9
3
12
663
(800)
(137)
(14)
(17)
(106)
(137)
(137)
Net periodic pension cost
Service cost
Net interest cost
Net periodic pension cost – recognised in operating earnings
Recognised net asset/(liability)
Assets of plans
Projected benefit obligation
Funded surplus/(obligation)
Recognised net asset/(liability) by jurisdiction:
New Zealand plan
Australian plans
Retirement plan surplus – recognised within note 21, Investments
New Zealand plan
Australian plans
Other overseas plans
Retirement plan liability – recognised within non current liabilities
Recognised net asset/(liability)
72
34 Retirement plans continued
Movement in recognised net asset
Recognised net asset/(liability) at the beginning of the year as previously reported
Change in accounting policy
Recognised net asset/(liability) at the beginning of the year as restated
Currency translation
Actuarial movements for the year
Net periodic pension cost
Employer contributions
Recognised net asset/(liability)
Assets of the plans
Assets of plans at the beginning of the year
Actual return on assets
Total contributions
Benefit payments
Settlements and curtailments
Currency translation
Assets of the plans consist of:
Australasian equities
International equities
Property
Bonds
Cash and short term deposits
Other assets
Projected benefit obligation
Projected benefit obligation as at the beginning of the year
Service cost
Interest cost
Member contributions
Actuarial gain/(loss) arising on movements in the discount rate
Actuarial gain/(loss) arising on changes in financial assumptions
Actuarial gain/(loss) arising on other assumptions – experience adjustments
Benefit payments
Settlements and curtailments
Currency translation
Fletcher Building Group
June 2013
NZ$M
June 2012
NZ$M
45
(182)
(137)
85
(14)
24
(42)
663
113
29
(53)
(9)
743
80
307
35
282
14
25
743
(800)
(10)
(28)
(5)
(15)
15
(4)
53
9
(785)
35
(87)
(52)
(1)
(95)
(12)
23
(137)
690
1
29
(55)
(5)
3
663
76
257
34
261
9
26
663
(742)
(9)
(34)
(6)
(79)
13
55
5
(3)
(800)
73
Notes to the financial statements
continued
34 Retirement plans continued
Assumptions used
The following table provides the weighted average assumptions used to develop the net periodic pension cost and the actuarial present value of
projected benefit obligations for the group’s plans:
Assumed discount rate on benefit obligations
Annual rate of increase in future compensation levels
Fletcher Building Group
2013
%
4.14
2.70
2012
%
3.36
3.26
Expected returns on plan assets have been determined by the independent actuaries as the weighted average of the expected return after tax and
investment fees for each asset class by the target allocation of assets to each class.
The group expects to contribute $21 million to its Australian and other overseas defined benefit plans during the year to 30 June 2014.
35 Share based payments
Executive share schemes
The group has implemented a long-term cash based incentive scheme targeted at the executives most able to influence the results of the group, with an
agreed percentage of any cash received to be invested in purchasing the company’s shares.
The executive long-term share scheme introduced in 2008 allows group executives to acquire shares in the company at market price. Payment of half of
any benefit under the executive performance share scheme is dependent upon the group’s total shareholder return exceeding the 51st percentile of the
total shareholder return of a comparative group of companies over a three year restricted period. Payment of the other half of any benefit is dependent
upon the group achieving an earnings per share target. In addition, in respect of the benefit which is dependant on total shareholders return, the three
year restricted period is automatically extended for up to one year if total shareholders return is less than the 51st percentile. Executives can elect to
extend the restricted period for up to one year if total shareholders return is between the 51st and 75th percentile. No extension is permitted for the
benefit which is dependant upon achieving an earnings per share target.
The group provides interest free loans to executives, who instruct the trustee to purchase shares on their behalf. The shares purchased by executives are
held by the trustee with executives entitled to vote and receive dividends, the proceeds of which are used to repay the interest free loan.
At the end of the restricted period the group will pay a bonus to the executives to the extent the performance targets have been met, sufficient for the
executives to repay the balance of the interest free loan on those shares which vest. The shares upon which performance targets have been met will then
fully vest to the executives. The loan owing on shares upon which performance targets have not been met (the forfeited shares) will be novated from the
executives to the trustee and will be fully repaid by the transfer of the forfeited shares. The receivable from the executives, which is secured only against
the shares held in the company, has been accounted for under the treasury stock method and deducted from paid up capital.
The following are details in regards to the share schemes:
Grant date
Number of shares granted
Market price per share at grant date
Total consideration paid
Vesting date
2012 Scheme
2011 Scheme
2010 Scheme
2009 Scheme
1 October
2012
1,542,549
$6.87
1 October
2011
1,340,033
$7.43
1 October
2010
1,019,011
$8.32
1 October
2009
811,927
$8.23
$10,597,312
$9,956,445
$8,478,172
$6,682,159
30 September
2015
30 September
2014
30 September
2013
30 September
2012
Maximum bonus payable – expensed over three years
$19,317,505
$17,962,298
$15,305,364
$13,063,404
Number of shares:
Number of shares originally granted
Less forfeited over life of scheme
Less vested over life of scheme
1,542,549
(96,834)
(13,224)
1,340,033
(397,499)
(2,186)
Number of shares held at 30 June 2013
1,432,491
940,348
Total amount expensed in year for executive performance share schemes
13,617,241
June 2013
NZ$
June 2012
NZ$
12,133,319
Liability recognised at year end for bonus payable
26,290,102
20,002,557
Fletcher Building Group
1,019,011
(350,871)
(55,700)
612,440
811,927
(536,758)
(262,665)
12,504
74
36 Segmental information
Industry segments
Year ended
Building Products
Construction
Distribution
Infrastructure
Laminates & Panels
Other
Group
less intersegment sales
Group external sales
Building Products
Construction
Distribution
Infrastructure
Laminates & Panels
Other
Group
Building Products
Construction
Distribution
Infrastructure
Laminates & Panels
Other (including debt and taxation)
Group
Building Products
Construction
Distribution
Infrastructure
Laminates & Panels
Other (including debt and taxation)
Group
June 2013
NZ$M
Gross sales
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
Gross sales
External sales
External sales
1,474
1,201
2,161
2,373
1,761
7
8,977
(460)
8,517
1,517
1,046
2,300
2,514
1,882
6
9,265
(426)
8,839
1,350
1,193
2,141
2,095
1,738
8,517
8,517
1,390
1,040
2,261
2,299
1,849
8,839
8,839
Operating earnings
(EBIT)
Operating earnings
(EBIT)
Significant items in
operating earnings
Significant items in
operating earnings
122
87
50
222
120
(32)
569
30
50
65
209
65
(16)
403
(79)
(74)
(153)
Depreciation and
amortisation expense
Depreciation and
amortisation expense
Capital expenditure
including acquisitions
Capital expenditure
including acquisitions
24
5
17
77
118
5
246
37
8
21
90
60
4
220
Funds*
770
69
703
1,841
1,788
(1,617)
3,554
38
11
21
91
66
3
230
Funds*
789
109
816
1,974
1,743
(1,979)
3,452
* Funds represent the external assets and liabilities of the group and are used for internal reporting purposes.
38
11
14
131
162
7
363
75
Notes to the financial statements
continued
36 Segmental information continued
June 2013
NZ$M
June 2012
NZ$M
June 2013
NZ$M
June 2012
NZ$M
Geographic segments
Year ended
New Zealand
Australia
North America
Asia
Europe
Other (including debt and taxation)
Group
New Zealand
Australia
North America
Asia
Europe
Other
Group
External sales
External sales
3,832
3,640
396
255
307
87
8,517
3,642
4,139
396
256
318
88
8,839
Funds*
1,682
2,541
238
436
291
(1,634)
3,554
Funds*
1,730
2,740
234
372
238
(1,862)
3,452
Operating earnings
(EBIT)
Operating earnings
(EBIT)
Significant items in
operating earnings
Significant items in
operating earnings
286
203
40
40
(8)
8
569
198
135
26
40
(7)
11
403
(9)
(124)
(20)
(153)
* Funds represent the net external assets and liabilities of the group and are used for internal reporting purposes.
During the year the Steel division was reorganised, with the long steel and distribution businesses incorporated into the Infrastructure Products division,
and the coated steel businesses incorporated into the Building Products division.
Additionally, the Crane division was reorganised, with the Iplex pipelines and Crane Copper Tube businesses incorporated into the Infrastructure
Products division. The Crane distribution businesses, Tradelink, Hudson and Mico have been consolidated with the PlaceMakers business as a Distribution
division.
Prior period data has been restated.
76
Independent auditor’s report
TO T hE ShAREhOLDERS OF FLETChER BUILDING LIMITED
Report on the company and group financial
statements
We have audited the accompanying
financial statements on pages 38 to 76 of
Fletcher Building Limited (‘’the company’’) and
the group, comprising the company and its
subsidiaries. The financial statements comprise
the balance sheets as at 30 June 2013, the
earnings statements and statements of
comprehensive income, movements in equity
and cashflows for the year then ended, and
a summary of significant accounting policies
and other explanatory information, for both
the company and the group.
Directors’ responsibility for the company
and group financial statements
The directors are responsible for the
preparation of company and group financial
statements in accordance with generally
accepted accounting practice in New Zealand
that give a true and fair view of the matters to
which they relate, and for such internal control
as the directors determine is necessary to
enable the preparation of company and group
financial statements that are free from material
misstatement whether due to fraud or error.
Auditor’s responsibility
Opinion
In our opinion the financial statements on
pages 38 to 76:
■ comply with generally accepted accounting
practice in New Zealand;
■ give a true and fair view of the financial
position of the company and the group
as at 30 June 2013 and of the financial
performance and cashflows of the company
and the group for the year then ended.
Report on other legal and regulatory
requirements
In accordance with the requirements of
sections 16(1)(d) and 16(1)(e) of the Financial
Reporting Act 1993, we report that:
■ we have obtained all the information and
explanations that we have required; and
■ in our opinion, proper accounting records
have been kept by Fletcher Building Limited
as far as appears from our examination of
those records.
21 August 2013
KPMG Auckland, New Zealand
Our responsibility is to express an opinion
on these company and group financial
statements based on our audit. We conducted
our audit in accordance with International
Standards on Auditing (New Zealand). Those
standards require that we comply with ethical
requirements and plan and perform the audit
to obtain reasonable assurance about whether
the company and group financial statements
are free from material misstatement.
An audit involves performing procedures to
obtain audit evidence about the amounts
and disclosures in the company and group
financial statements. The procedures selected
depend on the auditor’s judgement, including
the assessment of the risks of material
misstatement of the financial statements,
whether due to fraud or error. In making those
risk assessments, the auditor considers internal
control relevant to the company and group’s
preparation of the financial statements that
give a true and fair view of the matters to which
they relate in order to design audit procedures
that are appropriate in the circumstances, but
not for the purpose of expressing an opinion
on the effectiveness of the company and
group’s internal control. An audit also includes
evaluating the appropriateness of accounting
policies used and the reasonableness of
accounting estimates, as well as evaluating the
presentation of the financial statements.
We believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Our firm has also provided other services to
the company and group in relation to taxation
and other assurance services. Partners and
employees of our firm may also deal with the
company and group on normal terms within
the ordinary course of trading activities of the
business of the company and group. These
matters have not impaired our independence
as auditor of the company and group. The firm
has no other relationship with, or interest in, the
company and group.
77
Trend statement
Notes
5
4
June
2013
June
2012
June
2011
June
2010
June
2009
June
2008
3
June
2007
June
2006
June
2005
June
2004
2
1
NZ$M
NZ$M
NZ$M
NZ$M
NZ$M
NZ$M
NZ$M
NZ$M
NZ$M
NZ$M
Financial performance
Operating sales/revenue
Operating earnings (EBIT)
Net earnings
Cashflow from operations
Earnings per share – basic
(cents per share)
Dividends for the period
(cents per share)
Balance sheet
Current assets
Non current assets
Total assets
Current liabilities
Non current liabilities
Total liabilities
Capital
Reserves
Minority equity
Total equity
Total liabilities and equity
Other financial data
Return on average funds (%) 6
Return on average equity (%) 7
Gearing (%) 8
Net tangible assets per share ($)
8,517
8,839
7,416
6,799
7,103
7,091
5,926
5,520
4,636
3,958
569
326
559
403
185
448
492
283
402
521
272
522
159
(46)
533
768
467
434
703
484
483
675
379
560
612
347
479
460
240
424
47.6
27.2
45.0
44.9
(8.7)
93.2
101.9
81.3
77.6
55.7
34.0
34.0
33.0
29.0
38.0
48.5
45.0
40.0
32.0
25.0
2,862
4,241
7,103
1,517
2,032
3,549
3,112
4,367
7,479
1,936
2,091
4,027
3,104
4,388
7,492
1,700
2,092
3,792
2,606
2,582
2,553
913
35
3,554
7,103
10.8
9.4
33.3
2.61
838
32
3,452
7,479
7.4
5.2
37.4
2.65
1,113
34
3,700
7,492
10.6
8.2
34.3
2.71
2,317
3,397
5,714
1,384
1,307
2,691
1,912
1,077
34
3,023
5,714
12.7
9.1
26.8
2.90
2,255
3,550
5,805
1,313
1,508
2,821
1,895
1,057
32
2,984
5,805
3.4
(1.6)
31.1
2.80
3,967
14
2,549
3,686
6,235
1,436
2,043
3,479
1,364
1,351
41
2,756
6,235
19.0
19.0
40.1
2.90
3,197
2,074
2,359
4,433
1,187
950
2,137
1,325
926
45
2,296
4,433
24.8
26.0
22.2
3.25
1,699
2,400
4,099
1,207
1,092
2,299
970
786
44
1,800
4,099
26.1
24.6
37.1
2.47
1,484
2,173
3,657
1,239
991
2,230
929
455
43
1,427
3,657
29.3
29.5
44.4
2.11
1,171
1,611
2,782
818
918
1,736
754
252
40
1,046
2,782
24.7
24.3
43.1
1.68
6,166
4,296
3,207
1,987
(43)
42
40
61
33
Market capitalisation (NZ$M)
5,784
4,009
5,850
4,763
Total shareholders return (%) 9
51
(27)
14
24
1 The Tasman Building Products group was acquired on 30 September 2003. The balance sheet at June 2004 has been restated under NZ IFRS.
2 The Amatek Holdings group was acquired on 1 March 2005. The results for June 2005 have been restated under NZ IFRS.
3 The Formica Corporation group was acquired on 2 July 2007.
4 The Crane group was acquired with an effective acquisition date of 28 March 2011.
5 The June 2012 balance sheet has been restated following revisions to IAS 19 Employee Benefits adopted by the group.
6 EBIT to average funds (net debt and equity less deferred tax asset).
7 Net earnings to average shareholders’ funds.
8 Net debt (borrowings less cash and deposits) to net debt and equity.
9 Share price movement in year and gross dividend received, to opening share price.
78
Regulatory disclosures
Directors’ relevant interests in equity securities at 30 June 2013
Ordinary shares
Capital notes
Directly held
Held by associated persons
Directly held
Held by associated persons
M D Adamson 1
A J Carter
A T Jackson
J F Judge
K D Spargo
C Tarrant
G T Tilbrook
R G Waters
587,675
20,000
25,000
18,242
18,000
668,917
146,288
32,409
88,275
1,810
1,000,093
1,268,875
1 Includes 500,000 options over ordinary shares.
Securities dealings by directors
150,000
200,000
350,000
During the year, directors disclosed in respect of section 148(2) of the Companies Act 1993 that they (or their associated persons) acquired or disposed of a
relevant interest in securities as follows:
Director
J F Judge 3
M D Adamson
A J Carter
A T Jackson
M D Adamson
M D Adamson
C Tarrant
C Tarrant
M D Adamson
K D Spargo
G T Tilbrook
J F Judge 3
M D Adamson
C Tarrant
J F Judge 3
J F Judge 2,3
A J Carter
C Tarrant 3
Number of
securities acquired
Number of
securities disposed
Consideration $
30
2,261
710
2,000
500,000
146,288
1,000
2,000
5,000
6,000
19
1,162
242
65,663
200,000
1,810
$212
$15,969
5,015
$14,360
Nil
$1,005,000
$7,944
$17,220
$88,561
$45,875
$52,009
$161
$9,851
$2,052
N/A
N/A
$23,411
N/A
9,700
2,928
2 Fletcher Building Industries capital notes.
3 Non-beneficial interest.
Date
17/10/12
17/10/12
17/10/12
7/11/12
20/11/12
20/11/12
28/11/12
25/02/13
8/03/13
6/03/13
19/03/13
16/04/13
16/04/13
16/04/13
1/05/13
1/05/13
6/05/13
24/06/13
79
Regulatory disclosures
continued
Directors’ interests register
Directors’ certificates to cover entries in the interests register in respect of remuneration, dealing in the company’s securities, insurance and other interests
have been disclosed as required by the Companies Act 1993.
In accordance with Section 140(2) of the Companies Act 1993, directors have advised changes in their interests during the year ended 30 June 2013 of:
G T Tilbrook
R G Waters
R G Waters
A T Jackson
R G Waters
C Tarrant
A T Jackson
G T Tilbrook
R G Waters
R G Waters
A J Carter
A J Carter
A T Jackson
C Tarrant
Resigned as a director of NBN
Appointed as a director of Asciano
Resigned as a director of Westpac New Zealand
Appointed as a director of Delegat’s Group
Appointed as chairman of Woolworths
Appointed as a director of Shopping Centres Australasia Property Group Trustee NZ
Resigned as chairman of the NZ Racing Board
Resigned as a director of Transpacific Industries Group
Appointed as chairman of the ICC Cricket World Cup 2015
Resigned as a director of Fonterra Co-operative Group
Appointed as chairman of Air New Zealand (effective 27 September 2013)
Appointed as chairman of the Blues LLP
Resigned as chairman of Housing NZ Corporation
Appointed as deputy chair of the Government Superannuation Fund Authority
5/08/12
23/08/12
1/09/12
15/10/12
22/11/12
18/12/12
19/02/13
1/03/13
1/04/13
18/04/13
14/05/13
17/05/13
6/06/13
27/06/13
Stock exchange listings
The company’s shares are listed on the New Zealand (NZX) and Australian (ASX) stock exchanges.
Number of shares
% of shares
315,721,598
40,237,542
37,883,726
24,023,090
18,431,837
15,879,339
12,148,050
9,944,806
6,906,297
5,852,211
4,852,572
3,876,365
2,958,878
2,587,898
2,252,116
2,069,462
1,698,594
1,350,701
1,330,000
1,096,631
46.02
5.86
5.52
3.50
2.69
2.31
1.77
1.45
1.01
0.85
0.71
0.56
0.43
0.38
0.33
0.30
0.25
0.20
0.19
0.16
20 largest shareholders as at 31 July 2013
Name
New Zealand Central Securities Depository Limited
National Nominees Limited
JP Morgan Nominees Australia Limited
HCBC Custody Nominees (Australia) Limited
RBC Dexia Investor Services Australia Nominees PTY Limited
Custodial Services limited
Citicorp Nominees PTY Limited
BNP Paribas Nominees PTY Limited
FNZ Custodians Limited
Forsyth Barr Custodians Limited
Investment Custodial Services Limited
Southern Steel Group PTY Limited
Fletcher Building Share Schemes Limited
Masfen Securities Limited
AMP Life Limited
Fletcher Building Educational Fund Limited
New Zealand Depository Nominee Limited
Argo Investments Limited
UBS Nominees PTY Ltd
Australian Foundation Investment Company Limited
80
Stock exchange listings continued
New Zealand Central Securities Depository Limited provides a custodial depository service that allows electronic trading of securities to its members and does
not have a beneficial interest in these shares. Its major holders of Fletcher Building shares are:
Name
JP Morgan Chase Bank NA
HSBC Nominees (New Zealand) Limited
BNP Paribas Nominees (NZ) Limited
Accident Compensation Corporation
Citibank Nominees (New Zealand) Limited
National Nominees New Zealand Limited
New Zealand Superannuation Fund Nominees Limited
Tea Custodians Limited
Premier Nominees Limited
Westpac NZ Shares 2002 Wholesale Trust
Substantial security holders
Number of shares
% of shares
92,043,388
75,278,566
24,901,508
22,926,632
22,293,881
19,801,871
18,149,208
15,245,235
11,141,270
4,229,075
13.42
10.98
3.62
3.34
3.25
2.89
2.65
2.22
1.62
0.62
According to notices given to the company under the Securities Markets Act 1988, as at 31 August 2013, the substantial security holders in the company and
their relevant interests are noted below. The total number of issued voting securities of Fletcher Building Limited as at that date was 686,096,427.
Substantial security holders
The Capital Group Companies, Inc
Number of voting securities
Date of notice
42,945,596
12/07/13
Distribution of shareholders and holdings as at 31 July 2013
Size of holdings
1 to 999
1,000 to 4,999
5,000 to 9,999
10,000 to 49,999
50,000 to 99,999
100,000 to 499,999
500,000 and over
Total
Number of shareholders
17,058
20,803
4,487
2,822
153
104
54
%
37.50
45.74
9.87
6.20
0.34
0.23
0.12
45,481
100.00
Geographic distribution
Number of shareholders
New Zealand
Australia
Rest of the World
Total
34,850
9,981
650
45,481
%
76.62
21.95
1.43
100.00
Number of shares
6,958,490
46,017,580
29,876,429
48,947,018
10,139,697
17,849,699
526,307,514
686,096,427
Number of shares
498,538,478
184,791,327
2,766,622
%
1.01
6.71
4.35
7.13
1.48
2.60
76.72
100.00
%
72.67
26.93
0.40
686,096,427
100.00
All shares issued are fully paid and have full voting rights. The number of shareholders holding less than the marketable parcel of A$500 under the listing rules
of the ASX is 1,000.
The other equity securities on issue are 531 million of Fletcher Building Industries Limited capital notes, which can convert to Fletcher Building Limited
ordinary shares on the basis of 98 percent of the then current value of the shares. There were 8,278 holders of the capital notes at 31 July 2013. These equity
securities are quoted on the NZX but are unquoted on the ASX.
81
Regulatory disclosures
continued
Distribution of capital noteholders and holdings as at 31 July 2013
Size of holding
1 to 4,999
5,000 to 9,999
10,000 to 49,999
50,000 to 99,999
100,000 to 499,999
500,000 and over
Total
Fletcher Building Industries Limited
Number of noteholders
%
Number of capital notes
1,110
1,346
4,396
885
477
64
8,278
13.41
16.26
53.11
10.69
5.76
0.77
3,192,166
8,569,666
90,103,000
52,323,500
76,920,750
300,210,918
100.00
531,320,000
%
0.60
1.61
16.96
9.85
14.48
56.50
100.00
Limitations on the acquisition of the company’s securities
The terms of the company’s admission to the ASX and ongoing listing require the following disclosures.
The company is incorporated in New Zealand. As such it is not subject to Chapters 6, 6A, 6B and 6C of the Australian Corporations Act dealing with the
acquisition of shares (such as substantial holdings and takeovers). Limitations on acquisition of the securities are, however, imposed on the company under
New Zealand law:
(a) Securities in the company are in general freely transferable and the only significant restrictions or limitations in relation to the acquisition of securities
are those imposed by New Zealand laws relating to takeovers, overseas investment and competition.
(b) The New Zealand Takeovers Code creates a general rule under which the acquisition of more than 20 percent of the voting rights in the company or the
increase of an existing holding of 20 percent or more of the voting rights in the company can only occur in certain permitted ways. These include a full
takeover offer in accordance with the Takeovers Code, a partial takeover offer in accordance with the Takeovers Code, an acquisition approved by an
ordinary resolution, an allotment approved by an ordinary resolution, a creeping acquisition (in certain circumstances) or compulsory acquisition if a
shareholder holds 90 percent or more of the shares in the company.
(c) The New Zealand Overseas Investment Act and Overseas Investment Regulations regulate certain investments in New Zealand by overseas persons.
In general terms, the consent of the New Zealand Overseas Investment Office is likely to be required where an “overseas person” acquires shares or an
interest in shares in the company that amount to more than 25 percent of the shares issued by the company or, if the overseas person already holds 25
percent or more, the acquisition increases that holding.
(d) The New Zealand Commerce Act 1986 is likely to prevent a person from acquiring shares in the company if the acquisition would have, or would be
likely to have, the effect of substantially lessening competition in a market.
(e) On 31 March 2009, ASX granted the company an ongoing waiver from ASX Listing Rule 7.1 which regulates the circumstances where companies listed
on ASX are required to seek shareholder approval for the issue of securities. One of the conditions of the waiver is that the company remains subject to,
and complies with, the listing rules of NZX with respect to the issue of new securities.
In accordance with the requirements of the ASX waiver, the company certifies that during the 12 months to 30 June 2013 it has been subject to, and has
complied with, the requirements of the NZX with respect to the issue of new securities and that it continues to comply with those requirements.
NZX waiver
The company has been granted a waiver from NZX Listing Rule 7.6.6(a), to allow its chief executive officer and managing director, Mr Mark Adamson, to
participate in the Fletcher Building Limited Executive Long-Term Share Scheme (the Scheme) and to receive financial assistance as part of that Scheme, for as
long as Mr Adamson remains an employee of the company and a participant in the scheme.
This waiver was granted subject to the following conditions:
(a) the company obtains shareholder approval for the provision of financial assistance to Mr Adamson in connection with his participation in the Scheme at
its annual shareholders’ meeting (the meeting); and
(b) the notice of meeting contains the precise terms and conditions of Mr Adamson’s participation in the Scheme, and a description of the waiver and its
implications, being that financial assistance may continue to be provided to Mr Adamson for the period for which he is a participant in the Scheme,
which approval was given at the 2012 meeting.
82
SUBSIDIARY COMPANY DIRECTORS
Section 211(2) of the New Zealand Companies
Act 1993 requires the company to disclose,
in relation to its subsidiaries, the total
remuneration and value of other benefits
received by directors and former directors and
particulars of entries in the interests registers
made during the year ended 30 June 2013.
Apart from some overseas subsidiaries which
have independent directors or are required
to have a specific number of local residents
as directors, no wholly owned subsidiary has
directors who are not full-time employees of
the group. The company had 256 subsidiaries
worldwide at 30 June 2013.
No employee of Fletcher Building Limited
appointed as a director of Fletcher Building
Limited or its subsidiaries receives, or retains
any remuneration or other benefits, as a
director. The remuneration and other benefits
of such employees, received as employees,
are included in the relevant bandings for
remuneration disclosed previously under
Employee remuneration. Except where shown
below, no other director of any subsidiary
company within the group receives director’s
fees or other benefits as a director.
The following persons respectively held office
as directors of subsidiary companies at the end
of the year, or in the case of those persons with
the letter (R) after their name ceased to hold
office during the year. Alternate directors are
indicated by the letter (A) after their name.
Companies placed in liquidation during the year
are indicated by the letter (L) after their name.
AHI Roofing (Malaysia) SDN BHD
Z Bin Mat Desa (R), P Binti Mohamad (R),
T Richards, W Roest (R), P Wilson,
I Bin Harun, P Lamb
AHI Roofing (Middle East) Limited
T Richards, W Roest (R), N Olson
Bandelle Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Baron Insulation Pty Ltd
T Richards, C Zeitlyn, S McKay (R)
Boden Building Supplies Limited
J Beveridge, P Boden, V Grant (A)
AHI Roofing Gyarto Es Kereskedelmi Korlatolt
Felelossegu Tarasag
M Adamson, O Pascutiu, P Wilson
Builders Hardware Company Limited
J Beveridge
AHI Roofing Limited
T Richards, W Roest (R), N Olson
Building Choices Limited
J Beveridge, D Close, V Grant (A)
AHI Roofing Proizvodnja In Distribucija
Stresnih Sistemov D.O.O.
M Adamson (R), O Pascutiu, T Richards,
P Wilson
AHI Roofing Pty Limited
D Le Quesne, T Richards
Aickin Timber Limited
J Beveridge, W Roest (R), N Olson
Amatek Holdings Limited
M Farrell, N Gleeson (R), D Le Quesne,
W Roest (R), N Olson, L Huynh
Amatek Industries Pty Limited
N Gleeson (R), D Le Quesne, W Roest (R),
N Olson, L Huynh
Amatek Investments Limited
M Farrell, N Gleeson (R), D Le Quesne,
W Roest (R), N Olson, L Huynh
Amtel Pty Limited
N Gleeson (R), M Negri, T Richards, W Roest (R),
P Zuckerman (R)
Building Prefabrication Solutions Limited
J Beveridge, N Olson
Building Products Superannuation Fund
Pty Limited
S Hart, W Roest (R), L Box
Burford Building Supplies Limited
J Beveridge
Calvert Building Supplies Limited
J Beveridge
Cameron Building Supplies Limited
J Beveridge, D Cameron, V Grant (A)
Caravan Components Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Charmac Industries Proprietary Limited
W Roest (R), D Worley (R), N Olson, L Mayne
Cleaver Building Supplies Limited
J Beveridge, M Cleaver, V Grant (A)
Cloudguard No 96 Pty Ltd
W Roest (R), D Worley (R), N Olson, L Mayne
Andy Sellar Building Supplies Limited
J Beveridge, V Grant (A), A Sellar
Collier Building Supplies Limited
J Beveridge
Anson Building Supplies Limited
J Beveridge
Consort Laminates Limited
M Adamson (R), P Hall, N Mason
Associated Water Equipment Pty. Ltd.
D Worley (R), W Roest (R), N Olson, L Mayne
Austral Bronze Crane Copper Limited
S Robertson, W Roest (R), D Worley (R), N Olson,
L Mayne
Crane Distribution Limited
L Mayne, W Roest (R), D Worley (R), N Olson,
T Hickey
Crane Distribution NZ Limited
M Farrell, W Roest (R), D Worley (R), N Olson
Australian Construction Products Pty Limited
S Baker, M Malpass
Crane Distribution Properties Limited
M Farrell, W Roest (R), D Worley (R), N Olson
Australian Fibre Glass Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Crane Employee Services Pty Limited
W Roest (R), D Worley (R), N Olson, L Mayne
83
Regulatory disclosures
continued
Crane Enfield Metals Pty Limited
W Roest (R), D Worley (R), N Olson, L Mayne
Delcon Holdings (No. 16) Limited
M Farrell, W Roest (R), N Olson
Crane Group Limited
D Le Quesne, W Roest (R), D Worley (R),
N Olson, L Mayne
Creeks Metal Industries Pty Limited
D Le Quesne, N Gleeson (R), L Huynh
Crevet Ltd
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
Crevet Pipelines Pty Ltd
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
CTCI Pty Limited
W Roest (R), P Sackville (R), D Surveyor,
E Woldhuis, N Olson, A Webster (A)
Cullen Building Supplies Limited
J Beveridge, R Cullen, V Grant (A)
Cullity Timber Holdings Pty Limited
W Roest (R), D Surveyor, N Olson,
P Zuckerman
Dale King Building Supplies Limited
J Beveridge, V Grant (A), D King
EE-Fit Pty Limited
T Richards, C Zeitlyn, S McKay (R)
EFA Technologies Pty Limited
D Le Quesne, M Malpass
Engineered Timber Solutions Ltd
J Beveridge
Evans Building Supplies Limited
J Beveridge, M Evans, V Grant (A)
FBHS (Aust) Pty Limited
W Roest (R), P Zuckerman, T Richards,
N Gleeson (R), M Negri
FBSOL Pty Limited
W Roest (R), P Zuckerman, T Richards (R),
N Gleeson (R), M Negri
FDL No. 28 Limited
J Beveridge
FDL No. 29 Limited
J Beveridge
FDL No. 30 Limited
J Beveridge
Davis & Casey Building Supplies Limited
J Beveridge, T Davis, V Grant (A)
Fletcher Building (Australia) Finance
Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Fletcher Building (Australia) Pty Limited
M Farrell, N Gleeson (R), D Le Quesne,
W Roest (R), N Olson, L Huynh
Fletcher Building (Fiji) Limited
A Kumar, P Thumath (R), C White, A Brown,
M Malpass
Fletcher Building Holdings Limited
M Farrell, W Roest (R), J Ling (R), N Olson
Fletcher Building Holdings
New Zealand Limited
M Farrell, M Adamson, W Roest (R), J Ling (R),
N Olson
Fletcher Building Holdings USA Inc.
W Hudson (R), W Roest (R), M Quint, N Olson
Fletcher Building Industries Limited
A Carter, H Fletcher (R), A Jackson, J Judge,
J Ling (R), K Spargo, C Tarrant, G Tilbrook,
R Waters, M Adamson
Deavoll Building Supplies Limited
J Beveridge, V Grant (A)
Decra Roofing Systems, Inc.
W Hudson, T Richards, W Roest (R),
N Olson
Delcon Holdings (No. 1) Limited
W Roest (R), P Zuckerman, N Olson
Delcon Holdings (No. 2) Limited
W Roest (R), P Zuckerman, N Olson
Delcon Holdings (No. 3) Limited
A Cadman, W Roest (R), N Olson
Delcon Holdings (No. 8) Limited
T RIchards, W Roest (R), N Olson
Delcon Holdings (No. 10) Limited
M Farrell, W Roest (R), N Olson
Delcon Holdings (No. 11) Limited
M Farrell, W Roest (R), N Olson
Delcon Holdings (No. 15) Limited
G Darlow, W Roest (R), N Olson
84
Fletcher Building Netherlands B.V.
M Farrell, W Roest (R), P Ruoff (R), N Olson,
D Slob, A Van De Werken (EUR 2,500)
Fletcher Building (New Zealand) Limited
M Farrell, W Roest (R), N Olson
Fletcher Building Nominees Limited
J McDonald, G Niccol, M Farrell, W Roest (R),
C Munkowits, K Daly, N Olson
Fletcher Building Products Limited
T Richards, W Roest (R), N Olson
Fletcher Building Share Schemes Limited
G Niccol, J McDonald
Fletcher Challenge Building Bolivia S.A.
M Binns, K Cowie, H Ritchie
Fletcher Challenge Building UK Limited
J Ollard, D Wood
Fletcher Challenge Finance
Investments Limited
M Farrell, W Roest (R), N Olson
Fletcher Challenge Forest Industries Limited
M August, J Ollard, D Wood
Fletcher Challenge Industries S.A.
M Binns, K Cowie, H Ritchie
Fletcher Challenge Investments
Overseas Limited
M Farrell, W Roest (R), N Olson
Fletcher Challenge Overseas Holdings Limited
M Farrell, W Roest (R), N Olson
Fletcher Composite Research Limited
W Roest (R), P Zuckerman, N Olson
Fletcher Concrete (Fiji) Limited
P Thumath (R), A Kumar, A Brown, M Malpass,
C White
Fletcher Concrete & Infrastructure Limited
M Malpass, W Roest (R), N Olson
Fletcher Construction (Nouvelle Caledonie)
S.A.R.L.
A Brown
Fletcher Construction (Solomon Islands)
Limited
A Brown, L Gray
Fletcher Construction Australia Pty Limited
N Gleeson (R), C Munkowits, L Huynh
Fletcher Building Netherlands Antilles B.V.
S Coeriel (R), M Farrell, E Rakers (US $3,865),
W Roest (R), N Olson, J Mol-Rozema
Fletcher Construction Company (Fiji) Limited
A Brown, L Gray, J Matthews
Fletcher Construction Pty Limited
N Gleeson (R), C Munkowits, L Huynh
Formica (Asia) Ltd
C Wang, D Wang
Fletcher Distribution Limited
J Beveridge, W Roest (R), N Olson
Formica (China) Trading Co., Ltd
C Wang, C Kao, C Gray
Fletcher Insulation (Vic) Pty Limited
T Richards, C Zeitlyn, S McKay (R)
Formica (Malaysia) Sdn. Bhd.
K Leong, C Wang, J Yang
Fletcher Insulation Pty Limited
T Richards, C Zeitlyn, S McKay (R)
Fletcher Morobe Construction Pty Limited
A Brown, K Fletcher, L Gray, L Mathias
Fletcher Pacific Steel (Fiji) Limited
D Hargovind (FJ $2,500), I Jones, W Roest (R),
P Zuckerman
Fletcher Property Developments UK Limited
M August, J Ollard, D Wood
Fletcher Property Investments UK Limited
M August, J Ollard, D Wood
Fletcher Property Limited
G Darlow, W Roest (R), N Olson
Fletcher Residential Limited
G Darlow, W Roest (R), N Olson
Fletcher Steel Limited
W Roest (R), P Zuckerman (R), M Malpass,
T Richards, N Olson
Formica (N.Z.) Limited
M Adamson (R), W Roest (R), N Olson,
P Zuckerman
Formica (Nederland) B.V.
J Ruurd de Pater, N Mason
Formica (Singapore) Pte. Ltd
C Wang, C Chang, DH Wang
Formica (Thailand) Co., Ltd
W Kunanantakul, S Mahacharoenkeat,
DH Wang, C Wang
Formica Canada Inc.
M Adamson (R), L Box, C Sarrazin, M Quint
Formica Corporation
M Adamson, L Box, W Roest (R), M Quint
Formica Danmark A/S
I Delen, U Hector, R Pollington
Formica de Mexico SA DE CV
M Adamson (R), L Box, M Quint, B Strobel
Fletcher Wood Panels (Australia) Pty Limited
W Roest (R), D Surveyor, N Olson, P Zuckerman
Formica Decorative Materials (China) Co., Ltd
P Foreman (R), C Kao, C Wang, C Gray
FM Holdings Inc.
M Adamson (R), L Box, W Roest (R), M Quint,
P Zuckerman
FMB Comércio Importacão e Exportacão de
Laminados Decorativos Ltda
G Pikielny
Formica Finance Limited
M Adamson (R), P Hall, W Roest (R), N Mason,
R Pollington
Formica Global LLC
M Adamson (R), R Bollman (R), L Box, M Vernon,
M Quint, B Strobel
Formica Iki Oy
M Adamson (R), I Delen, R Pollington,
P Zuckerman
Formica International LLC
M Adamson (R), R Bollman (R), L Box, M Vernon,
M Quint, B Strobel
Formica Korea Corporation
T Ren, C Wang
Formica Laminates (India) Private Limited
M Adamson (R), S Badri, L Box, N Mason,
R Pollington, P Zuckerman
Formica Limited
M Adamson (R), L Box, P Foreman, P Hall,
N Mason, D Pallas, R Pollington, W Roest (R),
P Zuckerman
Formica LLC
I Delen, N Mason, R Pollington, A Tsvetov
Formica Middle East B.V.
M Adamson
Formica Norge A/S
I Delen, U Hector
Formica PSM Limited
M Adamson (R), P Hall
Formica S.A. (Spain)
M Adamson (R), P Hall, H Ruloffs
Formica S.A.S (France)
M Adamson (R), P Hall (R), N Mason,
R Pollington, P Zuckerman
Formica Skandinavien AB
M Adamson (R), I Delen, R Pollington
Formica SP.zo.O.
N Mason
Formica Taiwan Corporation
T Ren, C Wang, DH Wang
Forman Building Systems Limited
T Richards, W Roest (R), N Olson
Forman Building Systems Pty Limited
T Richards, C Zeitlyn
Forman Commercial Interiors Limited
T Richards, W Roest (R), N Olson
Forman Group Limited
T Richards, W Roest (R), N Olson
Forman Insulation Limited
T Richards, W Roest (R), N Olson
Forman Manufacturing Limited
T Richards, W Roest (R), N Olson
Formica Holdco UK Limited
M Adamson (R), P Hall, N Mason, R Pollington
Formica Holding Corp.
M Adamson (R), L Box, W Roest (R), M Quint,
P Zuckerman
Formica Holding GmbH
M Adamson, E Hoernisch, T Ruhnke
Formica Holdings Limited
M Adamson (R), P Hall, N Mason, R Pollington
Formica II Corporation
M Adamson R), L Box, W Roest (R), M Quint,
P Zuckerman
Gatic Pty Limited
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
G E Crane Investments Pty Ltd
W Roest (R), D Worley (R), N Olson, L Mayne
G E Crane Securities Pty Ltd
W Roest (R), D Worley (R), N Olson, L Mayne
G. E. Crane N.Z. Holdings Ltd
M Farrell, W Roest (R), D Worley (R), N Olson
G. E. Crane N.Z. Limited
M Farrell, W Roest (R), D Worley (R), N Olson
85
Regulatory disclosures
continued
Geoff Brown Building Supplies Limited
J Beveridge, G Brown, V Grant (A)
Kimura Building Supplies Limited
J Beveridge, V Grant (A), J Kimura
Mount Timber & Hardware Limited
J Beveridge, W Roest (R), N Olson
Geraldton Independant Building Supplies
Pty Limited
W Roest (R), D Surveyor, N Olson,
P Zuckerman
Graeme Joy Building Supplies Limited
J Beveridge, V Grant (A), G Joy
Gravure et Polissage de Surfaces Metalliques
M Adamson, P Hall, N Mason
Kingston Bridge Engineering Pty Ltd
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
New Zealand Ceiling & Drywall
Supplies Limited
D Jones
Kinsey Kydd Building Supplies Limited
J Beveridge, V Grant (A), S Kinsey
Nick Letica Building Supplies Limited
J Beveridge, V Grant (A), N Letica
Kusabs Building Supplies Limited
J Beveridge, V Grant (A), G Kusabs
Nock Building Supplies Limited
J Beveridge
Homapal GmbH
T Ruhnke
Laminates Acquisition Co.
M Adamson (R), L Box, W Roest (R), M Quint,
P Zuckerman
Home&Dry Limited (formerly DVS Limited)
T Richards, W Roest (R), N Olson
Laminates Holdings Pty Limited
W Roest (R), D Surveyor, N Olson, P Zuckerman
Hudson Building Supplies Pty Limited
W Roest (R), D Worley (R), N Olson, L Mayne
Laminex (Australia) Pty. Ltd.
W Roest (R), D Surveyor, N Olson, P Zuckerman
Northern Iron and Brass Foundry
Pty. Ltd.
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
NZ Insulation Services Limited
(formerly DVS Healthy Homes Limited)
T Richards, W Roest (R)
Pacific Trade & Export Limited
G Darlow, W Roest (R), N Olson
Perstorp Warerite Limited
M Adamson (R), P Hall, N Mason
PinkFit Limited
T Richards, W Roest (R), N Olson
Placemakers Limited
J Beveridge, W Roest (R), N Olson
Polymer Fusion Education Pty Ltd
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
Raoul Holdings Limited
M Malpass, W Roest (R), N Olson
Icon Industries National Administration
Pty Ltd
W Roest (R), D Worley (R), N Olson, L Mayne
Insulation Solutions Holdings Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Laminex Finance Pty Limited
N Gleeson (R), D le Quesne, L Huynh
Laminex Group (N.Z.) Limited
M Adamson (R), W Roest (R), N Olson,
P Zuckerman
Iplex Pipelines Australia Pty Limited
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
Laminex Group Pty Limited
W Roest (R), D Surveyor, N Olson, P Zuckerman
Iplex Pipelines NZ Limited
M Farrell, W Roest (R), D Worley (R), N Olson
Iplex Properties Pty. Limited
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
John Cockburn Building Supplies Limited
J Beveridge, J Cockburn, V Grant (A)
Ken Jones Building Supplies Limited
J Beveridge, V Grant (A), K Jones
Kenna Building Supplies Limited
J Beveridge, V Grant (A), L Kenna
Kevin Jarvis Building Supplies Limited
J Beveridge
Key Plastics Distribution Pty Ltd
W Roest (R), D Worley (R), N Olson, L Mayne
Key Plastics Pty. Ltd.
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
KH Consolidated Industries (Canberra)
Pty Limited
D Le Quesne, P Zuckerman (R), T Richards
86
Laminex Overseas Holdings Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Laminex US Holdings Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Macready Building Supplies Limited
J Beveridge, V Grant (A), J MacReady
McDonald Building Supplies Limited
J Beveridge, R Callon (A)
Rocla Australia Pty Limited
D Le Quesne, M Malpass
McGill Building Supplies Limited
J Beveridge
Meleccio Enterprises Limited
G Darlow, W Roest (R), N Olson
Milnes-Gatic Pty Ltd
W Roest (R), D Worley (R), N Olson, L Mayne
Rocla Concrete Pipes Pty Limited
D Le Quesne, M Malpass
Rocla Drilling Pty Limited
D Le Quesne, M Malpass
Rocla Group Superannuation Fund
Pty Limited
J Gardiner, W Roest (R), L Box
Milnes Holdings Limited
R McLeod, W Roest (R), D Worley (R), N Olson,
L Mayne
Rocla Industries Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Minnell Building Supplies Limited
J Beveridge, V Grant (A), D Minnell
Rocla Masonry Pty Limited
D Le Quesne, M Malpass
Morinda Australia Pty Limited
W Roest (R), P Zuckerman (R), T Richards, M Negri
Rocla Materials Pty Limited
D Cilento, M Malpass
Rocla NSW Pty Limited
D Le Quesne, M Malpass
Rocla Pty Limited
S Baker, D Cilento, M Malpass
Rocla SA Pty Limited
D Le Quesne, M Malpass
TAF Building Systems Pty Limited
D Le Quesne, T Richards
Trademates Limited
J Beveridge, W Roest (R), N Olson
Tasman Australia Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Unidur GmbH
M Adamson
Tasman Building Products Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Ward Building Supplies Limited
J Beveridge
Rocla Vic Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Tasman Insulation New Zealand Limited
T Richards, W Roest (R), N Olson
Rolleston Building Supplies Limited
J Beveridge, V Grant (A), R Rolleston
S Cubed Pty Limited
W Roest (R), P Zuckerman (R), T Richards,
N Gleeson (R), M Negri
Seabar Holdings (No 16) Limited
G Darlow, W Roest (R), N Olson
Tasman Investments (Netherlands Antilles) N.V.
S Coeriel (R), M Farrell, E Rakers (US $3,675),
W Roest (R), J Mol-Rozema, N Olson
Tasman Sinkware North America, Inc.
W Roest (R), N Olson
Tasman Sinkware Pty Limited
J Bayer, T Richards, W Roest (R), L Mayne
Servicios Formica de Mexico SA DE CV
M Adamson (R), L Box, M Quint, B Strobel
TBP Group Pty Limited
N Gleeson (R), D Le Quesne, L Huynh
Shanghai Fletcher Building Materials Trading
Company Limited
W Roest (R), C Wang, P Wilson
Shanghai Formica Decorative Material Co., Ltd
P Foreman (R), J Hu, C Kao, C Wang, C Gray
Shed Boss NZ Limited
M Farrell, W Roest (R), N Olson
Sisalation Pty Limited
T Richards, S McKay (R), C Zeitlyn
Southbound Building Supplies Limited
J Beveridge, V Grant (A), A Rance
Steven Marshall Building Supplies Limited
J Beveridge, V Grant (A), S Marshall
Stickland Building Supplies Limited
J Beveridge, V Grant (A), L Stickland
Stramit (Preston) Pty Limited
D Le Quesne, P Zuckerman (R), T Richards
Stramit Corporation Pty Limited
W Roest (R), P Zuckerman (R), T Richards,
M Negri
Stramit Pty Limited
D Le Quesne, P Zuckerman (R), T Richards
Sullivan & Armstrong Building
Supplies Limited
J Beveridge, V Grant (A), J Sullivan
Ted Harper Building Supplies Limited
J Beveridge, V Grant (A), E Harper
Tenedora Formica Mexico, S.A. de C.V.
M Adamson (R), L Box, M Quint, B Strobel
Terrace Insurances (PCC) Limited
J Crowder, M Eades (£2,500), M Farrell,
W Roest (R), N Olson
Terry Mellsop Building Supplies Limited
J Beveridge
The Diller Corporation
M Adamson (R), L Box, W Roest (R), M Quint,
P Zuckerman
The Fletcher Construction Company Cook
Islands Limited
A Brown, L Gray
The Fletcher Construction Company Limited
G Darlow, W Roest (R), N Olson
The Fletcher Organisation (Vanuatu) Limited
A Brown, L Gray, Diract Limited, Lotim Limited
The Fletcher Trust and Investment
Company Limited
G Darlow, W Roest (R), N Olson
Thomas Street Pty Limited
D Le Quesne, M Malpass
Wesfi Limited
D Le Quesne (R), W Roest (R), D Surveyor,
N Olson, P Zuckerman
Wesfi Manufacturing Pty Limited
W Roest (R), D Surveyor, N Olson, P Zuckerman
Winstone Wallboards Limited
T Richards, W Roest (R), N Olson
COMPANIES LIqUIDATED:
Laminex Inc
W Roest (R), M Quint
Waterman Building Supplies Limited
J Beveridge
COMPANIES AMALGAMATED :
Auckland Frame and Truss Supplies Limited
J Beveridge, B Bibbie, R Grimmer, D King,
O Lyttleton, S Marshall, L Stickland, J Sullivan,
R Spiers, B Deavoll (R)
Christchurch Frame & Truss Limited
J Beveridge, B Bibbie, M Cleaver, D Close,
M Evans, R Grimmer (A), O Lyttelton (A),
R Callon (R)
Decorative Surfaces Holding AB
M Adamson, I Delen, U Hector
Formica Vertriebs GmbH
M Adamson, E Hoernisch, T Ruhnke
Homapal Plattenwerk Beteiligungs-GmbH
T Ruhnke
Homapal Plattenwerk GmbH & Co KG
T Ruhnke, M Adamson (R), F Homann (R)
Waikato/BOP Frame & Truss Limited (formerly
Tango Warkworth Limited)
J Beveridge
Thor Plastics Pty Ltd
W Roest (R), D Worley (R), N Olson, L Mayne
Wellington Frame & Truss Limited
J Beveridge
Surface Materials Iki Oy
M Adamson, P Alderson, J Kerbs
Trade Mart Limited
J Beveridge, W Roest (R), N Olson
The O’Brien Group Limited
M Adamson, W Roest (R), D Worley (R)
87
Investor information
Annual shareholders’ meeting
Shareholder communications
The Annual Shareholders’ Meeting of
Fletcher Building Limited will be held in the
Level 4 Lounge, South Stand, Eden Park,
Reimers Avenue, Auckland, at 10.30am
on Wednesday 16 October 2013.
Final dividend information
The company has declared a final dividend
for the year of 17 cents per share payable on
16 October 2013. This is in addition to the
interim dividend of 17 cents per share paid in
April 2013. The final dividend has imputation
credits attached at a 28 percent tax rate. There
are no Australian franking credits attached.
Dividend Reinvestment Plan
Fletcher Building shareholders (excluding those
in jurisdictions where the issue of shares is not
permitted by law) can participate in a Dividend
Reinvestment Plan, under which they have
the opportunity to reinvest their dividends in
additional shares. To participate, please contact
the share registry.
Further information online
Details on Fletcher Building, its governance
policies, and its operations for the year
ended 30 June 2013 can be viewed on the
Fletcher Building website at fbu.com.
This website contains all news releases to
the NZX and ASX financial presentations
made by the company.
The company is not required to send printed
copies of the annual report and half year review
to shareholders. Instead, Fletcher Building
sends an annual review which is a summary
of the company’s operational and financial
activities for the year, although holders can
view the reports on the company’s website.
In addition, they have a right to receive a copy
of these reports on request.
Direct crediting of interest and dividends
To minimise the risk of fraud and misplacement
of dividend cheques shareholders are strongly
recommended to have all payments made
by way of direct credit to their nominated
New Zealand or Australian bank account.
This can be done by simply giving the share
registry written notice.
Share registries
Details of the company’s share registries are
given in the Directory on the inside back cover
of this report.
Shareholders with enquiries about share
transactions, changes of address or dividend
payments should contact the share registry in
the country in which their shares are registered.
88
DIRECTORY
Registered offices
Shareholder enquiries
Other investor enquiries
Fletcher Building Limited
Private Bag 92 114
Auckland 1142, New Zealand
T. +64 9 525 9000
F. +64 9 525 9032
E. moreinfo@fbu.com
Other information
fbu.com
New Zealand
Fletcher Building Limited
Private Bag 92 114
Auckland 1142
New Zealand
Fletcher House
810 Great South Road
Penrose, Auckland 1061
New Zealand
T. +64 9 525 9000
Australia
Fletcher Building Australia
Locked Bag 7013,
Chatswood DC 2067
NSW 2067, Australia
Level 11, Tower B, Zenith Centre
821 Pacific Highway
Chatswood, NSW 2067, Australia
T. +61 2 8986 0900
ARBN 096 046 936
Changes of address, payment
instructions and investment
portfolios can be viewed and
updated online:
investorcentre.co/nz.
Enquiries may be addressed to the
Share Registrar, Computershare
Investor Services:
New Zealand
Computershare Investor Services
Limited
Private Bag 92 119
Auckland 1142
New Zealand
Level 2, 159 Hurstmere Road
Takapuna, Auckland 0622
New Zealand
T. +64 9 488 8777
F. +64 9 488 8787
E. enquiry@computershare.co.nz
Australia
Computershare Investor Services
Pty Limited
GPO Box 3329
Melbourne, VIC 3001, Australia
Yarra Falls, 452 Johnston Street
Abbotsford, VIC 3067, Australia
T. 1800 501 366 (within Australia)
T. +61 3 9415 4083 (outside Australia)
F. +61 3 9473 2009
89
Asia
Europe
North America
South Pacific
New Zealand
Auckland
Bay of Plenty
Canterbury
Central North Island
Hawkes Bay
Nelson & Marlborough
Northland
Otago & Southland
Taranaki & Manawatu
Waikato
Wellington
Australia
ACT
New South Wales
Northern Territory
Queensland
South Australia
Tasmania
Victoria
Western Australia